Company Profile

Beijing UTour International Travel Service Company Limited wholesales and retailsoutbound trips, and Meetings, Incentives, Conventions and Exhibitions (MICE) tours.Event

Beijing Utour International Travel Service spent USD 25 million (CNY 162 million, cashand equity) buying 5.499% stake in qyer.com through its Hong Kong subsidiary.Although Alibaba and Trust Bridge Partners have stepped into the target earlier, itsfounders still retain majority ownership after this transaction.Investment Highlights

Founded by a group of Chinese students studying in Europe, qyer.com originallytargeted at their peers and provided travel information of European destinations. Now ithas developed out four major products: APP, shoestring guide, itinerary maker andselections of discount stores, covering over 300 places. Hundreds of millions of viewersdownload these tools to plan their trips.

There are 6000 “travel-geeks” registered on qyer.com, which will enable relatedcompanies conduct more effective marketing campaign. We believe not only travelagencies but also attraction operators, hotels, restaurants and even airlines willgradually approach qyer.com in the future to launch ads for deepening theirimpressions on the market. They may pay commission for consumers redirected fromqyer.com as well.

Posting ads is usually charged per CPC (cost per click) or CPM (cost per impression) orqyer.com can make profits through offering additional service, for example, a hotelwants to spend more money putting on its pictures. And data shows that 8%-10% ofqyer.com's members will make orders on Booking.com after visiting the website whilethe proportion of users of Booking.com itself is only 2%-3%, demonstrating advantageof the channel in accurately distributing travel products.

Earnings Forecast and Investment Recommendation: Qyer.com has made CNY18.98 million in revenue by the end of 15Q3. The net profit was CNY 420 thousand. Andconsidering Beijing Utour International Travel Service may sell its products leveragingqyer.com's client and destination resources, we made EPS forecast for the company atCNY 0.60 in 2016 and CNY 0.77 in 2017.

Potential Risk: terrorist attacks in Europe.