Tongcheng-Elong's first-quarter income reached ¥1.005 bn

The sudden outbreak of the epidemic has caused a significant impact on the global economy, and tourism cannot avoid it. However, Hong Kong-listed company Tongcheng-Elong (0780.HK) has demonstrated strong anti-risk ability and resilience during this period and made profits in the first quarter of 2020.

On May 21, Tongcheng-Elong announced their income results of the first quarter of 2020. According to the announcement, Tongcheng-Elong earned 1.005 billion yuan in the first quarter, adjusted EBITDA to 159 million yuan, and adjusted EBITDA profit margin to 15.8%. The adjusted net profit in the first quarter of 2020 was still positive, reaching 78.08 million yuan, with an adjusted net profit rate of 7.8%.

In terms of specific business sectors, the income of Tongcheng-Elong in the first quarter of 2020 from accommodation booking services, transportation ticketing services, and other aspects were affected to varying degrees. However, additional revenues such as advertising services and supporting value-added user services increased significantly, from 35.3 million yuan in the first quarter of 2019 to 89.33 million yuan, up 153.1% year on year.

As for user growth, with the improvement of the epidemic situation in China, the search volume of users' long-term travel has continued to rise, boosting the rapid recovery of the user scale of Tongcheng-Elong. The announcement shows that in the first quarter of 2020, MAU (average monthly living user) has rebounded to 148 million, while MPU (average monthly paid user) has reached 14.8 million.

When looking forward to the performance prospect of the second quarter of 2020, Tongcheng-Elong expects that the net income in the second quarter of 2020 will be significantly narrowed, with a year-on-year decrease of about 24% to 29%, but the adjusted net income will remain profitable.

Wu Zhixiang, co-chairman of Tongcheng-Elong, said that although the epidemic has brought short-term impacts and challenges to the company's business, in the long run, due to the improvement of consumption capacity, urbanization ratio and online penetration rate of tourism products, China's online tourism market will continue to develop rapidly with tremendous growth potential.

Chief executive officer, Ma Heping of Tongcheng-Elong, said that their business has the core competitive advantages in terms of flow channels, market positioning, technological innovation, and operation. Tongcheng-Elong has favorable conditions to grasp the recovery trend and has achieved growth. The company will adhere to the strategy of transforming from OTA to ITA and continue to enhance the travel experience of users.

With the increase of income level, the second, third, and fourth-tier cities are becoming an essential driving force for the growth of China's tourism industry in the next ten years.