Hello, and thank you for standing by for Tuniu's 2024 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.

Thank you, and welcome to our 2024 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, operation highlights and financial performance for the first quarter of 2024. 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 first quarter 2024 earnings conference call. In 2024, China's travel industry continued its healthy development trend. The upbound travel market, in particular, is showing robust growth due to the resumption of flights, the introduction of visa-free policies, and the further enhanced supply chain. During this year's Spring Festival and Labor Day holiday, the upbound travel market showed an encouraging rebound. In particular, over the Labor Day holiday, transaction volume for our outbound travel products increased by more than 200% year-over-year. In the first quarter, the company's financial performance maintained strong growth. Net revenues increased by 71% year-over-year, and revenues from package tours grew by 107%, while our profitability continued to improve. Our gross profit increased by 111% and net income turned positive on a year-over-year basis, reaching RMB22 million. This marks the first time since our listing that we have achieved GAAP profitability in the first quarter, and our fourth consecutive quarter of profitability on a non-GAAP basis. During the first quarter, we see market development opportunities and continue to focus on enhancing our products and services, as well as development of sales channels. Our in-house [indiscernible] one of our core competitive advantages, reflecting the growing contribution of in-house products to our revenue and profit, we will look to increase the proportion of the in-house products in our packaged tours this year. During the quarter, the GMV of new tour products grew by more than 60% compared to the previous quarter. We are pleased to see that our in-house products have been very well received due to their high quality service. This has contributed to increased repeat purchases by loyal customers and have enhanced Tuniu’s brand image. We were pleased to see loyal customers contributed over 65% to our total transaction…

Thank you, Donald. Hello, everyone. Now I will walk you through our first quarter of 2024 financial results in greater detail. Please note that all the monetary amounts are in RMB, unless otherwise stated. You can find the US dollar equivalents of the numbers in our earnings release. For the first quarter of 2024, net revenues were RMB108 million, representing a year-over-year increase of 71% from the corresponding period in 2023. The increase was primarily due to the growth of packaged tours as the travel market recovers. Revenues from packaged tours were up 107% year-over-year to RMB83 million and accounted for 77% of our total net revenue for the quarter. The increase was primarily due to the growth of organized tours. Other revenues were up 8% year-over-year to RMB25 million and accounted for 23% of total net revenues. The increase was primarily due to the increase in commission fees received from other travel-related products. Gross profit for the first quarter of 2024 was RMB82 million, up 111% year-over-year. Operating expenses for the first quarter of 2024 were RMB69.7 million, up 25% year-over-year. Research and product development expenses for the first quarter of 2024 were RMB13 million, down 9% year-over-year. The decrease was primarily due to the decrease in research and product development personal related expenses. Sales and marketing expenses for the first quarter of 2024 were RMB36.8 million, up 84% year-over-year. The increase was primarily due to the increase in promotion expenses and sales and marketing personnel related expenses. General and administrative expenses for the first quarter of 2024 were $20.5 million, down 8% year-over-year. The decrease was primarily due to the reversal of allowance for doubtful accounts. Net income attributable to ordinary shareholders of Tuniu Corporation was RMB13.9 million in the first quarter of 2024. Non-GAAP net income attributable to ordinary shareholders of Tuniu corporations, which excluded share-based compensation expenses and amortization of acquired intangible assets was RMB19.7 million in the first quarter of 2024. As of March 30th 2024 the company had cash and cash equivalents, restricted cash and short-term investments of RMB1.2 billion. Capital expenditures for the first quarter of 2024 were RMB1.2 million. For the second quarter of 2024, the company expects to generate RMB114.9 million to RMB119.9 million of net revenues, which represents a 15% to 20% increase year-over-year. Please note that these forecast reflects Tuniu's current and preliminary view on the industry and its operations, which is subject to change. Thank you for listening. We are now ready for your questions. Operator?

The question-and-answer session of this conference call will start in a moment. [Operator Instructions] The first question today comes from [Aranda Chen] (ph), who is an individual investor. Please go ahead.

Thank you, operator. Hi, management. First of all, congratulations on this quarter's performance. For the first quarter, how about your company's performance in outbound and domestic tourism respectively, and what are the proportions in revenues? Can you share your outlook for the upcoming summer vacation? And do you think you will achieve profitability in the second quarter of 2024? Thank you.

Thank you for the questions. [Technical Difficulty]

Pardon me. It looks like we've lost connection with our speakers. Please hold while we reconnect. Thank you very much. We've reconnected with our speakers. Please go ahead.

Okay. Thank you for the question. Both domestic and outbound tours continue to recover in the first quarter. Thanks to the Spring Festival, domestic travel market demonstrated strong growth. Trips to the northeast and southern China were hot during the winter. Our domestic tours experienced double-digit growth year-over-year in the first quarter, while outbound travel increased by a multi-fold due to more supply of airlines, hotels, and destination services, as well as more choice of destinations and products. APAC countries were popular in the first quarter, encouraged by short distance and warm weather, as well as visa-free policies. For revenue breakdown, domestic tours accounted for about 70% of GMV and outbound tours 30%, increasing from over 20% in the previous quarter. For the coming summer vacation, the pent-up demand will continue to drive the growth of the market. Summer is the peak season mainly because of holidays for children and students. Air travel is becoming the rigid demand for many people, especially families with children. Last summer location was dominated by domestic travel. Because outbound destinations were not fully opened until early August. Therefore, we expect the outbound travel will remain significant growth momentum this summer. For example, up till now we see the booking amount for packaged tours to Japan in July and August has already exceeded the same period last year. But as the booking window shrinks for domestic travel and also for some outbound travel due to more favourable visa policy, we have limited visibility towards the booking date for the whole summer vacation so far. For the second quarter, net revenue growth rate slowed down compared to the first quarter, due to the higher base in the second quarter last year. But revenues from our core business, packaged tours, will have a higher growth rate than total revenues. This year, our gross margin further improved to over 70%. That's because we focus on more profitable products, like our in-house packaged tour products. Also, by utilizing system and automation techniques, our cost of revenues is well controlled. And we will continue to implement strict expense control measures and apply our best to achieve continuous profitability. Thank you.

[Operator Instructions] This concludes our question and answer session. I'd like to turn the call back over to 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.