Token Cat Limited Q4 FY2020 earnings call

• Offline marketing services were heavily impacted by COVID-19 in 2020 but started resuming in late May 2020. Auto shows in Q4 2020 were 230 in 135 cities, improving from prior quarters. - Virtual dealership and online marketing services saw growth driven by initiatives like collaboration with TMall, Baidu Youjia, and Webank, and live streaming promotion events. - Implemented cost control measures such as scaling back recruitment budget and employee size, leading to slower operating expense growth.

For the fourth quarter, offline marketing services generated net revenues of RMB128.8 million from auto shows, which was down 24.4% year-over-year but up 55.9% quarter-over-quarter. Revenues from special promotion events in the fourth quarter of 2020 were RMB1.1 million. Revenues from virtual dealership, online marketing services and others reached RMB35.9 million in the fourth quarter, increasing 579.2% year-over-year. Offline marketing services revenues contribution: auto shows were a significant part, while virtual/online services showed strong growth.

• For the first quarter of 2021, expected net revenues to be between approximately RMB76 million and RMB80 million, representing a year-over-year approximate increase of 684% to 725.5%.

• Lingering uncertainty on business recovery due to new reported cases in northern China in the fourth quarter of 2021 and its potential impact on operations.

Q: Could you provide an update on the proposal to take the company private?

A: The company received the proposal in January and is evaluating it in-depth, with a special committee being formed.

Q: What's your perspective on consumer purchases and the state of the new car economy in China?

A: The macro economy in China has been improving, with auto passenger retail sales in the first two months of 2021 growing close to 70% year-over-year. Optimistic about improving trends for the rest of 2021.

Q: Do you expect auto show events to recover to pre-2020 levels?

A: Trying to recover the number of auto shows and city coverage to 2018-2019 levels, but priority is on ROI and operational efficiencies in operating cities.

Q: Will operating expenses ramp up as top line recovers?

A: OpEx will pick up in absolute figures, but cost control measures will be in place to keep OpEx as a percentage of revenue lower than in 2019 and 2020.