Token Cat Limited

Good morning and good evening, ladies and gentlemen. Thank you for standing by for Tuan Che Limited's 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 host today, Ms. Yang Song, IR representative of the company. Please go ahead, ma'am.

Hello, everyone, and welcome to Tuancho's fourth quarter and four-year 2020 earnings conference call. We have released our earnings results earlier today, and it's now available on our IR website, as well as on Newswire services. Before we continue, Please note that the discussion today will contain forward-looking statements made under the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. 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 statement filed with the SEC. Clencher does not assume any obligation to update any forward-looking statements except as required by law. Today, you will hear from Mr. Wei Wen, the company's chief executive officer. who will provide an overview of our growth strategies and business development, who will be followed by Mr. Chen Xiyu, 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.

Hello, and thank you, everyone, for joining us today on our fourth quarter and the four-year 2020 earnings score. We saw continued momentum in the fourth quarter as our net revenues of IMB 165.8 million beat the top end of our guidance ranged by 7 points and grew 65.7% versus the prior quarter. The better-than-expected fourth quarter results were primarily drawn by our offline marketing services that benefited from solid year-over-year passenger vehicle retail sales, growth of 7.5% in China. as well as our measured steps to resume our offline auto shows and the accelerating growth of our online marketing services. Additionally, we implemented rigorous cost measures such as scaling back our recruitment budget and employee size, combining our top-line recovery and strong focus on cost reduction Our net loss attributable to the company's shareholders was 25.4 million RMB in the fourth quarter, which narrowed 38.4% versus the third quarter 2020 and 62.5% year-over-year. Let's take a closer look at the fourth quarter performance of our business segments while also providing additional detail on our strategic and operational priorities. First, our offline marketing services. As we have discussed on previous earnings calls, our offline marketing events were heavily impacted by the COVID-19 pandemic, especially in the first half of 2020. However, As the pandemic became increasingly under control in China, we were able to progressively resume offline operations in late May of 2020, while keeping in accordance with all local and national regulatory guidelines on COVID-19 prevention and control. Currently, our offline order shows and special promotion events are mostly back to normal in most cities we operate. It should be noted, however, that with new reported cases in northern China in the first quarter of 2021, there's still lingering uncertainty on what is to come and how it may impact our business recovery. With our auto shows, we turn individual and isolated automobile purchase transactions into large-scale collective purchase activities. By attracting a large number of consumers, these events serve as integrated marketing solutions to our industry customers, which include OEMs, dealers and other automotive service providers. We enable interactions between large numbers of participants on both sides of a potential automobile purchaser transaction, creating a many-to-many environment with a short period of time. That's us creating value for both sides. For 2020, We organized 449 auto shows in 172 cities, compared with 1,055 in 233 cities in 2019. In the fourth quarter, we organized 230 auto shows in 135 cities, compared with 321 auto shows in 149 cities in the same period of 2019, but improving from 152 auto shows across 107 cities in the third quarter. As a result, we delivered 128.8 million RMB in net revenues generated from auto shows down 24.4% year-over-year, but increasing 55.9% quarter-over-quarter. In addition, we have developed our spatial promotion event services to better support our industrial customers through a series of integrated services, including event planning and execution. marketing training, and on-site coaching. Leveraging our deep insights in automotive transactions, we have also developed customized and targeted special promotional events for each auto dealer and OEM. In 2020, we held 207 special promotion events compared to six 127 in 2019 and in fourth quarter our events decreased 81% to 51 from 269 in the fourth quarter in 2019 with revenue decline 84.9% year over year. For our offline marketing services we continue to focus on cities where there is demand for more frequent auto shows and can therefore generate higher IRIs. For more remote cities with lower IRIs, we are focusing on online auto shows and special promotion events, a more cost-effective approach than offline events. Next. Let me move on to our goals initiative in virtual dealership and online marketing services. The extraordinary challenges that unfolded this year did stop us from capitalizing on online automotive retail opportunities that developed from the overall boost in internet usage during 2020. We focused on a number of initiatives, such as deepening our collaboration with Timor, Baidu Youjia, and WeBank, as we positioned ourselves for the continuous shift to online commerce and establish our brand as a leader in this space. Our efforts produced meaningful results. In the fourth quarter of 2020, our revenues from virtual dealerships, online marketing services, and others reached 35.9 million IMB, increasing 579.2% year-over-year. This was primarily driven by successful online promotion events that we held during the quarter. our strategic collaboration with Baidu Youjia and WeBank, and the revenues generated from our acquisition of Longyear International Limited in January 2020. Let me provide a recap on our main initiatives in online marketing services in 2020. First of all, we made headway in live streaming promotion events by leveraging our offline infrastructure, extensive relationships with OEMs and dealers, deep insights into consumer behavior, and our collaborative partnership with online e-commerce platforms. Our significant highlight in 2020 was the live streaming promotion event we conducted together with Timor-Odo. We not only organized these events for dealers, but also directly for OEMs. This event provided us with additional insights into consumers' online shopping needs, as well as the needs of OEMs and dealers. And we deliver, and we believe, can serve as good templates for our future endeavors. Our collaboration with Baidu Youjia, the auto segment of the Giant Baidu Portal, is another example of our creative online-merge-offline solutions. We helped Baidu Youjia expand its sales network to over 80 cities across China, where we serviced its operations aiming to improve sales essentially and the conversion rates for OEMs and the dealers. Looking ahead in 2021, We believe shifting consumer habits towards online commerce will continue to be a tailwind for the acceleration of the full digitalization of automotive sales to online retail platforms. We therefore see a defined path for us to continue serving the evolving consumer needs by leveraging our strengths as a leading omni-channel automotive marketplace. Now I will turn this call to Chen Xi, our Deputy CFO, for a closer look at our financial performance in the fourth quarter.