Packaged tours site Tuniu files for US IPO

Tuniu Corp, which operates one of China's largest packaged tours websites, filed with the US Securities Exchange Commission (SEC) over the weekend to raise up to $120 million in an IPO.

According to the prospectus, tuniu.com, which is run by the company, saw its net revenues jump by 154.7 percent from 765.5 million yuan ($123.23 million) in 2011 to 1.95 billion yuan last year.

However, the company, which sold 1.28 million trips last year, is challenged by high costs and expenses, the firm said.

Tuniu's cost of revenues accounted as 93.8 percent of its net revenues in 2013, down from 96.9 percent in 2011, the prospectus added.

"Our ability to achieve and maintain profitability depends on our ability to effectively reduce our costs and expenses as a percentage of our net revenues," tuniu.com said.

The company reported a net cash flow of 116.7 million yuan in 2013, up from 36.3 million in 2011. "We generally collect payments from our customers upon contract confirmation before we pay our travel suppliers, which allows us to generate positive cash flow from operations," it said in the prospectus.

The firm said it plans to increase its sales and marketing efforts, including advertising campaigns, to further increase its market share and it expects its share-based compensation to grow as well in the future.

"As a result, we expect our operating expenses to increase in absolute amount. If we fail to effectively reduce our costs and expenses as a percentage of our net revenues, we may not be able to achieve and maintain profitability," the prospectus said.

Tuniu.com, which was established in 2006 and started offering tours online in 2007, ranked first in China's online organized tour market in terms of transaction volume in 2013. The company has sold more than 3 million packaged tours since its inception.

Overseas leisure travel products and services contributed to over 70 percent of tuniu.com's gross bookings in 2013, the company said.

The news of tuniu.com seeking an IPO in the US came on the heels that Sina Corp's microblogging service, Weibo, announced on Friday that it priced its NASDAQ listing between $17 to $19 a share, to potentially raise $380 million.

A wave of Chinese technology companies are seeking IPOs in the US. JD, for example, filed in late January for an IPO to raise $1.5 billion, and security software maker Cheetah Mobile Inc, a unit of Kingsoft Corp Ltd, also filed with the SEC to raise about $300 million in an IPO of American Depositary Shares on Wednesday.