Overview
Upon the announcement of Uxin's (UXIN) divestment of its loan-facilitation business post the Q2 earnings call, its shares were down by over ~25%. The shares later recovered to $2.56 per share in October, though they are still down by ~8.2% compared to the pre-announcement price. Despite the negative sentiment, we think that there are some positives to the divestment move. Given the challenging macro outlook of the China auto industry in FY 2019, Uxin’s divestment of its loan facilitation business will significantly reduce the company’s credit risk exposure and allow the company