Hello. And thank you for standing by for Tuniu’s 2020 Third Quarter Earnings Conference Call. At this time, all participants are in a 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. Please go ahead.

Thank you. And welcome to our 2020 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 2020. 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 2020 third quarter earnings conference call. We are glad to see that in the third quarter while operating expenses continue to decline, our net revenue increased by more than 200% over the second quarter and GMV maintain an upwards mostly grew through July, August and September. Our operating cash flow also began to turn positive this quarter. The recovery of the domestic travel industry was evident. According to China’s Ministry of Culture and Tourism a total of 637 million tourists traveled within China during the October National Day holiday, almost returning to 80% of 2019 levels. We are positive on the domestic markets, which contributed to the improvement of our business. And here I would like to share our efforts made on sales and products during the quarter. For Tuniu’s sales network dedicated to our customer first principle, we have built a wide and solid customer base. We have established a unique customer service system in our industry, with tour advisors to guide customers in booking services and dedicated customer service representatives to maintain customer relationships. In addition, we have extended our services to handle customer needs after they reach their destination and have established our own local tour operators. During the epidemic, our customer service and the local tour operators provided timely service for customers, who have made great contributions to the recovery of our business in the post-epidemic era. Following the outbreak of COVID-19, we quickly refunded or altered previously purchased packages in order to maintain customer interest and guarantee experience. Owing to our timely response, we earn long-term trust and support from our customers. As the domestic travel market resumed, we’ll be rewarded with a group of loyal customers who have made an important contribution to Tuniu’s recovery.…

Thank you, Donald. Hello, everyone. Now I will go through our third quarter 2020 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 third quarter of 2020, net revenues were RMB123.5 million, representing a year-over-year decrease of 86% from the corresponding period in 2019. The decrease was primarily due to the negative impact brought by the outbreak and spread of COVID-19. Revenues from packaged tours were down 88% year-over-year to RMB86.4 million and accounted for 70% 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 65% year-over-year to RMB37.1 million and accounted for 30% of our total net revenues. The decrease was primarily due to the decline in service fees received from insurance companies and revenues generated from financial services. Gross margin was 53% in the third quarter of 2020, compared to a gross margin of 45% in the third quarter of 2019. Operating expenses for third quarter of 2020 were RMB127.8 million, down 71% year-over-year. Excluding share-based compensation expenses and amortization of acquired intangible assets, non-GAAP operating expenses were RMB118.2 million, representing a year-over-year decrease of 69%. Research and product development expenses for third quarter of 2020 were RMB16 million, down 75% 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 third quarter of 2020 were $49.9 million, down 79% year-over-year. The decrease was primarily due to the decrease in promotion expenses and sales and marketing personnel related expenses. General and administrative expenses for the third…

Thank you. [Operator Instructions] The first question today comes from Tracy Wang [ph], a private investor. Please go ahead.

Thank you for taking my question. Hi, management. Recently we have seen news such as about the COVID-19 vaccine trial data that favor the travel industry. Would you please share with us your view on the recovery of the industry and what’s your strategy to catch the recovery momentum? Thanks.

Thank you for the question. Yes. It’s very encouraging to hear the recent developments of effective COVID vaccines in both China and Western countries. That’s good news for all human beings. Also the Chinese authorities recently announced to keep 2021 Labor Day holiday as five days long. This news boosted the further recovery of domestic tourism. In fact, we are always competent for the long-term prospects for the travel industry. The domestic market is getting better and better during the past national holiday -- National Day holiday, both the industry and the company showed good recovery. Owing to our deep involvement in the leisure travel market, solid customer base, as well as the efforts made by our employees, Tuniu has been among the fastest to recover among China’s travel agencies. In short-term, we are still focusing on the domestic travel market, while the outbound travel still remains uncertainty. On the product side, we always committed to customer first with our core values. Our product teams are trying to find different itineraries, as well as various destination-based activities to satisfy the needs of both organized tour and self-guided tour customers. Our customer representatives and tour guides are working hard to provide the best service to our customers. On the sales side, we are grateful to our loyal customers as the repeated customer contribution reached new highs in the third quarter. Our dedication to the improvement of products and services helped us increased the repurchase rate. We reached the standard of our product launch again this year, so as to meet the customer needs for better and different products. Taikoo digital app is one of our new channels of acquiring customers compared to traditional ones. GMV generated from Taikoo app also saw in the third quarter. One of the major advantages of Taikoo is to acquire customers using the store owners network of trusted relationships. These customers usually have higher thickness. On the product side, recently we launched the upgraded Hotel + X product model, which is ideal for the changing needs of domestic travelers in the post-pandemic era. With the core resource hotel, we add different segments resources to form various products. Based on our direct procurement strategy and dynamic packaging system, we were able to find excellent resources and take this down to at the discounted prices. In terms of outbound travel, although it’s currently available, we are positive to the long-term prospect. Oversea leisure travel is one of our core strengths. We will maintain as a core team and kept them trained theoretically. We were confident that Tuniu will be among the first to recover outbound travel business when travel restrictions are relieved. Thank you.

Thank you. I have no further questions. Thanks.

[Operator Instructions] Since there appears to be no further questions, we are approaching the end of the conference call. I will now turn the call over to Tuniu’s Director of Investor Relations, Mary for any 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. Have a great day.