Performance rebounded strongly in the second half of the year
Revenue from customized content surged
China’s leading online tour guide provider Lvji Technology Holding Inc. (Lvji Technology or the Company, together with its subsidiaries, the Group, stock code: 1745.HK) announced its consolidated results for the year ended December 31, 2020 (“the Year”).
Financial Highlights:
- The revenue in 2020 was RMB295.1 million, compared with RMB541.8 million in 2019. The decrease in the revenue was mainly due to the global outbreak of COVID-19 in the first quarter which led to shrinking travel demand. The revenue in the second half of 2020 was RMB214.7 million, recording an increase of 167% compared to the first half of 2020.
- The Company has been establishing in-depth cooperation with cultural and tourism bureaus and scenic spots across China. The revenue from the sale of customized content in 2020 was RMB13.0 million, a significant increase of approximately 49.9% compared to 2019.
- The net loss for the Year was RMB100.6 million, whereas the profit in 2019 was RMB160.8 million. The loss was mainly due to the continuous pressure on the Company’s overseas online tour guide business, which was the result of the severe situation of overseas epidemic prevention and control, and the implementation of passenger flow control in domestic scenic spots, both partially offset the growth brought by the recovery of the domestic tourism industry since the second quarter in 2020. An impairment loss of RMB70.4 million in intangible assets was recorded for the year of 2020. Excluding listing expenses, the adjusted loss for the year was RMB61.1 million, and the adjusted profit for the year of 2019 was RMB178.8 million.
Operational Highlights:
- The number of online tour guides increased by 6,559 from 19,493 as of December 31, 2019 to 26,052 as of December 31, 2020, while the number of tourist attractions in China covered by our online tour guides increased from 11,238 as of December 31, 2019, to 14,229 as of December 31, 2020. The Company’s online tour guides covered 279 AAAAA tourist attractions and 2,343 AAAA tourist attractions.
- Established in-depth cooperation with the culture and tourism bureaus across China. During the reporting period, the Company successfully delivered several key projects of smart tourist attractions management service system. Developed SaaS system “Lvji Travel Tool” to help tourist attractions enhance their digital operation ability.
- Using VR and other innovative technologies combined with online tour guides, “Lvji VR” has finished the delivery of projects such as Xijiang Thousand Household Miao Village of Guizhou Province, Guilin Tourism University of Guangxi Province and all-round Luoning County of Henan Province.
During the Year, the outbreak of COVID-19 has severely affected the economy in China and the world. The consumption and tourism industry was basically stalled and halted in the first half of the Reporting Period with a significant decrease in travel demand of consumers. Fortunately, with the pandemic being gradually controlled in China since the second quarter in 2020 and the recovery of the domestic tourism market, the Company’s domestic tourism business has also resumed growth. However, due to pandemic prevention and control requirements, tourist attractions in China were still implementing passenger flow control, and some consumers were still vigilant to travel. In addition, the Company’s overseas online tour guide business has been under pressure due to the severe condition of overseas pandemic prevention and control, partially offsetting the growth brought by the recovery of the domestic tourism industry.
The Company’s total revenue for 2020 is RMB295.1 million, a year-on-year decrease of 45.5% from RMB541.8 million in 2019. In the second half of 2020, the Company performed well in the wave of recovery in the tourism industry and achieved a strong rebound. Compared with the revenue in the first half of 2020, the revenue in the second half of the year was RMB214.7 million, an increase of 167% quarter-to-quarter. At the same time, benefited from the in-depth cooperation with the cultural and tourism bureaus and scenic spots across China, the revenue from the sale of customized content increased significantly by about 49.9% year-on-year to RMB13.0 million. The net loss in 2020 was RMB100.6 million whereas the profit was RMB160.8 million in 2019. In 2020, the adjusted loss for the year excluding listing expenses was RMB61.1 million, and the adjusted profit in 2019 was RMB178.8 million.
During the Year, the Company captured the opportunity of recover and invested in research and development resources continuously to increase the coverage of tourist attractions. The Company further consolidated its market leading position by optimizing and upgrading the online tour guides. As of December 31, 2020, the Company’s online tour guides reached 26,052, an increase of 6,559 from 19,493 as of the end of 2019. The number of tourist attractions in China covered by the Company’s online tour guides increased from 11,238 as of the end of 2019 to 14,229 as of the end of 2020, and the Company’s online tour guides covered 279 AAAAA tourist attractions and 2,343 AAAA tourist attractions. Furthermore, the Company increased in-depth cooperation with local culture and tourism bureaus by focusing on schemes of all-round tourism and smart tourist attractions. At the same time, the Company has been using new technologies to enhance the production capacities of online tour guide and customized content and expand marketing channels, so as to continue to maintain its market leadership.
Strategically increased the coverage of tourist attractions, and the content of tour guides was multi-dimensionally optimized
In 2020, the Company continued to increase the coverage of tourist attractions and the number of online tour guides was 26,052 as at the end of 2020. In the regular epidemic prevention and control stage, consumers’ demand for short-distance travel in peripheral regions was rising rapidly. Therefore, the Company strategically increased the coverage of suburban tourist attractions in domestic cities to actively capture the opportunities brought by the domestic tourism industry’s recovery and meet the diverse travel demand of consumers.
In addition, the Company has been continuously optimizing the original content of tour guides. The Company carried out multi-dimensional technological innovation on online tour guides including creative radio drama, audio production for tour guides, video editing, animation, 3D scene and sticker design; upgraded the content of articles and strengthened the content of cultural tourism; expanded the sharing of practical and personalized content from single tourist attraction explanation mode to sharing and recommendation of multiple content to realize the transformation of creative characters and perspectives; upgraded audio-visual module and integrated video animation with the cultural knowledge of tourist attractions to enrich the display form of tourist attractions; and enriched drawing style and created 3D hand-painted maps to intuitively display the panorama of tourist attractions and provide more interesting content for users to enhance the tourism experience.
Deepened cooperation with cultural and tourism bureaus and tourist attractions and continuously deployed all-rounded tourism and smart tourist attractions management service system layout
During the Year, the Company established in-depth cooperation with the culture and tourism bureaus across China, aiming to change the service mode of the tourism industry and consumers’ way of traveling. The Company developed a smart tourist attractions management service system to assist management departments of the government in the efficient management and reasonable deployment of local tourism resources in the form of big data center, command center, Internet portal, etc. During the Reporting Period, the Company successfully delivered several key projects of smart tourist attractions management service system.
Meanwhile, the Company has been continuously strengthening cooperation with tourist attractions by assisting them in VR and AI tour guides and establishing a mobile phone tour and a big tourism data platform to improve the comprehensive service and operation platform of all-rounded tourism. In addition, in order to improve the digital marketing and detailed operation service of tourist attractions, the Company also developed SaaS system “Lvji Travel Tool” to help tourist attractions enhance their digital operation ability, diversify the options for consumers’ returning purchase, construct private internet traffic pool system in tourist attractions, provide solutions for smart tourist attractions, and facilitate the digitization of tourist attractions. Customized content services with cultural tourism bureaus and tourist attractions will be one of the important drivers of the Company’s future performance growth.
Continuously innovated technology and strengthened offline channel expansion
As a technology-driven company, the Company always insists on the application of innovative technology to the cooperative tourist attractions, using VR and other innovative technologies combined with online tour guides. “Lvji VR” offers functions such as 720 panoramic VR, VR panoramic live broadcast, VR comic live broadcast and VR video documentary filming, providing higher-quality services to the tourism market during the normalization of the epidemic prevention and control stage. During the Reporting Period, “Lvji VR” has finished the delivery of projects such as Xijiang Thousand Household Miao Village of Guizhou Province, Guilin Tourism University of Guangxi Province, and all-round Luoning County of Henan Province.
Combined with the current popular innovative sales mode, the Company intensified the offline market layout and expansion of online tour guides. During the Reporting Period, the Company negotiated with a number of well-known tourism groups, local travel agencies and large organizations and developed innovative sales and marketing strategies, including projects such as live broadcasting promotions, “reservation + ticketing” initiates and SaaS sales model, which has enriched the diversity of channels.
Mr. Zang Weizhong, Executive Director, Chairman of the Board, Chief Executive Officer and Founder of Lvji Technology, said, ” In the future, we will strive to build an industry chain of culture and tourism service platform, continue to strengthen our leadership market position, and combine AR and AI technology to make the interactive experience of consumers more interesting. We will also continue to optimize the “Lvji Mobile Tour” and build three systems of comprehensive management, comprehensive operation and comprehensive service according to the demand of digital upgrading of the tourist attractions to empower the long-term development of the tourist attractions. At the same time, we will focus on the establishment of all-rounded tourism demonstration districts and optimize the demonstrative all-rounded labeling system and tourist transport center system with the goal of building a national all-rounded tourism demonstration area to construct a trinity of “provinces and cities, regions and tourist attractions” all-rounded tourism big data comprehensive service platform. Furthermore, we will continue to upgrade SaaS business, build a multi-terminal and multi-channel one-stop smart tourism ecological platform, connecting consumers’ “dining, accommodation, transportation, entertainment, and shopping” and other supporting consumer service facilities, so as to empower the tourist attractions in realizing smart management, smart marketing and smart services.”
Mr. Zang continued: “The outbreak of COVID-19 has greatly changed the industrial structure of the domestic tourism market. The pandemic has promoted the development of the tourism industry in terms of smart tourism. In the stage of regular epidemic prevention and control, the Chinese government has launched a number of measures to stimulate domestic consumption, resulting in the accelerated recovery of the tourism market. We believe that we are well-positioned to capture the recovery of the tourism industry and the opportunity of popularization of smart tourism to resume the growth within a short period of time with our core competitive advantages on continuous technological innovations and strategic cooperation with OTAs to maintain our leading position in the online tour guide market. ”
About Lvji Technology Holdings Inc.
Lvji Technology Holding Inc. is China’s leading online tour guide provider. Established in December 2013, Lvji Technology bases on two core strategies of scenic guides and smart tourism and focuses on the development of all-round tour guide and smart tourism-related supporting services. As of December 31, 2020, the Company has developed a total of 26,052 online tour guides, covering 14,229 tourist attractions, including 279 AAAAA tourist attractions and 2,343 in China AAAA tourist attractions. It has formed a tourism ecosystem supported by online tour guides and smart management service systems and is a famous smart tourism industry solution expert.
This press release was issued by Porda Havas International Finance Communications Group for and on behalf of Lvji Technology Holdings Inc. For further information, please contact:
Porda Havas International Finance Communications Group
Ivy Lu +852 3150 6788 ivy.lu@pordahavas.com
Louise Liu +8621 3397 8796 louise.liu@pordahavas.com
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