Comprehensive Overview

The Group is an outbound travel product and service provider from China, with a special focus on providing Japanese tour groups and free travel related products to customers in East China. In fiscal year 2018, revenue generated by Japanese tour groups accounted for about 78.4% of the total revenue of group tours and local tours, while revenue from selling free travel products to Japanese destinations accounted for about 79.4% of the total revenue of freelance products. The group also entered the Japanese hotel industry by acquiring the Shizuoka Hotel in 2015 and purchasing two blocks of land in Tokyo to build a Tokyo Hotel in 2016. Since opening in 2018/10, Tokyo Hotels have started generating revenue.

In terms of Japan's outbound travel revenue in 2018, the group ranked fifth in East China, accounting for about 1.2% of the total Japanese travel revenue of East China outbound travel agencies.

According to Frost & Sullivan's report, the number of outbound travelers from the East China region to Japan increased from about 700,000 in 2014 to 2.3 million in 2018, with a compound annual growth rate of 32.4%.

Risk Factors

More than 60% of the group's travel group revenue and more than 75% of the group's income from independent travel products come from Japan Travel Group. Fluctuations in the Japanese yen exchange rate will affect the group's operating performance. If the yen exchange rate appreciates against the renminbi, the overall cost of a trip to Japan will rise, and customer demand for the group's Japan-related products and services may drop drastically, thereby affecting the group's operations, operating results and financial situation.