Tuniu Corporation Price & Performance (TOUR)

And welcome to our twenty twenty four fourth quarter and full year earnings conference call. Joining me on the call today are Donald Wu, Tuniu Founder, Chairman and Chief Executive Officer and Anng Jiang Chen, Tuniu's Financial Controller. For today's agenda, management will discuss business updates operation highlights and financial performance for the fourth quarter and fiscal year twenty twenty four. 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 certain non GAAP financial measures Please refer to our earnings release, which contains 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 funders Chairman and Chief Executive Officer, Donald Ou. Thank you, Mary. Good day, everyone. Welcome to our fourth quarter and full year [indiscernible] Earnings conference call. 2024 has been a year filled with achievements and milestones for Tuniu. With the recovery of the tourism market, our business is making steady progress and our profitability continues to grow.

On the financial side, in 2024, we achieved our first GAAP profit for the full year since our listing. On a non GAAP basis, net income grew by over 70% year over year reaching a record high since our IPO. While demonstrating the company's profitability, we are also meaning to share our interim achievements with our shareholders. Therefore, the Board of Directors approved a special cash dividend in March 2025. With approximately US4.2 million dollars allocated for distribution. Additionally, in March 2024, we announced a share repurchase [indiscernible] repurchase program and have spent over $6,200,000 on buybacks throughout the year In total, we returned approximately US10 million dollars to our shareholders in 2024. For our products we remain committed to innovation and adopt to evolving customer needs. In addition to continuously up we launched new products [indiscernible] such as the new Select product to better sell a wider range of customers. Our commitment to serve them remains strong. As we focus on customers' needs and strive to deliver high quality experiences. We implemented initiatives to improve customer satisfaction rate such as new tools zero shopping policy, for all of its itineraries. [indiscernible] for flight tickets. In terms of channels, we proactively embrace new media and continue to strengthen our live streaming presence.

At the same time, we collaborated with more online and offline partners to sell our customers and strengthen our capabilities in supply chain. Products and services. Next, I will provide a more detailed overview of the company's business achievements in 2024. For domestic tours, we saw an increase in demand for private and small group tour. As well as more self guided tours in response to this trend. We increased our supply of private and small group tours.

Private tours have become a standalone on the homepage of the Twilio app. And our in house new tool product now feature a significantly larger selection of private and small growth tour. For self guided tools, leveraging the company's accumulated strength in supply chain management we have further increased the supply of fragmented resources. In order to offer more flexible arrangement options. For customers. In addition to increasing the size of standalone resources such as flights, hotels and attraction tickets we have also launched a variety of day tour products to attract more self guided travelers who have already arrived [indiscernible] At the same time, we will continue to leverage Tuniu's advantages in dynamic texting technology [indiscernible] to better serve deaf guided travelers For outsponded tours, customers remain focused on destination coverage and the product variety. Many own our new tour customers are experienced travelers who are not taking their first trip abroad. To better serve this segment, we have introduced more in-depth single destination tour products Additionally, we have expanded our offerings to include new destinations such as South Africa and the Polar Regions. For our in house products, new tools have built a large loyal customer base. With a repurchase repurchase rate [indiscernible] that our regular product.

In 2024, transaction volume for new tour products grew by over 30% year over year. Nuitool has earned a [indiscernible] favor and trust by delivering exceptional experience. And we are committed to provide even higher quality products to the customers. Last year, New Tool fully implemented a zero shopping policy significantly enhancing the travel experience. This year, we will introduce more premium products including customized travel itineraries, tailored to customers preferences. In addition, with the growing popularity of travel from lower tier cities and the rise of checklist style travel among younger generations. We launched the in house new select of products in the third quarter last year. In 2024, transaction volume from cities outside the Tier one cities contributed more than 50% of Tuniu's total transaction volume. New Select products have gained significant popularity. Especially among first time travelers to new destinations. Due to their highly competitive product pricing. This year, we will continue to expand this supply of new selected products particularly outbound tour options. To meet the growing demand for first time international travel from customers in lower tier cities. In terms of sales, we have been continuously expanding the diversity of our sales channels As information is increasingly consumed via video content as opposed to text and images.

User habits are also changing Closing livestreams and short videos has become an essential part of daily life In 2024, we made significant progress in this area. We expanded the variety of life streaming products and the [indiscernible] introducing more organized tours and up to one travel products We also adjusted the product structure seasonally to meet the diverse needs of customers. In addition, we explore new approaches our core organizer tour business by experimenting with live streaming directly from travel destinations. Which received positive feedback. In 2024, our live streaming channels performed exceptionally well with both transaction and verification volume increasing by over 100% year over year. While the verification rate continued to improve. This year, we Tuniu will continue to leverage our experience and abilities in live streaming to further explore new media channels. We also made a significant progress in expanding our offline and external channels in 2024. The transaction volume of our offline stores grew by over 50% year over year. This source have attracted partners with their diverse product offerings advanced systems and promotion policies. At the same time, our offline stores have also helped increase the sales of our in house brand brand and contributed to brand promotions.

This year, we will continue to open more offline stores. Working closely with partners to provide customers with more personalized premium services. In our collaborations, with traffic platforms, we attracted customers [indiscernible] streamlined booking process and high quality service experience. By collaborating with external partners, we are able to provide our resources and high quality services to a broader customer base. For external channels, we will continue to embrace an open and collaborative approach striving for win win outcomes with all partners. Finally, regarding technology, we see great potential and opportunities in the combination of large language model agent with tourism We are catching Tuniu opportunities and invest in R and D. To improve our internal efficiency as well as user experience. Enhancing our conversation enhancing our conversion rate [indiscernible] and repurchase rate. Our goal is to provide customers with better solutions and prepare proactively for the evolving market landscape. In summary, 2025 will bring more opportunities and challenges in travel market This year, we will focus on product and service upgrade, channel expansion, and the technology technological advancements. We will remain resilient amidst change seeking opportunity opportunities and achieving high quality business development. In addition, we will leverage new technologies to further improve internal operational efficiency.

Reduce costs and achieve sustainable development and profitability [indiscernible] I will now turn the call over to Ancheng, our Financial Controller for the financial highlights. Thank you, Donald. Hello, everyone. Now I will walk you through our fourth quarter and fiscal year twenty twenty four financial results in greater detail Please note that all the monetary amounts are in RMB unless otherwise stated. You can find the U. S. Dollar equivalents of the numbers in our earnings release. For the fourth quarter of twenty twenty four, net revenues were RMB102.7 million, representing a year over year increase of 3% from the corresponding period 2023. Revenues from Kabi Tours were up 3% year over year to 75,400,000.0 and accounted for 73% of our total net revenues for the quarter. The increase was primarily due to the growth of optimized tours Other revenues were up 3% year over year to RMB27.3 million and accounted for RMB27. Percent of our total net revenue. The increase was primarily due to the increase in the fees for advertising services provided to Toys and Board and bureaus. Gross profit for the fourth quarter of twenty twenty four was $69,800,000 down 6% year over year. Operating expenses for the fourth quarter of twenty twenty four were $82,500,000 down 58% year over year.

Research and product development expenses for the fourth quarter of twenty twenty four were 13,300,000.0, up 28% year over year. The increase was primarily due to the increase in research and product development personnel related expenses. Sales and marketing expenses for the fourth quarter of twenty twenty four were $42,700,000 up 28% year over year. The increase was primarily due to the increase in sales and marketing personnel related expenses and promotion expenses. General and administrative expenses for the fourth quarter of twenty twenty four were 26,800,000.0 up 36% year over year. The decrease was primarily due to the decrease in general and administrative personnel related expenses Net loss attributable to ordinary shareholders of Tuniu Corporation was 24,200,000.0 in the fourth quarter of twenty twenty four. Non GAAP net loss attributable to ordinary shareholders of Tuniu Corporation which included the share based compensation expenses amortization of acquired intangible assets and impairment [indiscernible] property and equipment. Net 6,400,000.0 in the fourth quarter of twenty twenty four. As of December 31, 2024, the company had cash cash equivalents restricted cash certain investments and long term time deposits. Of RMB1.3 billion. Capital expenditures for the fourth quarter of twenty twenty four were RMB1.2 million, Now moving to full year 2024 results.

In 2024, net revenues were 513,600,000.0 representing a 16% year over year increase. Revenues from packaged tours were up 22% year over year to 4 and 7,500,000.0 and accounted for 79% of our total net revenues in '20 The increase was primarily due to the growth of organized tour Other revenues were down 2% year over year to 106,200,000.0 and accounted for 21% of our total net revenues in 2024. The decrease was primarily due to the decrease in revenues generated from financial services Gross profit were RMB358 million. In 2024. Up 22% year over year. Operating expenses were RMB292.8 million in 2024, down 25% year over year. Research and product development expenses were $52,700,000 dollars in 2024. Down 8% year over year. The decrease was primarily due to the decrease in research and product development personnel related expenses. Sales and marketing expenses were 01/2024, up 53% year over year. The increase was primarily due to the increase in promotion expenses. General and administrative expenses were $87,700,000 in 2024, down 23% year over year. The decrease was primarily due to the decrease in general and administrative personnel related expenses. Net income attributable to ordinary shareholders of Tuniu Corporation was 77,200,000.0 in 2024.

Non GAAP net income attributable to ordinary shareholders to Tuniu Corporation which excluded share based compensation expenses amortization of acquired intangible assets net gain on disposals of subsidiaries and the impairment of property and equipment. Net was 80,800,000.0 in 2024. Cash flow generated from operations for 2024 was $84,000,000 Capital expenditures were $12,000,000 in 2024. For the first quarter of twenty twenty five, the company is set to generate $106,600,000 to 122,000,000 of net revenues. Which represents an 8% to 13% increase year over year. Please note that this forecast reflects Tuniu current and preliminary views on the industry and its operations. Which is subject to change. Thank you for listening. We are now ready for your questions. Operator?

Thank you. The question and answer session of this conference call start in a moment. In order to be fair to all callers who wish to ask a question, will take one question at a time for each caller. The first question comes from Stacy Zhao, a Private Investor. Please go ahead. Hi, management.

Congratulations on a profitable year. Can you share with us your projections for the 2025 revenue and profit what are some key drivers to support revenue growth? Are you going to maintain quarterly or yearly profitability? Thank you.

Thank you for the questions. In 2025, the total travel market will continue to grow. While the market competition is getting more intense. In the form of both quality and price. We have continued to adopt high quality business development strategy trying to beat the industry average growth rate. On the product side, we are investing in products upgrading and innovation for our core products. For example, we'll introduce more in-depth and single destination tour products for our new tours. To better serve and retain our repeat customers, Based on factors such as the intense competition will keep competitive pricing for certain products and product lines to attract more new customers. Therefore, our gross profit reached will be negatively impact this year On the sales side, we'll continue to expand the diversity of our sales channels To embrace the changing user habits, we will expand sales on new media channels. We will leverage our experience and capabilities in live streaming expanding to more platforms. Last year, live streaming channel contributed about 10% of our total GMV. For offline channels, currently, we have over 200 stores nationwide This year, we are largely increased the number of offline stores. Maybe double that number.

On the technology side, we focus on AI agent through combining the power of AI agent with our insights of leading travel market. We will further enhance our user experience and improve operationally operational efficiency. As for your questions regarding profits, we believe our full year GAAP net income in 2024 has demonstrated Tuniu's ability to be profitable and serve as a meaningful step toward achieving long term profitability. In 2025, the market is filled with new opportunities and challenges. So we plan to make some investments as mentioned about In product innovation, sales channel, expansion and R and D. To further improve user experiences and internal efficiency. With these improvements, we will refine our competitive advantages and consolidate our market position. So as to drive the long term sustainable growth of Tuniu. Despite our investments we are still aiming for a profitable year in 2025. Quarterly performance may vary due to the seasonality and the third quarter is expected to be the season the peak season and will contribute the majority of the annual profits. Thank you. We are now approaching the end of the conference call. I will now turn the call over to Tuniu's Director of Investor Relations, Mary.

Closing remarks.

Once again, thank you for joining us today. Please don't hesitate to contact us if you have any further questions. Thank you for your continued support and we look forward to speaking with you in the coming months.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a good day.