Hello. And thank you for standing by for Tuniu's 2022 First 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. Mary, please go ahead.

Thank you. And welcome to our 2022 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, operational highlights and financial performance for the first quarter of 2022. Before we continue, I refer you to our Safe Harbor statement in 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 most directly comparable GAAP measures. Finally, please know 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 2022 earnings conference call. From the beginning of this year, we have seen the most severe resurgence of COVID-19 since the initial breakout in 2020. As a company with this experience in tourism, Tuniu has building resilience for coping with short-term industry patients, and we are confident that the industry will resume it's recovery in the near future. During the past quarter, we continue to focus on product innovation, service quality, all of which will help us to remain competitive as we take on new opportunities and challenges. Even as the pandemic resurgence has temporarily halted most travel, we feel to see a return among the public remains high. According to a recent study by domestic mainstream media outlet, travel back at the top of the consumption, which list for consumers aged between 18 to 35 and rank in the top 3 categories for consumers, about 8 out of 60. In order to satisfy our customers' demand for travel while complying with pandemic prevention regulations, we are constantly late up working and innovating our products and sales models. In terms of our products, we have aside the development of local tour products for travel within cities and nearby destinations. Leveraging our leader hotel resources, we initiated seasonal product offerings and our hotel plus ex-product model, such as winter off screen and teen growth picking in order to provide more diverse selections of local tour products for customers. Leveraging our resources in the city travel market, we also launched a series of city work educational state tour products, which cover museums, zoos and the public gardens. Our product innovations are designed to mirror market trends. Among this, camping has become more popular. We have recently begun offering high-quality camping of…

Thank you, Donald. Hello, everyone. Now I'll walk you through our first quarter of 2022 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 on the earnings release. For the first quarter of 2022, net revenues were RMB41.5 million, representing a year-over-year decrease of 46% from the corresponding period in 2021. The decrease is primarily due to the negative impact brought by the outbreak and the spread of COVID-19. Revenues from package tours were down 68% year-over-year to RMB14.4 million and accounted to -- and accounted for 35% of our total net revenues for the quarter. The decrease was primarily due to the resurgence of COVID-19 in certain regions in China. Other revenues were down 15% year-over-year to RMB27.1 million and accounted for 65% of our total net revenues. The decrease was primarily due to the decrease in the fees for advertising services provided to tourism boards and bureaus. Gross profit for the first quarter of 2022 was RMB15.8 million, down 45% year-over-year. Operating expenses for the first quarter of 2022 were RMB68.6 million, down 18% year-over-year. Excluding share-based compensation expenses and amortization of our acquired intangible assets, non-GAAP operating expenses was RMB65.5 million, representing a year-over-year decrease of 18%. The research and product development expenses for the first quarter of 2022 were RMB16.2 million, up 37% year-over-year. The increase was primarily due to the increase in research and product development for personnel-related expenses. Sales and marketing expenses for the first quarter of 2022 were RMB29.8 million, down 16% year-over-year. The decrease was primarily due to the decrease in promotion expenses. General and administrative expenses for the first quarter of 2022 were RMB27.7 million, down 38% year-over-year. The decrease was primarily due to the decrease in general and administrative personnel-related expenses and allowance for doubtful accounts. Net loss attributable to ordinary shareholders was RMB40.4 million in the first quarter of 2022. Non-GAAP net loss attributable to online shareholders, which excluded share-based compensation expenses and amortization of acquired intangible assets were RMB37.2 million in the first quarter of 2022. As of March 31, 2022, the company has cash and cash equivalents, restricted cash and short-term investments of RMB929.5 million. Capital expenditures for the first quarter of 2022 were RMB2.1 million. For the second quarter of 2022, the company expects to generate RMB32.2 million to RMB40.2 million of net revenue, which represents a 75% to 80% decrease year-over-year. Please note that these forecasts reflect Tuniu's current and preliminary review on the industry and its operations, which is subject to change, particularly as to the uncertainties brought about by the impact of COVID-19. Thank you for listening. We are now ready for your questions. Operator?

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question today comes from [Grace Al] with Retail. Please go ahead.

Thank you. Hello, my name is Grace. I have a question for management. As we know, the tourism industry is currently faced with challenges because of the severe resurgence of COVID-19 in the past few months. And on the first circumstances, how do you view the future development of the tourism industry and what strategic measures will the company take in the second half of the year to deal with the risks for pandemic. Will there be any changes compared to the past? Thank you.

Thank you for the question. We are facing the most severe rebound of the pandemic since the first quarter of 2020. The current round from outbreak has negatively affected the domestic travel market, as well as our revenues in the first half of the year. However, we are glad to see that with the number of infections gradually going down recently, domestic travel restrictions tend to be eased. In the past Dragoon Boat Festival, our number of trips doubled compared with spring festival. The market may remain the momentum of recovery in the coming summer location and national day holiday provided the pandemic phase under control. In the long month, we believe the industry will continue to grow despite the impact of the pandemic, tourism demand has not decreased but has been temporarily pent-up. And it will eventually be releasing something. This demonstrated by the increasing popular retail campaign since the spring. To capture the pent-up demand and the reset uncertainties of the pandemic we insist to provide products, which are innovative and flexible. On one side, we -- our product design follows the concept of parental tourism adding more personalized interactive activities for people to enjoy the avenues during the feed. On the other side, our product sales adopts advanced booking and travel congestion model. People are free to book any products at any time if their trips are delayed or canceled or they can choose later departure date or just get a refund. In terms of service, so we always insist with the customer first principle and provide full cycle service to our customers. Group services help us to retain customers. It's important to care about customers, especially when the market is fresh. Our customer service returned to close contact with regular customer during the pandemic to reinforce the customer stickiness providing them with travel related messages. Therefore, Tuniu is likely to be their first of choice when our customers plan to travel. In addition, the pandemic brings changes to the travel industry, and we are also trying something new. For example, we further developed rural tourism because it captures both the concept tourism and the momentum of local tour. Our local team travelled across the country to find fit for destinations, which should include a characteristic commendation for as well as local activities. We deeply cooperate with big technicians and design special products for them. Based on our experience in the travel industry and the knowledge of our customers, we have this definition to attract more customers and develop local tourism economy. More, we also run [indiscernible] by ourselves, a strong new business scope. In general, we will stay with Tuniu's core competitiveness under the challenging environment while trying to find the potential growth post. Thank you.

[Operator Instructions] Since there appears to be no further questions. I will now turn the conference 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 good day.