2021-09-24 03:46Financial Data and Key Metrics Changes - In Q2 2021, total net revenue increased by 86% year-over-year and 43% quarter-over-quarter, driven by strong recovery in China's domestic market [10][20] - Accommodation reservation revenue was RMB 2.5 billion, a 96% increase year-over-year, recovering to 72% of the 2019 level [20] - Transportation ticketing revenue reached RMB 2.1 billion, an 80% increase year-over-year, recovering to 61% of the 2019 levels [21] - Gross margin improved to 79% from 75% in the previous quarter, driven by strong top-line recovery and improved operating efficiency [23] - Adjusted EBITDA for Q2 was RMB 916 million, compared to RMB negative 216 million in the previous quarter [24] Business Line Data and Key Metrics Changes - Domestic hotel and air ticket GMV increased by about 150% year-over-year, with bookings up double digits compared to pre-COVID levels [10][11] - Corporate travel revenue grew by 141% year-over-year, driven by strong growth in accommodation bookings [22] - Packaged tour revenue increased by 182% year-over-year, recovering to 35% of the 2019 level [21] Market Data and Key Metrics Changes - Domestic hotel bookings in non-Guangdong areas were up approximately 30% compared to the same period in pre-COVID 2019 [11] - Local vacation travel saw local hotel booking grow nearly 80% versus pre-COVID levels [11] - International markets, particularly Europe and the U.S., showed significant improvement in air ticket bookings, with several countries surpassing 2019 levels [16] Company Strategy and Development Direction - The company is focusing on the domestic market, enhancing supply chain capabilities, content, and technology to support growth beyond the pandemic [12][13] - A five-year rural revitalization initiative was launched to boost local tourism and support low-income communities [6] - The company aims to leverage its content to inspire travelers and improve service quality, enhancing the overall booking experience [9] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the domestic travel market, supported by rising vaccination rates and relaxed travel restrictions [4][7] - The company anticipates that the new regulatory environment will foster fair competition and innovation in the industry [5][43] - Management noted that while outbound travel remains muted, there are promising signs of recovery in international markets [30] Other Important Information - The company has donated three million medical masks and hundreds of oxygen concentrators to support global COVID-19 efforts [19] - As of June 30, 2021, the balance of cash and cash equivalents was RMB 75 billion or U.S. $12 billion [25] Q&A Session Summary Question: What is the strategy for international recovery? - The company is pursuing a local focus, global vision strategy, with confidence in the recovery of domestic markets compensating for muted outbound travel [28][29] Question: How is the content supply ecosystem being developed? - The company has enriched content offerings, with total content bookings nearly doubling and user engagement improving significantly [31][32] Question: Can management break down the non-GAAP operating margin? - The company targets a normalized margin level of 20% to 30%, with healthy margins in the domestic business and expectations for international recovery [36][37] Question: What is the competitive landscape in lower-tier cities? - The company is penetrating lower-tier cities, with significant cross-selling between transportation and hotel bookings, and is seeing strong engagement from Generation Z [39][40] Question: Thoughts on the regulatory environment? - The company supports new regulations, believing they will foster a healthy growth environment and not significantly impact existing business practices [42][43] Question: Any changes in the competitive landscape due to regulations? - Management believes the new regulations will create a transparent and fair environment for all players in the industry [45][46]