Tuniu Corp (TOUR) 2025 Q3 法說會逐字稿

Hello, and thank you for standing by for Tuniu Corp FY 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 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 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 tap 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 revolving expectations for experienced travelers and the repeat customers who tend to prioritize the travel experience, and they already have more time and budget.

We leverage the company's strength in outbound tourism to introduce a wider range of niche destination products. For example, in October, our new tour launches 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 the Oceania.

In addition to meet the surge in the 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 this long-haul island products grew by several times year over year. We fully leverage our supply chain advantages to continuously expand the definitions 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 (inaudible) customers reach their preferred destination on a smaller budget.

In the third quarter, transaction volume for our new select outbound travel products increased by more than 100% year on year. In response to the growing number of self-guided travelers in China, we continue to leverage to new advantages in dynamic packaging technology to expand our Hotel plus X product offerings.

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 5 times year over year. For our sales channels, livestreaming is playing an increasingly important role for our sales.

In the third quarter, both payments and the verification volume through our livestreaming 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 during the peak season to maintain a wide, reliable product range and deliver price competitive offering.

In terms of format, we expanded our outdoor livestreaming activities, including inviting live streamers to broadcast the live from destination sites. We formed a professional verification team and specialized systems support, which together have improved efficiency across the entire process from product to supply to verification.

In terms of external partnerships, we collaborate with top tier live streamers to create synergies, and we work closely with (inaudible), 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 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. The personalized face-to-face service makes them particularly popular among senior travelers and the 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 at popular tourist destinations and the key transportation hubs. In September, we opened the two flagship stores in Xi'an on same day to better service -- to better serve customers preparing for National Day holiday travel.

In the third quarter, transaction volume from offline stores increased by nearly 20% year on year. The summer season is the peak period for leisure travel and while serving individual travelers, we also continue to provide high-quality services to corporate clients. In addition to business travel bookings, we leverage our extensive experience and skills in the (inaudible) travel sector to offer tailored vacation products to corporate clients.

We provide customize my 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 the methodologies have been embedded across all aspects of our operations and management, including product development and marketing, supply chain management, and the financial management. This has strengthened communication and the collaboration between internal and external teams and further improve 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 the profitability. We were pleased to see the robust travel demand during this year's National Day holiday, supported by several factors such as the extended holiday period.

Also, 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 [ornamentary] amounts are in RMB unless otherwise stated. You can find the US dollar equivalent of the numbers in our earnings release.

For the third quarter of 2025, net revenues were RMB202.1 million, representing a year-over-year increase of 9% from the corresponding period in 2024. Revenues from package tours were up 12% year over year to RMB179 million and accounted for 89% of our total net revenues for the quarter.

The increase was primarily due to the growth of offline tours and self-drive tours. Other revenues were down 14% year over year to RMB23 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 RMB109.6 million, down 10% year over year.

Operating expenses for the third quarter of 2025 were RMB95.8 million, up 3% year over year. Research and product development expenses for the third quarter of 2025 were RMB15.7 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 RMB61.5 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 RMB18.5 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 RMB19.8 million in the third quarter of 2025. Non-GAAP net income attributable to ordinary shareholders of Tuniu Corporation, which included share-based compensation expenses and amortization of acquired intangible assets, was RMB21.8 million in the third quarter of 2025.

As of September 30, 2025, the company had a cash and cash equivalent, restricted cash, short-term investments, and long-term deposits of RMB1.1 billion. Capital expenditures for the third quarter of 2025 were RMB2.1 million. For the fourth quarter of 2025, the company is bound to generate RMB111 million to RMB106.1 million of net revenues, which represents an 8% to 13% increase year over year.

Please note that this forecast reflect a new current and preliminary review 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) [Emma Liu], a private investor.

Congratulations on a solid quarter. I've got two 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 tours still dominate. In the third quarter, domestic tools consisted of about two-thirds of our total GMV and the overseas tours consisted of one-third, which is almost the same as the previous quarter.

The second question, we also have the 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 has had a 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 was increased over 5 times during the holiday. A self-guided tour is prevailing in the domestic market. We leveraged our dynamic packaging technology to enrich the supply of Hotel plus 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 (inaudible) 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 the 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 definitions, the Americans ranked number one in terms of growth rate.

Niche destinations are gaining appeal, especially for sophisticated travelers, by their natural beauty and the 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 are 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.