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spk10: Gentlemen, thank you for standing by Autohome's second quarter and interim 2022 earning conference call. At this time, all participants are in listen-only mode. A question and answer will follow the formal presentations. As a reminder, this conference call is being recorded. If you have any objection, you may disconnect at this time. It is now my pleasure to introduce your host, Soling Song, Autohome's IELTS Director. Mr. Song, please go ahead.
spk09: Thank you, operator. Hello, everyone. I'm starting soon. Welcome to Auto Home's second quarter and interim 2022 earnings conference call. Earlier today, Auto Home distributed its earnings press release, and you may find a copy on the company's website at www.autohome.com.cn. On today's call, we have Chairman and Chief Executive Officer, Ms. Xuan Long, and Chief Financial Officer, Ms. Craig Yanzeng. After the prepared remarks, our management will be able to answer all your questions. Before we begin, please know that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Security Litigation Reform Act of 1995. forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but not limited to, those outlined in your public filings with the Securities and Exchange Commission. Auto Home doesn't undertake any obligation to update any forward-looking statements except as required under applicable law. The earnings press release in this call also includes discussions of certain unaudited non-GAAP financial matters. Our press release contains a reconciliation of the non-GAAP matters to the most directly comparable GAAP matters and is available on AutoHomes.io website. As a reminder, this conference is being recorded. In addition, a live and archived webcast of this earnings conference call will also be available on Autohome's IR website. I will now turn the call over to Autohome's Chairman and CEO, Mr. Long, for opening remarks. Please go ahead, Mr. Long. Mr. Long, please speak.
spk06: Thank you, Mr. Song. Hello, everyone. I am the Chairman and CEO of Autohome. Thank you for joining us today for our second quarter 2022 earnings conference call. The net profit of those belonging to the car industry is 4.72 billion yuan, and the net profit rate is 27.2%. The second quarter of the macroeconomic environment is full of challenges, especially due to the centralized outbreak of the epidemic in some cities, which has led to a certain impact on the car industry and the overall production and sales of cars. The market began to rebound in June this year, and the sales of used cars in the whole country increased by 22%. However, the overall sales of the entire second-tier car dropped by about 10%. Despite this, the company can show a strong support lens. The overall operating performance of the second-tier car is significantly improved compared to the first-tier car. The company continues to maintain good operating capacity and a higher level of utilization. This reflects the firmness of the company's business and the ability to go through the industry cycle.
spk09: We are pleased to report a strong operational performance in the second quarter of 2022. Our total revenues for the second quarter were RMB 1.73 billion and adjusted net income attributable to auto home was RMB 472 million with adjusted net margin of 27.2%. The challenging micro environment and particularly the pandemic outbreak in multiple cities in China in Q2 has impacted the supply chain and the sales in the automotive industry. Although the market began to recover in June, with passenger vehicle sales nationwide increasing by 22% year over year, the overall passenger vehicle sales volume fell by about 10% in the second quarter. Against the backdrop of micro headwinds, our solid overall performance clearly demonstrates our strong growth momentum. and we achieved substantial sequential growth in our operating results in the second quarter and continued to maintain good profitability as well as a high profit margin level, a testament to our ability to navigate evolving market cycles.
spk06: The automotive industry is a typical long-term industry, and China's automotive consumption has a huge room for improvement in the future. Shijia is also constantly adjusting business models, expanding business boundaries, and offering more new products and new services in the face of the epidemic environment to solve the control of large customers and meet their demands. The company continues to support customers and has maintained close business connections with them. The company's business is stable and solid. It has won four major markets in the first half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of
spk09: COVID-19's resurgence repeatedly affected the Chinese auto market during the quarter. Despite this, the automotive industry remains a key pillar of the national economy, with cars a daily necessity in people's lives. The industry typically has a long life cycle and there is tremendous potential as China's automotive consumption continues to upgrade. Auto Home has also constantly adjusted its business model, expanded its business boundaries, and launched more new products and services during the pandemic to address customers' pain points and meet their demands. We have continued to empower customers, keeping those in commercial contact with them and have gained their trust and appreciation. Boasted by steady operations and solid business fundamentals, Autohome outperformed the wider market in the first half of this year. In the second half, as China's automotive market quickly rebounds, Aided by the implementation of various favorable policies, Autohome will continue to enhance its performance and deliver satisfactory results to the market. 接下来,请CFO曾延总详细介绍公司二季度业务和财务情况。 With that, I will now turn the call over to our CFO, Craig Sung, for a closer look at our second quarter of rating and financial results. Thank you, Ms. Long. Now I'd like to give you an overview of our second quarter highlights. During the second quarter, we continue to augment our traffic entrances by building our online traffic alliance. covering more users across various scenarios to accelerate traffic growth. According to PressMobile, auto homes aggregated average daily users grew by 8.1% year-over-year to 47.63 million in June. User competition-wise, the proportion of our high-value users utilizing smartphones worth over RMB 5,000, gave 37%, the percentage of all our competitors, which demonstrates the value of our user traffic. In addition, in order to create a diverse content ecosystem, we continue to advance the video layout, launch a standardized cloud exhibition, and launch a new new energy vehicle warehouse. By continuously extending the product service system, we bring value extension to our customers, and provide more choices and better experiences to our users. Thank you. Thank you. Furthermore, we continued to diversify our content ecosystem and executed our video-based strategy. To this end, we launched regular cloud auto shows and our brand new EV car model database to expand our product service and offerings, providing a wider range of choices and a better experience for our customers. During the first half year, in response to the pandemic's resurgence, we proactively hosted more than 300 national and local online auto shows covering over 70 million people throughout China. Meanwhile, we also initiated our Safety to Store campaign, a new promotional model empowering users to safely review and buy cars during the pandemic while also helping dealers, clients increase sales and upgrade the experience they offer users. In terms of new business, since the introduction of the new product, the main machine factory has quickly opened the market, and has established cooperation with half of the domestic mainstream car brands. The key indicators of commercial data products have the same number of increases. New energy business continues to grow and increase, and the sales of new energy market are increasing rapidly. Zhijia and Ping'an Ecotourism are also pushing forward according to the plan, and are gradually landing on the ground, and continue to create the advantages that I have, and provide the owners of Zhijia With respect to new business, our digital products have rapidly penetrated the market since their launch, covering over half of all mainstream automakers in China. Furthermore, we achieved double-digit year-over-year growth in all of our dealer digital products, key indicators. Our NEB business also continues to improve, with revenue growth rate accelerating and sales outperforming the average market level. The ecosystem synergies we are building between Autohome and Ping An Group are progressing according to the plan, and we continue to leverage our unique advantages to bring better services and experiences to Autohome users. 具体来看,内容上,之家以IP为核心, 加速资讯内容视频化的策略稳步推进, 超级测试从豪车测试跨界到摩托车的横评, The IP content has achieved significant breakthroughs in the type of vehicle used for transshipment tools. In the first half of the year, the total number of internal broadcasts of the four original IP series was 1.48 billion, and the total number of broadcasts was 2.07 billion. In June, we launched a new new energy vehicle warehouse. At the same time, the new energy platform continues to be upgraded and modified, which will greatly shorten the path of the user. The classification of content tools will also be clearer, and through the exclusive new energy vehicle, the real battery life, energy consumption, Moving on to content development, by leveraging our big IP brands, we've steadily advanced our strategy of promoting a video-based content transformation. For example, we augmented the content on our show SuperTask with crossover luxury automobile content to its motorcycle reviews. enabling us to achieve a breakthrough in our efforts to expand our IP content from passenger vehicles only to other transportation methods. In the first half of this year, our full original IP series accumulated over 148 million views on Autohome's platform and over 207 million on the entire network. We also launched our brand new NEV Car Model database in June, Meanwhile, we'll continue to upgrade our NEV platform, greatly shortening our path to reach users and helping users make better decisions with more refined content categories and search tools, as well as real data on NEV's driving range, energy consumption, charging efficiency, and other NEV-specific statistics. 汽车之家重视公司品牌的发展,长期持续深耕品牌建设。 and continue to upgrade the brand. This year, combined with the specific needs of the user community to buy a car and the latest development of the overall car market, we have signed Gu Ailin, the champion of Beijing 2022 Winter Olympics, as the latest spokesperson of the car company, and fully applied its digital image through VR and other advanced technologies in the online car exhibition and user interaction of the company, and received extensive effective transmission. Gu Ailin is an excellent representative of Chinese young people, We believe that in the future, there will be more young generation and female users in the customer group of automotive companies. Autohome attaches great importance to developing the company's brand and is committed to the sustained building and upgrading of the brand in the long term. This year, driven by the targeted needs of our users for car search, purchase and use, as well as the overall condition of the automobile market, We've signed Elin Gu, the 2022 Beijing Winter Olympic Champion as our brand ambassador. We'll use her digital image widely in our online auto shows and user interactions through cutting-edge technologies such as VR. Elin Gu is an excellent representative of China's younger generation. With her as our brand ambassador, we believe Auto Home will attract more younger and female users going forward. In the traditional business field, in the face of the change in the epidemic and the market, we launched and improved the new business operation mode in time, and actively assisted the customer community to overcome the difficulties. In the face of the epidemic, some of the car shows and offline activities were cancelled, and the marketing rhythm of the main airport was disrupted. The pain points of offline sales, sales groups and users' inconvenience in travel, the home of cars actively responded, and first launched a normal online car show and Anxin e-commerce service. The former is for users to watch cars and choose cars at any time, We'll be right back. Now turning to our traditional business segment, given the pandemic and market-wide changes, we promptly launched a new operational model while proactively helping our clients to overcome their difficulties. In response to the cancellation of local offline auto shows and events, travel inconveniences and disruptions to automaker sales activities and offline store operations, AutoHome reacted by launching regular online auto shows and safety-to-store services. The former enabled users to search and select cars anywhere at any time and allowed automakers to release localized promotional messages throughout platform. The latter offered ride vouchers to help users to get to full-size stores, solving their last-mile problem during the car buying process. For our lead generation business, our dealers' membership products include various tools and services to help dealers connect with potential customers. In the second quarter, over 12,000 clients purchased our premium version and over 6,000 clients purchased our tech version, with the number of clients purchasing high-end versions remaining high. In terms of data products, when car manufacturers use data and technology, to continue to innovate as a driving force, to continue to strengthen core competitiveness, and to expand the product map. Through the combination of digitalized products and VR vehicles and other projects, we can help retailers achieve non-contact-based sales, and the dynamic performance of retailers' digital campaign. In the second quarter, retailers' data products received more than 40% of the same amount of growth, and the number of customers exceeded 18,000. In the first half of the year, the number of single-business buyers and the number of e-sports income increased significantly, to increase by 32% and 20% in the same period of the previous year. In addition, the digitalization of the automotive industry is a development opportunity, surrounding the key pain points and core demands of the main engine factory, to build a smart solution for the car industry R2S, to quickly assist the traditional car industry in digitalization, and to make good progress. On a data products front, We rely on our data and tech as our backdrop and continue to push forward our innovation to enhance our core competitiveness. We expanded our product lineups with digital products and VR car search projects, helping dealers achieve touch-list operation and conduct sales safely during the pandemic. In the second quarter, revenue generated by dealers' digital products surged by over 40% year-over-year with more than 18,000 clients. During the first half of 2022, number of products purchased per store and average revenue per store increased vastly, achieving 32% and 20% year-over-year growth, respectively. In addition, riding on the development opportunities arising from the digital transformation within the auto industry, our R2S intelligent solutions tackled pain points and the core demands from automakers, aiding traditional auto companies throughout the digitalization process. Since we launched our first innovative digital and technology product in late 2021, We have continuously upgraded them and have now collaborated with over 30 automakers representing an enormous step forward in our efforts to extend our business beyond the vertical media industry. We believe our digital business will continue to grow and generate future revenues as well as help us achieve our second growth curve. 新能源领域在为车企提供品牌整体解决方案的基础上 We use car life as a focal point to customize the car owner activities in line with the brand tone. By combining the operation method above and below the line, we help the car start to expand the volume, increase the user activity, strengthen the fans, and diversify the source of income. In the second quarter, the income from the new energy brand has increased significantly, and continues to surpass the market and increase sales. On the other hand, as the penetration rate of new energy continues to deepen, our layout in this field is also accelerating. For our AEB business. We focus on providing comprehensive branding solutions for automakers, organizing activities and events for car owners, reflecting each manufacturer's brand image to promote their brand's unique car lifestyle. Combining online and offline operating methods, we help automakers to promote their messages, increase user interactions and user thickness, and diversify our income streams. In the second quarter, revenue generated from NEV Brands greatly increased year-over-year and continued to outperform the sales growth rate of the market. Furthermore, as the penetration rate of NEV increases, we have also expedited our development in this sector, resuming construction work on our new sales model stores as the pandemic eased. We expect to launch these stores in Beijing and Shanghai within the third quarter exploring an unprecedented auto sales model by using high-tech in a physical store setting. Our goal is to help new AEV automakers expand their exposure through our unique cutting-edge sales model and channels. We expect this operation to generate revenues for the company within 2022. In terms of second-hand cars, we have upgraded the second-hand car chain service ecosystem. Through the integration of the home of cars, day-to-day shooting, driving and safety, the three-in-one advantage resources to create an honest service cloud platform for users and customers at both ends of the station. Realize from providing clue service to providing increase, digitization, service direction upgrade, break through the existing single transformation mode, through the multi-dimensional content transmission array inside and outside the station, as well as the flow expansion of safety offline channels, expand the size of sales service users. In the second quarter, we continue to deepen the business of day-to-day shooting, On the used car front, we upgraded our full-chain used car service ecosystem by consolidating resources from AutoHome, TTP, and PN Group. Leveraging their resources, we built a one-stop cloud-based platform for trusted used car services, which seamlessly connects users and clients and provides value-added and digital services in addition to these generation services. With the support of diversified content on our platform and Ping An's offline channel resources, we will continuously expand the platform's scale to cover more car sellers. Furthermore, we continue to deepen business synergies with TTP through consolidation and auction services. In the second quarter, our platform accounted for around 23% of all used car trading volume in China, an increase of 3 percentage points quarter over quarter and 6 percentage points year over year. We also made building our certified used car system which has been launched in 47 cities in the country. The number of our certified car sources has grown by leaps and bounds and we expect it will continue to grow steadily in the future. In the second quarter, the State Department has lifted the restrictions on non-manufactured second-hand cars in the country, and completed the registration, backup, and car transaction registration regulations of the second-hand car market. This will accelerate the sale of second-hand cars and help new cars to be replaced and speed up the consumption of cars. The overall circulation of second-hand cars will be more fluid. A series of good policies will promote the exchange activity of second-hand cars nationwide. In the second quarter, China's State Council removed relocation restrictions for all small-sized, non-operating used cars that meet the national fifth emission standards and refined certain used car management regulations, including vehicle registration, trading registration, and filings. This will boost used car sales and accelerate car replacement, leading to a smoother circulation of used car overall. The series of new policies will benefit the development of the used car market in China by encouraging more trading activities, which will positively impact used car consumption and the used car market. Since June, with the easing of the epidemic, the central government and local governments have launched a series of economic incentives to promote the purchase and consumption of vehicles. The potential of car consumption has gradually been released, and it has actively promoted the resumption of domestic vehicles. The car market has shown signs of turning points. In June, the sales of car vehicles increased by more than 22% in the same ratio, and the production and sales indicators have returned to warm-up. The trend of recovery has become more prominent, and the car supply chain is gradually recovering. In April and May, due to the pandemic, the production capacity and market demand began to release in June. The number of people and sales in the car market has increased significantly. The automotive industry, as a national economy and a strategic support industry, is recovering its normal development rhythm. The leaders of the automotive sales industry have always stood at the forefront of digital innovation in the automotive industry. With a solid business foundation and stable financial performance, they have been actively developing and trying new business models in various fields. To summarize, we are pleased to have made progress in all of our business segments during a challenging quarter. With the pandemic slowly easing and the government announcing a series of economic stimulus policies to boost the economy and promote auto sales, delayed car consumption demand has gradually been released. We anticipate that these factors will positively affect the auto market and promote its recovery. Passenger vehicle sales increased by over 22% year-over-year in June, and the multiple sales and manufacturer indicators are exhibiting significant signs of recovery. As most factories suspended production in April and May, market demand in June led to a significantly higher trading volume. The auto industry, as one of the most important pillars in China's economy, is recovering at a steady pace. With auto homes' edge intact, strong business foundations and a brilliant financial performance, we have been proactively seeking new development opportunities in various sectors. We believe Autohome will continue to lead the development of China's auto industry and propel a steady long-term growth while creating lasting value for all of our stakeholders with outstanding performance that navigates market cycles. 接下来我向大家简述一下汽车之家2022年第二季度的主要财务情况。 Next, let me walk you through the key financials for the second quarter of 2022. Please know that, as with prior calls, I will reference RMB only in my discussion today, unless otherwise stated. Net revenues for the second quarter were 1.73 billion. For detailed breakdown, media services revenue came in at 531 million, these generation services revenues were 753 million, and online marketplace and others revenues were 450 million. 成本方面,第二季度营业成本为2.79亿元。 Moving on to cost. Cost of revenues in the second quarter was $279 million compared to $262 million in Q2 2021. The increase was primarily attributable to our continuous investment in contents. Growth margin in the second quarter was 83.9% compared to 86.5% in Q2 2021. Turning to operating expenses, sales and marketing expenses in the second quarter were 739 million compared to 562 million in Q2 2021. The increase was primarily attributable to the escalation of marketing and promotional spending. Products and development expenses were 362 million compared to 335 million in Q2 2021. The increase was primarily attributable to greater investments in research and development activities for digital products. Finally, general and administrative expenses were 127 million compared to 177 million in Q2 2021. Decrease was primarily attributable to the reduction of expected credit losses. Overall, we delivered operating profit of $301 million in the second quarter compared to $600 million and 73 million in the corresponding period of 2021. Adjusted net income attributable to Auto Home Inc. was 472 million in the second quarter compared to 795 million in the corresponding period of 2021. Non-GAAP basics and diluted earnings per share in the second quarter were both 0.94 compared to 1.58 and 1.57 respectively in the corresponding period of 2021. Non-GAAP basic and diluted earnings per ADA in the second quarter were both 3.77 compared to 6.31 and 6.30 respectively in the corresponding period of 2021. 截止2022年6月30我们的资产负债表表现持续强劲 As of June 30, 2022, our balance sheet remained very strong with cash, cash equivalents, and short-term investments of $20.94 billion. We generated net operating cash flow of $488 million in the second quarter of 2022. On November 18, 2021, the Board of Directors authorized a $200 million U.S. stock purchase plan for 12 months. On July 31, 2022, we have already repurchased about 1.88 million U.S. stocks. The total amount is about $54.2 million. On November 18th, 2021, our board of directors authorized a share repurchase program under which we may repurchase up to US dollar 200 million of auto homes ADRs for a period not to exceed 12 months. Thereafter, as of July 31st, 2022, we have repurchased approximately 1.88 million ADRs for a total cost of approximately 54.2 million US dollars. With that, we are ready to take your questions. Operator, please open the line for the Q&A session.
spk10: Thank you, management. If you have any questions, please press 01 on your telephone keypad. You enter a queue. After you announce it, please ask your question. If you find that your question has been answered before it's your turn to speak, please press 02 to cancel questions. So once again, 01 on your telephone keypad now to answer your questions. Our first question is Robin Learn from Daiwa. Please go ahead.
spk08: Hi. Thanks, management, for taking my question, and congratulations on a solid set of results. Could management give us some color on the auto market trend in second half of this year and how the impact from the government stimulus policy and chipset supply situation affects auto supplier willingness to allocate the marketing budget? Thank you. Also, how will the policy and the supply of chips affect some of the hospitals that supply ads?
spk06: Thank you. Okay, this question... The first question is for the chairman. I'm the chairman of Qikert's family, Longquan. Actually, you just asked two questions. 一个是关于这个测试的问题, 一个是关于这个芯片的问题。 Let me take this question.
spk01: I'm the president of Auto Home. My name is Long Quan. So actually your question covers two parts. The first part is about the auto market. The second is about the chip supply.
spk06: the impact of the epidemic, especially in Shanghai and Changchun, which is the main city of our country's gas station, has been strictly closed. So this led to the decline in the sales of used cars in April and May. The decline is very powerful. We also saw the corresponding data. In April, the decline was 35%. Why is this the case? Actually, starting from March, we can see that Shanghai and Changchun, they were under very serious lockdown. Shanghai and Changchun both are very important car OEM cities.
spk01: So that's why in April, you can see the car retail data dropped by 35% out of the wholesale. In May, the number dropped by 16.9%. So roughly speaking, in the second quarter, the retail market for the passenger car really declined a lot. 但是汽车消费是我们国家消费市场的重要支柱。
spk06: So the total sales of car consumer goods in China is about 10%. So in fact, since April, the relevant government departments of the country have announced some large-scale, some corresponding car consumption initiatives to promote the development of the car industry.
spk01: As you know, the auto consumption accounts for a very important pillar industry for the consumption market in China. It accounts for about 10% out of the national total retail consumption. So that's why the government, starting from April, adopted a lot of stimulus policies to boost the auto market. So that's why we can see a lot of large-scale consumption policies have been released.
spk06: For example, in April, the State Council released an opinion on further releasing the consumption potential and promoting the continued recovery of consumption. In May, it also proposed measures to cut down on the use of cars and buy tax. In July, 17 departments such as the Ministry of Commerce and the Ministry of Industry and Industry also released a notice on the use of mobile cars to expand the consumption of cars. There are actually 12 positive measures in between. So luckily in April, the State Council released
spk01: for opinions and policies to boost and release the consumption power in the auto market. And actually, in May, the government had cut a lot of tax, especially the purchasing tax for the cost. And we, in April, and actually starting from April, we do see a lot of government associated with other agencies. In July, the Ministry of Commerce, starting with 17 departments, have released a cohesive consumption boosting policy to further boost the market. As a result, we can see in June, the market consumption had already increased by 22.6%, and in July, the data increased by 17%, which means the auto market retail has really turned around.
spk06: China's car market should have a huge space for development. The relevant departments are looking at China's car consumption. It should be in the second half of this year. It is expected to achieve a significant growth. According to the latest prediction of Zhongqi Xie, the sales of cars in 2022 are expected to reach 27 million taels. The same growth is about 3%. The sales of used cars will reach 23 million taels. The same growth rate is about 7%. The sales volume of new energy vehicles is expected to reach 5.5 million. The same growth rate is 56% or more. As a car company, we have always been optimistic about the long-term development of the Chinese car industry. The potential of the future car industry should be huge. The space up front is also wide. There is plenty of room for improvement. We have high confidence in the future development of the car industry.
spk01: We are very confident that the Chinese auto market has a huge market potential to be further released. Actually, we do see that on the second half of this year, we would expect the consumption market would be very strong for the auto market. According to the latest forecast made by the China Auto Association, in 2022, The total car sales in China can reach 27 million units, which would be 3% up over the same period of last year. And also, the passenger car, the total sales can be expected to reach to 23 million, which is 7% up. For the NEV, it will grow very robustly. The total sales can reach to 5.5 million units, and the growth rate can be 56%. So you can see that we are very optimistic about the future of the Chinese car association and auto industry. We believe the market potential would be huge, and we are very confident that we would enjoy a bright future in the Chinese car auto market.
spk06: Now let me take the second part of your question, which is about the chips.
spk01: Actually, according to the pre-warning made by the Passenger Car Association of China in January, in this year there will be about 1 million cars which would enjoy the lack of chip supply. Actually, if you look at Toyota, the Toyota from Japan, they already cut production due to the lack of supply of chips. So this would affect the production speed of the car makers.
spk06: But in terms of domestic car production in China, the chip problem is similar to the second half of 2021. Today, it has been greatly resolved. So we predict that the whole industry will encounter the possibility of chip panic again. In other words, we think it is not as pessimistic as expected in the beginning of the year.
spk01: Now, let's look at the domestic OEMs in China. Actually, compared with the second half of 2021, we believe the situation has been eased, and it's already been improved in terms of the supply of the chips. We do not think we would encounter the massive scale lack of chip supply, which means we are more optimistic than the beginning of the year's forecast.
spk06: As some relevant departments of the country, for example, the relevant department of the Ministry of Industry and Industry, in the meeting in early July, it actually also expressed that for the monitoring of the operation of this industry, it should be monitored. Then do a stable job of supply of this kind of supply of gas, chips and oil raw materials. Then we must do our best to ensure the stability and stability of this industrial chain supply chain. That is to say, from the national policy level, for the recovery of this chip supply, Actually, according to the MIIT, which they made a speech
spk01: In early of July, they said they will keep a close eye on monitoring the whole industry and ensure that the chip supply and the raw material supply can be very smooth for the auto industry. They would try their best to protect the smooth of the supply chain management for the whole industry. So this laid a solid foundation to help the chip supply to be better improved. We believe that for the later half of this year, the new car would gradually launch to the market in a steady way. And especially for the second half of the year, there will be a series of very important auto shows and events will be held. So in this way, this provides more opportunities for the OEMs to showcase their latest models. We believe that the cheap supply would no longer be the bottleneck for the OEMs.
spk06: 好的,谢谢。 That's all, thank you.
spk02: Thank you, very helpful. Thanks.
spk10: Our next question is Li-Ping Zhao, CICC.
spk00: 龙总,曾总,贺总,晚上好。 我这边有两个问题啊。 首先第一个问题是关于这个online marketplace这个产品啊。 我们看到这个环比EQ来看的话, 这部分收入有一定的这个下滑, 那是否是因为二Q的时候, 新车上市趋缓, 对于数据产品的收入造成了一定的拖拽, 那我们怎么看下半年数据产品的一个增长的趋势? 然后第二个问题呢, 是关于我们这个营销投入的, 因为也看到三Q开始线下的这个活动陆续出现嘛, 比如我们也会有818的这个车展啊, I have two questions here. First, could you please give more color on the data product growth momentum in the second half of this year? And second, because there will be more offline campaigns in the second half, such as your August 18th festival. How should we expect the sales and marketing expenses in the third and fourth quarter of this year? Thank you.
spk09: Okay, thank you. Let me answer your question. First of all, Archegos' data products have indeed been affected by the delay in the release of new vehicles. Especially the main factory, our smart new vehicle release, It is also a very important product. In terms of the release of the car, many local brands have postponed the delay of the car show and some of the activities. In the second quarter, these cars will come out one after another. This also depends on the situation of the epidemic and the pace of the local market sales. But overall, from what we can see now, we expect that there will be an opportunity to rise in the second half of the year. Regarding the second question, it is about the revenue of the entire car marketing. We do have the 818 car festival, and at the same time, there will be this kind of normalized cloud station, as well as a series of online sales platforms and online sales services for car companies. Well, thank you very much for the question. As for the second question or first question, which is the data product, that's true.
spk01: In Q1, there was some postponing of the new car launch, and also some of the events have been canceled. So that's why this has delayed and actually created headwind for our data product revenue, especially some of the smart new car launch has been postponed. We believe that in the second quarter, if the COVID pandemic can be better controlled, The OEMs would quicken their steps in launching the new car models, so that's why for the second half of the year, we would expect the data product revenue to increase and climb up. Now, the second question, which is about the sales and marketing expenditure, that's true. For the second half of the year, we would have the August 18th auto show. We also have the online auto show and online 4S store, etc., So we believe that in third quarter, our revenue from advertising, the revenue would turn positive, so which would be very clear for Q3. For Q4, we have to look at some other factors, but for Q3, which is very clear that the revenue from the media and the advertising would turn positive.
spk09: Operator?
spk06: Operator?
spk10: Next question is Richie-san, HSBC.
spk05: Thank you, management, for taking my questions. I've got two questions. First of all is we have seen, we've seen video accounts, Weibo and Bilibili are getting more auto ad budgets than before. So how do we feel the competition from these other non-vertical platforms, and what is our strategy to tackle that? Second part is, can you share the progress made in our traffic and content investment, such as short video and live streaming? 我自己翻譯一下,農總,曾總,先生,晚上好,謝謝你們接受我的提問。 我有两个问题 第一个问题就想请教一下就是 我们看到视频和微博B站等的汽车广告的数量好像开始增长很快 管理是怎么看这些竞争对我们的影响 而我们会有什么对策 第二个问题就想请教是 公司在流量和内容方面的投资 例如短视频和主播方面有什么进展 谢谢
spk09: Thank you for your question. In fact, these two questions are basically linked together. First of all, the video number, Weibo, Bilibili, including Douyin, you will see that the growth of car ads is also very fast. We think this is also normal. Because now the entire information acquisition channel is diversified, and the media is also diversified, and there will be some differences in the past. So these places will be See it. Thank you for the question.
spk01: Yeah, that's true. You mentioned that Weibo or Bilibili also include TikTok, Douyin. They all have more and more car advertising business. That's very normal because, you know, the media has been diversified, and that naturally attracted a lot of car advertising, which is filled in our expectations. However, I have a few statements to make. Firstly, for Auto Home, we are still the major, you know, stakeholder in this vertical auto, you know, industry, media industry. Secondly, our business is not only limited to the vertical media, but we also launch diversified business, including the digital product, the leads generation business, et cetera. So that's why we are more diversified in terms of our revenue rather than a single media company.
spk09: Secondly, regarding the content, as you mentioned earlier, we have made a lot of investments. We have also achieved better results. For example, we have several core IPs. As I mentioned earlier, our four original IPs have accumulated over 200 million downloads. We are also leading in terms of VR and 3D modeling, especially in terms of tool-related attributes. When buying a car, ah ah The broad media, their professionalism, their control of a certain field, and their transformation are relatively weak. We are also looking for broad cooperation with other media such as TikTok and Tencent. Through these cooperation, we can still occupy an advantageous position.
spk01: Well, actually, as you know, for Rose Media, they are more entertainment-based content. For us, we also invested heavily into the content. For example, special effects and our core IP, we have four major original IPs, which generated about 200 million view clicks. And we are also in a leading position in a lot of our content areas. For example, the 3D modeling, we are in the leading position. And we also provide the tools, which would be practical tools for people to purchase a car. For example, we have the car model database, which our traffic would be very different from those media or entertainment-based content. So we are more professional, you know, car purchasing tools provider. We also established the traffic alliance with a lot of our partners, except TikTok, Douyin, and Tencent. So in this way, by collaborating with those traffic providers, we would continue to be in a leading position, especially when providing the professional content and providing the effective tools for people to purchase a car.
spk09: For example, in the second quarter, if you check the Quest Mobile data released, you can see our users have grown by 8.1% over last year, which is a very significant result. Okay, thank you.
spk01: Next question, please.
spk10: Next question is Brian Gong, Citigroup.
spk07: Thank you for accepting my question. My question is about the second-hand car business. I don't know if the management can share how big the revenue scale of this business is in the second quarter. And what are our expectations for the second-hand car business in the second half of the year? I would like to ask myself, can management share the rough revenue scale for TTP in the second quarter? And the requirements, you know, the stimulus policy, what's our expectation on TTP for the second half of this year? Thank you.
spk09: Before the outbreak of the epidemic in the beginning of the year, in January 2022, the Car Transport Association predicted that the total number of second-hand car transactions would be about 19 million, which is 8% of the total growth. Due to the impact of the Shanghai epidemic, the second-hand car industry has been affected by the second quarter. The second quarter is actually a negative growth. Then in June, after the epidemic was controlled, the second-hand car was also in the process of recovery.
spk01: Thank you for the question. Talking about the used car, actually, according to the forecast made in January of 22nd, the year-round used car transaction can be 19 million units, which would be 8% growth rate. However, starting from second quarter, especially the lockdown of Shanghai, that has been greatly impacted, the used car transaction. So that's why the real transaction volume in second quarter is negative growth. Starting from June, with the better management of the COVID-19, we can see the used car market is gradually picking up.
spk09: Now, talking about the used car business,
spk01: Currently, the used car transaction volume and the total revenue still accounts for a very small portion of our total revenue. And we believe that for the second half of the year, the used car business will continue to grow. The growth can be 23%. So it will continue to grow, especially on the second half of this year.
spk09: The State Council has also released new measures nationwide to strengthen the traffic of second-hand vehicles. From Zhijia, TianTianPaiChi and PingAn, in fact, in the whole second-hand vehicle today, we see that in addition to us, in fact, everyone can only serve one section of the entire chain, and they do not have all the ability. And Zhijia, TianTianPaiChi and PingAn, three and one of these advantageous resources, we are more According to the National State Council, they issued a policy which would boost the circulation of the used car market in China. Actually, each of the vendors can only work for a portion of the value chain.
spk01: leveraging on auto home, TTP, and Ping An, if we combine the three together, we can consolidate all the merit resources, which we can provide a one-stop solution for the car users and the car purchasers. So in this way, we can better provide value-added services and digitalized services for the used car business.
spk09: So we expect that as the policy gradually falls, and we
spk01: So we would expect that with the implementation of the real supportive policies and the consolidation of the three players, next year the used car business would generate a higher portion out of the total revenue.
spk09: Okay.
spk01: Okay, thank you.
spk10: Next question is Thomas Chong. Please go ahead.
spk04: Good evening. Thank you for accepting my question. My question is about renewable energy. We see that in the second quarter, our income is a very high-speed growth. I would like to ask about the current market situation. And in the next few years, do we think that this quarter can reach our income? Will there be any expectations? Thank you. I think my question is first, congratulations on a very strong set of results. And for new energy vehicles, we are seeing very fast revenue growth during the second quarter. May I ask about the competitive landscape at the moment? And in the next couple of years, how should we think about the revenue contribution from this segment in the future? Thank you.
spk09: Thank you. From a competitive point of view, Shijia has always been in a leading position in the industry. In the past period of time, you may have seen that from the point of view of the media, there is now a diversified way of the media. This is not the role of any company. This is a trend of the entire media development. So Zhijia also rely on the advertising revenue of the media to develop to be able to rely on through clues, through this digitalized product. In the future, more will be through, including car ecology, car life, customer car life, or even we can speed up the entire automotive marketing industry chain to such a digitalized level, so that more things can be done online. The digitalized product that we provide to our customers is actually a CRM Plus product. It is a product that combines customer clues, customer clicks, and customer management, including 3D management, into one. So in this area, we are actually always in the lead position, and this lead is still relatively stable. Thank you for the question. Talking about the competition, as you know, Autohome has continued to be a market leader in this market. Actually, we are not only limited to media business.
spk01: If you look at the overall trend, the media providers had always been more diversified. That's a market trend. So that's why Auto Home had already been diversifying our revenue rather than only relying on the media and advertising. We diversified our revenue by providing leads generation business, digitized products, the auto ecosystem, and auto lifestyle or car lifestyle products. So in this way, we are trying to reshape the value chain for the whole industry and to digitize the whole value chain. We provide a CRM plus business model, which we provide the leads generation, the clicks management, the full store management, and the CRM system. So maybe some of the competitors, they are very strong in a certain area. However, if you look at the combined strength, we are definitely a very solid market leading position.
spk09: It may break through the original S4S mode. At this point, we also have a response, especially since we have a new sales mode, which combines virtual technology and actual scenarios into a mode like a combination reality to do car sales. As we mentioned earlier, Now, talking about the NEV market, we are continuing in a very strong position, and the NEV has become a very strong power in the auto market.
spk01: However, the NUV sales is a brand new marketing and sales model, which they do not adopt the traditional model. That's why we are already prepared to mostly suitable for the NUV sales, which we call it a new retail sales model. We provide virtual reality technology or hybrid virtual reality technology to boost the car sales for the NUV or YAMS. And in the third quarter, we are going to launch some of the experience stores, and we welcome you to visit the experience stores and to feel by yourself.
spk09: Okay, due to time limit, let's allow the last question. Thank you. Operator, please.
spk10: And our last question is Stephen Chen, Morgan Stanley.
spk03: Mr. Long, Mr. Chen, Mr. Song, hello. Thank you for accepting my question. I have a question about media service revenue. In the second quarter, compared to the first quarter, we were affected by the epidemic, the supply chain, and so on. But our revenue here has achieved a growth of nearly 100%. I want to know if the main driving factor behind it is that we have done something different from other media or car racing platforms? In addition, in the second half of the year, you also mentioned that the sales of used cars this year is estimated to reach a new high of nearly four years. How should we think about the increase in income of the media service in the third quarter and the fourth quarter? Is there a chance to return to a higher income level in 2019 and 2020? Let me translate it myself. Thank you, management, for taking my questions. My question is about your media service segment. This segment revenue sold around 100% growth despite some city lockdowns and supply chain impact. Could you kindly share with us the underlying drivers behind such growth? What did you do differently than other media entertainment and other vertical platforms? Also, looking into the second half, How should we think about the media service revenue growth trajectory? As you mentioned, it is expected that PV sales is likely to reach a four-year high level. Any structural reason that the revenue line cannot go back to the previous high levels that we saw in 2019 and 2020? Thank you.
spk09: Okay, thank you. First of all, I would like to answer why the second quarter driver rate has increased so much compared to the first quarter. First of all, the first quarter is also a matter of seasonality in history. You know, everyone has the Spring Festival in the first quarter. This year's first quarter also has some special circumstances, such as the impact of the epidemic. Thank you for the question.
spk01: What are the major drivers? Actually, if you look at Q1, we believe there are some seasonality factors because there was Spring Festival, which is the biggest festival in China, and also the COVID pandemic. So that's why the media expenditure has been postponed due to those factors. However, after Q2, Shanghai and Jilin, they gradually have completed the city lockdown. They gradually reopened, so that's why the expenditure improved.
spk09: As for the future, you mentioned that from the media's point of view, compared to the past 2020, I think it's not the same as it was then. Now, we have increased the service It has been upgraded. It is far from just looking at it from this perspective. In fact, it is a comprehensive perspective. So in the future, we may also consider how to adjust our financial report so that everyone can see such a more comprehensive service. We also mentioned today that our current service is to do it in a broader and deeper way, including our new energy car, including our car life, including we also put the main airport and Now, looking into the future, whether we will be as good as what happened between 2019 and 2020, we have to say the current situation is very different from what happened in 2019 and 2020.
spk01: Because we are not only providing a single service, rather we are providing a more comprehensive and more, you know, combined services. So because our services to OEMs and the dealers all have been improved to a comprehensive service. So we may revise some of our accounting. in the financial reports and the financial statement to better reflect our business model change, which we provide combined and comprehensive services, including the NUV, the car lifestyle, the OEMs plus used car business, to which we are not only providing a single service, but rather we are providing comprehensive service. Our service has been deepened and broadened.
spk09: Operator, this is the end of the Q&A. Please go ahead.
spk10: Thank you. This is the end of Q&A sessions. I will turn the conference back to the management for closing remarks.
spk06: Thank you, everyone, for attending today's meeting. Thank you, everyone, for joining us today for the early conference call.
spk09: We appreciate your support and look forward to updating you on our next quarter 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 very much. Thank you. Bye.
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