BEIJING, Nov. 24, 2015 (GLOBE NEWSWIRE) -- Qunar Cayman Islands Limited (NASDAQ:QUNR) ("Qunar" or the "Company"), China's leading mobile and online travel platform, today announced its unaudited financial results for the third quarter ended September 30, 2015.

Highlights for the Third Quarter of 2015
  • Total revenues for the third quarter of 2015 were RMB1,325.1 million (US$208.5 million), an increase of 164.4% year-on-year.
  • Gross profit for the third quarter of 2015 were RMB826.8 million (US$130.1 million), an increase of 127.8% year-on-year.
  • Mobile revenues for the third quarter of 2015 were RMB975.5 million (US$153.5 million), an increase of 381.3% year-on-year, representing 73.6% of total revenues, compared to 40.4% in the corresponding period of 2014.
  • Total Estimated Flight Ticket volume  (TEFT) and  Total Estimated Hotel Room-night  volume (TEHR) for the third quarter of 2015 were 33.9 million and 22.0 million, respectively, an increase of 49.4% and 119.8% year-on-year.

"Q3 was another strong quarter for Qunar, with year-on-year revenue growth reaching 164% and year-on-year gross profit growth reaching 128%, the sixth consecutive quarter of over 100% revenue growth. The business fundamentals and growth momentum of Qunar continued to be very strong," said Chenchao (CC) Zhuang, chief executive officer and co-founder of Qunar.

"With mobile revenues up 381% year-on-year and hotel volume up 120% year-on-year in Q3, we are proud of the capabilities of our team to execute on our strategy and to deliver on our key initiatives quarter after quarter," said Yilu Zhao, chief financial officer of Qunar. "We also experienced substantial margin improvement due to robust gross profit growth and disciplined expenditures."

"On October 26 th, Baidu, Inc., the then largest shareholder of the Company transferred the majority of their ownership interest in the Company to Ctrip.com International, Ltd. With Ctrip becoming our largest shareholder, the two teams are currently exploring ways through which we can effectively cooperate to further strengthen our fundamental capabilities and create greater value for travelers, suppliers and shareholders," added Mr. Zhuang.

Third Quarter 2015 Financial Results

Total revenues for the third quarter of 2015 were RMB1,325.1 million (US$208.5 million), after deducting cash discounts and rebates from the coupon programs in the amount of RMB190.9 million (US$30.0 million), an increase of 164.4% year-on-year and 50.4% quarter-on-quarter.

Mobile revenues for the third quarter of 2015 were RMB975.5 million (US$153.5 million), an increase of 381.3% year-on-year, representing 73.6% of total revenues.

Flight and flight related revenues for the third quarter of 2015 were RMB596.6 million (US$93.9 million), an increase of 91.2% year-on-year and 15.4% quarter-on-quarter.

Accommodation reservation revenues were RMB550.7 million (US$86.6 million), an increase of 392.9% year-on-year and 112.7% quarter-on-quarter. Excluding revenues generated from the merchant model program, where revenues were booked on a gross basis, accommodation reservation revenues were RMB322.4 million (US$50.7 million), an increase of 188.6% year-on-year.

Gross profit for the third quarter of 2015 was RMB826.8 million (US$130.1 million), an increase of 127.8% year-on-year. Gross margin for the third quarter of 2015 was 62.4%, compared to 72.4% for the corresponding period of 2014 and 72.0% for the second quarter of 2015. The quarter-on-quarter and year-on-year decrease in gross margin was primarily due to the increase in certain accommodation reservation revenues booked on a gross basis. The year-on-year increase in gross profit during the quarter was primarily due to the significant increase in total revenues.

Product development expenses for the third quarter of 2015 were RMB408.8 million (US$64.3 million), an increase of 78.1% year-on-year, primarily due to an increase over the same period last year in salary, welfare and other expenses associated with headcount increases. Excluding share-based compensation expenses, product development expenses were RMB357.0 million (US$56.2 million), an increase of 65.5% year-on-year, and accounted for 26.9% of total revenues, compared to 43.1% for the corresponding period of 2014 and 37.5% for the second quarter of 2015.

Product sourcing expenses for the third quarter of 2015 were RMB187.1 million (US$29.4 million), an increase of 87.5% year-on-year, primarily due to an increase over the same period last year in product sourcing headcount. Excluding share-based compensation expenses, product sourcing expenses were RMB 184.2 million (US$29.0 million), an increase of 85.7% year-on-year, and accounted for 13.9% of total revenues, compared to 19.8% for the corresponding period of 2014 and 15.0% for the second quarter of 2015.

Sales and marketing expenses for the third quarter of 2015 were RMB768.3 million (US$120.9 million), an increase of 188.6% year-on-year, primarily due to stepped up discretionary expenditures to acquire new mobile users through offline channels, and to a lesser degree an increase in online marketing expenses as well as salary and welfare expenses as a result of increased headcount. The headcount expenses under sales and marketing were primarily expenses related to personnel with operational functions, including our customer service staff, photographers, editors, and staff responsible for data analysis. Excluding share-based compensation expenses, sales and marketing expenses were RMB 756.9 million (US$119.1 million), an increase of 187.8% year-on-year, and accounted for  57.1% of total revenues, compared to 52.5% for the corresponding period of 2014 and 78.9% for the second quarter of 2015.

General and administrative expenses for the third quarter of 2015 were RMB123.6 million (US$19.4 million), an increase of 15.6% year-on-year, primarily due to an increase in salary and welfare expenses associated with headcount increases. Excluding share-based compensation expenses, general and administrative expenses were RMB76.2 million (US$12.0 million), an increase of 29.6% year-on-year, and accounted for 5.8% of total revenues, compared to 11.7% for the corresponding period of 2014 and 10.0% for the second quarter of 2015.

Operating loss for the third quarter of 2015 was RMB661.1 million (US$104.0 million), compared to RMB575.1 million in the corresponding period of 2014 and RMB 695.2 million in the second quarter of 2015.

Operating loss on a non-GAAP basis, which excludes share-based compensation expenses of RMB113.4 million (US$17.8 million), was RMB547.6 million (US$86.2 million) for the third quarter of 2015, compared to RMB273.6 million in the corresponding period of 2014 and RMB611.5 million in the second quarter of 2015. Operating margin (non-GAAP) for the third quarter of 2015 was negative 41.3%, compared to negative 54.6% in the corresponding period of 2014 and negative 69.4% in the second quarter of 2015. The year-on-year increase in operating loss was mainly attributable to an ROI-driven, aggressive marketing strategy, and continued investment in product development and product sourcing to accelerate rapid market share gains, especially development of the Company's hotel direct business. The quarter-on-quarter decrease in operation loss was primarily due to strong revenue and gross profit growth and controlled operating expenditures.

Net loss attributable to Qunar's shareholders for the third quarter of 2015 was RMB734.8 million (US$115.6 million), compared to RMB566.2 million in the corresponding period of 2014 and RMB815.7 million in the second quarter of 2015. The quarter-on-quarter decrease in net loss was primarily due to reasons mentioned above.  Basic and diluted net loss per ADS for the third quarter of 2015 was RMB5.61 (US$0.87).

Adjusted net loss (non-GAAP), defined as net loss excluding share-based compensation expenses of RMB113.4 million (US$17.8 million) for the third quarter of 2015 was RMB624.2 million (US$98.2 million), compared to adjusted net loss of RMB264.7 million in the corresponding period of 2014 and adjusted net loss of RMB623.8 million in the second quarter of 2015.

Adjusted EBITDA (non-GAAP), defined as net loss before income tax expense, depreciation and amortization, interest expense, further adjusted to exclude share-based compensation expenses of RMB113.4 million (US$17.8 million) for the third quarter of 2015 was negative RMB537.3 million (US$84.5 million), compared to negative RMB245.4 million in the corresponding period of 2014 and negative RMB575.3 million in the second quarter of 2015.

As of September 30, 2015, Qunar had cash and cash equivalents, restricted cash, funds receivables and short-term investment of RMB6,893.1 million (US$1,084.6 million).

Recent Events

On October 26 th, Qunar announced the sale by Baidu, Inc. ("Baidu"), the then largest shareholder of the Company, of 178,702,519 Class A ordinary shares and 11,450,000 Class B ordinary shares of its ownership interest in the Company to Ctrip.com International, Ltd. ("Ctrip"). The exchange ratio is 1 Qunar ADS to 0.725 Ctrip ADSs.  After the completion of the transaction, Ctrip owns 190,152,519 Class B ordinary shares of Qunar.

Following the sale of Baidu's ownership interest, Mr. James Jianzhang Liang, Ms. Jane Jie Sun, Ms. Maria Maohua Sun and Mr. Xing Xiong were appointed to the Board of Qunar. Ms. Helen He, Mr. Liang Zeng, Mr. Yuming He and Mr. Fang Wei stepped down from the Board. These changes became effective on October 26, 2015.

As of October 31, 2015, Qunar had 16,517,672 Class A ordinary shares and 380,941,440 Class B ordinary shares outstanding.

Business Outlook

For the fourth quarter of 2015, Qunar expects year-on-year revenue growth in the estimated range of 105% to 125% and year-on-year growth of gross profit in the estimated range of 85% to 105%. These forecasts reflect Qunar's current and preliminary view based on current market and operating conditions, which is subject to change, and such change may be material.

Conference Call

Qunar's management will hold an earnings conference call at 9:00 PM on November 24, 2015, U.S. Eastern Time (10:00 AM on November 25, 2015, Beijing/Hong Kong Time).

Dial-in details for the earnings conference call are as follows:

International: +65-6823-2299U.S.: +1-631-514-2526UK: +44-20-3078-7622Hong Kong: +852-5808-3202Mainland China: 400-120-0539             Passcode for all regions: 8635585            A replay of the conference call may be accessed by phone at the following number until December 1, 2015:

International: +61-2-9641-7900Passcode: 8635585            Additionally, a live and archived webcast of this conference call will be available at http://investor.qunar.com.

Forward-looking Statements

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, quotations from management and the Business Outlook section in this press release, as well as Qunar's strategic and operational plans, contain forward-looking statements. Qunar may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Qunar's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's goals and strategies; its future business development, financial condition and results of operations; the expected growth of the online travel markets in China; the Company's expectations regarding demand for and market acceptance of its products and services; its expectations regarding relationships with users and travel service providers; the business cooperation agreement with Baidu; its plans to invest in the technology platform; competition in the industry; fluctuations in general economic and business conditions in China; and relevant government policies and regulations relating to the industry. Further information regarding these and other risks is included in the documents filed with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the press release, and Qunar undertakes no duty to update such information, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Qunar's consolidated financial results presented in accordance with United Statements Generally Accepted Accounting Principles ("GAAP"), Qunar also uses adjusted net income (loss), adjusted EBITDA and adjusted operating income (loss) as additional non-GAAP financial measures. These non-GAAP financial measures enable management to assess the Company's operating results without considering the impact of noncash charges, including share-based payments, depreciation and amortization, online marketing expenses from the Zhixin Cooperation Agreement and fair value change in warrant liability. Furthermore, these non-GAAP financial measures eliminate the impact of items that Qunar does not consider indicative of the performance of its business.

Qunar presents these non-GAAP financial measures because they are used by management to evaluate its operating performance, formulate business plans, and make strategic decisions on capital allocation. Qunar also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating its operating performance and consolidated results of operations in the same manner as management and in comparing financial results across accounting periods and to those of its peer companies. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. A limitation of using these non-GAAP financial measures is that these non-GAAP measures do not include all items that impact the Company's results of operations for the period. The table captioned "Reconciliations of GAAP and non-GAAP Measures" has more details on the reconciliations between GAAP financial measures that are most directly comparable to the non-GAAP financial measures.

Currency Convenience Translation

The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. The conversion of Renminbi (RMB) into U.S. dollars is based on the exchange rate set forth in the H.10 statistical release of the Federal Reserve Bank of New York on September 30, 2015, which was RMB6.3556 to US$1.00. The Company makes no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, or at all. The percentages stated are calculated based on the RMB amounts.

About Qunar

Qunar is China's leading mobile and online travel platform. With a commitment to building a travel ecosystem serving the entire travel industry value chain, Qunar is evolving the way people travel in a world increasingly enabled by technology. Qunar addresses the needs of Chinese travelers and travel service providers by efficiently matching industry supply and demand through its proprietary technologies. By providing technology infrastructure for travel service providers on mobile and online platforms, Qunar integrates and offers the most comprehensive selection of travel products and the most convenient means to complete desired transactions for Chinese travelers.

Qunar means "where to go" in Mandarin Chinese.

For more information, please visit http://ir.qunar.com.
             
Qunar Cayman Islands Limited            
Condensed Consolidated Balance Sheets              
    December 31,     September 30       September 30  
      2014       2015       2015  
(In thousands except for number of shares and per share data)   RMB   RMB   USD
    Audited   Unaudited   Unaudited
ASSETS            
Current assets:            
Cash and cash equivalents     812,972       4,056,784       638,301  
Restricted cash     236,929       1,851,184       291,268  
Funds receivable     413,084       729,965       114,854  
Short-term investments     -       255,121       40,141  
Accounts receivable, net     165,404       360,707       56,754  
Due from related parties     39,951       143,484       22,576  
Prepayments and other current assets     259,734       845,834       133,085  
Deferred tax assets, current     22,859       28,044       4,412  
Total current assets     1,950,933       8,271,123       1,301,391  
             
Non-current assets:            
Property and equipment, net     149,307       208,919       32,872  
Intangible assets,net     2,849       12,936       2,035  
Goodwill     -       10,755       1,692  
Long-term investments,net     103,175       610,605       96,074  
Other non-current assets     61,453       100,565       15,823  
Total non-current assets     316,784       943,780       148,496  
             
Total assets     2,267,717       9,214,903       1,449,887  
             
             
LIABILITIES AND (DEFICIT) EQUITY            
             
Current liabilities:            
Short-term loans     -       643,500       101,249  
Customer advances and deposits     258,992       340,852       53,630  
Due to related parties     6,305       1,240,317       195,153  
Accounts payable     19,813       42,083       6,622  
Salaries and welfare payable     201,433       420,600       66,178  
Income tax payable     22,821       27,557       4,336  
Accrued expenses and other current liabilities     1,155,547       2,300,703       361,996  
Warrant liability     701,776       -       -  
Total current liabilities     2,366,687       5,015,612       789,164  
             
Non-current liabilities:            
Deferred tax liability, non-current     -       1,363       214  
Long-term Debt     -       2,576,913       405,456  
Non-current liabilities     71,616       80,849       12,721  
Total non-current liabilities     71,616       2,659,125       418,391  
             
Total liabilities     2,438,303       7,674,737       1,207,555  
             
(Deficit) equity:            
Class A ordinary shares     1,426       1,242       195  
Class B ordinary shares     831       1,243       196  
Additional paid-in capital     2,069,313       5,942,987       935,079  
Accumulated other comprehensive income     4,163       85,206       13,406  
Accumulated deficit     (2,246,319 )     (4,498,060 )     (707,732 )
Total Qunar Cayman Islands Limited's shareholders' (deficit) equity       (170,586 )     1,532,618       241,144  
             
Noncontrolling Interests       -         7,548       1,188  
             
Total (deficit) equity       (170,586 )     1,540,166       242,332  
             
Total liabilities and (deficit) equity     2,267,717       9,214,903       1,449,887  
             
             

 
Qunar Cayman Islands Limited                    
Condensed Consolidated Statements of Operations        
        Three Months Ended    
      September 30,     June 30,     September 30,       September 30,    
      2014       2015       2015       2015    
(In thousands except for number of shares and per share(ADS) data)   RMB   RMB   RMB   USD  
    Unaudited   Unaudited   Unaudited   Unaudited  
Revenues(*)        
Flight and flight related       312,054       516,974       596,555       93,863    
Accommodation reservation       111,732       258,865       550,673       86,644    
Display advertising services       24,365       25,931       39,740       6,253    
Other services       52,976       79,192       138,169       21,739    
Total revenues       501,127       880,962       1,325,137       208,499    
Cost of Revenues       (138,223 )     (246,909 )     (498,357 )     (78,412 )  
Gross profit       362,904       634,053       826,780       130,087    
Operating expenses:                    
Product developments (Note 1)       (229,548 )     (350,790 )     (408,848 )     (64,329 )  
Product sourcing (Note 1)       (99,763 )     (134,527 )     (187,084 )     (29,436 )  
Sales and marketing (Note 1)       (266,210 )     (702,675 )     (768,304 )     (120,886 )  
General and administrative  (Note 1)       (106,902 )     (134,391 )     (123,595 )     (19,447 )  
Online marketing expense for Baidu Zhixin Cooperation       (235,575 )     (6,883 )     -       -    
Operating loss       (575,094 )     (695,213 )     (661,051 )     (104,011 )  
Interest income(expenses), net       6,923       (11,948 )     (42,882 )     (6,747 )  
Foreign exchange loss, net       4,444       (1,289 )     (29,656 )     (4,666 )  
Other income, net       1,371       4,895       1,584       248    
Fair value change in warrant liability       -       (109,761 )     -       -    
Loss before income taxes       (562,356 )     (813,316 )     (732,005 )     (115,176 )  
Income tax expense       (3,885 )     (3,194 )     (4,165 )     (655 )  
Equity in loss of affiliated companies, net of tax       -       (693 )     (1,428 )     (225 )  
Net loss       (566,241 )     (817,203 )     (737,598 )     (116,056 )  
                     
Net loss attributable to noncontrolling interests         -         1,516       2,777       437    
                     
Net loss attributable to Qunar Cayman Islands Limited       (566,241 )     (815,687 )     (734,821 )     (115,619 )  
                     
                     
                   
                   
Loss per share for ordinary shares:                      
Net loss per ordinary share—basic       (1.59 )     (2.22 )     (1.87 )     (0.29 )  
Net loss per ordinary share—diluted       (1.59 )     (2.22 )     (1.87 )     (0.29 )  
                     
Loss per ADS(each ADS represents three class B ordinary shares):                    
Net loss per ADS—basic       (4.77 )     (6.66 )     (5.61 )     (0.87 )  
Net loss per ADS—diluted       (4.77 )     (6.66 )     (5.61 )     (0.87 )  
                     
Weighted average number of ordinary shares:                      
Class A ordinary shares                    
Basic       251,652,499       224,299,179       217,406,863       217,406,863    
Diluted     251,652,499       224,299,179       217,406,863       217,406,863    
                 
Class B ordinary shares                    
Basic       104,241,891       143,459,651       176,259,169       176,259,169    
Diluted     355,894,390       367,758,830       393,666,032       393,666,032    
                 
Note 1: Includes share-based compensation expenses as follows:                  
Product developments       13,802       20,339       51,813       8,152    
Product sourcing       551       2,128       2,871       452    
Sales and marketing       3,171       7,974       11,364       1,788    
General and administrative       48,108       46,363       47,378       7,455    
Total share-based compensation expenses       65,632       76,804       113,426       17,847    
                     
* Starting from January 2015, we present our revenues by primary business lines of flight and flight related, accommodation reservation ,display advertising services and other services. Comparative amounts for the prior periods have been reclassified to conform to the current period presentation.  
 
 
                     

 
                   
       
Reconciliations of GAAP and non-GAAP measures (in thousands)                  
      Three Months Ended    
      September 30,     June 30,     September 30,       September 30,    
      2014       2015       2015       2015    
    RMB   RMB   RMB   USD  
    Unaudited   Unaudited   Unaudited   Unaudited  
Net loss       (566,241 )     (817,203 )     (737,598 )     (116,056 )  
Add:                  
Share-based compensation expenses     65,632       76,804       113,426       17,847    
Non-cash expenses relating to free user traffic contributed by Baidu     324       -       -       -    
Online marketing expense for Baidu Zhixin Cooperation     235,575       6,883       -       -    
Fair Value change in warrant liability     -       109,761       -       -    
Adjusted net loss (non-GAAP)(*)       (264,710 )     (623,755 )     (624,172 )     (98,209 )  
Add:                  
Income tax expense     3,885       3,194       4,165       655    
Depreciation and amortization     15,382       28,336       28,831       4,536    
Interest expense     -       16,888       53,845       8,472    
Adjusted EBITDA (non-GAAP)   (**)     (245,443 )     (575,337 )     (537,331 )     (84,546 )  
                                   
Operating loss     (575,094 )     (695,213 )     (661,051 )     (104,011 )  
Add:                  
Share-based compensation expenses     65,632       76,804       113,426       17,847    
Non-cash expenses relating to free user traffic contributed by Baidu     324       -       -       -    
Online marketing expense for Baidu Zhixin Cooperation     235,575       6,883       -       -    
Adjusted operating loss(non-GAAP)(***)     (273,563 )     (611,526 )     (547,625 )     (86,164 )  
                                   
*Adjusted net loss (non-GAAP), defined as net loss excluding share-based compensation expenses, non-cash expenses relating to free user traffic contributed by Baidu, Inc., online marketing expenses for Baidu Zhixin Cooperation and fair value change in warrant liability.
 
** Adjusted EBITDA (non-GAAP), defined as net loss before income taxes, interest expenses, depreciation and amortization, further adjusted to exclude share-based compensation expense, non-cash expenses relating to free user traffic contributed by Baidu, Inc., online marketing expenses for Baidu Zhixin Cooperation and fair value change in warrant liability.
 
*** Adjusted operating loss(non-GAAP), defined as operating loss excluding share-based compensation expenses, non-cash expenses relating to free user traffic contributed by Baidu, Inc. and online marketing expenses for Baidu Zhixin Cooperation.

For investor inquiries, please contact:Xiaolu ZhuInvestor RelationsQunar Cayman Islands LimitedTel: +86-10-5764-6223Email: ir@qunar.com

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