Original title: Youxin has lost money for 8 consecutive quarters and is nearing the delisting line. Is the used car e-commerce platform a good business? Source: BT Finance

Is the used car e-commerce platform really a good business? In fact, Youxin, founded in 2011, has always been burning money and losing money.

According to the data, from 2016 to 2019, Youxin's net losses were 1.39 billion yuan, 2.74 billion yuan, 1.53 billion yuan and 1.99 billion yuan respectively, with a net loss of 2.29 billion yuan in the first two fiscal quarters of this year.

Last week, Youxin released its unaudited financial results report for the second quarter of the 2021 fiscal year ending September 30, 2020. According to financial data, the company's total revenue for the second quarter was 76.4 million yuan, down 80.76% year on year from 396.6 million yuan in the same period in 2019. Gross margin fell to 22.4% from 56.9% in the same period last year, and net loss was 258.9 million yuan, up 28.22% year on year.

After the financial report was released, as of the closing of US stocks on December 17 EST, Youxin plummeted 20.71% to close at $1.11 to close at $1.11DelistingOne step closer to the edge.

The borderline of delisting is not the only problem

It is worth noting that in the nine quarters since it landed on the NASDAQ in June 2018, Youxin has been in a state of loss for 8 consecutive quarters, with a total loss of over 3.7 billion yuan.

Revenue plummeted, losses widened further, and gross margin plummeted. In addition to delisting concerns, for the used car e-commerce industry, which has burned ten years of money and still can't see an end, Youxin's financial performance will make it difficult for them to get financing from the capital market again.

Since 2020, Youxin has frequently been mired in negative news such as routine loans, salary cuts and layoffs, loss of executives, and corporate restrictions on high spending. Just the day before the release of the second-quarter earnings report, the company's legal representative and CFO Zeng was actually issued a consumption restriction order by the People's Court of Pudong New Area of Shanghai. An enterprise investigation revealed that Zeng Zhen was also issued a consumption restriction order by the People's Court of Chaoyang District of Beijing in May of this year.

The time left for Youxin is clearly running out. Financial reports show that as of September 30, 2020, what is owned by YouxinCash and cash equivalentsThere is only $219 million left.

De-financialize open sources and save money

Profits have always weighed on Youxin used cars. Financial data shows that Youxin has been making every effort to reduce costs in the latest quarter. In particular, in terms of marketing, it has also made great efforts to cut expenses.

Used car e-commerce platforms have always spent a lot of money on advertising. Youxin's marketing expenses once reached 694 million yuan in Q4 of 2017. As of September 30, 2020, Youxin invested only 75.53 million yuan in marketing in the second fiscal quarter. Compared with 290 million yuan in the same period last year, a sharp decrease of 74% year on year, R&D expenses decreased by 45.01% year on year, and administrative expenses decreased by 18.1% year on year.

It is worth noting that this financial report is Youxin's first financial report after fully transforming the online car purchase model. From it, you can also peek into the company's exploration of opening up resources and saving money after de-financialization.

Dai Kun, founder, chairman and CEO of Youxin, announced in September that the company had completely completed de-financialization, changed from being driven by strong finance to being driven by products and services, no longer undertaking any finance-related guarantee responsibilities or credit risks, and completely transitioned to a purely online car purchase model.

Judging from the revenue composition, the C-facing 2C business has now become Youxin's core business, contributing more than 80% of total business revenue.

Specifically, commission revenue was 13.2 million yuan, 176 million yuan for the same period last year, revenue from value-added services was 12 million yuan, and 158 million yuan for the same period last year, a sharp decline over the previous year, thus dragging down overall revenue.

In fact, when the 2C business becomes the main source of revenue for Youxin, it also means that if this business does not withstand risks, it will drag down the company as a whole.

According to data from the Ministry of Commerce, due to the epidemic, the cumulative volume of used car transactions nationwide from January to November fell 4.6% year-on-year to 126.34 million vehicles. In a situation where the overall car market is not optimistic, the sharp decline in the performance of Youxin's C-side 2C business, especially the national purchasing business, compared to the same period last year is also justifiable.

However, Youxin took advantage of this opportunity to completely change the original online and offline sales model to a complete online car purchase model. As a result, Youxin's pure online transaction volume and revenue increased significantly in the second quarter compared to the first quarter. In particular, the transaction volume rose 55.9% month-on-month from the previous quarter to 2,653 units, which was higher than the revenue guideline.

Although Youxin is the first industry player to propose nationwide purchases, the threshold for this business is currently not high, and other leading companies in the industry, such as Guazi and Big Search Auto, have also begun to switch to the online nationwide purchasing business. In comparison, Youxin does not currently have an advantage over competitors in terms of volume and cash flow.

In September of this year, Dai Kun, founder of Youxin, also proposed to build a self-built used car inventory, establish a “national direct purchase+self-built logistics” system, and directly enter used car sales using the JD model. At the time, some company insiders said that building its own used car inventory can directly control quality on the one hand and ensure more car sources on the other.

The strategy achieved sales results of 36.1 million yuan in September, compared to 0 in the same period last year. However, YouXin did not disclose the cost of this business and whether it is profitable.

But an even more urgent problem is that the inventory of self-built used cars is heavyassetsThe project requires huge sums of money to set up a team, purchase car supplies, rent and sales space, etc., but successive losses have made Youxin's capital extremely tight. Currently, it has only 219 million yuan in cash on its account. Without new financing, the company's cash flow will be in a hurry for some time to come.