Hello, and thank you for standing by for Tuniu's 2022 Second Quarter Earnings Conference Call. [Operator Instructions] 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, operator. And welcome to our 2022 second 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 second 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 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 second quarter 2022 earnings conference call. During the second quarter, while in April and May, tourism was impacted by most severe resurgence of COVID-19. Since the initial breakout in 2020. In June, we saw a rapid recovery as outbreaks were better controlled. The industry also benefited from variable policies, such as more relaxed travel restrictions. The enthusiasm for travel among the public remained high with demand increasing since the first half of the year. Tuniu’s total travel GMV growth exceeded 100% month-over-month during June and July, despite the setback in the second quarter. With the peak travel season starting in July booking volume for several popular destinations increased significantly with Tuniu’s booking volume doubling in July compared to the previous month. By keeping our focus on providing high quality products and services during times of external challenges, we are able to weather industry downturns and recover quickly during the rebound. In terms of our product new tool our core self-operated product continues to offer a high level of standard services to meet diverse customer demand. Since it was first launched over a decade ago, new tools production ecosystem has developed its own operating process and standards for product design, resource selection, customer service, and evaluation. Tuniu’s high quality products are the key to our high customer retention rate with the contribution of our repeat customers to overall GMV remaining at over 70%, since the pandemic broke out. Leveraging Tuniu’s high quality products and the reputation we aim to develop more popular products to meet the high market demand during the peak seasons. Taking one of our new tool products designed for Xinjiang as an example, we increased the number of the tour groups to meet the high demand in July with…

Thank you, Donald. Hello everyone. Now I walk you through our second quarter 2022 financial results in greater detail. Please note that all the monetary amounts are in RMB unless otherwise dated. You can find the U.S. equivalent of the numbers in our earnings release. For the second quarter of 2022 net revenues were RMB37.0 million representing a year-over-year decrease of 77% from the corresponding period in 2021. The decrease was primarily due to the negative impact brought by the resurgence and spread of COVID-19. Revenue from packaged tours were down 92% year-over-year to RMB 9.5 million and accounted for 26% of total net revenue for the quarter. The decrease was primarily due to the restrictions of COVID-19 in certain regions in China. Other revenues were down 20% year-over-year to RMB 27.4 million and accounting for 74% in our total net revenues. The decrease was primarily due to the decrease in the fees and for advertising services provided to tourism boards and bureaus and commission fees received from other travel-related products. Gross margin was 45% in the second quarter of 2022, compared to a gross margin of 43% in the second quarter of 2021. Operating expenses for second quarter of 2022 were RMB 139.4 million, up 46% year-over-year. Among it, gain on disposals of subsidiaries, which was recorded in other operating income were RMB 32.8 million. Impairment of goodwill, which was recorded due to the severer adverse impact of COVID-19 on the Company's business in this quarter with potential continuous impact in subsequent period’s, was RMB 112.1 million. Excluded share-based compensation expenses amortization of acquired intangible assets, gain on disposals of subsidiaries and impairment of goodwill, non-GAAP operating expenses were RMB 55.7 million, down 38% year-over-year. Research and product development expenses for second quarter of 2022 were RMB 14 million,…

[Operator Instructions] The first question is from Su Wong [ph], a Private Investor. Please go ahead.

Thank you, operator. Hi management. As we can see the second quarter saw significant increasing loss. Could you specify the courses and in the context of the recent recovery of tourism industry how has your business recovered in recent month, especially during the summer vacation? Thank you.

Thank you for the question. In the past quarter the travel industry has experienced the hardest time ever since the outbreak of COVID-19/2020. The resurgence our pandemic has prohibited many trips, especially zero travels. This greatly harmed our net revenues and revenues from packaged tours in particular for the second quarter. In terms of expenses, considering the continued influence of COVID-19 and uncertainty of the future market company did a goodwill impairment assessment and determined to record over RMB 100 million of goodwill impairment this quarter. Apart from this impairment, our non-GAAP operating system – our non-GAAP operating expenses decreased over 30% year-over-year. As summer vacation comes, the travel market is boosted by incentives such as relaxed restriction policies, increasing demand and peak season deferred from previous quarter; long-distance tours are preferred compared to local tours during summer vacation. According to our data, the average travel duration exceeded three days in July which were longer than those during spring festival and May Day holidays. Products for families with children are always popular during summer vacations. Apart from traditional theme parks and seaside trips, we launched the entertainment travel products, which promote children's participation and experience during the trips. Besides due to the hot weather this year, travelers had increased the demands for enjoying the cool and health-related services. In terms of destinations, Yunnan, Hainan and Xinjiang were Top 3 destinations in July. We showed a positive GMV growth compared to the same month last year. But Eastern China, which used to be one of the most popular departure and the definition district, was still on the way to recover due to the outbreak of COVID-19 in the previous quarter. In August, there were outbreaks in some popular destinations, which brought negative impact on the travel industry in the short-term. However, since the travel restriction scope was further narrowed the two countries the pressure on travel market was more moderate than before. From our data we see definitions without severe pandemic outbreak was still growing. For example, the order amount from Guangdong Province remained increase in August compared to July. To ensure good customer experience and current circumstances will increase the flexibility of our travel products. Customers may book in advance and later confirm departure city – departure date in online, or get for refund upon cancellation. For certain products event so the trip is confirmed. Our customers can cancel it and get a full refund for local tour operator services up to 24 hours before their departure date. Despite the current resurgence of the pandemic, looking ahead with the implementation of the precise and differentiate aided strategies in the prevention and control of COVID-19 domestic trips will be smoother and the industry will continue to recover. Thank you

[Operator Instructions] There are no other questions. 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. Good day.