Tuniu Corporation
Q1 2021 Earnings Call Transcript

Published: 3 Jun 2021

[Operator:]

Good morning, and welcome to Tuniu First Quarter 2021 Earnings Conference Call. Please note that this event is being recorded. I would now like to turn the conference over to Mary Chen, Investor Relations Director. Please go ahead.

[Mary Chen:]

Thank you, Kate, and welcome to our 2021 first quarter earnings conference call. Joining me on the call today are Donald Yu, Tuniu's Founder, Chairman and Chief Executive Officer; and Anqiang Chen, Tuniu's Financial Controller. For today's agenda, management will discuss business updates, operation highlights and financial performance for the first quarter of 2021. 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.

[Donald Yu:]

Thank you, Mary. Good day, everyone. Welcome to our first quarter 2021 earnings conference call. This spring, the domestic tourism industry has been experiencing a rapid recovery. Tuniu also experienced a strong recovery during the April and May holidays. The number of people traveling during the Qingming festival was nearly 3x that of the same period last year. And our total travel GMV during the Labor Day holiday was more than 4x than that of the same period last year. Also, for the first quarter, our operating expenses decreased over 17% year-over-year, and the net loss was narrowed significantly. Based on these encouraging things, for the second quarter, we anticipate net revenues will grow more than 300% year-over-year, delivering the first period of growth since the COVID-19 outbreak. We see great potential for growth in the travel industry with the release of pent-up tourist travel demand. However, we continue to face new challenges under the ever-changing market environment. Despite the strong demand for travel after enduring the pandemic restrictions, customers have become more demanding when selecting products with higher expectation for travel insurances and security and increase in new destinations and activities. This drives us to constantly develop innovative new products and enhance our service quality. We're always committed to develop high quality products that satisfy customers' demand. Our focus is to maximize customer satisfaction so as to raise repurchase rate for each products instead of creating the highest number of SKUs. Currently, all of Tuniu's new products are required to reach a 90% satisfaction rate for product launch, and we are expecting to increase this threshold in the future. We are fully leveraging the advantages of our integrated business model to accelerate the development of our own products. By vertically integrating across the industry, we have been able to accumulate rich resources and experience on both the supply and the demand side, which has benefited us in the development of our own products.

[Anqiang Chen:]

Thank you, Donald. Hello, everyone. Now I'll walk you through our first quarter of 2021 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 first quarter of 2021, net revenues were RMB77.4 million, representing a year-over-year decrease of 56% for the corresponding period in 2020. The decrease was primarily due to the negative impact brought by the outbreak and spread of COVID-19. Revenues from packaged tours were down 62% year-over-year to RMB45.4 million and accounted for 59% of our total net revenues for the quarter. The decrease was primarily due to the decline in travel to international destinations, impacted by the outbreak and spread of COVID-19. Other revenues were down 40% year-over-year to RMB32 million and accounted for 41% of our total net revenues. The decrease was primarily due to the decline in revenues generated from financial services.

[Operator:]

Our first question is from , a private investor.

[Unidentified Analyst:]

Congratulations on the strong recovery of the second quarter. Would you please give us more color on the performance in this quarter and the future quarters? What is your strategy for the coming 6 seasons?

[Donald Yu:]

[Operator:]

At this time, we have no more questions. So this concludes our question-and-answer session. I would like to turn the conference back over to Mary Chen for closing remarks.

[Mary Chen:]

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.

[Operator:]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.