Tongcheng Travel Holdings Limited

In 2025, China's travel industry and their company entered a new phase of high-quality development. Over the past year, we witnessed resilient travel demand with increasingly diversified trends. As immersive and experiential consumption continues to gain popularity, amidst this backdrop, we deeply dive into user needs and comprehensively optimize our travel products and user experiences. As a result, both our user base and our crew demonstrated robust growth in 2025, with APU reaching a record high. The robust business growth reflected the ongoing enhancement of our service quality and the expanding influence of our brand. The year 2025 was a year of challenges and opportunities for us. In response to consumers' diversified and personalized needs, we continuously enriched our product offerings. Facing growing expectations for premium services, we consistently improved our service quality. Amidst AI-driven technological revolution, we proactively embraced new frontier technologies with an open attitude. All these showcased our strong organizational agility and exceptional execution capabilities, further reaffirming our commitment to our user-centric mission of make travel easier and more joyful. The Chinese government sees travel as a vital pillar of national economic development. The latest 15 five-year plan has explicitly stated the commitment to expanding the supplies of high-quality travel products and to enhancing travel service standards with the goal of establishing China as a premier travel destination. From the pilot implementation of autumn and winter vacations in certain regions to the longest spring festival holiday on vacation, These expanding holiday arrangements underscore significant governmental support for the travel industry. In terms of demand, travel has become an essential part of people's pursuit of a better life with seasonal themes such as spring flower viewing, summer retreats, fall foliage tours, and winter snow activities continuously gaining popularity. In the coming year, we will remain focused on domestic market and deep dive into user needs, aiming to further solidify our leading position in the mass market. Simultaneously, we will make intensified efforts to capture growth opportunities in the outbound travel market to propel our global expansion strategy. On the operational front, we will continue to implement technological innovation and product upgrades centered on user experience. While enriching membership privileges, and deepening youth engagement. In 2021, we tapped into the hotel management business. After several years of rapid expansion, it has now gained meaningful scale. The integration of Wanda Hotels and Resorts in 2025 marked a pivotal milestone in the development of our hotel management business. This strategic move strengthened our brand portfolio and ecosystem while substantially elevating our competitiveness and market influence. By consistently executing our strategy and leveraging our strong Internet DNA, we are very positioned to accelerate the segment expansion in 2026, laying a robust foundation for our long-term sustainable growth. Amidst the rapid advancement of AI technology, we are devoted to expanding the application of AI in our business process for the optimizing operational efficiency and enhancing user experience. Building on our user-centric value proposition, market acumen, and superior execution capabilities, we are confident that we will continue broadening our competitive mode in the travel industry. Moving forward, we will continue to export our technologies and expertise to empower our partners and support a broader industry ecosystem, while strengthening our commitment to corporate social responsibility to foster sustainable industry growth and create greater value for all stakeholders. Next, I will hand over the call to Joyce. She will share with you our business and operational highlights of the fourth quarter and the full year of 2025. Joyce, please go ahead. Thank you, Hope.

2025 was a pivotal year of growth and achievement for our company. Beyond the steady expansion of our domestic business, our outbound travel and hotel management businesses made remarkable progress contributing meaningfully to the overall growth momentum of the company. During the past year, we acutely grasped users' evolving preferences and precisely captured emerging demands. This enabled us to once again deliver solid growth across all business segments, highlighting our excellence in strategic execution, operational efficiency, and organizational agility, Throughout the year, our accommodation business sustained robust growth momentum and achieved a record high in room-night sold. In early 2025, we identified a notable shift in users' preference toward high-quality hotels. In response to the changes, we strategically reallocated operational resources to meet this evolving demand, resulting in an approximately 5 percentage point year-over-year increase in the proportion of high-quality hotels built on our platform. In the meantime, we prioritize enhancing user experience. We not only offer the best value-for-money products and services, but also provided faster and more responsive support to user requests to further strengthen our presence in the mass market. As for our international business, we continue to enhance our product capabilities by deepening partnerships with third-party providers, as well as expanding our product and service offering. In addition, we leveraged our domestic user base to drive cross-sell initiatives and execute a precision marketing campaign, targeting high-potential users. All these efforts collectively led to nearly 30% growth in our international room night sold in 2025. In terms of our transportation business, it continuously demonstrated strong resilience throughout the year. Over the past year, we've placed a strong emphasis on improving both user experience and engagement. At the core of the efforts is our algorithm-driven pricing system, which leverages advanced algorithm capabilities to provide users with viable and accessible travel solutions. By utilizing a comprehensive range of transportation options, the intelligent system significantly enhances the overall travel experience for users. In the fourth quarter, we launched skiing-themed marketing campaigns and rolled out various benefits to skiing enthusiasts, so as to reinforce our positioning as an experience-driven platform and further engage our user base. On the international front, We focused on improving operational efficiency by implementing a more disciplined subsidy policy and expanding our VAS offering. As a result, we achieved a balanced growth in both volume and revenue throughout the year, with volume growth of nearly 25% for 2025. As mentioned at the beginning of the speech, 2025 marked a milestone year for our hotel management business with significant progress achieved. This year, we successfully completed the acquisition of Randa Hotels and Resorts, a company that possesses a renowned portfolio of upper upscale and luxury hotel brands with strong market presence in China. In addition to its hotel management expertise, the company is the only hotel management firm in China, with proven specialization in operating ski resorts. This unique capability can help us strengthen supply chain resources in the travel industry, thereby enhancing our influence and competitiveness. Furthermore, Wanda Hotels and Resorts operates its own in-house design institute, which is recognized as one of the leading hospitality design teams in China and has received numerous prestigious international awards. The team possesses strong capabilities in designing and managing large-scale hotels, as well as convention and exhibition centers. Its design solutions serve not only its own properties, but also high-end hospitality projects across the industry. Following the acquisition, the Wanda Hotels and Resorts team underwent a seamless integration process, resulting in a significant boost to its vitality. and optimize organizational capacity and refine strategic direction. This strategic integration has improved our brand portfolio, strengthened our market presence, and accelerated the sustainable growth of our hotel management business. Regarding our Elon Hotel technology platform, we remain focused on expanding our geographical footprint while prioritizing quality growth throughout the years. The platform also offers technology-enabled hotel management solutions featuring a proprietary property management system, a smart marketing solution, e-room TV, and service robots for automated in-room delivery. By the end of December, our total number of hotels in operation exceeded 3,000, with more than 1,800 in the pipeline. Looking ahead... We are committed to further expanding our asset-light hotel management business through network expansion and ecosystem enablement. This strategic approach will position us to achieve leadership in China's hotel industry and establish a second growth engine for the company. Traffic operation has been the foundation of our success, leveraging the Wastemuni program. we have effectively reached a broad user base across China, in particular those in lower tier cities. Over the past year, the recent ecosystem continued to serve as a critical traffic channel, very focused on enhancing operational efficiency. At the same time, our standalone app, a key driver of new user acquisition, demonstrated strong growth momentum over the past four quarters. To attract younger demographics, we wrote out a series of innovative products and engaging marketing campaigns to enhance user mindshare and solidify our positioning as an experience-oriented travel platform. As such, the average DA use of our standalone app posted more than 30% growth year-over-year in 2025. Additionally, social media has played an increasingly vital role in engaging users, particularly those younger audiences. During the year, we stepped up our efforts in social media platforms to connect with younger travelers and broadened our user reach. Through effective and targeted user engagement, we have accumulated the most extensive user base in China's OTA industry. For the 12 months ended December 2025, our annual paying users climbed to 253 million, representing a year-over-year growth of 6%. In addition, the accumulated number of passengers served on our platform over the past 12 months continued to expand and reached 2,034 million, with an annual purchase frequency exceeding 8 times per user. Moreover, our annual output for the year further rose to RMB 76.8, reflecting a year-over-year growth of 5.5%. Besides, our MPU also maintained a growth trajectory throughout the year and increased by 6% year-over-year to $46 million for 2025. As an innovation-driven company, we fully embrace new technologies such as GenAI, to transform our business. In December, we rolled out collaboration with Yanbao, enabling users to access to our travel booking services via the Weixin Mini program by searching travel itineraries on Yanbao app. In mid-March last year, we introduced our AI-powered travel planner, DeepTrip, which integrates the supply chain capabilities and market insights of our platform with the reasoning capabilities of GeepSeek. Over the past few quarters, we have continuously refined its functionality, incorporating social features to enhance its shareability among users. In the fourth quarter, we embedded a map tool to give users a clearer visual representation of their travel destinations. By the end of December, approximately 6.8 million users in total have utilized GeepTrip Additionally, we extended its application to some business scenarios by integrating DigTrips into air ticketing service. We aim to address users' pre-booking inquiries as well as helping them find competitive ticket prices, which not only improves operational efficiency but also enhance overall user experience. In customer service, AI now covers around 80% of user inquiries, demonstrating its important role in streamlining operations and enhancing user experience over the past year. We have consistently advanced the integration of AI in every phase of the customer service process, which not only reduced the workload of customer service staff, but also improved overall operational efficiency. Furthermore, we have made continuous advancements in AI capabilities to enhance its precision in identifying user requests and delivering timely, contextually relevant, and human-like responses. By leveraging AI-driven solutions, we aim to further optimize customer interaction, reduce response time, and maintain seamless user support as we continue to grow. In pursuit of global excellence, In ESG practices, we have achieved milestones in improving our ESG performance over the past few years. Notably, in 2025, our MSCI ESG rating was elevated to the top AAA level, surpassing 95% of global industry players. In addition, we were included in the S&P Global Sustainability Yearbook China for the third consecutive year. And we're also honored with the Industry Mover Award for our remarkable progress in driving sustainable development within our sector. All these achievements have not only demonstrated our leadership in ESG performance among global peers, but also reflected our resilience and excellence in corporate sustainability in the face of market uncertainty, evolving policy landscape, and dynamic social development. We remain dedicated to further strengthening our ESG practices and contributing to a more sustainable future. I'll stop here and give the call to our CFO, Julian. He will share with you the detailed financials in the fourth quarter and for the year of 2025. Julian, it's your turn.

Thank you, Joyce. Good evening, everyone. Over the past quarter, China's travel industry showcased remarkable resilience, driven by rising demand for immersive and experiential travel experiences across both traditional holiday hotspots and newly emerging destinations. Leveraging our profound understanding of evolving traveler preferences, we delivered another quarter of robust performance, having off a highly productive year. In the fourth quarter of 2025, we achieved healthy growth in both top and bottom lines. We reported net revenue of RMB 4.8 billion, representing a 14.2% year-over-year increase from the same period of 2024. We executed targeted marketing campaigns to strategically prepare for the 2026 Chinese New Year, while upholding rigorous cost discipline to ensure financial prudence. During the fourth quarter, our adjusted net profit rose to RMB $779.8 million, reflecting 18.1% year-over-year growth. The increase was principally fueled by the enhanced economies of scale and the optimized operations of our OTA business. Our core OTA business revenue registered a 17.5% year-over-year increase to RMB 4.1 billion during the fourth quarter of 2025. Our accommodation reservation business achieved RMB 1.3 billion in revenue for the fourth quarter of 2025, representing a 15.4% increase from the same period in 2024. The revenue increase was primarily driven by growth in hotel room night sold. coupled with the modest rise in ADR. In our domestic accommodation business, we proactively explored diverse accommodation scenarios to capture emerging growth opportunities, including themed offerings tailored to specific demands, such as winter vacation and exam season space. For our outbound accommodation business, we strengthened cooperation with third-party partners to extend product offerings as well as our destination footprint catering to growing user demand. In the fourth quarter, our ADR once again achieved year-over-year growth, benefiting from growing consumer demand for high-quality hotels and our proactive adjustments to user subsidy strategies. Supported by precise and disciplined marketing strategies, our net take rate remained stable year-over-year. Our transportation ticketing revenue for the fourth quarter reached RMB 1.8 billion, marking a 6.5% year-over-year increase compared with the same period of 2024. During the past quarter, we heightened our focus on improving user experience. We actively expanded travel supply chains and enriched VAS offerings to deliver a broader range of mobility options and ensure seamless travel experience for users. As for our international air ticketing business, it achieved balanced growth in both volume and revenue, which aligns with our long-term strategy. In the fourth quarter, our international air ticketing revenue increased to more than 7% of our total transportation ticketing revenue. Our other business segment maintains stellar growth momentum, with revenue reaching RMB 916.7 million in the fourth quarter. representing a growth of 53% year-over-year. This growth was mainly propelled by outstanding performance of our hotel management business and the consolidation of Wanda Hotel and the resource. Our tourism business achieved a revenue of RMB $777.5 million, which was largely flagged year-over-year, mainly due to our proactive reduction in pre-purchase business revenues as well as softer demand for Southeast Asia and Japan. In terms of profitability, our gross profits increased by 18.5% year-over-year to RMB $3.2 billion for the fourth quarter of 2025. The operating profit margin of our Po'oche business remains flat year-over-year for the fourth quarter of 2025, while the operating profit margin of our tourism business has been affected by the one-off goodwill impairment. Our adjusted EBITDA increased by 28.6% and reached RMB 1.3 billion in the fourth quarter of 2025. Adjusted net profit grew by 18.1% to RMB 779.8 million in the fourth quarter of 2025. Adjusted basic EPS for the fourth quarter of 2025 was RMB 0.33%. with a 17.9% year-over-year increase compared to the same period in 2024. Service development and administrative expenses in the fourth quarter of 2025 increased by 6.8% from the same period of 2024, excluding share-based compensation charges. Service development and administrative expenses in total accounted for 18.1% of revenue in the fourth quarter, compared with 18.6% of revenue in the same period of 2024. Trading and marketing expenses in the fourth quarter of 2025 increased by 22.7% from the same period of 2024, excluding share-based compensation charges. Selling and marketing expenses accounted for 32.4% of revenue in the fourth quarter, compared with 30.2% of revenue in the same period of 2024. Now, let's move to our results for financial year 2025. Our net revenue in 2025 achieved RMB 19.4 billion, representing a 11.9% year-over-year increase. The core OTA revenue achieved RMB $16.5 billion, representing a 16% year-over-year increase. Our accommodation reservation revenue was RMB $5.5 billion in 2025, representing a 16.8% year-over-year increase. Our transportation ticketing revenue reached RMB $7.9 billion, representing a 9.6% year-over-year increase. Other business revenue for 2025 achieved RMB 3.1 billion, representing a 34.4% year-over-year increase. Our tourism revenue for 2025 reached RMB 2.9 billion, representing a 6.9% year-over-year decrease. In terms of profitability, our gross profit in 2025 increased by 15.7% year-over-year, to RMB 12.9 billion. Adjusted EBITDA for 2025 improved by 26.9% year-over-year to RMB 5.1 billion. Meanwhile, adjusted net profit for 2025 increased by 22.2% year-over-year to RMB 3.4 billion. Adjusted basic EPS for 2025 was RMB 1.45. with a 20.8% year-over-year increase. As of December 31, 2025, the balance of cash and cash equivalents, restricted cash and short-term investments was RMB $12.3 billion. We highly appreciate our shareholders' consistent support and are committed to delivering sustainable capital returns. Our Board of Directors has proposed a final cash dividend of HK$0.25 per share, marking a 38.9% increase from last year. This reflects our commitment to enhance capital returns to shareholders. Over the past year, China's travel industry has demonstrated increasingly prominent trends toward diversification and personalization. As consumers place growing emphasis on emotional value and unique, experience-driven travel opportunities, notably the 2026 Spring Festival represented the longest holiday period on Raffles. During the nine-day holiday, consumers divided their holidays into multiple shorter trips, such as homecoming visits and vacation travel. Incremental demand from multiple trips during the festival has driven robust growth in our business volume. In addition, the pilot implementation of spring and autumn vacations, initially launched in Zhejiang and Sichuan, has been expanded to include more regions, such as Jiangsu and Anhui. We believe this initiative will help stimulate travel consumption and provide additional momentum to the growth of the tourism industry. Thus supported government policies. combined with sustained strength in user demand, fuels our optimism about the upward trajectory of China's travel industry in the coming year. Moving forward, we will remain focused on our core OTA business, providing users with diverse domestic and international travel products, while sparing no effort to enhance user experience. As we continue to improve operational efficiency in domestic OTA operations, we will actively expand our outbound business to foster our global brand presence. Additionally, our hotel management business will enter a new phase of high-quality growth, building a solid foundation for the company's long-term sustainable development. Concurrently, we will continue to adopt technological innovations as well as deepening the integration of AI technology with our supply chain capabilities, striving to better meet user needs. Last but not least, we will strengthen our corporate social responsibility to support the healthy development of the travel industry and to create greater value for our stakeholders. With that, operator, we are ready to take questions now. Thank you.