Good morning and good evening, ladies and gentlemen. Thank you for standing by for TuanChe Limited 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. Today's conference call is being recorded. Now, I will turn the call over to your speaker host today, Ms. Cynthia Tan, IR Representative of the Company. Please go ahead, ma'am.

Hello, everyone, and welcome to TuanChe's 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 the discussion today will contain forward-looking statements made under the Safe Harbor provisions 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. TuanChe 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, who will provide an overview of our growth strategies and business developments, who will 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.

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 a global chip supply shortage that constrained auto production. While our revenue contracted by 38.9% year-over-year to RMB61.1 million, primarily due to cancellations of a number of our offline auto shows in response to pandemic conditions, 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 RMB36.8 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, catering to the rising consumer demand for electric vehicles, leveraging our existing platform. We are establishing a new EV business line including a 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. China is the largest EV market in the world, with sales reaching over 1.3 million in 2020, representing close to 44% of all EVs sold globally. In 2021, EV 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, EV sales in China are 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 lowered vehicle costs as well as improved interactive smart features. While government regulation and industry standards on environmental protection and emissions continue to be favorable, many of the emerging EV 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 user needs and preferences to continuously enhance their products and services. 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 breadth of our customer insights, we have cumulatively served over 30 million customers and facilitated more than 1.4 million automobile sales transactions with GMV of approximately RMB200 billion via our integrator automotive marketplace. 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 counties nationwide. Through seamlessly integrating our existing platform with the top-tier electric vehicle design, R&D, and manufacturing teams we are building, and in-depth cooperation with potential strategic partners, we are confident this strategic expansion will drive significant synergistic value and ensure we secure our important stake in the EV revolution. Now, let me provide third quarter highlights from our business segments. First, we further enhanced our solid leadership positions in offline marketing services by creating new retail consumption scenarios through innovative platforms and strategic cooperation with partners. Due to the resurgence in COVID-19 cases and the industry-wide chip shortages that affected the production schedule of many OEMs, the number of auto shows we organized was reduced to 65 across 55 cities compared to 152 auto shows in 107 cities in the third quarter of 2020. These shows generated net revenues of RMB33.1 million, representing a 59.9% year-over-year decrease. Looking ahead, we will continue to enhance our offline marketing services by leveraging our proprietary data analytics capabilities and continuing to strengthen our collaboration with strategic partners and diversify our retail events and scenarios with more creative marketing solutions. We will also conduct further in-depth studies to identify in granular detail the areas with relatively higher potential ROI and to fine-tune our offline presence and the mix of offline and online marketing services accordingly. Next, let's move on to our growth initiatives 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 events management services to OEMs and dealers. These improvements led to a 72.6% year-over-year increase in net revenues from virtual dealership and online marketing services. 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 hold 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. We're optimistic that as China's auto market undergoes structural changes toward 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’re building, as well as the in-depth cooperation with potential strategic partners, will unlock significant value and lay a solid foundation for success. Now, I will turn the call over to Chenxi, our Deputy CFO, for a closer look at our financial performance in the third quarter.

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 markets and the impact from the pandemic, with net revenues of RMB61.1 million. To navigate the challenges in the third quarter, we remained squarely focused on cost management, cutting our net loss attributable to the Company's shareholders to RMB36.8 million from RMB41.2 million in the same period last year. We are excited about our decision to enter the EV manufacturing sector and are ready to chart a new path forward while continuing to pursue innovation and positioning the Company to capitalize on future consumer demand. Next, I'd 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. Our total revenues in the third quarter were RMB61.1 million, decreasing by 38.9% from RMB100 million in the same period last year. This was a result of a 59.3% year-over-year decrease in revenues generated from offline marketing services. As we progressively resume our offline auto shows, offline marketing services revenue generated from these auto shows decreased by 59.9% to RMB33.1 million from RMB83.6 million in the third quarter of 2020. Revenues from special promotional events in the third quarter of 2021 were RMB1.3 million compared with RMB2 million in the third quarter of 2020. Revenues from our virtual dealership services, online marketing services, and others increased by 72.6% to RMB26.6 million during the quarter, compared with RMB15.4 million in the third quarter of 2020, primarily due to the continuous expansion of our collaboration with Webank. Our gross profits in the third quarter decreased by 35.1% to RMB46.8 million from RMB72.1 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. In the third quarter, selling and marketing expenses decreased by 34.6% to RMB59.9 million from RMB91.6 million in the third quarter of 2020. The year-over-year decrease was primarily due to the decrease in promoter expenses and stock compensation expenses as a result of decreased volume of offline events. G&A expenses increased to RMB17 million from RMB15.9 million in the third quarter of 2020 and RMB14.4 million in the second quarter of 2021. Research and Development expenses were RMB9.2 million compared with RMB7.1 million in the third quarter of 2020 and RMB8.8 million in the second quarter of 2021, primarily due to higher stock compensation expenses for research and development personnel. Our loss from continuing operations was RMB39.3 million in the third quarter, lower compared with RMB42.6 million in the same period last year and higher compared with RMB9.3 million in the second quarter of 2021. Excluding the effects of share-based compensations, adjusted net loss attributable to the Company's shareholders was RMB34.4 million in the third quarter compared with RMB38.3 million in the same period last year. Adjusted basic and diluted net loss per ordinary share were both RMB0.11 in the third quarter compared with RMB0.13 in the same period last year. Adjusted EBITDA was a loss of RMB33.5 million in the third quarter compared with a loss of RMB37 million in the same period last year. Now turning to our balance sheet. At the end of September 2021, we had cash and cash equivalents and restricted cash of RMB134.3 million. For further details regarding our 2021 third financial results, please refer to our earnings press release. In the fourth quarter of 2021, we expect our net revenues to be between approximately RMB70 million and RMB80 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 the global microchip supply shortage on the auto industry. 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.

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

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