Tuniu Predicts 50% Revenue Growth in Third Quarter

Tuniu Corp. (Nasdaq: TOUR) announced net revenues in the second quarter increased 53.8 percent year-over-year to RMB 460.1 million ($67.9 million). Revenue from packaged tours in the second quarter of 2017 increased 57.7 percent year-over-year, the company said.

Tuniu's market share has grown rapidly in the past few years, but many analysts predict that the company has been burning through cash to win its market share and that it can't last long at that rate. When the heavy cash burn stops, the revenues threaten to plummet, these observers warned.

Alex Yan, Tuniu's co-founder, has denied the claims and insisted that Tuniu's revenue growth was organic and sustainable.

"During this quarter, both air ticketing and hotel booking grew organically beyond expectations," he said. "Our relationships with suppliers have strengthened and deepened. With the establishment of these relationships, we have been able to synergize these products with our core leisure travel packages, in particular our self-guided tours."

For the third quarter of 2017, Tuniu expects to generate from RMB 761.5 million to RMB 787.7 million of net revenue, which represents 45-50 percent growth, compared with net revenues in the corresponding period in 2016.