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Uxin Limited (UXIN -5.34%)
Q1Â 2019 Earnings Call
Jun 10, 2019, 8:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Ladies and gentlemen, thank you for standing by, and welcome to Uxin's First Quarter 2019 Earnings Conference Call. At this time, all participants are in listen-only mode. After management prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded, if you have any objection, you may disconnect at this time.
I would now like to turn the call over to Nancy Song, Investor Relations, Director of Uxin's. Please go ahead.
Nancy Song -- Investor Relations
Thank you, operator. Hello, everyone. Welcome to Uxin's first quarter 2019 conference call. Today, D.K., our Founder and CEO; and Zhen Zeng, our CFO, will discuss our financial results for the first quarter. Following the prepared remarks, D.K. and Zhen will be available to answer your questions.
Before we start, I'd will like to remind you that our statements today will contain forward-looking statements that we make under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. These statements are made based on management's current knowledge and assumptions about future events that involve risks and uncertainties, which could cause actual results to differ materially from our expectations. Uxin does not undertake any obligation to update any forward-looking statements, except as required under applicable laws. For more information about the potential risks and uncertainties, please refer to the company's filings with SEC.
With that, I will now turn the call over to our CEO, D.K. Please?
Kun Dai -- Chairman & Chief Executive Officer
Thank you, Nancy. Hello, everyone. Thank you for joining our first quarter 2019 earnings conference call. We are pleased to start the year with another strong quarter of growth as well as a significant improvement on the bottom line. Total revenue in the quarter increased by 55% year-over-year and exceeded RMB1 billion, once again beating the high end of our guidance. Thanks to greater economics of scale and a more effective cost control.
Gross margin improved to 70% from 66% in the same period one year ago. We also continued to gain operating leverage during the quarter, which enabled us to cut adjusted net loss by over 50% year-over-year to RMB231 million, and significantly reduce adjusted net loss as a percentage of total revenue to 23% from 74% in the same period last year.
Before we dive into operations, I'd like to highlight that starting from the first quarter this year, we will only disclose the transaction volume and the corresponding operational metrics for the transaction with generated revenues. With this change, transaction volume growth will serve as better indicator of our revenue growth by excluding free of charge transactions, investors can get a clear picture of the take rate that we can actually change -- charge from one used car and it will better demonstrate our ability to enhance monetization and the development of our cross-regional and intra-regional business. In addition, this will reflect how we are more focused on the transaction, which have generate monetization potential and better margin profile. The new method of disclosure has been applied to all the metrics of this earnings call.
Now, I will provide some further color on our operating starting with our 2C business, which continued to be the primary growth driver for Uxin. We facilitate transactions for over 78,000 used cars on our 2C platform, up 40% from the same period a year ago. Revenues from transaction facilitation services increased by 224% year-over-year, to RMB308 million for pleasing of the growth of our 2C business and a contributed 35% of total 2C revenues, which we are expanding our loan facilitation services. We are also continuously improving our risk management process.
We manage to keep the M3+ delinquency rate relatively stable at 1.45%, as of first quarter of 2019. A similar level to the 1.41%, as of the previous quarter. The cross-regional (ph) business continued to play an increasingly integral role in driving the growth of our 2C business. We maintained a growth momentum for the peak season in the fourth quarter and facilitated over 2,000 -- over 20,000 cross-regional transactions in the first quarter, up almost 50-times year-over-year.
The cross-regional business contributed 26% of total 2C transaction volume and a 32% of total 2C revenues, up from only 1% of transaction volume and revenues in the same period last year. As we control 100% of the entire shopping process and provide unique value to customer through our nationalwide selection of used car and by the price. We are naturally able to generate a higher take rate in our cross-regional business. In the fourth quarter, we generated a total take rate of 12.6% for cross-regional business transaction, of which 6.2% was for the transaction facilitation fees and a 6.4% was for the loan facilitation services.
During the quarter, we also made significant progress expanding our business in lower tier cities. As we've previously noted that, we are not adopting a franchising model to expand our service network and complemented -- complement the service centers that we operate directly with the expansion of our cross-regional business. Our franchise model has gained significant traction from local merchants across their country. As of end of the quarter, we had over 1300 established venture across China, of which over 600 was operated by ourself and over 700 by franchisees. The majority of the franchised services center were operated broadly throughout the quarter.
On average, this franchised service center will fully up and running for 1.3 months during the quarter, and collectively they contribute a low-teens percent of total cross-regional transactions. Our service network covered over 400 prefecture-level cities on 900 cities and region at all levels of China at administrative divisions, include a prefecture-level city, country level city and the district.
In order to enhance the user experience, we have been promoting onsite services across country. Upon request, our sales consultant can visit a customer at their workplace or home, help them interpret video inspection reports, introduce car specifics, assist them in selecting the car they prefer and help them execute the purchase. In terms of our intra-regional business, we facilitated over 57,000 used car transactions in the first quarter. As we have been expanding our cross-regional business, whereby customer don't need to see their car in person before they actually buy it, we now encourage all customer to use our cross-region services when we first engage with them. However, if the customer insists on seeing the car in person, but it doesn't require financing, we will no longer accompany him to visit an offline dealership or assist him with the purchase process onsite. In the quarter, we generated a total take rate of 8.4% for intra-regional used car transaction, of which 2.5% was for the transaction facilitation services and a 5.9% was for the loan facilitation services.
Moving on to our 2B business. Transaction volume decreased by 43% to 36,500 used cars during the quarter. The decline was primarily due to our change of the approach in serving customer with car-selling needs, as well as dealers' growing preference to sell used cars on our 2C platform, which was further bolstered by the growth of our 2C cross-regional business.
B2B transactions facilitation take rate was 3.8% down from 4.3% in the previous quarter. Strategically, the 2B business will continue to serve as a complementary pillar of our business that has strengthened our relationship with dealer and expands the inventory available for our 2C customers. Given that, we may continue to provide a favorable terms to our dealers on the 2B platform, so as to maintain stickiness as well as encourage dealers to expand a collaboration in the 2C business, especially cross-regional transactions.
Now, I'd like to briefly discuss our new strategic partnership with 58.com. 58.com's used car business in complementary with Uxin business model and we believe our partnership will lead to many synergy. 58 used car is a well established classified category of 58.com's platform, with huge volume of targeted used car traffic and a large user bases. By combining their traffic with our deep expertise will fulfill used car transactions throughout the entire value chain. We are confident that we will improve monetization and generate a significant value for both company.
More importantly in recent year, 58.com has been penetrating into lower tier city as well. This is aligned with our strategic focus on cross-regional transactions and the expansion of our service network into lower tier city across China. Through our strategic cooperation, we are confident that we will be better positioned to provide a customer with an enhanced car purchasing experience in China. Over the past several years, we have continuously evolved Uxin's business model to better meet customer demand, and we have experienced, rapid growth of both transaction volume and revenue. As we continue to expand our business, we will increase our focus on achieving more sustainable growth by implementing the following three initiatives.
First, we will continue shifting our resource to the cross-regional business. We always see a huge market opportunity, in addition to targeting this significant growth potential, our strategic focus on cross-regional transaction will enable us to generate greater revenue and take us one step closer to profitability.
Second, we will continue to improve our operational efficiency by taking a more strict approach to cost control and expense management. Third, we will adopt more stringent risk-control procedure and concentrated our resource on used car assets with better risk profiles. We have already been reviewing our loan facilitation business and are taking a more prudent approach in facilitating a loan. This will ensure that we build an even strong foundation and improve cash flow. Together, this initiative will help us build a more sustainable business over the long term and it take us one step closer to profitability.
With that, I would like to turn the call over to our CFO, Zhen Zeng to talk through our financials. Zeng, please.
Zhen Zeng -- Chief Financial Officer
Okay. Thanks D.K. Hello, everyone. Thanks for joining us today. Now let me walk you through our financial details on the first quarter of 2019. So, please note that all numbers are in RMB, unless otherwise stated. Also please note that some numbers I referred to are non-GAAP, you can find our reconciliation of these numbers in our earnings release.
In the first quarter, total revenue increased by 55% to RMB1,004 million from RMB649 million in the prior year period. The increase was primarily due to the increases in the 2C transaction volume, transaction facilitation take rate and the amount of loans facilitated. Drilling down to our business pillars. In terms of our 2C Business total 2C revenue was RMB883 million representing an increase of 94% year-over-year from RMB455 -- RMB454 million in the prior year period.
Moving on to more details. Revenue of 2C cross-regional business was~RMB284 million, representing a significant increase of 54-times from only RMB6 million in the prior year period. Cross-regional transaction volume increased potentially by 48 times to 20,647 units from only 420 units in the prior year period, and the corresponding GMV increased to RMB2,268 million from RMB57 million in the prior year period.
Cross-regional transaction facilitation revenue increased substantially by 47 times to RMB140 million from only RMB3 million in the prior year period, primarily due to the increase in the transaction volume, GMV and the transaction facilitation take rate of used car sold through our cross-regional business.
Take rate for the cross-regional transaction facilitation increased to 6.2% from 4.4% in the prior year period, primarily driven by our enhanced service user experience and higher pricing power. Cross-regional loan facilitation revenue significantly increased by 64 times to RMB144 million from only RMB2 million in the prior year period. Primarily due to the increases in the financing transaction volume and amount of loan facilitated as well as the increase in the loan facilitation take rate of the used car facilitated through our cross-regional services.
Take rate for cross-regional loan facilitation increased to 6.4% from 3.3% in the prior year period. Revenue of 2C intra-regional business was RMB599 million representing an increase of 33% of RMB449 million in the prior year period. Intra-regional transaction volume increased by 4% year-over-year to 57,630 units and its corresponding GMV increased by 22% year-over-year to RMB6,624 million. Intra-regional transaction facilitation revenue increased by 83% to RMB168 million from RMB92 million in the prior year period, primarily due to the increases in the transaction facilitation take rate and GMV of the used car sold through our Intra-regional services.
Take rate for Intra-regional transaction facilitation increased 2.5% from 1.7% in the prior year period. Intra-regional loan facilitation revenue increased by 21% to RMB430 million from RMB357 million in the prior year period, primarily due to the increases in the financing transaction volume and amount of loans facilitated for the used car sold through our intra-regional services. Take rate for intra-regional loan facilitation remain at 5.9% compared with the prior year period.
In terms of our 2B business, our 2B transaction facilitation revenue was RMB70 million, representing a decrease of 36% year-over-year, primarily due to the decline in transaction volume, which reflect our ongoing traffic shifted to the 2C business. The decrease of 2B transaction volume was mainly because of our change of approach in certain customers with car-selling needs as well as the dealers' growing preference for retail transactions for our 2C platform. Our take rate for 2B transaction facilitation increased to 3.8% from 3.5% in the prior year period.
Cost of the revenues increased by 33% year-over-year to RMB296 million compared to RMB222 million in the prior year period. The increase was primarily due to the increase in costs of fulfillment, title transfer and registration, which were correspondingly driven by the increase in the transaction volume, as well as the increase in salary and benefit of employees engaged in car inspection, quality control, customer service and after-sales service.
Gross profit increased by 65% (ph) to RMB708 million from RMB427 million in the prior year period. Gross margin increased to 70% in the quarter compared to 65% (ph) in the prior year period. Total operating expenses was RMB969 million, non-GAAP operating expenses excluding share-based compensation was RMB915 million.
For sales and marketing expenses slightly increased by 8% year-over-year, to RMB681 million, compared to RMB633 million in the prior year period. The minimal increase reflects our continuous effort to enhance operating efficiency and improve conversion rate. 2C marketing expenses as a percentage of total revenue increased to 68% during the quarter, decreasing from 97% in the prior year period.
For G&A, expenses increased by 17% to RMB188 million from RMB151 million in the prior year period. The increase was primarily attributable to the increase in share-based compensation expenses. G&A expenses excluding share-based compensation expenses was RMB135 million, representing 13% our total revenue in the quarter decreased from 24% in the prior year period.
R&D expenses increased by 17% to RMB80 million from RMB68 million in the prior year period. The increase was primarily due to the increase in salary and benefit expenses. R&D expenses, excluding share-based compensation expenses was RMB79 million, representing 8% of total revenue in the quarter, decreasing from 10% in the prior year period. We are confident that we -- our increasing operating leverage and prudent approach to expenses, management will continue to improve our profitability over time.
Loss from guarantee liability was RMB20 million compared to a loss of RMB18 million in the prior year period. The loss was primarily due to the fluctuation in the delinquency rate from the first quarter of 2018.
Loss from operations was RMB261 million, a decrease from RMB453 million in the prior year period. Non-GAAP loss from operations, which exclude share-based compensation expenses was RMB208 million, a decrease from RMB451 million in the prior year period. Non-GAAP loss from operations as a percentage of total revenue was 21%, a significant decrease from 69% in the prior year period.
Fair value change of derivative liabilities was nil in the quarter compared to a loss of RMB359 million in the prior year period. We no longer see any impact of derivative liability, as the preferred share were converted into ordinary share at the time of IPO.
Net loss was RMB285 million decreased from a net loss from RMB839 million in the prior year period. The narrowed net loss was primarily due to the greater operating leverage and a decrease in the loss from fair value change of derivative liabilities.
Non-GAAP net loss, which exclude share-based compensation expenses was RMB231 in the quarter, a decrease from RMB478 million in the prior year period. Non-GAAP net loss as a percentage of total revenue 23% decreased significantly from 74% in the prior year period.
Turning to our cash position. As of March 31, 2019, we had cash and cash equivalents of RMB455 million compared to RMB801 million, as of December 31, 2018. We have short-term deposit in other investment product of RMB597 million compared to RMB596 million, as of December 31, 2018. We had a restricted cash of RMB2,025,000 compared to RMB2,013,000 million as of December 31, 2018.
Before we move on to our guidance, I'd like to highlight our determination to implement of initiative that D.K. outlined, which will have drive the potential growth of our business. Our strategy focusing on building the cross-regional business will fuel our growth and our initiative to improve cost control and the strict management risk will enhance our operating efficiency and move us value toward profitability.
Factoring the measure that we are taking, we expect the total revenue for the second quarter of 2019 to be in the range of RMB900 million to RMB950 million. This forecast to reflects the company's current and primary views on the market and operational conditions, which are subject to change.
That concludes our prepared remarks.
Nancy Song -- Investor Relations
Thank you, Mr. Zhen. Operator, we'd like to open the call for questions now.
Questions and Answers:
Operator
Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions) The first question comes from the line of Eddy Wang from Morgan Stanley. Please ask the questions.
Eddy Wang -- Morgan Stanley -- Analyst
Hey D.K. (Foreign Language).
Kun Dai -- Chairman & Chief Executive Officer
Hi, Eddy.
Eddy Wang -- Morgan Stanley -- Analyst
(Foreign Language) I have two questions. The first is about that you have been talking about to implement three new initiatives, including the shift more resources to cross-regional transactions, improved operation efficiency as well as focus on the used car assets with better risk profile. So, can you give us more color on how such initiatives will be reflected on the operation as well as the financial metrics in terms of the transaction volume growth, proportion of the cross-regional transaction, long attach rate and other customer spending in the next few quarters, this is the first question.
And second question is actually I would like to have your view on the competitive landscape of the used car e-commerce industry. On the one hand we actually noted that demand of both new car and used car relatively weak yesterday in China, but on the other hand we have also noticed some of our competitors are claiming to increase their investment in the used car business. So, our new initiatives seem to me that is to focus more balanced between the sustainable growth with profitability. So, does it mean that you think the used car e-commerce industry has gone to a stage that probability is becoming the most -- one of the most important targets of all the used car e-commerce companies? Thank you.
Zhen Zeng -- Chief Financial Officer
Okay, Eddy. Here is -- Michael here. So, I'll address your first question. So, overall speaking after a year of the rapid development, we think now is the right time for us to shift our focusing on high quality and more sustainable growth. And we have been continuously optimizing our business model and operations and we have identified great market opportunity in the 2C, especially for the cross-regional business.
More importantly, we have viewed the core (ph) capability to carry out the business and have the first mover advantage. In order to capture this market opportunity, I think we will shift the key resource to our cross-regional transaction and to become more focusing on the spending days core business, using our new disclosure method that we are looking at around the 40% of transaction volume coming from the cross-regional transaction this year.
Concentrating on the -- within the cross-regional business, will not only gave us more sustainable growth, but also take us one step closer to the profitability. And to ensure this high quality growth, starting from the second quarter, we have been conducting a overall for the whole company in-depth review of our business operations, operational efficiency and the cash flow. And of course some of the low margin and/or the low efficient business such as new car loan facilitation business we have decide to stop the business. For the loan product, the headcount or operating regions, we streamlined related headcount and operations. And at the same time, we have decide to take more conversation approach to our loan facilitation business and going forward, we will commit our resource to used car asset with better risk profits.
We will also adopt strict risk-control process and be more prudent, when facilitating the loan. Regarding some of the intra-regional loans with less satisfactory risk profile or low cash flow performance, we will also cutting back this portion of volume, but we are confident that it will lead a more sustainable business and improve the cash flow, things we no longer provide on that transaction facilitation service to the local transaction without financing package and not disclose the free of charge transaction financing attach rate will seem higher.
And for the -- I think the intra-regional business, our loan attach rate will 100% and for the cross-regional is around 80% to 85%. And we will also take strict measure to manage the control expenses to ensure that we are maximizing the impact every dollar we spent and continue to optimize the operational efficiency.
Compared to the last year, our branding expenses will be great reviews in this year. And I think with this initiatives to your top-line of this year will be lower than the previous factors, our bottom line will be further improved, so we believe we can build a even stronger foundation for our long term growth.
Kun Dai -- Chairman & Chief Executive Officer
Hello Eddy, this is D.K. I'm addressing your second question. I use Chinese to answer the question, and Nancy help me to translate.
Eddy Wang -- Morgan Stanley -- Analyst
Okay, right.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Nancy Song -- Investor Relations
Yeah. So, I think the key difference from previous years is the different models between different players are very clear now. So, some of the players are choosing as a heavy model, some of the competitors choosing the traffic action model and for us, for Uxin, we are firm believer of the B2C model and our key value is in the -- for the whole supply chain.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Nancy Song -- Investor Relations
Yeah. So, we have been prepared for cross-regional services for many years. So, starting from 2011, when we established, we've been fully prepared for all the capabilities. So, we have been doing a lot of things throughout the value chain from the how we secure the car, inventory to car inspection to standardization and to the reservation as well as the offline fulfillment, such as logistics and the title transfer. So, all of the -- these are the whole new used car purchasing experience to Chinese consumers. So, we believe the market or the barrier we have been set is quite high. So, it's not something other competitors can catch up with -- within very short time of period.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Nancy Song -- Investor Relations
Yeah. So, our focus on the sustainability and high quality of the growth, doesn't mean that we will slow down our pace. Instead, we will put more concentrate our resources on the core business, which has our cross-regional business. So, our goal is not only to maintain our market leadership for the moment. More importantly, we will extend our market leadership in the future.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Nancy Song -- Investor Relations
Thank you.
Eddy Wang -- Morgan Stanley -- Analyst
(Foreign Language).
Zhen Zeng -- Chief Financial Officer
(Foreign Language).
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Operator
Thank you. The next question comes from the line of Ronald Keung from Goldman Sachs. Please ask the question.
Ronald Keung -- Goldman Sachs -- Analyst
(Foreign Language) So, thank you D.K., Michael and Nancy, as I've got two questions. Firstly, is on given the focus on cross-regional that we've talked about and I've heard D.K. talked about the strategies and the uniqueness of our business model there. I just want to hear, have we done sort of -- how do you see the market size, could be ultimately, how many cities do you plan to cover in the lower tier cities to your cellphone and franchise models? And sort of how do you see the total volumes could reach in terms of lower tier consumption power for these used cars?
And they came out one of the potential challenges is always that we as a buyer we haven't seen the car, we haven't test driven it. So, to make a decision on the spot without touching and seeing the car, what else besides sort of video or the sales agent talk about inspection report? What else can we offer to increase the confidence of the buyer using our platform in buying these cars from other cities?
And the second about the disclosure change and you outlined what exactly have changed there, particularly I see you mentioned about volume side note that are not generating, commission revenues are no longer counted. So, could you give us some apples-to-apples GMV and volume numbers for three, four fiscal last year, full year 2018 under this new definition that could help us compare more apples-to-apples from this year onwards? Thank you.
Kun Dai -- Chairman & Chief Executive Officer
Okay. Thank you Ronald. I will address your first question and I use Chinese to answer, and then Nancy will help me to translate. Okay, Ronald. (Foreign Language).
Nancy Song -- Investor Relations
Yeah. So, condition of the used car transaction is due to extend for the China's used car market as well as it's also true for the US or European market. So, for our cross-regional transactions, we provided two key unique values to the consumers. Why is the wide selection of used cars nationwide selections. So, whether, especially for the consumers in the lower tier cities, whether they can find this car as very important. So, for lower tier cities, we can enlarge the used car transaction as high as thousands of sold and for high tier cities, we can provide as high as 20 times more used car selection.
This is the first one we provide. And for the second value is to increase of the overall efficiency of the used car industry and we can cut the unnecessary procedures in-between. So, we can lower both the price gap between different markets. So, we can provide better prices to the consumers.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Nancy Song -- Investor Relations
So, we think we can guide our consumers to change their shopping behavior, especially by the capabilities we provide the reservation. So, the first thing is how we can better display the used cars online. So, first we provide on top of the tax plus picture, the inspection report we will also provide, reading the inspection reports as well as the VR functions, so consumers will have a better idea of how this car performs even without seeing the car in person, so we will increase their comfort level to purchase a car online.
So, secondly we provide a well-round warranty services to the consumers, so we provide a 30-day quality issue return policy or we provide one-year or 20,000 kilometres warranty programs to the consumers, also called the super value cars, we also provide a three-day no-reasons-asked return policy. So, all of these will lower the -- increase the people's trust to purchase online.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Nancy Song -- Investor Relations
Yeah. So, in longer term, if we look at in 10 years horizon, the online transaction of the used car, the advantage is quite clear. So, we believe there will be as high as 50% of the consumers will choose to purchase the car online. So, especially for the cars with car price above RMB80,000, so people will be more price sensitive and they will be more prudent, when choosing the car. So, online connection will give them more comfort level.
And also with our cross-regional transactions, we provide a whole new purchasing experience to the consumers. The consumers, who are purchasing through our cross-regional services they feel very happy about it. We believe that this will be the trend going forward.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Nancy Song -- Investor Relations
Yeah. Starting from Q4 '17 or early '18, we started to launch this cross-regional transactions with the consecutive quarters of volume growth very rapidly. So, this is also the evidence that our cross-regional transactions is gaining traction among consumers. Thank you.
Zhen Zeng -- Chief Financial Officer
Okay, Ronald, it's Michael here. So, I'll address your second question. Because we changed the disclosure method, So on the apple-to-apple base, for the full year of 2018, the total fee transaction is 255,000 used cars and the GMV is RMB27 billion. And for the intra-regional, the transaction volume is 220,000 used cards and the GMV of RMB23 billion, and for the cross-regional, if the transaction volume is 38,000 and the GMV is RMB4 billion. Okay. Thanks, Ronald.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Zhen Zeng -- Chief Financial Officer
Yeah, thank you.
Ronald Keung -- Goldman Sachs -- Analyst
(Foreign Language) D.K, Nancy and Michael.
Operator
Thank you. Your next question comes from the line of Nick Lai from JPMorgan. Please ask your question.
Nick Lai -- JP Morgan -- Analyst
(Foreign Language) My simple question is number one, our partnership with Taobao, what does that mean to our revenue and profit, if you could quantify that or not? And secondly, management talk about multiple saving and cutting, what does that mean to our volume and cost (ph) in a rest of the year? Thanks.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Nancy Song -- Investor Relations
Yeah. So, 58.com has massive target at the used car traffic and large user base. So, they've been also penetrated into larger cities in recent years. So, this is highly in line with our strategy in the profit and the transactions. So, by leveling their traffic and their resources in the lower tier cities, for the way we can further extent our cross-regional transaction. In return, we will help to stay out if they either come to offer their monetize their traffic as well, so we believe the synergy is quite great.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Nancy Song -- Investor Relations
Yeah. So, after three years of branding investment, Uxin brand is highly recognized by the consumers, especially with the consumers with purchase minded consumers. So, we believe it is the right time to control the branding budget and also it is practical. So, we don't see any material impact on our volume and we believe it won't impact, I mean, in the near future as well.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Nancy Song -- Investor Relations
Yeah. So, our car producing is heavy invest distribution (ph) making process. So, it will take quite long time before they can finally make the purchase. So, people normally will choose from platform-to-platform and compare the used cars. So, we believe the invest more in branding will have a limited impact show, yeah.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Nick Lai -- JP Morgan -- Analyst
Thank you very much.
Operator
Thank you. We have the last question from the line of Monica Chen from Credit Suisse. Please ask the question.
Monica Chen -- Credit Suisse -- Analyst
(Foreign Language) Hi, D.K., Michael and Nancy. So, I will quickly translate my questions. My question is about the market outlook for this year. So, the year today used car transaction volume looks quite weak comparing to the growth rate in last year, and given the micro uncertainties for this year. So, how do your management think about the second half market outlook? And what is our expectation on the transaction volume growth for this year? And to achieve this target, what do management think about the biggest opportunity and the challenges for this? Thank you.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Nancy Song -- Investor Relations
Yeah. So, the car marketing trend in China has been quite challenging for quite a few times. So, the new car market has been declined year-over-year and for the used car market the growth is still slowing down under way. I think this trend will continue in the next few months.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Nancy Song -- Investor Relations
Yeah. If you look at our last year's third quarter and fourth quarter as well as this year's first quarter growth, we maintained very high growth both in transactions volume and revenue growth. This is especially thanks to our cross-regional transactions. I think this high growth is mainly because our profitable transactions or our total transactions are still relatively low compared to the whole market.
So, we are still benefiting from the people's underlying condition of their purchasing behavior. So, this is also why we are less impacted than the whole market. And for the -- I mean looking into the remainder of 2019, we asked you look at very decent or high quality growth. So, as we previously mentioned, we are focused more on the sustainability of our growth, even though our top-line growth or volume growth will be lower than previously expected.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Nancy Song -- Investor Relations
Yeah. With all the initiatives in place, we believe our profitability of this deal will be highly improved. Thank you.
Kun Dai -- Chairman & Chief Executive Officer
(Foreign Language).
Monica Chen -- Credit Suisse -- Analyst
(Foreign Language).
Operator
Thank you. I will now hand over to Nancy for closing remarks.
Nancy Song -- Investor Relations
Yeah, thank you everyone for joining us today and for your continuous support for Uxin. We're looking forward to speaking to you again in the future. Thank you.
Operator
Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.
Duration: 64 minutes
Call participants:
Nancy Song -- Investor Relations
Kun Dai -- Chairman & Chief Executive Officer
Zhen Zeng -- Chief Financial Officer
Eddy Wang -- Morgan Stanley -- Analyst
Ronald Keung -- Goldman Sachs -- Analyst
Nick Lai -- JP Morgan -- Analyst
Monica Chen -- Credit Suisse -- Analyst
