Autohome Inc.

Ladies and gentlemen, thank you for standing by for Autohome's fourth quarter and full year 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the former 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 Soong, Auto Home's IR Director. Mr. Song, please go ahead.

Thank you, operator. Hello, everyone. Good evening. Welcome to Auto Home's fourth quarter and full year 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 the Chief Executive Officer, Ms. Qianlong, and the Chief Financial Officer, Ms. Yanzeng, with us. After our prepared remarks, our management team will be available to answer your questions. Before we continue, please know 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 actual 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 U.S. Securities and Exchange Commission and the Stock Exchange of Hong Kong Limited. Autohome doesn't undertake any obligation to update any forward-looking statements except as required under applicable law. Please also note that Autohome's earnings press release and this conference call include discussions of certain and audited non-GAAP financial matters. Please refer to our press release, which contains a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures, and is available on AutoHomes IR website. Again, as a reminder, this conference call is being recorded. In addition, a live and archived webcast of this earnings conference call will also be available on AutoHomes IR website. I will now turn the call over to Auto Home Chairman and the CEO, Mr. Long, for opening remarks. Please go ahead, Mr. Long. Thank you.

Hello, everyone. This is Mr. Long, Chairman and CEO of Auto Home. Thank you for joining us today in our earnings call. In the fourth quarter, the performance of Car Home increased and recovered.

The total revenue increased by 12% compared to the previous quarter. Among them, the revenue of the media business increased by 64% compared to the previous quarter. While the revenue increased rapidly, we continued to maintain a higher level of profit. In the fourth quarter, those belonging to Car Home achieved a 43% increase in net profit. The net profit rate reached 35.3%. The full closure of 2022 All year round Although the epidemic and other uncertain factors are in the past But the family's performance has been reversed from the past With extreme inner business performance Again clearly prove to the market With a large and active user base Steadfast and stable chicken plate business And the innovation ability to lead the industry In fact, the family can go through the industry cycle In the fourth quarter, auto home business witnessed accelerated pace of recovery with total revenues up by 12% year-over-year. Notably, media services delivered robust revenue growth at 64% year-over-year. While boosting our top-line growth, we also maintained good profitability and a high profit margin level. Our adjusted net income for the fourth quarter surged by 43% year-over-year, with adjusted net margins reaching 35.3%, closing out 2022 on a high note. Against the backdrop of the pandemic and other uncertainties throughout the year, AutoHome successfully overcame adversity and a bounce-back stroke, once again demonstrating the resilience and the vitality of our business, building on our large and engaged user base, solid business fundamentals, and industry-leading innovation capabilities, AutoHome is well positioned to navigate market cycles and achieve healthy long-term development as we continue to blaze trails and become the industry's frontrunner.

Looking back at 2020, we achieved long-term progress in the two key areas of content and ecosystem construction and channel innovation. In terms of content, We successfully used the large IP brand to promote a video-based strategy. Hengxiang cooperates with multiple Internet platforms, cooperates with partners to organize cross-border activities, and explore new experiences in car life. On the track of innovation, we continue to dig deeper into industrial values and promote the development of business.

In the field of new energy, car maintenance, data products, etc., we continue to achieve new achievements. Between one and all, Looking back at 2022, we achieved significant progress in two key areas, content ecosystem construction and exploration of new initiatives. On the content front, we successfully leveraged our big IT brands to promote our video-based strategy and formed partnerships and organized cross-promotional activities with multiple internet platforms to explore new automotive lifestyle experiences. In terms of new initiative exploration, we made huge strides in exploring the industrial value chain and promoting in-depth development across our business. Supported by our continuous new achievements in EVs, used cars, data products, and other fields. Driven by our relentless efforts in these two areas, we continue to expand new business boundaries, establish new standards, and foster new types of business. With our multiple-dimensional business roadmap and extensive development concepts, we've built a brand-new ecosystem in the automotive industry, propelling Autohome to new heights.

Over the new year, with the improvement of the macroeconomic environment, the continued recovery of the industry, and the movement of the local government's stable consumer policy, the automotive industry is also looking forward to maintaining a stable and deep development.

Qisezijia will benefit from the recovery of the industry, continue to support co-operative partners and the digitalization of the entire industry, and gradually improve shareholder returns to achieve eastern profit. Heading into 2023, with the improvement in the macro environment, the restoration of industry order, and the local government policies to stabilize growth and boost consumption, the auto industry is expected to maintain a steady upward trend Benefiting from the industry's recovery, Autohome will continue to empower business partners and promote industry-wide digital transformation, while also increasing shareholder returns and achieving a win-win situation for all parties. Next, let's have Mr. Sun Yanyi introduce the company's four sectors and comprehensive business and financial situation. So with that, I will now turn the call over to our Chief Financial Officer, Craig Zeng Yan, for a closer look at our fourth quarter and the four-year operating and financial results. Thank you, Mr. Long. Hello, everyone. I'm Craig Zeng Yan, the Chief Financial Officer of Autohome. continue to build core IPs, and establish a car-only IP system to construct a useful and interesting video content ecosystem in all directions. As Ms. Long just mentioned, we've made ongoing efforts to advance content creation and build core IPs to establish Autohome's IP matrix, constructing a useful and fun video-based content ecosystem. For example, winter testing, This is our long-standing network IP test project since 2019. The test results are of great guidance for users to choose a car and buy a car. In 2022, the winter test covered 58 newly listed popular electric vehicles. So far, the total network playback volume is nearly 300 million, including super test, long-range pen and paper, and the home of cars, the largest original IP, with a total network playback volume of nearly 800 million. Our original IP governance overall scale is ahead of the industry. In addition, we have held more than 550 online car shows throughout the year, which make it convenient for users to watch cars and choose cars. In terms of content, we have also incorporated more new and interesting ways of playing such as the original universe, digital people, and digital products to attract the attention and participation of a large number of young users and effectively improve user connectivity. For example, Winter Inspection, our flagship vehicle testing IT project, has consistently produced useful content since its launch in 2019, with test results that greatly assist users in choosing and buying cars. In 2022, Winter Inspection covered 58 newly launched popular electric vehicles and has accumulated nearly 300 million views across the entire network to date. AutoHome's four original IPs, including SuperText and the Travel Journal, have accumulated nearly 800 million views network-wide, leading the market in terms of the overall size of our original IP matrix. In addition, we held more than 550 online auto shows throughout this year, providing users a seamless experience for searching and choosing cars anytime and anywhere. We also introduced interesting elements such as metaverse, match human and virtue assets to our content creation portfolio to encourage greater participation and a deeper engagement from younger users, effectively enhancing our user sickness. In addition, we have reached strategic cooperation with many partners, such as Gaode, Huawei, and Beili New Energy, in order to seek more business coordination. We also organized various activities with Ma Hongwo, Jindong Car, and Wang Yi Yun Music, and explored new car experiences. These innovative strategies have completely increased our traffic size and expanded the scope of user access. According to Questmobile data, in December 2022, We have reached strategic cooperation with multiple partners such as AMAT, Huawei Cloud, and the Beijing Institute of Technology, Xinyuan Information, etc., or BIT, to explore greater business synergies. We've also jointly organized a broad array of activities with online platforms such as MaFengWo, JD Auto, and NetEase Cloud Music to explore new automotive lifestyle experiences. These creative tactics have substantially increased the user traffic in our ecosystem and extended our user base. According to Quest Mobile, Auto Home's mobile DAU in December 2022 increased by 16.1% year-over-year and reached a record high of 54.39 million, further reinforcing our leadership position in the industry. In terms of commercial and commercial business, despite the big challenges faced by the car market in 2022, it continues to maintain a stable and good growth status in the fourth quarter. Car dealerships will continue to upgrade their lead products and tools, and use technology to continuously reduce the cost of decision-making and trading costs of customers, and help commercial customers to fully reduce their cost-effectiveness. Car dealerships will maintain a stable number of business partners, and the supply version will remain at more than 13,000, and the technology version will be close to 8,000. The high-end version has more than 20,000 businesses. Regarding our dealership business, despite the immense challenges the auto market faced in 2022, Auto Home continued to maintain steady upward growth momentum in the fourth quarter. Notably, with the continuous upgrading of various lead generation tools and services of our dealers' membership products, which is Chuxiang Hui, we continue to reduce our customers' decision-making costs and transaction costs. Through advanced technology, helping our dealer customers to reduce overall costs and increase efficiency. As a result, in the fourth quarter, over 13,000 dealers purchased our premium version and nearly 8,000 dealers purchased our tech version. For a combined total of over 21,000 dealers purchasing high-end versions of our lead subscription packages. In the field of digital innovation, we have accelerated the growth of the second growth curve. By increasing the strength of the resource system and the corresponding investment in the key areas, we have achieved a major improvement in terms of new industry, new model, and new products. In terms of exploration of new initiatives, we accelerated the development of our second growth curve, achieving major breakthroughs in new types of business, new models, and new products by increasing resources allocation and investment in key areas. Let me walk you through in great detail. In the new energy industry, the trend of increasing the penetration rate of new energy vehicles, and actively lead the change in the industry. In September 2022, the first offline experience store was officially opened, and the world's first energy space station was launched. This is a brand new retail model that I have. It opens from online to offline to all-line retail business. Not only can it provide a one-stop shopping experience for customers on all sides, but it has also received initial recognition from the main market. So far, We have cooperated with 26 brands as a new attempt in the field of new retail. In 2022, the overall income of new energy brand brands will increase by 153% and continue to run in the industry sales increase. In the future, Car Home will continue to explore multi-border integration in multiple cities to improve the penetration rate of offline stores and lead to the change of purchase experience. First, let's look at our new energy vehicle business. Facing the continuous increase in NEV's penetration rate, Autohome adapted proactively and led the market's transformation. In September 2022, we officially unveiled our first offline experience store, pioneering a unique multi-brand retail model called EnergySpace. This full-chain retail model connects online activities with offline transactions, providing users with a one-stop selecting and purchasing experience, while also gaining recognition from OEMs. As of now, we have cooperated with 26 brands, becoming OEM's new partner in the new retail field. In 2022, revenue generated from NEB brands continued to grow vigorously and increased by 153% year-over-year, once again outperforming the industry's sales growth. Looking forward, Autohome will continue to explore the integration of multiple types of businesses, improve the penetration rate of offline stores in various cities, and lead the transformation of the car-purchasing experience. At present, we have established cooperation with more than half of the Chinese market to establish cooperation with car brands. The Chinese digital and technical capabilities of commercial data products provide all-round digital marketing services to commercial customers, helping businessmen to improve their performance. In the whole year, the number of individual income and individual cooperation products of digital commercial companies has increased by more than 20%. On our data product front, AutoHome achieved a 0 to 1 breakthrough in 2022, providing OEMs with five series of data tools to meet their diverse needs, spanning from users' private domain operations to the digitalization of back-end services. At present, we have established cooperation with more than half of the automakers in China's auto markets. Building on Autohome's digital capabilities, our data products provided our dealer customers with full-chain digital marketing products and services, helping dealers to increase profits and efficiency. For full year 2022, both the average revenue of data products per dealer store and the average number of data products adopted by each dealer store increased by more than 20% year over year. We accelerate the combination of the advantages of home, day-to-day parking, and Ping'an Group. We strongly promote the construction of a full chain of trading service platforms for second-hand vehicles. Both the user and customer sides have made good progress. On the user side, we provide the user with vehicle frame and vehicle frame survey tools through the product list of the car market. We solve the concerns of the user buying a car. On the customer side, we create a digital cloud platform for second-hand vehicles. We help retailers to operate effectively. In addition, the day-to-day parking of vehicles has been further improved through detailed operation and operation, and the business situation continues to improve. In 2022, the information combination and auction service of Zhijia has affected about 21.5% of the domestic second-hand car trading volume, and has increased by nearly 5%. In the future, we will continue to accelerate the deployment of the entire industrial chain, and through deep strategic cooperation with Beijing New Energy, we will create a second-hand car and new energy car data products, Moving to our used car business, we accelerated our integration of resources from Autohome, Pingnan Group, and the TianTianPaiTru or TTP. And drastically promoting our one-stop full-chain transaction service platform for used cars and achieving solid progress on both the buyer end and the dealer end. For buyers, we provided them with vehicle condition and price inquiry tools through our car history object product, effectively solving their purchasing concerns. On the other end, we helped them improve operating efficiency by building a used car digital cloud-based platform. In addition, we further enhanced TDP's efficiency through refined operations and upgraded its operating conditions. In 2022, through AutoHomes matching and option services, our platform accounted for about 21.5% of all used car transactions in China with 5% point year-over-year growth. Moving forward, we'll continue to expand our footprint across the entire industrial chain and create data products for use NEVs via in-depth strategic cooperation with BIT, differentiating ourselves and building our competitive edge in the used car field. As the leader of the Chinese automotive industry, car manufacturers will continue to maintain their competitive advantage in the industry. At the same time, all traditional flagship businesses will maintain the existing market share and customer groups. At the same time, we will continue to work hard to upgrade all innovative business plans, build a full chain road car ecosystem platform, and provide service to car users throughout their lifetime. By actively leading the transformation of the industry, we will vigorously promote the digitalization and upgrade of the automotive industry, and continue to create more long-term value for users, customers, and shareholders through the excellent performance of the transition and industry development cycle. To summarize, despite the complex microenvironment and various uncertainties in 2022, we are pleased to have made great progress in all business segments. We maintained upward growth momentum in our business recovery for two consecutive quarters and illustrated a perfect V-shaped rebound, outperforming the overall market and achieving stellar results. As the leader in China's auto vertical media industry, Autohome will continue to strengthen its competitive advantages by solidifying its various traditional business spaces and maintaining its existing market share and customer base. Meanwhile, we also continue to cultivate our innovative business segments to build a one-stop full-chain auto ecosystem platform, providing our users with services across the full lifecycle of automobile ownership. We are confident we can vigorously promote the digital upgrades and transformation of the automotive industry while creating lasting value for all our users, customers, and shareholders with outstanding performance that transcends market cycles. Next, I would like to explain the main financial situation in 2022, the fourth quarter, and the whole year. Next, let me walk you through the key financials for the fourth quarter and the full year 2022. Please note that, as with prior calls, I will reference RMB only in my discussion today, unless otherwise stated. To sum up, the total revenue of the media service is 6.1 billion yuan, which is 63.7% of the total revenue. The revenue of the telecom service is 7.87 billion yuan, which is 1.1% of the total revenue. The revenue of the online marketing and other services is 4.96 billion yuan. Net revenues for the fourth quarter were 1.89 billion, or 11.8% year-over-year. For a detailed breakdown, media services revenue came in at 610 million, an increase 63.7 percent year-over-year. Least generation services revenue increased 1.1 percent year-over-year to 787 million and the online marketplace and others revenues were 496 million. Moving on to our cost. Cost of revenue in the fourth quarter was 371 million compared to 262 million in Q4 2021. The increase was primarily attributable to our continuous investment in content. Growth margin in the fourth quarter was 80.4% compared to 84.5% in Q4 2021. Turning to operating expenses. Sales and marketing expenses in the fourth quarter were 673 million compared to 803 million in Q4 2021. The decrease was primarily attributable to the decline in marketing and promotional standing. Product and development expenses were 313 million compared to 395 million in Q4 2021. Finally, general and administrative expenses were $103 million compared to $128 million in Q4 2021. In short, the annual profit of the fourth quarter of the Car Home was $5.13 billion, and the annual profit of the second quarter was $1.77 billion. The annual profit of the fourth quarter of the Car Home was $6.69 billion, and the annual profit of the fourth quarter was $4.69 billion. Overall, we delivered operating profits of $513 million in the fourth quarter compared to $177 million in the corresponding period of 2021. Adjusted net income attributable to auto home was $669 million in the fourth quarter compared to $469 million in the corresponding period of 2021. The fourth quarter, the basic and corrupt state-adjusted U.S. stock net profit is divided into 1.36 yuan and 1.35 yuan. In the same year, the total was 0.93 yuan. The fourth quarter, the basic and corrupt state-adjusted U.S. stock net profit is divided into 5.42 yuan and 5.11 yuan. In the same year, the total was 3.71 yuan and 3.70 yuan. Nungap's basic and diluted earnings per share in the first quarter were 1.36 and 1.35 respectively, compared to both 0.93 in the corresponding period of 2021. Non-GAAP Basics and Diluted Earnings per ADI in the fourth quarter were 5.42% and 4.41% respectively, compared to 3.71% and 3.7% respectively in the corresponding period of 2021. Next, let me briefly summarize the performance of 2022. The total revenue was 69.4 billion yuan, and the total revenue of the media service was 19.6 billion yuan. Let me now turn to a short summary of our 2022 full-year results. The total revenues were $6.94 billion. Of that, media services revenues were $1.96 billion. Leased generation services revenues were $3.06 billion. And online marketplaces and other revenues were $1.92 billion. In addition, we delivered an adjusted net income attributable to auto home of $2.17 billion. As of December 31, 2022, our assets are not on the table and continue to perform strongly. The current cash and short-term investments are estimated at 22.8 billion yuan. The current cash flow from the financial activities in 2022 is estimated at 25.7 billion yuan. As of December 31st, 2022, our balance sheet remained very strong with cash, cash equivalents, and short-term investments of $22.08 billion. We generated net operating cash flow of $2.57 billion in 2022. On November 18th, 2021, the car company's board of directors was authorized to approve a $200 million loan for 72 months. On November 3, 2022, the Board of Directors will be authorized to extend the deadline of the stock repurchase plan for 12 months to November 17, 2023. As of February 10, 2023, we have repurchased about 3.69 million U.S. stocks, with a total cost of about $1.1 billion. On November 18, 2021, our board of directors authorized a share repurchase program under which we were committed to repurchase up to 200 million u.s dollar of auto homes ads for a period not to exceed 12 months thereafter on november the 3rd 2022 our board of directors authorized an extension of the share repurchase program for another 12 months expiring on november 17 2023 as of february 10 2023 we have repurchased approximately 3.69 million ADIs for a total cost of approximately $111 million. I am happy to announce that the Board of Directors will change the annual cash policy of 2022-2026 to a fixed cash policy of more than 500 million yuan per year, and will gradually increase the total amount of capital in order to better repay the large shareholder's long-term support to the company. And all of these to announce that our board approved an amendment to change the annual cash dividend to a fixed amount of at least RMB 500 million between 2022 and 2026. augmenting our ongoing increases in shareholder returns even further to repay our investors for their long-term support. Our board has also approved a dividend of approximately $0.58 per ADS or $0.45 per ordinary share for fiscal year 2022. The company has maintained a stable business for a long time, has a sufficient amount of money, and is in good health. In the public market, the company is actively buying and selling stocks, and the company continues to raise money. This shows the company's determination to increase the efficiency of capital allocation, and it also shows the company's long-term interest in raising the interests of investors. By 2023, the company will continue to pursue the goal of achieving long-term health growth, and continue to strive to create long-term value for shareholders. AutoHome's long-term stable operations, sufficient cash reserves and healthy cash flow, as well as our active stock repurchase program and ongoing dividend payouts, demonstrate our determination to improve our capital allocation efficiency and reflect our long-standing dedication to our investors' interests. As we step into 2023, we will continue to develop new initiatives targeting long-term healthy growth while remaining committed to delivering shareholder value. With that, we are ready to take all your questions. Operator, please open the line for the Q&A session.

Thank you. We will now begin the question and on to the session. To ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Our first question comes from the line of Thomas Chong from Jefferies. Please ask your question.

謝謝。 Thanks management for taking my questions and congratulations on a solid set of results. I have two questions. My first question is about the outlook for the auto industry for this year. And number two is about our cash usage and capital allocation. Thank you.

Thank you for your question. I am Longquan. My question is about the 23-year-old car. I think the reason for your question

Through this data, I want to talk about the reasons. There are mainly two reasons. The first reason is because of this year's Spring Festival. It's in January. This is one reason. The second reason is because our country's preferential policies for oil and new energy are the same as last year. So that's why some of the related reactions to our test came before the fourth quarter of last year.

Well, thank you for the question. My name is Longquan. I'm going to try to answer your question by quoting why you asked this question. As you know, in terms of January, you have noticed that some of the data of the production themselves had already been released. If we compare the production and the sales with the same period of last year, the numbers have been dropping significantly. That's also true of comparing with the previous month. I think there were two reasons tied to this. The first reason is because the long holiday, the Chinese Spring Festival, was on January. The second reason is because the favorable policy and the subsidy for the combustion car and for the NBV The policy has been faded away at the end of last year.

In fact, in January this year, the State Council's long meeting has also pointed out that it is necessary to promote consumption in time for the lack of demand, to accelerate the recovery and become the main driving force of the economy, to promote and help life services companies and individual business owners, to promote the overall landing of car and other general consumption policies,

Then the organization began to offer a variety of activities for consumer consumption to promote access to consumer consumption and speed up recovery.

So this is the number of long meetings of the State Council this year. So at the same time, with the end of our epidemic in the second half of this year, the production life in Beijing has been resumed. So the consumption of test cars has actually begun to recover.

Well, having said that, I still want to say I'm optimistic about 2023. Why I say so was due to the following reasons. Actually, if you look at the auto industry, it has been a pillar industry in China, and also the government attached great importance to this industry. According to the 2023 January State Council Standing Committee meeting, they said that we need to address the conflict about supply satisfying the demand of the consumers and try to push forward consumption and put all the consumption as one of the pillars to boost the economy. And we also need to implement a lot of consumption policies to be implemented to boost the auto consumption. And we also need to boost the marketing and expenditure for all kinds of consumption retail business and also try to boost the retail business to recover. So the rules were the policies has been released due to the January Standing Committee of the State Council.

But we can see this kind of government of various provinces As long as it is for some of these new energy cars This kind of real-time policy has always been released For example, our Shanghai and Hunan For this new energy This car's self-reliance subsidy policy is actually continuing Then Samsung is also encouraging some of the conditions to increase this subsidy In the same way, in the second quarter of 2023, some traditional car shows will also be opened. So I think that new car models that will be launched one after another will have some sales opportunities. Many of these options can drive the demand for consumption to rise. At the same time, we can also see

And also, I want to say, although the national level subsidy has been faded away temporarily, but at the provincial level, the local government launched a lot of new initiatives to boost the energy consumption. For example, in Shanghai and Hunan province, It continued the trade-in subsidy for the MEV cards. In Shanxi Province, they encouraged some of the cities to boost more effectively on the subsidy and also to dig into the trade-in potential to boost the consumption. I think also with the abandon of the zero COVID policy and opening up, we believe that the auto show will also recover. and a lot of new car models gradually being launched into the market. So in this way, we believe the auto consumption market would be pushed forward.

In addition, from the sales structure of the automotive market, it seems that the new energy car has continued to grow relatively quickly in the past few years.

And also, if you look at the auto market, the sales structure, we do see that the NVV sales

has been increasing in a continuous way. For example, even if the national subsidy had faded away, there are a lot of new policies to boost the NEV consumption. We believe the NEV market would be policy-driven, transforming into a market-driven market. In this way, we believe that maybe in the near-term or short-term, there may be some slowdown of the sales But for the long run, we believe the year-round growth would continue to be around 40%. We do believe there are more diversions in the NUV market. The top players would benefit out of such diversions. And that would help the NUV top players to expand more on their branding.

In 2023, I think this is the first year of the implementation of the new policy of the second-hand car. Last year, a series of new policies of the second-hand car were announced, so that the past is based on personal transactions, and the transformation is based on entrepreneurship. The market of the second-hand car has also been transformed from an economic model to a commercial model. Also, I want to take this opportunity to comment on the used car market. We believe 2023 would be the first year

to fully implementation of the used car new policies. We believe that the used car market would be personal transaction driven, transforming into corporate letting business. And the used car market would also experience the transformation from the agent-based model to the dealership-based model. We believe the 2023 market of the used car, the overall growth can be 8%. We also believe the government is trying to encourage the scalability of the used car business and they try to make the operation in a more standardized and compliance way. All this would further boost the healthy development of the used car market.

So in general, we have reason to believe that with the implementation of some of the country's relevant compensation policies, it will further stimulate the market主体和消费活力, so we

The development of this domestic test in the next two or three years is full of confidence.

Overall speaking, we believe with the implementation of all these supporting policies, we believe this would boost the consumption needs and vitalize the consumption demand. So that's why I'm quite confident about the 2023 domestic auto market.

As for the use of cash, I would like to invite Ding Yan to talk about it.

Talking about the allocation of the cash, I would like to invite Mr. Zeng Yan to take this question.

The company has a relatively good cash reserve. The cash flow is also very healthy. Last year, we sent 2.1 billion in cash flow. The company is also very interested in this interest. So we have just approved it in the cash flow. Last quarter, we approved the extension of our stock return plan. This quarter, we also approved an increase in our stock price. In this way, our stock price increased by almost 16% compared to last year. In general, the future year will also be at least 500 million, and it may gradually increase. Therefore, we will return our shares through the return and overpayment. In the future, we are actively looking for new ways of investing in our business, including content. We also have a lot of video and live paintings, including some of the original universe, including our current AI, and the whole direction of investment. We are also expanding on some new channels, such as the data products we invested in. We have already seen the obvious results. So in the end, we will see if there are any opportunities to help the company's development, such as M&A or internationalization. We will all go and see.

Thank you for the question. Talking about the cash, we have abundant reservoir of the cash and our cash flow has been very healthy. And we also attach great importance to the shareholders' interest. We have the net inflow of 2.1 billion of the cash last year. According to our BOD meeting last quarter, we will extend the share by back initiative. And in this quarter, we already improved actually the dividend payout ratio about 16% compared with the last year. So actually the dividend payout would be 500 million RMB and it will continue to grow in future. So that is a way we're trying to actually give back to our shareholders. Now, talking about the business side, we have a lot of new initiatives. We have new investments into the content, the video-based, the live streaming-based, the metaverse-based, and AR-based products. And according to our new business, the data product has been thriving. And we are also looking into some other opportunities to explore the M&A deals and make our business more global presence. So thank you for the question.

谢谢。 Thank you. Our next question comes from the line of Richie Sun from HSBC. Please ask your question, Richie.

I will translate myself. Thank you, management, for taking my questions. I have two questions. First of all, in 2023, for data products, what would be our KPI and what types of new launches can we expect? Second of all is, going to this year for the used car business what will be our KPI and focus and how should we think about the long-term adjusted net margin for this business thank you

Our plan basically revolves around our customers, helping customers to increase their efficiency. Because our business, whether it's for the salespeople or for the main airport, is all about helping them improve their work efficiency and help them improve their efficiency. So we will continue to release our new modules in this direction. On the other hand, we will continue to increase the coverage of customers to allow customers to use our modules more comprehensively to promote our speedy products.

Talking about the digitalized product, our major purpose is trying to help our clients to lower the cost and enhance the efficiency, no matter it's for YAM or for the dealers. So we are trying to help them to improve the efficiency and we would continuously to launch a lot of new models. And also, on the other hand, we are trying to enhance the coverage of more clients. And we wanted to empower the customers with our new modules.

As for the direction of new products, I can probably mention it here. For example, we will focus on the direction of the battery, the new energy car, and the second-hand car of Beili New Energy.

Now talking about the future direction of the new business, we are working with the BIT on the batteries, on the NGV autos, and some of the used car business. We all have a lot of our innovative initiatives.

Now talking about the used car business,

Our major purpose is trying to establish a one-stop, full-chain transaction and service platform.

In this way, we can reach a trade deadline and be able to participate in the entire process of second-hand trading. This is exactly the focus of second-hand trading in the entire market. Second-hand trading, we will work to achieve this goal with our second-hand dumps and some data products.

Talking about the used car focus, firstly, we are trying to create a closed loop for the transaction. Actually, it will cover all the full business chain of the used car transaction. We believe this would be the pain point in the used car market. And we are also going to launch the used car SaaS service and some other data products.

The continuous online operation of 22-year-old Zhijia Google has become more effective. In 2022, Alder Home had finalized our operating

And in this way, we enhanced the coordination of the resources and also have a better management, not only on the 2C side, but also on the 2B side, which achieved a good breakthrough. For example, we launched an innovative trading business and also used the CarStats product and the car history and the car condition data service. And we work with BIT on a lot of our deepened data services. In the future, Autohome is trying to build a one-stop solution for auto purchasing and a one-stop solution for auto sales plus SaaS product. That is our strategic target.

Because of the business model of the 20-story market, we are still in a stage of exploration. Now, tell me about the used car business model. As you know, it is under exploration for the whole market.

We achieved a profitable business for the auto home used car business. For the TTP, it achieved a break even on the later half of last year. So in this way, we are trying to build our used car business. The margin would be similar to our dealership business.

Thank you. Our next question comes from the line of Ryan Gong from Citi. Please ask your question, Ryan. Good evening.

Thank you for accepting my question. First of all, congratulations on your very good performance. I have two questions. The first one is about the second-hand car of Tianjin. As we just mentioned, the second-hand car of Tianjin has an increase of about 8% this year. Under this background, We expect that there won't be a lot of increase in annual revenue because there has always been a market share gain in the past. The second question is that Mr. Long mentioned that the government will continue to come up with more policies to improve the automotive industry this year. Can you talk more specifically about what policies we expect to come up with, especially in March? Thank you. I will translate myself. Good evening, management. Thanks for taking my questions. Congratulations on the solid results. I have two questions. First is regarding GDP. We just mentioned that we expect the used car industry to have an 8% year-on-year growth for 2023. With this number, how should we expect the 10-10 price growth this year? And secondly, management just mentioned that you expect some favorable policy toward auto industry to be rolled out this year. So can management give more specific what kind of policies we are expecting ahead? Thank you.

Thank you.

Due to the impact of the pandemic, the second-hand car market is a market that needs to communicate. So last year, the second-hand car market was a The second-hand car will be a relatively good growth trend this year. The market report we see is that there will be a growth of about 180%. But we think that if everything goes well, this goal may be more promising and even possible to break through. As a family, we think we should be able to exceed this speed.

Well, thank you for the question. Talking about the COVID pandemic, it affected the used car business because the transaction of the used car made a lot of offline face-to-face communication. So that's why in 2022, the used car business in domestic market dropped experience actually 9%. So now the good news is that with more and more supporting policy release and with the reopening up of the society post-pandemic, we believe the used car market would experience very good growth this year. According to some market report, which says the growth can be 8%, we hope that this 8% is achievable and it will even achieve beyond 8%. And other homes' growth would be better than the market.

Mr. Long has already answered a lot of questions when it comes to car policy. In general, we believe that cars are a major consumer today, and they are a consumer, not a house. Therefore, we believe that the country will definitely promote the consumption of cars in a larger environment. There should be several aspects to this. One is to stabilize the consumption of new cars. As Mr. Long mentioned, there are already some policies in many places. The central policy will be introduced in March after the new government is confirmed. New energy has always been a key strategy of the country. We believe that its support in this area will not be too weak. According to the auto market policy, as Mr. Long had already introduced to you,

We believe that the auto market would benefit out of the policies. You know, auto is a large amount consumption for the individuals or for families. It is different from housing because housing is not movable. It's a real estate. So that's why we believe that if in March there will be new policies released to further support the market, the market can be quite good. There were three factors I want to mention. The first one is the policy was trying to stabilize the sales of the new cars. And secondly, the NDV continued to be the strategic focus of the market. And thirdly, for the used car, we believe that it would have a lot of potential to grow. If you look at the outbreak of the breakdown of the used car comparing with the new car sales, it only accounts for 60%. of the car sales. But in some of the matured markets, the used car's transaction volume was two times, doubles, or even triples of the new car. So in this way, we believe the used car market has a lot of potential.

Thank you. Thank you all for your questions. I'll turn the conference back to the management team for closing comments.

Thank you everyone for attending today's meeting.

We also look forward to the recent development of our communication company at the next conference. If you have any questions or suggestions, please feel free to contact us at any time. Thank you.

Thank you, everyone. Thank you very much for joining us today. We appreciate your support and look forward to updating you on our next quarter's conference call in a few months' time. And in the meantime, please feel free to contact us if you have any further questions or comments. Thank you very much. Thank you. Bye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 1 1. you Thank you. Bye. Thank you. you

Ladies and gentlemen, thank you for standing by for Autohome's fourth quarter and full year 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the former 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 Soong, Auto Home's IR Director. Mr. Song, please go ahead.

Thank you, operator. Hello, everyone. Good evening. Welcome to Auto Home's fourth quarter and full year 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 the Chief Executive Officer, Ms. Quanlong, and the Chief Financial Officer, Ms. Yanzeng with us. After our prepared remarks, our management team will be available to answer your questions. Before we continue, please know 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 actual 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 U.S. Securities and Exchange Commission and the Stock Exchange of Hong Kong Limited. Autohome doesn't undertake any obligation to update any forward-looking statements except as required under applicable law. Please also note that Autohome's earnings press release and this conference call include discussions of certain unaudited non-GAAP financial matters. Please refer to our press release, which contains a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures and is available on Autohome's IR website. Again, as a reminder, this conference call 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 Chairman and the CEO, Mr. Long, for opening remarks. Please go ahead, Mr. Long.

Thank you, Mr. Long. Hello everyone, this is Mr. Long, Chairman and CEO of Autohome. Thank you for joining us today in our earnings call. In the fourth quarter, the performance of Car Home increased and recovered.

The total revenue increased by 12% compared to the previous quarter. Among them, the revenue of the media business increased by 64% compared to the previous quarter. While the revenue increased rapidly, we continued to maintain a higher level of profit. In the fourth quarter, those belonging to Car Home achieved a 43% increase in net profit. The net profit rate reached 35.3%. The full closure of 2022 All year round Although the epidemic and other uncertain factors are in the past But the family's performance has been reversed from the past With the performance of extreme inner business Once again, it clearly proves to the market Based on the large and active user base Steadfast and stable chicken plate business And the creative ability to lead the industry In fact, the family can go through the industry cycle In the fourth quarter, auto home business witnessed accelerated pace of recovery with total revenues up by 12% year-over-year. Notably, media services delivered robust revenue growth at 64% year-over-year. While boosting our top-line growth, we also maintained good profitability and a high profit margin level. Our adjusted net income for the fourth quarter surged by 43% year-over-year, with adjusted net margins reaching 35.3%, closing out 2022 on a high note. Against the backdrop of the pandemic and other incidences throughout the year, Autohome successfully overcame adversity and a bounce-back stroke, once again demonstrating the resilience and the vitality of our business. Building on our large and engaged user base, solid business fundamentals, and industry-leading innovation capabilities, AutoHome is well positioned to navigate market cycles and achieve healthy long-term development as we continue to blaze trails and become the industry's frontrunner.

Looking back at 2020, we achieved long-term progress in the two key areas of content and ecosystem construction and channel innovation. In terms of content, We successfully used the large IP brand to promote a video-based strategy. Horizontal integration of multiple Internet platforms Cooperative partners organize cross-border activities Explore the new experience of car life On the track of innovation, we continue to dig deeper into industrial values.

Promote the development of business in the field of new energy, second-hand cars, data products, etc. Continue to achieve new results One and one Looking back at 2022, we achieved significant progress in two key areas, content ecosystem construction and exploration of new initiatives. On the content front, we successfully leveraged our big IT brands to promote our video-based strategy and formed partnerships and organized cross-promotional activities with multiple internet platforms to explore new automotive lifestyle experiences. In terms of new initiative exploration, we made huge strides in exploring the industrial value chain and promoted in-depth development across our business. supported by our continuous new achievements in NEDs, used cars, data products and other fields. Driven by our relentless efforts in these two areas, we continue to expand new business boundaries, establish new standards and foster new types of business. With our multiple-dimensional business roadmap and extensive development concepts, we've built a brand-new ecosystem in the automotive industry, propelling Autohome to new heights.

As the new year approaches, with the improvement of the red-light environment, the restructuring of the industry, and the steady growth of local governments' consumer policy, the automotive industry is also looking forward to a steady and deep development.

Qisezijia will benefit from the recovery of the industry, continue to improve the cooperation of partners and the digitalization of the entire industry, and gradually improve the shareholding of shareholders to achieve east-south win-win. Heading into 2023, with the improvement in the macro environment, the restoration of industry order, and the local government policies to stabilize growth and boost consumption, the auto industry is expected to maintain a steady upward trend Benefiting from the industry's recovery, Autohome will continue to empower business partners and promote industry-wide digital transformation, while also increasing shareholder returns and achieving a win-win situation for all parties. Next, let's have Mr. Sun Yanyi introduce the company's four sectors and the comprehensive business and financial situation. So with that, I will now turn the call over to our Chief Financial Officer, Craig Zeng Yan, for a closer look at our fourth quarter and the three-year operating and financial results. Thank you, Mr. Long. Hello, everyone. I'm Craig Zeng Yan, the Chief Financial Officer of Autohome. continue to build core IPs, and build IT-based IT systems. All-round construction of useful and interesting video content ecosystem. As Ms. Long just mentioned, we've made ongoing efforts to advance content creation and build core IPs to establish Autohome's IP matrix, constructing a useful and fun video-based content ecosystem. For example, winter testing, This is our long-standing brand IP test project since 2019. The test results are of great guidance for users to choose a car or buy a car. In 2022, the winter test covered 58 newly launched popular electric vehicles. So far, the total number of online downloads is nearly 300 million, including super tests, long-term notes, and the car's four major original IPs. The total number of online downloads is nearly 800 million. The overall size of our original IP organization is in the top of the industry. In addition, we have held more than 550 online car shows throughout the year, which make it convenient for users to watch cars and choose cars. In terms of content, we have also incorporated more new and interesting ways of playing such as the original universe, digital people, and digital products to attract the attention and participation of a large number of young users and effectively improve user connectivity. For example, Winter Inspection, our flagship vehicle testing IT project, has consistently produced useful content since its launch in 2019 with test results that greatly assist users in choosing and buying cars. In 2022, Winter Inspection covered 58 newly launched popular electric vehicles and has accumulated nearly 300 million views across the entire network to date. AutoHome's four original IPs, including SuperText and the Travel Journal, have accumulated nearly 800 million views network-wide, leading the market in terms of the overall size of our original IP matrix. In addition, we held more than 550 online auto shows throughout this year, providing users a seamless experience for searching and choosing cars anytime and anywhere. We also introduced interesting elements such as metaverse, match human and virtue assets to our content creation portfolio to encourage greater participation and a deeper engagement from younger users, effectively enhancing our user stigmas. In addition, we have reached strategic cooperation with high-quality land, Huawei Cloud, and Beili New Energy, and other partners, seeking more business coordination, and joint organization of various activities with Ma Hongwo, Jindong Car, and Wang Yi Yun Music, to explore new car experiences. These innovative strategies have completely increased our traffic size and expanded the scope of user access. According to Quest Mobile data, in December 2022, We have reached strategic cooperation with multiple partners such as AMAT, Huawei Cloud, and the Beijing Institute of Technology, Xinyuan Information, etc., or BIT, to explore greater business synergies. We've also jointly organized a broad array of activities with online platforms such as MaFengWo, JD Auto, and NetEase Cloud Music to explore new automotive lifestyle experiences. These creative tactics have substantially increased the user traffic in our ecosystem and extended our user base. According to Quest Mobile, Auto Home's mobile DAU in December 2022 increased by 16.1% year-over-year and reached a record high of 54.39 million, further reinforcing our leadership position in the industry. In the field of commercial and commercial business, despite the big challenges faced by the car market in 2022, at the 4th quarter, the car industry will continue to maintain a stable and good growth. Car dealerships will continue to upgrade their lead products and tools, and use technology to continuously reduce the cost of decision-making and transaction costs of customers, and help commercial customers to fully reduce their cost-effectiveness. The number of business partners in car dealerships will remain stable, and the supply version will remain at more than 13,000, and the technology version will be close to 8,000. The high-end version has more than 20,000 customers. Regarding our dealership business, despite the immense challenges the auto market faced in 2022, Auto Home continued to maintain steady upward growth momentum in the fourth quarter. Notably, with the continuous upgrading of various lead generation tools and services of our dealers' membership products, which is Che Shan Hui, we continue to reduce our customers' decision-making costs and transaction costs. through advanced technology, helping our dealer customers to reduce overall costs and increase efficiency. As a result, in the fourth quarter, over 13,000 dealers purchased our premium version and nearly 8,000 dealers purchased our tech version, for a combined total of over 21,000 dealers purchasing high-end versions of our lead subscription packages. In terms of exploration of new initiatives, we accelerated the development of our second growth curve achieving major breakthroughs in new types of business new models and new products by increasing resources allocation and investment in key areas let me walk you through in great detail and actively lead the change in the industry. In September 2022, the first offline experience chain was officially opened, and the new retail model of the world's first energy space station was launched. It opens from online to offline to the whole chain of retail business. Not only can it provide a one-stop shopping experience for end-of-the-line users, but it has also received initial recognition from the main market. So far, We have cooperated with 26 brands as a new attempt in the field of new retail. In 2022, the overall income of new energy brand brands will increase by 153% and continue to run in the industry sales increase. In the future, Car Home will continue to explore multi-border integration in multiple cities to improve the penetration rate of offline stores and lead to the change of purchase experience. First, let's look at our new energy vehicle business. Facing the continuous increase in NEV's penetration rate, Autohome adapted proactively and led the market's transformation. In September 2022, we officially unveiled our first offline experience store, pioneering a unique multi-brand retail model called EnergySpace. This full-chain retail model connects online activities with offline transactions, providing users with a one-stop selecting and purchasing experience, while also gaining recognition from OEMs. As of now, we have cooperated with 26 brands, becoming OEM's new partner in the new retail field. In 2022, revenue generated from NEB brands continued to grow vigorously and increased by 153% year-over-year, once again outperforming the industry's sales growth. Looking forward, Autohome will continue to explore the integration of multiple types of businesses, improve the penetration rate of offline stores in various cities, and lead the transformation of the car purchasing experience. At present, we have established cooperation with more than half of the Chinese market. By adding digital and technical capabilities to commercial data products, we can provide customers with all-round digital marketing services, and help businessmen to improve their performance. In general, the number of single-sale income and single-sale cooperation products of digital marketers has increased by more than 20%. On our data product front, AutoHome achieved a 0 to 1 breakthrough in 2022, providing OEMs with five series of data tools to meet their diverse needs, spanning from users' private domain operations to the digitalization of back-end services. At present, we have established cooperation with more than half of the automakers in China's auto markets. Building on Auto Home's digital capabilities, our data products provided our dealer customers with full-chain digital marketing products and services, helping dealers to increase profits and efficiency. For full year 2022, both the average revenue of data products per dealer store and the average number of data products adopted by each dealer store increased by more than 20% year over year. Our portfolio We accelerate the combination of the advantages of home, day-to-day parking, and Ping'an Group. We strongly promote the construction of a full chain of trading service platforms for second-hand vehicles. Both the user and customer sides have achieved good progress. As for the user side, we provide the user with vehicle frame and vehicle frame survey tools through the product of the car market. We solve the concerns of the user buying a car. As for the customer side, we create a digital cloud platform for second-hand vehicles. We help retailers to run their business. In addition, the day-to-day parking of vehicles has been further improved through detailed operation and operation, and the business situation continues to improve. In 2022, the information combination and auction service of Zhijia will affect the transaction volume of the second-hand car dealership in China by about 21.5% and increase by nearly 5%. In the future, we will continue to accelerate the deployment of the entire industrial chain, and through deep strategic cooperation with Beijing New Energy, we will create second-hand car and new energy car data products, Moving to our used car business, we accelerated our integration of resources from Autohome, Pingnan Group, and the TianTianPaiTru or TTP. And drastically promoting our one-stop full-chain transaction service platform for used cars and achieving solid progress on both the buyer end and the dealer end. For buyers, we provided them with vehicle condition and price inquiry tools through our car history object product, effectively solving their purchasing concerns. On the other end, we helped them improve operating efficiency by building a used car digital cloud-based platform. In addition, we further enhanced TDP's efficiency through refined operations and upgraded its operating condition. In 2022, through AutoHomes matching and option services, our platform accounted for about 21.5% of all used car transactions in China with 5% point year-over-year growth. Moving forward, we'll continue to expand our footprint across the entire industrial chain and create data products for use NEVs via in-depth strategic cooperation with BIT, differentiating ourselves and building our competitive edge in the used car field. Although R2.0 faces a complex macro environment and various uncertain factors throughout the year, the company has made a lot of progress in all business segments and maintained a good trend of performance for two consecutive seasons. Last year, the perfect situation of micro-reversal came out and won the market. As the leader of the Chinese automotive industry, the automotive industry will continue to maintain the competitive advantage of the industry. At the same time, all traditional flagship businesses will maintain the existing market share and customer groups. At the same time, we will continue to work hard to upgrade all innovative business plans, build a full chain road car ecosystem platform, and provide service to car users throughout their lifetime. By actively leading the transformation of the industry, we will vigorously promote the digitalization and upgrade of the automotive industry, and create more long-term value for users, customers, and shareholders with the excellent performance of the transition and industry development cycle. To summarize, despite the complex microenvironment and various uncertainties in 2022, we are pleased to have made great progress in all business segments. We maintained upward growth momentum in our business recovery for two consecutive quarters and illustrated a perfect V-shaped rebound, outperforming the overall market and achieving stellar results. As the leader in China's auto vertical media industry, Auto Home will continue to strengthen its competitive advantages by solidifying its various traditional business spaces and maintaining its existing market share and customer base. Meanwhile, we also continue to cultivate our innovative business segments to build a one-stop full-chain auto ecosystem platform, providing our users with services across the full lifecycle of automobile ownership. We are confident we can vigorously promote the digital upgrades and transformation of the automotive industry while creating lasting value for all our users, customers, and shareholders with outstanding performance that transcends market cycles. Next, I would like to explain the main financial situation of the fourth quarter of 2022 and the whole year. Next, let me walk you through the key financials for the fourth quarter and the full year 2022. Please note that, as with prior calls, I will reference RMB only in my discussion today, unless otherwise stated. To sum up, the total revenue of each service is 6.1 billion yuan, with a 63.7% increase. The total revenue of each service is 7.87 billion yuan, with a 1.1% increase. In addition, the revenue of marketing and other services is 4.96 billion yuan. Net revenues for the fourth quarter were 1.89 billion, up 11.8% year-over-year. For a detailed breakdown, media services revenue came in at 610 million, an increase 63.7% year-over-year. Least generation services revenue increased 1.1% year-over-year to 787 million, and the online marketplace and others revenue were 496 million. In terms of cost, in the fourth quarter, the operating cost was 3.7 billion yuan. In 2021, it was 2.62 billion yuan. The operating cost has been increasing, mainly due to our continuous investment in content. Moving on to our cost. Cost of revenue in the fourth quarter was 371 million compared to 262 million in Q4 2021. The increase was primarily attributable to our continuous investment in content. Gross margin in the fourth quarter was 80.4% compared to 84.5% in Q4 2021. Turning to operating expenses. Sales and marketing expenses in the fourth quarter were 673 million compared to 803 million in Q4 2021. The decrease was primarily attributable to the decline in marketing and promotional spending. Product and development expenses were $313 million, compared to $395 million in Q4 2021. Finally, general and administrative expenses were $103 million, compared to $128 million in Q4 2021. Finally, the fourth quarter's annual profit was $5.13 billion, and the total in 2021 was $1.77 billion. Overall, we delivered operating profits of $513 million in the fourth quarter, compared to $177 million in the corresponding period of 2021. Adjusted net income attributable to Auto Home was $669 million in the fourth quarter, compared to $400 and 69 million in the corresponding period of 2021. Nungap's basic and diluted earnings per share in the first quarter were 1.36 and 1.35 respectively, compared to both 0.93 in the corresponding period of 2021. Non-gas basis and diluted earnings per ADI in the fourth quarter were 5.42% and 4.41% respectively, compared to 3.71% and 3.7% respectively in the corresponding period of 2021. Next, I would like to briefly summarize the performance of 2022. The total revenue was 69.4 billion yuan, and the total revenue of the media service was 19.6 billion yuan. Let me now turn to a short summary of our 2022 four-year results. The total revenues were $6.94 billion. Of that, media services revenues were $1.96 billion. Leased generation services revenues were $3.06 billion. And online marketplaces and others revenues were $1.92 billion. In addition, we delivered an adjusted net income attributable to auto home of $2.17 billion. As of December 31, 2022, our assets have continued to perform strongly. The current capital and short-term investments are estimated at 22.8 billion yuan. The current capital flow from the financial activities in 2022 is estimated at 25.7 billion yuan. As of December 31st, 2022, our balance sheet remained very strong with cash, cash equivalents, and short-term investments of $22.08 billion. We generated net operating cash flow of $2.57 billion in 2022. On November 18, 2021, the CEO of Automotive Home authorized a $7.2 billion project On November 3, 2022, the board of directors will be authorized to extend the deadline of the stock repurchase plan for 12 months to November 17, 2023. As of February 10, 2023, we have already repurchased about 3.69 million US dollars, with a total cost of about $1.1 billion. On November 18, 2021, our board of directors authorized a share repurchase program under which we were committed to repurchase up to 200 million u.s dollar of auto homes ads for a period not to exceed 12 months thereafter on november the 3rd 2022 our board of directors authorized an extension of the share repurchase program for another 12 months expiring on november 17 2023 as of february 10 2023 we have repurchased approximately $3.69 million to a total cost of approximately $111 million. I am happy to announce that the Board of Directors will change the annual cash policy of 2022 to 2026 to $500 million per year, and will gradually increase the total amount of the fund to better repay the large shareholders for their long-term support of the company. The Board of Directors has approved the 2022 fiscal year to be $0.58 for U.S. stocks and $0.145 for U.S. stocks. I'm also pleased to announce that our Board approved an amendment to change the annual cash dividend to a fixed amount of at least RMB 500 million between 2022 and 2026. augmenting our ongoing increases in shareholder returns even further to repay our investors for their long-term support. Our board has also approved a dividend of approximately $0.58 per ADS or $0.45 per ordinary share for fiscal year 2022. The company has maintained a stable business for a long time, with sufficient cash reserves and healthy cash flow. In the public market, the company has actively repurchased and continuously distributed shares, and has been determined to enhance the efficiency of capital allocation. This has also shown that the company has always valued the interests of investors in the long term. By 2023, the company will continue to implement the policy to achieve long-term health growth and continue to strive to create long-term value for shareholders. AutoHome's long-term stable operations, sufficient cash reserves and healthy cash flow, as well as our active stock repurchase program and ongoing dividend payouts, demonstrate our determination to improve our capital allocation efficiency and reflect our long-standing dedication to our investors' interests. As we step into 2023, we will continue to develop new initiatives targeting long-term healthy growth while remaining committed to delivering shareholder value. With that, we are ready to take all your questions. Operator, please open the line for the Q&A session.

Thank you. We will now begin the question and on to the session. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Our first question comes from the line of Thomas Chong from Jefferies. Please ask your question.

謝謝。 Thanks management for taking my questions and congratulations on a solid set of results. I have two questions. My first question is about the outlook for the auto industry for this year. And number two is about our cash usage and capital allocation. Thank you.

Thank you for your question. I am Longquan. My question is about the 23-year history of the car market. I think the reason for your question

Through this data, I would like to talk about the reasons. There are mainly two reasons. The first reason is because of the Spring Festival this year, which is in January. This is one reason. The second reason is that our country's preferential policies for oil and new energy vehicles are all up to date from the end of last year. So, this caused some of the related reactions of our test to arrive before the fourth quarter of last year.

Well, thank you for the question. My name is Longquan. I'm going to try to answer your question by quoting why you asked this question. As you know, in terms of January, you have noticed that some of the data of the production themselves had already been released. If we compare the production and the sales with the same period of last year, the numbers have been dropping significantly. That's also true of comparing with the previous month. I think there were two reasons tied to this. The first reason is because the long holiday, the Chinese Spring Festival, was on January. The second reason is because the favorable policy and the subsidy for the combustion car and for the NBV The policy has been faded away at the end of last year.

In general, I am optimistic about the 23-year policy. Why am I optimistic? First of all, our country's automotive industry is actually a support industry for the national economy. It has been long-term valued by the country and the government.

So in fact, in this year's January, the State Council's long meeting has also pointed out that this is not enough to meet the needs. This kind of prominent contradiction is to promote this consumption in time to speed up the recovery and become the main trigger of the economy. Then promote and help life service enterprises and individual business owners Promote the overall landing of large-scale consumption policies such as cars Then the organization began to offer a variety of activities for consumer consumption Promote contact-based consumption and accelerate recovery Then this is the number of business meetings of the State Council this year So at the same time, with this 2020 With the end of the epidemic, the production life in Beijing has been resumed. The consumption of test vehicles has actually begun to recover.

Well, having said that, I still want to say I'm optimistic about 2023. Why I say so was due to the following reasons. Actually, if you look at the auto industry, it has been a pillar industry in China and also the government attached great importance to this industry. According to the 2023 January State Council Standing Committee meeting, they said that we need to address the conflict about satisfying the demand of the consumers and to try to push forward consumption and put all the consumption as one of the pillar to boost the economy. And we also need to implement a lot of consumption policies to be implemented to boost the auto consumption. And we also need to boost the marketing and expenditure for the all kinds of consumption retail business and also try to boost the retail business to recover. So the rules were the policies has been released due to the January Standing Committee of the State Council.

The self-adjustment policy of this car is actually being continued Then Samsung is also encouraging some of the fourth with conditions Increase this kind of interest on this subsidy Then the same In fact, with the second quarter of this two or three years Some of the traditional car stores in the county will also carry out this kind of opening So I think this kind of new car type of continuous listing of the car will lead to some sales forgetfulness And also I want to say, although the national level subsidy has been faded away temporarily, but at the provincial level, the government, the local government

launched a lot of new initiatives to boost the NEV consumption. For example, in Shanghai and Hunan Province, they continued the trade-in subsidy for the NEV cards. In Shaanxi Province, they encouraged some of the cities to boost more effectively on the subsidy and also to dig into the trade-in potential to boost the consumption. And think also with the abandon of the zero COVID policy and opening up, we believe that the auto show will also recover. And a lot of new car models gradually being launched into the market. So in this way, we believe the auto consumption market would be pushed forward.

In addition, from the sales structure of the automotive market, it seems that this new car,

So these few years have been continuing this kind of rapid growth attitude So the relevant data from last year Actually, we have also made this kind of announcement to everyone. Although it is said that with the withdrawal of this kind of national stock So what about new energy cars? From this policy drive Will turn to this market drive Real speed

and also if you look at the auto market the sales structure we do see that the nev cells has been increasing in a continuous way for example even if the national subsidy had faded away but there are a lot of new policies to boost the nev consumption We believe the NUV market would be policy-driven, transforming into a market-driven market. In this way, we believe that maybe in the near term or short run, there may be some slowdown of results. But for the long run, we believe the year-round growth would continue to be around 40%. We do believe there are more diversions in the NUV market. The top players would benefit out of such diversions. And that would help the NGV top players to expand more on their branding.

So, except for the new car, I would like to talk about the development of the second-hand car. In 2023, I think this is the first year that the second-hand car new policy is fully implemented. Last year, a series of second-hand car new policies were announced. So that the past is based on personal transactions So the transformation is to commercialize this kind of business So the market of second-hand cars It also transforms from the economic model to the marketing model So we expect this two or three years So the market of second-hand cars The overall growth should be around eight So as a government It encourages the scale and standardization of the second-hand car industry

Also, I want to take this opportunity to comment on the used car market. We believe 2023 would be the first year to fully implementation of the used car new policies. We believe that the used car market would be personal transaction driven, transforming into corporate letting business. So, and the used car market would also experience the transformation from the agent-based model to the dealership-based model. We believe the 2023 market of the used car, the overall growth can be 8%. We also believe the government is trying to encourage the scalability of the used car business and they try to make the operation in a more standardized and compliance way. All this would further boost the healthy development of the used car market. Overall speaking, we believe with the implementation of all these supporting policies, we believe this would boost the consumption needs and vitalize the consumption demand. So that's why I'm quite confident about the 2023 domestic auto market. Now, talking about the allocation of the cash, I would like to invite Mr. Zheng Yan to take this question.

The company has a relatively good cash reserve. The cash flow is also very healthy. Last year, we had 21 billion in cash flow. The company also pays great attention to the interests of shareholders. So, we just approved it in the cash flow. Last quarter, we approved the extension of our stock return plan. This quarter, we also approved an increase in our stock market share. In this way, our stock market share increased by almost 16% compared to last year. In general, the future year will also be at least 500 million, and it may gradually increase. So we will return our stock through the return, In the future, we are actively looking for new ways of investing in our business, including content. We also have a lot of video and live paintings, including some of the original universe, including our current AI, an entire direction of investment. We are also expanding on some new channels, such as the data products we invested in, which have already seen obvious results. In the end, we will see if there are any opportunities to help the company's development, such as M&A or internationalization.

Thank you for the question. Talking about the cash, we have abundant reservoir of the cash and our cash flow has been very healthy. And we also attach great importance to the shareholders' interest. We have the net inflow of $2.1 billion of the cash last year. According to our BOD meeting last quarter, we will extend the share by back initiative. And in this quarter, we already improved actually the dividend payout ratio about 16% compared with the last year. So actually the dividend payout would be 500 million RMB and it will continue to grow in future. So that is a way we're trying to actually give back to our shareholders. Now, talking about the business side, we have a lot of new initiatives. We have new investments into the content, the video-based, the live streaming-based, the metaverse-based, and the AR-based products. And according to our new business, the data product has been thriving. And we are also looking into some other opportunities to explore the M&A deals and make our business more global presence. So thank you for the question.

谢谢。 Thank you. Our next question comes from the line of Richie Sun from HSBC. Please ask your question, Richie.

I will translate myself. Thank you, management, for taking my questions. I have two questions. First of all, in 2023 for data products, what would be our KPI and what types of new launches can we expect? Second of all is, Going to this year for the used car business, what will be our KPI and focus? And how should we think about the long-term adjusted net margin for this business? Thank you.

Thank you. Our plan basically revolves around our customers, helping customers to increase their efficiency. Because our business, whether it's for the retailers or for the main airport, is all about helping them improve their work efficiency and help them improve their efficiency. So we will continue to release our new modules in this direction. On the other hand, we will continue to increase the coverage of customers to allow customers to use more of our modules to comprehensively promote our speedy product.

Talking about the digitalized product, our major purpose is trying to help our clients to lower the cost and enhance the efficiency, no matter it's for YAM or for the dealers. So we are trying to help them to improve the efficiency and we would continuously to launch a lot of new models. And also, on the other hand, we are trying to enhance the coverage of more clients. And we wanted to empower the customers with our new modules.

As for the direction of new products, I can probably mention it here. For example, we will focus on the direction of battery, new car, and second-hand cars related to Beili New Energy.

Now talking about the future direction of the new business, we are working with the BIT on the batteries, on the NGV autos, and some of the used car business. We all have a lot of our innovative initiatives.

Now talking about the used car business,

Our major purpose is trying to establish a one-stop, full-chain transaction and service platform.

In this way, we can achieve a closed loop of transactions and be able to participate in the entire process of second-hand trading. This is exactly the focus of second-hand trading in the entire market. Second-hand trading, we will build our second-hand data and data products to achieve this goal.

Talking about the used car focus, firstly, we are trying to create a closed loop for the transaction. Actually, it will cover all the full business chain of the used car transaction. We believe this would be the pain point in the used car market. And we are also going to launch the used car SaaS service and some other data products.

The continuous online operation of 22 years of home and work continues to be more effective. In 2022, Alder Home had finalized our operating

And in this way, we enhanced the coordination of the resources and also have a better management, not only on the 2C side, but also on the 2B side, which achieved a good breakthrough. For example, we launched an innovative trading business and also used the CarStats product and the car history and the car condition data service. And we work with BIT on a lot of our deepened data services. In the future, Autohome is trying to build a one-stop solution for auto purchasing and a one-stop solution for auto sales plus SaaS product. That is our strategic target.

Because of the business model of the 20-story market, we are still in a stage of exploration. Now, talking about the used car business model, as you know, it is under exploration for the whole market.

We achieved the profitable business for the auto home used car business. For the TTP, it achieved a break even on the later half of last year. So in this way, we are trying to build our used car business. The margin would be similar to our dealership business.

Thank you. Our next question comes from the line of Ryan Gong from Citi. Please ask your question, Ryan. Good evening.

Thank you for accepting my question. First of all, congratulations on your very good performance. I have two questions. The first one is about the second-hand car of Tianjin. As we just mentioned, the second-hand car of Tianjin has an increase of about 8% this year. Under this background, We expect to see a lot of increases this year because there has been a market share gain in the past. The second question is that Mr. Long mentioned that the government will continue to introduce more policies to improve the automotive industry this year. Can you talk about what policies we expect to introduce, especially in March? Thank you. I will translate myself. Good evening, management. Thanks for taking my questions. Congratulations on the solid results. I have two questions. First is regarding GDP. We just mentioned that we expect the used car industry to have an 8% year-on-year growth for 2020. With this number, how should we expect the campaign price growth this year? and secondly management just mentioned that you expect some favorable policy toward auto industry to be rolled out this year so can management give more specific uh what kind of policies we are expecting uh ahead thank you uh

We believe that this year's second-hand car will be a good starting point for growth. The market report we see is that there will be a growth of about 180%. But we think that if everything goes well, this goal may be more promising and even possible to break through. As a family, we think we should be able to exceed this speed.

Well, thank you for the question. Talking about the COVID pandemic, it affected the used car business because the transaction of the used car made a lot of offline face-to-face communication. So that's why in 2022, the used car business in domestic market dropped, experienced actually 9%. So now the good news is that with more and more supporting policy release and with the reopening up of the society post-pandemic, we believe the used car market would experience very good growth this year. According to some market report, which says the growth can be 8%, we hope that this 8% is achievable and it will even achieve beyond 8%. And other homes' growth would be better than the market.

Mr. Long has already answered a lot of questions when it comes to car policy. In general, we believe that cars are a major consumer today, and they are a consumer, not a house. Therefore, we believe that the country will definitely promote the consumption of cars in a larger environment. There should be several aspects to this. One is to stabilize the consumption of new cars. As Mr. Long mentioned, there are already some policies in many places. The central policy will be introduced in March after the new government is confirmed. New energy has always been a key strategy of the country. We believe that its support in this area will not be too weak. According to the auto market policy, as Mr. Long had already introduced to you,

We believe that the auto market would benefit out of the policies. You know, auto is a large amount consumption for the individuals or for families. It is different from housing because housing is not movable. It's a real estate. So that's why we believe that if in March there will be new policies released to further support the market, the market can be quite good. There were three factors I want to mention. The first one is the policy was trying to stabilize the sales of the new cars. And secondly, the NDV continued to be the strategic focus of the market. And thirdly, for the used car, we believe that it would have a lot of potential to grow. If you look at the outbreak of the breakdown of the used car comparing with the new car sales, it only accounts for 60%. of the car sales. But in some of the matured markets, the used car's transaction volume was two times, doubles, or even triples of the new car. So in this way, we believe the used car market has a lot of potential.

Thank you. Thank you all for your questions. I'll turn the conference back to the management team for closing comments.

Thank you for attending today's meeting.

We also look forward to the recent development of our communication company at the next conference. If you have any questions or suggestions, please contact us at any time. Thank you.

Thank you, everyone. Thank you very much for joining us today. We appreciate your support and look forward to updating you on our next quarter's conference call in a few months' time. And in the meantime, please feel free to contact us if you have any further questions or comments. Thank you very much. Thank you. Bye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.