Tuniu Corporation

Hello, and thank you for standing by for 2NEWS 2024 Third 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 is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference call, Director of Investor Relations, Mary.

Thank you, and welcome to our 2024 Third Quarter Earnings Conference Call. Joining me on the call today are Donald Yu, 2NEWS founder, chairman, and chief executive officer, and Anxiang Chen, 2NEWS financial controller. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the third quarter of 2024. Before we continue, I refer you to our safe harbor statement in the earnings press release, which applies to this call, as we will make forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, please note that unless otherwise stated. All figures mentioned during this conference call are in RMB. I would now like to turn the call over to our funder, chairman, and chief executive officer, Donald Yu.

Thank you, Mary. Good day, everyone. Welcome to our third quarter 2024 earnings conference call. In the third quarter, Our revenues and profits continued to grow, with GAAP net income reaching a record high since our listing, up to RMB 43.9 million. And our net income for the first three quarters of this year exceeded 100 million RMB. On a non-GAAP basis, we have achieved profitability for six consecutive quarters. During the seasonally strong third quarter, the market demonstrated robust demand. With more new products introduced compared to last summer, particularly for outbound travel, our product range was significantly enriched for customers. The transactional volume of our outbound travel products achieved a double-digit year-over-year growth in the quarter. As travel increasingly becomes essential for more people, we have noticed a growing diversification in customer demands, ranging from destination choices to products and services. Additionally, as methods and channels for reaching customers evolve, more advanced and diverse needs are emerging, such as in-depth single destination tours, private tours, live streaming, and short videos. Recognizing this trend, we aim to create differentiated products and services to meet the variety demands of customers. In terms of products, we are further strengthening our in-house product development, optimizing our product lines and offering tailored solutions for various customer segments to meet the broad demand for vacation travel. Meanwhile, we continue to collaborate with third-party suppliers to introduce a wider range of diverse products to meet customer demands, such as niche products and destinations. During the third quarter, we further optimized our in-house product line. Our new tour products continue to follow a high-quality approach, aiming to deliver industry-leading travel experiences. In addition to our zero-shopping policy for new tour itineraries, we are offering more small growth and private tours covering a broader range of destinations such as South America and the polar regions, which are often considered once-in-a-lifetime destinations. Our new tour products are customized for travel fans, families, and repeat customers who prioritize travel-unique experiences and are open to exploring new products and their definitions. In the first three quarters of this year, the transaction volume of new tool products increased over 30% year-over-year. Additionally, new tool products maintain a remarkable 98% customer satisfaction rate, with some newly launched in-depth outbound travel products such as those to Thailand and Bali, achieving a perfect 100% satisfaction rate. During the third quarter, responding to the surge in travel enthusiasm from customers in lower-tier cities and the rise of checklist-style travel among young people, we launched our in-house News Lab products. representing the core of 2NEWS Organized Tour product line. New select products include the most classic roles at highly competitive prices. New select products further diversify the price range of 2NEWS in-house offerings and are an excellent choice for those visiting a destination for the first time. For product promotion, we embraced popular live streaming channels to attract more new customers. We are pleased to see the new selected products that we have launched for popular domestic and outbound destinations have received very positive response during the summer vacation. During the quarter, we further explored travel live streaming shows. the total payment volume from our live streaming shows increased by nearly 100% year-over-year, while verification volume increased by over 100%, with the verification rate further improving. Additionally, we once again achieved profitability through a single channel. During the summer, Our product offerings have become more diverse and better selected. We capitalized on the demand for family tours by increasing sales of theme park-related travel products. We also expanded coverage of outbound destinations, such as the Maldives and Europe, to meet demand. and introduced cost-effective products like NewFlex for a diverse consumer base. Additionally, we offered more flexible organized tour options, such as one-day tours, to attract more self-guided tour customers. In addition, our team has become more experienced. We strengthened the setup of our in-house live streaming studios, stopped entirely by our employees who are more familiar with our products and systems, resulting in higher efficiency. Additionally, we have a dedicated verification team to help customers complete verification more quickly. In the third quarter, Leveraging our deep understanding of package tool products and the demands of our target customers, we further enhanced our live streaming models. Our influencers left their studios and conducted live streaming shows directly from the destinations, offering customers a more immersive experience. During the in-house, in-studio, out-streaming show, we adopted an encyclopedic approach to introduce destinations, which showcased our professionalism and helped us gain customer trust, leading to a rise in bookings. Furthermore, we remained committed to diversifying into new sales channels that will deliver sustainable growth. In the third quarter, we continued to expand the range of products in our offline stores, helping us provide enhanced services to customers during the peak season. Through our partnerships with traffic platforms, such as our collaboration with Alipay Transport, we attracted more customers through a streamlined booking process and superior service experience, with monthly growth in air ticket bookings during the quarter. Moreover, we collaborated with tourism bureaus of several countries including Thailand, Saudi Arabia, and Australia, leveraging two new strengthens in outbound travel markets to boost their local tourism and enhance travel experiences for Chinese tourists visiting these destinations. In terms of services, during the peak season, in addition to ensuring high-quality travel experience for our customers, we also focused on maintaining ongoing customer engagement We maintained regular customer follow-ups, inviting guests to provide feedback on our products, services, and tour guides, allowing us to identify and resolve potential issues promptly. We also promoted non-bonding policy for our flight tickets, enhancing the booking experience on 2NEW. demonstrating our commitment to integrity and transparency. We have constantly displayed our product satisfaction rating on the website, which currently stands at 94%. Our repeat customers have constantly contributed over 65% of our transaction volume. In November, a new holiday policy was introduced, adding two more public holidays starting next year. This is a positive signal for the tourism industry, especially for the travel sector, reinforcing our confidence in the long-term development of the sector. The upcoming spring festival holiday will be extended to eight days, which will further boost the public's enthusiasm for travel. We look forward to broadening and enhancing our products and services to meet the needs of our customers. High-quality products and services have always been our core competitive advantages and are an inevitable trend for industry development. 2NEW remains committed to achieving high-quality development while upholding our service quality, closely monitoring the ever-changing needs of our customers to ensure that our product services and promotion channels remain at the forefront of the industry. At the same time, we continue to prioritize efficiency improvement strict cost control and optimizing the performance of our sales channels to support the company's long-term healthy growth and profitability. I'll now turn the call over to Anqiang, our financial controller, for the financial highlight.