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eLong, Inc. (LONG)
Q3 2010 Earnings Call Transcript
November 11, 2010 7:00 pm ET
Philip Yang – IR
Guangfu Cui – CEO
Mike Doyle – CFO
Eddie Leung – Bank of America
Fawne Kiang – Brean Murray, Carret & Co.
Michael Anthony – Promise
Previous Statements by LONG
» eLong CEO Discusses Q2 2010 Results - Earnings Call Transcript
» eLong, Inc. Q1 2010 Earnings Call Transcript
» eLong, Inc. Q4 2009 and FY2009 Earnings Call Transcript
Hello everyone, thank you for joining eLong’s third quarter 2010 conference call.
Today, Guangfu Cui, our CEO, will make some remarks about the company’s performance in the third 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 the U.S. Securities Act and 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 proud to report another quarter of strong top line growth with net revenues growing 42% year over year to RMB138 million, and income from operations growing 104% year over year to RMB12 million. Among the factors which contributed to our performance in the third quarter were: our efforts to drive online growth; strong summer travel demand in China, and the Shanghai World Expo.
We increased hotel coverage over 54% to approximately 14,300 hotels in the third quarter from approximately 9,300 during the same period a year ago, and in October we expanded our coverage to more than 15,000 hotels. In addition, eLong.com offers customers more than 130,000 hotels worldwide through our interface with Expedia. eLong.com continues to be the largest online distributor in China in terms of hotels offered which can be directly booked. We will continue to expand hotel coverage 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 “eCoupon” promotion for 12 months. eCoupon offers discounts of up to 100 Renminbi off hotel bookings made online. The eCoupon has reinforced eLong’s brand position of “real savings and a worry-free booking experience”, and rewarded customers for transacting online. In the third quarter, we increased online marketing spending to capture the summer travel demand. We are happy to see the continuing growth of our online hotel bookings in the past few quarters, and online transactions now comprise over 40% of our total hotel transactions. We will keep driving our business online going forward as we believe this represents the best opportunity for our long term growth, and we will also work to improve efficiency of our coupon and online marketing spending.
We have been improving our customer experience both online and offline. In the third quarter, we continued to upgrade our website, which provided customers with faster page loading time and better website availability. Our call center continued its high quality service with a 99% customer satisfaction rate and a 92% very satisfied rate.
In the third quarter, we took steps to increase the efficiency of our air business. We phased out air ticket cash transactions in most cities, and by November 1, we had completely eliminated cash transaction business. This move may negatively impact revenue from the air ticketing business for a few quarters; however, we believe this will improve our competitiveness in our air ticketing operations in the long run as we focus on providing outstanding service to the growing number of credit card and other non-cash transaction customers. Going forward, the key challenge for our air business is to address the ticket price competitiveness vs. airlines websites, and vs. wholesalers selling online.
Our priorities remain the same as shared with you at the beginning of the year.
to upgrade our product and service offerings such as dynamic packages, hotels, and air tickets;
to further improve online booking and after sales experience;
to continue our efforts to launch effective online marketing programs; and
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 are confident to the long-term growth of our business.