In This Article:
Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Tongcheng Travel Holdings Ltd (FRA:TEM) achieved a record high quarterly revenue of RMB5.0 billion, representing a 51% increase from the same period of 2023.
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The company's adjusted net profit reached a quarterly historical high of RMB910 million, with an adjusted net profit margin growing to 18.2%.
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The transportation business, a key growth driver, achieved a record high in quarterly revenue, with the air ticketing business gaining market share.
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International business saw substantial growth, with outbound accommodation and air ticketing volumes recording over 100% year-over-year growth.
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The standalone app experienced significant growth, with daily active users reaching an all-time high of over 3 million before the National Day holiday.
Negative Points
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The GMV growth was only 2% to 3% due to a drop in ADR and ATV, which offset the volume growth.
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Despite strong revenue growth, the integration of the tourism business impacted overall margins.
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The user acquisition cost for the standalone app is higher than for other platforms, with a longer payback period.
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There is a deceleration in the growth of monthly paying users (MPU) and annual paying users (APU), indicating potential saturation in the user base.
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The advertising and corporate travel business segments showed flat year-over-year growth, partially offsetting gains in other areas.
Q & A Highlights
Q: Could you elaborate on the deceleration in MPUs and APUs growth? Does it indicate a near-term ceiling for the user base in China? What are your targets for these metrics? A: Our strategic focus has shifted towards enhancing user value and purchase frequency rather than expanding the user base. Our user purchase frequency has improved significantly, and we are confident that the number of paying users will continue to grow. We are exploring various user acquisition channels and focusing on enhancing user engagement and value through tailored promotions and cross-selling strategies. (Respondent: Unidentified_5)
Q: What is the outlook for the next quarter and next year, particularly for domestic and outbound business? How should we view the future margin trends? A: We remain optimistic about China's travel industry, with strong growth observed during the National Day holiday. We anticipate sustained growth in outbound travel and international markets. Our strategy focuses on balanced growth and profitability, with improved marketing efficiency and operational leverage expected to enhance margins further. (Respondent: Unidentified_6)