Q3 2021 TuanChe Ltd Earnings Call
Speaker 3: Good morning and good evening, ladies and gentlemen. Thank you for standing by for Tuan-Chi Limited's third quarter 2021 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.
Good morning, and good evening, ladies and gentlemen, thank you for standing by for <unk> Limited third quarter 2021 earnings Conference call.
At this time all participants are in a listen only mode.
After managements prepared remarks, there will be a question and answer session.
Speaker 3: Today's conference call is being recorded. Now, I will turn the call over to your speaker host today, Ms. Cynthia Tan, IR Director of the company. Please go ahead, ma'am.
Today's conference call is being recorded now I will turn the call over to your speaker host today, Ms. Cynthia Tan IR director of the company. Please go ahead ma'am.
Speaker 4: Hello everyone and welcome to Sancho's Third Quarter 2021 Earning Conference call. We released our earnings results earlier today and it is now available on our website as well as on news wire services. Before we continue, please note that discussion today will contain a forward-looking statement made under the Safe Harbor provision of the US private security litigation reform act of 1995. Forward-looking statement involves inherent risk and of certain...
Hello, everyone and welcome to the partial third quarter 2021 and then conference call. We released our earnings results earlier today and it is now available on our IR website as well.
While some of this before we continue please note that discussion today will contain forward looking statements made under the safe Harbor provision of the U S. Private security and litigation Reform Act of 1995 forward looking statements involve inherent risk and uncertainties as such our future results may be materially different from the views expressed today.
Speaker 4: As such, our future results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in our earning relief and our registration statement filed with the Act.
Information regarding this and other waste and uncertainties is included in our earning release and amortization statement filed with the FTC contract does not assume any obligation to update any forward looking statements, except as required by law today, you'll hear from Mr. Wei Wen the company's Chief Executive Officer will provide an overview of our gross debt.
Speaker 4: Feng Shui does not assume any obligation to update any forward-looking statements expect as required by law. Today, you'll hear from Mr. Wei Weng, the company's chief executive officer, who will provide an overview of our growth strategies and business development.
Keith and business developments that'd be followed by Mr. Chen Qi Romney the company's subsea Chief Financial Officer will provide additional details on the company's financial results and discuss the financial outlook. Following managements prepared remarks, well open up the call to questions, but that's that I'll now like to turn the call over Tor CEO , Mr. Wei Wen.
Speaker 4: to be followed by Mr. Chen Xiu Yu, Rongmi, the company's Deputy Chief Financial Officer, who will provide additional details on the company's financial results and discuss the financial outlook.
Speaker 4: Following management's prepared remarks, we'll open up the call to questions.
Speaker 4: With that said, I would now like to turn the call over to our CEO , Mr. Wei Wen. Please go ahead, sir.
Please go ahead Sir.
Speaker 5: Thank you, Xinxia. Hello, everyone. Thank you for joining us today on our third quarter 2021 earnings call.
Thank you Cynthia Hello, everyone. Thank you for joining us today on our third quarter earnings call.
Speaker 5: In this quarter, we can preserve against a challenging macro environment with COVID-19 flare-ups and a global chip supply shortage that constrains auto production, while our revenue contracted by 38.9% year-over-year to 61.1 million RMB.
In this quarter.
Please vote against a challenging macro environment.
19.
And our global our chip.
<unk> shortage.
<unk> auto production well, our revenue contracted by four to eight or nine 4% year over year to 61.1 million RMB.
Speaker 5: primarily due to cancellation of a number of our offline auto shows in response to pandemic conditions.
Primarily due to cancel the recent cancellation of a number of our offline auto shows in response to pandemic conditions.
Speaker 5: We forged ahead with our online initiatives, streamlined our cost base, and narrowed our net loss attributes attributable to the company's shareholders. Bye!
The forged ahead with our online and it's a two.
Streamlined our cost base and narrowed our net loss attributable to common shareholder by.
Speaker 5: 10.7% year over year to 36.
10, 7% year over year too.
So it is six.
One 8 million RMB.
Speaker 5: Before we discuss our third quarter results in more detail, let's first talk about our strategic plan to expand our business into easy manufacturing.
Before we discuss our third quarter results in more detail, let's first talk about our strategic plan to expand our business into EV manufacturing.
Speaker 5: catering to the rising consumer demand of electric vehicles.
Catering to the rising consumer demand.
Chicken vehicles.
Speaker 5: leveraging our existing platform. We are establishing a new EV business line including a design, R&D and manufacturing team.
Leveraging our existing platform right.
But we're establishing a new EV business line, including a design R&D and a man and the manufacturing team.
Speaker 5: while holding open discussions with potential strategic partners.
While holding.
What kind of discussions.
With potential strategic partners.
Speaker 5: We will announce the progress of major business transactions, if any, in a timely manner.
We will announce the.
Progress on major business transaction.
If any no.
Linda in the timely manner.
China is the largest uneasy.
Speaker 5: marked in the world, with sales reaching over 1.3 million in 2020, representing close to 44% of all NEVs sold globally in 2021.
During the war with tariff, reaching over one 3 million in 'twenty or 'twenty one.
Presenting close to 48, 4% of our E. These sort of globally.
In 2020 one.
E V would tell us there.
Speaker 5: penetration in China rose to 14.8% throughout the year and 22.6% in December from
Penetration in China Rose two.
14.8% through after a year and a 20.
So there are two points to 6% in December from.
Speaker 5: 5.8% in the year 2020. According to the China Passenger Car Association.
Five.
8% in the year.
On the 20th.
According to the China passenger car Association.
Speaker 5: in 2022, NEVCRs in China are virtually expected to reach
In 'twenty to 'twenty two.
In China.
Unfortunately expected to rich.
Speaker 5: 5.5 million growing at a cargo of
Five 5 million growing at a casual.
Speaker 5: of which was.
400.
The 6%.
Okay.
Speaker 5: much faster than the overall passenger vehicle market.
Much faster than the overall passenger vehicle market.
Supported by the.
Speaker 5: expedited establishment of EV infrastructure and technological advancement.
But oh, that's good I get this.
Establishment of EV infrastructure and technology advancement.
Speaker 5: that have lowered vehicle costs as well as improved interactive smart features.
That have lower vehicle costs as well as improve the.
Interactive smart future fit.
Speaker 5: features while government regulation and the industry standards on environmental protection and the emissions continue to be favorable.
Teachers, while government regulation and the industry's Denver on environmental protection and the emission continue to be favorable.
Speaker 5: Many of the emerging NEV OEMs are building a direct sales network so they can interact first-hand with their users to shape their purchase experience and efficiently receive feedback on our user needs and preference to continuously enhance their products and the service.
Any of the emerging uneasy Oems are building a direct yourself neck work so that so there Ken.
Act firsthand with our users to ship they are purchased caravan.
And efficiently received feedback on our user needs and.
Preparer took and to continuously enhance their products and services.
Speaker 5: In this context, we believe we are well positioned to capitalize on consumers' rising demand for EVs given our tremendous customer base.
In this context, we believe we are well positioned to cabinet capitalize on consumer rising demand for evs, giving them our tremendous customer base.
Speaker 5: and the depth and breadth of our customer insights.
Under the depth and the breadth of.
Our customer insights.
Speaker 5: We have cumulatively sold over 30 million customers and facilitated more than 1.4 million automobile sales transactions.
Well Pamela.
Literally solved for solar or solar kit milling customers and facilitated more than one point a fifth one.
One point of for milling automobile automobile sales transactions.
Speaker 5: with GMV of approximately 200 billion RMB. We are our integrated automotive marketplace.
With Jeremy of approximately.
200 and billing RMB.
Sure.
The automobile market place.
Speaker 5: Furthermore, we have extensive sales operations covering 125 cities as of September
Furthermore, we have extensive.
So it's a pressure covering 125 cities as of September <unk>.
Speaker 5: 30, 2021 to enable the success of our EV manufacturing.
Sure Kids.
'twenty one.
To enable the success of our EV manufacturing.
We will harness.
Speaker 5: our leading auto sales capabilities and the sales network spanning from first tier cities.
Our leading auto sales.
Some affiliates and the sales network spanning from first tier cities.
Speaker 5: to provincial countries nationwide.
True province, or country isn't that nation wide.
So we will see them soon.
Speaker 5: through seamlessly integrating our existing platform with the top-tier electric vehicle design, R&D and manufacturing team we are building.
Leslie integrating our existing platform with the pups tier electric vehicle design.
M D and the manufacturing team we're building.
Speaker 5: and in-depth cooperation with potential strategic partners. We are confident this strategic expansion will drive significant...
And our in depth cooperation with potential strategic partners.
Confident this strategic expansion.
Drive is significant.
Speaker 5: synergistic value and ensure we secure an important stake in the EV revolution.
So logistic value and ensure we secure and insecure important stake in the EV Revolution.
Speaker 5: Now let me provide third quarter highlights from our business segments.
Now, let me provide third quarter highlights from our business segments.
Berke.
Speaker 5: We further enhanced our solid leadership position in offline marketing service by creating new retail consumption scenarios through innovative platforms and strategic cooperation with partners.
We further enhanced our solid leadership position in offline marketing service.
Creating new retail consumption scenarios.
So in a way to get from them.
Strategic cooperation with partners.
Due to.
Speaker 5: with surging COVID-19 cases and the industry-wide chip shortages.
Surging COVID-19 cases under the and that's pretty wide chip shortages.
Speaker 5: that affected the production schedule of many OEMs.
Effected of the production schedule of menu Oems many Oems the number of older shows well organized well reduce the 265 across 55 cities.
Speaker 5: many OEMs. The number of older shows we organized were reduced to 65 across 55 cities, compared to 152 older shows in 100 and
There are two 152 older shows in 100 and up.
Speaker 5: seven cities in the third quarter of 2020.
Seven cities in the soda corridor of 2020.
This shows.
Speaker 5: generated net revenue of 33.1 million IMB, representing a 59.9% year-over-year decrease.
Generally the net revenues.
$43 1 million RMB.
Presenting representing a.
59, 9% year over year decrease.
Speaker 5: Looking ahead, we will continue to enhance our offline marketing services by leveraging our powerful data analysis capabilities and continuing to strengthen our collaboration with strategic partners.
Looking ahead.
We will continue to enhance our offline marketing services by leveraging our pulp our days in AR.
And analysis capabilities.
Continuing to strengthen our collaboration with stretch <expletive> partners and.
Speaker 5: diversify our retail events and scenarios with more creative
The work, but diversify our retail events and.
So no real scenarios with.
More creative marketing solutions.
Speaker 5: We will also conduct further in-depth studies.
We will also conduct further in depth studies.
Speaker 5: to identify in granular detail.
To identify.
Granular detail.
Speaker 5: with relatively higher potential IoI and fine-tune our offline presence and mix of offline and online marketing services accordingly.
Hi, Ralph.
With relatively high hydro a potential highway and fine tune our offline.
And the mix of offline and online marketing services accordingly.
Next.
Speaker 5: Let's move on to our growth initiatives in virtual dealerships and online marketing services.
Let's move onto our growth initiative in virtual dealership and online marketing services.
Speaker 5: During the third quarter of 2021, we extended our online marketing services.
During the third quarter of 22, new long weeks, that's extended our online marketing services.
Speaker 5: and attrition by providing best-in-class user management.
And attrition by providing best in class you're from management.
Speaker 5: online training, and events management services to OEMs and dealers.
Online training.
The event management services to Oems and the dealer.
This improvement.
Led to a seven.
Speaker 5: 72.6% year-over-year increase in net revenues for virtual dealerships and online marketing services.
70, 72 upon the 6% year over year increase in net revenues.
To a dealership and online marketing services.
Speaker 5: Going forward, we will further build on our existing business as a...
Going forward, we were further build on our existing business.
Uh huh.
Speaker 5: integrated automotive marketplace while leveraging our innovative foundation to expand into EV manufacturing.
Integrated automotive marketplace, while leveraging our <unk>.
<unk> innovated in a video foundation to expand into EV manufacturing.
Speaker 5: Following our announcement on January 5, 2022, to expand our strategic focus to EV manufacturing, we continued open discussions with potential strategic partners and are on track to identify candidates.
Following our announcement on January five so until 'twenty two to expand our strategic focus to EV manufacturing.
We continue to.
Open discussions with potential strategic partners and are on track to identify candidates with highly complementary strengths.
Speaker 5: with highly complementary strengths that will allow the creation of substantial synergistic value.
That will allow the creation of substantial substantial than that.
Just it failure.
Speaker 5: We are optimistic that China's auto market under girls'
We are optimistic that neither of China's auto market bundle goes.
Speaker 5: structural changes toward a smarter and more energy efficient mobility.
Structural changes toward a smarter and more energy.
Patient <unk>.
Related solutions.
Speaker 5: our innovative business model, massive customer base, strong customer insights and our leading auto sales network.
Our innovative business model.
Zero customer base strong customer insights and our leading although sales network.
Speaker 5: coupled with the top-tier design R&D and manufacturing teams we are building, as well as the in-depth cooperation with potential strategic partners, will unlock significant value and lay a solid foundation for success.
Coupled with the top tier is on.
N D and the manufacturing team, we're building as well as well as the in depth cooperation with potential strategic partners will unlock significant value and to lay a solid foundation for success.
Speaker 5: Now I will turn the call over to Chenxi, our Deputy CFO , for a closer look at our financial performance in the third quarter.
Now I will turn the call over.
Switching to see our deputy CFO for a closer look at our financial performance in the third quarter.
Speaker 6: Thank you, Mr. Wen. Hello, everyone. Thank you for joining us. Our third quarter results were in line with our expectations, given the weakening auto market and the impact from the pandemic, with net revenues of 61.1 million RMB. To navigate the challenges in the third quarter, we remain determined.
Thank you Mr. Wynn Hello, everyone. Thank you for joining us our third quarter results were in line with our expectations given the weakening auto market and the impact from the pandemic with net revenues of $61 1 million RMB to navigate the challenges in the third quarter.
We mined.
Speaker 6: squarely focused on cost management, cutting net loss attributable to the company's shareholders to 36.8 million NMB from 41.2 million NMB in the same period last year.
Squarely focused on cost management cutting our net loss attributable to the company's shareholders to $36 8 million RMB from 41.2 million RMB in the same period last year.
Speaker 6: We are excited our decision to enter the EV manufacturing and are ready to chart a new path forward while continuing to pursue innovation and positioning the company to capitalize on future consumer demand.
We're excited.
Our decision to enter the EV manufacturing.
And.
Our ready to charter a new path forward, while continuing to pursue innovation and positioning the company to capitalize on future as consumer demand.
Speaker 6: Next, I would like to walk through our third quarter 2021 financial results. Before I start, please note that all numbers stated in my following remarks are in RMB, unless otherwise noted.
Thanks.
I would like to walk through our third quarter 2021 financial results before I start. Please note that all numbers stated in my following remarks are in RMB unless otherwise noted.
Speaker 6: Our total revenues in the third quarter were 61.1 million RMB, decreasing by 38.9% from 100 million RMB in the same period last year. This was a result of 59.3% year-over-year decrease in revenues generated from offline marketing services.
Total revenues in the third quarter was $61 1 million RMB decreasing by 38, 9% from 100 million RMB in the same period last year.
This was a result from 59.
She took nine 3% year over year decrease in revenues generated from offline marketing services as.
Speaker 6: As we progressively resume our offline auto shows, offline marketing services revenue generated from these auto shows decreased by 59.9% to 33.1 million Nambi from 82.6 million Nambi in the third quarter of 2020.
As we purposefully.
Our offline auto shows offline marketing services revenues generated from this photo shows decreased by 59, 9% to $33 1 million RMB from $82 6 million RMB in the third quarter of 2020 revenues from special promotion events in the third quarter of 2021 one.
Speaker 6: Revenues from special promotion events in the third quarter of 2021 were 1.3 million NMB compared with 2 million NMB in the third quarter of 2020. Revenues from our virtual dealership services, online marketing services and others increased by 72.6% to 26.6 million NMB during the quarter compared with 15.4 million NMB in the third quarter of 2020 primarily due to the continuous expansion of our collaboration with Rebank.
<unk> 3 million non be compared with 2 million RMB.
Third quarter of 2020 <unk>.
Revenues from our virtual dealership services online marketing services and others increased by 73, 6% to $26 6 million on beach during the quarter compared with $15 4 million on beat in the third quarter of 2020, primarily due to the continuous expansion.
Of our collaboration with Cleveland.
Speaker 6: Our gross profit in the third quarter decreased by 35.1% to 46.8 million RMB from 72.1 million RMB in the third quarter of 2020. Gross margin was 76.6% in the third quarter of 2021 compared with 72.1% in the same period last year primarily due to the change in revenue mix.
Our gross profit in the third quarter decreased by 35, 1% to 48, $46 8 million RMB from $72 1 million in the third quarter of 2010.
Gross margin was 76, 6% in the third quarter of 2021, compared with 72.1 cents.
In the same period last year, primarily due to the change in revenue mix.
Speaker 6: In the third quarter, selling and marketing expenses decreased by 34.6%.
In the third quarter, selling and marketing expenses decreased by 34 six.
Speaker 6: sent to 59.9 million NMB from 91.6 million NMB in the third quarter of 2020. The year-over-year decrease was primarily due to the decrease in promotion expenses and staff compensation expenses as a result of decreased volume of offline benefits.
Sent to 40 to $59 9 million RMB from 91 6 million RMB in the third quarter of 2020, the year over year decrease was primarily due to the decrease in promotional expenses and stock compensation expenses.
Salt of decreased volume of offline beds.
Speaker 6: GNA expenses increased to 17 million NANB from 15.9 million NANB in the third quarter of 2020 and 14.4 million NANB in the second quarter of 2021. Research and development expenses were 9.2 million NANB compared with 7.1 million NANB in the third quarter of 2020 and 8.8 million NANB in the second quarter of 2021.
G&A expenses increased to 17 million RMB from $15 9 million RMB in the third quarter of 2020, and $14 4 million RMB in the second quarter of 2021.
Search and development expenses were $9 2 million RMB compared with $7 1 million RMB in the third quarter of 2020, and eight 8 million RMB in the second quarter of 2021.
Speaker 6: primarily due to higher staff compensation expenses for research and development personnel.
Primarily due to higher staff compensation expenses for research and development personnel.
Speaker 6: are lost from continuing operations for 39.3 million 9B in the third quarter, lower compared with 42.6 million 9B in the same period last year, and higher compared with 9.3 million 9B in the second quarter of 2021.
Our loss from continuing operations were $39 3 million RMB in the third quarter lower compared with $42 6 million RMB in the same period last year.
And higher compared with $9 3 million RMB in the second quarter of 2021 .
Speaker 6: Excluding the effect of share-based compensation, adjusted net loss attributable to the company's shareholders was 34.4 million RMB in the third quarter compared with 38.3 million RMB in the same period last year.
Excluding the effects of share based compensation adjusted net loss attributable to the company's shareholders.
$34 4 million RMB.
The third quarter compared with $38 3 million in R&D in the same period last year.
Speaker 6: adjusted basic diluted net loss per ordinary share with both 0.11 RMB in the third quarter compared with 0.13 RMB in the same period last year.
Adjusted basic and diluted net loss per ordinary share with both <unk> in the third quarter compared with $1 three on being in the same period last year.
Speaker 6: I just see EBITDA was a loss of 33.5 million RMB in the third quarter compared with a loss of 37 million RMB in the same period launch date.
Adjusted EBITDA was a loss of $33 5 million RMB in the third quarter compared with a loss of 37 million RMB in the same period last year.
Speaker 6: Now turning to our balance sheet, at the end of September 2021, we had cash and cash equivalents and restricted cash of 134.3 million RMB. For further details regarding our 2021 third financial results, please refer to our earnings press release.
Now turning to our balance sheet at the end of September 2020 , one we had cash and cash equivalents and restricted cash of $134 3 million RMB for further details regarding our 2021 third financial results. Please refer to our earnings press release in the fall.
Speaker 6: In the fourth quarter of 2021, we expect our net revenues to be between approximately $17.9 billion and $18.9 billion, representing a year-over-year decrease of approximately 57.8% to 51.7%.
Quarter of 2021, we expect our net revenues to be between approximately 17 million RMB 80 million RMB, representing a year over year decrease of approximately.
Seven 8% to 51, 7%.
Speaker 6: This is primarily attributable to the estimated decline in the expected number of offline events to be held in the fourth quarter of 2021, including auto shows and special promotion events.
This is primarily attributable to the estimated decline in the expected number of offline events to be held in the fourth quarter of 2021, including auto shows and special promotion events due to the COVID-19 pandemic as well as the impact of global microchips supply shortage.
Speaker 6: due to the COVID-19 pandemic, as well as the impact of global microchip supply shortage on the auto industry.
The auto industry.
Speaker 6: This forecast reflects the company's current and preliminary views on the market and the operational conditions, as well as the influence of the COVID-19 pandemic, all of which are subject to change.
This forecast reflects the company's current and preliminary views on the market and operational conditions as well as the influence of the COVID-19 pandemic all of which are subject to change.
Speaker 6: This concludes our prepared remarks for today. Operator, we are now ready to take questions. Thank you.
This concludes our prepared remarks for today operator, we're now ready to take questions. Thank you.
Speaker 3: We will now begin the question and answer session. To ask a question you may press star then one on your telephone keypad. If you are using a speakerphone please pick up your handset before pressing the keys.
We will now begin the question and answer session.
You ask a question you May press Star then one on your telephone keypad.
If you are using a speakerphone please pick up your handset before pressing the keys.
Speaker 3: If at any time your question has been addressed and you would like to withdraw your question, please press star then two. For the benefit 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.
If any time your question has been addressed and you would like to withdraw your question. Please press Star then two.
For the benefit 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.
Speaker 3: At this time, we will pause momentarily to assemble our roster.
At this time, we will pause momentarily to assemble our roster.
Speaker 3: This as there are no further questions now, I'd like to turn the call back over to the company. For closing remarks.
This.
As there are no further questions now I'd like to turn the call back over to the company for closing remarks.
Speaker 4: Thank you once again for joining us today. If you have any questions, please feel free to contact us.
Thank you once again for joining us today.
If you have any questions. Please feel free to contact us.
Speaker 3: This concludes this conference call. You may now disconnect your line. Thank you.
This concludes this conference call you may now.
Now disconnect your line. Thank you.
Okay.
Yeah.
Speaker 2: ?? ?? ?? ?? ?? ??
Yeah.
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Yeah.
Okay.
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Speaker 3: Again, the conference has ended. You may disconnect your line.
Again the conference has ended you may disconnect your line.
Yeah.
[music].