eLong, Inc. (LONG)
Q1 2010 Earnings Call Transcript
May 20, 2010 8:00 pm ET
Guangfu Cui - CEO
Mike Doyle - CFO
Philip Yang - Investor Relations
Ming Zhao - Susquehanna International Group
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Good day to everyone and welcome to eLong's First Quarter 2010 earnings report conference call. (Operator Instructions) I will now hand over the line to Philip Yang and I will be standing by for the Q&A session. Please go ahead, thank you.
Hello everyone, thank you for joining eLong's first quarter 2010 conference call.
Today, Guangfu Cui, our CEO, will make some remarks about the company's performance in the first quarter 2010 followed by Mike Doyle, our CFO, who will provide additional detail on our financial results. Following their prepared remarks, Guangfu and Mike will be available to take your questions.
Before the management presentations, please allow me to read our Safe Harbor Statement. During this conference call representatives of the company will make certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. These statements are based upon management's current views and expectations with respect to future events and are not a guarantee of future performance. Furthermore, these statements are, by their nature, subject to a large number of risks and uncertainties that could cause actual performance and results to differ materially from those discussed in the forward-looking statements as a result of a wide variety of factors. eLong undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Please refer to the risk factors described in our Annual Report on Form 20-F, as well as the full text of the Safe Harbor Statement in our Form 6-K, which will be furnished to the SEC in connection with our press release and this conference call, for discussion of some of the important factors that could affect future results.
I will now turn the call over to our CEO, Guangfu Cui.
Thank you, Philip. Hello everyone, thank you for being on this call.
We are happy to report another quarter of double digit top line growth with net revenues growing 30% year over year to RMB101 million, and positive income from operations. We are seeing results both from our efforts to drive online growth, and from a healthy pick-up in travel industry demand in China.
We have now increased hotel coverage 44% to approximately 11,200 hotels from approximately 7,800 as of March 31, 2009. In addition, eLong.com now offers our customers more than 100,000 hotels worldwide through our seamless interface with Expedia. This makes eLong.com the largest online distributor in China in terms of hotels offered which can be directly booked. We will continue to expand hotel coverage in areas where we see demand from our customers. This effort is in line with our vision, which is to become the largest online travel marketplace in China.
We have run our "e-coupon" promotion for 6 months. E-coupon offers discounts of up to 100 reminbi off hotel bookings made online. The E-coupon has reinforced eLong's brand position of "real savings and a worry-free booking experience," and rewarded customers for transacting online. We have been also investing on line marketing focusing on search. We are happy to see the continuing growth of our online hotel bookings in the past few quarters, and will keep driving business online going forward as we believe this represents the best opportunity for our long term growth.
We have been improving our customer experience both online and offline. In the first quarter, our call center continued its high quality service with an over 99% customer satisfaction rate and a 92% very satisfied rate. After months of testing, today we formally launched our mobile phone booking platform, m.eLong.com.
We launched our air ticket plus hotel room dynamic packages in January 2010. Booking air tickets and hotel rooms together as a package gives consumers additional savings, and thus further enhance the eLong brand proposition of "real savings and a worry free booking experience"!
Our priorities in 2010 remain the same as shared with you last quarter.
1) to upgrade our product and service offerings such as dynamic packages, hotels, and air tickets;
2) to further improve online booking and after sales service experience
3) to continue our efforts to launch effective online marketing programs; and
4) to work with hotel and air suppliers to procure competitively priced products for our customers.
Successful execution of our priorities and plans remains critical, and we remain confident and committed to the long-term growth of our business.
Now, I would like to hand the call over to Mike for a review of our financial results.
Thank you, Guangfu. In the first quarter, we delivered a significant acceleration in year-on-year revenue growth to 30% and continued to make progress on our efficiency improvement initiatives. As a result, we were profitable in this quarter. Income from operations was RMB6.3 million, an increase of RMB9.6 million from our loss from operations of a year ago and net income was RMB5.9 million, an increase of RMB3.9 million from our net income of a year ago.
Our Q1 Y/Y performance benefited from a weak quarter a year ago due to the impact of the global financial crisis in 2009. However, our quarterly results were also driven by improved conversion, both on and offline, due to our broader hotel inventory portfolio, improved customer service and our promotional activities. We drove further efficiencies in Sales & Marketing expenses, by increasing spend in higher efficiency on-line channels and reducing expenses offline.