Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, thank you for standing by for Autohome’s First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference call is being recorded.

If you have any objections, you may disconnect at this time.

pleasure your my Autohome’s Sterling now Director. IR is to host, introduce Song, It Mr.

ahead. go please Song,

Sterling Song

Thank evening, call. Operator. you website first distributed you, at Good earnings may quarter to Song. its on XXXX Autohome’s find Welcome www.autohome.com.cn. a earnings the release conference press Earlier copy Autohome everyone. today, and I’m company’s Sterling

prepared team On we have Craig Mr. be the and Long; Officer, answer today’s Chairman Mr. Officer, your management call, Chief Zeng. Yan remarks, available to the After Quan will and Chief our Financial questions. Executive

note we continue, Harbor the Before Private of contain will forward-looking the of made please Securities Safe that the discussion Reform Act XXXX. today under Litigation U.S. statements provisions

to Kong materially subject except of filings Forward-looking doesn’t Potential undertake to include, U.S. stock public the are with obligation and exchange any and expectations. risks but statements Exchange uncertainties to risks the cause applicable limited in Limited. law. are our Autohome differ required outlined and our under to from update those not Commission forward-looking that Hong Securities current any uncertainties as may and statements, actual results

to unaudited Please financial conference call on IR the most certain and measures is also measures. GAAP earnings and this reconciliation that discussions website. which available of Autohome’s Please non-GAAP note release includes contains release, measures to Autohome’s press our refer a the press non-GAAP of directly comparable

As a recorded. conference being this reminder, is call

conference IR of webcast earnings website. archive call on also and live this a addition, be will In available Autohome’s

I and ahead. opening Autohome’s Please CEO, Chairman will Mr. over for turn remarks. to now Long, go call the

Quan Long

despite for We start with challenging robust the off auto of Media CEO everyone. revenue saw Chairman Hello, to a conference growth year-over-year increasing call quarter market. year-over-year. a This today. Long, everybody. got and Thank XX.X% earnings of first revenue X% you Autohome. Thank our Quan services by joining total solid in you, is

new contribution energy TPP with rise brands and again growth the data the returned once continue growth from their products track Notably, market. revenues to rate to and from revenue the outperforming

our profitability. made also was solid adjusted the of comparatively income only year-over-year our first we at businesses, attributable progress improve XX.X% remained We level margin by a net our not and up in XX.X%. high net to Autohome quarter for Adjusted

a the year of to of of by initiatives began service. We service rolling our out the and series ecosystem, reach broaden customer user comprised dual

our focus span. consumers’ needs. aspects our user we from side, On our platform’s life This our range user-centric life car create make to consumption the enrich [inaudible] is of C-end a on cars’ platform shift content transforming all of capture expanding previous launched better strategy to wider our automobile and car services, to address overall

model retail On the to implemented customer to service and side, initiated Energy -- stores according Autohome replicate model replace the fully our new plan. we have Space quickly franchise

and in our horizons We maintain that AI-powered have new dealers. augmenting creation, and business technology more products offerings for our the These product strides data help for edge. have also broadened application digital advancements service competitive us scenarios made comprehensive with our products

ecosystem partner first the we Moreover, in its ERNIE Bot information Baidu’s connected automotive to becoming also industry.

propel jointly Autohome forward, the explore and Baidu large and will models. of Going language application

of we market maintain trajectory. consumer automobile vehicles trends continue to the a demand rise Looking into new expected greater penetration steady seeing will and XXXX, are and The released. in upward will rate positive to energy be

users. further our ecosystem, expanding to encourage to and auto serving create and which buyers will help additional auto among and groups the will government vibrant forward stabilize look also a more increasing continuously consumption. strive Meanwhile, we market supportive top user healthier our We policies, influence and

development in business development and our our transaction long-term to and environment. achieving costs concept, our leveraging partners to inclusive innovation committed to remain and technological We high-quality reduce core open and this decision-making ever-changing

turn to now first results. Officer, will our quarter I and Zeng Chief our closer over financial call Craig look operating Now, Financial with at for the that,

Craig Yan Zeng

everyone. Craig Long. CFO Thank I Autohome. of am Hello, Zeng, you, the Mr.

we During advance to innovation exceptional quarter, strategies. the experience content provide enhanced and first we product with to continued hand, On our users C-end implement drive services. to ecosystem one

focus On content the of We’ve formed creators small and our alliances. other content multichannel incentives, new media growth high-quality areas hand, drive and content creator a must we to content, on holistically encourage the across empowering ecosystem, tools through services user also diversified program creation. metrics

we the incentives in year, daily Conference, increase of at example, Creators new posted the introduced high-quality orders number of new our a Autohome and amount a significant platform. content beginning at For of resulting the in the series of

On launched content evaluation across regional the front, attracted more IP generating and with cross-border a the over million audience, interactions on massive It quarter first we elements. XXX auto in the Made XXX,XXX a China network. than views in entire combining

generated holographic for and AR Auto In a over resulting in of addition, pieces The the reading of X.X experience. an immersive over we Shanghai total car Show billion. provide utilized users Show XX,XXX exposure Auto to content, with technology

According to expanded In XX.X vertical. scale since by of million, our continuous automotive demonstrating our DAUs the to beginning in of mobile record March, traffic XX% year. the rapidly leadership high QuestMobile, increased year-over-year media Autohome’s has the reach a

users a comprehensive insights. with competitive For operations daily direct products, of intelligence from package traditional our landscape of customers business, lease range our provides subscription to empowerment the ranging and connection with

are By to and on data decisions technology, leveraging expansion profit front, our operations, transformation to able traffic respect optimization in user we more. our and operating dealer and advantages with support customer’s

models to business, to business new deep the we create As to growth we industry of innovative core our to understanding potential avenues. support our that address use identify expand trends explore enhance ability and our opportunities our

business, enriching continuously store process and offline operations in last cycles have our energy other since sites been user September adjusting [ph]. For as the optimizing first shortening experience launch we user our scenarios and driving new its test Shanghai on decision-making by

aiming than of the expand multi-brand our have scale XX clearly more stores construction already customers services with number to this year. started We’ve cooperative and new increased further brands of cooperation of the our the demonstrate model. Our retail efficiency of franchise services reached

a to quarter, increase outperformed the fourth of year-over-year from XX% growth the sales. with brands new of energy In revenue industry significantly rate vehicle contribution broader rise the continue

digital to on products. Moving

In line in to launched addition the base integrated This upgrading will existing in a data designed we Cloud, our product spots enhance address products fourth offerings new manufacturers quarter, product EV digital our continuously with new to data our provide Smart value. energy and vehicle solutions. greatly

service technology for data to enabling quickly to release we for integrated identified dealers products AI-driven Smart high users As improve increased production capacity which launch have effectively dealer too, and more an Selection, net worth new customers, dealers quality. and

rapid of all indicators for all of by by each in and experienced for double store of key data data dealer per dealer dealers. products, grew products prior the digits compared number for adopted data quarter, number to our first we customers upward year the the the period. a average product revenue the dealer trend average stores products data our During The of

We are now where powerful human active to create and together entering operations decision-making efficient come the of a intelligence model collaboration systems. era and

some Regarding the car the used in car on put business, fluctuating industry. new pressure car first used the prices quarter

car TTP, our businesses. growth, together used between the business with Y-o-Y Autohome’s we synergy achieved However, unit, demonstrating

services, In business Our and about X% of for whole the growth Y-o-Y used Autohome’s growth. of XX.X% our car China, transactions representing used nearly also platform through profitability. car auction all fourth maintain accounted as in a matching quarter,

transparent taken for we’ve sellers reliable cars support including improved products, consumption collision and of terms level. The the to repairs used the general repairs comprehensive next queries, our vehicle buyers battery and with too and new and providing conditions car energy two maintenance, environment. In conditions,

full Going platform forward, the users service remain one-stop used and for of a products. used car we’ll dealers by the SaaS supported industry, at creating our forefront car

and staying consistently pushed auto service, user needs. evolving services addition providing the curve the of comprehensive and with diversified tracking Overall, Autohome the content limits of is We information. in other to users ahead more by tools and the markets quality

committed to development As an pioneer, [ph] innovation. technological geoscientifics concept and we industry of the are

As our are lead new developments. such, rapidly to we industry technologies core and introducing advancing models

we empowering long-term up devote technology, our high-quality and to to ourselves business open areas achieve with the will cutting-edge industry amplifying development. new competitive ahead, advantages, continue Looking

you only year-over-year. key revenues my today the RMBX.XX were billion, Please quarter unless me quarter XXXX. the as for Net calls stated. with otherwise let first prior financials the in up X.X% Next, note that fourth discussion I RMB reference through walk for of will

For XX.X% year-over-year. services to of breakdown, revenue and generation Lease other media million. million, an detailed came XX% RMBXXX revenues a increase in million revenues RMBXXX were at online services RMBXXX marketplace were the and

to XXXX. in compared operational costs. revenue was million, Moving was QX The to QX margin primarily in the quarter growth to of was Cost attributable XX.X%, RMBXXX RMBXXX on fourth to the compared in costs. million first in Gross the quarter XX.X% XXXX. of increase

to expenses RMBXXX was RMBXXX compared to in in promotional million QX Sales the expenses. operating marketing XXXX. first were XXXX. quarter RMBXXX compared decline in were The marketing primarily Turning RMBXXX expenses to Product million, to in spending. QX and attributable and development a and million, decrease million

Finally, in RMBXXX million to administrative XXXX. general RMBXXX expenses million, QX were compared and

So compared corresponding net an in of million representing we of increase period first RMBXXX quarter, RMBXXX was in of XXXX, the to the XX.X% quarter, of the to an year-over-year. delivered million of increase corresponding operating Autohome Adjusted in million to profit compared year-over-year. Inc. million in the first RMBXXX RMBXXX representing period XXXX, income X.X% attributable

and the RMBX.XX both X.XX%, of per earnings diluted to corresponding in in quarter ADS and X.XX the and quarter corresponding period XXXX. per basic were earnings basic both both of Non-GAAP first share diluted were for the compared Non-GAAP respectively, first in RMBX.XX, to RMBX.XX the period in XXXX. compared

remained short-term RMBX.XX of billion. RMBXX.XX As of net the and our quarter of very flow cash investments first March cash cash, in balance XXXX, We billion sheet strong XX, XXXX. equivalents generated with of operating

we XXXX, XXXX, another of were Directors On program authorized November Board On XX XX a Directors not share ADS for US$XXX the million XXXX. months Board an for Autohome months extension share a on repurchase of repurchase thereafter. authorized repurchase X, to November period under XX, our of permitted to November XX, expiring program up to of exceed our which

have May approximately for total cost of XXXX, a million. of we X.XX repurchased approximately million ADS As X, US$XXX

line ready questions. you. are open to we session. your please the that, Q&A With the Thank take for Operator,

Operator

Our [Operator Please question comes Brenda from Certainly. Zhao Instructions] from CICC. of line first ahead. the go

Brenda Zhao

on [Foreign Hey, guys. questions the strong and quarter. Thanks for my congratulations Language] management taking

you of please And all, for So, you. of on for the NEVs the you could your update expansion outer model upcoming and share the year? in retail us market the for experience quarters? offline your also, the on structural the first for progress Thank store views new opportunities could rest of plans the

Quan Long

[Foreign Language]

Unidentified Company Representative

Okay. Mr. question. Long is taking the first

As quarter, market passenger of sales the January vehicle see, is sluggish. according in a auto to CPCA we to cumulative by of we dropped the that little retail And see from statistic bit the the all first March, XX.X%.

the of expired car spring because XXXX presidential early reason end One second policies car in advance the reason has festival is already purchase some the of last released of and purchase is the the amount and been because year. by

because that consumers. well And Xb wait-and-see since there’s price Domestic see attitudes strong important which cut, very promotion the to is and war, of there worsens is impact another also price we reason as the Policy, March further and as

So remained in passenger March, we see sales flat. the vehicle

statistics is We has see that However, XX.X% to also Y-o-Y if the stabilized and to at as The consumption are getting of look is away growth reasonable auto in entire wait-and-see CPCA and price recover. the started there be war attitude a fading growth X.X%. and released month-by-month been to the you mitigating. consumers back April, market of

Quan Long

[Foreign Language]

Unidentified Company Representative

comparison the about between NEV asked cars You and cars. ICE

there’s to see can decrease and in reduction the be of that the by XX.X% continues Y-o-Y that sales speaking, expand. dropped market sales So, weakening QX continued In you to and a the see of the ICE you ICE XXXX, year cars generally of Y-o-Y year can XX.X%. this car

the hold promotions to Since consumers as wait and OEMs production and their a and March as and follow with after product the delays started well to many money that nationwide in and to see other price up cut, attitude. better started

ICE negative of with cars can So will improvement the believe these all that be penetration, Well, of at sales the further time are you that squeezed. NEV same the on the sales. imposing impacts see the we further the ICE car

Quan Long

Language] [Foreign

Unidentified Company Representative

to In sales terms the of growth the slowdown. started NEV, NEV

still is keeps penetration momentum strong quite the However, increasing. and

So XXXX, since the QX sales of started XXXX, by Y-o-Y to car XX.X%. of NEV sales slow of increased down, in QX the the new and

expected already penetration also penetration domestic XXXX, is the XX%. in XX.X%. hit However, NEV hit forecasted that to CPCA

Auto car models launching just new models, almost are the half cars the see car almost X,XXX -- among concluded of Show, NEV Auto XXX and about of more the In new among than we them exhibition, the of in which Show. are XXX become NEV actually Shanghai mainstream and cars

market the NEV quite future, the So are think development. see competition of NEV you market for the got in the the huge future also promising still potential growth and is that about that a quite can we fairs. We the

Quan Long

[Foreign Language]

Unidentified Company Representative

that Besides the system consumption. improve that the Central end should after working consumption that continue storage, car are and can development strength many accelerated from auto pointed out and development, the to at charging identified in they’re grid. the launch the the this QX power time, they NDRC for as post, local the of and consolidate tax incentive Well, a policies of same supportive of also expand the will quickly NEV since April of such promote year, the that also new launching well further going expressed facility purchase. see energy as for policy the also the their the including conference also you we to also April, governments side, XXXX, series of to policy important the incentives And Government

Quan Long

[Foreign Language]

Unidentified Company Representative

stimulation these demand the the released domestic policies, of all believe of consumers. car conditions and for be will the variable that gradually With we purchase

We launch trend are as development industry about government future to to promote quite the to the come continue promising policies auto will stable the since trying the of and market well as to and domestic we’re even get we that believe development the of local markets future. QX bullish well also national, the all more will auto and entire gradually the

Craig Yan Zeng

[Foreign Language]

Unidentified Company Representative

Thank for first the Mr. question taking second take question. Zeng you, Mr. the Long, and will

the and the launched of space. last also model of our being offline energy immersive models. our through new gain retail the new lot is and models consumers And decision-making question can and this greatly NEV. a really shorten brand store by can efficiency the the And one-stop first car And horizontal new enhance different of the have enjoy consumers. car year, the experience Shanghai breakdown actually the an have immersive retail So we can experience great a comparison recognized These XXX-degree of in consumers the kinds a which of about dynamic Autohome multiple holistic experience new model and we the recognition model. manner, in of from energy also types users of we is cycle corporate new and and holographic

Craig Yan Zeng

Language] [Foreign

Unidentified Company Representative

This also our recognition clients. OEM gained great from

to terms in to XX than has the already So gradually experience holographic entered being launch the see you model with the can that launched into will plan retail QX, going and cooperation franchising in modeling now the store more of online. be we’re brands. stores According there two franchisee

we’re stores. you franchise will all other will also underway. with Well, be about has everything well been and stores at time, development second in the opened the half the the the going the we of to in franchise our share China, store And year, of more then in information same franchise gradually start cities

Craig Yan Zeng

[Foreign Language]

Unidentified Company Representative

And it will competitive online the Autohome will become future, in So we online In think focus of new on in core continue new of actually trial model adds. retail. terms offline that a our the for convergence one the believe model. we we offline to this plus plus terms convergence this is of that

Sterling Song

question, Thank you. next Operator, please.

Operator

you. Thank

the question line Sun Our Ritchie. next comes go HSBC. of Please from Ritchie ahead, from

Ritchie Sun

[Foreign Language] translate myself. will thank I you. it

we what regarding online into business? our challenges So, opportunities to all, about and also question the revenue trend? Thank first now what vertical how and brought of growth Second this think you. this and used should car and also Autohome also opportunity? profit XXXX large platforms tap how the revenue I of of how we about the should models, for level plan part to is the can ask part is recovery profitability like AIGC growth, the think and right is the growth the is And drivers business about

Quan Long

[Foreign Language]

Unidentified Company Representative

Okay.

about The first question is the car. used

for though I car So business price pressure think the QX, as that cut the car whole. a use new in even imposed of some

and into with However, for car good entered have business you used see highly have efficient combination TTP that we very can business our synergy. Autohome, of a we

can Y-o-Y business, by revenue, grew in that car which the all business used XX%. among as revenue of terms as So see experienced a well of TTP you growth TTP

Quan Long

Language] [Foreign

Unidentified Company Representative

terms in in the of of terms marketing. business, margin, And for very see the times traditional can of our that card growth we have you of use good

the quarter. realized and first profitable time, profit generating at keep also the While same also ever TTP

So plus this see adopted you auction can the the TTP, is that model. for testing

So business, lower. comparing with the car used used be the to margin

way. However, we we in a gross think better that margin in will the future, TTP continue of the

Quan Long

[Foreign Language]

Unidentified Company Representative

as as the revenue about the margin. talking So well drivers for

about parts. talk car used Used business. is car heavily the I car firstly, on So, dependent business the growth

in constantly rise. car You a parts can overall see China has that on been

also the of business used result will a on rise. car be As a

few limitation the fewer because are business there communications see can all of COVID-XX, past they medication, lot the a because needs of are of car the products. Over you non-standard used years, offline with offline that

business believe promising that two the a the in years, So very we will next car used manner. in develop

Quan Long

[Foreign Language]

Unidentified Company Representative

Another We you the have synergy traditional used business, business, in important that from comes the we as TTP been a see An business, can Ping to itself. terms car Besides, going driver second-hand place our can of also we’re lead. well Group car see as within taking the Autohome whole. as that

leading selling services and as the will platform So our actually to product competitive entire and expand car industry. chain one-stop SaaS so we to buying position car one-stop build whole in to plus gain continue the a edge

Quan Long

Language] [Foreign

Unidentified Company Representative

Second question is about AIGC.

that you First is the see of tool. AIGC all,

competitors familiar with we That Baidu cooperation the it, you this entered early adopt get at. why you into the you earlier until in use and earlier instrument gain will the So is time. the with first it been have

Quan Long

[Foreign Language]

Unidentified Company Representative

AIGC is from far only enough. itself However,

to that content. PGC the did including UGC a in ecosystem, the also auto create components and OGC, We entire better

content create an ecosystem the C-end we’re together to going strategy. So with creator,

the the the Smart for also cetera. Outbound, we smart example, as the dialogue assistance, AI-assisted as have well AI Selection, other besides, et Smart instruments, So

AI all the So of will dealers to cost cut improve efficiency. these instruments their have and

Sterling Song

you. Thank next. Operator,

Operator

you. Thank

from question Thomas. next ahead, comes from the Our Please of Thomas Chong go line Jefferies.

Unidentified Analyst

question. for two taking have my you I Thank questions.

So, for can new our the first, launch? [Foreign translate myself. question Language] products future use can will management I target the on of is cash, My second plan and management for product on share data the share on plans.

Quan Long

Language] [Foreign

Unidentified Company Representative

about first products. So data let the me question the related

users data existing as terms and data effectiveness, the products, to optimize the continue of it own biggest different because is our The the and their so our of and products us the In the product with let media existing business that play combine ones. other will to improve products product, further from usability with the as iterate to need role. get well we the

we continue our and of further to to further coverage client will So data expand enhance penetration of the products. the the base

Quan Long

[Foreign Language]

Unidentified Company Representative

In we of products, new keep the the terms launching also products. new

in EV Selection, the the Smart as And have we example, clients. we clients. the also QX, well OEM launched have as data the the targeting products Smart other For targeting dealer Cloud

going to so are So synergies, operation in combine the products. more as making our to as vision well future, as we menu much the smart models, proactive

Quan Long

[Foreign Language]

Unidentified Company Representative

QX in as product, dealer’s per for already growth. product store exceed the the data the as corporation of you And per XX,XXX. well users average see that double-digit can all store revenue, And this paying gas year, the

quite the developments about for So the dealers. are data bullish we product future

the already a we CRM also SaaS product And have developed plus matrix. Plus

as to and our facilitate digital as and also investment maintain to data our our strengthen upgrading competitive so clients as well and and edge in their enable to this product going area in R&D, improve We’re technology, in transformation.

Quan Long

Language] [Foreign

Unidentified Company Representative

our as plan. the as spend second cash, is well how about future question Your we

I Autohome think financially is that sound. always

future, increasing In increasing to will of to the we shareholders. always, as about been have proportion continue our we consider we So the have payout increasing the payout dividend the ratio. return and been

Quan Long

Language] [Foreign

Unidentified Company Representative

that, share the already into have go I any on repurchase, of I details. buyback terms won’t and In and elaborated

eye retail. business the increase good in a business new we the investment, If a been particular potential are of going there keeping of terms in in we’re chance have So opportunities. on the close to investment terms

Sterling Song

Operator, maybe time since limited. we is take the last

Operator

Okay.

from the Citi. Brian. question Please your ask Our question, last Brian of from Gong comes line

Brian Gong

question. this taking of will [Foreign the first was translate thanks the Despite -- I weak. sales auto the Thanks Language] myself. for quarter, management kind

revenue grow decently. OEMs Our

the auto but another weak, new view on been your sales you. growth, share still Auto can OEMs of Thank rolled a Show? one have hand, So Shanghai management in kind given, quarter second of out there hand, on lot on model

Quan Long

[Foreign Language]

Unidentified Company Representative

relatively first So to topic, this to industry long-term industry. auto that see I is a of add all, want

as will short-term the So significantly fluctuation not budget. impact OEMs, marketing your volatility sales and well the as

Quan Long

[Foreign Language]

Unidentified Company Representative

ad revenue, even the that business look over can quarters, be on to though there however, are you the ad-related you past market, Autohome, revenue our If at fluctuations the see stable. continues several from

Quan Long

Language] [Foreign

Unidentified Company Representative

that of just and So opportunities, the that Show a of are in I Auto car new car a the models you Shanghai future, lot new of more launching as the there I also continuous think models. terms of launch market the believe in that there also expenses. I believe well that new And with launching, a need marketing be we ads, will car mentioned as

here opportunities we to would like more for us. So see

Quan Long

[Foreign Language]

Unidentified Company Representative

it will bit little for And vehicles, be more the traditional a ICE complicated.

You can see that sales XX% dropped in Y-o-Y. QX, by the

So will complicated, that policy. even be there National things the because in impact of we will more think be XB QX

different choices, cuts circumstances? mitigate will So other OEM to many measures have they or adopt may for example, the the price

Quan Long

[Foreign Language]

Unidentified Company Representative

So, challenges. of QX, opportunities, that in ad the well generally in we are there speaking, think business, as both as terms

like I Just are business, our two car used mentioned there drivers. what for

general market like from market and expand trends. new clients. thing And services, our to performance, the is offer the the the we we growth pursue The would like would new with to tap own from driver areas and together our comes to first into overall other services

our improve to and serve in So, business. better we’re generally clients going performance the speaking, to our ad further

Sterling Song

Q&A the Thank the That is Operator? Okay. Operator. session. you, end of

Operator

you. Thank

the have much all I’ll to question-and-answer of turn you closing session. back remarks. for very questions. your reached for We management end the conference Thank the

Quan Long

Language] [Foreign

Sterling Song

months’ I us a in joining conference updating few next earnings time. Thank quarter’s and you everyone. support appreciate very looking today. Thank to for our you on forward your you, much call

Thank any the meantime, comments, have or us. feel you please you to contact very much. in questions free So, if Good-bye.

Quan Long

Good-bye.

Unidentified Company Representative

Thank you.

Operator

for you participating. concludes call. today’s conference Thank That

may now disconnect. You

Autohome (ATHM) 11 May 232023 Q1 Earnings call transcript