Hello, and thank you for standing by for Tuniu's 2025 Second Quarter Earnings Conference Call. [Operator Instructions] Today's conference call 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, Ms. Mary Chen. Please go ahead.

Thank you, and welcome to our 2025 2nd 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 2025. . 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 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 2025 earnings conference call. In the second quarter, we saw a robust performance across the travel sector as the 3 holiday period helped sustain strong consumer demand. During this holiday, Tuniu recorded year-over-year growth in both transaction volume and the number of trips. During the quarter, the company continued to maintain consistent growth momentum with net revenues increasing by 15% year-over-year and revenues from packaged towards growing by 26%. . Tuniu's robust supply chain has allowed us to execute our product strategy effectively with positive results. By expanding our range of offerings, we are meeting the needs of diverse customer segments while attracting more customers through competitive pricing. Together, these efforts are driving sustained growth across the business. In addition, our diversified sales channels have enabled us to reach a broader customer base. We are seeing more and more of our sales coming from new channels like live streaming and off- line stores. At the same time, we are closely monitoring the ROI of each channel and maintaining strict cost control over internal operations. In the second quarter, we once again achieved moderate profitability on both a GAAP and non-GAAP basis. Let me walk you through some of our key initiatives in more detail. In the second quarter, we continued to strengthen our supply chain, which remains simple to delivering high-quality products at competitive pricing. First, we further enhanced our direct and centralized procurement strategies in order to lower purchasing costs. Second, we focused on resource integration. For example, by leveraging our nationwide sales network with consolidated international flight resources and introduce connecting flights for certain outbound travel products. This approach allows us to consolidate customers from across the country to depart from key hub cities, expanding our departure…

Thank you, Donald. Hello, everyone. Now I will walk you through our second quarter of 2025 financial results in greater detail. Please note that all 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 second quarter of 2025, net revenues were CNY 134.9 million representing a year-over-year increase of 15% from the corresponding period in 2024. Revenues from packaged tours were up 26% year-over-year to CNY 113.4 million and accounted for 84% of our total net revenues for the quarter. The increase was primarily due to the growth of organized tours and the self-drive tours. Other revenues were down 21% year-over-year to CNY 21.5 million and accounted for 16% of our total net revenues. The decrease was primarily due to the decrease in the fees for advertising services provided to tourism boards and bureaus. Gross profit for the second quarter of 2025 was CNY 86 million, up 2% year-over-year. Operating expenses for the second quarter of 2025 was CNY 78.9 million, up 58% year-over-year. Research and product development expenses for the second quarter of 2025 were CNY 16.4 million, up 29% year-over-year. The increase was primarily due to the increase in research and product development personnel-related expenses. Sales and marketing expenses for the second quarter of 2025 were CNY 45 million, up 12% year-over- year. The increase was primarily due to the increase in sales and marketing personnel related expenses and promotion expenses. General and administrative expenses for the second quarter of 2025 were CNY 17.8 million, down 18% year-over-year. The decrease was primarily due to the reversal of current expected credit losses allowance. Net income attributable to ordinary shareholders of Tuniu corporation was CNY 14.5 million in the second quarter of 2025. Non-GAAP net income attributable to ordinary shareholders of Tuniu Corporation which excluded share-based compensation expenses and amortization of acquired intangible assets was CNY 16.5 million in the second quarter of 2025. As of June 30, 2025, the company had cash and cash equivalents, restricted cash, short- term investments and long-term deposits of CNY 1.2 billion. Cash flow generated from operations for the second quarter of 2025 was CNY 46 million. Capital expenditures for the second quarter of 2025 were CNY 1 million. For the third quarter of 2025, the company expects to generate CNY 199 million to CNY 208.3 million of net revenues, which represents a 7% to 12% increase year-over-year. Please note that this forecast reflects Tuniu 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 is Ms. [ Lisa Lu ], Investor.

I've got 2 questions. First, can management share the revenue breakdown by destinations for this quarter? And which destinations drove the growth of packaged tour revenues? Second, can you give more details about the bookings in the summer vacation?

Thank you for your questions. As you know, our packaged tour revenue increased 26% year-over-year, making a solid growth. In terms of key drivers for the growth, domestic destinations achieved double-digit growth during the quarter, outbound tours growth faster than domestic tours in terms of GMV. Europe, Japan and Maldives all posted double-digit year-over-year growth. Some emerging destinations had higher growth rates. For example, South America increased over 50%. Sri Lanka and the Caucasus both increased over 100%. But the headwind from some Southeast Asia countries have slowed down and lowered demand from -- for the destination. Southeast Asia declined roughly 30% during the quarter. In terms of destination breakdown, domestic tours contributed about 2/3 of our total GMV and outbound tours about 1/3 during third quarter. Within outbound destinations, Europe is the top 1 destination, which contributed about 1/3 of our outbound towards GMV. Japan and Maldives each contributed about over 10%. Middle East and Africa as well as America less than 10%, respectively. For the rest of the outbound destinations each contributed less than 5%. For the second question about summer vacation. The demand has increased significantly during the peak season. Families with children are one of the main customer growth during the summer. Domestic city tours are hot, especially cities with museums such as Xi An and the Nanjing as well as cities with theme parks such as Shanghai and Guangzhou. For long-haul tours, Huizhou is a public destination due to its cool weather. Following the shift of our customer habits, this summer, we launched more small growth tours at more competitive prices and sell our products through live streaming shows as scenic spots in Guizhou. For outbond travel, although we don't have full picture now, we have seen double-digit year-on-year growth in Japan, Europe and certain islands, including Maldives in July. For Southeast Asia, in spite of headwinds in Thailand and Cambodia. Singapore and Malaysia are gaining popularity since the summer vacation. Our Niu Select itinerary is covering both Singapore and Malaysia launched this summer have passed 10,000 paying customers through live streaming shows so far. In general, the market continues its growth momentum in the peak season. As a result, we expect 7% to 12% net revenues growth in the third quarter and we will try to make profit again.

[Operator Instructions] We are now approaching the end of our conference call. I would now like to turn the call over to Tuniu's Director of Investor Relations, Ms. Mary Chen. Please go ahead.

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.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.