Q4 2023 Cheche Group Earnings Call
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I would now like to turn the conference over the Miranda Davidson Investor Relations Ms. Davidson the floor is yours.
Yeah.
Miranda Davidson: Thank you operator.
Speaker Change: Hello, everyone and thank you for joining us to review touches 2023 fourth quarter and full year results. This morning touch opposed to both the earnings release and related Investor presentation to its website at IR Dot Church of group Dotcom.
Speaker Change: With me on the call today are Lei, Zhang catches founder and Chief Executive Officer.
Speaker Change: Tangela G catches chief financial Officer, and Tingling touches Chief strategy Officer.
Speaker Change: After prepared remarks are concluded we will open the call for questions.
But before we begin some statements in this teleconference are forward looking within the meaning of federal Securities laws.
Speaker Change: Although we believe these statements are reasonable we can give no assurance that they will prove to be accurate because they are prospective in nature.
Speaker Change: Actual results could differ materially from those we discuss today. We encourage you to review the most recent format for in subsequent filings for risk factors that could materially impact our results.
Speaker Change: And as I mentioned, the earnings release and Investor deck are available at IR, that's such a group dot com and we encourage you to review the reconciliations of certain non-GAAP measures contained within.
Speaker Change: With that I'll turn it over to MS. Zhang Chief Executive Officer Lee. Please go ahead.
MS. Zhang: Thank you good morning.
It's a great pleasure to host.
MS. Zhang: Earnings call we had later.
Speaker Change: Fair enough.
Speaker Change: Sure.
Speaker Change: China's largest auto insurance technology plentiful.
Speaker Change: Digital auto reinsurance transaction premiums.
Speaker Change: Lisa.
Driving the digital transformation.
Speaker Change: Through our cutting edge embedded policies.
Speaker Change: And the unique stockholder is particularly well positioned to capture significant opportunities resulting from axa.
Speaker Change: Accelerating digitalization of the auto insurance market in China.
Speaker Change: As of December 31, 2023 should you have a wider range of ultimate insured transactions.
Speaker Change: Having provider.
Speaker Change: Over 44 meters.
Speaker Change: Lindsay over billing.
Speaker Change: These recent premium.
Speaker Change: And Colombia, reaching with over 100 insurance carriers.
Speaker Change: 2021 2023.
Speaker Change: We believe that depth and breadth of our network to provide a strong competitive barrier.
Speaker Change: But ultimately the media rich.
Speaker Change: Could you provide.
Speaker Change: Integrated plentiful to generate additional <unk>.
Speaker Change: Revenue stream and deepening customer relationships.
Speaker Change: But he has a bad access and utilize our flagship digital.
Speaker Change: Fiction products through easy issue.
Speaker Change: Specialized service agents.
Speaker Change: Auto services professionals.
Speaker Change: We also have a solution.
Speaker Change: For insurance carriers.
Speaker Change: Intermediaries and the regulatory bodies.
Speaker Change: The.
Speaker Change: Digital search.
Speaker Change: Intelligent west all the thoughts.
Speaker Change: Insurance intermediate risk.
Although reaching FNC meeting evolving regulatory requirements.
So it's beautiful.
Speaker Change: Thats beautiful salt or even jointly developed by Tricia.
Speaker Change: The Shanghai as soon as they can change.
Speaker Change: It's I E.
Speaker Change: So I'd say too early.
Speaker Change: And the magnitude risk for electrical work.
Speaker Change: This proved up are designed to be delivered and we have mobile web.
Speaker Change: Webb Wechat and the third party applications.
Speaker Change: Our political almost open at Topco also enabled.
Speaker Change: Operability with many application.
Speaker Change: Systems.
Speaker Change: Often adopt by the ecosystem participants.
Speaker Change: Ebay and suite of solutions.
Two points of theory is the integrate heater credit phone connected to more than 10 of the leading companies.
Speaker Change: And currently serving more than 10 of pulp companies.
Speaker Change: The political.
Speaker Change: At this time.
Innovative products and the digital operations.
Speaker Change: Providing that insight to our vast network of over 400 people.
Speaker Change: Okay today, even more than 110 branches.
Speaker Change: Across 25 provinces nationwide.
Speaker Change: Oh, it's scalable.
Speaker Change: Great and enforcing cloud based model reaches consumers.
Speaker Change: Efficiently and to.
Speaker Change: Accumulated valuable data and insights.
Two contributor to the precision of our products.
Speaker Change: China's auto market is undergoing.
Speaker Change: Precedent.
Speaker Change: Churn to join it by three major forces.
Speaker Change: Wow.
Speaker Change: The rapid shift from internal combustion to new energy vehicles.
Speaker Change: Second the market adoption.
Speaker Change: We have the technologies, including advanced autonomous driving.
Speaker Change: <unk> right, though China is a major auto exposure given the consolidation also domestic market.
Speaker Change: Why I pulled recently terminated its car development program.
China is the Xiaomi launched the first of these are with us today.
Speaker Change: As the extension of all and most people consume a computer room.
Speaker Change: In many ways, China is leapfrogging, the U S and Europe with the latest generation of <unk>, including a fault wide affliction of workers.
Speaker Change: A more rapid innovation cycle.
Speaker Change: Our low cost structure and the <unk>.
Speaker Change: Tennessee is divestment into coal technologies.
Speaker Change: So EV are projected to occur.
Speaker Change: Three a holder of 50% of our new vehicle sales in China as early as this coming may.
Speaker Change: Under the 'twenty 'twenty four SaaS well in ABB.
Speaker Change: Expected to exceed 12 billion.
Speaker Change: With over 100, new models coming to market this year.
Speaker Change: At the same time, there is a massive consolidation underway.
Speaker Change: You will favor the most innovative cost competitive and the well funded player.
Speaker Change: This.
Tristan: This is tristan.
Tristan: Also have several implications for how ultimately.
Speaker Change: Designed under delivered.
Speaker Change: It currently is.
Speaker Change: Lewis is issued and the renewed through the some other weird because touch screen.
Speaker Change: Resulting decaire consume like a trs.
Speaker Change: And is generating additional revenues for the automaker.
Truthfully is currently serving as a technology partner for EV manufacturers, such as cell phones, our retail.
Speaker Change: And the other higher profile Brian.
Speaker Change: Second the does the sensors.
In the latest generation of <unk>.
Speaker Change: Means that ensures an automaker's cause shifts towards automating the claims management appearance.
Speaker Change: Do you have currently.
Speaker Change: Reducing the incidence of fraud.
Speaker Change: Totally the providing the technology to make these happen to improve the consumer claims.
Speaker Change: And the insurance risk management.
Speaker Change: Leveraging sensors and AI technology.
Speaker Change: It is now possible to recall the data before essence and automatically monitor what happens after this.
Speaker Change: This data can be swift transmitted to the insurance companies, allowing them to quickly obtain <unk> related inflammation beat off of the claim settlement.
Speaker Change: And the reduced human errors delays.
Speaker Change: By end of life, where consensus data insurance companies can also more accurately determining and extend our work damage and repair costs.
Speaker Change: Loading unnecessary dispute.
Third at level, three and level for automation, becoming reality liability, we will increasingly rely on data streams to determine whether it's been with a view to the automakers the operator or some hybrid of the two.
Truthfully collaborating closely with the relevant regulatory.
Speaker Change: <unk> therapies and industry stakeholders.
Speaker Change: These questions.
As EV integrity, and the connectivity increased and autonomous driving technologies to become a reality future ABB policies will be more accurately priced at a liability will be the widening to autonomous driving liability insurance and the tradition.
Speaker Change: We are patient.
Speaker Change: Auto manufacturers will begin to undertake a portion of our liabilities are logging apparitor down.
Speaker Change: <unk> policy for the consumer and the reducing their total cost of.
Speaker Change: Ownership.
Speaker Change: Electric vehicles, because that's what's real time.
Speaker Change: The precise data.
User and driver behavior.
Speaker Change: Which would be.
Speaker Change: <unk>.
Speaker Change: The actuarial models traditional ultra resources that are currently rely on historical data coupled with the application of AI and the insurance industry.
Speaker Change: Particularly in the actuarial science.
Speaker Change: Insurance pricing, we are shifting from a bowl.
Speaker Change: Simply.
Speaker Change: Pricing model to a diversified and.
Speaker Change: Precisely.
Speaker Change: This will result in more diverse product form such as my age based insurance and even the potential for customized pricing for each vehicle.
Speaker Change: Total score for this year.
Speaker Change: A lighter with the growth strategies, we have been falling under the critical divert diverse dynamics.
Speaker Change: That are impacting the automotive industry in China, I think the transition rapidly to a green.
Speaker Change: <unk> and global facing future.
Speaker Change: We will maintain our position as the most comprehensive.
Speaker Change: Ecosystem for auto unrelated insurance products in China.
Speaker Change: As illustrated recently by continued expansion of our relationship with Sinopec.
Speaker Change: We view aligned ourself with the leading brands in China as a key technology partner that helps the insurance and claims management directly into the work experience.
Speaker Change: We will continue to leverage the rich data streams from intelligent.
Speaker Change: Workers and AI to enhance it.
Speaker Change: I see.
Speaker Change: Risk management and the bottom line of the insurers.
Speaker Change: We'll be working with industry stakeholders, and directors to increase compliance and transparency in the industry.
Speaker Change: While establishing required stance for the rapidly approaching what else autonomous driving.
Speaker Change: We are thoughtfully pursue opportunities to expand overseas as our manufacturing partner can transact tension in markets, including.
Speaker Change: Southeast Asia, the middle Eastern.
Speaker Change: Europe.
Speaker Change: In summary, we expect that 2024 will be.
Exciting year for our industry and for Twitter.
Speaker Change: Thank you for your interesting our story.
Speaker Change: Ill now turn the call over to our CFO and Rajiv. Thank you.
Thank you Lee I'd like to begin by touching on our first.
Speaker Change: <unk> full year operational and financial highlights and providing our expectations for 224 before taking questions Checker continues to scale the business with the technology to the capitalization approach as a result total return premiums placed for the quarter increased.
Speaker Change: Thank you for calling 7% should be 6.4 billing or U S. Dollar 894 million, while total written premiums placed or for the full year increased 36, 2% year over year to $22 6 billion or U S dollar to $8 2 billion.
Speaker Change: The total number of policies placed grew 26, 3% in the first quarter to $4 8 million were for the full year that number increased to 28, 5% year over year to $15 8 million for the quarter 155000.
Speaker Change: Policies, and maybe 511 million of the corresponding premiums were embedded a new AED deliveries growing 300, a notch, 1.7% and the 322, 7% respectively year over year, how does this embedded in the new <unk> deliveries and the.
Speaker Change: <unk> bonding premiums for the full year reached 416000, and they're gonna be one point to 45 billion or U S. Dollar $204 2 million representing growth of 536, 7% and 525, 3% respectively.
Speaker Change: Compared to the prior year triggered chocolate bars.
Speaker Change: <unk> growth has been largely organic from a higher inflation.
Speaker Change: All of our marketing standpoint, with a substantial amount of business generated through word of mouth referrals and a local industrial relationships. This is illustrated by the addition of over 50.
Speaker Change: 50, and the 700, new referral partners in the quarter contributing to over $1 1 million total referral partners.
Speaker Change: Yes.
Speaker Change: In a similar vein insurance intermediaries total to over 4000 to 500, and the insurance company contracts, where over 1900 as of year end.
Speaker Change: There are children. This argument in part by our growing partnerships with AED manufacturers and their retail networks, such as our recently announced expanded partnership with Sinopec 5000 gas stations nationwide NASA.
Speaker Change: NASA less goes to financial update part.
Speaker Change: In terms of top line results we generated.
Speaker Change: $867 8 million or U S dollar at $122 2 million in the first quarter.
Speaker Change: So only 1% year over year. The increase was mainly attributable to growth in insurance transactions conducted through our platform by referral partners and third party lab Plapper partners for the year NASA revenues saw even stronger growth equating 20, so I'd point to.
Speaker Change: Two or three points, the way billing or U S. Dollar for 165 million caused our revenues in the fourth quarter was $824 2 million or U S. Dollar $116 1 million up 13, 4% in the quarter and 20.
Speaker Change: One 6% for the year to really be three points.
16 billing for our U S dollar for $145 2 million.
Total operating expenses growth, increasing 50% from 51% in the first quarter and a 19 points a week for the year has primarily been driven by the increase of share based compensation expenses and lifting related professional service fees. Excluding this non capex.
Fences.
Speaker Change: Our adjusted total operating expenses increased eight 1% of agriculture, mainly due to the increase of postal his team professional service fees for the year. Our adjusted total operating expenses decreased by 16, 6% from the prior year well as a percentage of net.
Speaker Change: Revenues adjusted total operating expenses decreased from eight 5%.
Speaker Change: Prior year to five 7%, resulting from the growth of our net revenues and the improvement of our operational efficiencies.
Speaker Change: Our net loss in the quarter it wasn't going to be.
32 million or U S. Dollar four 5 million weighted her the other comparable loss in the fourth quarter of 2022.
Speaker Change: Adjusted net loss for the quarter was a negative $4 9 million or U S. Dollar they all point to southern Neely compared to a gain of 90.
Speaker Change: $4 2 million in the prior year's quarter. The change was mainly driven by an increase of Airbnb $5 6 million in Costar listing.
Speaker Change: Professional service fees and a decrease of <unk> three.
Speaker Change: $3 7 million gross profit due to the decrease of SaaS revenues for the year No law school to the 159 6 million or U S. Dollar 22 point about Lilly dropped really be 91 million in the prior year well, excluding non-GAAP expenses.
Speaker Change: The adjusted NIE loss improved to 35, 7% from renminbi.
Speaker Change: $51 6 million to really be $33 2 million or U S dollar $4 7 million.
Speaker Change: Turning to our balance sheet, our cash position remains as chalk, what's it going to be 266 to $4 9 million in cash cash equivalents and short term investments.
Speaker Change: Providing us with healthy financial flexibility.
As we look ahead, particularly expects its net revenues for the year of 2020 for two major properties do you have to wait.
Sure it would be.
Speaker Change: <unk> 7 billion, representing an increase of $6. One besides two child point to emphasize compared to a four year old 2023. Our total written premiums placed are expected to range from $24 5 billion to really be $26 5 billion, representing an increase of.
Speaker Change: Eight 4% to 17, 3% compared to the 44 year old 2023.
Speaker Change: With that we are well well be happy to address your question. Thank you.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: We will now begin the question and answer session.
Speaker Change: You ask a question you May press star.
Speaker Change: And then one on your Touchtone phone.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: Okay.
Speaker Change: The first question today comes from you use young with CIBC. Please go ahead.
Speaker Change: Okay.
Speaker Change: Hi, Thanks management, all from a VLCC.
Speaker Change: One question. So can you give us some more color on your future strategy.
Speaker Change: U M G vehicle insurance mhm. Thanks.
Speaker Change: Although oil drones with the horrible Unfortunately for you.
Speaker Change: Oh geez.
Speaker Change: <unk> $3 2 million.
Speaker Change: Tricia do you wrong.
Speaker Change: Daniel Fula Shadow.
Speaker Change: Julien the Shimon mentioned, our strong local shelf.
Speaker Change: Calpine.
Speaker Change: Alicia.
Speaker Change: Chung of Utah.
Speaker Change: By Baidu did you you.
I don't know I'm a homogeneous.
Speaker Change: Entergy does not solely because we don't want to tell you.
Speaker Change: For me I'm, not sure foolhardy familiar and she geology, both arguments window emerging yeah, she in orange or the shutdown of the jumbo Coppola Jacobs she enjoyed up evolution.
Speaker Change: John Switchblades withdrawn or you've got some G&A number with me a bunch of other switches.
Speaker Change: Yeah.
Speaker Change: Regionally.
Speaker Change: Regarding either.
Speaker Change: Sure Egypt.
Speaker Change: Julia.
Speaker Change: Sure Julien.
Speaker Change:
Speaker Change: Okay.
Speaker Change: Our largest and EV auto insurance provider in China, we have so the.
Speaker Change: Top 10, major and EV makers in China, such as expense.
Speaker Change: Auto <unk> antibody to auto and this year, the nev insurance insurers will still be the focus of our growth strategy.
Speaker Change: <unk>.
Speaker Change: And Oh, yeah and nev.
Speaker Change: Sales have oh accounted for over 50% of the total.
Speaker Change: New cars in China. So we believe that we will continue to.
Our work with our <unk> partners and the benefit of problems that explosive.
Speaker Change: Sanchez after any of these.
Speaker Change: They already are not so sure she actually has gone up.
Speaker Change: <unk> Josh.
Speaker Change: On the two account.
Speaker Change: So are you woman.
Speaker Change: Yeah sure.
Speaker Change: To achieve so biogen loosen tinder HLA amongst should you teaching children I think yeah.
Speaker Change: I would attempt Conchy Liberal Chi children, Joshua Jerome <unk> should be bouquet.
Speaker Change: So I'm going to shoot you heard I'm wondering about the moment that GE Pratt <unk>, Zhang Jun will total 70 <unk> now.
Speaker Change: All of them and to realize she's hurdle bingo.
Speaker Change: Okay.
Speaker Change: And on.
Speaker Change: On the other hand any of these are more about the.
Speaker Change: But autonomous driving and the more intelligence. So we will and we can expect that we will work with them.
Speaker Change: More in EV makers and too.
<unk> provided more services on the precise insurance pricing.
Speaker Change: And we.
Speaker Change: Expect that the.
Speaker Change: The smart pricing in ferrous pricing cat not.
Speaker Change: Go without the big data and artificial.
Speaker Change: Intelligence technology. So we will continue to invest in this aspect to meet the needs of the smart.
Speaker Change: Auto insurance and the needs of our partners.
Speaker Change: Thank you very much.
Speaker Change: The next question comes from Mark long with crime impact capital. Please go ahead.
Speaker Change: Yeah.
Speaker Change: Hi, Lee.
Speaker Change: Sandra team congratulations on a very strong 2023.
Speaker Change: And positioning the company for a very strong 2024.
Speaker Change: My question was about.
Speaker Change: Your plans for continuing to develop.
Speaker Change: AI based technology for.
Speaker Change: The auto insurance market in.
Speaker Change: Especially the EV space could you elaborate on your plans for deploying.
Speaker Change: AI and machine learning as you continue to expand your product set.
Speaker Change: Okay.
Mark: Thank you Mark.
Mark: On the day.
Mark: China unchanged.
Mark: Biogen being good quadrant do not choose to draw that you're sure Chi.
Sure.
Speaker Change: Joshua dialogues Italiana should you Nonetheless, Google now.
Speaker Change: Which has all the <unk> and <unk>.
Speaker Change: Or what other.
Speaker Change: You don't see more multilingual phone Cuda particular chili on this users would your vocal Joshua and Josh have seen way how are you.
Speaker Change: She was the only issue.
Speaker Change: She was gonna finally, so each year to ensure.
Speaker Change: Thanks.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Oh, the smart insurers it depends on the data that we have.
Speaker Change: The gain from the autonomous driving and.
Speaker Change: At present on China, and the smart on Ltvs have a connected into the Iot system and can provide a rich driving data and driving behaviors. The mileage and ended the scope of <unk> and its behavior and the battery information.
Speaker Change: Sure.
Speaker Change: D von <unk> could be on a remote technologies.
Speaker Change: <unk> also grew.
Speaker Change: <unk>, Oman insurance, you're going to change.
Speaker Change: And Jim in pushing harder thing yeah.
Speaker Change: And she got a lead they are down.
Speaker Change: Trillium program should we hope women copilot show in the genomic picture could.
Speaker Change: Quite to the downstream <unk> interesting call.
Speaker Change: Well so the teams are launching.
Speaker Change: 20, <unk> <unk> <unk>.
Speaker Change: And therefore for the shoulder, Chile, so delusional easier for tutorial.
Speaker Change: Yeah.
Speaker Change: And then there are two aspects.
Speaker Change: As to how we will.
Speaker Change: Deploy the artificial intelligence Oh, my hand, we will assess the insurance carrier.
Speaker Change: Two.
And I realize a diversified there.
Speaker Change: Pricing for the Iot vehicles and there too.
Speaker Change: Uh huh.
Speaker Change: I too have a potent anti fraud and efforts and on the other hand and when the accident happens.
Speaker Change: Our.
Speaker Change: Our smart claim system, well update the information to that.
Speaker Change: Claim center after insurance carriers.
Speaker Change: And Oh, that's not insurers and the.
Speaker Change: Precise pricing cannot cannot go without the rich data.
So we will immediately tricia promotions that <unk> Zhengzhou, Suzhou Chongqing Fuji number Tricia Jonas when you throw in trying to June I mean, who you are.
Speaker Change: <unk> G should you saw the amount of tissue the Iot deals with the Jamba yugo changing though.
Speaker Change: Yeah.
Speaker Change: Florida, John that you know Lee we changed all filmed her tongue in bundle.
Speaker Change: Thank you.
Speaker Change: A lot of food.
Speaker Change: Tissue.
Speaker Change: Okay.
So we believe that the auto insurance and we all are.
Speaker Change: Trying to get from the current of financial product into.
Speaker Change: Into a more.
Speaker Change: Iot based and online services with a precise.
Speaker Change: So those pricing and other financial services with a growth of more smart vehicles.
Speaker Change: Thank you.
Speaker Change: As a reminder, if you would like to ask a question.
Speaker Change: Press Star then one to be joined in the queue.
Speaker Change: I would like to turn the conference back over to Lee for any closing remarks.
Speaker Change: Yeah.
Speaker Change: Thank you everyone for joining the call. If you have any follow up questions.
Speaker Change: Please.
Speaker Change: Investor relationship have a good day. Thank you everyone. Thank you.
Speaker Change: Yeah.
Speaker Change: The conference has now concluded.
Speaker Change: Attending today's presentation you may now disconnect.