Q4 2020 TuanChe Ltd Earnings Call

Good morning, and good evening. Ladies and gentlemen. Thank you for standing by for a limited fourth quarter earnings conference call at this time. All participants are in a listen-only mode after Management's prepared remarks. There will be a question-and-answer session. Today's conference call is being recorded. Now, I will turn the call over to your speaker hosted a Ms. Yunsung IR representative of the company, please go ahead ma'am.

Hello everyone and welcome to Twin Trees fourth quarter and four year twenty-twenty earnings conference call. We have released our earnings results earlier today and off now available on our website as well as on news wire Services, before we continue please note that the discussion today will contain forward-looking statements made under the Safe Harbor provision of the private Securities litigation Reform Act of 1995 or looking statements involved in here risks and uncertainties as such our future results may be materially different from the views expressed today off the information regarding this and other risks and uncertainties is included in our earnings release and our registration statement filed with birth.

BC Transit does not assume any obligation to update any forward-looking statements except as required by law today. You will hear from the same way one. The company's chief executive officer who will provide an overview of our growth strategies and Business Development who will be followed by must have changed she Ronnie the company's Deputy Chief Financial Officer who will provide additional details on the company's Financial results back and discuss the financial Outlook following Management's prepared remarks. We'll open up the call to questions with that said I would now like to turn the call over to our CEO mr. Way one, please go ahead sir. Hello, and thank you everyone for joining us today on our first quarter and the year twenty-twenty audience korte Hobe.

Can you the momentum in order as our net revenues of our MD 165.8 million?

Key to the top end of our guidance range by seven point and the group 65.7% versus the prior of the better-than-expected fourth-quarter results were primarily driven by our offline marketing services that benefited from New Jersey your passenger vehicle retail sales growth of 7.5% in China as well. As our mayor the steps to resume our offline Auto shows and accelerating girls of our online marketing services.

Additionally we implemented rigorous cost mayor's such as scaling back our Recruitment and employee size combining our top-line recovery and don't focus on cost reduction our net loss attributable to the company's shareholders wage $25 for the 4 million vmd in the first quarter, which narrowed 38.4% prefer the third quarter 2012 and 62.5% year-over-year. Let's take a closer look at the fourth quarter performance of our business segments am also providing additional details on our strategic and operational priorities.

First I will offline marketing Services as we have discussed on previous earnings calls our offline marketing event. Well heavily impacted by the COVID-19 pandemic especially in the first half of 2028. However, as academics can increase saved under control in China, we were able to progressively resume offline operations in late May of 2020 while keeping in accordance with our local and the national regulatory guidelines on COVID-19 2019 prevention and the control currently offline other shows and a special promotion events mostly back to normal in most cities. We operate

It should be noted horrible not with new reported cases in northern China in the first quarter of 2021. There are there are lingering uncertainty on what is to come and how it may impact our business recovery. This other shows returned off device your and isolated all the moves you purchase transactions into large-scale Collective purchase active activities.

Placing attracting a large number of consumers this events serve as integrated marketing solutions to our industry customers would include GM dealers and other automotive service providers. We never interactions between large numbers of participants on both sides of a potential automobile purchaser transaction creating many many environment with a short pure period of time that last creating value or for both sides.

Port Monday 20th

We organized 449 other shows in 172 cities compared with one thousand or fifty five thousand two hundred and thirty-three cities in 2019 in the fourth quarter. We organized 230 order shows in 136 compatible with 220 one of the shows in 149 cities in the same period of 2019, but improving 650th to Auto shows across one hundred zero seven cities in the store quarter as a result.

We delivered one hundred and twenty eight point eight million in revenues generated from other ships down.

And the ballpoint 4% year-over-year, but increasing 55.9% quarter-over-quarter. In addition. We have the name of the our special promotion Event Services to better support our industrial customers through a series of integrated integrated services, including event planning and execution marketing training and on-site coaching leveraging our deep inside in almost home Automotive transactions. We have also developed the customize and targeted special promotional events for each other dealer or and p.m.

Internet we have 200 a 07.

Special promotion event compared to 627 in 2019 and a quarter our events decreased.

And he won't pretend to 5551 from 269 in the fourth quarter in 2019 with Revenue life line and hit 4.9% year-over-year for our offline marketing Services. They continue to focus on cities where there is a month for more frequent Auto shows and can therefore generate higher arrives or more remote cities with lawyer arrives. We are focusing on Line Auto shows and special promotion events more cost-effective approach than offline events.

next

Let me move on to our girls initiative in Virtual dealership and online marketing services.

The extraordinary challenges that unfolded this year. It'll stop us from capitalizing capitalizing on online retail opportunities that developed from the overall boost in internet usage during to the 20. We focused on a number of initiatives such as deep deepening our collaboration with Timor and we Bank as we positioned ourselves for the continued shifter to online Commerce and establish our brand as a leader in this space.

And for produce meaningful results in the first quarter of 2028 our revenues from virtual dealership online marketing services and other another reached sweep 3500 9 million MB increasing 507 9.2% wage over here. This was primarily primarily driven by successful online promotion events that we heard during the quarter our strategic collaboration with Baidu and the weekend and the revenues generated from our acquisition of long hair International Limited in January 2017.

Let me provide the cap on our name initials in online marketing services in two different here. First of all, we met Headway in live streaming off promotion events by leveraging our offline infrastructure.

Extensive relationships with audience and the dealers give insights into consumer behavior and our collaborative partnership with online e-commerce that form I want significant highlight into the 20th was the live streaming promotion events. We conducted together with t more orders. We not only organized this event or dealer but also directly for this events provided us with additional insights into consumers online shopping as well as the needle of all bombs and the dealers and we deliver and we believe can serve as good templates for our future endeavors.

Our collaboration with the auto segment of the agenda by two portals is another example of our creative online merge offline a Solutions. We have the buy to expand itself networks 2 over 80 cities across China where we serve our service. It's operations aiming to improve yourself eventually and the conversion conversion rates for audience and the dealers looking ahead in June 20th of 21.

Don't hit it and leave shifting consumer habits toward online Commerce with continue to be a terrible. Well the acceleration of the 4-Digit realization of Automotive Sales.

Online retail platform with a defined the past four to continue serving the involving consumer needs by leveraging off a leading omni-channel automotive Marketplace.

No weapon. He's call to change our Deputy vehicle for a closer. Look at our financial performance in the first quarter.

Thank you. Mister Winn. Hello, everyone. Thank you for joining us. We concluded a challenging twenty-twenty with a fourth-quarter that demonstrated solid Improvement our net revenues Thursday the nine point three percent lower than the same period in twenty ninety 65.7% compared with the third quarter of 2020 the significant top-line recovery achieved while we simultaneously a comprehensive approach to managing our costs this resulted in slower operating expense growth of 29.5% quarter-over-quarter leading to a narrow net loss of 25.7 million MB which was seventies. Sorry, which was 37.6% and 65% lower versus the third quarter 2020 and the same. The last year respectively. Meanwhile, we maintained a healthy combined balance of cash and cash equivalents.

Restricted cash and time deposits of 185.4 million on the which will provide us with the runway. We need to create a platform for future growth next. I would like to work through our fourth quarter 2020 Financial results before I start please note that all numbers that stated in my following remarks may not be terms unless otherwise noted our total revenues in the fourth quarter 165.8 million MB decreasing 9.3% from 1082.859 being the same period last year this was a result of continued adverse impact of the, 19 pandemic. The decrease was partially offset by the year-over-year break bunch of dealerships online marketing services and others compared with third quarter this year total revenues increased by 65.7% off.

Offline Services recovered and our online service is maintained solid performance as we progressively resumed are offline Auto shows are offline marketing Services revenues generated from this Auto shows decreased by 24.4% to 128.8 million MB from 170.4 million MB in the fourth quarter of 2019 online marketing Services revenue generated from Auto shows increased 55.9% of the third quarter of 2020 of 82.6 million. MB remedy is generated from special promotion events in the fourth quarter of 2020 or 1.1 million Ramsey compared with 7.1 million MB in the fourth quarter of 2019 and two million, am being asked to have 20/20 roaming is from virtual dealership online marketing services and others increased by 579.2% to 35.9 month.

On the June the quarter.

Compared with 5.3 million being the fourth quarter of 2019 primarily due to our continuous expansion of online marketing services, including live streaming promotion Avec collaboration with Baidu and we Bank per year over year growth was also helped by the revenue generated from our completed acquisition of longer International Imaging in January 2020 across profit in the fourth quarter decreased by 8.7% to 120.6 million MB from wage 132.1 million MB in the fourth quarter of 2019, but increased by 67.3% quarter-over-quarter our gross margin increased to seventy Point seventy 2.8% from 72.3% in the same period last year primarily due to the change in Revenue Max month.

In the fourth quarter selling and marketing expenses decreased by 32.5% to 107.7 million MB from 159.6 MB in the fourth quarter of 2019 and increased by 17.6% compared with the third quarter of 2020. As our operations continue to recover off the year-over-year decrease was also primarily due to the decrease in promotional expenses and staff compensation expenses as a result of conscious control may just take him by the company and reduce offline lengths

General and administrative expenses were 30.6 million mg compared with 27.8 million MB in the fourth quarter of 2019 and 50.9 million MB GNA expenses in the third quarter of 2020 research and development expenses decreased to 10.3 million MB from 13.8 million MB fourth quarter of 2019 and 7.1 million MB in the third quarter primarily due to the decrease in staff compensation expenses are loss from continuing operations was 20 and 7.9 million on be in the fourth quarter lower compared with 69.1 million MB in the same period last year and forty two point six million in the third quarter of 2020 respectively excluding the effect of share-based compensation adjusted net loss attributable to the company's shareholders was twenty-two. Yep.

2.5 million MB in the fourth quarter compared with 58 million MB in the same period last year adjusted basic and diluted net loss ordinary share or both 0.007 R&B in the fourth quarter compared with two million to be in the same period last year was just it was a loss of 21.3 million RMB in the fourth quarter compared with a loss of 57.8 million MB in the same period last year now turned into our street at the end of December 2020. We had cash and cash equivalents and time deposits of 155.6 million MB for more money on file 2024. Yeah Financial results. Please refer to our earnings press release for further details.

For the 1st.

Quotes are twenty Twenty-One. We expect our net revenues to be between approximately 76 million MB and 18 million MB representing a year-over-year a price increase of 684% to 725.5% is forecast reflects company's current and preliminary views on the market and operational conditions as well as the influence of the, 19 pandemic which are all subject to change. This concludes. Our prepared remarks for today operator. We're not ready to take questions. Thank you.

Thank you. We will now begin the question-and-answer session to ask a question. You may press * then 1 month on your telephone keypad. If you were using a speaker phone, please pick up your handset before pressing the keys at any time. Your question has been addressed and you would like to withdraw your question, please press * then two for the benefits of all participants on today's call. If you wish to ask your question to management in Chinese, please immediately repeat your question in English.

At this time, we will pause momentarily to assemble our roster.

The first question comes from Jack offended with Maxim group, please. Go ahead.

Hi, great. Thank you. Good evening guys. Thanks for taking my questions for a few questions for when and then a couple purani on the South Side. So for for Mister when it's it's great to see the business turning around in a positive direction. But of course, I'm sure there's a lot of investors out there that are interested in receiving maybe a status update following the proposal letter from January some to the board of directors and potential of taking the company private. So for as long as you have positive updates on the business side, what do you what would you tell investors that are maybe interested in buying the stock? But given this proposal that's outstanding. Thank you.

So that should give us a moment.

Hello, Jack.

I'm going from home. I mean who could be received the proposal in January from the buying Pious Group found the companies evaluating proposal depth, but due to the Chinese New Year the company still in the process of forming a special committee to further our valuation The Proposal that's all we can say for now. There's there's a little we can express until further information is available.

Okay, understood. I appreciate the the added color and that's understandable. And then another question for Mister when more on an update on the business, so just just bought a bigger picture. I believe Avast is kind of question before just maybe can you provide some perspective on what you're seeing in terms of consumer purchases in their their appetite for for Ticket purchases such as new cars and I just can't talk about the overall Financial Health of your your various autopartners and just the general state of the economy for for new cars in China.

From which engine go home when he is Jamesha off my quick know me for the Chinese market overall. It's it's it's been improving significantly over the past few quarters, especially for Jeep GDP figures as well as Import and Export. So we we think that the overall macro economy is improving. Oh she took off just can you turn off and what's your issue? Bring you won't find myself.

but the auto sector for the first two months of

Twenty one or two passenger retail sales in China grew close to $80 70% year-over-year according to China passenger car Association all from the low base last year, but also boosted by the broad economic recovery that significantly boasted consumer confidence.

Scott good enough

sure, that that's good and then I guess just sticking to that trend of new passenger Auto Sales up significantly obviously off of down year last year. I'm talking about the overall Market obviously, um in just any any preliminary thoughts and what you're expecting for March and kind of throughout the balance of twenty Twenty-One. Do you expect to sort of high positive life to to continue in terms of growth for the overall passenger car off?

Make a Dodge Durango. That should have it here on Thursday. We think that the market economy is being quite optimistic about the wage the improving trends for the rest of year. And that's also being aided by the statement from the World Bank stating that the the the Chinese GDP growth for 2012-13 will be one of the best in the world and for the auto sector we we also we also believe that the the upward trend is is is more likely.

in 2021

that's helpful. Then let me switch gears now the virtual just from from 20 specifically from a segment perspective virtual dealership segment was very, you know, very strong clearly was ahead of my expectations longer-term. I guess. Do you do you see and given just given the dynamic you guys are shifting your kind of strategy as you go along here. Do you expect the virtual dealership segment in other segments to be kind of I don't know. Where do you see that mix evolving over time? Is it going to be the core off line Auto Show Business is the core of the business or is it going to become the virtual dealership business? Is that going to be more of a focus? Just how do you see this playing out over time?

okay, is this a

Julien Kang, yeah, sure.

In twenty-twenty our online products Services was was improving very fast. But and we also we also do believe that is segment will be as important part of our future growth, but our Auto Show businesses will remain a strong email core products for product product mix sure exactly the same time Trader Joe's on your washer you go for 20 21, or maybe the next few years the auto show business was still be the large business in our in our Revenue mix and our Core Business in our product mix

Does that help understand that's helpful. That's helpful. I appreciate the color there. And then just as far as auto show events go, you know, they continue to I think it was what was a 230 auto show events in the fourth quarter. That's again, you know, another sequential Improvement, which is good to see do you expect the number of auto show events you host to home eventually like when do you expect that to maybe return to the same levels? You saw earlier in 2019 and 2018 or is it too is it too hard to say just any color there?

Oh, well, what are the opinion that you get more money down and go. On Thursday. We are trying to recover the number of older shows and the city coverage to the level of 2018 and 2019 but still a priority. Our first priority is the Allies this Auto shows produce and the operational efficiencies in the cities. We operate so, I'm not the base. We we we try to we're trying to recover from us.

Gotcha. Okay that that's helpful that makes sense to me as well. And it may just one last question. Maybe maybe for your Ronnie just given the revenue momentum and just the overall macro environment needs to kind of turn around in a positive direction. Just wondering you know for your perspective on what that means for your your plans and how you think about operating expense Investments and whether you'd like to ramp those up as we as you go along as the Top Line begins to recover do you expect the effects to pick up again or any any color they're down the apis will certainly pick up in in terms of absolute figures but we're we're doing everything we can to come to take everything to take cost control measures to you know to minimize the the the all packs and the costs. So I would expect for 20 21 the the the the absolute figure we'll go up but the centage that Opex is of birth.

Revenue will be lower than that of 2019 and 2024 or 2019 as well. Okay.

Okay, that's it for me guys. It's it's great to see the positive turnaround story playing out. I wish you best of luck. Thank you. All right. Thank you.

As there are no further questions now. I'd like to turn the call back over to management for closing remarks.

Thank you. Once again for joining us today. If you have further questions, please feel free to contact Winters investor relation to the contact information provided them on our website or the PS sent a group investor relations.

boots

You may now disconnect your line. Thank you.

Thank you.

Pub