Token Cat Ltd (TC) 2021 Q3 法說會逐字稿

Good morning, and good evening, ladies and gentlemen. Thank you for standing by for TuanChe Limited's Third Quarter 2021 Earnings Conference Call. (Operator Instructions) 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.

女士們，先生們，早安，晚上好。感謝您參加團車有限公司2021年第三季業績電話會議。 （接線員指示）今天的電話會議正在錄音中。現在，我將把電話交給今天的主持人，公司投資者關係總監Cynthia Tan女士。請您開始吧，女士。

Hello, everyone, and welcome to TuanChe Third Quarter 2021 Earnings Conference Call. We released our earnings results earlier today, and it is now available on our IR website as well as on Newswire services. Before we continue, please note that discussion today will contain forward-looking statements made under the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995.

大家好，歡迎參加團車2021年第三季財報電話會議。我們今天早些時候發布了財報，現在可以在我們的投資者關係網站和新聞專線服務上查看。在繼續討論之前，請注意，今天的討論將包含根據1995年美國《私人證券訴訟改革法》安全港條款做出的前瞻性聲明。

Forward-looking statements involve inherent risks and uncertainties. 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 earnings release and our registration statements filed with the SEC. TuanChe does not assume any obligation to update any forward-looking statements, except as required by law.

前瞻性陳述涉及固有風險和不確定性。因此，我們未來的業績可能與今天表達的觀點有重大差異。有關此及其他風險和不確定性的更多信息，請參閱我們的收益報告以及提交給美國證券交易委員會 (SEC) 的註冊聲明。除非法律另有規定，團車不承擔更新任何前瞻性聲明的義務。

Today, you'll hear from Mr. Wei Wen, the company's Chief Executive Officer, who will provide an overview of our growth strategies and business development. To be followed by Mr. Chenxi Yu, Ronnie, the company's deputy Chief Financial Officer, who will provide additional details on the company's financial results 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. Wei Wen. Please go ahead, sir.

今天，公司執行長魏文先生將概述我們的成長策略和業務發展。隨後，公司副財務長餘晨曦先生將詳細介紹公司的財務業績，並討論財務前景。在管理層的準備好的發言之後，我們將開始提問環節。現在，我想將電話會議交給執行長魏文先生。先生，請開始提問。

Thank you, Cynthia. Hello, everyone. Thank you for joining us today on our third quarter 2021 earnings call. In this quarter, we persevered against a challenging macro environment with COVID-19 flare-ups and global chip supply shortage that constrained order production. While our revenue contracted by 38.9% year-over-year to RMB 61.1 million, primarily due to cancellation of a number of our offline auto shows in response to pandemic conditions.

謝謝辛西亞。大家好。感謝您今天參加我們2021年第三季財報電話會議。本季度，我們克服了充滿挑戰的宏觀環境，新冠疫情爆發，全球晶片供應短缺，導致訂單生產受限。我們的營收年減38.9%，至人民幣6,110萬元，主因是受疫情影響，我們取消了部分線下車展。

We forged ahead with our online initiatives, streamlined our cost base and narrowed our net loss attributable to the company's shareholders by 10.7% year-over-year to RMB 36.8 million. 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.

我們大力推動線上業務，精簡了成本基礎，歸屬於公司股東的淨虧損年減10.7%至人民幣3,680萬元。在詳細討論第三季業績之前，我們先來談談我們拓展電動車製造業務的策略計畫。

Catering to the rising consumer demand of electric vehicles, leveraging our existing platform, we are establishing a new EV business line, including design, R&D and a manufacturing team. While holding open discussions with potential strategic partners, we will announce the progress of major business transactions, if any, in a timely manner.

為了滿足日益增長的電動車消費需求，我們將利用現有平台，建立一條新的電動車業務線，包括設計、研發和製造團隊。我們將與潛在的策略夥伴進行公開洽談，並及時公佈重大業務交易的進度。

China is the largest NEV market in the world, with sales reaching over 1.3 million in 2020, representing close to 44% of all NEVs sold globally in 2021. NEV retail sales penetration in China rose to 14.8% throughout the year and 22.6% in December from 5.8% in the year 2020. According to the China Passenger Car Association, in 2022, NEV sales in China are virtually expected to reach 5.5 million, growing at a CAGR of 106%, much faster than the overall passenger vehicle market, supported by the expedited establishment of EV, infrastructure and technological advancements that have lower vehicle costs as well as improved interactive smart features.

中國是全球最大的新能源汽車市場，2020 年銷量超過 130 萬輛，佔 2021 年全球新能源汽車銷量的近 44%。中國新能源汽車零售滲透率從 2020 年的 5.8% 上升至 2021 年全年的 14.8%，12 月為 22.6%。根據中國乘用車資訊聯席會的預測，到 2022 年，中國新能源汽車銷量預計將達到 550 萬輛，年複合增長率為 106%，遠高於整體乘用車市場，這得益於電動汽車和基礎設施的快速建設以及汽車成本降低、交互智能功能改進等技術進步。

While government regulation and the industry standards on environmental protection and emission continue to be favorable, many of the emerging NEV OEMs are building a direct-to-sales network so they can interact firsthand with their users to ship their purchase experience and efficiently receive feedback on our user needs and prepare us to continuously enhance their products and services.

雖然政府法規和行業標準在環境保護和排放方面持續有利，但許多新興的 NEV OEM 正在建立直接面向銷售的網絡，以便他們可以與用戶進行直接互動，提供購買體驗，並有效地接收有關我們用戶需求的反饋，並讓我們做好準備，不斷改進他們的產品和服務。

In this context, we believe we are well positioned to capitalize on consumers' rising demand for EVs given our tremendous customer base. Under the depth and the breadth of our customer insights, we have cumulatively sold over 30 million customers and facilitated more than 1.4 million automobile sales transactions with GMV of approximately RMB 200 billion we're -- our integrated automotive marketplace.

在此背景下，我們相信，憑藉我們龐大的客戶群，我們完全有能力抓住消費者對電動車日益增長的需求。憑藉我們深入而廣博的客戶洞察，我們已累計服務超過3000萬客戶，促成超過140萬筆汽車交易，交易總額（GMV）約2000億元人民幣——我們打造了一體化的汽車交易平台。

Furthermore, we have extensive sales operations covering 125 cities as of September 30, 2021. To enable the success of our EV manufacturing, we will harness our leading auto sales capabilities and the sales network spanning from first-tier cities to provincial countries nationwide. Through seamlessly integrating our existing platform with the top-tier electric vehicle design, R&D and the manufacturing team we are building, and in-depth operation with potential strategic partners, we are confident the strategic expansion will drive significant synergistic value and ensure we secure an important stake in the EV revolution.

此外，截至2021年9月30日，我們的銷售業務已涵蓋125個城市。為了確保電動車製造業務的成功，我們將充分利用我們領先的汽車銷售能力以及覆蓋全國一線城市至省級城市的銷售網絡。透過將現有平台與我們正在打造的頂級電動車設計、研發和製造團隊無縫整合，並與潛在的戰略合作夥伴進行深度合作，我們相信，此次戰略擴張將帶來顯著的協同價值，並確保我們在電動車革命中佔據重要地位。

Now let me provide third quarter highlights from our business segments. First, we further enhanced our solid leadership position in off-line marketing services by creating new retail consumption scenarios through innovative platforms and strategic cooperation with partners. Due to resurging COVID-19 cases and the industry-wide chip shortages that affected the production schedule of many OEMs, the number of auto shows we organized were reduced to 65 across 55 cities compared to 152 auto shows in 107 cities in the third quarter of 2020. These shows generated a net revenue of RMB 33.1 million, representing a 59.9% year-over-year decrease.

現在，我想分享我們各業務板塊在第三季的亮點。首先，我們透過創新平台和與合作夥伴的策略合作，打造新的零售消費場景，進一步鞏固了我們在線下行銷服務領域的領先地位。由於新冠疫情反复，以及全行業晶片短缺影響了眾多主機廠的生產計劃，我們組織的車展數量從2020年第三季在107個城市舉辦的152場車展減少到55個城市的65場。這些車展帶來的淨收入為人民幣3,310萬元，較去年同期下降59.9%。

Looking ahead, we will continue to enhance our off-line marketing services by leveraging our powerful base and analysis capabilities and continuing to strengthen our collaboration with strategic partners and diversify our retail events and scenarios with more creative marketing solutions.

展望未來，我們將繼續利用強大的基礎和分析能力，加強與策略合作夥伴的合作，並透過更具創意的行銷解決方案使我們的零售活動和場景多樣化，從而增強我們的線下行銷服務。

We will also conduct further in-depth studies to identify in granular detail errors with relatively higher potential ROI and fine-tune our off-line presence and the mix of off-line and online marketing services autonomy.

我們還將進行進一步的深入研究，以識別具有相對較高潛在投資回報率的細微錯誤，並微調我們的線下業務以及線下和線上行銷服務自主性的組合。

Next, let's move on to our growth initiative in virtual dealership and online marketing services. During the third quarter of 2021, we extended our online marketing services penetration by providing best-in-class user management. Online training and event management services to OEMs and dealers. These improvements led to a 72.6% year-over-year increase in net revenues for virtual dealership and online marketing services.

接下來，我們來談談我們在虛擬經銷商和線上行銷服務方面的成長計劃。 2021年第三季度，我們透過提供一流的用戶管理、線上培訓和活動管理服務，擴大了線上行銷服務的滲透率，為原始設備製造商和經銷商提供服務。這些改進使虛擬經銷商和線上行銷服務的淨收入年增72.6%。

Going forward, we will further build on our existing business as an integrated automotive marketplace, while leveraging our innovative foundation to expand into EV manufacturing. Following our announcement on January 5, 2022, 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 that will allow the creation of substantial synergistic value.

展望未來，我們將進一步鞏固現有業務，打造一個綜合汽車市場，同時利用我們創新的基礎，拓展至電動車製造領域。繼2022年1月5日宣布將策略重點擴展至電動車製造後，我們將繼續與潛在的策略夥伴展開洽談，並有望找到具有高度互補優勢、能夠創造巨大協同價值的候選合作夥伴。

We are optimistic that as China's auto market undergoes structural changes towards a smarter and more energy-efficient mobility solutions. Our innovative business model, massive customer base, strong customer insights and our leading auto sales network, coupled with the top-tier design, R&D and manufacturing teams, we are building as well as the in-depth operation with potential strategic partners will unlock significant value and lay a solid foundation for success.

我們樂觀地認為，隨著中國汽車市場朝著更智慧、更節能的出行解決方案方向進行結構性變革，我們擁有創新的商業模式、龐大的客戶基礎、強大的客戶洞察力和領先的汽車銷售網絡，加上我們正在打造的頂級設計、研發和製造團隊，以及與潛在戰略合作夥伴的深度合作，將釋放巨大的價值，並為成功奠定堅實的基礎。

Now I will turn the call over to Chenxi, our deputy CFO for a closer look at our financial performance in the third quarter.

現在，我將把電話交給我們的副財務長陳曦，讓他仔細看看我們第三季的財務表現。

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 RMB 61.1 million. To navigate the challenges in the third quarter, we remain squarely focused on cost management, cutting our net loss attributable to the company's shareholders to RMB 36.8 million from RMB 41.2 million in the same period last year.

謝謝溫先生。大家好，感謝您的收看。考慮到汽車市場疲軟和疫情的影響，我們第三季的業績符合預期，淨收入為人民幣6,110萬元。為了因應第三季的挑戰，我們持續專注於成本管理，將歸屬於公司股東的淨虧損從去年同期的人民幣4,120萬元削減至人民幣3,680萬元。

We are excited our decision to enter the EV manufacturing and are ready to charter a new path forward, while continuing to pursue innovation and positioning the company to capitalize on future consumer demand. Next, I would like to walk through our third quarter 2021 financial results.

我們很高興決定進入電動車製造領域，並準備開闢一條新的發展道路，同時繼續追求創新，並讓公司更能利用未來的消費者需求。接下來，我想介紹一下我們2021年第三季的財務表現。

Before I start, please note that all numbers stated in my following remarks are in RMB unless otherwise noted. Our total revenues in the third quarter were RMB 61.1 million, decreasing by 38.9% from RMB 100 million in the same period last year. This was a result of 59.3% year-over-year decrease in revenues generated from offline marketing services.

在我開始之前，請注意，除非另有說明，以下所有數字均以人民幣為單位。我們第三季的總收入為人民幣6,110萬元，較去年同期的1億元下降38.9%。這是由於線下行銷服務收入較去年同期下降59.3%。

As we purposely resumed our off-line auto shows, off-line marketing services revenue generated from these auto shows decreased by 59.9% to RMB 33.1 million from RMB 82.6 million in the third quarter of 2020.

由於我們特意恢復了線下車展，來自這些車展的線下行銷服務收入從 2020 年第三季的人民幣 8,260 萬元下降 59.9% 至人民幣 3,310 萬元。

Revenues from special promotion events in the third quarter of 2021 were RMB 1.3 million compared with RMB 2 million in the third quarter of 2020. Revenues from our virtual dealership services, online marketing services and others increased by 72.6% to RMB 26.6 million during the quarter compared with RMB 15.4 million in the third quarter 2020, primarily due to the continuous expansion of our collaboration with 3 Webank.

2021年第三季來自特別促銷活動的收入為人民幣130萬元，而2020年第三季為人民幣200萬元。本季來自虛擬經銷商服務、線上行銷服務及其他的收入為人民幣2,660萬元，而2020年第三季為人民幣1,540萬元，成長72.6%，主要由於我們與微眾銀行的合作不斷擴大。

Our gross profit in the third quarter decreased by 35.1% to RMB 46.8 million from RMB 72.1 million 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.

我們第三季的毛利為人民幣4,680萬元，較2020年第三季的人民幣7,210萬元下降35.1%。 2021年第三季的毛利率為76.6%，而去年同期為72.1%，主要是由於收入結構的變化。

In the third quarter, selling and marketing expenses decreased by 34.6% to RMB 59.9 million from RMB 91.6 million 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 off-line events. G&A expenses increased to RMB 17 million from RMB 15.9 million in the third quarter of 2020 and RMB 14.4 million in the second quarter of 2021.

第三季度，銷售及市場推廣費用為人民幣5,990萬元，較2020年第三季的人民幣9,160萬元下降34.6%。年比下降主要由於線下活動數量減少導致推廣費用和員工薪資費用減少。一般及行政管理費用（G&A）從2020年第三季的人民幣1,590萬元及2021年第二季的人民幣1,440萬元增至人民幣1,700萬元。

Research and development expenses were RMB 9.2 million compared with RMB 7.1 million in the third quarter of 2020 and RMB 8.8 million in the second quarter of 2021, primarily due to higher stock compensation expenses for research and development personnel.

研發費用為人民幣 920 萬元，而 2020 年第三季為 710 萬元，2021 年第二季為 880 萬元，主要原因是研發人員的股票薪資費用增加。

Our loss from continuing operations were RMB 39.3 million in the third quarter, lower compared with RMB 42.6 million in the same period last year and higher compared with RMB 9.3 million in the second quarter of 2021.

我們第三季的持續經營虧損為 3,930 萬元，低於去年同期的 4,260 萬元，高於 2021 年第二季的 930 萬元人民幣。

Excluding the effects of share-based compensations, adjusted net loss attributable to the company's shareholders was RMB 34.4 million in the third quarter compared with RMB 38.3 million in the same period last year. Adjusted basic and diluted net loss per ordinary share were both RMB 0.11 in the third quarter compared RMB 0.13 in the same period last year. Adjusted EBITDA was a loss of RMB 33.5 million in the third quarter compared with a loss of RMB 37 million in the same period last year.

剔除股權激勵措施的影響，第三季歸屬於公司股東的調整後淨虧損為人民幣3,440萬元，去年同期為人民幣3,830萬元。第三季調整後每股普通股基本淨虧損和稀釋淨虧損均為人民幣0.11元，去年同期均為0.13元人民幣。第三季調整後EBITDA虧損為人民幣3,350萬元，去年同期為3,700萬元。

Now turning to our balance sheet. At the end of September 2021, we had cash and cash equivalents and restricted cash of RMB 134.3 million. For further details regarding our 2021 third financial results, please refer to our earnings press release.

現在回顧一下我們的資產負債表。截至2021年9月底，我們的現金、現金等價物及限制性現金為人民幣1.343億元。有關我們2021年第三季財務業績的更多詳情，請參閱我們的獲利新聞稿。

In the fourth quarter of 2021, we expect our net revenues to be between approximately RMB 70 million and RMB 80 million, representing a year-over-year decrease of approximately 57.8% to 51.7%. 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 on the auto industry.

我們預計2021年第四季淨收入約為人民幣7,000萬元至8,000萬元，年減約57.8%至51.7%。這主要由於新冠疫情以及全球晶片供應短缺對汽車產業的影響，預計2021年第四季預計舉辦的線下活動（包括車展、專場推廣活動）數量將減少。

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. This concludes our prepared remarks for today. Operator, we are now ready to take questions. Thank you.

此預測反映了公司對市場和營運狀況以及新冠疫情影響的當前和初步看法，所有這些看法都可能發生變化。今天的準備發言到此結束。接線員，我們現在可以回答問題了。謝謝。

(Operator Instructions) As there are no further questions now, I'd like to turn the call back over to the company for closing remarks.

（操作員指示）由於現在沒有其他問題，我想將電話轉回給公司進行結束語。

Thank you once again for joining us today. If you have any questions, please feel free to contact.

再次感謝您今天的參與。如有任何疑問，請隨時與我們聯繫。

This concludes this conference call. You may now disconnect your line. Thank you.

本次電話會議到此結束。您可以掛斷電話了。謝謝。