TOUR

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Thank you, Betsy, and welcome to our 2025 fourth quarter and full year earnings conference call. Joining me on the call today are Donald Dunde Yu, Tuniu Corporation's Founder, Chairman and Chief Executive Officer, and Anqiang Chen, Tuniu Corporation's Financial Controller. For today's agenda, management will discuss business updates, operational highlights, and financial performance for the fourth quarter and fiscal year 2025. Before we continue, please refer to our Safe Harbor statements in the earnings press release, which apply 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 our reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, 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 Founder, Chairman and Chief Executive Officer, Donald Dunde Yu.

Thank you, Mary. Good day, everyone. Welcome to our fourth quarter and full year 2025 earnings conference call. In the fourth quarter, our business continued to maintain solid growth momentum. Net revenues increased by 20% year over year, exceeding our previous guidance, while revenues from our core packaged tour products grew at an even faster pace, rising 35% year over year. At the same time, we achieved profitability for both the quarter and the year. This also marks the third consecutive year following the pandemic in which we have delivered a full year non-GAAP profitability. We have announced a long-term shareholder return plan totaling up to $50 million to be carried out during the three-year period from March 2026 via cash dividends and share repurchases. This plan reflects both our commitment to provide shareholders with sustainable returns and our confidence in the long-term outlook of the travel industry. The travel market continued to grow in a healthy manner in the past year. The extension of national holidays and other favorable policies further stimulated domestic travel demand, while the increasing number of visa-free destinations makes it easier for Chinese travelers to explore more destinations overseas. In 2025, we adopted a more proactive product strategy. By differentiating our products and product lines, we targeted distinct customer segments and offered a richer, more tailored portfolio based on customer needs. Meanwhile, we leveraged our supply chain growth to enhance price competitiveness and attract more customers. During the year, we continued to pursue an open and collaborative approach, attracting high-quality partners to expand new channels and enhance service quality for our customers. Contributions from channels such as live streaming, offline stores, and corporate clients continued to increase as a share of Tuniu Corporation's transaction volume. In addition, we actively embraced new technologies, leveraging innovation tools to further enhance our product and service and improve operational efficiency. Now I will walk you through our key achievements in more detail. First, our strong supply chain remains the foundation for delivering high-quality and price-competitive products. In 2025, we further enhanced our direct and centralized procurement strategy in order to lower purchasing costs. Moreover, based on customer needs and pain points, we consolidated flight resources and introduced several connecting flights for select long-haul travel products to niche destinations. This approach further expanded our departure city coverage, making it more convenient for travelers from lower-tier cities to travel abroad. 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, and further boosted demand for related destinations. Many hub cities such as Chengdu are popular tourist destinations themselves, allowing travelers to combine stopovers with leisure visits. As a result, these products gained strong traction upon launch. For example, our Caucasus series using connecting flights recorded over 500% year-over-year growth in transaction volume in 2025. We will continue to expand these offerings by adding more departure points and destinations. In terms of products, we continue to adopt a differentiated strategy to better serve distinct customer segments. As the core customers of our New Tour products, experienced travelers and repeat customers tend to prioritize travel experience and typically have greater flexibility in both time and budget. In 2025, New Tour introduced a wider range of niche destination products, including the organizer tours to the Caucasus region in April and to South America in October. At the same time, we further enhanced the travel experience of New Tour products by implementing a zero-shopping policy throughout the trip and by including curated experiences such as Michelin-star dining and helicopter tours. In 2024, we launched our New Select series, offering a wider range of cost-effective products and further expanding Tuniu Corporation's price tiers. In 2025, we expanded our New Select offerings to cover a broader array of international destinations. With more competitive pricing, the New Select products have attracted a wider customer base, enabling travelers to either reduce their travel budgets or explore additional destinations within the same budget, an option that strongly appeals to travel fans, particularly younger ones. The New Select Singapore–Malaysia tour series launched in June recorded over 10,000 paid bookings during the summer holiday period. We also observed a continued rise in demand for self-guided tours, particularly in the domestic travel market. Last year, we expanded the supply of our Hotel Plus X products, with hotels at the core and supported by dynamic packaging technology. We broadened the coverage to all provinces in China's mainland and further penetrated lower-tier markets. During the 2025 Labor Day and National Day holidays, transaction volume for our self-drive tour products recorded triple-digit year-over-year growth. Going forward, we will continue this strategy by expanding the supply and destination coverage of our self-guided tour products. In addition, in 2025, we continued to explore and expand diversified channels. Live streaming is playing an increasingly important role for our sales. In 2025, both payment and verification volume through our live streaming channel continued to record double-digit year-over-year growth, while achieving profitability through a single channel. The live streaming channel contributed over 15% to our total transaction volume in 2025, compared to approximately 10% in 2024. On the product side, first, we expanded the range of live streaming offerings. Beyond the traditional hotel plus scenic spot packages, we added personalized service products such as travel photography as well as more high-ticket items like long-haul outbound travel products, enriching customers' choices. Second, we fully leveraged our supply chain advantages to ensure competitive pricing. For example, our New Select products are highly popular with live stream audiences due to their good value for money. In terms of format, we increased the number of our outdoor live streaming shows, including inviting live streamers to broadcast live from destination sites. In March, Tuniu Corporation partnered with multiple live streamers to conduct a 21-day on-site live streaming campaign across 10 islands in the Maldives, generating cumulative sales of over RMB100 million. On the service side, with more than a decade of experience in the travel industry, we provide professional tour guidance and comprehensive travel-related services. In addition, we have a dedicated verification team and specialized system support in place to deliver a smoother redemption experience for customers. Offline stores remain an essential part of our overall sales and service network. As of 2025, we operated more than 400 stores nationwide. We expanded our store presence in key cities, including major popular tourist destinations and transportation hubs such as Chengdu and Xi'an, building scale in local markets to enhance operational efficiency and reduce costs. In 2025, transaction volume from offline stores increased by nearly 20% year over year. We also continued to develop channels such as traffic platforms and corporate clients, tailoring our product offerings to the specific needs of each channel. On traffic platforms, sales of standalone products such as air tickets and hotel bookings grew rapidly. For corporate clients, in addition to providing business travel booking services, we leveraged our extensive experience in the leisure segment to offer customized group travel solutions as well as personal and family vacation products for employees. In 2025, transaction value from corporate clients increased by more than 20% year over year. In terms of technology, we are exploring the application of AI agents across various business scenarios. Last April, Tuniu Corporation officially launched our self-developed travel AI agent, AI Assistant Xiao Niu. The assistant integrates vertical travel application scenarios with large language models to provide customers with one-stop services, including smart search, automated price comparisons, personalized recommendations, and dynamic packaging. At the same time, we continued to integrate technological tools into our daily operations. These initiatives have improved efficiency and helped control operating costs. We are encouraged by the growing adoption of our AI tools among both customers and employees. In addition, we have adopted an open collaboration approach by gradually providing external AI agents such as OpenClaw with the same comprehensive travel booking capabilities available in our app via MCP interface, enabling them to search and place bookings directly. We will continue to embrace new technology to support high-quality growth. Over the past year, we have made steady progress while managing a range of challenges. Overall, the company continues to move forward on the sustainable development path. In the year ahead, we will remain focused on customer needs, continue refining our products and services, and expand our reach through diversified channels to support stable and sustainable growth. I will now turn the call over to Anqiang Chen, our Financial Controller, for the financial highlights.

Thank you, Donald. Hello, everyone. Now I will walk you through our fourth quarter and fiscal year 2025 financial results in greater detail. Please note that all amounts are in RMB unless otherwise stated. You can find the U.S. dollar equivalent of the numbers in our earnings release. For the fourth quarter of 2025, net revenues were RMB123.5 million, representing a year-over-year increase of 20% from the corresponding period in 2024. Revenues from packaged tours were up 35% year over year to RMB102.1 million and accounted for 83% of our total net revenues for the quarter. The increase was primarily due to the growth of organized tours and self-guided tours. Other revenues were down 21% year over year to RMB21.5 million and accounted for 17% of our total net revenues. The decrease was primarily due to the decrease of merchandise sales. Gross profit for the fourth quarter of 2025 was RMB70 million, almost in line with gross profit in the fourth quarter of 2024. Operating expenses for the fourth quarter of 2025 were million, down 16% year over year. Research and product development expenses for the fourth quarter of 2025 were RMB12.3 million, 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 for the fourth quarter of 2025 were RMB44.1 million, up 3% year over year. The increase was primarily due to the increase in promotional expenses. General and administrative expenses for the fourth quarter of 2025 were RMB12.8 million, down 52% year over year. The decrease was primarily due to the impairment of property and equipment, net, recorded in the fourth quarter of 2024. Net income attributable to ordinary shareholders of Tuniu Corporation was RMB1.5 million in the fourth quarter of 2025. Non-GAAP net income attributable to ordinary shareholders of Tuniu Corporation, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB3.5 million in the fourth quarter of 2025. As of December 31, 2025, the company had cash and cash equivalents, restricted cash, certain investments, and long-term deposits of RMB1.1 billion. Cash flow generated from operations for the fourth quarter of 2025 was RMB68.8 million. Capital expenditures for the fourth quarter of 2025 were RMB0.5 million. Now, moving to full year 2025 results. In 2025, net revenues were RMB578 million, representing a 13% year-over-year increase. Revenues from packaged tours were up 21% year over year to RMB493.5 million and accounted for 85% of our total net revenues in 2025. The increase was primarily due to the growth of organized tours and self-guided tours. Other revenues were down 20% year over year to RMB84.5 million and accounted for 15% of our total net revenues in 2025. The decrease was primarily due to the decrease in the commission fees received from other travel-related products. Gross profit was RMB335 million in 2025, down 6% year over year. Operating expenses were RMB323.7 million in 2025, up 10% year over year. Research and product development expenses were million in 2025, up 12% year over year. The increase was primarily due to the increase in research and product development personnel-related expenses. Sales and marketing expenses were RMB193.9 million in 2025, up 8% year over year. The increase was primarily due to the increase in promotional expenses. General and administrative expenses were RMB71.8 million in 2025, down 18% year over year. The decrease was primarily due to the decrease in general and administrative personnel-related expenses and impairment of property and equipment, net. Net income attributable to ordinary shareholders of Tuniu Corporation was RMB31.1 million in 2025. Non-GAAP net income attributable to ordinary shareholders of Tuniu Corporation, which excluded share-based compensation expenses, amortization of acquired intangible assets, and impairment of property and equipment, net, was RMB42.6 million in 2025. Capital expenditures were RMB4.4 million in 2025. For 2026, the company expects to generate RMB100 million to RMB131.6 million of net revenues, which represents a 7% to 12% increase year over year. Please note that this forecast reflects our current and preliminary views on the industry and our operations, which are subject to change. Thank you for listening. We are now ready for your questions.

We will now open for questions. There are no questions at this time. I will now turn the call over to Tuniu Corporation's Director of Investor Relations, Mary Chen.

Once again, thank you for joining us today. Please do not 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.

Hello, and thank you for standing by for Tuniu's 2025 Third Quarter Earnings Conference Call. [Operator Instructions] 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. Please go ahead.

Thank you, and welcome to our 2025 third quarter earnings conference call. Joining me on the call today is 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 third quarter of 2025. 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 Founder, Chairman and Chief Executive Officer, Donald Yu.

Thank you, Mary. Good day, everyone. Welcome to our third quarter 2025 earnings conference call. In the third quarter, with the peak travel season approaching, demand for travel accelerated and the tourism industry demonstrated thriving growth. Tuniu also recorded year-over-year growth in both transaction volume and the number of trips booked. From a destination perspective, both domestic and outbound travel achieved year-over-year growth in transaction volume and the number of trips booked. In the third quarter, net revenues increased by 9% year-over-year with revenues from our core packaged tour products growing by 12%. Since the beginning of this year, quarterly revenues from our packaged tours have consistently achieved double-digit year-over-year growth. We also continued to deliver quarterly profitability on both a GAAP and a non-GAAP basis. As customer needs continue to evolve this quarter, we tapped into our core capabilities across products, supply chain and sales channels to better tailor our portfolio to market demand. In addition, we further enhanced our operational efficiency by leveraging technology tools. Next, I will elaborate in detail on some of our key initiatives. In terms of products, we continue to focus on customer needs and enhance our offerings to meet their evolving expectations. For experienced travelers and repeat customers who tend to prioritize the travel experience and usually have more time and budget. We leveraged the company's strength in outbound tourism to introduce a wider range of niche destination products. For example, in October, our new tour launched its first organized tour to South Africa -- South America. Our new tour series now spans all major regions across Asia, Europe, Africa, the Americas and Oceania. In addition, to meet the surge in leisure travel demand during the summer, we expanded our long-haul island offerings, including destinations such as Seychelles and Mauritius. In the third quarter, transaction volume for these long-haul island products grew by several times year-over-year. We fully leveraged our supply chain advantages to continuously expand destinations for our new select products and attract customers with compelling high-value offerings. For key domestic destinations such as Guizhou, we adopted on-site live streaming to offer customers a more immersive experience. In the outbound travel market, we expanded our destination coverage and offered more price competitive options, helping value-conscious customers reach their preferred destinations on a smaller budget. In the third quarter, transaction volume for our new select outbound travel products increased by more than 100% year-over-year. In response to the growing number of self-guided travelers in China, we continued to leverage Tuniu's advantages in dynamic packaging technology to expand our Hotel+X product offering. Our self-drive tour products now cover all provinces in Chinese Mainland. During the National Day holiday this year, transaction volume for our self-drive tour products increased by 5x year-over-year. For our sales channels, live streaming is playing an increasingly important role for our sales. In the third quarter, both payments and verification volume through our live streaming channels continued to record double-digit year-over-year growth while maintaining single quarter profitability. On the product side, we fully leveraged our supply chain strength during the peak season to maintain a wide reliable product range and deliver price competitive offerings. In terms of format, we expanded our outdoor live streaming activities, including inviting live streamers to broadcast live from destination sites. We formed a professional verification team and specialized system support, which together have improved efficiency across the entire process from product supply verification. In terms of external partnerships, we collaborate with top-tier live streamers to create synergies. And we work closely with mid- and long-tail creators, providing them with support and resources so we can grow together. We are pleased to see that more and more external live streamers are choosing to partner with Tuniu with some even becoming our exclusive live streamers focusing solely on selling our products. Offline stores remain an essential part of our overall sales and service network. Their personalized face-to-face service makes them particularly popular among senior travelers and community-based customers who are also key customer segments for our organized tour products. In the third quarter, we continued to expand our offline store footprint, adding locations in major cities as popular tourist destinations and key transportation hubs. In September, we opened 2 flagship stores in Xi'an on the same day to better serve customers, preparing for National Day holiday travel. In the third quarter, transaction volume from offline stores increased by nearly 20% year-over-year. The summer season is a peak period for leisure travel. And while serving individual travelers, we also continued to provide high-quality services to corporate clients. In addition to business travel bookings, we leveraged our extensive experience and strength in the leisure travel sector to offer tailored vacation products to corporate clients. We provide customized trips for some corporate clients and further extended our products and services to offer their employees with a range of personal and family vacation options. In the third quarter, transaction volume from corporate customers also recorded double-digit year-over-year growth. In terms of technology, various technology tools and methodologies have been embedded across all aspects of our operations and management, including product development and marketing, supply chain management and financial management. This has strengthened communication and collaboration between internal and external teams and further improved our operational efficiency. We will continue to explore advanced technologies such as dynamic packaging and AI applications and apply them across more scenarios to further enhance our operational efficiency and profitability. We were pleased to see the robust travel demand during this year's National Day holiday, supported by favorable factors such as the extended holiday period. Although the industry typically enters a low season in the fourth quarter. We continue to see active demand for off-peak travel, ice and snow trips and other niche segments. We will continue to seize these market opportunities by strengthening product development and adjusting our marketing efforts for seasonal needs. With a richer, more distinctive and more value-for-money product portfolio, we aim to attract both new and existing customers while also preparing fully for the peak travel period during the Chinese New Year holiday. I will now turn the call over to Anqiang, our Financial Controller, for the financial highlights.

Thank you, Donald. Hello, everyone. Now I'll walk you through our third quarter of 2025 financial results in greater detail. Please note that all 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 third quarter of 2025, net revenues were CNY 202.1 million, representing a year-over-year increase of 9% from the corresponding period in 2024. Revenues from packaged tours were up 12% year-over-year to CNY 179 million and accounted for 89% of our total net revenues for the quarter. The increase was primarily due to the growth of organized tours and self-drive tours. Other revenues were down 14% year-over-year to CNY 23 million and accounted for 11% of our total net revenues. The decrease was primarily due to the decrease in the commission fees received from other travel-related products. Gross profit for the third quarter of 2025 was CNY 109.6 million, down 10% year-over-year. Operating expenses for the third quarter of 2025 were CNY 95.8 million, up 3% year-over-year. Research and product development expenses for the third quarter of 2025 were CNY 15.7 million, up 15% 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 third quarter of 2025 were CNY 61.5 million, up 2% year-over-year. The increase was primarily due to the increase in sales and marketing personnel-related expenses. General and administrative expenses for the third quarter of 2025 were CNY 18.5 million, which was almost in line with general and administrative expenses in the third quarter of 2024. Net income attributable to ordinary shareholders of Tuniu Corporation was CNY 19.8 million in the third quarter of 2025. Non-GAAP net income attributable to ordinary shareholders of Tuniu Corporation, which excluded share-based compensation expenses and amortization of acquired intangible assets was CNY 21.8 million in the third quarter of 2025. As of September 30, 2025, the company had cash and cash equivalents, restricted cash, short-term investments and long-term deposits of CNY 1.1 billion. Capital expenditures for the third quarter of 2025 were CNY 2.1 million. For the fourth quarter of 2025, the company expects to generate CNY 111 million to CNY [ 116.1 ] million of net revenues, which represents an 8% to 13% increase year-over-year. Please note that this forecast reflects Tuniu's current and preliminary view on the industry and its operations, which is subject to change. Thank you for listening. We are now ready for your questions. Operator?

[Operator Instructions] And today's first question comes from [ Emma Li, ] a private investor.

Congratulations on a solid quarter. I've got 2 questions. First, can management share the revenue proportions by domestic and outbound tours in the third quarter? Well second, can you please elaborate on travel performance during this year's National Day holiday. Will our company still remain profitable in the fourth quarter? That's all.

Thanks for your questions. For your first question, currently, domestic tour still dominate. In the third quarter, domestic tours consisted of about 2/3 of our total GMV and overseas tours consisted of 1/3, which is almost the same as the previous quarter. For second question, we observed healthy increase in both domestic and outbound travel market during the National Day holiday. Both our GMV and the number of trips recorded during the holiday had double-digit growth compared with the same period last year. This reinforced our confidence in the sustained growth of China's travel market. For domestic market, we saw growing numbers of self-guided tours. In particular, our self-drive tours increased over 5x during the holiday. As self-guided tour is prevailing in the domestic market, we leveraged our dynamic packaging technology to enrich the supply of Hotel+X products. We used to focus our self-guided tour products on popular regions such as Yangtze River Delta and hot scenic spots such as [indiscernible] Park. This year, we extended our product offerings to all provinces throughout Chinese Mainland, partnership penetrating to lower-tier cities. We will continue to adopt this strategy as we see great potential in lower-tier cities. For outbound travel market, we recorded double-digit growth during the holiday. We saw nearly 50% increase in GMV from APAC regions. Popular destinations included Singapore, Malaysia and certain islands such as Maldives and Bali. For long-haul destinations, the Americas ranked #1 in terms of growth rate. Niche destinations are gaining appeal, especially for sophisticated travelers by their natural beauty and unique local experiences. For the fourth quarter, we expect an 8% to 13% year-over-year increase in our net revenues and the packaged tours may grow faster. We will also try our best to achieve non-GAAP breakeven or profitability for the quarter. Thank you.

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, for 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 your lines.