Tuniu Corporation

Hello and thank you for standing by for 2 News 2025 Second 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 call 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, Ms. Mary Chin. Please go ahead.

Thank you, and welcome to our 2025 Second Quarter Earnings Conference Call. Joining me on the call today are Donald Yu, Junyu's founder, chairman, and chief executive officer, and Anqiang Chen, Junyu's financial controller. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the second quarter of 2025. Before we continue, I refer you to our safe harbor statement in 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 most directly comparable GAAP measures. Finally, please note that, unless otherwise stated, of figures mentioned during this conference call are in RMB. I would now like to turn the call over to our founder, chairman, and chief executive officer, Donald Yu.

Thank you, Mary. Good day, everyone. Welcome to our second quarter 2025 earnings conference call. In the second quarter, we saw a robust performance across the travel sector as the three holiday periods helped sustain strong consumer demand. During these holidays, 2NEW recorded year-over-year growth in both transaction volume and the number of trips. During the quarter, the company continued to maintain consistent growth momentum with net revenues increasing by 15% year-over-year and revenues from packaged tools growing by 26%. Sunil's robust supply chain has allowed us to execute our product strategy effectively with positive results. By expanding our range of offerings, we are meeting the needs of diverse customer segments while attracting more customers through competitive pricing. Together these efforts are driving sustained growth across the business. In addition, our diversified sales channels have enabled us to reach a broader customer base we are seeing more and more of ourselves coming from new channels like live streaming and offline stores at the same time we are closely monitoring the roi of each channel and maintaining strict cost control over internal operations. In the second quarter, we once again achieved quarterly profitability on both GAAP and non-GAAP basis. Let me walk you through some of our key initiatives in more detail. In the second quarter, we continued to strengthen our supply chain, which remains central to delivering high-quality products at competitive prices. First, we further enhanced our direct and centralized procurement strategies in order to lower purchasing costs. Second, we focused on resource integration. For example, by leveraging our nationwide sales network, we consolidated international flight resources and introduced connecting flights for certain outbound travel products. This approach allowed us to consolidate customers from across the country to depart from key hub cities, expanding our departure city coverage and making travel more convenient for customers in different regions. It also enabled us to take advantage of airline discounts available in those hubs allowing us to offer even more competitive pricing to our customers. In addition, we support our suppliers by offering more favorable payment terms, as well as providing system and technical support. This initiative helps us attract high-quality suppliers to collaborate closely with us. in delivering better products and services to our customers. On the product side, our various product lines continued to provide more targeted solutions for different types of customers. New tool targets lead to high end customers and maintain a high repurchase rate by focusing on quality. Over half of the customers booking new products are loyal customers. New select products have gained popularity among customers due to its cost-effective value proposition. especially on live streaming channels. We continue to expand the offerings of new select products, covering more destinations and itineraries. In the second quarter, transaction volume for new tool plus new select products grew by more than 25% year-over-year. In terms of product innovation, we continued to explore new destination offerings. For example, new tour launched its first tour in the emerging destination of the Caucasus region, which received a 100% disinfection rate. In response to strong demand, we expanded beyond the premium organizing tours and introduced more price-competitive Coqusus products under our new select line. As the summer peak season approached, we conducted a live streaming show in the region in July. As a result, transaction volume for Coqusus products in the second quarter grew by over 150% year-over-year. We also continue to diversify our sales network during the quarter, with emerging channels contributing an increasing share of total transaction volume. During the second quarter, both payment and verification volume through our live streaming channels achieved double-digit year-over-year growth. Backed by our leading position in travel live streaming, as well as strong brand recognition and product reputation, we expanded our live stream offerings to include higher-priced items, such as luxury hotels, out-scale island destinations, and long-haul outbound tours. With over a decade of deep experience in the outbound travel segment, we've successfully brought our expertise into the live streaming channels. Offering products tailored to live stream viewers supported by professional presentations and the comprehensive services such as VISA assistance. As a result, we quickly emerged as a leading outbound travel supplier through live streaming. For example, one of our in-house products for Dubai has already surpassed 10,000 paying customers since its launch earlier this year. For live streaming leader travel products, we've been encouraging more influencers to step out of their studios and conduct live streaming shows directly from their destinations. offering customers a more immersive experience. At the same time, we've partnered with a number of top and mid-tier influencers to host the dedicated live streaming shows and jointly promote our offerings. In the second quarter, live streaming's contribution to the company's total transaction volume continued to grow, rising from over 15% in the previous quarter to nearly 20%. In the second quarter, we continued to strengthen our offline store network. We expanded coverage in key cities, particularly popular departure cities, tourist destinations, and the transportation hub to build local scale and drive down operating costs. As a result, transaction volume from offline stores grew by over 20% year-over-year during the quarter. On the technology front, We continue to explore the application of AI agents across various scenarios with a focus on enhancing customer experience and improving internal operational efficiency. We are pleased to see that more and more customers and employees are actually using our AI tools to help book trips and complete tasks. We will continue to enhance and update our technology tools in response to user feedback. In conclusion, with the arrival of the summer season, the travel industry is entering its peak period. While managing the surge in travel demand, we are also closely observing shifts in customer behavior, including booking habits, travel preferences, and product choices, and are continuously refining our products and services in response. Our goal is to ensure that more new and regular customers think of 2NEW first when it comes to planning their trips. I'll now turn the call over to Anqiang, our financial controller, for the financial highlights.