Autohome Inc.

Ladies and gentlemen, thank you for standing by for Autohome's third quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. A question and answer session will follow management's prepared remarks. As a reminder, this conference call is being recorded. If you have any objections, you may disconnect at this time. A live and archived webcast of this earnings conference call will also be available on Autohome's IR website. It is now my pleasure to introduce your host, Soling Song, Autohome's IR Director.

Mr. Song, please go ahead.

on the company's website at ir.autohome.com.cn. Joining me today on today's call are Chief Executive Officer, Ms. Tao Wu, and Chief Financial Officer, Ms. Craig Yanzeng. Management team will go through their prepared remarks, which will be followed by a Q&A session, where they will be available to answer all your questions. Before we continue, Please note that the discussion today will contain forevolution statements made under the Safe Harbor Provision of the U.S. Private Security Dedication Reform Act of 1995. Forevolution 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 Hong Kong Stock Exchange. AutoHome doesn't undertake any obligation to update any forward-looking statement except as required under applicable law. Please also note that AutoHome's earnings press release and this conference call include discussion of certain unaudited non-GAAP financial measures. A reconciliation of the non-GAAP measure to the most directly comparable GAAP measures can be found in our earnings release today. I will now turn the call over to Auto Home CEO, Mr. Wu, for the opening remarks. Please go ahead, Mr. Wu.

Thank you. Hello, everyone. This is Tao Wu, CEO of Auto Home. And thank you for joining our earnings conference call today. In the third quarter, we continue to advance our integrated online to offline ecosystem strategy, focusing on deepening engagement across the entire value chain while further optimizing our business structure. In the online field, we have launched new professional content and product proofs, further enhancing our differentiated competitive advantage, and thus continuing to expand the flow of platforms. In September, Zhijia's mobile end, the number of active users broke 70 million for the first time, which increased by 5.6%. This proves that the influence of Zhijia in the user community is steadily increasing. In the offline market, we focus on the off-road market to create a 100-storey car exhibition. In the first three seasons of this year, we successfully held more than 500 offline car exhibitions to provide consumers in these regions with a one-stop service experience from choosing cars, watching cars, testing cars, to buying cars, making it easier and more convenient to buy cars. In addition, through the various products and services of Car Home, On the online front, we are leveraging our new professional content and product mix to strengthen our differentiated competitive advantages, which has led to a steady increase

in our traffic scale. In September, our average mobile DAU increased 5.6% year-over-year to exceed 70 million for the first time, underscoring our expanding influence among users. In terms of our offline offerings, we are focused on low-tier markets with the deployment of initiatives like the 100 Cities Trade-in for New. In the first three months of this year, we successfully organized over 500 Offline also shows providing consumers in this region with a single one-stop service experience that spans from car selection, viewing, and test driving to purchase, making the process more convenient than ever. Additionally, by leveraging the products and services available through our franchise stores, we are able to offer comprehensive and integrated online to offline solutions that further optimize our customers' business operations. Driven by robust growth in our new retail business, revenues from online marketplace and others increased 3.1% year-over-year during the third quarter.

What we are paying attention to is that our new retail business has significantly accelerated the expansion to low-end cities in this quarter. So far, the total number of home space stations and satellite stores has exceeded 50. to build a national channel network that covers high-middle-level cities, satellites, and penetrates low-middle-level cities. The expansion and scale of the channel not only verifies our business model, but also the applicability of more extensive cities, and the ability to integrate platforms for our future, link the resources of the upper and lower industries, as well as explore and develop more innovative business models to establish a foundation. In terms of digitalization, we rely on the comprehensive capabilities of data technology and platforms to continuously improve the coverage of digitalized products and strengthen the application of AI technology in various types of products to help customers manage the system. In addition, our cooperation with Ping'an Group has also reached a new level. In traditional business, data products, second-hand cars, and rear cars, we have continuously launched a series of innovative products and services.

Notably, we significantly accelerated the expansion of our new retail business into lower tier cities this quarter. To date, we have a nationwide network of more than 50 stores with auto home space stores in mid to high tier cities and satellite stores in middle to lower tier cities. The expansion and growing scale of our channels have only demonstrated the adaptability of our business model across a wider range of cities but also lays the foundation for the integration of our platform capabilities enables collaboration with partners along the industry value chain and allows us to explore and develop additional initiative business models in the future in terms of digitalization we are leveraging our combined capabilities in data technology and platforms to continuously enhance the coverage of our digital products. Additionally, we have expanded the application of artificial intelligence technology across various products to enhance the quality and efficiency of our customers' operations. Furthermore, our cooperation with Ping An Group has hit new heights with the introduction of a series of innovative products and services across our traditional businesses, as well as data products, used cars, and aftermarket factors, both strengthening our unique competitive advantages in this area.

In the future, we will further strengthen the layout of the localization and down-to-earth market, improve the influence of home brands, adapt to market changes, continue to promote product innovation, broaden business boundaries, and lead industry development. Looking to the future, we will further strengthen our local presence in lower-tier markets to enhance our brand influence

while adapting to evolving market dynamics. Our commitment to driving product innovation and broadening our business horizons remains firm as we contribute to the industry's development. At the same time, we'll fully leverage TN Group's offline resources and aftermarket service capabilities to amplify synergy and solidify our differentiated competitive advantages. We're confident that these initiatives will enable us to create great value for the industry and support our long-term sustainable development.

接下来请CFO曾岩先生详细介绍芝家二四年第三季度的业务及财务情况。 With that, I will now turn the call over to our CFO Craig Zeng for a closer look at the third quarter 2024 operating and financial results. 谢谢吴超总,大家好。

I'm Zeng Yan, the Chief Financial Officer of Car Home. Thank you, Mr. Wu. Hello, everyone. I'm Chris Zeng, the CFO of Autohome. In the third quarter, we will continue to upgrade the user content and tools, and release continuous car home, AH home, content guidance, and real-world smart evaluation systems to create high-definition, high-quality content. We also launched the industry's first scene-based vehicle library to integrate real-world car scenes

In the third quarter, we continue to enhance our content and tools by successfully introducing the Autohome AH Plus content matrix and the real scenario intelligent evaluation system to create a rich array of high quality content. Additionally, we launched an industry leading scenario based vehicle model library that integrates real life car usage scenarios, providing users with a more relevant and practical guide for vehicle selection.

To be more specific, the original content of Car Home covers more than 13 levels, covering new cars, reviews, culture, and the four core tracks of the industry. Through live broadcasts, videos, and other forms, we can deliver real, useful information to users, and solve problems that users face when using cars Specifically,

Our original content matrix now covers more than 13 programs, covering four key segments, including new cars, car evaluations, car culture, and the auto industry. We offer authentic and practical information to users through live streaming and videos, addressing a wide range of challenges they encounter throughout the entire lifecycle of car ownership. Our intelligent evaluation system focuses on core product features, such as advanced driver assistance and a smart cockpit, combining professional evaluation capabilities with users' real-life scenarios. Through professional field tests, multi-dimensional vehicle reviews, and comparisons, and the live streaming of technical insights, we deliver the most practical and relevant smart evaluation results to our users.

In terms of tools, our scene and picture library covers night, space, and intelligence, the three core car viewing scenarios, allowing users to know more directly the appearance, functions, and intelligent level of the vehicle, greatly improving the efficiency and convenience of the car selection. At the same time, we have upgraded the full-fledged platform, bringing all kinds of policies, subsidies, and promotions, and other information in real-time, allowing users to understand all information in one go, and achieve full automatic matching computing advantages. In addition, by upgrading the digging and algorithmic model of people, cars, and data, we use AIGC, dialogue robots, and other tools in many scenarios such as searching, live broadcast, and IAM to deepen interaction with users, quickly and accurately respond to user needs, and enhance user experience. Quest Mobile data shows On tools, our scenario-based image library covers three core viewing scenarios, nighttime, spatial, and intelligent car viewing. These innovative tools provide users

with an intuitive understanding of a vehicle's authentic functionality and smart capabilities, significantly improving the efficiency and convenience of the car selection process. We also upgraded our benefits platform to aggregate various policies, subsidies, and other promotional information in real time, providing users with a one-stop information platform to automatically match and calculate discounts Additionally, leveraging our upgraded algorithms and the user and vehicle data we have mined, we've deployed tools such as AIGC and chatbots across multiple scenarios, including search, live streaming, and instant messaging. This deepens interaction with users, increases the speed and accuracy of response, and improves the overall user experience. According to Quest Mobile, The number of our average mobile DAUs grew by 5.6% year-over-year, reaching 72.87 million in September, demonstrating our leading position in the automotive media vertical.

In the new energy sector, our satellite plan is being implemented in three seasons. More than 50 space stations and satellite assemblies have been launched nationwide. It shows that the construction of our downstream channels has reached a large scale. Through the close cooperation between these space stations and衛星店, we have built an efficient network channel, realized resource sharing and advantageous complementing, and provided channel support for the new energy main plant in the empty city. The continued expansion of the offline service scale not only allows us to provide localization, online and offline integrated solutions for closed-end customers, It also allows us to investigate and explore the consumer needs of low- and mid-range cities. In the future, we will dig deeper into the potential of regional satellites, play a platform advantage, integrate industrial chain resources, and make more attempts and innovations in business models.

Turning to NEV, our satellite plan was widely implemented in the third quarter. To date, we've established over 50 franchise auto home space floors and satellite stores across China, marking the initial scaling of our expansion into lower tier cities. The seamless collaboration between Old Home Space and the satellite stores has facilitated the creation of an efficient network channel. This collaboration encourages resource sharing and offers complementary advantages, providing AEV manufacturers with channel support in cities where they don't have a presence The ongoing expansion of our offline service network enables us to provide business and customers with localized and integrated online and offline solutions while also tapping into and collecting consumer needs in the middle to lower tier cities. Going forward, we will further explore the potential of the regional centralized stores, leveraging our platform advantages to integrate resources throughout the industry value chain and pursue even more innovative business models.

At the same time, we also used the unique resources of Ping'an Group to launch a financial insurance service. This greatly expanded the financial product line of our store, broadened our service scope, and enriched the sales tools of our store. For example, we integrated Ping'an's car owner service capability to launch a unique price protection and warm-up power pack. We also leverage Ping An's unique resources to pilot financial insurance services in their stores.

This expands the financial product offerings available through auto home-based stores, broadens our service scope, and diversifies revenue streams. For instance, we integrated P&I's car owner service capabilities to launch a unique industry offering price guarantee heartfelt benefits package, which provides purchase protection and healthcare for consumers who purchase cars through our franchise stores. We are pleased to see revenues from AEB brands continue to grow and consistently uptake the industry's sales growth rate during the third quarter, increasing 54% compared to the same period last year.

In the digital sector, in the third quarter, we combined the advantages of Ping'an Group's post-trial scenarios and offline service capabilities. We also launched external platforms for post-trial services, and maintenance assistants, as well as smart car digitalized service products. First, it can help the refinery to reduce the cost of goods and services, and increase the efficiency of appointment and return, and then use the safety offline team to provide one-to-one information service to smart car users in many scenarios, effectively promote transaction transformation, and obtain positive market feedback. In the first nine months of this year, Zhijia's overall data product revenue increased by as much as 8%.

On the digital front, we combine Ping An Group's strength in up-to-sale scenarios and offline service capabilities during the third quarter to launch an outbound cord platform and maintenance assistance for up-to-sale services, as well as digital services for vehicle trade-in. The former enables maintenance possibilities to reduce customer acquisition costs and improve in division and return visit efficiency. while the latter utilizes Ping An's offline team to provide one-on-one consulting services to customers for 3D vehicles across multiple scenarios. This effectively improves transaction conversion rates and has generated positive feedback from the market. During the first nine months of this year, revenue from data products increased by 8% year-over-year.

We effectively integrate the resources of Zhijia and Ping'an Group to strengthen the business coordination with TianTian. For example, by using Zhijia's Jiameng store and Ping'an's offline team, we can increase the supply of 4S stores and auction cars of TianTian. We can also help Ping'an and Zhijia's second-hand car team to help TianTian to expand the range of merchants and buyers across the country and stimulate the demand for cross-region shopping. so as to effectively increase the transaction volume and sale price, so that day-to-day parking can achieve business expansion while controlling costs.

For used car business, we've effectively integrated the resources of Auto Home and Ping An Group to strengthen the synergies with TTP. For example, leveraging our franchise stores and Ping An's offline team, we've increased the supply of vehicles for auctions from 4S dealerships for TTP. At the same time, European groups and auto homes use car teams with assistive TTP in expanding its merchant buyer base nationwide, driving demand for cross-regional car purchases. This initiative has effectively increased transaction volumes and prices and enabled TTP to expand its business while carefully managing costs.

Overall, TTP has achieved a steady business development in the last three seasons. The innovative business of the early stage of the company has been effective and has continued to optimize and upgrade in practice, leading to the growth of online marketing and other income in this quarter. As we continue to deepen our cooperation with Ping'an Group, we will gradually launch more special products in various business scenarios. At the same time, we also actively increase shareholding and return on stock in the form of shareholding and stock repurchase. Looking forward to the future, continue to work to optimize the operating efficiency and provide good support for the long-term high-quality development of the company.

Overall, our businesses made steady progress in the third quarter. Our innovative businesses laid out earlier have proven effective as we continuously optimize and expand them through practical applications. These achievements drove the growth of our online marketplace and others' revenues this quarter. As we deepen our cooperation with Ping An Group, we are gradually rolling out additional unique products across various business scenarios. At the same time, we are actively enhancing shareholder returns through dividends and stock repurchases. Looking ahead, we remain committed to optimizing operational efficiency to support our long-term, high-quality development.

Next, let me briefly walk you through the key financials for the third quarter of 2024. Please note that, as with prior course, I will reference RMB only in my discussion today, unless otherwise stated. Net revenues for third quarter were $1.77 billion. Breaking it down, media services revenues were $326 million. Least generation services revenues

were $831 million, and online marketplace and others' revenues were $618 million, up 3.1% year-over-year. Cost of revenues in the third quarter was $408 million, compared to $374 million in the third quarter of 2023. Gross margin in the third quarter was 77%, compared to 84% during the same period last year.

In terms of operating expenses, the third quarter sales and market expenses were $8.77 billion, and the same period was $9.35 billion. The development expenses were $3.39 billion, and the same period was $3.55 billion. Generally, the management fee is 1.37 billion yuan. In the same period last year, it was 1.41 billion yuan.

Turning to operating expenses, sales and marketing expenses in the third quarter were 877 million compared to 935 million in the third quarter of 2023. Product and development expenses were 339 million compared to 355 million in the third period of 2023. General and administrative expenses were $137 million compared to $141 million during the same period last year.

Overall, the business profit of the third quarter of Car Home was $0.83 billion, and the same period last year was $1.66 billion. The current adjustment profit of Car Home was $4.97 billion, and the same period last year was $6.04 billion.

Overall, which levered an operating profit of $83 million in the third quarter, compared to $166 million for the same period of 2023. Adjusted net income attributable to auto home was $497 million in the third quarter, compared to $604 million in the corresponding period of last year.

In the third quarter, the adjustment of the basic Non-GAAP basic and diluted earnings per share in the quarter

were 1.02 compared to 1.23 in the corresponding period of 2023. Non-GAAP basic and diluted earnings per ADS in the third quarter were 4.09 and 4.08 respectively, compared to 4.93 and 4.92 respectively in the corresponding period of 2023.

As of September 30, 2024, our asset debt table continues to show strong performance. As of September 30th, 2024, our balance sheet remained very strong with cash, cash equivalents and short-term investments of 23.06 billion. We generated net operating cash flow of 209 million

in the third quarter of 2024.

On September 4, 2024, our board of directors authorized

a new share repurchase program under which we were permitted to repurchase up to USD 200 million of Autohomes ADS for a period not exceed 12 months thereafter. As of November 1, 2024, we've repurchased approximately 244,000 ADS for a total cost of approximately USD 6.7 million.

In addition, according to the company's share policy, The Board of Directors has approved the issuance of $1.15 U.S. stock or $0.2875 U.S. stock in U.S. stocks, which will be paid in U.S. dollars to the holders of U.S. stocks and stocks registered on December 31, 2024. The total amount of the dividend will be about $1.1 billion, which is expected to be divided into In addition, in accordance with our dividend policy, our board of directors has approved a cash dividend of US dollar 1.15

per ADS or USD 0.2875 for ordinary share payable in the US dollars to holders of ADS and ordinary shareholders of records as of the close of business on December 31, 2024. This aggregate amount of the dividends will be approximately RMB 1 billion. and is expected to be paid to holders of ordinary shares and ADS of the company on or around March 14, 2025 and March 19, 2025, respectively. This reflects our strong confidence in our business and future development, as well as our strong commitment to maximizing shareholder returns. 以上是公司的财务数据汇总,下面我们开始问答环节。

The above is our financial summary.

With that, I'm now ready to open up the Q&A section. Operator, please.

Thank you. We will now begin the question and answer session. To ask a question, please press star 11 on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. We will now take our first question from the line of Thomas Chong from Jefferies. Please ask your question, Thomas.

Thanks, management, for taking my question. I would like to ask about the ongoing price warfare. and the trade-in programs. What are the impacts to the industry and Autohome? Thank you.

Thank you for your question. I will answer your question. The car industry has been fighting for market share for about a year and a half. According to our observation, the trend has eased recently, but there are no signs of a stop in the short term. However, we see that the continuous price gap does not lead to an explosive growth in car sales. According to the latest data from the National Youth Association, sales in the first to ninth month only increased by 2.2%. The price gap also greatly damaged the profit rate of car companies. In the first to ninth month of this year, the average profit rate of the automotive industry was 4.6%. 6.1% of the profits of industrial enterprises in the same period. This is an average level. At the same time, dealers also face huge business pressure due to the continued price war. According to the survey report of the survival status of dealers in the first half of 2024, only less than 30% of car dealers completed the sales target in the first half of the year. And a large part of it is to reach the target of sales by price change. In addition, the proportion of dealers who deal with losses has reached 50.8%, which is more than half of this. At the same time, the sum of the horsepower of the single battery has also dropped significantly. For example, in the case of new car business, the average loss of the single battery can reach 1.78 million yuan.

Okay, thank you for raising the question. We see that with major car companies fighting price wars to grab the market share, which has lasted for more than 1.5 years now. According to our observation, the trend has eased slightly recently, but there's no sign of ending in the short term. However, the ongoing price war did not bring the explosion of the car sales growth. According to the latest data from CPCA, retail sales increased about only 2.2% year-on-year from January to September, The price war has also greatly hurt the profitability of the car companies. From January to September, we see that the average profit margin of the auto industry was only 4.6%, much lower than the average level of the industrial enterprise profit margin of 6.1% in the same period. Meanwhile, dealers are facing tremendous operating pressure due to ongoing price war. According to China Automobile Dealers Association, survey report on the survival of the dealers in the first half of 2024, less than 30% of the auto dealers accomplished their sales target in the first half of the year, and a large proportion of them reached their sales target by exchanging price for volume. In addition, the proportion of dealers operating at a loss reached 50.8%, expanding significantly compared with the same period of last year, and the average total gross profit of a single store also had a large drop, especially in the new car business, with an average single store loss of 1.78 million yuan.

In general, the price war of the car market has had a more serious negative impact on car manufacturers. In this situation, the country has also proposed a policy to change and update the car waste, to further stimulate the potential of our consumption, promote supply and demand, Both sides of this joint development From the disclosure data of the Youth Association In the wake of the policy The car market is still warming up recently New energy vehicles domestic The penetration rate of retail has reached 50% in three months in a row September New energy retail sales fell by 10.6% overall The wholesale of used cars has also created the highest history of the industry, etc. Based on these data, our new policies are helpful to help the automotive industry regain confidence.

Generally speaking, the price war in the auto market has caused car enterprises and dealers to suffer more seriously negative impacts. Under such circumstances, China has introduced a policy of trade-in and also upgraded the vehicle scrapping to help release the consumption potential in an orderly manner and to promote the common development of both supply and demand side. From the data disclosed by CPCA and the stimulation of the policy, the auto market has been picking up recently. The domestic retail penetration of NEV has exceeded 50% for three consecutive months. The retail sales of new energy vehicles in September increased by 10.6%. from the previous month, and the wholesale of overall passenger vehicles hit a new record high for the same month, which helped to restore confidence in the auto industry.

From last year to this year, this intense price war has caused a serious decline in vehicle profits. The budget for vehicle sales is also shrinking significantly. To a certain extent, we have also been affected by the industry. Thank you.

The serious price war that lasted from last year to now has resulted in a serious decline of profit of the automakers and a contraction in the marketing budget of the OEMs, and we have also been affected by the industry to a certain extent. However, in the long run, with the price war gradually slowing down, the continued development of the NEV industry as well as the government's introduction of the new favorable policies to support consumption We believe that the auto market will have good potential for future growth in the long run, and we are also optimistic about the longer-term development of China's auto industry. And we will also be developing in a sound manner together with China's auto industry. Thank you.

Thank you. Our next question comes from the line of Xiaodan Zhang from CICC.

Please go ahead, Xiaodan. Hello, Mr. Wu, Mr. Zeng, and Mr. Feng. I have two questions for you. The first question is about our new energy space station. We launched the satellite project this year. I would like to ask the management to share the progress of the satellite project and how to look forward to the expansion speed of the next two years. So thanks, management, for taking my questions. My first question is on the new retail model of NAVs. So could you please update us on the progress of the satellite plan and how should we think of the expansion pace for next year? And secondly, could you please give us more color on how we are I'm going to look for more business synergies between Autohome and Pion Group. Thank you.

Thank you. Let me answer your first question about the satellite plan for the New Energy Space Station. Currently, the total number of 70 space stations and satellite assemblies has exceeded 50. On the city layout, the space station mainly covers the mid- and high-altitude cities, while the satellite stations are more in the mid- and low-altitude cities. Okay, thank you for raising this question. I'll firstly take the first question. At present, the Autohome space stores and the satellite stores altogether have already exceeded 50. In terms of the city layout,

The space doors mainly cover medium to high-tier cities, while satellite doors mainly cover medium to low-tier cities. So this kind of one-plus-n model with the space door and the core while surrounded by the satellite door can make us quickly penetrate into the lower-tier cities with a network service and reaching out quickly to our clients so as to facilitate the OEMs in their channels with uncovered cities.

In terms of efficiency, we are also helping the host market to achieve an optimization of cost efficiency. This model mainly helps them to reduce the cost of channel reduction and at the same time improve sales efficiency. At present, the market feedback is still good. For Zhijiao, it is also an increase in our income. As the new energy car market penetration rate continues to rise, Zhijiao not only promotes the new retail sales network In terms of the performance of the space stores as well as the satellite store, we see that it actually facilitates OEMs to realize the optimization of their cost efficiency.

Well, at the same time, it also helped the OEMs to lower their channel expansion cost while increasing the sales efficiency. And present, we see that the overall market feedback is very positive. Well, at the same time, it also generates extra revenue for all the homes. With ever increasing penetration of the AEV market, we see that with that great synergy of the space store as well as the satellite store, we can quickly facilitate the upgrading From the new tail network single point coverage to comprehensive coverage, while at the same time the NEV brand revenue steadily grows, while at the same time it continues to outperform the overall NEV market, showing very sound market adaptability and competitive edge.

Next year, we will continue to expand our mode of electricity. On the other hand, we want to make the existing electricity more solid, and also make the existing electricity model continuously upgrade. We have some explorations, such as strengthening the integration of industrial chains, and financing of financial insurance, to make their business expansion more solid. So there are two lines. One is the increase in quantity, and the other is to make the existing electricity model more solid with more explorations and operations.

So looking to the future, we're also going to walk by both legs. On the one hand, we're going to grow the number of the stores. We're going to make our business model even more sound and robust so as to gain more recognition from the OEMs. The existing franchised stores will keep upgrading, including the integration of the industrial chains as well as the in-store financial insurance. So that actually the franchise that stores their business expansion can cover more wide range of the area. So actually both area, one is to grow the volume, the other thing is to have more explorations and upgrading in a business model.

Your second question is about the collaboration between Zhijia and Tiananmen Square. The current progress in traditional business, for example, As for your second question, which is about the synergy between Autohome and PNC,

We see that in the traditional business, for example, we have co-hosted the 100 cities trade-in for new campaigns so that we can leverage on the strength of the PN offline team and to reach out to the uncovered cities of auto home. We also jointly launched more than 500 offline auto shows covering more than 250 cities nationwide So as to focusing on the lower tier market to create transaction scenario and to build differentiated competitive edge.

At Jinling Shou, we also used the resources of the industry. We also launched some financial insurance services to expand our energy product line. At the same time, we believe that the country's policy of saving and replacing new products In terms of the new retail, we also leveraged on P&S resources and also piloted with our auto home in-store financial services, including the financial insurance, and further expanded the financial product offerings.

while at the same time we also respond to the trading policy of the national government so as to integrate our service capabilities to the auto buyers and to provide what I mentioned before the price guarantee heartfelt benefit package so as to bring the one-stop service to the doorstep of the consumers and to provide the car purchase guarantee for the consumers.

Ping'an Group's advantages in rear-end scenarios and offline services. It has launched an outsourcing platform for after-sales business, and digital services for maintenance and replacement vehicles. Using Ping'an Group's offline team to provide one-to-one information for replacement vehicle service users in multiple scenarios, effectively promoting the transformation of communication.

As for the data product, we also leverage on the stress of Ping An Group in aftermarket scenario as well as offline service capabilities. We launched the outbound call platform, the maintenance assistance, as well as digital services for the trading vehicles. We also take good use of the offline team of Ping An, so as to provide one-on-one consulting services for the trading car users and multiple scenarios, so as to effectively promote conversions.

In terms of the used car business,

AutoCom has integrated the resources with Ping An Group to strengthen the synergy of TTP. For example, the Ping An Auto Loan Agent facilitated TTP to increase the vehicle sources from 4S dealerships, and the Ping An Leasing Team also helped the TTP to increase cooperation with the merchants. All of these measures effectively increased the transaction volume and also enabling TTP to enhance their service capabilities for further business expansion. So generally speaking, we will actually leverage on both online as well as offline strength of PM group. We will also explore more business models so as to expand the possibilities of our service delivery.

Next question. Thank you. Our next question comes from Richie Sun from HSBC. Please ask your question, Richie.

Thank you, management, for taking my questions. First of all, what is management's view on 2025 used car market? And how does management view the goal for T&M Pi next year? Second of all, what has also homemade in terms of shareholder return progress? And what is the plan for the future? Thank you.

Thank you for your question. Regarding the second-hand car, we have already mentioned that the price of the new car market has been going on for more than a year. The pressure on the second-hand car market is still quite big. The price of new cars continues to drop. Users are more hesitant to buy second-hand cars. This has also caused the domestic second-hand car market to be relatively low for several consecutive seasons. The positivity of car dealers has been severely affected. Although there is a stimulus of this abandoned policy, we see that from January to September 2024, The total volume of second-hand cars has increased by only 5.37%, which is much lower than last year. Indeed, we have seen a lot of good policies, but at the same time, we also see that the overall profit of second-hand cars is not good. Single-car transactions are basically in a state of loss. In September, the exchange rate of second-hand cars was 6.42 million yuan, which is 0.12 million yuan lower than last year. The demand for cars between the price range of 5 to 100,000 yuan is relatively abundant, but the profit space of the car is limited, and the profit situation has not been significantly improved. So in this case, we think that the price of this new car will not stop very quickly next year, so it will be a very challenging year for 20 cars next year. What is the goal of daily parking? I think daily parking, because now, the power of the policy of the whole country's climate change has caused a large number of cars to flow to the CS store. So, the short-term goal of T&T is that we may be more able to serve the C2B auction. Okay, thank you for raising this question. Let me firstly take the question.

Like I said before, you know, based on the more than one year price war of the new car market, it do actually imposes a huge pressure on the used car market. So with continuous downward pressure of the new car price, we see that the users are quite reluctant to make their purchase. As a result, the used car market in China for several consecutive quarters continue to be sluggish. And you can see that the auto dealers, they're not very enthusiastic in their car purchase. Even though there are policy updates such as scrappage, however, as well as what you have observed from January to September of 2024, the cumulative trading volume of the used car only increased by 5.37%, which has greatly declined comparing with the same period of last year. Even though there are policy preferences We do see that profitability of the automakers are not very good. We can see that the single car trading is still at a loss. And we see that in September, the used car trading average price is only 64,200 RMBY, which is a drop of 1,200 RMBY versus the same period of last year. And the strongest demand comes from the price range of 50,000 to 100,000. the profit margin of the auto dealers are greatly squeezed and their profitability cannot improve. So talking about the future, we see that actually for TTP, you can see that a lot of the car vehicle sources are actually rushing into the 4S dealership stores because next year we expect that the new car price will not end immediately. There will still be a big challenge for the use of vehicle. So for TTP, Actually, our previous trend is with the C2B auction market. But now we see that there will be more opportunities on the B2B market. So besides the previous trend on C2B, we're going to make more breakthroughs and transformations in the B2B market so as to tap into the potential in the B2B sector.

The second question is about shareholder feedback. Zhijia has been continuously improving shareholder feedback in the past two years. Last year, we announced at least 1.5 billion yuan of RMB per year. We just announced a new 1.5 billion yuan, so we have achieved this goal this year. At this point, in September, the Board of Directors also bought back a stock worth less than US$200 million in a year. This is also to reduce the fluctuation of stock prices and be able to continue to pass to increase the return on shares. We believe that we are ahead of the market in this regard. However, in the future, we may not only make mistakes in these two aspects. We will also see what new possibilities and opportunities there are to strengthen our efforts in the share return aspect.

As for your second question, which is about the shareholders' return, we see that Auto Home has always been very dedicated to increasing the return to our shareholders. Like we said before, last year, we actually announced a shareholders' return plan for about $1.5 billion, and we just announced an actual $1 billion dividend payout. As a result, altogether, there will be $1.5 billion dividend payout to our shareholders. And our board also actually in September adopted a 200 million USD shares buyback plan. We also have adopted many measures to reduce the volatility of the share price. So we think that currently we have been using dividend payout as well as shares repurchase to enhance the return to our shareholders while quite taking the lead in this area. So looking into the future, we will continue to look into the other possibilities so as to enhance the chance to increase the shareholder's return. Thank you.

Next question.

Thank you. Our next question comes from the line of Brian Gong from Citi. Please, go ahead, Brian.

Thank you for accepting my question. There are two questions here. The first one is, earlier, Mr. Guan mentioned that the project will continue. So I would like to ask, under this background, what does Mr. Guan think about Thanks for taking my question. And the management estimation about price war, which continues for the auto industry. So under this background, how does management think about OEMs as budget for the first quarter and for next year? And second question is about contract renewal with dealers. And what's the latest progress? And how does management think about the overall contract renewal for this one? Thank you.

Thank you. The first question is about the advertising budget of the host market. In the fourth quarter to the end of the year, the sales performance of the host market may also... Their sales situation may also greatly affect their budget. For those host markets that are close to or able to achieve their sales goals, they may increase their efforts to promote sales. and they may also fund the budget directly to the consumers to stimulate the transaction. There are some mobile phone companies that may not do very well. They may be more sensitive to the cost and may reduce their investment in this area. Overall, we can see that mobile phone companies are relatively cautious in terms of advertising budget this year. Next year, We expect that their investment in price stations will not be as strong as this year or the past two years. It will be more reasonable to balance the investment in advertising budget and price station subsidies. So we think that their investment situation next year will be better than this year. But we also need to look at the specific performance of the main factory as time goes on, especially after next year.

Okay, thank you for raising this question. The first one is about the OEM advertising budget as well as the outlook for the next year. We are already approaching Q4, which is actually the end of the year, and we see actually the sales performance of the OEMs are also coming to the end. For those who are expected to hit the sales target, they will actually promote their terminal sales or directly subsidize the consumers with their budgets so as to incentivize their transactions. But for those less well-behaving or performing OEMs, they will actually cut their advertising budget. So generally speaking, the OEMs, they are very precautious about their advertising strategy. And we think that looking into next year, they will more reasonably balance their advertising budgeting as well as the price for subsidies. Next year, things might get better, but it still depends. We will still see how they will perform after next year. Thank you.

As for the schedule of the fair, we are about to start at this time. It's like this every year. It's been going on for about a quarter. In terms of historical data, we have always been relatively stable. At the time, Zhijia covered most of the retailers. This is also the market. The retailers have a relatively high level of recognition and dependence on Zhijia's car dealership service. From Zhijia's point of view, we have always tried to improve the products from car dealerships. We can use more data, technology and services to enhance the quality of our services to improve the exact matching and efficient transformation for retailers. This year, we will cooperate with the group in a broader way. We will provide more diversified full-fledged tools to help retailers deal with the challenges of competitive markets and profits. We will update you with more details about the progress.

As for the contract of renew for the lease subscription package, actually, this will initiate at the end of the year and will last until the first quarter of next year. From historical data, you can see that a contract of renew of Auto Home for lease subscription package has always been very stable. And present, Auto Home has already widely covered most majority of the dealers on the market, which also shows the overall recognition of the dealers to our service as well as their reliance on our service. As one of our core service, you can see that Autohome will continue to leverage on big data technology as well as better service quality so as to further empower the dealers and to further enhance the precision of the matchmaking as well as the efficiency of the conversion. Well, at the same time, this year we'll also continue to cooperate with PM groups to further provide more diversified instruments for our dealers so as to facilitate them to cope with the fierce market competition as well as the challenge of their profit margin. In terms of the progress of the contract renew, we will keep you updated about the latest progress. Thank you. Thank you.

There are no further questions at this time. I'll turn the conference back to the management for closing comments.

Thank you very much for joining us today. 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, everyone. Thank you. Bye-bye.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.