Tongcheng-Elong Announces 2021 Interim Results
HONG KONG,Aug. 24,2021 -- Tongcheng-Elong Holdings Limited ("Tongcheng-Elong" or the "Company",together with its subsidiaries are referred to as the "Group",stock code: 0780.HK),an innovator and leader in the online travel industry in China,is pleased to announce its unaudited consolidated results for the six months ended June 30,2021 (the "Period").
Since 2021,effective control measures implemented by the Chinese government have led to a gradual improvement in the impact of the COVID-19 pandemic and a recovery in the tourism market. However,since the end of May 2021,the resurgence of the pandemic in some areas in China has resulted in stricter travel restrictions,which have inevitably had an adverse impact on tourism in the region to a certain extent. In the face of the complicated external environment,the Company has responded proactively and achieved satisfactory results with its competitive advantages in terms of diversified traffic sources,solid market position,strong product innovation and effective operational strategies,and strove for making more contributions to the travel industry and society.
Results Highlights:
As a leading player in the online travel agency (hereinafter "OTA") industry,Tongcheng-Elong has reacted expeditiously to the changes in the industry,actively adjusted strategies and optimized operations while maintaining flexible operations and stringent cost control,which helped us overcome the uncertainties and seize the market opportunities. For the six months ended June 30,2021,its revenue increased by 70.1% year-to-year to RMB3,751.7 million from RMB2,205.2 million for the same period in 2020. Benefitted from the stringent cost control and light operating model,the Company's adjusted net profit for the Period increased by 153.3% to RMB694.6 million,with adjusted net profit margins of 18.5%.
During the Period,we continued to focus on the lower-tier cities market,with traffic from the Wexin channel remaining stable and other diversified channels actively following up,driving a continuous increase in the number of users. During the Period,our average MAUs increased by 58.1% year on year to 256.1 million. At the same time,we actively captured the market rebound by gathering strong innovation and focusing on rapid product release. We launched innovative products such as "Blind Box of Air Tickets" to meet the diverse needs of users and continue to enhance user experience. During the Period,the Company's average MPUs increased significantly by 82.0% year-to-year to 30.4 million. These excellent results are a testament to our comprehensive and diversified products and services,outstanding ability to improve conversions and continued improvement in offline user acquisition activities.
While the travel industry was under the shadow of the pandemic,the Company quickly conducted research and rapidly responded to the crisis,proactively capitalizing on the potential opportunities to further penetrate lower-tier cities in China. Compared to the same period in 2019,the Company's domestic room nights sold grew by over 65%,with over 100% growth in lower-tier cities. Its domestic air ticketing volume grew by nearly 30% over 2019 level,and bus ticketing volume increased by more than 270% when compared with 2019.
Business Review:
During the Period,the Company leveraged extensive industry expertise to maintain a keen sense of the market,launched tailored products to meet the needs and preferences of the users and created a unique product that resonated with users. In the second quarter of this year,the "blind box of air tickets" initiative acquired new users,especially the younger generations who have strong curiosity and enjoy the thrill of the unknown. As a result,the innovative marketing initiative brought a massive traffic to the platform,which has contributed significantly to the record high of MAUs in the second quarter.
During the Period,the Company further diversified and utilized the traffic channels. In late July,the agreement with Tencent was successfully renewed,pursuant to which subject to independent shareholder's approval. The deepened cooperation between the two companies enhanced the operational efficiency. In the second quarter of 2021,approximately 78.1% of average MAUs was contributed from Weixin mini program. We have not only created stable and efficient traffic through Weixin mini program,but also developed extensively with partners from Tencent's ecosystem to continuously expand the business presence to meet the needs of more users. In addition,we wereawarded the "Best Mini-program for the first half of the year" at the Aladdin semi-annual conference,in recognition of its innovative products and services,as well as its outstanding performance in mini-program.
In terms of other traffic sources,we made continuous efforts to explore and diversify our traffic sources. Firstly,we continued to optimize our stand-alone APP; Secondly,we consolidated the cooperation with location-based apps; Thirdly,we worked with one of the largest handset vendors in China to embed order status tracking service in their smart watches. At the same time,we also partnered with short video platforms to enhance user engagement. Moreover,we continued to invest in offline user acquisition initiatives. We cooperated with bus operators and tourist attractions to set up ticket vending machines so as to accelerate their digitalization. We joined hands with hotels to set up the QR code scanning function to convert offline-online users to online.
In order to provide satisfying one-stop-shop products and services,we continued to strengthen long-term relationships with our TSPs. As of June 30,our online platforms offered over 8,700 domestic routes,over 2.2 million hotels selections and alternative accommodation options,approximately 390,000 bus routes,over 700 ferry routes,and approximately 8,000 domestic tourist attractions ticketing services. Through quality value-added services such as advertising,in-store dining and hotel facility cash vouchers,we have been able to meet the potential needs of customers while elevating monetization for both the Company and our suppliers. In addition,through the strong alliance between us and our upstream suppliers,live-streaming events and offline marketing activities were carried out smoothly,thus contributing greatly to the revitalization of the travel industry.
At the same time,we have committed to providing users with the best travel solutions. By deepening the synergy among different business segments such as transportation,accommodation and tourist attractions,we have conducted thorough user behavior and scenario analysis to launch precise and targeted promotions,thereby constructing personalized and customized solutions to meet their needs,and ultimately brought us more traffic and business expansion.
In terms of technological innovation,we continued to step up efforts to transform from an OTA to an ITA (intelligent travel assistant,hereinafter "ITA"),aiming at bringing positive value to the entire travel industry. For example,we established an intelligent customer experience platform to conduct efficient data collection and promptly respond to users' concerns,so as to further improve customer service quality and efficiency. We have optimized the Huixing system to enhance the operating efficiency as well as improving user experience. We developed a comprehensive SaaS solution for individual and small chain hotels to enhance their operational efficiency. We also developed an effective digital analysis system to deepen our strategic cooperation with Xi'an Xianyang International Airport to enhance its operation efficiency. By utilizing strengths of our platform and technologies,we developed tailored intelligent products to provide passengers with more travel information and enhance their user experience,as well as providing higher value propositions to our partners along the industry chain.
As a socially responsible enterprise,we reacted swiftly and provided our customers with no-penalty refund policy to protect our users' safety and help contain the spread of virus in the affected regions. Moreover,with the aim to support natural disaster relief actions,we partnered with Tencent Maps to launch the "map of good-will hotels",which helped users locate hotels which can provide rescue services including shelters and basic supplies. This map also enabled users to track flooding conditions in Zhengzhou so as to help them plan travel routes.
Business Outlook and Strategy:
The pandemic has definitely caused some fluctuations to China's travel industry. Looking into the future,the effective control measures implemented by the Chinese government and the growing popularity of vaccination will help control the pandemic. We have already seen great opportunities and huge growth potentials in this market and will endeavor to capture these opportunities for notable achievement in business growth. We have strong confidence to stay resilient and outpace the industry average by leveraging on our competitive advantages in leading market position,diversified traffic sources,and outstanding operation strategies.
Going forward,we will further penetrate the travel market by utilizing our cost-effective traffic sources while actively diversifying alternative traffic channels with priorities in lower-tier cities. We will also continuously improve our products and services with technological innovations,aiming at transforming from an OTA to ITA. Furthermore,we will also explore mergers and acquisitions opportunities to achieve synergy for long-term growth. Ultimately,we will continuously focus on business development and value contribution to the industry,so as to realize our sustainable growth potentials in the future.
Appendix
Key Financial Metrics for the Three Months Ended June 30,2021
Unaudited
Three months ended June 30,
2021
RMB'000
2020
RMB'000
year-on-year
change
Revenue
2,137,977
1,200,106
78.1%
Adjusted EBITDA
530,081
267,349
98.3 %
Adjusted net profit for the period
398,300
196,162
103.0 %
Revenue growth/(decrease) (year-to-year)
78.1%
(24.6)%
Adjusted EBITDA margin
24.8%
22.3%
Adjusted net margin
18.6%
16.3%
Key Financial Metrics for the Six Months Ended June 30,2021
Unaudited
Six months ended June 30,
2021
RMB'000
2020
RMB'000
Year-on-year
change
Revenue
3,751,740
2,205,222
70.1%
Adjusted EBITDA
947,490
426,251
122.3%
Adjusted net profit for the period
694,587
274,237
153.3%
Revenue growth/(decrease) (year-to-year)
70.1%
(34.6)%
Adjusted EBITDA margin
25.3%
19.3%
Adjusted net margin
18.5%
12.4%
About Tongcheng-Elong Holdings Limited
Tongcheng-Elong Holdings Limited ("Tongcheng-Elong" or the "Company") is a market leader in China's online travel industry. The Company is the combined business resulting from the Tongcheng-eLong Merger,which was completed in March 2018. The shares of the Company were listed on the Hong Kong Stock Exchange on November 26,2018. The Company is a one-stop shop for users' travel needs. With the mission of "We make travel easier and more joyful",the Company offers a comprehensive and innovative selection of products and services covering nearly all aspects of travel,including transportation ticketing,accommodation reservation，attraction ticketing and various ancillary value-added travel products and services designed to meet users' evolving travel needs throughout their trips. The Company was selected as the "Most valuable TMT Company","Industry Award of the Year","Excellence in Poverty Alleviation of the Year Award","Most Welcomed IPO Company by Investors" and also awarded the "Best Mini Program of the Year" by Aladdin Index,"The Best Award of Mini Program Traffic" by iResearch etc. The Company is currently the sole operator of the "Rail & Flight" and "Hotel" portals in the mobile payment interface of Tencent's Weixin and Mobile QQ. In 2020 April 22,the Company launched a new service brand ("ly.com "),selecting the new brand logo "Feiermeng" and the brand slogan "Together,let's go!",hoping to use a younger way to serve more users.
