TOUR

Hello, thank you for standing by for Tuniu's 2026 first quarter earnings conference call. At this time, all participants are in 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, June, and welcome to our 2026 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 2026. 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 first quarter 2026 earnings conference call. The travel industry maintained solid growth momentum in the first quarter of 2026, supported in part by the longest Chinese New Year holiday on record, with both domestic and outbound travel markets seeing stable growth. In the first quarter, our net revenues increased by 13% year-over-year. At the same time, we achieved non-GAAP profitability for the fifth consecutive quarter.

This year, we will continue to strengthen both our supply chain capability and the sales channel development. Supported by the company's strength in products and industry insight, we aim to further enhance our travel resource base and business partnerships. We will also continue to leverage technology tools to improve operational efficiency and deliver high-quality products and services to a broader customer base. Next, I will go through our core strategic initiatives in more detail.

On the supply side, we will continue to expand our supplier network across areas such as car rentals, overseas hotels, and destination experiences with the aim of further broadening our product offering. Also, we will integrate demand for both Tuniu and our partners to further strengthen the advantages of our centralized procurement while maintaining product quality and price competitiveness. Last year, we added connecting flight solutions to our outbound travel products, expanding departure coverage and serving more travelers from lower-tier cities.

This year, we are extending our connecting flight solutions to domestic travel products, offering customers more flexible travel arrangements. For certain Niu Tour products, we provide travelers departing from different cities across China with integrated flight solutions. In the event of delays to connecting flights, we will assist customers in completing the remaining segments of their journeys at no additional cost.

High-quality products continue to play an important role in attracting our customers and partners. In line with this, Niu Tour has been one of our core high-quality organized tour products, supported by a relatively loyal customer base. To meet evolving customer demand, Niu Tour products have expanded into long-haul and more complex destinations, including Africa and South America.

This year, we continued to introduce new premium outbound tour products for experienced travelers, such as North America multi-destination itineraries covering the U.S., Canada, and Mexico, as well as South America and Antarctica tours, which have been well-received with many repeat customers. In terms of the domestic travel market, we see that customer demand is gradually shifting from traditional sightseeing towards more culture and experience-oriented travel. In response, we have upgraded our organized tour products through introducing more in-depth itineraries focused on single destinations.

These products reduce the number of stops within an itinerary, focus on core destinations and selected sightseeing attractions, and provide travelers with more time for exploration and local experiences. To further enhance the travel experience, many of these in-depth products are offered in small group and private group tour formats. Certain new tour products also feature experienced senior tour guides to provide in-depth commentary for travelers. We have seen that the number of self-guided travelers has continued to increase.

To address the changing needs of this segment, we expanded our Hotel+ offerings with hotels as the core component. To support this, we have strengthened direct sourcing of resort hotels and increased procurement of other travel-related products to broaden our offering. In addition, supported by AI and dynamic packaging technologies, many self-guided travel products are now content-driven for potential bookings.

After customers input relevant information, the system can automatically generate destination recommendations and travel itineraries. Customers can then select their preferred elements to customize their own self-guided travel packages, which offers greater flexibility and personalization in the booking process. We have continued to expand our channel presence. Also, together with our partners, we've worked to better identify customer needs across different channels and have accordingly adjusted our products and services to support product sales.

In the first quarter, live streaming's contribution to our total transaction volume further increased to over 20%. Both payment and the verification volume continued to record double-digit year-over-year growth. As we continue to gain experience in live streaming and better understand customer preferences, we have introduced more targeted products for different customer segments. For example, for senior travelers, we introduced European tour products with itineraries longer than 15 days.

While for family-oriented customers, we promoted customized Singapore tours and private group products. These targeted initiatives improved customer acquisition efficiency and contributed to higher verification rates. In addition, we continue to extend live streaming to destination-based scenarios. For example, we conducted onboard live stream sessions from cruise ships, providing customers with a more direct understanding of destinations and helping drive both booking and verifications.

In the first quarter, our offline store business continued to grow, with transaction volume increasing by nearly 30% year-over-year. Offline stores continued to play an important role in the sales of organized tour products and the promotion of Tuniu brands. We fully opened our systems and the product offerings to offline stores, enabling them to expand our reach into lower-tier markets and provide customers in lower-tier cities with access to a broader range of travel products, particularly outbound travel products.

This year, we plan to continue expanding our offline store network. In addition, we are further broadening our channel partnerships backed by our solid supply chain, quality products, and advanced technology tools. Our S2B2C model enables us to efficiently provide business partners with a broad range of products and services to meet the needs of their end customers. This collaborative approach creates value for both sides.

Tuniu is able to connect the supply and demand more efficiently, lower customer acquisition costs, and expand sales scale, while partners can offer high-quality travel products and services to better sell and retain their customers. Going forward, we will continue to expand our partner network and jointly serve a broader customer base. In terms of technology, we will continue to explore the application of AI technology across various business scenarios this year, further integrating automation tools into more operational processes.

Through ongoing tool upgrading and improvements to our regular operations, AI tools can assist employees in handling more repetitive tasks, allowing them to focus on more complex and innovative work. On the customer side, technology tools such as itinerary recommendation, standalone product booking, and dynamic packaging provide customers with a more intelligent, convenient, and efficient booking experience. In particular, self-guided travelers can leverage AI-assisted tools to customize travel products based on their own preferences and needs.

This year, the travel market has seen a growing number of peak travel periods. Following the spring break and the recent holidays in the second quarter, the summer travel season is approaching. This represents both opportunities and challenges. We will continue to strengthen the supply, sales, and service capabilities of our seasonal travel products and work closely with sales channel partners to provide more customers with simple, convenient, and high-quality travel experiences. I'll now turn the call over to Anqiang Chen, our Financial Controller, for the financial highlights.

Thank you, Donald. Hello, everyone. I'll walk you through our first quarter of 2026 financial results in greater detail. Please note that all monetary amounts are in RMB, unless otherwise stated. You can find the US dollar equivalents of the numbers in our earnings release. For the first quarter of 2026, net revenues were CNY 132.6 million, representing a year-over-year increase of 13% from the corresponding periods in 2025. Revenues from package tours were up 11% year-over-year to CNY 109.7 million and accounted for 83% of our total net revenues for the quarter.

The increase was primarily due to the growth of outbound tours and the self-guided tours. Other revenues were up 24% year-over-year to CNY 22.9 million, and accounted for 17% of our total net revenues. The increase was primarily due to the increase in the fees for advertising services provided to tourism boards and bureaus.

Gross profit for the first quarter of 2026 was CNY 73.6 million, up 6% year-over-year. Operating expenses for the first quarter of 2026 were CNY 77.3 million, down 4% year-over-year. Research and product development expenses for the first quarter of 2026 were CNY 13.6 million, down 7% 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 first quarter of 2026 were CNY 50.5 million, up 17% year-over-year.

The increase was primarily due to the increase in promotion expenses. General and administrative expenses for the first quarter of 2026 were CNY 13.5 million, down 41% year-over-year. The decrease was primarily due to the impairment of property and equipment net recorded in the first quarter of 2025. Net income attributable to ordinary shareholders of Tuniu Corporation was CNY 0.7 million in the first quarter of 2026.

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 2.6 million in the first quarter of 2026. As of March 31st, 2026, the company had cash and cash equivalents, restricted cash, short-term investments, and long-term deposits of CNY 1 billion. Capital expenditures for the first quarter of 2026 were CNY 0.5 million.

For the second quarter of 2026, the company expects to generate CNY 134.9 million-CNY 141.6 million of net revenues, which represents a 0%-5% 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?

The question and answer session of this conference call will start in a moment. In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please request to join the question queue again after your first question has been addressed.

To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Cathy Lu, Private Investor. Please go ahead.

Hi, management. Thank you for the opportunity. Two questions here. First, we were seeing the market conditions for the second quarter look relatively mixed. With the rollout of the spring break policy as a positive driver and the surging airfares as a headwind, how will these factors impact our business? My second one is about upcoming summer vacation. Could you kindly share some color on current booking trends? That's all. Thank you.

Thank you for the questions. Firstly, we are glad to see a lot of cities implemented spring breaks this year. Many of them arranged the breaks before Qingming or Labor Day holidays, forming a longer vacation. It stimulated the growth of travels, especially air travels, in the domestic market. For example, we recorded over 50% year-over-year growth in the number of trips from April the 1st till the 6th this year. Moreover, during April the 1st to the 3rd.

The number of trips for family tours tripled compared to the same period last year. Products featuring natural experiences, theme parks, and study tours were most favored by families with children. We've launched several spring break-oriented products in East China, which were welcomed by the parents. We plan to expand the destination coverage of autumn break products in the second half of the year.

For the increase of airfare prices, the impact is limited on long-haul package tours. Such package tours often contain many travel resources other than airfare, so the risk can be mitigated by integrating other resources in the package. Through our coordinating with the suppliers, many long-haul outbound tour products maintain the same price despite the higher airfares. For domestic tours, we provide alternative travel solutions such as connecting flights, train tickets, and car rental.

Considering headwinds at certain outbound destinations, as well as airfare price impact on short-haul travels and air ticketing alone, we expect the revenues to increase up to 5% year-over-year in the second quarter. For your second question about the summer vacation, it is still too early to tell. We have limited visibility towards the booking data due to short booking windows, especially for domestic tours and the short-haul outbound tours. Based on our insight, destinations with cooler weather such as Guizhou and Neimenggu will be on the hot list.

Also, as we see the shift from traditional sightseeing to culture experience is ongoing, cities such as Beijing and Datong will be popular. For long-haul outbound travel tours, the bookings are on the chart. For example, so far, we see the booking amount for package tours to America in July and August has already exceeded the same period last year. Thank you.

Once again, if you have a question, please press star then one. 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 continuous 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. Good day.

We have reconnected with our speakers. Please proceed, Mary.

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.