TuanChe(TC) - 2021 Q4 - Annual Report

Financial Performance - The company's net revenues were RMB644.8 million, RMB330.2 million, and RMB357.6 million (US$56.1 million) in 2019, 2020, and 2021, respectively[447]. - The net loss for the company was RMB251.3 million, RMB163.5 million, and RMB101.9 million (US$16.0 million) in 2019, 2020, and 2021, respectively[447]. - Net revenues for 2021 were RMB357.6 million (US$56.1 million), a decrease from RMB330.2 million in 2020 and RMB644.8 million in 2019[470][472]. - The net loss for 2021 was RMB101.9 million (US$15.998 million), improving from a net loss of RMB163.5 million in 2020 and RMB251.3 million in 2019[468][469]. - Adjusted EBITDA for 2021 was RMB(82.9) million (US$13.004 million), compared to RMB(141.1) million in 2020 and RMB(143.9) million in 2019[468]. - Revenue from offline marketing services, primarily from auto shows, accounted for 67.9% of total net revenues in 2021, down from 75.9% in 2020 and 93.6% in 2019[474][472]. - Revenue from referral services for commercial banks increased significantly to RMB67.0 million (US$10.5 million) in 2021, representing 18.8% of total net revenues, up from 5.7% in 2020[476][472]. - The company facilitated 158 special promotion events in 2021, generating RMB4.0 million (US$0.6 million) in revenue, which was 1.1% of total net revenues[475][472]. - Share-based compensation expenses decreased to RMB9.8 million (US$1.537 million) in 2021 from RMB17.4 million in 2020 and RMB110.0 million in 2019[469]. Business Operations - In 2021, the company organized 450 auto shows and facilitated 104,689 automobile sales transactions, with a total GMV of approximately US$2.3 billion[295]. - The company has developed a scalable omni-channel automotive marketplace approach, integrating online platforms and offline events to enhance marketing effectiveness[298]. - The company operates through its online platform and offline events, creating a "many-to-many" environment for automobile transactions[290]. - The company hosted 450 auto shows across 142 cities in 2021, a decrease from 449 shows in 2020 and 1,055 shows in 2019[316]. - The total number of automobile sales transactions facilitated by the company was 140,264 in 2020 and 104,689 in 2021, with a total GMV of approximately RMB19.8 billion in 2020 and RMB14.6 billion (US$2.3 billion) in 2021[446]. - The company ceased operations of its virtual dealership business in 2021, which had previously facilitated the sale of over 1,878 automobiles in 2019[326]. - The company facilitated 158 special promotion events in 2021 to support industry customers[295]. Consumer Engagement - As of December 31, 2021, over 26.5 million consumers have entered their information on the company's online platform, with average monthly unique visits of 3.1 million in 2021[300]. - In 2021, the company attracted approximately 3.0 million consumers to sign up for offline events through online channels[301]. - The company has created customized city homepages for over 320 cities in China to target local consumers[300]. - During 2021, consumers at offline events paid on average 4.5% less than the manufacturer suggested retail price[307]. Employment and Workforce - As of December 31, 2021, the company had 621 full-time employees, with 488 in sales and marketing[333]. - The company has adopted more prudent strategies regarding hiring, selling, and marketing in response to the COVID-19 pandemic, including scaling back recruitment budgets and employee size[449]. Strategic Developments - The company commenced its electric vehicle manufacturing business in January 2022, indicating a strategic expansion into new markets[288]. - The company completed the acquisition of Longye in January 2020, which is expected to enhance customer capabilities in consumer acquisition and management[455]. - The company plans to seek additional facilities to accommodate future growth, as its current facilities are deemed adequate for current needs[330]. Regulatory Environment - The PRC Foreign Investment Law, effective January 1, 2020, replaced three previous laws regulating foreign investment in China[341]. - The implementation regulation of the Foreign Investment Law clarifies that existing foreign-invested enterprises can change their organizational forms until January 1, 2025[341]. - The Negative List (2021 version) reduces the number of industries with restrictions on foreign investment, allowing 100% foreign ownership in certain sectors like e-commerce[348]. - Foreign-invested value-added telecommunications enterprises must be Sino-foreign joint ventures, with foreign ownership capped at 50%[344]. - The latest amendment to the Provisions on the Administration of Foreign-Invested Telecommunications Enterprises removed the requirement for primary foreign investors to have a profitable record[346]. - The Foreign Investment Information Measures require foreign investors to disclose investment information through the Enterprise Registration System starting January 1, 2020[342]. - The Security Review Mechanism mandates foreign investors to declare investments in sectors concerning state security prior to making investments[343]. Data Protection and Privacy - The PRC government has enacted multiple laws to protect personal information, including the Personal Information Protection Law, which took effect in November 2021, requiring explicit user consent for data processing[375]. - The Internet Security Law, effective from June 2017, mandates that network operators must clearly indicate the purposes and methods of personal information collection and maintain user privacy[362]. - The Data Security Law, effective from September 2021, introduces a security review procedure for data activities that may affect national security, particularly for companies processing large amounts of user data[363]. - The Anti-Monopoly Guidelines for Internet Platforms, issued in February 2021, prohibit monopolistic practices by internet platforms to ensure market competition and protect user interests[380]. - Financial institutions must adhere to the Measures for Financial Consumer Protection, effective from November 2020, which emphasizes the protection of personal financial information and requires explicit consent for data handling[377]. - The Civil Code of PRC, effective from January 2021, establishes legal protections for personal information, mandating that processing must be lawful, appropriate, and necessary[374]. - The CIIP Regulations require critical information infrastructure operators to establish cybersecurity protection systems and hold them accountable for security breaches[367]. - The Measures for the Security Assessment of Cross-border Data Transmission require data processors to conduct security assessments for data shared with overseas recipients[368]. - The PRC's regulatory framework includes severe penalties for violations of data protection laws, including fines, license revocation, and potential criminal liabilities[361]. - The MIIT's regulations on internet services prohibit unauthorized collection and use of personal information, with strict penalties for non-compliance[360]. Taxation and Financial Regulations - The PRC enterprise income tax rate is uniformly set at 25% for all resident enterprises, with a reduced rate of 15% for high and new technology enterprises[392]. - Financing guarantee companies are limited to outstanding guarantee liabilities not exceeding ten times their net assets, and specific limits apply to liabilities concerning the same guaranteed party[383]. - The CBIRC's Commercial Banks Online Lending Measures require commercial banks to independently conduct core risk control and credit assessment, prohibiting outsourcing of these functions[388]. - The CBIRC implemented a two-year transitional period for compliance with the Commercial Banks Online Lending Measures, starting from July 2020[387]. - The withholding tax rate for dividends paid by a PRC enterprise to a Hong Kong enterprise is reduced to 5% if the Hong Kong enterprise directly holds at least 25% of the PRC enterprise[402]. - Non-resident enterprises are subject to a withholding tax on PRC-sourced income at a rate of 10% unless specific conditions are met[402]. - Wholly foreign-owned enterprises in the PRC may pay dividends only out of accumulated profits after setting aside at least 10% of accumulated after-tax profits as a statutory reserve fund[417]. - Statutory reserve funds and discretionary surplus funds may not be distributed as cash dividends[417]. - Renminbi is freely convertible for current account items but not for capital account items without prior approval from SAFE[403]. - Foreign-invested enterprises must use Renminbi converted from foreign currency capital only for purposes within the approved business scope[405]. - SAFE Circular 19 lifted some foreign exchange restrictions but prohibits using Renminbi funds for expenditures beyond the business scope[408]. - PRC residents must register with SAFE for overseas investments and financing through special-purpose vehicles[413]. - The opening of various special purpose foreign exchange accounts no longer requires approval from SAFE[406]. - SAFE Circular 8 allows enterprises to use income under the capital account for domestic payments without prior proof materials for each transaction[412]. Overseas Listing Regulations - The M&A Rules require foreign investors to obtain CSRC approval before publicly listing securities on overseas exchanges if they acquire domestic companies[418]. - The Negative List (2021 Version) mandates that domestic companies in prohibited businesses must seek governmental approval for overseas offerings and listings[420]. - The Draft Overseas Listing Regulations stipulate that if a PRC enterprise's operating income exceeds 50% of the issuer's audited financials, it is considered an indirect overseas offering[423]. - Non-compliance with overseas listing regulations can result in fines ranging from RMB1 million to RMB10 million, and serious violations may lead to business suspension or license revocation[424]. Intellectual Property - The company has 167 registered trademarks and 98 software copyrights in China as of the report date[329]. - The PRC's Copyright Law protects copyrighted software for a term of 50 years, with the latest amendment effective from June 2021[389]. - The Patent Law allows for patentable inventions, utility models, and designs, with the State Intellectual Property Office responsible for approvals[389]. - The Trademark Law adopts a "first-to-file" principle for trademark registration, with the PRC Trademark Office overseeing the process[390].