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spk01: Ladies and gentlemen, thank you for standing by for Autohome's third quarter 2021 earnings conference call. At this time, all participants are in a lesson-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. It is now my pleasure to introduce your host, Sterling Song. Auto Homes I Director, Mr. Sung, please go ahead.
spk10: Thank you, operator. Good evening. Hello, everyone. I'm Sterling Sung. Welcome to Auto Homes Third Quarter 2021 Earnings Conference Call. Earlier today, Auto Homes distributed its earnings press release, and you may find a copy on the company's website at www.autohomes.com.cn. On today's call, we have Chairman and Chief Executive Officer Ms. Qianlong, Co-President Ms. Haifeng Sha, Chief Technology Officer Ms. Bibo Xiang, Vice President Ms. Youzhou, and Finance Director Ms. Hong Jiang. After the prepared remarks, our management team will be available to answer your questions. Before we begin, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Security Education Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause adverse results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the Securities and Exchange Commission. Auto Home doesn't undertake any obligation to update and improve a looping statement except as required under applicable law. The earnings press release in this court also includes discussions of certain unaudited, non-GAAP financial matters. Our press release contains a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures and is available on Autohome's IR website. As a reminder, this conference is being recorded. In addition, a live and archived webcast of this early conference call will also be available on Autohome's IR website. I will now turn the call over to Autohome Chairman and CEO, Ms. Lung. Ms. Lung, please go ahead.
spk03: Hello everyone and thank you for joining us today. In the third quarter of 2021, negative factors such as chip shortage and price increase in raw materials continued to suppress the car industry. Car production cost increased by more than 10% from the same ratio, and sales were significantly reduced in relation to the above. With the addition of a lot of large-scale electric power, the sales of cars were low, and the production and sales in the third quarter decreased by 12% from the same ratio. Car-owned businesses are facing a huge challenge. Despite this, we can achieve a total revenue of 17.6 billion RMB in three seasons. New business revenue increases by 2.5%, and the revenue increases by 32%. The net profit of car-owned businesses in three seasons is 5.83 billion RMB. The net profit is 33.1% and 33.1%. At the same time, In the third quarter of 2021, cheap shortage and rising raw material prices continue to impact the auto industry.
spk10: The production cost of auto manufacturers increased by more than 10% year-over-year, and the marketing-related budgets were significantly reduced. Several rounds of power rationing across multiple regions in China also affected manufacturers, including auto manufacturers. Production and sales of new PV each fell 12% year-over-year in the third quarter. As a result, Autohome is facing great challenges. Despite this catering, we delivered total revenues of 1.76 billion RMB for the quarter and the revenues from our online marketplace and others business increased by 2.5% year-over-year, accounting for 32% of total revenues. In addition, our adjusted net income attributable to Auto Home Inc. in the third quarter was 583 million RMB, with adjusted net margin of 33.1 percent. On November 18, 2021, Autohomes Board of Directors authorized a share repurchase program under which the company may repurchase up to 200 million US dollars of its American depository shares over the next 12 months. The company plans to fund repurchase from its existing cash balance.
spk03: Next, I will summarize the major progress of our various businesses this quarter. According to the QM statistics, the number of active users on the mobile unit in September reached 4,387 million, which is 12.3% of the total growth. In terms of the structure of the users, the number of active users on mobile mobile units of more than 5,000 yuan is up to 37%. This also proves that the number of high-consumption users in the family of cars is much higher than the average level of products and industries.
spk10: First, let me summarize the main progress we have achieved in this quarter in terms of CN traffic. According to statistics from QM, the number of average DAUs who access our mobile website, primary app, and the mini apps grew to 43.87 million in September, representing a 12.3% increase year-over-year and topping the automotive media litigants. Looking at our user composition, the proportion of active users using mobile phones priced above 5,000 RMB was 37%, much higher than the competing platform or industry average, indicating the strong purchasing power of auto home users.
spk03: During the quarter,
spk10: Affected by the decline in the auto market, our revenue from traditional business experience was constrained in the third quarter, while Autohome maintained its leading position in the automotive media vertical as its first-tribe destination for users to view, buy, and use cars.
spk03: In this quarter, we accelerate the promotion of the strategic upgrade to the ground, and the new business achieves significant step-by-step progress. In terms of data products, the technology and content system of the smart listing 3.0 will be upgraded, and the product penetration rate of the previous three quarters will be increased to 36%. The digital sales company has built a full chain solution program of 12 products of three major models. From 3.01% to 3.55% in the average purchase of each salesman. In terms of new energy, we have increased the cooperation rate of new energy vehicles. In the third quarter, the income from new energy brands has increased significantly, especially in the main new power vehicles. The average market share of new cars is more than 50%. In terms of second-hand vehicles, The day-to-day filming of the second-hand car online auction platform of China's largest second-hand car is more and more terrifying. Through detailed operation, continuous improvement of operations, through the full-fledged resource management of clues, data and management, the second-hand car platform of the second-hand car company of the first three seasons of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-hand car company of the second-
spk10: During the quarter, we accelerated implementation of strategic upgrades and achieved significant progress in new businesses. For data products, we upgraded our intelligent new car launch 3.0 technology and content system, improving the product penetration rate to 36% for the first nine months of 2021. On the dealer side, we are offering 12 products across three major modules to provide dealers with a full structure of solutions. Notably, the average number of data products purchased by a single dealer store has increased from 3.01 to 3.55. With respect to our NEV business, revenues from NEV brands more than doubled year-over-year in the third quarter as we increased our efforts to engage with NEV automakers. Specifically, among major new strength NEV automakers, Auto Home has achieved over 50% market share on average. For used car business, TTP has further solidified its position as the largest online used car auction platform in China and enhanced its efficiency through refined operations. In the first nine months, the cumulative number of used car dealers we served has increased by 77% year-over-year, thanks to our full-scope services covering lease, data, and overall management.
spk03: Next, I will share with you the specific market and business situation. Looking back at the third quarter, the chip shortage in the global scope continues to impact the automotive industry. China's new and used car market continues to drop. From July to September, the sales of used cars have expanded significantly. The same ratio dropped by 7%, 12%, and 17%. In addition, the price of raw materials and other large-scale products continues to rise. The supply and supply of raw materials is tense, and local governments are implementing a high-restriction NACA line strategy. Part of the main factories in the east and north, such as Jiangzhe and other places, and car parts production bases are affected to a different extent. The data of the National Statistics Bureau shows that The third quarter of the car manufacturing industry fell by 46%. The third quarter of the industry income rate is only 4.9%, which is at the bottom of history. The car industry is under the influence of multiple negative factors. Car production is expected to slow down and the sales budget will drop. The data of the Boston Consulting Company and the company's survey data show a decline of about 40% to 50% from the same rate as the online marketing budget. The market generally predicts that the four-season test will continue to fluctuate at the bottom. After the first quarter of 2022, the chip supply problem may gradually ease, and the domestic overall test will gradually recover. With that overview, I'd like to share more details on the market environment and our business operations.
spk10: In the third quarter, a persistent worldwide shortage of chips continued to have a significant impact on the auto industry. To this tweet, from July to September, PV sales declined each month by 7%, 12%, and 17% year-over-year, respectively. In addition, prices of raw materials and other commodities continued to trend upward. As a result of raw coal shortages, local governments began to implement power rationing policies to limit high energy consumption and high pollution enterprises. OEMs and auto parts manufacturers based in Northeast regions and other key manufacturing areas such as Jiangsu and Zhejiang provinces were all affected by these policies to a varying extent. Data from the National Bureau of Statistics shows that automobile manufacturing industries' first quarter profit fell by 46% year-over-year, with profit margins only 4.9% near its historical low. Contending with multiple unfavorable conditions, automakers have extended their projected timing of when auto production recovery will return to normal levels and have reduced their marketing budgets accordingly. Boston Consulting Group's data and the company's survey concluded the budget pool related to online marketing has dropped by 40 to 50% year over year. The market generally expects the auto industry will continue to fluctuate at the bottom in the fourth quarter. The cheap supply issue may gradually ease post the first quarter of 2022 and the overall domestic auto market may recover accordingly. It is expected that the auto market may return to a relatively normal level of growth in the second half of 2022.
spk03: For our traditional business, despite the short-term difficulties facing the auto market and serious competition,
spk10: AutoHomeMatch remained focused on improving service quality and customer value instead of adopting radical low-price schemes. Adhering to a sustainable business model supports our ability to maintain leading market share position in the auto media vertical.
spk03: The strategic promotion is also steadily advancing to the ground. Specifically, the technology and resources, offline activities and traffic, etc. are fully integrated to achieve the health and health of the automotive ecosystem.
spk10: We have prepared steadily the implementation of strategic upgrades. More specifically, we have been deepening our integration with Ping An to create a platform service matrix for car reviewing, car buying, car selling, and car use, building a vigorous ecosystem that integrates technology, resources, offline activities, and traffic to achieve the joint construction of a healthy automobile ecosystem.
spk03: In terms of content, we have opened up more games, created more scenes, and covered more groups of people. These three strategies have not only achieved progress, but also greatly improved original videos and live broadcasts. All kinds of cross-border assistance and offline activities have also been fully spread. We are working with NetEase to produce new music and new programs. In addition, we have also held the first new energy vehicle expansion festival in the industry. In the field of professional content, we have launched a model car vehicle warehouse, and updated the modification car channel and the largest car vehicle warehouse in the industry, etc. The diversified content evidence and rich offline activities allow us to reach a wider audience. This year's 818 Super Car Exhibition has a coverage of more than 500 million, and the growth rate is growing rapidly.
spk10: Moving to content, our three-mole content strategy involving more users, more formats, and more scenarios is progressing well. We have significantly increased the proportion of original videos and live streaming content on our platform, established crossover collaborations, and rolled out complimentary offline activities. For example, we jointly produced a new program with NetEase Cloud Music and held the industry's first carnival for NEV car owners. We also expanded our content offering with the launch of our motorcycle model library and modified car channel and the industry's largest car-in-use model library, etc. Our efforts to diversify our content matrix and abundant offline activities are consistently broadening our user reach. This year, our featured online-offline event, August 18, Super Auto Show, garnered more than 500 million visits, more than double last year's number.
spk03: We have expanded our investment in innovative business on B-DAN business. We have made many breakthroughs in business. We continue to provide genuine service to customers through digitalized sales products. We help salespeople improve their business level and achieve the truth of the story. Currently, we have more than 50% success rate in three products. We have achieved systematic integration with nearly 10 manufacturers.
spk10: for bn businesses we increase our investment in innovative businesses and strive to achieve breakthroughs for example digital dealer products continue to provide dealer customers with value-added services helping them improve their operating performance At present, three of our data products have demonstrated a penetration rate of over 50%, and we have implemented system-level integration with nearly 10 automakers.
spk03: On the basis of the new energy business providing a resumption of brands and channel sales and the overall resolution of the problem, we have deeply discovered the deep-level demand for cars, and deep-rooted development in user operation, innovation, and trading models. In the first three seasons, the number of new energy brands that cooperated with each other reached 22. In the third season, the income of the new energy brand was the same as the growth.
spk10: With respect to our NEV business, we are exploring NEV automakers' specific needs and introducing new NEV targeted business models, in addition to providing solutions covering rebranding and promotional channels for them. As I mentioned, since the beginning of the year, we have broadened our NEV partnerships with 22 NEV brands, and our revenue from NEV brands more than doubled year-over-year in the third quarter.
spk03: Over the past year, we have continued to speed up the layout of the second-hand car industry chain. In the sale of C-Class vehicles, we have built a car owner service lobby, and replaced the user model and other products. We have opened a direct link between salespeople and high-quality second-hand car sellers. We have built the first sales service platform for Chinese users. Day-to-day parking and home second-hand car co-operations have greatly improved transaction efficiency and reduced operating costs through detailed operation.
spk10: We have also fully accelerated our deployment in the used car industry this year. By creating car owner service platform and trading user model products, we are able to connect the car sellers with high-quality used car dealers directly and build out a number one car selling platform for Chinese users. In collaboration with Auto Home, TTP has greatly improved its efficiency and reduced operating costs through refined operations.
spk03: With the success of the strategic version, the company has not only developed in terms of talent introduction and management upgrade, but has also attracted experienced professional senior management managers to join the team. including CTO Mr. Xiang Binbo, who is a former witness and participant in the early development of the Chinese Internet. He has rich experience in the field of search engines, commercial advertising, recommendation systems, natural language processing, and data mining. Chen Lengzhi, Yabu Search, Taobao, Zitongzhi, and other 36 searchers will carry out technological and product development upgrades in the field of AI, big data, and fanfare. Vice President Mr. Wu Jiang, who is in charge of the large-scale business, has more than 20 years of experience in the Internet industry. It is one of the earliest growth experts in domestic users. It has participated in the re-establishment of a variety of C-series products in various famous Internet companies such as OPPO, Xunlei, and others. In the future, it will focus on C-series products, video content, and user experience. Mr. Yang, the vice president of our main machine factory business, In the automotive industry for 15 years, it has comprehensive management experience in marketing, technology, and products, and is recognized as a well-known car manufacturer such as Ford, BMW, and Dongfeng. and even market-level customer demand. With the addition of professional energy workers with internet and automotive industry background, the management team of automotive companies is even more diverse, and they jointly promote strategic landing to realize business field innovation and development.
spk10: With a broadened strategic landscape, we are delighted to see that we have attracted several experienced professionals to our senior management team, including our new CTO, Ms. Bibo Xiang, an early participant in the development of the Internet sector in China. Ms. Xiang has extensive experience in search engines, commercial advertising, recommendation systems, natural language processing, and data mining. He has worked with internet giants including Yahoo Search, Taobao Advertisement, and 360 Search. Going forward, he will lead auto homes technology and product development and oversee AI, big data, and algorithm upgrades. And then I'd like to introduce Ms. Jiang Wu, the Vice President of our CN business. She will focus on the comprehensive upgrades of the CN products, video content and user experience. Ms. Wu brings us more than 20 years of experience in the internet industry and is one of the earliest user growth experts in China. He has participated in the establishment of numerous to-see and product businesses in companies including OPPO, Xunlei, and Renren, etc. Finally, Ms. Sun Yang joined Auto Home as Vice President of our OEM business unit. Ms. Yang has 15 years' experience in the auto industry, including comprehensive management experience across marketing, technology, and products. He has held positions with well-known automakers including Ford, Forward and Dongfeng Nissan and has great insight into the auto market and customer needs. With such professional diverse background and skill sets in internet and automotive industry, we are working together to execute auto home strategies and achieve new breakthroughs.
spk03: In general, the car industry is steadily advancing in various strategic efforts to continue to maintain the leading position in the mobile traffic and the car media market. At the same time, we will continue to build new business channels, try new business models, and develop new products based on strong assets, liabilities, and profitability. In the future, we will continue to advance in the following areas.
spk10: Overall, Autohome is ready to fulfill its mission of further maintaining its leading position in both mobile traffic and vertical media market share. Supported by the strong balance sheet and profitability, we will strategically explore new territories, seek new business models, and develop new products. In the future, we plan to continue to advance in the following areas.
spk03: This list will continue to deepen the three-degree strategy, by introducing KOR and online and offline depth assistance, to improve the depth and coverage of live content, based on structural data and large data recommendation capabilities, Through the precise recommendation and continuous operation of multiple interests and scenarios, we can improve user penetration and increase user connectivity. We use the new employee user area to cover high-quality car scenarios and provide a series of product styles for the community. Increase the penetration rate in the new employee car group and the young user group to catch the new employee opportunity.
spk10: For the end business, we'll continue to sharpen our three more strategies, including introducing key opinion leaders to our platform, as well as in-depth online and offline integration to increase the depth and breadth of live streaming content coverage. Building on structured data, such as car model library and our big data recommendation capabilities, We'll continue our efforts in accurate recommendations across various interest-based scenarios to constantly streamline user operations and enhance user sickness. While we remain our advantage in covering high-spending user groups, we are also embracing the opportunities arising from NEV through a series of products and formats, such as a new energy-dedicated user section covering high-frequency car-in-use scenarios and private domain user communities, aiming to increase our user penetration among NEV owners and younger demographics.
spk03: B-DAN will provide a comprehensive solution for digitalization, digitalization, virtualization, and high-speed route for digital marketing by B-DAN. At the same time, it will fully deploy digitalized marketing business, optimize business structure, realize digitalized products, and fully support the management and management of various sections of marketing and marketing B-DAN. In the future, the second-hand car will enter co-operative security resources, upgrade self-change service, At the same time, we will also collaborate with T&T Python to jointly build a bidder certification system, and build an authentic ecosystem of second-hand cars, and enable car dealers to sell the entire range, allowing consumers to gain a high-quality experience.
spk10: For B&Bs, we will help automakers to build a digital marketing highway upon digitalization, intelligence, and virtualization with full-chain solutions. Meanwhile, we have broadened the digital dealer business to optimizing business structure and empower dealers with our digital products in all aspects of operation and management. Auto Home's used car business will further cooperate with Ping An to upgrade the trade-in service. We also jointly built a golden standard certification system with TTP to create a trustworthy used car ecosystem that empowers dealers across a full used car lifecycle and provides consumers with high standard experience.
spk03: Looking forward to the future, Qicheng Home will continue to grow in cooperation with Ping'an Group. On the basis of a healthy business model and a solid business, we will steadily promote innovative business in all aspects, actively and steadily expand new channels, and open up room for growth. We insist on a long-term and sustainable development path. We are full of confidence in China's overall policy and home home's long-term development.
spk10: We firmly believe that the auto industry's current challenges are temporary and that the industry's long-term positive trend remains intact. We now estimate China's auto industry will resume growth trends in the first half of 2022. Following that, we are convinced that auto homes' media services business will be poised for rapid recovery while our new business will be in a better position to lead the market. Looking forward, Autohome will continue to build synergies with Ping'an. With our healthy business model and solid fundamentals, Autohome will steadily promote business innovation, actively unlock growth potential, and strive for long-term sustainable development as we have full confidence in the long-term development of China's overall auto market and company. With that, I now turn the call over to our finance director, Ms. Hong Jiang, for a closer look at our third quarter's financial results.
spk07: Thank you, Mr. Long. Now let me walk you through the key financials for the third quarter. Please note that, as with the prior calls, I will reference R&D only in my discussion today unless otherwise stated. Net revenues for the third quarter were 1.76 billion. When the detail breaks down, media services revenue came in at 434 million. This generation services revenue was 768 million, and the online marketplace and other revenues increased by 2.5% year-over-year to 561 million, primarily driven by the consolidation of TTP. Moving on to the cost. Cost of revenues was $281 million compared to $250 million in the third quarter of 2020. Bars margin was 84.1% in the third quarter compared to 89.2% in the same period last year. Turning to operating expenses, Sales and marketing expenses in the third quarter were $712 million compared to $979 million a year ago. The decrease was primarily due to the reduction in promotional spending and continuous budget control. Product and development expenses were $364 million compared to $349 million in the third quarter of 2020. Finally, T&A expenses were $111 million compared to $140 million in the sub-quarter of 2020. Overall, we delivered operating profits of $365 million in the sub-quarter compared to $744 million in the corresponding period of 2020. Adjusted net income attributable to out-of-home was 583 million in the third quarter compared to 902 million in the corresponding period of 2020. Non-GAAP basic and dilutive earnings per share for the third quarter were 1.15 and 1.15 RMB respectively compared to 1.89 and 1.88 RMB in the corresponding period of 2020. Nungat's basic and diluted earnings per ADF for third quarter were 4.61 and 4.61 RMB respectively, compared to 7.55 and 7.52 RMB in the corresponding period of last year. As of September 30, 2021, our balance sheet remained very strong, with cash, cash equivalent, and a short-term investment of 19.18 billion. We generated operating cash flow of 567 million in the third quarter of 2021. With that, we are ready to take your questions. Operator, please open the line for the Q&A.
spk01: Thank you. So, ladies and gentlemen, if you wish to queue for a question, please press 01 on your telephone keypad and wait for a name to be announced. If you wish to cancel your quest, please press 02. We would like to keep to one question at the maximum for each time. And you are reminded to state your name and company name. The first question It's from Thomas Chung at Jefferies. Please go ahead.
spk05: I will translate by myself. My question is, I want to know about the competitive landscape in each business segment. Thank you.
spk11: Let me answer some questions about the experience here. Later, our president, Mr. Shao Hai-feng, will answer some of the questions. In the C segment, as Mr. Long introduced, our total DAU has reached 3.87 million. This number is actually growing very fast. Compared to the previous 12.3 million, its number in the APP segment is actually almost the same as our competitors in the 2nd and 3rd place. So actually, to a certain extent, we may also be in a relatively In addition, we noticed that First Mobile mentioned in the report that in terms of the quality of the users on the C-end, it has a report that the daily user ratio of mobile phones over 5,000 yuan is 37%, and our competitors are basically 29% to 30%. In terms of the industry, the entire logistics industry is 15% of the total. This means that our user quality and user consumption capacity will be higher. This is actually a requirement for people who are looking for a car and buying a car, which is more needed by our customers and our main assets and e-commerce. On the other hand, on September 15, we have already shared with you that our competitors in the future in terms of traffic acquisition rely on Tencent and直接交通. We also have a big company, Ping An Group. At that time, we actually shared a few numbers with you. One is that Ping An Group itself has 6.4 billion users and 2.1 billion financial customers. In this case, there are 1.4 billion P&A car owners, 60 million P&A car owners, and 0.3 billion P&A bank credit card car owners. Therefore, these customers and traffic will become a source of new traffic in the future. In other words,
spk08: Thank you for the question. Actually, according to the statistic from the Quest Mobile, the number of daily DAU of our access to mobile websites and also primary APP and mini-APP grow to 43.87 million in September, representing 12.3% increase year-on-year. And actually, among them, especially for those active users who actually using mobile phones priced above 5,000 RMB was 37%. Actually comparing that number with our peers, our major competitors, that number was only 20%. The industry average was only 15% which indicate that our user is more high end and actually their purchasing power is stronger. Well, according to the competitive landscape, maybe somebody will say our competitors, they have a mother company, which is Tencent and ByteDance. Actually, our mother company, Ping An Group, was very capable. For example, let me quote with you with a few numbers. For Ping An Group, we have 640 million Internet users and 210 million financial service users. Out of that, we still have 60 million auto insurance of Ping An and 30 million credit card users, which also are the car owners of Ping An Bank. So actually leveraging on Ping An Group's large and vast customer base, we actually can further grow our auto homes business. We also expanded into the EV and renewable energy and EV business as well as the live streaming and live broadcasting business. We also offered a lot of, for example, motorcycle car model library and also together with the live streaming and the live broadcasting business, we are attracting more and more users, especially the young users. Now let me turn to Mr. Shao Haisheng to take more of your questions. Thank you.
spk02: I would like to share with you my outlook over the next 24 months.
spk08: of the market competition?
spk02: First of all, I think we should look at traditional business first, or what we call the chess business. In terms of the chess business, our judgment on the future is that it will gradually shift from quantity to quality. The future will be more and more important Now let's look at our traditional business first.
spk08: We believe that the traditional business actually would transform from quantitative-based to qualitative-based, which means the driver would be quantity, then transforming to quality. The OEMs and the dealers would pay more attention to the quality of the data, for example, the effectiveness and the conversion rate of the leads. Auto home is absolutely number one in the vertical auto media industry. Now, in terms of the advertisement product perspective, we believe the advertisement would transform from the exposure type to more interactive and immersive type. We believe that the leads In the future, will be more direct linking with the customers.
spk02: In terms of new business, let's look at three new businesses. One is data, one is news, and the other is the car. In terms of data business, let's look at the big trend first. The big trend is that the future of the mobile phone market and the retail market will turn to digitalization. This road is currently determined. It will only go faster and faster. In this process, our opponents should look at it this way. First of all, when you look at it in the eyes of the eye, Zhijia is the earliest in this layout. Then stand in this other competition to see, for example, this Baidu, Ali, Kedashunfei, These big companies and even more small and medium-sized companies are providing digital transformation of some of the so-called basic solutions. The advantages of Zhijia in this area are actually the most important. The first one is that Zhijia's data is accumulated in our industry. The second one is that our data is from 2016 until now. Our cleaning Now let's look at the new business. We have three major pieces of new business. One is data business, second is NEV, and third one is used car.
spk08: Now let's look at the data business. For the big data, we believe there's one thing which is quite momentum, and it's for sure, that is the digital transformation of the OEMs and the dealers. This is for sure, and they were accelerating the whole process to go to digitalization. Comparing with our competitors, actually we are an early bird in the vertical media industry of the auto, And compared with other competitors, which are Internet players like Baidu, Alibaba, and iFly, actually we have better foundation and a more solid foundation than those companies. Actually, we have larger volume of the data because we accumulated the data ever since 2016. And secondly, we have done a great job in cleaning the data, classifying the data, and we input and feed our data into our models, which make our models more valid and more relevant and more smart. So in this way, we have better results and effectiveness over our competitors in terms of the data business.
spk02: In the field of new employees, we have reached more than 50% of our standard. In the next two years, we think the biggest demand of the new employees is the demand for sales growth in a direct mode. This is the biggest trend. Therefore, from this point of view, Maybe in the future, if we don't change a new service method, it may be the biggest challenge for everyone. Therefore, in fact, for Zhijia, in addition to vinegar trading, we are currently leading. After that, we will also launch a new retail model that can help these new companies. Now let's look at the NUV business.
spk08: Actually, we already account for more than 50% of the market share in the NUV business. Looking into the next two years, We believe that the OEMs, their biggest challenge is how to maximize and enhance their sales under a direct sales model. So for most vertical media players, if they don't transform their business model and their service model, that would be a big challenge for them. For us, we are already in the leading position because we already promoted and also boosted the transaction and the sales in the EV market. So in this way, we can help growth OEMs to achieve more success under the direct selling, you know, retail model. 那在二手车里面呢,中国这个二手车市场大,并且呢它是散。
spk02: Now let's comment on the used car business. Actually, used car is a big market in China, but it's very much segmented.
spk08: There is no giant player who dominates this market because there are so many small players, it's so much segmented. In terms of the B and the C, or the B to B side and the C to B side, lack of trust is the major challenge. 目前我们在二手车里面,我们目前接到我们最大的对标的友商是58。
spk02: We and 58 are in the C1 chain, and then the C1 of this trading and the C2 chain. In these three areas, we are basically like this. Currently, 58 and I can make a profit, but Well, actually, in terms of the user card, our major competitor is 5.8, 5.8.com.
spk08: However, we are more successful in promoting the transaction because we can effectively boost the transaction. And in terms of the trading transaction and auction process, we are more advanced comparing with 5A.
spk02: This...
spk09: At the same time, we can connect more car dealers.
spk02: We hope to expand our current service of more than 50,000 second-hand car dealers to more than 90,000. In this way, we can basically call car dealers. After that, if there are more car dealers, there will be more CR car dealers. If there are more CR car dealers, I will have more CR clues.
spk08: 那我们形成一个完整的二手车的交易服务链条。 好,谢谢。 Actually, in terms of the used car business, leveraging on Ping An Group's massive resources, our benefit and our advantages is that we can maximize our source of odors, the used cars. If we can monopoly the source of the used cars, and we can very quickly be leading the second player in the market by getting into the B2B model, in this way, we will be in the leading position. And we actually is already in the leading position. And in terms of dealing with real car dealers, used car dealers, currently we're working with more than 50,000 used car dealers and our target is to grow this number to more than 90,000. Currently, it's 50,000 and we are going to expand in 90,000 used car dealers. In this way, we can maximize our source of the used cars and we can boost the transaction to ensure we will be in the leading position in the used car auction market.
spk01: Our next question... Our next question will be from Brenda Chow at CICC. Please go ahead.
spk09: Hello, my name is Brenda Chow. I'm a student at CICC. My name is Brenda Chow. I'm a student at CICC. Thank you. Sergeant Dr. Miss Brenda, it seems like I have a really bad signal.
spk01: So can you please readjust and ask the question again? Sorry, everyone. Participant to Brenda is having a bit of technical issues at the moment. Maybe we'll have her back later. Now let's move on with the next question. Who is from HSBC? Richie Sung, please go ahead.
spk04: So I'll translate the question myself. So recently there were some news talking about Ping An potentially selling auto home stake. Can management respond to that and How do we see Ping An's involvement into auto home strategy and the importance towards Ping An? How does it change so far? Thank you.
spk11: Some rumors are like making up stories. Rumors are rumors. For us, we haven't received any information about this within Ping'an Group and CarGa. Currently, the share price of CarGa is at a time limit that is underestimated. The core management of Ping'an Group and the core management of CarGa actually have a very frequent discussion about the future business strategy development of CarGa and the collaboration with Ping'an Group. Actually, my comment is rumor is just a rumor. There's no sound evidence. And internally, we haven't heard anything
spk08: similar to you quoted. We haven't had any news like that. Actually, if you look at the auto home shares, the share value currently is undervalued, the share price. Actually, for Ping An Group and Auto Home, we had very frequent and timely as well as routinely discussion about auto home business. And also, this morning, we just held an internal meeting talking about older home remains to be one of the core parts of the auto ecosystem of the Ping An Group, and it will be in the future. So Ping An Group attached great importance to support older home development. Thank you.
spk01: Thank you. Our next question will be from Brenda Zhao at CICC. Please go ahead.
spk06: Hello, Manager Chen. Thank you for accepting my question. I have two questions. The first one is about the new car market. I would like to know your opinion about the new car market in the next four seasons and next year. When can we see the core business income stable? The second question is about the company's strategy at the end of the year. Thanks, management, for taking my questions. I have two questions here. First, could management share the view of 4Q and next year market outlook when the coal business revenue growth is expected to recover? And next question is related to the customer end strategy. So what's the company's strategy on the new emerging business model, such as live streaming? Thank you. Thank you for your question.
spk10: President Piao, please answer the first question. Then President Zhou will answer the next question.
spk02: Okay, this is how it should be. I remember last time we also shared this point of view in the communication. At present, we are still maintaining our goal. From the perspective of the new car, look at this. It's pretty. I'm optimistic. I'm optimistic that next year's Q2 will get this solution. The mid-term will be in the second half of the year. In terms of this year, the Q3 and Q4 of this year should be the critical moments of the new car sales. Q1 of next year will have some opportunities. I think we still maintain this judgment. As for next year, it is actually the new car sales. For the sales increase, we currently have one called Thank you.
spk08: Well, actually, to answer your question, firstly, in terms of the short supply of the chips in auto business, on the optimistic side, we believe next Q2, the situation will be eased. And for the later half of next year, you can see that the whole market would be turned over. Actually, for this year, Q3 and Q4, in terms of the new car sales, we would call it the darkest time, the darkest hours. We believe this situation will be eased in the next Q1. And we believe the new car sales would go up next year. In Q1, maybe it would be growing by 4% to 5%. So it would be middle single digit. And I think it would be comparable to, the growth rate of 2019.
spk11: Let me go back to the problem of live streaming on the C-end. First of all, I may have to distinguish between live streaming and live streaming. In terms of live streaming, especially in the automotive industry, it's a bit small. It may not be as ideal in terms of the actual effect. Because automotive is a very complex transaction, it is impossible to make too many transactions through online live streaming, except for our latest new strength, the new energy car. This is the first answer. The second one is about what we will do in the future in the field of live streaming. As we have just said, among our three strategies, the second one is called more play. More play involves more videos and more live streaming. For example, we will do a live streaming innovation called seven roads, seven screens, and seven hours at Guangzhou Station tomorrow. You can also pay attention to it. Translation.
spk08: Now, in terms of the live streaming business, actually we have to distinguish from live broadcasting and the live broadcasting while live selling of the vehicles. Actually, in terms of the live streaming and the live selling of the vehicle, we do see there are lots of discussion about that. However, the real sales is still very low. Because auto sales is a very complicated transaction. It cannot easily be completely done online. So actually, we are expecting that on the live streaming in the area, there will be more new ways. We would see more ways to be more interactive in the future. Actually, tomorrow would be the Guangzhou Auto Show, and we would be hosting the seven-hour live streaming campaign, which is a quite innovative live streaming activity. So we welcome you to join us for tomorrow's live streaming.
spk10: Thank you.
spk01: Thank you. There are no further questions at this time. I'll turn the conference back to management for closing comments.
spk10: Thank you. Thank you, everyone. Thank you very much for joining us today. We appreciate your support and look forward to updating you on next quarter's conference call in a few months time. In the meantime, please feel free to contact us if you have any further questions or comments. Thank you. Goodbye.
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