A：The business highlights for the quarter include strong growth momentum despite the seasonal impact of the Chinese New Year holiday on used car sales, with retail transaction volume reaching a high and sustaining rapid sales growth. Inventory turnover was maintained at approximately 30 days, and gross margin remained stable at 7.7%. The net promoter score improved to 68 and continued to rank among the highest in the industry.

A：Recent developments indicate a slowdown in China's auto market with cumulative new vehicle sales declining by 20% year over year during the first five months. This has led to higher requirements for used car retailers in terms of pricing, inventory turnover, capital efficiency, and risk management.

A：Despite the decline in new vehicle sales, China's used car market achieved a modest 2% increase in transaction volume during the first five months of 2026, significantly outperforming the new car market.

A：Looking at a longer-term perspective, the industry adjustments are expected to reshape the competitive landscape. With the current volatility easing, the large vehicle ownership base in China, low level of used car transactions relative to vehicle ownership compared to developed markets, and growing demand for affordable, high-quality vehicles will continue to support the long-term growth of the used car industry.

A：The company's plans include the operation of the Ti Super Store in North China as the first project, strategic partnerships with municipal governments to invest in and operate used car superstores, and an expanding nationwide network which is expected to further strengthen service coverage, regional synergy, and brand influence.

A：The outlook for the second quarter is that retail transaction volume is expected to exceed 120,000 units, continuing the strong growth trajectory. The company reaffirms its target of achieving more than 100% year-over-year growth in retail transaction volume for the full year of 2026.

A：Due to the ongoing industry adjustments and the addition of new superstores, retail transaction volume reached 119% year over year. Sales volume at existing superstores ramped up, and new superstores gradually commenced operations. The significant increase in retail transaction volume drove the year-over-year growth in retail revenue. However, adjusted EBITDA loss increased by roughly 25 million RMB because the newly opened superstores were in the early stages of ramping up operations and the company made upfront investments in staffing to support future expansion plans.

A：New car prices have generally stabilized, which, given the company's fast inventory turnover, suggests that the decline in vehicle prices is stabilizing and thus the growth margin remains under pressure.

A：The performance of newly opened superstores has been accelerating, with revenue growth and profitability increasing. Compared to the first superstore, the performance is notably better as evidenced by the web of revenue growth and profitability at the new stores, particularly in cities like Web Hu and Mo.

A：Several factors have contributed to the improved performance and faster ramp-up period for new stores, including a more mature procurement, pricing, and inventory management system; standardized sales and operations teams; brand recognition aiding in customer attraction; improved site selection and project evaluation capabilities; and a favorable real estate market environment.

A：The company plans to open 4 to 6 new super stores in 2026 and is in discussions with local governments for future cooperation opportunities. Market conditions have shown volatility, but the company will not change its long-term strategy of nationwide expansion due to short-term market volatility. However, it will remain flexible and disciplined in execution and may adopt a more conservative approach to the pace of new store openings, inventory ramp-up, and operating expenses, prioritizing cash efficiency and lower-level operating quality.

A：Yes, there is a similar trend in used car sales performance. Although new car sales have declined by 7.5%, used car sales have declined much less, resulting in a higher retail penetration of new vehicles. This is primarily due to the ownership structure of vehicles in China, where new cars are less prevalent. However, used I vehicles are facing pricing pressure, and the used car market is price-driven. Residual values have fallen, making used cars more competitive in terms of value for money, and are expected to drive an increase in both new vehicle trade-in and used car replacement purchases as the pricing adjustment is completed.