Uxin Limited (UXIN) Stock Prices Skyrocket Following Successful Financial Reports

Uxin Limited (UXIN) stock prices were up a monumental 45.32% as of market close on April 28th, 2021, bringing the price per share up to USD$2.95 at the end of the trading day. Subsequent pre-market fluctuations saw the price climb marginally by an additional 4.24% to hit USD$3.08.

Transition to Inventory-Owning Model

99% of the transaction volume sold in Q4 2020 was done so from the company’s own inventory, marking the completion of the transformation into an inventory-owning business model. To facilitate this move and maintain standards of quality, UXIN has started construction in Xi’an for its first inspection and reconditioning center.

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Promising Financial Reports

Total revenues for the three months ended December 31st, 2020 came out to USD$49.5 million, a significant quarter-over-quarter increase. Because of the recent transition to an inventory-owning model, reported revenues for the quarter were recognized on a gross basis. Accordingly, gross margins were 2.9%, with steady increases expected in the upcoming quarters. Because of the aforementioned transition, substantial changed were made to revenue recognition and the classification of expenses and costs as compared to the same time period over the previous year.

Preferential Government Policies

UXIN has enjoyed the massive growth potential of the used car market in China, with the Chinese government continuing to facilitate that growth with preferential policies for the sector. May 2020 saw the reduction of value-added tax (VAT) from 2% to 0.5% on used car sales. Previous restrictions on cross-regional transactions and title transfers of used cars have recently been lifted across all regions by the mandate of the General Office of the State Council.

Transactions Facilitate by Changed Policies

The government has also simplified the documentation process with the complete digitization of registration and related documentation. Title transfer costs have also been reduced while the efficiency of cross-regional used car transactions has been increased. These measures are likely to facilitate a more efficient and sustainable business environment for the used car sector, which UXIN hopes to be at the forefront of.

Strategic Partnership with JD.com

The company has recently launched a self-operated online store for used car transactions through JD.com’s online platform following the entering of a strategic partnership by UXIN and JD.com. This move provides consumers with a one-stop online used car purchase solution.  In an effort to provide a used car purchasing experience hitherto unprecedented in the market, the collaboration aims to provide consumers with car inspection, purchasing, insurance and aftersales services solutions.

Future Outlook for UXIN

With a stellar recent financial track record and strategic partnerships with big-name companies, UXIN is poised to further expand its footprint in the used car sector. Facilitated by preferential government changes in policy, potential and current investors hope to see significant and sustained increases in shareholder value.


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