Maria Xin - Senior Director of Investor Relations and Strategic Investment Donald Yu - Co-founder, Chairman and CEO Alex Yan - Co-founder, President and COO Conor Yang - CFO.

David Jin - Goldman Sachs Natalie Wu - CICC Tian Hou - TH Capital Amanda Chen - Morgan Stanley Evan Zhou - Credit Suisse Juan Lin - 86 Research.

Good morning. Welcome to Tuniu Corporation Fourth Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I’d now like to turn the conference over to Maria Xin.

Ms. Xin, please go ahead..

Thank you and welcome to our 2015 fourth quarter and full-year earnings conference call. Joining me on the call today are Donald Yu, Co-founder, Chairman and Chief Executive Officer; Alex Yan, Co-founder, President and Chief Operating Officer; and Conor Yang, Chief Financial Officer.

For today's agenda, management will discuss business updates, operation highlights and financial performance for the fourth quarter of 2015 and the full-year of 2015. Before we continue, I refer you to our Safe Harbor statements in the earnings press release which applies to this call as we will make forward-looking statements.

Also this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, please note that unless otherwise stated, all figures mentioned in this conference call are in renminbi.

I’d now like to turn the call over to our Co-founder and Chief Executive Officer, Donald Yu..

Thanks, Maria. Good day everyone. Welcome to our 2015 fourth quarter and full-year earnings conference call. We are pleased with the achievements that Tuniu has accomplished this year.

The number of packaged tours that we’ve served during 2015 increased 104% year-over-year to more than RMB4.4 million while net revenues increased more than 116% year-over-year. For the fourth quarter 2015, net revenues and the gross bookings increased by 104% and 102% year-over-year, respectively, out placing our industry peers.

Notably, Tuniu also rapidly expanded its market share in the fast growing leisure travel market during 2015. We were able to accumulate additional market share through ongoing execution of strategic initiatives and the commitment to the diversifying high-quality leisure products to our customers.

In recent months, external events such as the tragic events in Paris have negatively impacted some of our popular destinations and have caused a temporary shock to certain regions.

While the events have negatively impacted these regions, but given Tuniu’s diversified offerings of products, our customers were able to find alternative products and packages in China and nearby countries.

We believe that although these external events can cause an impact to our operations in the short-term, the overrating involving consumption pattern in China, we will outweigh these external factors and support our long-term growth.

Now I will go through some of our key strategic initiatives that we continue to focus on in order to develop our long-term competitiveness. This includes continuing our regional expansion, diversifying our product offerings, strengthening our direct procurement capabilities and enhancing our technology.

I’d like to first give updates on the development of our regional expansion plan, which continues to progress in line with our expectations. During 2015, we achieved significant progress in terms of our regional expansion as the number of regional center has grown from 75 at the end of 2014 to the current 170.

The increased regional coverage had strengthened our presence in lower tier cities. These investments in regional centers continue to pay-off as the regions covered by new regional centers that we opened during 2014 and 2015 contributed 16.3% of our gross booking in 2015, up from less than 1% in 2013.

We are confident that this regional current centers will continue to help to strengthen its regional customer acquisition capabilities and drive our business development.

Starting from the second half of 2015, we established a number of destination-based service centers at popular destination throughout the world, in places such as Maldives, Bali and Japan. This service centers will facilitate Tuniu in a number of ways.

Tuniu now be able to offer the travelers a wide range of local destination services with improved quality standardization. Additionally, we will be able to saw high-quality and competitively price destination-based products that are only accessible locally.

By combining our initiatives in departure cities and the destination-based service centers, our offline capabilities are stronger than ever. We will be able to enhance the customer experience throughout the tree [ph] and provide higher quality services to our travelers.

Now I’ll like to give an update on the development of our travel related services, that synergies with our core business. New products such as hotel booking, air ticketing, and online financial services, provide our customers with additional capacity for customization during their trips.

This diversified product offerings of complementary services strengthen our competitive advantage in leader travel and set us apart from our peers. For our air ticketing and hotel booking services, we continue to make excellent progress during the fourth quarter as we achieved synergy with our leader travel business.

In early 2016, we introduced an open platform model for both our air ticketing and hotel booking services in order to enrich the diversification of their offerings.

Additionally, we launched air ticket plus X and hotel plus X initiative that bundle air ticket of hotel with other offerings such as local tours, destination-based services, tour attraction, ticket and Wi-Fi services. Air ticketing and hotel booking continue to expand their coverage of offerings.

They serve as the fundamental component that promote our packaged tour to destination that are generally within a six-hour flight radius from the departure city. Regionally we’ve also taken significant stride in our last mile transportation offerings during the first quarter of 2016 Tuniu launched a fast ticketing and a car rental channel.

These new offerings provide our travelers with the most comprehensive transportation solution during their trip. We continue to make investments in this travel related services, because this compliment our core leisure travel business wheel.

In the future, we believe this investments will reach [indiscernible] to make contributions to our profitability and become part of our core competitive advantage within the industry. For the direct procurement, Tuniu continues to gather and consolidate resources throughout the travel supply chain.

During the fourth quarter, Tuniu’s direct procurement has reached 30% of our gross bookings. As we continue to increase direct procurement and utilize a localized procurement strategy, we’ve been able to achieve standardization across all of our products and services to ensure quality control for our customers.

Lastly, I want to touch on mobile and technology. In the fourth quarter of 2015, mobile contribution remains strong. Mobile conversion rate continues to be on the rise as we optimize our mobile app with additional product offerings so that our customers can have an improved user experience.

Additionally, as we continue to diversify our products offerings and increase our offline capabilities, Tuniu has been making continuous stride in enhancing our back-end systems. The enhancement in our system allows for improved automation and allows us to efficiently scale. 2015 has been a year filled with new milestones.

Our progress in regional expansion, direct procurement, complimentary travel related services, and mobile technology continues to pay way for our future growth. I’ll now turn the call over to Conor Yang, our CFO, for the financial highlights..

Thank you, Donald. Hello, everyone. I’ll now walk you through our fourth quarter and full-year 2015 financial results in greater detail. Please note that all the monetary amounts are in RMB, unless otherwise stated. You can find U.S dollar equivalent of the numbers in our earnings release. Fourth quarter 2015 results.

Starting from the fourth quarter 2015, that the packaged tour gross bookings for the quarter increased by 102.1% year-over-year to RMB2.7 billion, including 65.7% from outbound tours. For both quarter, net revenue were RMB1.9 million, representing 104.1% year-over-year growth.

Revenues from organized tours substantially all of which are recognized on gross basis, were up 101.4% year-over-year to RMB1.8 billion, and accounted for 95.2% of our total net revenues for the quarter.

The increase was primarily due to the rapid growth in demand for travel to certain international destinations, such as Japan, Australia, New Zealand, North America, and for domestic tours.

The number of trips for organized tours, excluding local tours, increased by 122.9% year-over-year to over 429,000 and the number of trips of local tours increased by 44.8% year-over-year to over 362,000.

Revenues from self-guided tours, which are recognized on a net basis were up 82.4% year-over-year to RMB52.2 million and accounted for 2.8% of our total net revenue. The increase was primarily due to the growth in travel to both domestic destinations, certain islands, and Japan.

The number of trips for self-guided tours increased by 174.7%, year-over-year, to over 319,000 in the fourth quarter of 2015.

Other revenues which are recognized on a net basis were up 434.3% year-over-year to RMB47.3 million, primarily due to a rise in service fee received from insurance companies, revenues from tourist attraction tickets, online financial services and other travel-related products.

Gross margin for the fourth quarter of 2015 was 4.2% compared to 6.6% in the same period in 2014. The decline in gross margin was primarily due to Tuniu’s competitive pricing strategy and higher costs associated with new regional service center expansion.

Operating expenses for the fourth quarter of 2015 were RMB641.1 million, up 169.3% year-over-year, excluding share-based compensation and amortization of acquired intangible assets. The non-GAAP operating expenses were RMB581.9 million, representing a year-over-year increase of 156.2%.

Research and product development expenses for the fourth quarter of 2015 were RMB106 million, up 173.8% year-over-year.

The increase was primarily due to investments for the implementation of additional product categories such as airline finance services, accommodation, reservation and transportation ticketing, increase in direct procurement related personnel at regional service centers, improvement of online technology, and the rise in technology and product development personnel-related expenses.

Sales and marketing expenses for the fourth quarter of 2015 were RMB394.8 million, up 175.9% year-over-year.

The increase was primarily due to branding campaigns and advertisements for our mobile business development, expansion of our VIP customer service center, and amortization and acquired intangible assets from the previously announced transaction with JD.com.

General and administrative expenses were RMB146.6 million in the fourth quarter of 2015, up 147.5% year-over-year. The increase was primarily due to an increase in headcount of our administrative personnel as a result of our business expansion, such as regional service center expansion and product category expansion.

Net loss attributable to ordinary shareholders was RMB547 million in the fourth quarter of 2015. Non-GAAP net loss attributable to ordinary shareholders, which excluded share-based compensation expenses and amortization of acquired intangible assets were RMB487.3 million in the fourth quarter of 2015.

As of December 31, 2015, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB3.7 billion. In the fourth quarter, cash conversion cycle was negative 31 days compared to negative 44 days in the corresponding period last year. Capital expenditures for the fourth quarter of this year were RMB53.6 million.

Now moving to our full-year 2015 results. Packaged tours, gross booking for 2015 increased by 114.6% year-over-year to RMB10.6 billion, including 65.1% from outbound tours. Organized tours accounted for 71.7% of the overall gross booking in 2015. In 2015, net revenues were RMB7.6 billion, representing 116.3% year-over-year growth.

Revenues from organized tours substantially of which are recognized on a gross basis was RMB7.4 billion in 2015, representing 114.4% increase in 2014. The increase was primarily due to the record growth in demand for travel to certain international destinations, such as Europe, Southeast Asia, Japan, and North America and for domestic tours.

The number of trips for organized tours, excluding local tours increased by 129.4% to 1.63 million, up from 712,000 in 2014, and the number of trips of local tours increased by 58.4% to over 1.7 million, up from more than 1.7 -- 1.07 million in 2014.

Revenues from self-guided tours, which are recognized on a net basis, were RMB194.2 million in the fourth full-year of 2015, representing a 108.5% increase from previous year. The increase in revenues was primarily due to the growth in travel to domestic destinations, certain islands and Japan.

The number of trips for self-guided tours increased by 181.6% to 1,114,000, up from 395,000 in 2014. Other revenues, which are recognized on a net basis were RMB127.7 million in the full-year 2015, representing a 344.2% increase from 2014.

The increase was primarily due to a rise in service fees received from insurance companies, revenues from tourist attraction tickets and other travel-related products. Gross margin was 4.8% in 2015 compared to 6.4% in 2014.

The decline in gross margin was primarily due to Tuniu’s competitive pricing strategy and the higher costs associated with the new -- newly opened regional service centers. Operating expenses were RMB1.8 billion in 2015, representing a 161.1% increase from 2014.

Excluding share-based compensation and amortization of acquired intangible assets, the non-GAAP operating expenses were RMB1.7 billion in 2015, representing, up from 158% from previous year. Research and product development expenses were RMB298.2 million in 2015, up 184.3% from 2014.

The increase was primarily due to investments for the implementation of additional product categories and initiatives, increase in direct procurement related personnel at regional service centers, and improvement of online technology, and rise in technology and product development personnel-related expenses.

Sales and marketing expenses were RMB1.2 billion in 2015, up 165.8% from 2014. The increase was primarily due to branding campaigns, and placement for mobile business development, and amortization of acquired intangible assets from the previously announced transaction with JD.com.

General and administrative expenses were RMB385.4 million in 2015, up 130.8% from 2014. The increase was primarily due to an increase in the headcount of our administrative personnel as a result of our business expansion, such as regional service center expansion and product category expansion.

Net loss attributable to the ordinary shareholders was RMB1.5 billion in 2015. Non-GAAP net loss attributable to ordinary shareholders, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB1.3 billion in 2015.

In 2015, the cash conversion cycle was negative 30 days compared to negative 34 days in 2014. Capital expenditures for 2015 were RMB130.6 million. First quarter 2016 outlook. Now let me provide a top line guidance for the first quarter of 2016.

Tuniu current expects to generate revenues in the range of RMB1.9 billion to RMB2 billion of net revenues, which represents 58% to 63% growth year-over-year. This forecast reflects Tuniu’s current and preliminary view on the industry and its operations, which is subject to change. Thank you for listening. We are now ready for your questions.

Operator?.

Yes, thank you. We will now begin the question-and-answer-session. [Operator Instructions] And the first question comes from David Jin with Goldman Sachs..

Hi. Good evening management. Thanks for taking my questions. My question is regarding your first quarter guidance. Its -- as it looks a bit soft from both year-over-year sequential growth perspectives.

Would you please elaborate more on your guidance? Is it because of general traveling to slowdown, intensifying competition, or any specific geographic reasons? Then I have a follow-up. Thanks..

The first quarter, there are few things. Since the IS attack in Paris and several terrorist events happened in Turkey -- in the fourth quarter last year, that has a pretty big impact in our business.

As you know that Europe used to be the largest region of our overall business and that -- when that happen we incur cancellation and -- the Q1, the [indiscernible] typically is a peak season for Chinese people go to Europe. But as a result, that has translated into a very kind of pretty big impact in first quarter.

And yes, as the Chinese economy slowdown, it remained to be same. We believe that first quarter, in particular, associate with these events. And I think going forward; we’ve kind of see slow recovery from this region at the current stage..

Thank you, Conor. I want to follow-up with that. Since you think the first quarter is a bit unique, so since we’ve already passed the two months, can you elaborate more on the traveler trend year-to-date and how you think a full-year growth will look like? Thank you very much..

After the Chinese New Year to now have we’ve seen pretty good recovery from Europe and other regions. And we believe that the tour -- the leisure travel industry in China still has a very robust growth trend and we think that for the whole year we still think that we can able to achieve a higher gross rate than industry overall..

Thank you very much..

Thank you. And your next question comes from Natalie Wu with CICC..

Hi. Good evening, management. Thanks for taking my questions. I just have a quick follow-up on the -- first question, you mentioned that first quarter weakness is majorly related to Europe.

So just wondering how much revenue contribution from Europe currently to Tuniu and can we see a year-on-year growth rate with reacceleration in the rest of 2016?.

Europe used to be above 14% of our total GMV and when that terror event -- terrorist event happen from the beginning of this year we’ve seen even negative growth from Europe for our business at a period of time. And then after New Year, after like a few months about to grow -- gradually recover. That’s the trend.

We believe that as we continue to expand into more regional departing cities, as we continue to have more direct procurement to enhance our overall product offering quality and pricing. We believe that Europe should gradually recover to gain the top order of our overall GMV gain in the future.

And other regions, yes, when that happen, overall you’ve this kind of psychological effect in -- going to travel abroad. But we believe that the overall leisure travel trends still are -- still very robust in China and in our plan that we want to be meant high gross rate in 2016..

Great. Thank you. I’ve second question, if I may, can management show some color on the gross profit margin strategy in 2016? Will Company still maintain a low price, low margin strategy to expand market share or will -- will you just increase the gross profit margin a little bit? Thank you..

I think that overall for 2015, the overall gross margin about 4.8% for the year. For 2016, as we continue to conduct our strategy that further integration in the whole value chain continue to do more direct procurement.

And also this year we’re going to expand into many popular destinations to do more direct procurement in the local level -- in the destination level. Therefore that overall we believe that our gross margin should improve from our previous years right now.

And so far the competitive environment as we’ve seen in the market has actually -- it’s not as bad as we have seen last year. So I think that overall for this year, the gross margin profile should look better than previous years..

So just to confirm, we will see the gross profit margin to improve in 2016, and revenue growth till we accelerate in the rest of 2016, right?.

I think that the first quarter has slowed down, but for the rest of the year, at least so far we have seen that the gross momentum has already greatly recovered from the beginning of the first half of this quarter. And as I said that, as we continue to do more direct procurement, so will overall enhance our margin.

And also we have a -- expand our product category into many areas, such as like hotel booking, air-ticketing, the buses and the -- our ticketing and also the related insurance product. Therefore these will all eventually contribute to the overall gross margin..

Great. That is helpful. Thank you..

Yes..

Thank you. And the next question comes from Tian Hou with TH Capital..

Yes. Good evening, management. I have couple of questions. One is; you did announce that the Hainan Travel Group, the investment has been complete. And I wonder what's the plan going forward? What do you guys plan to do together? How can you benefit from Hainan’s investment beyond just money? So that’s the first question.

I have a couple more after you answer this..

Yes, with Hainan Airline, I think the [indiscernible] coming up from their air-ticketing resources that we had already started this deeper cooperation with Hainan Airline and its associate airline companies not only on the charter flight -- not only on the group ticking, but as well as the individual air-ticketing purchase from Hainan.

And in many part of the destinations, we can either have like a charter flight or secure more like group tickets inventory from Hainan Airline.

And they have also on the other side that, they have a license and also the full function on the -- financial -- internet financial service area that we can cooperate with them to further utilize their license and infrastructure of the internet finance. Thank you..

Got it. The second question is related to what you said in the press release. You will offer open platform to third party travel service providers and enable them to provide, promote -- to promote their hotel bookings and air-ticketing offerings.

And in this regard, I wonder what's the differentiation between Tuniu’s offer and features or even [indiscernible]? That’s number one question. If you do this, what could be the commission rate? And how do you control the quality of the third party offerings? So that’s the question related to this platform..

Yes, our like hotel booking and the air-ticketing services is different than our peers. That most of the OTA, their air-ticketing and hotel booking are catering for the most -- more like commercial travelers, business travelers rather than leisure travelers.

In Tuniu that we established these two channels really to serve our leisure travel customer better. For example that, that air-ticketing we saw mostly departing from these places to like more destinations -- leisure travel destinations same as like hotel.

So we’re really focusing on the destination, hotels and air-ticketing, and to ensure that our customer is better served and especially on the availability of air-ticketing and hotels.

Hotel for example, that we do mostly like prepaid hotels, and also like for air-ticketing, we provide that full refund if the customer purchase and eventually there’s no ticket available.

So we do a lot of function on these two is really to facilitate for the monetizing of our traffic flow and to serve our leisure travel customer better so they then have the more choices if they come to like booking individually on air-ticketing and hotels..

So my last question is, can you provide the breakdown of the 2.7 did in gross bookings in Q4?.

Right. Roughly about -- that is roughly about 70% for organized tour, and about 30% for self-guided tours, if you breakdown by organized tour and self-guided tours. But if you breakdown by like outbound versus domestic, although the gross booking we had probably about 65% for Chinese people travel outbound, and the rest in domestic destinations..

Okay. That’s all my question, thank you..

Okay. Thank you..

Thank you. And the next question comes from Amanda Chen with Morgan Stanley..

Hi, Donald, Alex, Conor and Maria. Thank you for taking my question. I have three questions here if I may? The first one is regarding 2016, the full year outlook. I think Conor, your definition that the macro economy slowdown maybe will impact the outlook a little bit.

Can you elaborate more, and what's the full year outlook -- the impact on the full year outlook? Thank you..

Well, so far we have seen this. As I said earlier that, first quarter due to those terrorist events in Europe and other places will have a impact combined with maybe a bit economy overall situation. But after New Year, especially right now coming to the last week of February, and when -- the momentum we feel in March, that is greatly recovered.

So the full-year impact still, it’s hard to comment right now, but overall we believe that as we continue to expand our strategy into more departing, we open more regional service centers to happen to the huge market in China, and on the other side we do better procurement and more direct procurement to ensure better quality and service to our customers.

That’s the -- I think the overall momentum is still quite strong. And yes -- and I’m sorry that we did not provide like a formal number on the full year guidance..

Sure, okay. Very helpful. And second one is still regarding the 2016. I know you don’t give the specific numbers, but can you give us a rough like guidance of all your sales and marketing expenses and also the R&D expenses which actually was up at large this quarter. So will you continue this trend in 2016? Thank you..

Yes, our overall budget for this year is that, you have seen that we have reported the full-year financial on the 2015 and marketing and product research and G&A. I think by 2016, I think the -- we are -- our plan is to overall all these expenses as a percentage of revenue should get better compared to 2015..

Okay. And the third one is regarding your self-guided tour. If I read the numbers correctly, I think this quarter the revenue generated from each trade actually declined a little bit. Any specific reason behind? Thank you..

Amanda, actually I don’t know which number you’re referring to. Our overall self-guided tour includes the Q4 actually as strong as organized tours similarly. And in terms of number of trip actually has increased like 170 something percent year-over-year.

Are you talking about our ASP?.

Yes, ASP..

Right. The ASP -- yes, exactly the number of trip outpaced the gross booking growth of the self-guided tours, not just because the air fee is a combination of our self-guided tours like with airline -- with air-ticketing and local tour as well.

So the local self-guided tour we call it like, especially people drive cars and we saw hotels [indiscernible] attraction tickets as a package, that number has really increased in a very, very high speed. So therefore the number of trips has increased a lot more than the overall like gross booking for self-guided tours.

That caused the ASP to drop because of this kind of different category gross rate like the self-guided -- self-drive trip for local tour for self-guided tours has increased more like quicker than others..

Got it. Thank you.

A quick follow-up, so your take rate of your air-ticketing and hotel business, what's the latest take rate for this open platform business model?.

Sorry, we did not provide the number. But overall like hotel for example, it’s not too far away from the industry norm..

Got it. Thank you. Very helpful. Thank you..

Thank you. And the next question comes from Evan Zhou with Credit Suisse..

Hi, good evening, Donald and Conor and Maria. Thanks for taking my questions. First question is regarding the, our internet finance product. I think you’ve given us a pretty decent outlook and a great variety of product in last December is during the investor conference.

I was wondering like, if you can give us an update on kind of how the progress going so far was kind of cross sell ratio that we have as a percentage for total transactions that combines with the finance product? And what do you expect these contribution to ramp up in the other revenue line down the road? Thank you..

Yes, all these revenue contribution actually is shown in the combination number of the other revenue in the financial statements. So you can see that the, our other revenue gross rate year-over-year is over 400%. So it’s a very robust growth.

Among the internet finance, the insurance business is growing very fast, and also that over like installation for our customers and also the supply chain financing and the financial part or management for our customers.

These have the experience of very strong gross momentum and -- overall the internet finance contribution to the [indiscernible] exceeded like 1% of our revenue. And I mean, we expect that the -- we started build a team last year, and we expect that overall the internet finance itself should like breakeven status for 2016..

All right, thanks Donald, Conor. Second question regarding the regional expansion -- regional center expansion plan. I was wondering, I think we’re probably at our year two after we announced like a pretty brand plan last year.

I think, can you maybe give us some more color on how do you think about the progress so far, and is there an update to the total number of centers that we are going to build in the next couple of quarters? And shall we expect the run rate for the cost and OpEx to still be ramping up in 2016 or kind of gradually coming down little bit? Thank you..

The overall regional service center expansion plan that currently we have are 170. Our plan is to expand to about 300 by the end of this year, that’s in China, the regional service centers. And the offshore destination places that we’re going to build about -- build our team in 15 places in the more popular destinations for this year.

And the CapEx, for example on these regional service center is roughly less than RMB0.5 million per new center. So if -- this year we’re going to expand like additional 130 of those, so its roughly like slightly above like RMB 50 million on the CapEx together with the first year expansions for the newly opened regional service center in 2016..

Got it. Thanks for the color, Conor..

Thank you..

Thank you. [Operator Instructions] And our next question comes from Juan Lin with 86 Research..

Hi, good evening Donald, Alex, Conor and Maria. Thank you for taking my questions. I have one question related to the take rate of your self-guided tour and packaged or group tour.

I’m wondering, what is the take rate for the organized tour and self-guided tour for the fourth quarter, and how does it compare to the third quarter? And going forward, how should we forecast the change for your take rate in 2016 and beyond? Thank you..

Hi, [indiscernible] that organized tour around 5% something more or less, 5% to 6% similar to self-guided tour is about 6%. Yes, slightly below the quarter, yes..

Thank you, Conor. And what is the reason for sequential decline in the take rate. Because I remember last year fourth quarter take rate actually improved from the third quarter..

Right. That’s [indiscernible] actually it’s more on the -- from the organized tour especially in the European regions as we expand that when these IS attack happened in the mid fourth quarter, and for the rest of the fourth quarter we have a check-in inventory that we need to get rid of.

Therefore we decrease the price more aggressively on these regions, and in some instance we have incurred selling inventory loss, therefore causing the overall margin drop from previous quarters..

Okay.

So should we assume that the take rate could improve on the current from Q4 level since we’re already through the impact from the terror attack in Europe?.

Well, if everything goes well, overall as I explain that, our plan for 2016 that the gross margin profile should improve somewhat from our previous year..

Thank you very much. That’s all my questions..

Thank you..

Thank you. And as there are no more questions, I would like to turn the call back over to management for any closing comments..

Once again, thank you for joining us today. Please don’t hesitate to contact us if you have any further questions. Thank you for your continued support, and we look forward to speaking with you in the coming months..

Thank you. The conference is now concluded. Thank you for attending today's presentation. We now disconnect..