Autohome Inc. Price & Performance (ATHM)

Potential risks and uncertainties include, but are not limited to those outlined in our public filings with the U. S. Securities and Exchange Commission and the Hong Kong Stock Exchange, Autofome does undertake any obligation to update any forward looking statements except as required under applicable law. Please also note that Autohome's earnings press release and this conference call include discussions of certain unaudited non GAAP financial measures. A reconciliation of the non GAAP measures to the most directly comparable GAAP measures can be found our earnings release I will now turn the call over to Auto Home CEO, Ms. Yang, for opening remarks. Please go ahead, Ms. Yang. Thank you for Sterling. Hello, everyone. This is So, yeah, Today is my first time to join the earnings conference call as the CEO of the company. We suppose you have read the update filing by the company earlier today Hire Group has become the new controlling shareholder of OrthoHome Autohome. Autohome as China's leading online automotive consumer platform is supported by the core foundation of data plus technology. Both a broad user base deep industry insights professional content, a strong network of OEMs and dealers and a strong financial system.

Higher strategic investments reflect recognition of Autohome's business model and the market potential. And we will inject new vitality into Autohome's long term development. In the future, Autohome will serve as a key hub in Hire's automotive industry ecosystem continuing to solidify and develop the existing businesses while leveraging advanced management experience of higher and operational systems of Cartag in deeper user experiences smart software connectivity and the new automotive retail to continue to strengthen Autohome O2O intelligent exchange and a comprehensive service capability. Further driving innovation and growth for the company and better serving every user. At the same time, Ping An Group will remain as a key shareholder of the company will continue to strongly support Autohome's long term development. Let us take an overview at the company's financials. Earnings [indiscernible] We concluded 2024 strongly with significant breakthroughs across each of our innovative businesses. Total revenues for the year reached RMB7.04 billion with revenues from online marketplace and others increased by 8.1% year over year. And accounted for 33.8% of total revenue. Notably, our NUV business maintained strong growth momentum with revenues in 2024 increasing by 55.2% year over year.

Adjusted net income attributable to AutoHome in 2024 reached RMB2.05 billion AOD and adjusted net margin of 29.1%. Additionally, we announced a combination of RMB1.5 billion in dividends the year. And as of last week, had repurchased approximately US88.5 million dollars worth of shares Moving forward, we remain committed to executing the Board's approved dividend and share repurchase program, enhancing our shareholder returns. Our strategic focus throughout 2024 was integrating our online to offline ecosystem highlighted by significant milestones in user growth. Enhances our content matrix, expansion of our new retail business and deployment of AI applications, which were particularly successful for our innovative businesses, I'd like to take a moment to review these achievements in greater First, our online traffic reached new highs again with average mobile DAU exceeding 77,000,000 in December 2024, reflecting the effectiveness of our high quality content driven strategy. Driving user growth We also expanded partners with multiple Internet platforms leveraging open collaboration to engage with a broader demographic and expand our reach. Second, since the launch of our first Autohome space stores in 2022, a subsequent large scale rollout at the end of twenty twenty three, and the accelerated expansion of satellite stores into low tier cities in 2024, we've made substantial progress in building out our offline The total number of franchise offline stores now exceeds 150 generating strong brand aggregation and extensive channel coverage.

At the same time, we held more than 1,100 cities trading for new auto shows in over 200 cities during the year, effectively promoting trade in for new and the AEVs into rural areas policies In terms of technological innovation, we've simply see integrated AI across all aspects of our business. From content creation for consumers to operational management and decision making analysis for clients, significantly enhancing productivity and operational efficiency for our customers. Automobile play a crucial role in driving domestic demand and expanding consumption. Making the industry vital to China's economy growth. In the automotive media sector we'll continue to build differentiated competitive advantages by diversifying and expanding online traffic through our professional content matrix and ecosystem of partnerships, We also deepen our presence in offline regional markets with improved services for users and leverage our digital tools to connect online and offline operations.

By utilizing our deep understanding of consumer needs and capitalizing our opportunities to transform the industry, We are building a virtuous cycle between our online and offline businesses. Looking forward, we'll continue to target substantial business opportunities we see in low tier markets deepen our presence in these regions, upgrade and refine our business models and enhance operational culture quality to propel our development of new heights. With that, I will now turn the call over to our Chief Financial Officer, Craig Zeng, for a closer look at our fourth quarter and full year 2024 operating and financial results. Thank you, Ms. Young. Hello, everyone. I'm Quixong, CFO of Autohome. Hariha Sunyan, In 2024, we continue to make progress in content development leveraging our professional evaluation capabilities and the deep understanding of our user needs, we focus on two core technological areas: smart vehicles and AV. With this in mind, we've developed a series of professional IP matrices that are both useful for users and beneficial the industry [indiscernible] For example, in December, we launched the first winter dual temperature test program focused on NEV. This initiative directly [indiscernible] three major industry pain points under low temperature conditions short range, slow charging and high energy consumption.

We conducted comprehensive tests on the reliability and the comfort of vehicles in low temperature environments covering more than 50 models across 30 brands, generating over 600,000,000 deals across various platforms. And scoring the industries broad recognition of our expertise in professional content [indiscernible] So that [indiscernible] Additionally, our content localization strategy was successfully implemented in several pilot cities such as Chengdu and Tian these locations, we adopted an open platform model to create localized content channels that integrate services and promotional activities from local automotive partners This approach connects regional user needs with local resources forming a complete closed loop from user demand [indiscernible] This initiative not only helped us acquire traffic from low tier markets but also lays a foundation for the further expansion of our regional businesses. According to press mobile data, the number of our average mobile DAUs in December 2024 reached $77,480,000 an increase of 13.6% from the same period in 2023, reflecting our leading position in the automotive media vertical. Turning to NEVs. During the fourth quarter, our new retail business focused on strengthening operations in online live streaming and offline activities online, we utilized its exhibition halls and holographic cabin at Autohome Space stores to boost local user acquisition capabilities through live streaming.

Offline, we leveraged vehicles from several brands to create curated sales events that simplify the car selection process for users while making purchasing more cost effective. We also observed rapid growth in new media metrics accounts and the key influencer accounts related to new retail in the fourth quarter, driving significant growth in both lease and transaction volumes on a sequential basis to date, we have established 28 franchised auto home space stores and more than 130 satellite stores [indiscernible] We are also pleased to report that total revenues from NEVs during the year including those from the new retail business, increased by 55.2% from last year reflecting its huge growth potential. In addition as China's largest automotive Internet platform national trade in policies We aggregate subsidies policies and promotional offers from manufacturers in real time through our online platform providing users with a one stop survey for discount information and automatic matching of benefits that accelerate demand for vehicle upgrades and trading. Moreover, we organized the 100 cities trade in for new series of offline auto shows to bring our products and services into third and fourth tier cities. By focusing on these low tier markets, we create transaction scenarios and facilitate the implementation of Precin for New and NEB policies in rural areas.

In 2024, we hosted nearly 1,000 offline also shows covering almost two fifty cities nationwide.

With over 80% of them in low tier cities. During the fourth quarter, we prioritized AI driven upgrades for our products particularly for lead subscription package services. For example, our AITC Video Generation two now features modular graphics and video production capabilities that greatly enhance the format of content while empowering dealers to create high quality content efficiently. Additionally, it also supports one click distribution of content across multiple mainstream media platforms, significantly improving operational efficiency for dealers. We also integrated AI into core products for dealership operations. For example, in lead management, AI driven smart follow ups provide dealers with comprehensive strategies and tools for managing to leads from initial contact into the transaction, improving store staff issue resolution efficiency by over 20%. In business management, AI incorporates each source operational data and standardizes complex operational data analysis process so that managers can quickly obtain insights to guide their decision making. These upgrades not only enhance the efficiency of content of creation and distribution, but also significantly improved operational and management efficiency of dealership for our used car business, in 2024, we enhanced digital application providing users and clients with a broad range digital inquiry and other marketing tools such as vehicle condition, and pricing to enhance the user experience and improve clients' operational efficiency.

We also continue to strengthen vehicle sourcing, particularly for certified high quality vehicles to ensure vehicle quality and promote the healthy development of the industry. Over the year, the number of average daily certified vehicles on our platform almost doubled compared to the previous year. Moving forward, we will continue to focus on strict cost control while optimizing operational efficiency to ensure the stable development of our business. Before discussing the specifics of our financials, I believe everyone has already noted that the decrease in our media services revenues during the fourth quarter narrowed significantly on the back of improving auto sales market. Looking ahead to the New Year, we hope to see our traditional business continue to stabilize and recover as we will continue to prudently invest in innovative growth initiatives in order to achieve our dual adaptive of business expansion financial stability. With that, let me briefly walk you through key financials for the fourth quarter and full year 2024. Please note that I will reference RMB only in my discussion today [indiscernible] Snap revenues for the fourth quarter were 1,780,000,000.00 Breaking it down, media services revenues were $437,000,000 List generation services revenues were $750,000,000, [indiscernible] were RMB588 million, up 3.3% year over year. [indiscernible] On cost, cost of revenues in the fourth quarter was RMB420 $9,000,000 compared to $368,000,000 in the first quarter of twenty twenty three.

Gross margin in the fourth quarter was 76% compared to 80.8% of 2023. Turning to operating expenses. Sales and marketing expenses in the fourth quarter were RMB718 million, compared to RMB730 million in the fourth quarter of twenty twenty three. Product and development expenses were RMB $328,000,000 compared to RMB $356,000,000 the first quarter of last year. General and administrative expenses were 131,000,000 compared to RMB 157,000,000 during the same period of 2023. Overall, we delivered an operating profit of $232,000,000 in the fourth quarter compared to RMB367 million for the same period of last year.

Adjusted net income attributable to Autohome was $487,000,000 in the fourth quarter compared to $5.00 $3,000,000 in the corresponding period of 2023. Non GAAP basic and diluted earnings per share in the fourth quarter were both one compared to 1.04 in the corresponding period of 2023. Non GAAP basic and diluted earnings per ADS in the first quarter were $4.02 and $3.99 respectively compared to 4.15 and 4.14, respectively, in the corresponding period of 2023. Now I'll briefly summarize our 2024 full year results. Total revenues were RMB7.04 billion, of which media services revenues were RMB1.52 billion, lease generation services revenues were RMB3.14 billion, and the online marketplace and others revenues were RMB3.4 billion. RMB2.38 billion, an increase of 8.1% year over year. In addition, we delivered an adjusted net income attributable to Autosome of Autohome billion, with adjusted net margin of 0.1%. As of 12/31/2024, our balance sheet remains robust with cash cash equivalents and short term investments of 23 point we generated net operating cash flow of RMB1.3 billion, $37,000,000,000 twenty twenty four. On 09/04/2024, our Board of Directors authorized a new share repurchase program under which we were committed to repurchase up to $200,000,000 of Autohome home ADS for a period not to exceed twelve months thereafter.

As of 02/14/2025, we repurchased approximately 3,300,000 ADS for a total cost of approximately 88,500,000.0 S. Dollar. The above is our financial summary. With that, we are ready to open Q and A session. Operator, Thank you. We will now begin the question and answer session. First question comes from the line of Thomas Chong of Jefferies. Please go ahead.

Thanks, management, for taking my question. I will transfer my questions. Two questions. First is, for the transaction with Cartag. So what's the background and the purpose of this transaction? And how it will impact our business in the future and in what areas plan to cooperate. And my second question is, we saw the recovery in the fourth quarter in twenty twenty four. So how's the reason the positive policies will impact Autohome market and And [indiscernible] And what's the management outlook for the Automarket 2025? Thank you for the question. My name is Yang Song. Firstly, we cannot comment on higher investment decision making. But we believe that Hyer's Kartik strategic shareholding in Autohome is a decision based on multi phased considerations, As you know, stated in the news release are higher as China's leading online service platform for auto automotive consumers, Autohome own takes data plus technology as its core support. And it has a wide use base. In-depth industry insights, professional content, as well as strong network of vehicle manufacturers, OEMs and the dealers and a stable financial system, higher strategic shareholding reflects its current mission of Autohome's business model and the market potential And we are also injecting vitality into the long term development of Odohome.

In the future, as a key hub in higher Autohome and develop its existing business and at the same time draw on higher's advanced management experiences on the Cortex operating system to further promote the company's innovation and growth, we aim to better serve every users and the customers At the same time, HireWao utilizes its leading advantages in technological innovation, user insights, consumer services system and the human and order combination management model integrates the online offline integrated operating of Cartag's especially its advanced store management, inventory management experiences and comprehensive Empower Autohome. It will also develop game synergy in the field of in-depth user experience intelligent hardware connection and automotive new retail and continuously strengthen Autohome's O2O interaction on the comprehensive operating and service capability. So overall speaking, we firmly believe that by combining the resources and the professional knowledge of the two parties, more synergy can be created. Providing users with more high quality and innovative solutions In addition, I have a supplementary notice After the transaction is completed, Ping An Group will continue to be the major shareholder of Autohome and the deep collaboration with Autohome in multiple assets such as after sales vehicle services, online marketing and support the long term development of Autohome together with Hyre.

Now it would be my great pleasure to answer your second question.

Thank you for the question. I consider this to be a great question. According to the official data, the auto market performed strongly in the fourth quarter of last year. We sell volume increased by 13.2% year over year We believe that this is mainly because approaching the end of the year auto companies made efforts to achieve their annual goals. We coupled with the exploration of some two new policies at the end of the December, it effectively boosted the auto market sales and helped the recent recovery of the industry confidence.

The social of Vuzhou As you know, as a professional vehicle media platform in the automotive industry, in order to meet users' needs, for the two new policies, which is the large scale equipment renewal and the consumer goods trade in incentives, And we do see that OTOOM has created a localized content channel, integrated and updated the local trade in for new policies and accurately connected user needs with local resources. According to the Quest mobile data, shows that in December of twenty twenty four, the average daily number of mobile users of automotive increased by 13.6% year over year. Further consolidating its industry influences. At the same time, with the recovery of the auto market, Autohome's media business has also picked up growing by 34% quarter over quarter We expect this trend to be continued in 2025. Next, I would like to share with you my outlook. For 2025. According to the market detailed sales in 2025, it will increase by 2% year on year And also, we can see that the cumulative retail sales in 2024 increased by 5.5% year over year, among which the retail sales of new renewable energy passenger vehicles will increase by 20% year over year.

And the penetration rates will reach to 57% We believe that this overall pattern of auto market in 2025 will be stable and positive under the following trends may be shown. I would like to provide you with three detailed [indiscernible] So firstly, we do see continued favorable policies and steady growth of the auto market. And secondly, we do see the continuous growth of the renewable energy vehicle and also the emergence of the intelligent trends And thirdly, we do see the industry price competition will continue. In summary, in the long run, with the continuous development of the renewable energy vehicle industry and the government, introduction of the new favorable policies to support the auto market consumption we believe that the auto market will have strong long term growth and we will also continue to deepen our efforts in the new renewable energy business and develop healthy together with the Chinese automotive industry. That's all for my answer. Thank you very much.

Thank you for the questions. Next question comes from Brian Kong from Citi. Please go ahead. I will trust myself, sales management for taking question. I have two questions. First is regarding our lead generation business. How is the contract renewal situation so far?

And any areas to further explore potentials for this segment? And the second question is about the outlook, 2025 outlook for used car market. And when does how much in the expected when management is expects this industry and our business to recover? For used car business? Thank you.

Thank you very much. I would like to take your questions. Talking about the renewal of the Bilibili Connect Actually, it started at the end of twenty twenty four as usual and was basically completed after the Spring Festival in 2025. The renewal situation is very good. Actually, it's exceeds 85%. Which is better than previous year. Why we can achieve such success is because of the two factors. One is the product to operate. Full scale AI implementation, upgrading on platform information data and workflow through AI operation reduction, AI for us, efficiently improvement on AI decision making system, it reduces cost and increased revenue for dealers. And secondly, the brand advantages. We have very strong brand influence, high user traffic, and also we have the optimized operating experience and the comprehensive service guarantee continuously attract a large number of customers to renew. And also I want to talk about the business potential. In the following three aspects.

The firstly is the Chinese auto market. Although, maybe different source may have different projection, but we believe the overall trend would be up If the total sales go up, the lease would also go up. That is for sure the trend. And also we can do more on digitization and intelligentization. For example, we can further optimize AI technology to achieve more accurate customer portraits and personalized recommendation. Helping the dealers to reach targeted customers in a more effective way We can also analyze the users' car and using big data and AI to better achieve more efficient targeted market strategy suggested for dealers. And also we do see more pinotence in more coverage In the past, our market is more focused on the big cities And in the future, we can get into the down market, which is more at the lower tier cities and help us to achieve more customers. And secondly, in terms of the lead business, we focused a lot on new customers. In the field and etcetera. So in this way, we can further expand the business growth. Now talking about your second question, which is about the used car business. I should say in 2024, the used car sales increased while the profits declined.

The annual used car transaction volume increased by 6.5% However, out of the top 100 user car dealers, 49 had a single vehicle gross profit margin, which is only between 4% to 6%. And 29% had a GP margin of less than 4%. [indiscernible] Now talking about why the reason of sales growth for example, they are from the policy support, for example, the trading for new policies in the new car market has driven the replacement demand for used cars to a certain extent and also cross provincial business handling under the listing of the National five emission limit has simplified the trading process reduced the trading costs and improved the trading efficiency. What's the interesting part is about the renewable market used car. In the past, there are a lot of not so transparency in this market and the volume is not big.

However, the transaction volume in 2024 exceeds 1,000,000 vehicles, an increase of 48% year over year, which is an important driver for the market growth. Well, there are pros and cons. For example, the reason for the prop profit declining is mainly due to the price warms. In the new renewable new car market, which have led to large fluctuation in the purchase and the sales price of the used car and extended inventory cycle and a difficult capital recovery So this single vehicle gross profit margin of used car dealership enterprises had generally declined. [indiscernible] Now I would like to share with you my outlook for 2025.

Firstly, the market. With the continuous implementation of the trading for new policy, the market demand would continue to be released, coupled with the promotion of the renewable energy used car, the sales volume of the used car industry in 2025 is expected to continue to grow. Talking about the price war, I should say in 02/2025, the price war would continue, but the volatility would be less. We do believe that that would help to improve the market We are aiming to address the pain point in the market for example, to enhance the transparency of the user in terms of the pricing and the condition of the car So that's why in Autohome, we want to promote the trust worthy used car source, which would increase significantly So this certified and high quality car source usually has higher selling price and we help the dealers to improve the profitability. And also digital tools such as vehicle condition and price queries can effectively improve the business equation efficiency. So in this way, we believe that the overall momentum is that it will be long term growth. Of the market, but do not expect to see short term outbursts of the rapid growth of the market.

Thank you for the questions. One moment for the next question. Our next question comes from the line of Xiaodhan Zhang from CICC. Please go ahead.

Now we're So thanks management for taking my questions. And could you please share your outlook on 2025 revenue and margin outlook on the NEV's new retail model and how should we think of its expansion pace going onwards? Thank you. Well, thank you very much for the question. As you know, the renewable energy vehicle is one of the key development strategy for Autohome. And we believe that the new retail business, we will focus more on O2O the online and offline collaboration. We believe that this would be the major driver for the future growth of the business. Actually, our plastics experience shows that this is a very good strategy For example, in 2022, we only have one space store in Shanghai. By the end of twenty twenty three, we have 28 space station franchise stores. Since we started testing the Seismic stores in May, but also the total number of the space station has satellite franchise station has now exceeded 150 So it can be seen that the construction of our offline channels have taken initial shape, achieving the wide coverage of the high and the low tier cities. [indiscernible] And this year, we will continue to explore, especially in the lower tier cities.

We want to have a wide coverage in the smaller and the lower tier cities. In terms of the profit, we believe the profit would be reasonable and it is not a cash burning business. For the renewable and the new retail business. And we want to see that our franchisees can achieve the balance [indiscernible] terms of its financial recovery in balance in the short term. So in this way, our 2025 business will continue to grow.

Thank you. One moment for the next questions. Our next question comes from the line of Richardson from HSBC.

Thank you management for taking my question. I want to ask how should we think about or what is your view on further lifting the payout ratio or show the return?

Thank you.

Well, thank you very much for the great question. Actually, if you look at the past three years, in 2022, we had already paid 5,000,000 dividend payout. In 2023, this number reached to RMB1 billion and in 2024, it further reached to RMB1.5 billion. And also, our Board of Directors also made a promise that in the future in the next three years, we would pay out no less than RMB1.5 billion. Addition to the dividend payout, we also find out other ways to, for example, for the share buyback policies, to better boost our share price. It helps the investors to reduce its risk. Actually, out of these 200,000,000 share buyback plan, as for now, we had executed approximately US88.5 million dollars So in the future, in addition to the dividend pay out, we will continue to do more share buyback policies and other effective way to help to better giving back to our shareholders. [indiscernible] Thank you. There are no further questions at this time. I will turn the conference back to management for closing.

Thank you, everyone. Thank you very much for joining us today. We appreciate your support to the company and we look forward to updating you on our next quarter's conference call in a few months' time.

In the meantime, if you have any questions, please feel free to contact us And thank you for joining us today. Thank you, everyone. Bye bye. [indiscernible]