Release Date: December 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tuniu Corp (TOUR, Financial) achieved a record high GAAP net income of RMB43.9 million in the third quarter, with net income for the first three quarters exceeding RMB100 million.
- The company has maintained non-GAAP profitability for six consecutive quarters.
- Outbound travel products saw double-digit year-over-year growth in transactional volume, indicating strong market demand.
- New tour products achieved a 30% year-over-year increase in transaction volume and maintained a 98% customer satisfaction rate.
- The company successfully expanded its product offerings, including new slack products and live streaming channels, which increased total payment volume by nearly 100% year-over-year.
Negative Points
- Operating expenses increased by 11% year-over-year, driven by a 53% rise in sales and marketing expenses.
- Other revenues decreased by 5% year-over-year due to a decline in fees for advertising services.
- The fourth quarter is expected to see a slowdown in revenue growth due to seasonal factors, with only a 0% to 5% year-over-year increase anticipated.
- Research and product development expenses decreased by 26% year-over-year, potentially impacting future innovation.
- The company faces limitations in scale effects during the off-season, which may lead to lower profit margins in the fourth quarter.
Q & A Highlights
Q: Congratulations on another profitable quarter. My question is about the outlook for the fourth quarter. Could you please share the reasons for the slowdown of revenue and any guidance on the bottom line? Also, can you share some insights on next year's market for both domestic and outbound tourists?
A: Thank you for the question. Fourth quarter is off season for tourism. Revenues will drop compared to last quarters due to seasonality. On a year-over-year basis, we expect low single-digit growth for our total revenues. For domestic market, the two main themes for winter travel are ice and snow tourism and heading for the storm. In the North, the ice and snow period tourism was very hot last year and has continued its popularity this year. But for the purpose of avoiding the cold weather, people have more choices this winter. Overseas destinations were fully opened since the fourth quarter of 2023. And this winter, there are more products launched for popular destinations, such as East Asia and Australia. Together, we -- more with the policy in some Southeast Asia countries, traveling abroad can be as convenient as domestic tours. Generally speaking, last year was comparatively high base for both domestic and outbound tours due to the release of pent-up demand. On the bottom line, we don't give any specific guidance as revenues declined due to seasonality in the fourth quarter. limitations in scale effects will lead to lower profit for the period. However, since we have already achieved non-GAAP profitability for six consecutive quarters, we will try our best to keep the momentum. For the next year, the tourism industry will maintain steady growth. Also the launch of new project launch in November, we further encourage travel, especially air travel during certain holidays. From the demand side, we see continued growth after the pandemic. Travel is becoming [travel] -- in the life of more and more people regardless of their ages and locations. For example, we have many silver generation (inaudible). We cover a lot with Tuniu new tours. We have more free time and disposable income to enjoy travel. Also, with the widespread popularity of live streaming shows and short videos, travelers from lower-tier cities have increased their bookings through Internet. Many of them go abroad for the first time and they are very promising growths for outbound travels. With the emergence of more transportation hub, we may bring more travelers from lower-tier cities to overseas destinations. For domestic market, customer needs become more diversified. We need to provide products [where wired] in destinations, itinerary activities, group sizes and prices to catch different customers growth. This trend may continue in the coming year, and we are already -- we are always prepared to launch new products and services. For outbound travel, it will continue its growth momentum, but the recovery will rise from region to region, depending on the resuming of airlines and the supply chains, for example, Southeast Asia recovers faster this year while North America is behind. Therefore, we see chances for growth of long distance outbound travel next year. Thank you.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
