Good day, ladies and gentlemen, and welcome to the Fourth Quarter Full Year 2016 Ctrip.com International Earnings Conference Call. My name is Derek and I'll be your operator for today. At this time, all participants are in a listen-only mode. We shall facilitate a question-and-answer session at the end of the conference. At this time, I will like to turn the conference over to Michelle Qi. You may proceed.

Thank you, Derek. morning and welcome to Ctrip fourth quarter and full year 2016 earnings conference call. Joining me today on the call we have Mr. James Liang, Executive Chairman of the Board; Ms. Jane Sun, Chief Executive Officer; and Ms. Cindy Wang, Chief Financial Officer. During this call, we will discuss our future outlook and performance which are forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in Ctrip's public filing with the Securities and Exchange Commission. Ctrip does not undertake any obligation to update any forward-looking statement except as required under applicable law. James, Jane, and Cindy will share our strategy and business updates, operating highlights and financial performance for the fourth quarter of 2016, as well as outlook for the first quarter of 2017. After the prepared remarks, we will have a Q&A session. With that, I'll turn the call over to Jim for a business update. Jim, please?

Thank you, Michelle, and thanks everyone for joining us today on the call. Sales results in fourth quarter of 2016 ended the year on a high note. Net revenues were up 76% year-over-year in the fourth quarter, driven by solid organic growth and the inclusion of an invested company. Non-GAAP operating margin for the quarter was 16%, meaningfully higher than the 10% in the same period a year ago. In the following sections I will discuss Ctrip's growth potential and strategy in both the domestic and international online travel market. China's domestic travel market continues to offer great growth potential. The domestic travel market grew to 4.4 billion trips in 2016. According to the government's 13th Five-Year Plan, the number of domestic trips is expected to reach 6.7 billion by 2020, implying an 11% CAGR. As the leading player in the space, Ctrip is well positioned to benefit from this favorable secular trend. Thus, we have actively expanded our service to offer more value to our customers. Ctrip is in a strong position to foster such innovation due to our large customer base and the one-stop travel platform model. In 2016, we successfully launched several new service initiatives such as online travel guide, airport parking service, and currency exchange services. These services have further improved customer experiences, increased customer loyalty and contributed to our overall sales growth. Second, we have actively growing our customer base by penetrating into lower tier cities through increased product offering and a targeted marketing campaign. Last year, Ctrip users in the second, third tier cities grew 80% year-over-year. Historical data in the first tier cities in the neighboring countries suggest that travel spending accelerates when GDP per capita reaches a certain level. We expect to see similar trends in lower tier cities and we'll continue…

Thanks, James. I'm very pleased to share updates on Ctrip's main businesses with you. First: on hotel and accommodations. Total hotel revenue grew by 56% compared to the same period last year, driven by both volume growth and the inclusion of an invested company. This quarter's growth rate reflected the negative impact after adoption of the VAT tax of approximately 5% to 10%. A large hotel inventory and high quality of services are the core competencies of our hotel business. Ctrip provides one of the most comprehensive and competitive hotel inventory, sourcing from our direct network and industry partners. At the end of 2016, Ctrip's hotel network covered over 1.2 million hotels around the world. Ctrip supports our hotel partners on a multi fronts, including reservations, marketing, customer services and data analysis. We also uphold high quality service standard supported by a strong IT infrastructure. Today, over 90% of Ctrip's hotel orders can be confirmed almost immediately after booking. And hotel price changes can be reflected on our website and app within one minute. Second: transportation ticketing services. Total transportation revenue grew by 97% year-over-year in the fourth quarter, benefiting from the faster growing new business units and a strong execution. Train ticketing maintained its healthy momentum. In the fourth quarter, train ticketing volume grew approximately 70% year-over-year, driven by a strong execution. Bus ticketing continued to generate strong volume growth. The business grew about 250% in the fourth quarter year-over-year. The air ticketing delivered solid growth. We will continue to work closely with major airlines to build a healthy ticket distribution environment. Our international air ticketing revenue grew by over 50% year-over-year, mainly driven by strong volume growth. We expect the Skyscanner investment will further strengthen our international air ticketing business. Our multi-model transportation solution connects more cities at…

Thank you, Jane. Thank you, everyone. For the first quarter of 2016, Ctrip reported net revenues of RMB 5.1 billion or $730 million, representing a 76% increase from the same period in 2015, primarily due to the consolidation of Qunar starting from the end of last year. Net revenues for the fourth quarter of 2016 decreased 9% from the previous quarter, primarily due to seasonality. For the full year ended December 31, 2016, net revenues were RMB 19.2 billion or $2.8 billion, representing a 76% increase from 2015. Accommodation reservation revenues for the fourth quarter of 2016 were RMB 1.8 billion or $266 million, representing a 56% increase from the same period in 2015, primarily driven by increase in accommodation reservation volume and consolidation of Qunar. Accommodation reservation revenues for the fourth quarter of 2016 decreased 11% from the previous quarter, primarily due to seasonality. For the full year ended December 31, 2016, accommodation reservation revenues were RMB 7.3 billion or $1.1 billion, representing a 58% increase from 2015. The hotel reservation revenues accounted for 37% of the total revenues in 2016 and 40% of total revenues in 2015. Transportation ticketing revenues for the fourth quarter of 2016 were RMB 2.4 billion or $352 million representing a 97% increase from the same period in 2015, primarily driven by increase in ticketing volume and consolidation of Qunar. Transportation ticketing revenues increased to 1% from the previous quarter. For the full year ended December 31, 2016, transportation ticketing revenue were RMB 8.8 billion or $1.3 billion, representing a 98% increase from 2015. The transportation ticketing revenues accounted for 45% of the total revenues in 2016 and 39% of the total revenues in 2015. Packaged-tour revenues for the fourth quarter of 2016 were RMB 467 million or $67 million, representing a 33% increase…

Certainly. And our first question will come from the line of Amanda Chen from Morgan Stanley.

Hi. Good morning, management. Congratulations on the strong quarter and thank you for taking my questions. I have two here.

Hey, Amanda.

First is regarding – hi, can you hear me?

Yes.

Yes.

Okay, great. Congratulations on the strong quarter and thank you for taking my question. I have two here. First is regarding the international market. Could you please share your international expansion strategy in general? And then, specifically, how will you leverage on Priceline's resources? How will you integrate investees such as Skyscanner and MakeMyTrip into Ctrip ecosystem? And especially, when entering new overseas market, how will you balance the interest between Ctrip and your investees? That's my first question. And the second one is regarding your long-term margin improvement. I think you previously guided that margin will improve to 20% to 30% in the long term. So, could you please share this – could you please specify the margin improvement trajectory and do you see it is faster than your previous estimate? Thank you very much.

Yeah. Thank you. Skyscanner and MakeMyTrip are independent brands, so they will have their own independent strategy of penetrating their relevant markets. But we have lot of sharing or knowledge sharing and technology sharing that can be realized. We have very good product complementary. Skyscanner have very strong air ticketing products in Europe and we have very strong in China and we are expanding to other parts of the world by sharing our expertise. And combined, we have a much stronger overall product. So that will help each other to penetrating our markets. Also, the same is with our partners such as Priceline, and combined, we have better products across the world by sharing our product strengths in different parts of the market.

Yes. Regarding the margin, given that there is still huge room for Ctrip to grow both domestically and internationally, so we are stick with the original long-term margin target that we are going to gradually improve our margin to 20% to 30% level in the next two to three years.

Your next question will be from the line of Ming Xu, UBS. Ming Xu - UBS Securities (Asia) Ltd.: Good morning, James, Jane and Cindy. Congratulations on the strong result. So, I have two questions here. First is on Skyscanner. Could you help us understand the revenue opportunity that Skyscanner can bring? So, specifically, what Ctrip can help Skyscanner to improve their own revenue and take rate and, also, what Skyscanner can help Ctrip to improve your international business? And the second question is on the margins. Obviously, the margin is very strong this quarter, particularly around gross margin, and also on the saving in product development cost. So could you help us understand why you achieved such good result in these two lines, particularly, what business line actually achieved the higher gross margin and also what kind of a cost synergy you achieved in product development cost? Thank you.

Thank you. Skyscanner is a very – they have a very healthy growth and very significant market share, especially in the market outside of China in the European and Asia Pacific areas. But, in terms of revenue, their total revenue accounts for about mid-to-high single digit of Ctrip as a group. For the margins, yeah, Ctrip's team we – in the last couple of years, we worked very hard together with Qunar's team to improve our both gross margin as well as the operating margins. For example, in the call center or service centers, our target is to maintain or, to some extent, to increase our service standard at the same time by introducing a lot of new technologies to help us to improve the operational efficiencies across all business lines. So, hard work had very good returns on the margins.

The next question will be from the line of Alicia Yap, Citi.

Hi. Hi, good morning, James, Jane and Cindy. Congrats on the strong results and thanks for taking my questions. I have a couple of questions here as well. First of all, I missed part of the prepared remarks. I'm not too sure if you disclosed what was your GMV number for the full year 2016. And then, Jane, remember you actually mentioned on the annual event that you guys target the new GMV to achieve about RMB 1 trillion by 2018 and then double it up by 2021. Can you share with us what would be the rough breakdown of the GMV for transportation versus accommodations? In other words, like if you could share with us which business line will have a faster growth in GMV based on the target that you have? And then, second question, just a housekeeping. What is the head count number at the end of December versus end of the 3Q? Thank you.

Thank you, Alicia. In 2016, the total GMV of Ctrip group was around RMB 430 billion, despite we have some challenges in our air ticket business due to the adjustment in the air ticket distribution environment. But we are still very confident that we can achieve our original 2020 targets in an organic way. Of course, after the acquisition of Skyscanner, we also expect some additional international contribution from Skyscanner. Regarding the RMB 2 trillion, the RMB 2 trillion in five-year include Skyscanner's contribution. However, due to Skyscanner, they have the different business model which is metasearch model their transaction values estimate. So, it will be easier for investors to benchmark our organic GMV and the revenue growth against our original GMV target with additional contribution coming from Skyscanner. For each business line items, I think we will have a very healthy growth across all business lines, but in terms of a GMV contribution, because the selling price of the air ticket business is the highest, so air ticket will account for approximately half of our total GMV.

The next question will be from the line of Natalie Wu, CICC.

Hi, management. Congratulations on very solid quarter and thanks for taking my question. So, I have two questions here. The first one is related to the first quarter guidance and Skyscanner. So, what will be the guidance if we exclude Skyscanner? Did you just mention that Skyscanner accounts for like mid-to-high single digit revenue? So based on simple calculation, the revenue growth guidance excluding Skyscanner is like 30% to 40%. Correct me if I am wrong. And can you also share with us extra color on what will be the guidance growth rate for each different business line? And also, what should we expect regarding Skyscanner's impact on your revenue growth and margin profiles in upcoming 2017? And my second question is regarding the recent sales in terms of Japan and Korea outbound travel, so can management give us a rough feeling regarding these kind of stuff impact on your financials? Thank you.

Thank you, Natalie. So we forecast that our net revenue including Skyscanner will grow about 40% to 45%. Skyscanner accounts for roughly about mid-to-high single digit of our total revenues of the group. And for the each business line items, please be noted that the following revenue growth for each business line items include the negative 5% to 10% VAT tax impact. So, including the negative impact from VAT tax, accommodation reservation will grow about 20% to 30% and transportation ticketing revenues will grow about 45% to 55% year-over-year, and packaged-tour business will grow about 20% to 30%. Corporate travel business will grow about 10% to 20% year-over-year in the first quarter of 2017. In terms of the impact of Japan and Korea, Ctrip has very diversified destinations. We have all products, all destinations that Chinese travelers will like to go. So the impact, first of all, we don't notice such kind of a negative impact from these two destinations, but for, Ctrip, as long as the GDP per capita growth continued to grow and Chinese travelers and Chinese people have more money to travel abroad, I think the big picture for our outbound travel business is very healthy. We have – our target is just to outpace the industry growth and continuously to gaining market share in the travel industry.

Got it. Thank you.

Your next question will be from the line of Binnie Wong, BoA.

Good morning, James, Jane, Cindy, and Michelle. Congratulations on ending 2016 with a solid quarter with significant margin expansions and an encouraging outlook. I have a question on the hotel business. We actually see better than company expected growth, but it's still moderated versus early part of 2016; besides the reasons from high base in Qunar, any particular reasons? And can you share with us any strategy into – your strategy into hotel in 2017? Would growth come from volume or to great expansion? And appreciate your color on the competition. Have you lost it in both high and low-end hotel and also on coupon trends in hotel? Thank you. And my second question is on the 1Q outlook. How much is that coming from Skyscanner? And maybe Cindy can share with us by segment growth outlook too? Thank you.

Sure. Hotel business is one of the major business lines in our total portfolio. So our team will execute very strongly in couple of fronts. First of all, on the hotel coverage, including domestic as well as international, we will put great efforts to extend our coverage to make sure whichever hotel our customer wants we will have the coverage and good price for these hotels. Secondly, it's information. We want to make sure the information related to these hotels will be strengthened and the rating system in our systems also will be strengthened. Thirdly, it's the service. Ctrip is known to have excellent services. That is why our customer, once have used our services, stick to us and is very loyal to us. So, our service team is very much committed to excel our service level by providing 24x7 services to make sure when the customer rents into issues we are there with them, traveling with them and support them. So, with our investment in the coverage, information, service and technology, these are the key factors which drive our growth going forward. And your second question, sorry. Yeah, Cindy will take the second question.

Yes. So, for the Skyscanner, because they are one of the most – one of the best metasearch engines, but vast majority of their revenues are coming from the air ticket business and their total revenue accounts for about mid-to-high single digit of Ctrip's group. In terms of a margin, they have very similar margin profile compared with Ctrip's organic business.

Your next question is from the line of Tian Hou, T. H. Captial.

Good morning, management. I have a question related to competition. So, after you consolidate eLong and Qunar, it doesn't seem like very much competition in the market. However, there could be some competition like (45:34), and also actually airbnb. So, I wonder, how management prepared to go against each those kind of potential competition in the future. That's my question.

Thanks. I think our team is trained to fight competition every year. Ever since the company was established, everyone wants to get into our travel industry. So every year, there are newcomers, but many came, many failed. So, for us, the team needs to be vigilant. We develop our technology platform and scalability so that our efficiency exceeds any players in the market. Secondly, the service element is also very important for us to serve our customers well to make sure it's a one-stop service platform. If a customer make air ticketing booking and it's very easy for them to add on services for hotel, for local attraction. So, if there is some reason the flight is delayed, we will automatically adjust the follow-on services for them. So one-stop shopping platform, it also give us a lot of advantage compared to single product platform. And thirdly, I think the element for our technology innovation also gives us the scale and the margin expansion. So, internally, to an extent, we can make our operation more automatic, more efficient to do that. The savings we achieve not only will give us the margin expansion, but also give us the strength to compete in the marketplace. So if there are any competition that we are facing, we never turn away from these competitions, instead, we will head on and make sure we use the competition as an opportunity to penetrate into the lower tier cities into the market that Ctrip had never been touched as an extension of our new business. So, the team is very well trained to compete in the competitive environment to make our team stronger.

Your next question will be from the line of Wendy Huang, Macquarie.

Thank you. So, Jane, you mentioned earlier in your prepared remark that penetration into low tier cities and also improving profitability will be 2017 strategic focus. So, with this kind of a strategic focus, how should we expect the ARPU to change and also margin trend in 2017? And also, alongside, can you give us update on the recent hotel coupon trend in both high-end and low-end market? And also the blended air ticket rate net rate recently, how has that actually trended? Thank you.

Sure. I will give a general feel in terms of our overall strategy and Cindy will add on more color for the numbers. I think in order to run a successful business, we always have to look into a couple of things; one is the market share gain, second is the margin and thirdly is investment into the future. I think if a company only focus on the market share without – by burning lots of money, it can never sustain its growth, because the money you burnt currently is not sustainable. So we look at a couple of things. First of all, if the GDP growth rate currently is at about 5% to 6% and travel growth doubled the GDP growth at about 10%, and Ctrip normally can double, triple the industry growth, so our guidance reflects our strong growth trajectory. And secondly, because we invest so heavily in R&D, in our service, it gave us a leading advantage compared to our peer players in the market. So if you look at the market, the only company in the online travel business that is profitable is the Ctrip group. And we will continuously invest in our technology to automate processes that is standard, but also provide human support when a machine cannot handle a crisis. So, that's our strategy. Thirdly, I think Ctrip is always very disciplined to run operation. Any money that we can save throughout our operation, we will save it, and that gives us the strength to face any competition going forward. So we want to make sure that our margin expands methodically throughout the year, delivering the promise we have given to our shareholder. But, meantime, we will also reserve sufficient bullets, so if there's any competition in the market, we will not give any opportunity to other players to make sure we further penetrate in the untouched land. So, Cindy will follow-on with the discussion on numbers.

Yes. So, in the first quarter of 2017, we have a very healthy top line growth at about 40% to 45% and, on the bottom line, we will deliver a non-GAAP operating profit at about RMB 750 million to RMB 850 million.

Your next question will be from the line of Eric Wen, Blue Lotus.

Hi. Hi. Thanks for taking my questions and congratulations on the very strong quarter and outlook. We just noticed that the January ticketing volume of the major Chinese airlines seems to be registering a healthy rebound. Can we comment on whether this will sustain as a trend in the rebounding in Chinese travelling overseas in 2017? And can we elaborate on the latest outlook and cross currents regarding to Chinese overseas travel?

January, this year, the Chinese New Year is a little bit earlier. So we have to add January and February together in order to get apple-to-apple comparison. But, in general, as long as the GDP growth rate is healthy, travel industry growth is healthy, Ctrip should do very well in the market as well. And to support our airline partners to make sure we drive volume for all our partners in the air industry.

Your next question will be from the line of Jin-Kyu Yoon, Mizuho Securities.

Hi. Good morning, guys. Just a couple of things. First of all, is there any material seasonality difference between Ctrip and Skyscanner? And second of all, did I hear you correctly? Did you say it was RMB 750 million to RMB 850 million on the bottom line for Q1? Just to want to make that clear. Thanks, guys.

Yes. Given that Skyscanner, their total revenue contribution to Ctrip as group is still not material, so their seasonality won't too much impact Ctrip's. But (53:50), worldwide, normally summer is the peak season.

Got it. And then on the bottom line, can you – just wanted to clear up, was it RMB 750 million to RMB 850 million on the bottom line you set for Q1?

The non-GAAP operating margin will be around RMB 750 million to RMB 850 million for Q1 2017.

Got it. Perfect. Thanks guys.

Thanks.

Your next question will be from the line of Ronald Keung, Goldman Sachs. Ronald Keung - Goldman Sachs (Asia) LLC: Hi. Thanks and congratulations, James, Jane and Cindy on the very strong results. There were questions about take rates earlier, so I just want to follow-up on how are you seeing the low-end hotel in terms of take rates and the competitive landscape on that? And, for air ticketing, just want to know how the cross selling initiatives at Qunar, are you seeing improvements in that as well? And on corporate travel, you beat your target quite significantly in the fourth quarter, but you're expecting 10% to 20% growth in the first, is this a segment that's surprising you so far? Thanks.

So, first of all, on take rate, I think so far the market has been quite healthy. We will make sure the take rate is reasonable so our hotel partners and Ctrip and customers will have a win-win-win arrangement in the hotel business. In terms of the lower tier cities, these hotels are really selling at very low price, somewhere around $15 to $30. So, at that level, it's very hard to make significant profit from these hotels. So, strategy we have is we're very willing to invest in this segment to lower the price and penetrate into these markets. So that's on the first question. The second is on the cross-sell air ticket. Yes, air ticket is the first stop for our customers. So, we will study – use our big data to study our customers' behavior to make sure whatever they need during their trip will be promoted and sent to them very smoothly to make sure we give them a comprehensive product offering. And thirdly, on corporate travel, Ctrip is a dominant player in China for corporate travel. Its volume already has far exceeded number two and number three combined. And going forward, the team is very innovative. Not only we focus on the core business air ticket and hotel, we also penetrate into their OA system, penetrate into their technology to make sure the approval process can be done on a mobile to streamline the processes. So, going forward, we also will put lots of investment in the technology and gain market share in the corporate travel market. Thank you.

Your next question is from Juan Lin, 86Research.

Hi. Good morning, James, Jane and Cindy. Congratulations on another very strong quarter. My question is related to your low-tier city penetration strategy. In particular, what is the marketing strategy in 2017 in terms of standing and the direction of marketing platforms and channels? And my second question is related to train and bus ticketing. Wondering what is the current revenue contribution by train and bus bookings and also the take rate and take rate trend for these business lines. Thank you.

I will take the first question and Cindy will take the second. For the penetration into the second tier, third tier cities, we always have our strategy to further penetrate into the lower tier cities. So, this year, we will allocate more marketing dollars to aggressively gain this market share. With the GDP level that's increasing, I think some advanced investment in this area will give us the advantage in terms of leadership in this market. In terms of the sales marketing platform, these lower tier cities is quite different from first tier cities, so our team is going into these cities to make sure we select the most efficient marketing channel in order to increase our ROI for the strategic investment in these cities.

So for the train and bus ticket, yes, those are two highest growth segments in Ctrip. And in terms of volume growth, they already surpassed air ticket to contribute the highest volumes in Ctrip group because the market size is much bigger than all the other – in terms of volume, is much higher than the other revenue segment. But the take rate for these two business lines is still comparative lower. So it now contributes about 10% to 15% of the total ticketing revenues – transportation ticketing revenues.

Your next question will be from the line of Jed Kelly, Oppenheimer. Jed Kelly - Oppenheimer & Co., Inc.: Great. Good morning, management. Thank you for taking my question. Can you provide any additional color just on scaling your product and development expenses in 2017?

Yes. In 2017, currently, we do not plan to add head count unless it's really critical. So with the current infrastructure, we will be able to increase our top line. The main investment we will have is mainly in the technology front because if our engineers are able to automate a lot of standard processes, they will be able to cut lots of cost. So, currently, the margin guidance as well as the top line guidance reflects our scalability.

Your next question will be from the line of Thomas Chong, BOCI.

Hi, and good morning. Thanks management for taking my questions. I have two quick questions. First is about our strategic outlook and what management thinks is the key challenge in coming years? And secondly is about the overseas revenue contribution over the long run. Can management give us some color about the revenue between domestic and overseas in three to five years' time? Thanks.

Yeah. I think the opportunity for Ctrip is great. Although we are the largest player in the market, but the overall market share for Ctrip globally is very, very small. So, domestically, our goal is aggressively get into the second tier, third tier, low-tier cities, and we're very well prepared and allocate sufficient resources to do that. And globally, I think with the growth of the outbound travel, we will travel with our customers around the world and by providing the products they need around the world. And the recent investment in Skyscanner will also enable us to expand our footprint. So, right now, the contribution for international business is about 10% to 20%. Going forward, we like to grow it into anywhere between one-third, 40% or even more. Thank you.

Your next question will be from the line of Julia Pan, Kay Hian. Julia Pan - UOB Kay Hian Investment Consulting (Shanghai) Co. Ltd.: Yes. Congratulations on a strong quarter. And I have three questions. One, could you please give us some update on the contribution of outbound travel for each segment? And in terms of the international expansion, which market will you be focus on? And could you please give us some update on the travel market in U.S. and Europe and India after we made the investment? And also, for Skyscanner, could you please give us some of the latest update for this quarter? Do you think the healthy margin of 20% to 25% to be sustainable and with the competition environment in Europe? Thank you.

Yeah. Outbound travel, as we discussed before, is similar between (01:03:36) business items, hotels, outbound travel, international hotel accounts for about 15% to 20% of the total accommodation reservation revenues. And for the air ticket, international air ticket accounts for about 30% of the total air ticketing revenues. For packaged-tour business because now outbound travel has predominantly become the mainstream of the packaged-tour business, so international or outbound travel contribute over 50% of our total revenues in the packaged-tour business. Yeah. In terms of the footprint, I think Ctrip will focus on domestic extension into the lower tier cities and, also Asia, because we're so close to Asia, so obviously, Asia country becomes very important. Our partner, Skyscanner, their price comparison metasearch engine in Europe and their brand is very well recognized in the air ticketing business. So we will work with them to learn from each other and to strengthen each other's service and products going forward. Thank you.

Your next question will be from the line of Alex Liu, Daiwa. Alex Liu - Daiwa Capital Markets (Hong Kong) Ltd.: Hi. Thank you, management, for this opportunity. I'm just wondering, just a quick question on the cash flow. I think, considering the future, our cash flow will likely to continue improving. I'm just wondering is there any point that we start to pay dividend in the future.

Yeah. I think if – there are two options. One is to reserve the cash, so when there is a good opportunity, we will make strategic investment to increase the value for the shareholders and that historically has been very successful. If you look at our balance sheet, historically, we always make investments when market had a downturn, and then established a leadership in the strategic area such as hotel. We made investment in major chain hotels. For the international players, we made investment in the number one player in Hong Kong, number one player in India, and all these investments were made at a low point when market lost the confidence, but we know the company is very strong. And historically, these investments have generated double, triple or even 10 times the return. So that's one option. Another option is give this money to shareholders and if we feel that or – we always have to balance what approach will give our shareholders the best return and we will choose the approach that generates the best yield and best return for our shareholders.

Your next question will be from the line of Alvin Jiang, Deutsche Bank.

Hi, James, Jane, Cindy and Michelle. Thank you for taking my question. And I only have a very quick on the outbound travel, because we saw the tourist number year-on-year growth in this Chinese New Year was only 6% to 7% year-on-year growth. Do you have little bit concern on this low growth in outbound tourist number or do you see the price upgrade or other factors can more than offset of this slowdown in outbound traveling? Thank you.

Yeah. This year, it's a little bit slower than last year, but still healthy. From our view, we still grew very healthily. Our air ticketing business still is growing for outbound business more than 50% year-over-year. So I think the way we need to stand out in a tough environment is really through the service and product offering, which we will stay strong. While the other players cannot perform, we'll be able to give customers the best product and services. And we are still positive on the outbound travel.

Your next question will be from the line of Billy Leung, Haitong International.

Hi. And thanks for taking my question. Just one quick question is in terms of the hotel business, could we just get a rough idea of whether (01:08:40) of that revenue is split between high-end hotels and low-end hotels? Thank you.

Yeah. We have probably the most comprehensive product offerings both domestically and internationally in the hotel business. But still, high-end – for three above or three, four, five star hotels contribute vast majority of our revenues and maybe 100% of our bottom line for the hotel business.

Your next question will be from the line of Justin Patterson, Raymond James.

Hi, good morning. This is James on for Justin. Congrats on a solid quarter. I was hoping to circle back to the margin expansion we've seen the last couple of quarters. Wondering if you could rank order the different drivers of that expansion? And also moving into 2017, just wondering what the biggest puts and takes are there just in terms of expanding that margin further? Thanks.

Yeah. As we discussed, I think margin expansion comes from a couple of things. One is strong revenue generation from the top line. Secondly is our scalability. As we grow so big, we do not plan to add head count. Instead, we will automate a lot of standard procedures in order to expand our margin. And thirdly, we also need to make sure that we reserve sufficient resources for us to further invest into future, including the investment in the lower tier cities. So, the margin guidance reflects a comprehensive view in terms of improving margin as well as the future investment.

Your next question will be from the line of Jialong Shi, Nomura. Jialong Shi - Nomura International (Hong Kong) Ltd.: Hi. Good morning, management. Thanks for taking my call. Congratulations on a solid quarter. So I have a housekeeping question. I just wonder what kind of hotel revenue growth you would expect for 2017 and which should be the bigger driver behind such growth, is that hotel volume or net commission rate?

We provide the guidance only for the first quarter of 2017. When we have a good visibility toward the end of the year, maybe we will provide the guidance for the 2017 full year guidance. So, for the first quarter, including the negative impact about 5% to 10% from the VAT tax, our total revenues for the accommodation reservation will grow about 20% to 30%. This growth was driven by both the volume as well as the margin.

At this time, I'm showing no further questions in queue, I would like to turn the call back over to Michelle for any closing remarks.

Thanks. Thank you, everyone, for joining us today. You can find transcript and webcast of today's call on our IR website. We look forward to speaking with you on our first quarter 2017 earnings call. Thank you and have a good day.

Thank you.

Thank you.

Ladies and gentlemen that concludes today's conference. We thank you for your participation. You may now disconnect. Have a great day.