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NANJING, China, May 23, 2019 /PRNewswire/ -- Tuniu Corporation (NASDAQ:TOUR) ("Tuniu" or the "Company"), a leading online leisure travel company in China, today announced its unaudited financial results for the first quarter ended March 31, 2019.

Mr. Donald Dunde Yu, Tuniu's founder, Chairman and Chief Executive Officer, said, "In 2019, Tuniu will focus on maintaining and expanding its long-term competitive advantages. We have reprioritized our product offering to focus on the best-selling products in popular destinations. By collectively making procurement of these best-selling products, it allows us to improve our bargaining power and effectively increase our product margins. On the other hand, our social marketing tools leverage our offline retail stores to effectively distribute Tuniu's products and services to local communities, social groups and various consumption settings. Overall, we aim to provide the best products and services to our customers."

Ms. Maria Yi Xin, Tuniu's Chief Financial Officer, said, "By putting increased emphasis and resources into the best-selling products, we are able to further improve our margins. During the quarter, contribution of our offline retail stores continues to rise as we refine our offline service capabilities. Although our offline retail store model is already proven, we believe there continues to be room for operational improvements that can further unlock the profitability potential of these stores. Going forward, we will focus on improving the user experience by providing high quality products through Niu Tour, which are organized tours that are directly designed and procured by Tuniu, and Tuniu Selection, which are best-selling products from our top suppliers."

First Quarter 2019 Results

Net revenues were RMB456.9 million (US$68.1 ^[1] million) in the first quarter of 2019, representing a year-over-year decrease of 4.9% from the corresponding period in 2018.

• Revenues from packaged tours were RMB365.9 million (US$54.5 million) in the first quarter of 2019, representing a year-over-year decrease of 9.1% from the corresponding period in 2018. The decrease was primarily due to the decline in certain destinations.
• Other revenues were RMB91.0 million (US$13.6 million) in the first quarter of 2019, representing a year-over-year increase of 16.8% from the corresponding period in 2018. The increase was primarily due to a rise in revenues generated from financial services and commission fees received from certain travel-related products.

Cost of revenues was RMB206.0 million (US$30.7 million) in the first quarter of 2019, representing a year-over-year decrease of 5.5% from the corresponding period in 2018. As a percentage of net revenues, cost of revenues was 45.1% in the first quarter of 2019 compared to 45.3% in the corresponding period in 2018.

Gross profit was RMB250.8 million (US$37.4 million) in the first quarter of 2019, representing a year-over-year decrease of 4.5% from the corresponding period in 2018. The decrease was primarily due to the decline in revenues from packaged tours.

Operating expenses were RMB431.4 million (US$64.3 million) in the first quarter of 2019, representing a year-over-year increase of 12.4% from the corresponding period in 2018. Share-based compensation expenses and amortization of acquired intangible assets, which were allocated to operating expenses, were RMB56.7 million (US$8.4 million) in the first quarter of 2019. Non-GAAP ^{[ 2]}  operating expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets, were RMB374.7 million (US$55.8 million) in the first quarter of 2019, representing a year-over-year increase of 11.4%.

• Research and product development expenses were RMB80.0 million (US$11.9 million) in the first quarter of 2019, representing a year-over-year decrease of 4.8%. Non-GAAP research and product development expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB5.6 million (US$0.8 million), were RMB74.5 million (US$11.1 million) in the first quarter of 2019, representing a year-over-year decrease of 9.6% from the corresponding period in 2018. The decrease was primarily due to the increase in efficiency resulting from economies of scale and refined management, and optimization of research and product development personnel.
• Sales and marketing expenses were RMB218.8 million (US$32.6 million) in the first quarter of 2019, representing a year-over-year increase of 17.8%. Non-GAAP sales and marketing expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB35.6 million (US$5.3 million), were RMB183.2 million (US$27.3 million) in the first quarter of 2019, representing a year-over-year increase of 21.0% from the corresponding period in 2018. The increase was primarily due to the expansion of our offline retail stores.
• General and administrative expenses were RMB135.1 million (US$20.1 million) in the first quarter of 2019, representing a year-over-year increase of 17.9%. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB15.5 million (US$2.3 million), were RMB119.5 million (US$17.8 million) in the first quarter of 2019, representing a year-over-year increase of 15.9% from the corresponding period in 2018. The increase was primarily due to an increase in general and administrative personnel related expenses.

Loss from operations was RMB180.5 million (US$26.9 million) in the first quarter of 2019, compared to a loss from operations of RMB121.1 million in the first quarter of 2018. Non-GAAP loss from operations, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB122.0 million (US$18.2 million) in the first quarter of 2019.

Net loss was RMB148.2 million (US$22.1 million) in the first quarter of 2019, compared to a net loss of RMB71.6 million in the first quarter of 2018. Non-GAAP net loss, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB89.6 million (US$13.4 million) in the first quarter of 2019.

Net loss attributable to ordinary shareholders was RMB150.6 million (US$22.4 million) in the first quarter of 2019, compared to a net loss attributable to ordinary shareholders of RMB74.7 million in the first quarter of 2018. Non-GAAP net loss attributable to ordinary shareholders, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB92.1 million (US13.7 million) in the first quarter of 2019.

As of March 31, 2019, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB1.8 billion (US$269.6 million). 

Business Outlook

For the second quarter of 2019, Tuniu expects to generate RMB472.7 million to RMB499.0 million of net revenues, which represents 5% to 10% decrease year-over-year. This forecast reflects Tuniu's current and preliminary view on the industry and its operations, which is subject to change.

Conference Call Information

Tuniu's management will hold an earnings conference call at 8:00 am U.S. Eastern Time, on May 23, 2019, (8:00 pm, Beijing/Hong Kong Time, on May 23, 2019) to discuss the first quarter 2019 financial results.

To participate in the conference call, please dial the following numbers:

A telephone replay will be available one hour after the end of the conference through May 30, 2019. The dial-in details are as follows:

Additionally, a live and archived webcast of the conference call will also be available on the Company's investor relations website at http://ir.tuniu.com.

About Tuniu

Tuniu (Nasdaq:TOUR) is a leading online leisure travel company in China that offers a large selection of packaged tours, including organized and self-guided tours, as well as travel-related services for leisure travelers through its website tuniu.com and mobile platform. Tuniu has over 2,200,000 stock keeping units (SKUs) of packaged tours, covering over 420 departing cities throughout China and all popular destinations worldwide. Tuniu provides one-stop leisure travel solutions and a compelling customer experience through its online platform and offline service network. For more information, please visit http://ir.tuniu.com.

Safe Harbor Statement

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Tuniu may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about Tuniu's beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but are not limited to the following: Tuniu's goals and strategies; the growth of the online leisure travel market in China; the demand for Tuniu's products and services; its relationships with customers and travel suppliers; the Company's ability to offer competitive travel products and services; Tuniu's future business development, results of operations and financial condition; competition in the online travel industry in China; relevant government policies and regulations relating to the Company's structure, business and industry; and the general economic and business condition in China and elsewhere. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and Tuniu does not undertake any obligation to update such information, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement the Company's unaudited consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), the Company has provided non-GAAP information related to cost of revenues, research and product development expenses, sales and marketing expenses, general and administrative expenses, operating expenses, loss from operations, net loss, net loss attributable to ordinary shareholders, net loss per ordinary share attributable to ordinary shareholders-basic and diluted and net loss per ADS, which excludes share-based compensation expenses and amortization of acquired intangible assets. We believe that the non-GAAP financial measures used in this press release are useful for understanding and assessing underlying business performance and operating trends, and management and investors benefit from referring to these non-GAAP financial measures in assessing our financial performance and when planning and forecasting future periods. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and non-GAAP Results" set forth at the end of this press release.

A limitation of using non-GAAP financial measures excluding share-based compensation expenses and amortization of acquired intangible assets is that share-based compensation expenses and amortization of acquired intangible assets have been – and will continue to be – significant recurring expenses in the Company's business. You should not view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies.

For investor and media inquiries, please contact:

China
Mary Chen
Investor Relations Director
Tuniu Corporation
Phone: +86-25-6960-9988
E-mail: ir@tuniu.com

(Financial Tables Follow)

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SOURCE Tuniu