Hello, and thank you for standing by for Tuniu's 2022 Third Quarter Earnings Conference Call. At this time, all participants are in 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 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 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 third quarter 2022 earnings conference call. In the beginning of this quarter, Tuniu’s business rebounded as China’s travel industry showed a strong recovery with more effective control over COVID-19 and the arrival of the peak summer season. While more recent pandemic outbreak since August have impacted location and travel plans, Tuniu's net revenues increased over 100% and revenues from packaged tours increased over 300% in the third quarter, compared to the second quarter. Since 2020, both the overall tourism industry and the company have been impacted by uncertainties in the external environment. Despite these challenges, we have remained focused on customer demand and providing high quality products and service, as well as continuing to roll-out cost control measures to strengthen our [resiliency] [ph] in the [face of risk] [ph]. Meanwhile, we have constantly upgraded our products design, customer service, and marketing tool to meet customer demand in the post pandemic time as we seek new growth opportunities. Turning now to our products Tuniu's integrated production, supply, and marketing model is the foundation of our ability to provide customers with high quality products. Firstly, we are stricter with our supply chain selection. Following the pandemic outbreak, our service quality might be particularly impacted by industry changes, including the withdrawal of some of our suppliers from the market. To counter this, we have reorganized our supply chain and strengthened our supplier evaluation and extraction process. And with direct procurement advantages from our self-operated local tour operators at destinations, we have reliable resources to continue providing products with industry leading satisfaction rates. Secondly, we have streamlined our product SKUs and focused our production efforts on key technicians to leverage the advantages of [scale] [ph] and focus towards creating more popular travel products. During the…

Thank you, Donald. Hello, everyone. Now, I’ll walk you through our third quarter of 2022 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 equivalent of the numbers in our earnings release. For the third quarter of 2022, net revenues were 77.9 million, representing a year-over-year decrease of 32% from the corresponding period in 2021. The decrease was primarily due to the negative impact brought by the resurgence and the spread of COVID-19. Revenues from packaged tours were down 54% year-over-year to 41.4 million and accounted for 53% of our total net revenues for the quarter. The decrease was primarily due to the [resurgence] [ph] of COVID-19 in certain regions in China. Other revenues were up [52%] [ph] year-over-year to 36.4 million and accounted for 47% of total net revenues. The increase was primarily due to the increase in commission fees received from other travel related products. Gross margin was [58%] [ph] in the third quarter of 2022, compared to a gross margin of 35% in the third quarter of 2021. Operating expenses for the third quarter of 2022 were 59.3 down 38% year-over-year. Excluding share-based compensation expenses and amortization of acquired intangible assets, non-GAAP operating expenses were 57.4 million, representing a year-over-year decrease of 37%. Research and product development expenses for the third quarter of 2022 were 9.7 million down 38% 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 2022 were 26.5 million, down 36% year-over-year. The decrease was primarily due to the decrease in promotional expenses. General and administrative expenses for the third quarter of 2022 were 24.3 million, down 41% year-over-year. The decrease was primarily due to the decrease in general and administrative personnel related expenses. Net loss attributable to ordinary shareholders was RMB22 million in the third quarter of 2022. Non-GAAP net loss attributable to ordinary shareholders, which excluded share based compensation expenses and amortization of acquired intangible assets was 20.1 million in the third quarter of 2022. As of September 2022, the company had cash and cash equivalents, restricted cash, and short-term investments of 949.6 million. Capital expenditures for the third quarter of 2022 were 1 million. For the fourth quarter of 2022, the company [indiscernible] generated 26.5 million to 30.8 million of net revenues, which represents a 58% to 68% decrease year-over-year. Please note that the forecast will be flat to new current and preliminary view 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?

[Operator Instructions] Our first question today comes from [Lily Yang] [ph], a Private Investor. Please go ahead.

Thank you, operator. Hi, management. Under the continuous influence of COVID-19 around China, the overall tourism industry is faced with challenges and uncertainties, so what is your company's current solution and future strategic plan? Thank you.

Thank you for the question. In the third quarter, tourism industry rebounded since fewer pandemic cases were reported from late stream until the mid-August. Our revenues from [packaged-tours] [ph] increased over 300% on a quarter-over-quarter basis. And many A-share listed companies that operated in scenic areas also reported better financial performance than the previous quarter. From these results, we can see, as long as the pandemic is under control, the industry will soon show a strong [indiscernible]. We always have built in the market and the company despite the uncertainties and difficulties we are [indiscernible]. First of all, we will continue to focus on domestic [leisure travel market] [ph] where we have over 10 years of experience and to provide high quality products and services under the integrated model. These are our core competitive advantages. Although our revenues are temporarily impacted by external factors, we are positive about the long-term growth driven by user demand. Apart from focusing on our core business, we also seek development and breakthrough in some new business areas. Currently, phasing on the continuous resurgence of COVID-19, we take every chance of development with the pandemic stability [indiscernible]. The release of pent-up demand will drive the growth of our revenues as the epidemic situation improves, provided that our products and services are good enough to attract customers. It requires us to keep improving our products and services based on the track change of the customer preference. For example, in the post-pandemic era, travelers tend to [stream] [ph], personalize and nonstandard products, while B&B plus scenic areas would be a nice solution for them, and is [safe] [ph] and good for small scale travels. Besides providing such products, we will also run a few B&B by ourselves. During the summer vacation, our B&B in Xinjiang provide some…

[Operator Instructions] 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.