Hello and thank you for standing by for Tuniu's 2023 Fourth Quarter and Full Year 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.

Thank you, and welcome to our 2023 fourth quarter and full year 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 fourth quarter and fiscal year 2023. 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 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 fourth quarter and full year 2023 earnings conference call. Tuniu delivered a strong performance in the fourth quarter of 2023, with net revenues growing year-over-year by 266%, including a 1377% increase in revenues from package tours. Gross profit increased by 512% year-over-year, and we achieved non-GAAP profitability for the third consecutive quarter. 2023 was a significant year of recovery for the travel industry following the pandemic. With a robust rebound in the domestic travel market, we saw a dramatic increase in travel demand during China's national holidays and summer vacation. Amidst the emergence of many popular destinations and attractions. In terms of outbound travel, the number of newly opened up destination countries increased from 20 at the beginning of the year to 138 by the end of the fourth quarter. Countries like Thailand and Singapore introduced favourable visa policy, helping to boost the recovery of the outbound travel market. We are pleased with our performance for the full year 2023. Our net revenues increased by 140% year-over-year. Revenues from package tours increased by 374% and gross profit increased by 228%. We also achieved our first full-year profitability on a non-GAAP basis since the pandemic, with non-GAAP net income approaching RMB51 million. The highest since our listing. In 2023, pent-up travel demand was released with the relaxation of travel restrictions. [Technical Difficulty] the supply chain relating to the outbound travel market was impacted during the pandemic. In response, our priority was to recover and rebuild the supply chain to remotely provide products to meet customer demand. Now leading Tuniu's rich experience in the industry and our continuous efforts to maintain relationships during the pandemic, our procurement and product teams have been able to rapidly rebuild our portfolio of products by sourcing high-quality…

Thank you, Donald. Hello, everyone. Now I will walk you through our fourth quarter and fiscal year 2023 financial results in greater detail. Please note that all the monetary amounts are in RMB unless otherwise stated. You can find the US dollar equivalent of the numbers in our earnings release. Starting from the fourth quarter of 2023, net revenues were RMB99.9 million in the fourth quarter of 2023, representing a year-over-year increase of 266% from the corresponding period in 2022. The increase was primarily due to the growth of package tours and the travel market recovers. Revenues from package tours were up 1377% year-over-year to RMB73.4 million and accounted for 73% of total net revenues for the quarter. The increase was primarily due to the growth of online tours. Other revenues were up 19% year-over-year to RMB26.6 million and accounted for 27% of total net revenues. The increase was primarily due to the growth in commission fees received from other travel related products. Gross profit for the fourth quarter of 2023 was RMB74.6 million, up 512% year-over-year. Operating expenses for the fourth quarter of 2023 were RMB198 million, up 509% year-over-year. The increase was primarily due to the impairment of goodwill of RMB114.7 million recorded in the fourth quarter of 2023. Research and product development expenses for the fourth quarter of 2023 were RMB10.4 million, down 5% year-over-year. The decrease was primarily due to the decrease in research and product development personnel related expenses. Research and product development expenses as a percentage of net revenues were 10% down from 40% during the same period last year. Sales and marketing expenses for the fourth quarter of 2023 were RMB33.2 million, up 45% year-over-year. The increase was primarily due to the increase in promotion expenses. Sales and marketing expenses as a percentage…

The question-and-answer session of this conference call will start in a moment. [Operator Instructions] And our first question comes from Rita Lee, a Private Investor. Please go ahead.

Thank you, operator. Hi, management. First of all, congratulations on achieving a profitable year. Generally speaking, the financial performance is good, but for the fourth quarter, we see a GAAP net loss. Could you please specify the core causes? And another question is about this year's outlook. Can you share any strategic plan in both business and finance? Thank you.

Thank you for the questions. For the fourth quarter last year, we achieved a non-GAAP profitability for the third consecutive quarter. It's also the first time since our listing that we achieved profitability in the fourth quarter, which is off-season. Well, on a GAAP basis, we still incur net loss this quarter. The main difference between GAAP and non-GAAP results is that we recorded over RMB100 million of goodwill impairment in the GAAP results. This is a financial treatment based on an asset required by US GAAP. We conducted the assessment at year-end comparing the company's net assets with the market value. When the market value is lower, impairment will be triggered. However, given our rapid business recovery, improved profitability as well as positive operating cash flow for the full year, we believe our share price is undervalued. So we proposed a share buyback plan of repurchasing up to US$10 million worth of shares on open market, which was approved by our board. We have faith in the continuous growth of both travel industry and our company and we want to deliver this confidence to the public while announcing our past year achievements as well as new year resolutions. Turning to the plans for 2024, Firstly, we will continue to focus on the development of our in-house product say Tuniu high-quality in-house products are our protective mode and differentiate Tuniu from platform OTAs. Moreover, for Tuniu brand products such as new tour, we have the pricing power, so new tours contributes steadily to both our revenues and profits. This year, we will continue to increase both SKUs and revenue contribution of new tours. For example, we will develop more small group and the private group tours in new tour series, catering for current demand trends. These tours usually contain two…

[Operator Instructions] There are no further questions at this time. 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 and you may now disconnect.