Tuniu Announces Unaudited First Quarter 2019 Financial Results

NANJING,China,May 23,2019 -- 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,"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 operationswas 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,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,was RMB89.6 million (US$13.4 million) in the first quarter of 2019.

Net loss attributable to ordinary shareholderswas 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,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).

[1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB6.7112 on March 29,2019 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/default.htm.

[2] The section below entitled "About Non-GAAP Financial Measures" provides information about the use of Non-GAAP financial measures in this press release,and the table captioned "Reconciliations of GAAP and Non-GAAP Results" set forth at the end of this press release reconciles Non-GAAP financial information with the Company's financial results under GAAP.

Business Outlook

For the second quarter of 2019,Tuniu expects to generate RMB472.7 million to RMB499.0 million of net revenues,which represents5% 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,(8:00 pm,Beijing/Hong Kong Time,2019) to discuss the first quarter 2019 financial results.

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

US:

+1-888-346-8982

Hong Kong:

+852-301-84992

China:

4001-201203

International:

+1-412-902-4272

Conference ID:

Tuniu 1Q 2019 Earnings Call

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:

US:

+1-877-344-7529

International:

+1-412-317-0088

Replay Access Code:

10131630

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.

AboutTuniu

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.comand mobile platform. Tuniu has over 2,200,000 stock keeping units (SKUs) of packaged tours,covering over 420 departing cities throughout China and allpopular 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)

Tuniu Corporation

Unaudited Condensed Consolidated Balance Sheets

(All amounts in thousands,except per share information)

December 31,2018

March 31,2019

March 31,2019

RMB

RMB

US$

ASSETS

Current assets

Cash and cash equivalents

560,356

441,504

65,786

Restricted cash

270,670

253,577

37,784

Short-term investments

859,211

1,114,288

166,034

Accounts receivable,net

347,547

374,515

55,804

Amounts due from related parties

696,520

714,959

106,532

Prepayments and other current assets

1,673,584

1,568,279

233,681

Total current assets

4,407,888

4,467,122

665,621

Non-current assets

Long-term investments

1,302,506

1,265,673

188,591

Property and equipment,net

187,360

199,273

29,693

Intangible assets,net

317,885

283,461

42,237

Land use right,net

100,836

100,320

14,948

Operating lease right-of-use assets,net*

-

195,247

29,093

Goodwill

159,409

159,409

23,753

Other non-current assets

81,039

85,883

12,797

Total non-current assets

2,149,035

2,289,266

341,112

Total assets

6,556,923

6,756,388

1,006,733

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Short-term borrowings

49,312

57,820

8,615

Accounts and notes payable

1,305,610

1,497,132

223,080

Amounts due to related parties

77,159

102,704

15,303

Salary and welfare payable

104,480

79,920

11,908

Taxes payable

23,316

12,625

1,881

Advances from customers

1,058,946

1,007,828

150,171

Operating lease liabilities,current*

-

95,640

14,251

Accrued expenses and other current liabilities

483,832

485,346

72,319

Total current liabilities

3,102,655

3,339,015

497,528

Non-current liabilities

Operating lease liabilities,non-current*

-

110,848

16,517

Deferred tax liabilities

19,855

19,268

2,871

Long-term borrowings

4,492

4,058

605

Other non-current liabilities

16,069

10,764

1,604

Total non-current liabilities

40,416

144,938

21,597

Total liabilities

3,143,071

3,483,953

519,125

Mezzanine equity

Redeemable noncontrolling interests

69,319

70,576

10,516

Shareholders' equity

Ordinary shares

249

249

37

Less: Treasury stock

(304,535)

(313,232)

(46,673)

Additional paid-in capital

9,061,979

9,082,223

1,353,293

Accumulated other comprehensive income

284,079

279,337

41,623

Accumulated deficit

(5,691,409)

(5,841,468)

(870,406)

Total Tuniu's shareholders' equity

3,350,363

3,207,109

477,874

Noncontrolling interests

(5,830)

(5,250)

(782)

Total Shareholders' equity

3,344,533

3,201,859

477,092

Total liabilities and shareholders' equity

6,733

*On 1 January 2019,the Company adopted ASC 842,Leases and used the optional transition method to initially apply this new lease standard at the

adoption date. Right-of-use assets and lease liabilities were recognized on the Company's consolidated financial statements.

Tuniu Corporation

Unaudited Condensed Consolidated Statements of Comprehensive Loss

(All amounts in thousands,except per share information)

QuarterEnded

QuarterEnded

QuarterEnded

QuarterEnded

March 31,2018

December 31,2019

RMB

RMB

RMB

US$

Revenues

Packaged tours

402,679

357,619

365,893

54,520

Others

77,854

113,616

90,964

13,554

Net revenues

480,533

471,235

456,857

68,074

Cost of revenues

(217,907)

(201,018)

(206,019)

(30,698)

Gross profit

262,626

270,217

250,838

37,376

Operating expenses

Research and product development

(84,054)

(75,854)

(80,016)

(11,923)

Sales and marketing

(185,831)

(209,094)

(218,820)

(32,605)

General and administrative

(114,609)

(120,510)

(135,072)

(20,126)

Other operating income

735

32,130

2,543

379

Total operating expenses

(383,759)

(373,328)

(431,365)

(64,275)

Loss from operations

(121,133)

(103,111)

(180,527)

(26,899)

Other income/(expenses)

Interest and investment income

39,474

30,696

38,671

5,762

Interest expense

-

(6,158)

(6,810)

(1,015)

Foreign exchange gains/(losses),net

5,977

(2,043)

(303)

(45)

Other income,net

7,945

5,653

268

40

Loss before income tax expense

(67,737)

(74,963)

(148,701)

(22,157)

Income tax (expense)/benefit

(3,828)

2,025

525

78

Net loss

(71,565)

(72,938)

(148,176)

(22,079)

Net income/(loss) attributable to noncontrolling interests

1,299

(9,511)

1,169

174

Net income/(loss) attributable to redeemable noncontrolling

interests

940

(1,848)

714

106

Net loss attributable to Tuniu Corporation

(73,804)

(61,579)

(150,059)

(22,359)

Accretion on of redeemable noncontrolling interest

(869)

(3,082)

(543)

(81)

Net loss attributable to ordinary shareholders

(74,673)

(64,661)

(150,602)

(22,440)

Net loss

(71,079)

Other comprehensive (loss)/income:

Foreign currency translation adjustment,net of nil tax

(28,452)

1

(4,742)

(707)

Comprehensive loss

(100,017)

(72,937)

(152,918)

(22,786)

Loss per share

Net loss per ordinary share attributable to ordinary

shareholders - basic and diluted

(0.19)

(0.17)

(0.41)

(0.06)

Net loss per ADS - basic and diluted*

(0.57)

(0.51)

(1.23)

(0.18)

Weighted average number of ordinary shares used in

computing basic and diluted loss per share

388,843,912

370,486,502

369,190,766

369,766

Share-based compensation expenses included are as follows：

Cost of revenues

227

392

1,869

278

Research and product development

1,260

2,173

5,041

751

Sales and marketing

185

333

1,416

211

General and administrative

10,709

8,901

14,835

2,210

Total

12,381

11,799

23,161

3,450

*Each ADS represents three of the Company's ordinary shares.

Reconciliations of GAAP and Non-GAAP Results

(All amounts in thousands,except per share information)

Quarter Ended March 31,2019

GAAP

Share-based

Amortization of acquired

Non-GAAP

Result

Compensation

intangible assets

Result

Cost of revenues

(206,019)

1,869

-

(204,150)

Research and product development

(80,016)

5,041

513

(74,462)

Sales and marketing

(218,820)

1,416

34,163

(183,241)

General and administrative

(135,072)

14,835

703

(119,534)

Other operating income

2,543

-

-

2,543

Total operating expenses

(431,365)

21,292

35,379

(374,694)

Loss from operations

(180,527)

23,161

35,379

(121,987)

Net loss

(148,176)

23,379

(89,636)

Net loss attributable to ordinary shareholders

(150,602)

23,379

(92,062)

Net loss per ordinary share attributable to ordinary

shareholders - basic and diluted (RMB)

(0.41)

(0.25)

Net loss per ADS - basic and diluted (RMB)

(1.23)

(0.75)

Weighted average number of ordinary shares used

in computing basic and diluted loss per share

369,766

Quarter Ended December 31,2018

GAAP

Share-based

Amortization of acquired

Non-GAAP

Result

Compensation

intangible assets

Result

Cost of revenues

(201,018)

392

-

(200,626)

Research and product development

(75,854)

2,173

589

(73,092)

Sales and marketing

(209,094)

333

34,163

(174,598)

General and administrative

(120,510)

8,901

781

(110,828)

Other operating income

32,130

-

-

32,130

Total operating expenses

(373,328)

11,407

35,533

(326,388)

Loss from operations

(103,111)

11,799

35,533

(55,779)

Net loss

(72,938)

11,533

(25,606)

Net loss attributable to ordinary shareholders

(64,661)

11,533

(17,329)

Net loss per ordinary share attributable to ordinary

shareholders - basic and diluted (RMB)

(0.17)

(0.05)

Net loss per ADS - basic and diluted (RMB)

(0.51)

(0.15)

Weighted average number of ordinary shares used

in computing basic and diluted loss per share

370,502

370,502

Quarter Ended March 31,2018

GAAP

Share-based

Amortization of acquired

Non-GAAP

Result

Compensation

intangible assets

Result

Cost of revenues

(217,907)

227

-

(217,680)

Research and product development

(84,054)

1,260

399

(82,395)

Sales and marketing

(185,831)

185

34,163

(151,483)

General and administrative

(114,609)

10,709

781

(103,119)

Other operating income

735

-

-

735

Total operating expenses

(383,759)

12,154

35,343

(336,262)

Loss from operations

(121,133)

12,381

35,343

(73,409)

Net loss

(71,565)

12,343

(23,841)

Net loss attributable to ordinary shareholders

(74,673)

12,343

(26,949)

Net loss per ordinary share attributable to ordinary

shareholders - basic and diluted (RMB)

(0.19)

(0.07)

Net loss per ADS - basic and diluted (RMB)

(0.57)

(0.21)

Weighted average number of ordinary shares used

in computing basic and diluted loss per share

388,912

388,912

*Basic net loss per ordinary share attributable to ordinary shareholders is calculated by dividing net loss attributable to ordinary

shareholders by the weighted average number of ordinary shares outstanding during the periods. Diluted net loss per ordinary

share attributable to ordinary shareholders is calculated by dividing net loss attributable to ordinary shareholders by the

weighted average number of ordinary shares and dilutive potential ordinary shares outstanding during the periods,including the

dilutive effect of share-based awards as determined under the treasury stock method.

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