Ladies and gentlemen, thank you for standing by, and welcome to Uxin's Earnings Conference Call for the Quarter Ended September 30th, 2021 . At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a Q&A session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the call over to your host for today's conference call, Ms. Joyce Tang, IR Director of the company. Please go ahead, ma'am.
Thank you, operator. Hello, everyone. Welcome to Uxin's Earnings Conference Call for the Quarter Ending September 30th, 2021. On the call today are DK, Founder and CEO of Uxin, and John Lin, CFO of Uxin. DK will review business operations and company highlights, followed by John, who will discuss financials and guidance. They will both be available to answer your questions during the Q&A session that follows. Before we start, I would like to remind you that this call may contain forward-looking statements made under the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management's current knowledge and assumptions about future events. They involve known or unknown risks and uncertainties, which could cause actual results to differ materially from those in the forward-looking statements.
Uxin does not undertake any obligation to update any forward-looking statements except as required under applicable law. For more information about the potential risks and uncertainties, please refer to our filings with the SEC. With that, I will now turn the call over to our CEO, DK. DK, please go ahead.
Hello, everyone. Thank you for joining our earnings conference call today. To better communicate with both domestic and international investors, my prepared remarks today will still be in both English and Chinese. In the second quarter of fiscal year 2022, which ended on September 30th, we maintained solid growth in terms of both sales volume and revenue. Total transaction volume in the quarter was 3,648 units, which is an increase of 21% compared with last quarter.
The retail transaction volume was 1,027 units, an increase of 51% compared with last quarter. In terms of our reputation with customers, our persistent efforts to improve vehicle quality and service experience have generated good results. In the quarter, our Net Promoter Score, or NPS, increased for the fourth consecutive quarter to 56, a new record high versus 42 in the previous quarter. Going forward, we will continue to optimize and upgrade the quality of our products and services in order to provide best-in-class, one-stop shop purchasing experience to our customers and drive high-quality sales growth through positive word of mouth. We completed an important milestone in our business development in this November. With our Xi'an IRC successfully launched and running, we launched our second IRC in Hefei, Anhui Province.
East China holds the largest amount of used car transactions, and Anhui Province is one of the fastest growing areas for car consumption in the region. The rollout of our second IRC in Hefei, this represents a key strategic step in our business expansion. Specifically, phase one of the Hefei IRC covers a total area of about 100,000 sq m, with a warehousing capacity of up to 2,000 vehicles. Currently, the combined number of vehicles available for sale in Hefei is roughly 1,500, covering 52 brands in a large collection of economic and luxury models. As far as we know, this is the largest self-owned used car IRC in China. Compared to Xi'an IRC, the Hefei IRC demonstrates our improvement in sales value, quality, operational management, and service systems.
Since we began operating in mid-November, the new Hefei IRC has been well received among customers for its vehicle quality and services. The vehicle sales volume has been growing steadily week over week. When the construction is fully completed, the Hefei IRC will be one of the most advanced used car production centers that features streamlined operations, automation, digitalization and business intelligence. It will be a one-stop used car purchase destination, offering vehicle acquisition, inspection, refurbishment, demonstration sales and after sales service.
[Non-English content]
In terms of vehicle sourcing, we have expanded our pool of vehicles to include leading domestic and foreign electric vehicle brands. We are building our EV business operations by establishing sourcing channels, inspection standards and refurbishment process especially designed for EVs. This will enable us to provide high quality and reliable used EVs to our customers. We believe this will provide new growth drivers for Uxin in the coming era of electric vehicles. Meanwhile, we also hope that we can leverage our extensive inspection and reconditioning capabilities to drive the healthy development of the used EV market in China.
[Non-English content]
In terms of vehicle reconditioning capabilities, we continue to optimize and streamline our work process to improve both quality and efficiency. Based on our market research, majority of used car dealers in China only offer very limited or the most basic level of reconditioning service before selling the vehicles to customers. At Uxin, we have accumulated an integrated database of reconditioning standards and process through years of operations. This, we can utilize our scale advantage in procurement to optimize reconditioning costs and can offer our customers high quality vehicles at attractive price. Meanwhile, we actively invest in reconditioning equipment and technology to further boost our efficiency. In Hefei IRC, our average time and cost required to reconditioning a car decreased more than 50% compared to the time when the Xi'an IRC was just launched.
We will continue to focus on improving every business process to strike a good balance among quality, cost and efficiency.
[Non-English content]
Recently, we have closed part of the second tranche of the financing transaction ahead of the original schedule. Following our development plan, we will expand vehicle acquisition, enhance refurbishment capabilities and optimize supply chain. Investment in these key areas will enable us to increase available for sale inventory and further improve the car purchasing experience of our customers.
[Non-English content]
Finally, I would like to once again thank our customers and shareholders for their continuous support and our team for their hard work and dedication. This will be a long and fruitful journey, and we will have a long way to go. The smooth operations of the Xi'an IRC over the past six months and the newly launched Hefei IRC has given us great confidence in our business. Going forward, we will remain committed to our current development direction and contribute to the long-term and healthy development of the Chinese used car industry. We believe all our efforts and investments today will pay off in the future. With that, I'd like to turn the call over to our CFO, John, to walk you through the financial results. John, please go ahead.
Okay. Thanks, DK. Hello, everyone. Let me walk you through our financial performance in the quarter ended September 30th, 2021. The business was growing steadily in this quarter. We started to increase our available for sales inventory in Xi'an IRC since we received the first tranche of the new investment in early July, and it reached the full capacity at around 600 cars in mid-August. The improved inventory level enabled us to ramp up our retail sales volume. The retail volume increased 51% quarter-to-quarter, and overall sales volume increased 21% quarter-to-quarter. As a result, our revenues increased by 24.5% compared to last quarter. Meanwhile, we spent tremendous amount of efforts to minimize our cost and expense structure, build a lean organization and drive efficient operational processes.
The impact has been reflected in our continuous improving operational outcomes. One thing I would like to comment specifically is the fair value adjustment impact of the issuance of senior convertible preferred stock as a result of our financing deal with NIO Capital and Joy Capital. Because the stock price rose significantly since the company announced entering into a binding term sheet with these two investors on April 1st of 2021 , this led to a paper loss of RMB 1,654.9 million or $256.8 million, which impact the net profit. This loss is purely driven by accounting treatment. It is a non-cash item and has no impact on our cash flow, and it is not related to our business operation.
With respect to the financing transaction with NIO Capital and Joy Capital that we announced earlier, as part of the second closing of $50 million, we have received $27.5 million cash ahead of schedule. We expect to receive the remaining $22.5 million in the coming months as planned. As DK said earlier, we will leverage the capital to continue investing in key business initiatives, including increasing car inventory, optimizing reconditioning technologies and our supply chain to drive further high-quality business growth. As we announced earlier, Uxin has been included in MSCI Global Small Cap Index, China Index, effective November 30th, 2021. This is the first time that Uxin has joined the MSCI index. We see this as a recognition of Uxin's business performance and China's used car industry credentials.
The used vehicle industry in China has huge opportunities, and we believe Uxin is well-positioned to lead the dynamic growth of this promising market. Full details of the quarter ended September 30th, 2021 are available in our earnings release. Now I will run through some key numbers. All numbers are in RMB unless otherwise stated. Transaction volume was 3,648 units for the three months ended September 30 th, 2021, compared with 3,011 units last quarter and the 2,653 units in the same period of last year.
Total revenue was RMB 345.9 million for the three months ended September 30th, 2021, compared with RMB 277.8 million last quarter and RMB 76.4 million in the same period of last year. Gross margin was 4.2% for the three months ended September 30th, 2021, compared with 4% the last quarter and a negative 22.4% in the same period of last year. The loss from continuing operation was RMB 45.9 million for the three months ended September 30th, 2021, compared with RMB 50.7 million last quarter and RMB 162.6 million in the same period of last year.
The non-GAAP adjusted loss from continuing operations was RMB 43.2 million for three months this quarter, compared with RMB 44.6 million last quarter and RMB 178.3 million in the same period of last year. The fair value impact of the issuance of the senior convertible preferred shares resulted in a loss of RMB 1,654.9 million for three months ended September 30th, 2021. As discussed earlier, the impact was mainly due to the significant rise in the stock price since the company announced a press release about entering into the deal. The fair value impact was a non-cash charge.
The net loss from continuing operations was RMB 1,714.6 million for the months ended September 30th, 2021, compared with RMB 258.9 million in the same period last year. If removing the fair value adjustment impact, the non-GAAP adjusted net loss from continuing operations was RMB 56.9 million for the three months ended September 30th, 2021, compared with RMB 274.6 million in the same period last year. About our cash position. As of September 30th, 2021, we had cash and cash equivalents of RMB 230.6 million. Moving on to our guidance.
We expect our total revenues to be in the range of RMB 480 million-RMB 500 million, for the three months ending December 31st of 2021. This forecast reflects our current and preliminary views on the market and operational conditions, which are subject to changes. This concludes our prepared remarks. Thanks. Operator, we are ready to receive the questions. Thank you.
Certainly, sir. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, you can press the pound or hash key. Once again, it is star one on your telephone keypad to ask a question. Please note there might be a slight pause as we collate the questions. We have the first question. This is coming from the line of Fei Dai from TF Securities. Please go ahead.
DK，[Non-English content] Repeat my question in English.
Judging from the financial situation of the last quarter, we noticed that the wholesale vehicle business has contributed more revenue to the overall performance of the company. Judging from this quarter, this proportion is being further optimized. How does the company understand the development of the business? What will be the impact on the retail vehicle business in the future? Thank you.
[Non-English content]
In Uxin, currently the sales breakdown between our retail and wholesale business is one to two. Given our brand impact and market reputation, many customers come to us to sell their used vehicles. However, currently, we don't sell all the used cars sourcing from individual car owners through our retail business for the few reasons. First, we have to consider the space capacity. Meanwhile, we would like to control the level of cash tied up in our inventory. Also, it takes time to increase our sales capacity. Therefore, for the cars that are not up to our retail standards and those that stay beyond our inventory capacity, we will sell through our wholesale business and accelerate our inventory turnover rate.
[Non-English content]
In the long run, this percentage breakdown will gradually change. As our retail inventory level gradually increase and the Hefei and Xi'an IRC have both been in operation, our retail sales will for sure gradually climb. We expect the sales breakdown between retail and wholesale to be two to one annually, which means retail sales will be twice as much as wholesale sales.
[Non-English content]
[Non-English content]
Thank you. Shall we go to the next question?
Certainly. We have the next question. This is coming from the line of Jay Jin from China Securities. Please go ahead.
[Non-English content]
Yeah. Sorry, could you please repeat your question in English? No?
[Foreign language].
I have two questions, first one is about the net loss. Could you explain the impact of the fair value change for the net loss? The second question is about cash flow. What's the expectation of the following quarters cash flow? Okay.
[Non-English content]
Okay.
Okay.
This is a paper loss related to our financing transaction, which was announced earlier this year. It's a purely accounting treatment under the U.S. GAAP regulation due to the change in stock price. After the announcement of the deal with NIO Capital and Joy Capital, the rise of Uxin stock resulted in the loss on our income statements. However, this is a non-cash item which will not have any impact on the company's cash flow status, and it's not related to our business development.
[Non-English content]
In terms of cash flow condition, after receiving the funding from investors, we have ample cash on balance sheet. We received the first tranche of $100 million in July, and we are closing the second tranche of $50 million, which is also ahead of the original schedule. This reflects the investors' full recognition and confidence of our operation and business development. Meanwhile, the follow-on warrants, a part of the transaction also progress well as we are working closely with investors. Such funding will support our future business development. As of today, our business is doing well and keeps expanding with the continuous growth of our vehicle inventory. All in all speaking, as we have made sound plan of the usage of our cash, I believe our cash balance is sufficient.
[Non-English content]
[Non-English content]
Operator, please go ahead to next question.
Certainly, we have the next question. This is coming from the line of Pinky Wu from CITIC Securities. Please go ahead.
[Non-English content] Let me translate to English. My question is about the electric vehicle used cars, and on one hand it goes growth very fast, and however there's some other problems, for example, the discount or how to estimate its values, and I would like to hear from you about what our plans and views about the second hand electric vehicles. Thank you.
[Non-English content]
We have launched our used EV business. EV is a major trend in auto industry. Although the pool of existing EVs is still in a relatively small amount, but there is a clear sign that the demand from owners of EV cars to switch or upgrade their vehicles is increasing, and the used electric vehicles are popular and sellable in the market. The potential market size for used electric vehicle will be as large as conventional gas-powered used cars. Although there are some differences between these categories in terms of inspection, reconditioning, pricing and sales.
[Non-English content]
We have already launched our used electric vehicle business. Currently, we offer used EVs of multiple well-known EV brands. Meanwhile, we continue to build up our electric vehicle service systems and refine our capabilities on a number of fronts, including inspection, pricing and after sales service. We are also exploring the best way to sell used electric vehicles. We hope to contribute to the healthy development of used electric vehicle markets in China by leveraging our extensive know-how and capabilities in used vehicle markets built up through years of operations.
[Non-English content]
Thanks, operator .
Thank you. We have no further questions at this moment. I would like to hand the conference back to our host for any ending remarks. Please take over.
Thank you operator, thank you for all investors joining us today, we look forward to see you next time. Goodbye.
Goodbye.
Goodbye. Thanks.
Thank you. That concludes our conference call for today. Thank you all for your participation. You may disconnect now.