DSC Holdings Ltd. reported a 61.5% year-over-year reduction in adjusted net loss for the second quarter of 2026, highlighting progress in its AI-driven platform for China’s used car dealers. The company, which listed on Nasdaq in June, posted an adjusted net loss of RMB 7.2 million, down from RMB 19.2 million in the same period a year earlier. Revenue grew 3.7% year-over-year and 14% sequentially, reaching RMB 140 million.
The GAAP net loss widened to RMB 240.5 million from RMB 25 million in Q2 2025, primarily due to approximately RMB 227.8 million in share-based compensation and related expenses tied to its IPO. Excluding these costs, operating expenses declined across key categories: general and administrative expenses fell 14%, sales and marketing expenses dropped 14%, and research and development spending decreased 29%.
AI adoption accelerated during the quarter, with the company’s platform-based assistants deployed at over 4,100 dealerships by the end of June. Daily token consumption for AI services surged from zero to more than 150 million, while the number of paying digital employees—including social media specialists and management assistants—reached 3,510 by the same date. Revenue from monetized dealerships, now exceeding 9,000, contributed to the platform’s growing user base of nearly 200,000 monthly active users.
Industry dynamics in China’s used car market remained challenging. Mainstream model prices fell 10%–15% within two months amid aggressive new car pricing, while an estimated 70% of used car dealers operated at a loss in the first half of the year. Despite this, national used car transaction volume rose 1.5% year-over-year to 9.72 million units in H1 2026, marking the first time used car sales surpassed new car retail volumes in June. Used car exports increased 61% year-over-year during the period.
DSC Holdings maintains a dominant position in the sector, with market share above 90% for several years, according to China Insights Consultancy. The platform operates over 4,000 inspectors across 250 cities and collaborates with 40,000 car carriers in more than 2,600 counties and cities, supported by a network of over 100 self-operated delivery warehouses.
Shares of DSC Holdings fell 1.88% in pre-market trading to $8.36 following the results, having gained 15.4% over the prior week. The stock has traded between $4.52 and $16.35 over the past 52 weeks. InvestingPro’s analyst target stands at $12.09, implying 42% upside potential from the current level.
