Q3 2020 TuanChe Ltd Earnings Call
Good morning, and good evening, ladies and gentlemen, thank you for standing by welcome the <unk> Limited third quarter 2020 earnings Conference call.
This time all participants are in a listen only mode. After prepared remarks by the management team there will be a question and answer session. Today's conference call is being recorded I would now like to turn the call over to your host today Ms., Cynthia and IR director of the company. Please go ahead ma'am.
Hello, everyone and welcome to control so called total gets clunky I know 'cause cool well the lease and then once those are the other day and it's now available on our website at <unk> on this was that was it.
We continue please note that the discussion today will contain forward looking statements made under the safe Harbor provision of the U.S. because its a cookie litigation Reform Act of NUCYNTA deployed for.
Okay statements involve inherent uncertainties as such our future results may be materially different from the views expressed a day for.
The information regarding that's another reason that said it it feels good it you know a new release and other decisions. They know what the FCC punctual does not assume any obligation to day to day and forward looking statements, except as required by law. The day, you'll hear from Mr. wait one the company as Chief Executive Officer will provide an overview of our growth strategies.
Business development will be followed by Mr. Tracy you Bobby its company Deputy Chief Financial Officer, who will provide additional details on the company's financial results for this got the financial outlook. Following managements prepared remarks, we'll open up for cold [noise].
That's that I would now like to turn the call over to our CEO Mr. <unk>. Please go ahead Sir.
Hello, and thanks, everyone for joining us today.
For the quarter.
<unk> or non core.
Well there are to use the for at par for quarter bizarre.
Strayed from all of those are all momentum.
Building revenue other reducing.
Reducing net losses.
The way for all throughout the year market conditions for all of all day Bye.
Probably the Notching ONEOK, Inc. Thank you.
Our net revenue per well longer the milling I'd be oh.
For the 6.2% Laura.
<unk> <unk> compared with other than corporate off the year, we exceeded the top end of our guidance.
Ranch by 5.3%.
In total the.
82.7 per cent over the second for for this.
This walk from.
Remember in it for them by a real.
Cabrera, Inc, offline marketing services.
Gradual assumption for all will apply for auto show.
The Guy in May is making steady progress.
In addition to that.
Great show quarter over quarter for recovery off revenue for the <unk>.
Back to the old our rigorous cost containment measures.
Mitigating our medical.
Attributable to the company shareholder.
For the award for two mailing I'd be.
Compared with 46.8, moving I'd be a seven quarter love for you.
Let's take a closer look how did they go for for.
For most all of our business segments, while also providing additional detail on our strategic.
Strategic and operational.
Yes.
For Oh offline Mcneil from it is.
We have to talk for all now we're starting the quarter Ah Onez core EPS.
For a couple either non team and then in grizzly aren't real controlling China.
We started to progress from there.
I will outline investing late in May.
While keeping inc.
Order for our local and national.
The other free.
Got it and I got.
Got it okay.
<unk>, Oh, COVID-19 prevention and the control.
<unk> for the longer than the 52 other shows.
Inc, Wanda and seven.
Yes. It is.
For the quarter.
EBITDA was 200 and a total other shows you walk through the other 50 cities. It was seven pure Oh, so 19.
But improving from six day, while other shows across 56 it is the second quarter.
As I was dark wood.
Delivered.
It did 2.6 million I'd be Inc. Net revenue.
And the regular for all other shows.
Uh huh.
So it is reported to adjusted year over year, but.
<unk>, increasing 100 on the 47.6% quarter over quarter.
[noise], although quarterly EPS number off Spanish French or promotion events.
Chris the by.
Six distinct from the 7% total six differ from longer that non seem to England. So the quarter Lucky.
Well its revenue declined.
Six to 7.1 percentage you everybody here.
As we resumed our operations autos.
Total sales in China or from the Boston.
For bonded he was total quarter Chinas auto retail sales increased 7.9% year over year.
For for fourth quarter off.
Yeah from a year over year sales go into your.
It was up for all.
Non <unk> recovery.
For start up.
Consumer confidence.
Let's go back to.
Sort of course, or what followed by continued strength in October and November was <unk> percent total retail sales growth in both mall.
Give me off for the confidence in our recovery of momentum in the fourth quarter on other.
Yeah.
Strategically for.
For offline marketing services, we will continue to focus on generating higher ROI.
But also for the leverage.
Leveraging our.
Our deep insights in automotive was transactions and have developed a.
Customized <unk> and Oh, you did a special promotion promotional events for each auto dealer and Oh, yes.
Next.
Let me move on to our growth naturally.
Naturally to initiate Hill, Inc worked with Alicia and Oh, My my Conservative.
Our revenue from Florida dealership.
Oh, My my Conservative Ann Arbor.
Reached a.
15 point for milling I'm be increasing well I'm going and 65.9% year over year. This was primarily driven by success for online promotion your bad debt.
For our to do though quarter.
Hello, Joe teach.
Collaboration.
Despite the wheel John that we bank.
The revenue generated from our acquisition of long yet International limited in January for <unk>.
If this is a silver lining to the.
Leverage it.
<unk> buys up and that mix it has been a phenomenal growth Inc.
Did for economic.
You can also.
All lines relative.
Including streaming events are benefiting from this trend.
I'd be glad to we have seen from 10 deposit here.
Yeah, No contribution from this segment.
A key factor in this day in your success.
Being the.
Collaboratively a collaborative partnerships.
It was devilish to.
With two more on the bike do your job the.
Although segment, although the Gen two portal.
In novel cooperation with bad to your job well expanded itself net the walk to over 80 is that is of.
Of course, China.
Well, we have a self operation.
And moving to improve so our sales eventually and a conversion rates for Oems and the dealer.
We have also made up for.
<unk> for the program.
Streaming promotional events as we look to accelerate as a formal digitalization all for the multilevel marketing with online retail platform partnerships such as the wall, we have with Pmall.
Through this engagement we.
No the only because.
Integral part of all that.
They call system.
Contribute value through strong OEM on the dealer relationships. Other we also again significant exposure for our own events. So we are exposed to risk.
As a rich Adler Afghan that or the other will use our debt and the insight.
In further developing our digital offerings within the area automotive <unk> marketing.
Yeah for your other define.
The bonds.
As a way to.
For the increasing opportunities that play to I was trying to strength.
Presence.
Oh strength in March channel or the automotive transaction facility facilitation.
Corporate <unk> Belo profit position is.
15 tools.
This is assisting automotive Oh, yes on the dealer Inc.
Optimizing.
[noise] their marketing efforts.
You also acquisition strategies and a conversion rate.
In order to create a shopping on the buying experience for customer studies.
Studies from smoothed natural Anda after live.
This is a marked multitude of dynamic for this.
No rapidly for shaping that industry well cost and.
That's joining I'll join all of or Europe.
Oh on debt.
As for kids.
And connecting all non Wal Mart <unk>.
Credit is well positioned to deliver for tenda shareholder value in the long for.
No I'm not totally core or what we're changing our debt Gill simple for how close are look at all financial performance. The total corridor.
Thank you Mr went Oh Hello, everyone. Thank you for joining us.
Oh CEO Mr. went just mentioned against the backdrop of for recovering consumer market. We are pleased to <unk>. We're pleased with the recovery in our topline revenue. This is the second quarter.
On the <unk> well duration in the year over year decrease which was supported by growing offline marketing activities and the <unk> robust performance up online segments, maintaining the screen in the price quota net revenues from but for dealership online marketing services and other schools.
160, 60.9 cents per year over year. Furthermore, we continue to execute rigorous cost and expense control measures [noise].
Doing so [noise].
Oh shoot grid is to an increased gross margin for 72.1% from the reduction of total operating expenses by 21.4% year over year [noise].
Leading to a bottom line improvement.
As we look ahead to the end of the year. We're building on this performance momentum and further strengthening the service capabilities. That's a that's the foundation of our unique omni channel profit.
We have a solid foundation to capture long term prospects in the changing industry and provide real benefits to all in all a body would change.
No I'd like to walk through our third quarter 2020 financial results.
Before I start. Please note that all numbers stated in my following remarks right in RMB terms.
Unless otherwise noted.
Our total revenues in the third quarter were 100 million RMB decreasing 26.2% from 135.6 million non be in the same period last year.
This was a result of the continued adverse impact of the Kobin non simple dynamic the decrease was partially offset by the old year over year revenue growth of virtual dealerships online marketing services and others compared with the second quarter of this year total revenues increased by 82.7 per cent.
I saw offline services recovered and our online services maintained solid performance.
As for progressively resumed Oh for Oh, two shows our offline marketing services revenues generated from these other shows decreased by 33.2% to 82.6 million non be from 123.6 million non beat in the third quarter of 2019 the.
The offline marketing services revenues generated from other shows increased by 147.6 minutes per cent over the second quarter of 2020, or so just 3.4 million RMB.
Revenue was generated from special promotions in the third quarter for new trends. He was 2.0 million RMB compared with 6.0 million non being the so called top 29 scene on 1.5 million non b.
In the second quarter for 10 dependency.
Revenues from our but for dealership online marketing services and others increased by 160.9% to 15.4 million RMB during the quarter compared with 5.9 million non be necessary for so 29 C.
Primarily due to our continuous expansion or for online marketing services, including live streaming promotion events and collaboration with Baidu job and we bank debt.
The year over year growth was also helped by revenue generated from a completed acquisition of flow your instinct for limited.
In January Twentytwenty.
Our gross profit in the third quarter decreased by 22.6% to 72.1 million RMB from 93.2 million RMB in the third quarter of 2019, but increased by 6% to 67.5% quarter over quarter.
Oh.
Our gross margin increased to 72.1 per cent from 68.7% in sales in the same period last year, primarily due to the change in the revenue mix.
In the <unk> quota setting a marketing expenses decreased by 15.8 per cent to.
Two non to 1.6 million RMB from 100, an 8.8 million non beat in the third quarter of 2019 increased by 88.6 per cent compared with the second quarter from 20 to 20.
I saw operations continue to recover the year over year decrease was primarily due to the decrease in promotional expenses.
Income on stock compensation expenses as a result of cost control measures taken by the company and a reduced number of <unk> flow humans.
Generate general and administrative expenses for 15.9 million RMB significantly lower compared with 25.0 million RMBS assets. So of course from 29 feet and 28 million RMB <unk> expenses in the second quarter from 10 dependency primarily due to the decrease in stock compensation.
<unk> expenses research and development expenses.
Decreased by 7.1 million non be from 12.2 million non be so.
So quotes from 29 feet and 8.3 million.
From being the second quarter of Twentytwenty, primarily due to the decrease in stock compensation expenses.
Our loss from continuing operations was for 42.6 million RMB in flow quarter lower compared with.
For 52.8 million non being the same period last year and slightly higher compared with.
41.8 million non beat in the second quarter from 20 tendency.
Good day.
[noise], excluding the effect of share based compensation expenses adjusted net loss attributable to the company. Its shareholders was 38.3 million RMB enough for the quarter of 2020, compared with 36.9 million non beat in the same period last year I.
Adjusted basic and diluted net loss per <unk> per ordinary share for both 0.13 and be in the third quarter compared with <unk> 0.13, RMB in the same period last year I.
Adjusted EBITDA was a loss of 37 million RMB.
In the third quarter compared with a loss of 37.9 million non be in the same period last year.
Now turning to our balance sheet at the end of third quarter Twentytwenty, we had cash and cash equivalents time deposits and short term investments of 183.0 million RMB.
For the fourth quarter of 2020, we expect our net revenues to be between approximately 145 million RMB on 155 million RMB representation for year.
Year over year approximate decrease of 20.7 per cent should 15.2%. This primarily this is primarily attributable to the estimated declining number of offline events that is expected to be held in the fourth quarter of 2022 to the coffee nine seemed pandemic.
This forecast reflects the company is current and preliminary views on the market and operational conditions as well as the influence of the Cobi non seem pandemic, which are all subject to change.
This concludes our prepared remarks today, operator, we're now ready to take questions. Thank you.
Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your pet scans done for use in speakerphone. Please pick up your handset before pressing need to withdraw your question. Please press Star then too.
For the benefit of all participants on today's call. If you wish to ask your question to management and shiny leased immediately repeat your question in English.
We will pause momentarily to assemble our Uh huh.
The first question today.
Some Jacques banned Red with Maxim Group. Please go ahead.
Hi, Good evening to you guys and good morning from me. Thanks.
Thanks for taking my questions all other.
I'll start with the.
Just just hoping you could provide provide some perspective on what you're seeing in terms of consumer purchase appetite for big ticket items, such as new cars.
And then just an update on the overall financial health of your your very various auto partners and virtual dealers.
Easy home stores, just just a general update there from the financial health and appetite from consumers. Thank you for [noise].
Yeah Nice to meet you again, Jack and let me translate for crushers for how that went from done they go to eat or should it sounds like each other you taken when she Trojan Bakken Chunky Sensata you got so for the you guys. She told you well eat it and I thought I should for me answer though are the other ones you show on Monday, So for that I'm amazed at how we don't.
I would again total drunks or sometimes for them.
[noise] antibodies.
[noise].
[noise] gene, which other phone call not sure from like.
From a country, where she's for digital coupons and.
Annualizing 20 <unk> for now.
Incremental nephews wonderful you control so much other than that Oh, so for the seating should that negotiation.
We can identify oh without a strong recovery also oh consumers' confidence in the big ticket items comes from shows like autos apples and it's kinda reflected by from a market day term, we observe for I know.
Which unless you got from Duncan what other when he isn't really a simple <unk> Oh, no Josh salvage other Soviet Union for sure do though what do you need.
Free coming from.
The other market is we bought a recovering just at the same speed as a macro market and the consumer confidence is recovering at the same time.
Oh, Okay, just let them know where she growth.
Thank you for that she.
And this recovery is a continuous inc is a continuous trend except for and by the non stop.
Short term momentum.
HM.
For the hopeful that should flush it out for younger.
You know not a problem.
No it's actually Uh huh.
Either a gene shiels for that.
I want a major a major operation partners are the Oems and dealers and from our knowledge that situation is continually improving so I'll just a few quarters for the out 2020.
Great. Thanks, Thank you Cynthia for I translate that for me that I appreciate that and then that's good to hear and then certainly does seem to be the case.
And then I mean.
Moving my next question here is just sticking with kind of a cold good recovery subject on on the economy.
With with you know at least from they at least from the U.S. in Europe. You know two recent vaccines have been approved for coal but.
I'm just wondering what the impact is.
From vaccines in China, and how you know just kind of where where the economy is as a whole with with the covert vaccines are rolling out and how that's it like.
Hi, good business, our businesses close down anymore or is everything pretty much completely opened up again.
Okay. Let me try first because I was like are you using to make when the OTA will take Oh, he too hard to tell you I don't know that I wouldn't want what the take off and when they do other what does it took a shutout to hopefully for the yellow Oh subsurface yeah, sometimes from that do you think inventories in Canada.
Now the other haven't worked when he goes through is in the <unk> email from let's.
<unk> total going back since Ashford <unk>, particularly with some day, though [laughter].
Business study or do anything with or without the order momentum zone or whatever million zone from that as you are.
It took a done deal for Bausch, where they'll come are allowed to <unk>.
Due to net from the.
For the vaccine, which is I don't want them to people that they are typically a mill doesn't doesn't for him to watch other sure you lean on us [laughter] from the knee and go for you how have you know yes.
From that since it's just Oh amended and it's still a long runway for Oh, everybody together like things are in.
In the field trips a day.
It's the same in <unk> and Europe for.
Yeah, I know I from what I heard you know assessing other show that.
Oh from the time that the Chinese people are still a very cautious in a public areas and every but most of them still keep that must on Oh, Nick on Oh, Yeah, Yeah, a backlog for just hang out yourself at the washer pitch on day.
For the offline I'll fly consumption has been strongly with coverage and as we can see in most of the malls in Beijing.
Oh, that's for sure what other for about two months Oh, My Gosh rules from the jumping me actually we don't see the labeling or do they use from the jubilation wash up or out Russia. Other pandemic is he takes a few cities in.
In China out to other because you'll do the cost from that outbreak in your <unk> and Europe.
So we are still expecting that maybe they will in fact, my I pod impact our other shows in some southern cities.
Okay. Thank you that's helpful.
It does I mean, obviously, a as expected the vaccine and everything these are long term longer term initiatives still but at least it's the ball has been starting to roll here. So that's a good positive sign that the trended relative at least so I'm happy to hear that next question. Since there is only about two weeks remaining.
In the fourth quarter.
And ours. So are there any preliminary data points, maybe you can share in terms of how auto sales youre twon shape filled credit auto sales.
Facilitate or have trended on a weekly basis over the fourth quarter like would you expect the auto shows from Allpoint events to increase in Q4 from this third quarter.
[noise], let me try other selection for US passes I wouldn't do should signal to his interest legal hint that acreage.
Yeah sure take your share Joshi. She has got to see other should we just not entitled to know when all the other show they go to from a single please begin.
As a rule would do for other okay fluids I'm talking from two from <unk> He was huh.
There are other than just some people little or no I'm not sure she for the fish own habitual Saddam from dependent of accident, but honestly don't shop at all she other she is how sure Chinese into all from the assured I'm doing this and how about for she didn't know so you know that got you to so you do that you can garner.
Oh, you know shut off a woman day, each I'm wondering sort of how should really be don't see humans.
In the third quarter, although passenger car sales in China continued to recover trial started he may increased by seven from 8% year over year, and it's driven by effective control of Korean liking pandemic domestically and various government policies to promote other cells as a blocked economy recovery that Oh sorry.
Consumer confidence so robust, though quota that was followed by a continuous strength in October and November with a nice one three per than an 11.6% other passenger car sales flow respectively. So that give us further confidence in the sales I look in the fourth quarter and 2021.
Well I'm going to tell major other treasure to for the auto show Honey girls.
Net of what I'm pretty sure I'm actually not for sure.
Yeah.
For the each other from that well you know woman that equivalent for the from in a actually which anything.
I'm business has also gradually and slowly recover starting in the end of May I know I've got other shows, especially for motion and I'm moving on now mostly back to normal in most anyway upright, but they're still lingering uncertainties in terms of the pace of recovery and the recent cleat Nike in case.
I would put it in saying go down and and so trying in the third quarter and fourth quarter as well as potential plateau for a second wave of COVID-19 in the fourth well globally continue to give us uncertainty affecting the company operation and financial results. So as far as we are concerned we are still uncertain on the number.
Other shall we can hold right now.
[noise] Okay. Thank you.
Yes, yes, that's great.
And then I guess just one one more question for me and other update I kinda for an interesting that you guys provided in your numbers from a price, which was the number of cities that twangy assets sales operations and that number slightly decline Q over Q, yeah for it relative to the Q2 level.
It was a slight decline, but it sounds like this may have been somewhat intentional. So I'm wondering if that is correct and then are you exiting certain areas that maybe because they have less potential positive ROI.
Oh, let me translate the question for US how can we don't want nothing from sure Oh.
Sure Joe should be doing.
Okay.
Nigger, a woman's from the say from what are your for Gotta Treasury live up to any share. These are called ROI. The TCV usual discussion oh on the tissue that doescher bottle now on a doctor English for that reason each zone tertiary shelf interest in that had a net being the channel.
But you were down either quick kind of other put it on a well a couple other she she's probably you would add to that too that oh that that is a great question regarding to the cities. We operate that Oh, we have a as you can observe we have maintained those cities with higher I'll I am more high frequency in auto show and then for.
Those warm in most cities lift lower I'll eyes, and maybe even we even lead to other losses, well holding a long time out a other income auto shows when I turn to our new online auto shows an online special promotion events to cover those areas and that would be.
A more cost effective way.
Okay.
That does not okay interesting net yeah.
Yes, it does that net that sounds like a good that sounds like a good moving so I'm happy to hear that as well for like a strategic repositioning a bit see I guess your your revenue this quarter. Congrats on that you exceeded your guidance exceed my estimates that it's good to hear things are turning around and other.
I wish you the best Thank you.
Thank you very much Jacques.
Okay and bad debt.
[noise] I'm sorry, there are no further questions I'd like to talk to turn the call back over for management for closing remarks.
Okay. Thank you once again for joining US today. If you have other questions. Please feel free to contact <unk> Investor Relations to the company information provided on the last night or the P. R to.
Yes, good [laughter] Investor relations. Thank you.
This concludes the earnings conference call you May now disconnect. Your line. Thank you for attending.