Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Autohome Inc (ATHM, Financial) reported a 5.6% year-over-year increase in average mobile daily active users, reaching over 70 million.
- The company successfully organized over 500 offline auto shows in low-tier markets, enhancing consumer engagement.
- Revenues from the online marketplace and other segments increased by 3.1% year over year.
- Autohome Inc (ATHM) expanded its new retail business into lower-tier cities, establishing a network of over 50 stores.
- The company strengthened its cooperation with Ping An Group, introducing innovative products and services across various sectors.
Negative Points
- Autohome Inc (ATHM) experienced a decline in gross margin to 77% from 80.4% in the same period last year.
- Operating profit decreased to RMB83 million compared to RMB166 million in the third quarter of 2023.
- Adjusted net income attributable to Autohome was RMB497 million, down from RMB604 million in the corresponding period last year.
- The ongoing price war in the auto industry has negatively impacted the profitability of car companies and dealers.
- The used car market remains sluggish, with a significant decline in trading volume and profitability.
Q & A Highlights
Q: What are the impacts of the ongoing price war and trade-in program on the industry and Autohome?
A: Tao Wu, CEO, explained that the price war among major car companies has slightly eased but continues to impact profitability, with average profit margins in the auto industry dropping to 4.6%. Dealers face significant pressure, with many operating at a loss. The trade-in policy aims to stimulate the market, and while the price war has affected Autohome, the company remains optimistic about long-term growth in the auto market.
Q: Can you update us on the progress of the new retail model for NEVs and the satellite plan?
A: Tao Wu, CEO, stated that Autohome has over 50 space and satellite stores, with space stores in higher-tier cities and satellite stores in lower-tier cities. This model helps OEMs optimize costs and expand channels efficiently. The NEV brand revenue is growing steadily, and Autohome plans to expand the number of stores and enhance the business model.
Q: What is the management's view on the 2025 used car market and shareholder return progress?
A: Tao Wu, CEO, noted that the used car market faces challenges due to the new car price war, with trading volumes increasing only slightly. Autohome plans to focus more on the B2B market. Regarding shareholder returns, Autohome has announced a RMB1 billion dividend payout and a USD200 million share buyback plan to enhance shareholder value.
Q: How does management view OEM advertising budgets for the fourth quarter and next year?
A: Tao Wu, CEO, mentioned that OEMs are cautious with advertising budgets, balancing them with price war subsidies. While some OEMs may cut budgets, others may increase spending to meet sales targets. The outlook for next year depends on market conditions, but there is potential for improvement.
Q: What is the progress on contract renewals with dealers?
A: Tao Wu, CEO, stated that Autohome's contract renewals for lead subscription packages have been stable, with strong dealer recognition and reliance on their services. Autohome plans to leverage big data and technology to enhance dealer support and improve service precision and efficiency.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
