Tuniu Forecasts Q3 Revenue at $29.8M-$31.3M

Packaged Tours Drive Revenue While Costs Bite

Packaged tour revenue grew 6.8% year over year to RMB121.1 million in Q2. But other revenue fell 16.9% to RMB17.8 million as tourism board advertising fees weakened TipRanks. More worrying: cost of revenues jumped 27.9%, crushing gross profit down 11.1% to RMB76.4 million TipRanks.

The company posted a RMB6.1 million operating loss despite the revenue gain TipRanks. Tuniu is caught between growing tour bookings and ballooning expenses. That squeeze turned prior earnings of $0.30 per share into just $0.01 this quarter Investing.

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Sixth Straight Quarter of Profitability Despite EPS Decline

Tuniu reported its sixth consecutive quarter of non-GAAP profitability Yahoo Finance, a bright spot amid the EPS collapse. On a GAAP basis, however, the company swung to losses. The disconnect shows management is using non-standard metrics to frame earnings positively.

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Cash Pile and Share Buyback Signal Confidence

Tuniu held about RMB1 billion in cash at quarter-end, giving it firepower for growth and shareholder returns TipRanks. The company repurchased 0.7 million ADSs for $5.2 million in Q2 under a $10 million buyback plan. Hedge fund Jane Street also initiated a position, buying 50,564 shares worth roughly $31,000 TipRanks.

The cash position and buyback suggest management believes shares are undervalued. But persistently flat growth and margin pressure may test that thesis if Q3 guidance proves optimistic.

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Q3 Outlook Points to Growth Slowdown Ahead

Q3 guidance of RMB202.1 million to RMB212.2 million implies 0% to 5% year-over-year growth. That's a significant slowdown from the brisk double-digit pace Tuniu achieved in prior years TipRanks. The range suggests management sees little tailwind from outbound Chinese travel or cost improvements in the near term.

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