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Tuniu Announces Unaudited Fourth Quarter and Fiscal Year 2014 Financial Results

03/05/2015| 10:38:06 AM| 中文

Tuniu Corporation announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2014.

NANJING, China, March 4, 2015 (GLOBE NEWSWIRE) -- Tuniu Corporation (Nasdaq:TOUR) ("Tuniu" or the "Company"), a leading online leisure travel company in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2014.

Highlights for the Fourth Quarter of 2014

Net revenues in the fourth quarter of 2014 increased by 90.9% year-over-year to RMB928.7 million (US$149.7 million)1.
Gross margin was 6.6% in the fourth quarter of 2014 compared to 3.6% in the fourth quarter of 2013.
Total number of trips from organized tours (excluding local tours) increased by 139.9% year-over-year and the total number of trips from self-guided tours increased by 83.7% year-over-year in the fourth quarter of 2014.
Mobile traffic contributed to over 65% of total online traffic and 45% of total online orders in the fourth quarter of 2014.
Tuniu added 452 regional service centers in the fourth quarter of 2014. As of December 31, 2014, Tuniu had 75 regional service centers throughout China.

Highlights for the Fiscal Year 2014

Net revenues were RMB3.5 billion (US$569.7 million) in 2014, up 81.3% from 2013.
Gross margin was 6.4% in 2014, compared to 6.2% in 2013.
Total number of trips from organized tours (excluding local tours) increased by 93.9% year-over-year and the total number of trips from self-guided tours increased by 78.7% year-over-year in 2014.

Mr. Donald Yu, Tuniu's co-founder and Chief Executive Officer, said, "We are pleased to have delivered excellent top-line growth of 90.9% year-over-year in the fourth quarter of 2014 as we continued to expand our market share in China's online leisure travel industry. According to the latest iResearch report3, Tuniu was the number one ranked company in online organized tours with a market share of over 20% in 2014. We are confident that our ongoing investments in the online shopping experience, tour advisory services and regional online-to-offline services will further differentiate Tuniu's customer experience and drive growth."

Mr. Alex Yan, Tuniu's co-founder and Chief Operating Officer, said, "In the fourth quarter, we opened 45 additional regional service centers in China's second-and-third-tier cities, broadening our presence to a total of 75 service centers in 73 cities at the end of 2014. As we execute on our regional expansion strategy, we are particularly pleased to see strong growth momentum and increasing contribution from lower tier cities. During the fourth quarter, we also enhanced our supply chain management through deeper cooperation with strategic suppliers and continuing our transition towards direct procurement relationships. These initiatives are a vital component of our plans to expand product offerings and improve profitability."

Mr. Conor Yang, Tuniu's Chief Financial Officer, said, "Our strategic investments in regional expansion, technology innovation, and brand promotion will strengthen our competitiveness in the long run. With the online penetration rate of the leisure travel market surpassing 10% in 20144 and set to continue growing, we are confident there is a great potential for industry leaders such as Tuniu to keep sustainable growth in the years to come."

Fourth Quarter 2014 Results

Net revenues were RMB928.7 million (US$149.7 million) in the fourth quarter of 2014, representing a year-over-year increase of 90.9% from the corresponding period in 2013. The increase was primarily due to the growth in revenues from both organized tours and self-guided tours. The number of trips sold increased by 88.0% to 558,715 in the fourth quarter of 2014 up from 297,110 in the fourth quarter of 2013.

Revenues from organized tours, which are recognized on a gross basis, were RMB896.0 million (US$144.4 million) in the fourth quarter of 2014, representing a year-over-year increase of 88.7% from the corresponding period in 2013. The increase was primarily due to the rapid growth in demand for travel to certain international destinations, such as Europe, North America, South Korea and Japan, and for domestic tours. In the fourth quarter of 2014, the number of trips of organized tours (excluding local tours) increased by 139.9% to 192,505 up from 80,258 in the fourth quarter of 2013, and the number of trips of local tours increased by 62.8% to 250,046 from 153,605 in the fourth quarter of 2013.
 
Revenues from self-guided tours, which are recognized on a net basis, were RMB28.6 million (US$4.6 million) in the fourth quarter of 2014, representing a year-over-year increase of 292.9% from the corresponding period in 2013. The increase in revenues was primarily due to the margin improvement in Maldives and certain domestic tours. The number of trips of self-guided tours increased by 83.7% year-over-year to 116,164 in the fourth quarter of 2014 from 63,247 in the fourth quarter of 2013.
 
Other revenues were RMB8.9 million (US$1.4 million) in the fourth quarter of 2014, representing a year-over-year increase of 26.8% from the corresponding period in 2013. The increase was primarily due to a rise of service fees received from insurance companies and tourism boards and bureaus.

Cost of revenues was RMB867.1 million (US$139.8 million) in the fourth quarter of 2014, representing a year-over-year increase of 84.9% from the corresponding period in 2013. The increase was primarily due to an increase in cost to suppliers of organized tours and the personnel expansion in tour advisor, call center and regional service centers during the period. As a percentage of net revenues, cost of revenues was 93.4% in the fourth quarter of 2014 compared to 96.4% in the corresponding period in 2013.

Gross margin was 6.6% in the fourth quarter of 2014 compared to 3.6% in the fourth quarter of 2013. The increase in gross margin was primarily due to cost savings from economies of scale, and increasing direct-procurement, as well as from reduced pricing competition for the Maldives product lines.

Operating expenses were RMB238.0 million (US$38.4 million) in the fourth quarter of 2014, representing a year-over-year increase of 210.9% from the corresponding period in 2013. Share-based compensation expenses, which were allocated to related operating expense line items, were RMB10.9 million (US$1.8 million) in the fourth quarter of 2014. Non-GAAP operating expenses, which excluded share-based compensation expenses, were RMB227.2 million (US$36.6 million) in the fourth quarter of 2014, representing a year-over-year increase of 196.7%.

Research and product development expenses were RMB38.7 million (US$6.2 million) in the fourth quarter of 2014, representing a year-over-year increase of 176.7%. Non-GAAP research and product development expenses, which excluded share-based compensation expenses of RMB0.5 million (US$76.3 thousand), were RMB38.2 million (US$6.2 million) in the fourth quarter of 2014, representing an increase of 173.3% from the corresponding period in 2013. The increase was primarily due to investments in technology personnel for mobile related initiatives and new lines of product and service offerings, such as dynamic packaging, destination services and regional services.
 
Sales and marketing expenses were RMB143.1 million (US$23.1 million) in the fourth quarter of 2014, representing a year-over-year increase of 272.8%. Non-GAAP sales and marketing expenses, which excluded share-based compensation expenses of RMB0.1 million (US$21.5 thousand), were RMB143.0 million (US$23.0 million) in the fourth quarter of 2014, representing a year-over-year increase of 272.5% from the corresponding period in 2013. The increase was primarily due to branding campaigns and advertisements to drive our mobile business expansion.
 
General and administrative expenses were RM59.2 million (US$9.5 million) in the fourth quarter of 2014, representing a year-over-year increase of 140.6%. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses of RMB10.3 million (US$1.7 million), were RMB49.0 million (US$7.9 million) in the fourth quarter of 2014, representing a year-over-year increase of 98.9% from the corresponding period in 2013. The increase was primarily due to growing headcount of our administrative personnel as a result of our business expansion and an increase in the professional service fees associated with being a public company.

Loss from operations was RMB176.5 million (US$28.4 million) in the fourth quarter of 2014, compared to a loss from operations of RMB59.2 million (US$9.5 million) in the corresponding period in 2013. Non-GAAP loss from operations, which excluded share-based compensation expenses, was RMB165.5 million (US$26.7 million) in the fourth quarter of 2014.

Net loss was RMB168.0 million (US$27.1 million) in the fourth quarter of 2014, compared to a net loss of RMB53.7 million (US$8.7 million) in the fourth quarter of 2013. Non-GAAP net loss, which excluded share-based compensation expenses, was RMB157.1 million (US$25.3 million) in the fourth quarter of 2014.

Net loss attributable to ordinary shareholders was RMB168.0 million (US$27.1 million) in the fourth quarter of 2014, compared to a net loss attributable to ordinary shareholders of RMB53.7 million (US$8.7 million) in the corresponding period in 2013. Non-GAAP net loss attributable to ordinary shareholders, which excluded share-based compensation expenses, was RMB157.1 million (US$25.3 million) in the fourth quarter of 2014.

As of December 31, 2014, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB2.0 billion (US$317.6 million).

Fiscal Year 2014 Results

Net revenues were RMB3.5 billion (US$569.7 million) in 2014, an 81.3% increase from 2013.

Revenues from organized tours, which are recognized on a gross basis, were RMB3.4 billion (US$553.3 million) in 2014, representing an increase of 81.4% from 2013. The increase was primarily due to the rapid growth in demand for travel to certain international destinations, such as Europe, North America, South Korea and Japan, and for domestic tours. In 2014, the number of trips of organized tours (excluding local tours) increased by 93.9% to 711,847 up from 367,104 in 2013, and the number of trips of local tours increased by 56.4% to 1,074,335 up from 687,121 in 2013.
 
Revenues from self-guided tours, which are recognized on a net basis, were RMB93.1 million (US$15.0 million) in 2014, representing a 90.4% increase from 2013. The increase in revenues was primarily due to growth in travel to the Maldives and certain domestic destinations. The number of trips of self-guided tours increased by 78.7% to 395,652 in 2014 up from 221,412 in 2013.
 
Other revenues, were RMB28.8 million (US$4.6 million) in 2014, representing a 38.6% increase from 2013. The increase was primarily due to a rise of service fees received from insurance companies and tourism boards and bureaus.

Cost of revenues was RMB3.3 billion (US$533.3 million) in 2014, representing an 80.8% increase from 2013. The increase was in line with the growth of revenues. As a percentage of net revenues, cost of revenues was 93.6% in 2014 compared to 93.8% in 2013.

Gross margin was 6.4% in 2014 compared to 6.2% in 2013.

Operating expenses were RMB699.2 million (US$112.7 million) in 2014, representing a 222.1% increase from 2013. Share-based compensation expenses, which were allocated to related operating expense line items, were RMB38.4 million (US$6.2 million) in 2014. Non-GAAP operating expenses, which excluded share-based compensation expenses, were RMB660.8 million (US$106.5 million) in 2014, up 204.4% from 2013.

Research and product development expenses were RMB104.9 million (US$16.9 million) in 2014, representing a 169.0% increase from 2013. Non-GAAP research and product development expenses, which excluded share-based compensation expenses of RMB2.0 million (US$0.3 million), were RMB102.9 million (US$16.6 million) in 2014, representing a 163.9% increase from 2013. The increase was primarily due to investments in new product offerings and mobile related initiatives, and the rise in technology expenses and personnel expenses for product development.
 
Sales and marketing expenses were RMB434.2 million (US$70.0 million) in 2014, a 294.5% increase from 2013. Non-GAAP sales and marketing expenses, which excluded share-based compensation expenses of RMB0.9million (US$0.1 million), were RMB433.3 million (US$69.8 million) in 2014, representing a 293.7% increase from 2013. The increase was primarily due to branding campaigns and advertisements for our mobile business expansion.
 
General and administrative expenses were RMB167.0 million (US$26.9 million) in 2014, representing a 139.7% increase from 2013. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses of RMB35.5 million (US$5.7 million), were RMB131.4 million (US$21.2 million) in 2014, up 88.6% from 2013. The increase was primarily due to growing headcount of our administrative personnel as a result of our business expansion and an increase in the professional service fees associated with being a public company.

Loss from operations was RMB473.0 million (US$76.2 million) in 2014, compared to a loss from operations of RMB97.0 million (US$15.6 million) in 2013. Non-GAAP loss from operations, which excluded share-based compensation expenses, was RMB433.8 million (US$69.9 million) in 2014.

Net loss was RMB447.9 million (US$72.2 million) in 2014, compared to a net loss of RMB79.6 million (US$12.8 million) in 2013. Non-GAAP net loss, which excluded share-based compensation expenses, was RMB408.7 million (US$65.9 million) in 2014.

Net loss attributable to ordinary shareholders was RMB463.5 million (US$74.7 million) in 2014, compared to a net loss attributable to ordinary shareholders of RMB139.1 million (US$22.4 million) in 2013. Non-GAAP net loss attributable to ordinary shareholders, which excluded share-based compensation expenses, was RMB424.3 million (US$68.4 million) in 2014.

Business Outlook

For the first quarter of 2015, Tuniu expects to generate RMB1.13 billion to RMB1.16 billion of net revenues, which represents 95% to 100% growth year-over-year. This forecast reflects Tuniu's current and preliminary view on the industry and its operations, which is subject to change.

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