Hello and thank you for standing by for Tuniu's 2024 Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After managements’ 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 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 the financial performance for the third 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 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 2024 earnings conference call. In the third quarter, our revenues and profit continued to grow. With GAAP net income reaching a record high since our listing, up to RMB43.9 million and our net income for the first three quarters of this year exceeded RMB100 million. On a non-GAAP basis, we have achieved profitability for six consecutive quarters. During the seasonally strong third quarter, the market demonstrated robust demand with more new products introduced compared to last summer particularly for outbound travel, our product range was significantly enriched for customers. The transaction volume of our outbound travel products achieved a double-digit year-over-year growth in the quarter. As travel increasingly becomes essential for more people, we have noticed a growing diversification in customer demand, ranging from destination choices to products and services. Additionally, as methods and channels for reaching customers involved more advanced and diverse needs are emerging such as in-depth single destination tools, private towards live streaming and short videos. Recognizing this trend, we aim to create differentiated products and services to meet the rise in demand of customers. In terms of products, we are further strengthening our in-house product development, optimizing our product lines and offering tailored solutions for various customer segments to meet the broad demand for location travel. Meanwhile, we continue to collaborate with the third-party suppliers to introduce a wider range of diverse products to meet customer demand, such as niche products and destinations. During the third quarter, we further optimized our in-house product line. Our new tool products continue to follow a high quality approach, aiming to deliver industry-leading travel experiences. In addition to our zero shopping policy for new tool itineraries, we are offering more growth and private tools covering a broader range of…

Thank you, Donald. Hello, everyone. Now I'll walk you through our third quarter of 2024 financial results in greater detail. Please note that our inventory amounts are in RMB unless otherwise stated. You can find the U.S. dollar equivalents of the numbers in our earnings release. For the third quarter of 2024, net revenues were RMB186 million, representing a year-over-year increase of 4% from the corresponding period in 2023. Revenues from packaged tours were up 6% year-over-year to RMB159.3 million and accounted for 86% of our total net revenue for the quarter. The increase was primarily due to the growth of organized tours. Other revenues were down 5% year-over-year to RMB26.7 million and accounted for 14% of our total net revenues. The decrease was primarily due to the decrease in the fees for advertising services provided to tourism board and bureaus. Gross profit for the third quarter of 2024 was RMB121.8 million, up 6% year-over-year. Operating expenses for the third quarter of 2024 were RMB92.6 million, up 11% year-over-year. Research and product development expenses for the third quarter of 2024 were RMB13.6 million, down 26% 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 2024 were RMB60.6 million, up 53% year-over-year. The increase was primarily due to the increase in promotion expenses. General and administrative expenses for the third quarter of 2024 were RMB18.6 million, down 31% 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 RMB44.4 million in the third quarter of 2024. Non-GAAP net income attributable to ordinary shareholders of Tuniu Corporation, which excluded share based compensation expenses and amortization of acquired intangible assets was RMB46.6 million in the third quarter of 2024. As of September 30, 2024, the company had cash and cash equivalents, restricted cash and short-term investments of RMB1.3 billion. Cash flow generated from operations for the third quarter of 2024 was RMB13 million. Capital expenditures for the third quarter of 2024 were RMB1.1 million. For the fourth quarter of 2024, the company expects to generate RMB100 million to RMB105 million of net revenues, which represents a 0% to 5% increase year-over-year. Please note that this forecast reflects new 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?

[Operator Instructions] The first question today comes from [Judie Wong], a Private Investor.

Congratulations on another profit quarter. My questions are about the outlook for the fourth quarter. Could you please share the reasons for the slowdown of revenue growth and any guidance on the bottom line? Also, can you share some insights on next year's market for both domestic and outbound tours?

Fourth quarter is off season for tourism. Revenues will drop compared to last quarter due to seasonality. On a year-over-year basis, we expect low single-digit growth for our total revenues. For domestic market, the two main themes for winter travel are ice and snow tourism and heading for the storm. In the North, the ice and snow period tourism was very hot last year and has continued its popularity this year. But for the purpose of avoiding the crude weather, people have more choices this winter. Over the definitions were fully opened since the fourth quarter of 2023. And this winter, there are more products launched for popular destinations, such as Southeast Asia and Australia. Together with favorable visa policy in some Southeast Asia countries, traveling abroad can be as convenient as domestic tours. Generally speaking, last year was comparatively high base for both domestic and outbound tours due to the release of pent-up demand. For the bottom line, we don't give any specific guidance as revenues declined due to seasonality in the fourth quarter, limitations in scale effects will lead to lower profit for the period. However, since we have already achieved non-GAAP profitability for six consecutive quarters, we will try our best to keep the momentum. For the next year, the tourism industry will maintain steady growth. Also the launch of new holiday policy in November, we further encourage travel, especially air travel during certain holidays. From the demand side, we see continued growth after the pandemic. Travelling is become mean part of the life of more and more people regardless of their ages and locations. For example, we have many silver generation VIP guests. We cover a lot with Tuniu new tours. They have more 3x and disposable income to enjoy travel. Also, with the widespread popularity of live streaming shows and short videos travelers from lower-tier cities have increased their bookings through Internet. Many of them were broad for the first time and be a very promising growth for upbound travels. With the emergence of more transportation hub, we may bring more travelers from lower-tier cities to overseas destinations. For domestic market, customer needs become more diversified. We need to provide products relied in destinations, itinerary activities, group sizes and prices to catch different customer growth. This trend may continue in the coming year and we are already -- we are always prepared to launch new products and services. For outbound travel, it will continue its growth momentum, but the recovery will rise from region to region, depending on the resuming of airlines and the supply chains. For example, Southeast Asia recovers faster this year, while North America is behind. Therefore, we see chances for growth of long distance outbound travel next year.

We are now approaching the end of the conference call. I will now turn the call back 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.