Tuniu Posts Disappointing Financials, Expects Slow Q2
The stock in Tuniu Corp. (Nasdaq: TOUR) slipped nearly 6% on Wednesday following the release of disappointing financials even as a recent survey shows 60% of Chinese are planning a trip in 2020.
The Nanjing-based online leisure travel company said in a statement today that its revenue in the first quarter reached $24.6 million, down 62% from a year ago. Its net loss hit $29 million, or 8 cents per share, in the three months through March, up 39% year-over-year.
Tuniu has also significantly lowered its revenue guidance for the next quarter. The company said that it expects to generate 20.8 million yuan ($3 million) to 72.8 million yuan ($10.4 million) in revenue in the second quarter, down between 86% and 96%.
Tuniu attributed its revenue drop to the adverse impact on travel due to the outbreak of Covid-19. The company has suspended its packaged tour sales and collected fewer service fees from insurance companies during the first quarter.
Still, the company had $296.6 million cash and cash equivalents in the book to weather the storm of the epidemic-related industry slowdown.
"Even though travel restrictions implemented during the COVID-19 pandemic remain in place, we are positive on the long-term prospect as there has been a strong accumulation of demand for travel products," Dunde Yu, the chief executive officer of Tuniu, said in the statement.
Founded in 2006, the travel company offers organized and self-guided tours, as well as travel-related services for leisure travelers through its website Tuniu.com and mobile platform.
Tuniu announced a business shift in the domestic market, turning to high-quality domestic travel products to customers to meet the near-term challenges.
China is reportedly leading in travel recovery as a recent survey in May showed 60% of Chinese intend to travel in 2020, with more than 45% seeking an overseas trip, according to a survey by Ivy Alliance Tourism Consulting. Among the sought destinations, Japan has ranked top, followed by Thailand, Europe, the Maldives, and Singapore.
Shares in Tuniu closed at $1.08 per share on Wednesday.