- Turnaround from Loss to Profit
- Steadily Business Recovery
China’s leading online tour guide provider Lvji Technology Holding Inc. (Lvji Technology or the Company, together with its subsidiaries, the Group, HKG: 1745.HK) is pleased to announce its consolidated results for the six months ended 30 June 2021 (the Period).
Since March 2021, the tourism market has recovered, which led to a rapid recovery in travel demand of consumers and resulting in a steady growth in the Group’s business. In the first half of 2021, the total revenue of the Group increased by approximately 118.1% to RMB175.1 million, and the revenue level has almost resumed to that before the outbreak of the epidemic. Gross profit increased significantly to RMB48.8 million, with a gross profit margin of 27.9% compared to 4.6% for the same period of 2020. The substantial increase in gross profit margin was mainly due to the steady growth of revenue during the Period and the accelerated recovery of the tourism market. Lvji Technology has achieved a turnaround from loss to profit during the Period, with a profit for the period of about RMB 880,000, compared with a loss of about RMB 80.0 million in the same period in 2020.
Lvji Technology continues to consolidate its leading position of online tour guides, actively capture the opportunities brought by the recovery and flexibly respond to changes in market demand. Under the normalization of epidemic prevention and control, short-distance travel and peripheral tours have become increasingly popular among tourists. Therefore, the Company strategically increased the online tour guide coverage of tourist attractions on the outskirts of cities to enhance its adaptability to market changes. At the same time, the Company has upgraded and optimized the content of online tour guides for popular tourist attractions, including improving the accuracy of the tour guides, optimizing the mapping processes and upgrading the explanations to provide consumers with a better experience and meet the diversified travel demands of tourists. As of June 30, 2021, the Group had developed 30,464 online tour guides, 8,240 more than in 2020 over the same period, covering tourist attractions in China and overseas, which covered 288 AAAAA tourist attractions, 2,476 AAAA tourist attractions, 1,851 AAA tourist attractions in China.
Reduced cost and increased efficiency with intelligent technology and continuously upgraded of smart services
During the Period, in relation to the SaaS business, Lvji Technology developed and iteratively launched a product named “Digital View Pass” with smart management, smart marketing and smart service as the core, offering digital marketing solutions for tourist attractions. By constructing smart mini-programs, digital marketing system, smart tourist attractions system and private Internet traffic system, the digital marketing system and delicacy operation system were constructed in tourist attractions and informationalized resources were integrated to meet the digital upgrading demand of various tourist attractions and the culture and tourism bureaus, so as to achieve new business growth in tourist attractions and enhance the operational and management efficiency of tourist attractions. In addition, “Digital View Pass” can effectively enhance the efficiency of our customized content business such as the development efficiency of the “Mobile Tour” project and reduce the development costs.
The Company upgraded the smart tourist attractions management service system to assist management departments of the government in efficient management and reasonable deployment of local tourism resources in the form of big data center, command center, Internet portal, etc. For example, in the tourist attractions operation service, the system can perform passenger flow monitoring, heat map analysis, smart terminal management, artificial intelligence learning, which could analyze tourists’ consumption habits and provide data reference for the management of tourist attractions resulting in the digital upgrading of tourist attractions. During the Reporting Period, the Company successfully delivered several key projects of smart tourist attractions management service system. The revenue from sale of customized content increased by approximately 174.2% from approximately RMB1.6 million for the six months ended June 30, 2020 to approximately RMB4.3 million for the six months ended June 30, 2021.
Actively expanding our scenario-based marketing to acquire diversified user traffic
In addition to strengthening the mutually beneficial cooperation with OTAs, Lvji Technology is actively expanding its scenario-based marketing to acquire diversified sources of user traffic. The Company had placed shared family bicycles in over 40 tourist attractions, where tourists can scan the QR code on the bicycle to get an online tour guide of the tourist attractions while exploring the tourist attractions on them, satisfying the needs of parent-child trips and listening to the online tour guide, and enhancing the travel experience of tourists. In addition, for the young people, especially Generation Z, who like to experience the combination of games and travel, the Company has also introduced a tourism product called “Lvji Live Acting Role-Playing Game” to tourist attractions, using scenes of tourist attractions and the cultural stories behind them, combined with the tour guide, to create tailor-made scripts with the characteristics of the tourist attractions. Through a plot of drama that tourists can participate in and perform, the Company brings tourists an immersive tourism experience, enhance the sense of interaction between tourists and tourists’ attractions as well as the fun of playing, and satisfy the social needs and novelty experience of young people, thus helping tourist attractions to gain more offline users. The Company is also actively expanding the business into other smart terminals. During the Reporting Period, the Company became the first batch of content eco-partner of HUAWEI HarmonyOS and launched a version adapted to HUAWEI’s smartwatch to satisfy users with high-quality products that seamlessly switch under different scenarios and cover more usage channels.
Mr. Zang Weizhong, Executive Director, Chairman of the Board, Chief Executive Officer and Founder of Lvji Technology said, ” Lvji Technology is well-positioned to embrace the recovery of the tourism industry, respond flexibly to market changes and capture the opportunities of smart tourism popularization. We will continue to focus on our core strategies and maintain our leading position in the online tour guide market by leveraging our enterprise positioning of “China’s leading culture and tourism industry chain service platform”, and we are confident in seizing the recovery opportunities and leading the development of the online tour guide industry.
In the long run, we believe that with the further increase in the support for “Internet + Tourism” in China and the advocation of the government to develop high-quality development of tourism with the help of technological innovation, it is expected that the online penetration of online tourism products will increase continuously, and the digital development of China’s tourism will accelerate and generate the considerable potential for growth. In the future, we will flexibly adjust and continuously optimize the coverage of online tour guide products according to the market demand; strengthen the innovation as well as R&D capability, continuously improve the products and services such as “Digital View Pass” to meet the demand of digital upgrading of tourist attractions. We will strive to build an industry chain of culture and tourism service platform to continue to strengthen our leading market position.”
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. According to F&S, Lvji technology is an online tour guide provider with an 86.2% market share in the online tour guide service market in terms of GMV in 2018. As of June 30 2021, the Company developed a total of 30,464 online tour guides in China and overseas, which covered 288 AAAAA tourist attractions, 2,476 AAAA tourist attractions, 1,851 AAA tourist attractions.
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