Uxin

Prospectus Summary

PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in the ADSs discussed under "Risk Factors," before deciding whether to invest in the ADSs. This prospectus contains information from an industry report dated May 11, 2018 commissioned by us and prepared by iResearch, an industry report dated February 5, 2018 commissioned by us and prepared by China Insights Consultancy, an industry survey dated April 2018 commission by us and prepared by Ipsos, each an independent research firm, to provide information regarding our industry and our market position.

Overview

We are the largest used car e-commerce platform in China in terms of both the number of transactions facilitated and total GMV in 2017, according to iResearch. As the destination for online used car transactions in China, we make it possible for consumers to buy cars from dealers, and for dealers to buy cars from other dealers and consumers, through an innovative integrated online and offline platform.

Our mission is to enable people to buy the car of their choice. Both consumers and businesses in China face significant challenges in buying and selling used cars, such as access to a limited number of vehicles, incomplete and unreliable information about vehicles, and complex transaction processes. Our platform addresses these issues by enabling consumers and businesses to discover, evaluate and transact in used cars throughout China, providing a reliable and one-stop transaction experience. Our platform consists of two highly synergistic businesses:

COMMAND=ADD_TABLEWIDTH,"100%" User-specified TAGGED TABLE end of user-specified TAGGED TABLE

Since our founding, both Uxin Used Car and Uxin Auction have achieved significant success. They possessed market shares of 41% and 42% in terms of GMV in the online 2C and 2B used car markets in China in 2017, compared to 32% and 40% in 2016, respectively, according to iResearch.

We have transformed used car commerce in China through our innovative integrated online and offline approach that addresses each step of the transaction and covers the entire value chain. Our highly scalable online platform allows sellers to reach a broad audience and ensures that users have access to an extensive nationwide selection of used cars. Our offline infrastructure allows us to provide services that are important to enabling transactions, such as the inspection, title transfer and delivery of vehicles, in-person consultation and other after-sale services. In particular, our inspection capabilities allow us to collect proprietary data, images and videos of vehicles and generate accurate car condition reports that allow for standardized comparisons, which are crucial to our users' online purchase decision-making processes. With a significant amount of data on buyers, sellers, vehicles and transactions on our platform, we are able to continue to innovate and improve our services to meet the varied needs of our users. Together, our services provide users with the superior experience and peace of mind that our brand embodies, in fact, our name—Uxin (" ") translates to quality and trust in Chinese.

Our comprehensive services are built upon a number of critical foundations, including proprietary technology and data analytics capabilities, an extensive service network and unique transaction enablement capabilities.

COMMAND=ADD_TABLEWIDTH,"100%" User-specified TAGGED TABLE end of user-specified TAGGED TABLE

We collaborate with a large number of third-party partners to provide financing products, insurance, and other services through our platform. For example, our financing partners assess buyers' credit and fund loans facilitated through our platform. This improves the transaction experience for our buyers and allows us to establish ongoing relationships with our customers to serve them for other after-sale needs including their next car purchase.

As our platform grows, more buyers tend to attract more sellers, which in turn engages additional buyers across a broader selection of used cars, driving significant network effects. In addition, more buyers and sellers will attract more third-party service partners and expand the offerings on our platform, forming a more vibrant ecosystem. Since our inception in 2011, we have witnessed significant growth in our business. The total number of used cars sold through our platform has increased from 377,777 in 2016 to 634,317 in 2017, representing a 67.9% increase, and from 102,098 in the first three months of 2017 to 165,003 in the first three months of 2018, representing a 61.6% increase. The total GMV of our platform has grown from RMB26.0 billion in 2016 to RMB43.4 billion (US$6.9 billion) in 2017, representing a 67.0% increase, and from RMB7.9 billion in the first three months of 2017 to RMB11.6 billion (US$1.9 billion) in the first three months of 2018, representing a 47.8% increase.

We generate revenues primarily through fees for transaction facilitation and auto loan facilitation services. Our total revenues grew to RMB1,951.4 million (US$298.6 million) in 2017, representing an increase of 136.7% from 2016. For the three months ended March 31, 2018, our total revenues was RMB649.4 million (US$103.3 million), representing an increase of 93.2% over the same period in 2017. Our net loss was RMB2,747.8 million (US$420.5 million) in 2017, compared to RMB1,392.9 million in 2016. Our net loss was RMB839.4 million (US$133.5 million) in the first three months of 2018, compared to RMB510.8 million in the first three months of 2017. Our adjusted net loss, a non-GAAP measure defined as net loss excluding share-based compensation and fair value change of derivative liabilities was RMB1,696.1 million (US$259.6 million) in 2017, compared to RMB1,050.4 million in 2016, and RMB478.0 million (US$76.0 million) in the first three months of 2018, compared to RMB430.4 million in the first three months of 2017. See "Summary Consolidated Financial and Operating Data—Non-GAAP Financial Measure."

Our Strengths

We believe that the following competitive strengths contribute to our success and differentiate us from our competitors:

•

largest used car e-commerce platform in China;


•

innovative integrated online and offline business model;


•

superior transaction experience;


•

transaction-centric platform with multiple service opportunities;


•

strong data analytics capabilities and proprietary technology; and


•

visionary and experienced management team with proven track record.

Our Strategies

We intend to execute the following strategies to further expand our business:

•

continue to expand nationwide footprint;


•

further improve user experience;


•

capture additional service opportunities;


•

reinforce technology leadership through innovation; and


•

selectively pursue strategic alliance, investment and acquisition opportunities.

Our Challenges

Our ability to achieve our mission and execute our strategies is subject to risks and uncertainties, including those relating to our ability to:

•

provide differentiated and superior customer experience;


•

maintain and enhance customer trust in our platform;


•

compete successfully;


•

assess and mitigate various risks, including credit;


•

achieve profitability and generate positive operating cash flow;


•

manage our rapid growth and implement our business strategies;


•

maintain and expand relationships with our business partners, including financing partners;


•

comply with applicable laws and regulations; and


•

maintain and upgrade our technology capabilities.

See "Risk Factors" and other information included in this prospectus for a discussion of these and other risks and uncertainties that we face.

Industry Overview

China is the world's second largest automotive market as measured by car PARC and is forecasted to become the largest automotive market by 2023, according to iResearch. As of December 31, 2017, there were approximately 185 million car PARC in China, compared with 275 million car PARC in the United States. Despite the scale of China's car PARC, the low car ownership rate and a large population indicate significant room for continued growth.

Total used car transaction volume in China reached 12.4 million in 2017. The ratio of China's used car sales to new car sales by volume was 0.5 in 2017, significantly lower than that of 2.4 in the United States. Used car transaction volume in China is expected to grow rapidly at a CAGR of 19.0% from 12.4 million in 2017 to 29.6 million by 2022, according to iResearch.

Additionally, China's used car supply chain is ripe for disruption due to the following factors:

•

challenges faced by used car consumers, including limited local car selection, lack of trust in used car dealers, lack of one-stop shop for services, and underserved used car financing needs;


•

challenges faced by used car dealers, including operational capabilities deficiencies and inefficiencies, such as those relating to customer acquisition; and


•

fragmented, multi-layered and inefficient used car supply chain.

A seamlessly integrated online and offline model is best suited to address these issues. An online business provides buyers with access to a brand selection of cars through a user-friendly online vehicle search process, it also provides better and more convenient purchase and related services by better matching, buyers and sellers through the use of big data to enable customized used car financing and insurance products. Offline services can facilitate sales by providing customers with vehicle inspection, customer support, logistics and fulfillment solutions, and after-sale warranty and other services.

China's used car consumer financing market, used car logistics market, and automotive aftermarket are also massive market opportunities. For example, the penetration rate of consumer auto financing in China is still low compared to more developed markets. New technology-enabled business will improve overall transparency, efficiency and liquidity of the used car supply chain. As a result, China's used car consumer financing market is expected to grow at a CAGR of 45.6% from RMB72.3 billion in 2017 to RMB473.0 billion (US$75.4 billion) in 2022, according to iResearch.

Corporate Structure

The following diagram illustrates our corporate structure as of the date of this prospectus, including our significant subsidiaries and our variable interest entities and their significant subsidiaries.

COMMAND=ADD_LINERULETXT,NOSHADE COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT"

(1)

The other shareholders of Fairlubo Auction Company Limited are LC Fund V, L.P., one of our shareholders, LC Parallel Fund V, L.P., one of our shareholders, and Fengshion Capital Investment Fund, LP. LC Fund V, L.P. holds 7.138%, LC Parallel Fund V, L.P. holds 0.5541%, and Fengshion Capital Investment Fund, LP. holds 15.3847% of the equity interest in Fairlubo Auction Company Limited. Upon the completion of this offering, the shares held by these entities in Fairlubo will be converted into ordinary shares of our company, and Fairlubo will become our 100% owned subsidiary. See "Description of Share Capital—History of Securities issuances."

(2)

Shareholders of Youxin Hulian are Mr. Kun Dai, our CEO and Beijing Min Si Lian Hua Investment Management Co., Ltd., an affiliate of our shareholder, Redrock Holding Investments Limited. Mr. Kun Dai holds 99.9923% and Beijing Min Si Lian Hua Investment Management Co., Ltd. holds 0.0077% of the equity interest in Youxin Hulian.

(3)

Shareholders of Fengshun Lubao are Yishouche, one of our consolidated VIEs, and Shanghai Fengshang Equity Investment Fund Partnership (Limited Partnership), an affiliate of one of the shareholders of Fairlubo Auction Company Limited, Fengshion Capital Investment Fund, LP. Yishouche holds 99.99% and Shanghai Fengshang Equity Investment Fund Partnership (Limited Partnership) holds 0.01% of the equity interest in Fengshun Lubao.

(4)

Shareholders of Yishouche are Mr. Kun Dai, our CEO and Beijing Min Si Lian Hua Investment Management Co., Ltd., an affiliate of our shareholder, Redrock Holding Investments Limited. Mr. Kun Dai holds 99.9999% and Beijing Min Si Lian Hua Investment Management Co., Ltd. holds 0.0001% of the equity interest in Yishouche.

Our WFOEs, Youxinpai, Yougu and Youxin Lubao entered into contractual arrangements with Youxin Hulian, Yishouche, Fengshun Lubao and their respective shareholders to conduct part of our 2B business, our 2C business and salvage car business, respectively, due to PRC legal restrictions on foreign ownership and investment in value-added telecommunications services. These contractual arrangements enable us to (i) exercise effective control over our VIEs, (ii) receive substantially all of the economic benefits of our VIEs, and (iii) have an exclusive option to purchase all or part of the equity interests in and assets of our VIEs when and to the extent permitted by PRC law.

As a result of our direct ownership in our WFOEs and the VIE contractual arrangements, we are regarded as the primary beneficiary of our VIEs, and we treat them and their subsidiaries as our consolidated affiliated entities under U.S. GAAP. We have consolidated the financial results of our VIEs and their respective subsidiaries in our consolidated financial statements in accordance with U.S. GAAP. The revenues generated by our VIEs, Youxin Hulian, Yishouche, Fengshun Lubao and their subsidiaries taken as a whole accounted for 12.5% of our total revenue for the year ended December 31, 2017 and 14.6% of our total revenues for the three months ended March 31, 2018. For more details, please see "Corporate History and Structure."

Implication of Being an Emerging Growth Company and a Foreign Private Issuer

As a company with less than US$1.07 billion in revenue for our last fiscal year, we qualify as an "emerging growth company" pursuant to the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements compared to those that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company's internal control over financial reporting. The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We do not plan to "opt out" of such exemptions afforded to an emerging growth company.

We will remain an emerging growth company until the earliest of (a) the last day of the fiscal year during which we have total annual gross revenues of at least US$1.07 billion; (b) the last day of our fiscal year following the fifth anniversary of the completion of this offering; (c) the date on which we have, during the preceding three-year period, issued more than US$1.07 billion in non-convertible debt; or (d) the date on which we are deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our shares that are held by non-affiliates exceeds US$700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers. Moreover, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. In addition, as a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the NASDAQ corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the NASDAQ corporate governance listing standards.

General Corporate Information

Uxin Limited was incorporated as a Cayman Island corporation on December 8, 2011. Our registered office is at the offices of Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our corporate headquarters are located at 2-5/F, Tower E, LSHM Center, No.8 Guangshun South Avenue, Chaoyang District, Beijing, China. Our telephone number is +86 10 5631-2700. Our main websites are www.xin.com and www.youxinpai.com. The information on, or accessible through, our websites are not deemed to be part of this prospectus.

Conventions That Apply to this Prospectus

Unless otherwise indicated or the context otherwise requires, references in this prospectus to:

•

"Active dealers" in a given period are to dealers who bid for cars through our 2B business, or dealers who list cars for sale through either our 2B business or our 2C business during that period. If a dealer bids cars through our 2B business and also lists cars for sale through either our 2B or our 2C business, all in the same period, such dealer will be counted as two active dealers for the period;


•

"ADSs" are to the American depositary shares, each of which represents ordinary shares;


•

"CAGR" are to compound annual growth rate;


•

"Car PARC" are to the total number of light vehicles, including cars, sport utility vehicles and light trucks in a region or market;


•

"Check Auto" are to our proprietary car inspection system;


•

"China" or "PRC" are to the People's Republic of China, excluding, for the purpose of this prospectus only, Taiwan, Hong Kong, and Macau;


•

"GMV" are to gross merchandise value of used cars as measured by gross selling price of used cars, excluding service fees and interests (if any) charged, and "total GMV" are to the GMV of our 2C and 2B businesses;


•

"RMB" and "Renminbi" are to the legal currency of China, which is our reporting currency;


•

"shares" or "ordinary shares" prior to this offering are to our ordinary shares, par value $0.001 per share;


•

"US$," "U.S. dollars," "$," and "dollars" are to the legal currency of the United States;


•

"Uxin" or "our platform" are to our platform primarily for buying and selling used cars, which primarily consists of two businesses, Uxin Auction and Uxin Used Car;


•

"Uxin Auction" are to our 2B business;


•

"Uxin Used Car" are to our 2C business;


•

"Our WFOEs" are to our wholly-owned subsidiaries in China;


•

"Our VIEs" are to our variable interest entities, which are Youxin Internet (Beijing) Information Technology Co., Ltd. or Youxin Hulian, Beijing Fengshun Lubao Automotive Auction Limited, or Fengshun Lubao, and Youxin Yishouche (Beijing) Information Technology Co., Ltd., or Yishouche; and


•

"we," "us," "our company" and "our" are to Uxin Limited, our Cayman Islands holding company, and its subsidiaries, and its consolidated affiliated entities in the PRC.

Unless the context indicates otherwise, all information in this prospectus assumes no exercise by the underwriters of their option to purchase up to additional ADSs representing ordinary shares from us.

THIS IS THE END OF A COMPOSITION COMPONENT TOC_END