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CFO Cindy Wang observed that the market has shown resilience in travel volume. She highlighted that consumers, especially younger and retired demographics, are focusing more on experiential products like concerts and themed tours. While this drives strong volume growth across all segments, it is partially offset by a slight decrease in average daily rates (ADR).

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CFO Xiaofan Wang acknowledged a high-single-digit YoY decrease in hotel ADR in Q1 but noted the decline narrowed in Q2, with prices dropping only by a low-single-digit during the Labor Day holiday. She mentioned that a high-single-digit increase in hotel supply was met with strong demand for mid-to-upper range hotels, and expects prices to stabilize as demand grows.

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Executive Chairman James Liang responded that AI agents will complement, not replace, OTAs by becoming new traffic entry points. He emphasized Trip.com's value in providing extensive real-time proprietary data and an end-to-end service model, which AI alone cannot replicate. He confirmed continued investment in generative AI to introduce more user-friendly features.

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CFO Xiaofan Wang reported that total outbound flight capacity recovered to nearly 80% of 2019 levels during the summer and is expected to remain stable. She noted that average outbound airfares are currently 5-10% above pre-COVID levels and have increased slightly quarter-over-quarter.

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Executive Chairman James Liang stated that future growth will be driven by expanding into China's lower-tier cities, capitalizing on the sustained recovery of outbound travel, and growing the Trip.com platform in Asia. Key new initiatives include developing China's inbound travel market, creating products for the 'silver generation,' and offering entertainment-plus-travel packages for younger demographics, all supported by investments in content and AI.

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Management explained that government policies are aimed at curbing the price war caused by overcapacity, leading to a market shift towards top-tier and self-owned brands. For the used car market, recovery is linked to car ownership and age, but consumer hesitancy persists due to a lack of transparency. Autohome is addressing this by launching a certified used car flagship store and developing AI tools to improve transparency and trust, noting that a stable new car market would benefit used car demand.

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CEO Song Yang explained that the Haier acquisition is still pending regulatory approval and she could only share public information, reiterating a commitment to the O2O new retail model and partnership with Ping An. Regarding the market, she expects the price war to continue in the short term but believes room for further declines is limited. She acknowledged that dealers face significant challenges and need to transform, but stated that the overall dealer base remains stable and should recover after a period of adjustment.

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CEO Song Yang reported a strong dealer contract renewal rate exceeding 85%, attributing the success to AI-driven product upgrades and brand strength. He identified future growth potential in deeper digitalization, expansion into lower-tier cities, and post-sales services. For the used car market, Mr. Yang noted that 2024 saw higher sales volume but lower profits due to new car price wars. He expects sales to continue growing in 2025, with price volatility lessening. Autohome aims to address market pain points by enhancing transparency and promoting certified vehicles to improve dealer profitability.

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CEO Tao Wu stated that OEM advertising spending in Q4 is cautious, with some OEMs shifting budgets to consumer subsidies while others are cutting back. He anticipates a more balanced approach next year but acknowledges uncertainty remains. For dealer contract renewals, which begin at year-end, Mr. Wu expressed confidence in stability, citing dealers' reliance on Autohome's services. He added that Autohome will continue to enhance its offerings with big data and Ping An collaborations to help dealers navigate market challenges.

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CEO Zhou Tao, via a translator, explained that the enterprise cloud slowdown was due to seasonality, including the Chinese New Year and customer budgeting cycles. The public cloud's growth appeared muted because a large cluster for Xiaomi was delivered late in Q1, with revenue recognition expected in Q2. He confirmed that Xiaomi's new model was trained on Kingsoft Cloud's infrastructure and that long-term inference demand from Xiaomi represents significant potential, though its timing depends on Xiaomi's own rollout pace.

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CFO Haijian He stated that the key theme for 2025 revenue is 'acceleration' on an annual basis, driven by AI and other healthy verticals. Regarding profitability, He noted that positive operating cash flow for three consecutive quarters is a strong leading indicator. He expects EBITDA and operating profit margins to expand at a faster pace than gross margin, with the company aiming for steady improvement across all key margin metrics.

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Chief Financing and Investment Officer Chong Cai stated that monthly active truckers grew at a high single-digit rate, with engagement and transaction frequency improving. This was driven by higher order volume, better matching algorithms reducing idle time, and the success of the trucker membership program. He noted the trucker supply has been structurally stable, preventing a significant imbalance.

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CFO Chong Cai explained that the record-high fulfillment rate was driven by an improved user mix, with direct shippers now accounting for 50% of orders, alongside precision operational strategies that reduced fulfillment times. He also noted that better supply-demand dynamics contributed. Mr. Cai anticipates the fulfillment rate will continue its steady upward trajectory in the coming year.

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CEO Feng Zhou explained that Youdao's dual approach, combining its proprietary Confucius model with open-source models like DeepSeek, enhances user experience by offering both speed and comprehensive answers. He stated this strategy accelerates innovation and allows the Confucius model to excel in specific areas like translation and K-12 Q&A, where it now achieves over 92% accuracy. Dr. Zhou also noted that self-hosting models improves stability and reduces costs.

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CEO Dr. Feng Zhou outlined a dual focus on AI-driven education and marketing technologies, leveraging reasoning models like DeepSeek. He anticipates modest revenue growth with a strong emphasis on profitability. For Learning Services, the focus is on high-demand products with integrated AI tutoring. Smart Devices will see continued innovation in the dictionary pen category. Online Marketing will deepen its collaboration with NetEase and expand globally. VP of Finance Wayne Li added that the company aims for breakeven annual operating cash flow in 2025, building on the significant profitability and cash flow improvements seen in 2024.

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VP of Strategy and Capital Markets Peng Su stated that Youdao is prioritizing healthy, sustainable development and focusing on high-demand services like Youdao Lingshi, scaling back on low-ROI customer acquisition. He highlighted that strong retention rates, now hitting 70%, are key. CEO Feng Zhou added that while summer customer acquisition had challenges, the focus on customer satisfaction and retention provides a solid foundation for future growth.

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