Autohome Inc.

Ladies and gentlemen, thank you for standing by for Auto Home's first quarter 2025 earnings conference call. At this time, all participants are in listen only mode. A question and answer session will follow management's prepared marks. 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 Auto Home's IR website. It is now my pleasure to introduce your host, Sterling Song, Auto Home's IR director, Mr. Song. Please go ahead.

Thank you, operator. Hello, everyone, and welcome to Auto Home's first quarter 2025 earnings conference call. Earlier today, Auto Home Distributed is earning press release, which can be found on the company's IR website at .com.com. Joining me on today's call are Chief Executive Officer Ms. Song Yang and Chief Financial Officer Ms. Craig Yan-Zeng. Management will go through their prepared remarks first, which will be followed by a Q&A session where they will be available to answer all 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 Securities Detigation 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 filing with the U.S. Securities Exchange Commission and the Hong Kong Stock Exchange. Auto Home doesn't undertake any obligation to update any forward-looking statements except as required under applicable laws. Please also know that Auto Home's earnings press release and this conference call include discussions of certain non-GAAP financial measures. The reconciliation of the non-GAAP measures to the most directly comparable GAAP measures can be found in our earnings release. I will now turn the call over to Auto Home CEO Ms. Yang for opening remarks. Please go ahead, Ms. Yang. Yang Dongqiang. Thank you, Sirling. Hello everyone. This is Song Yang. Thank you for joining our earnings conference call today.

In the first

quarter, we concentrated on strengthening the fundamentals of our business and on enhancing our innovative initiative. Leveraging our solid foundation, we continued to drive breakthrough innovation, steadily advancing our online to offline integration strategy, and achieving solid progress. In terms of building our foundation, we focused on expanding our product offerings and enhancing the user experience to deliver greater value and establish a solid base. On our content, we enriched our content portfolio by adding table logs, camping and other broader automotive-related content. We also introduced a robot section on our APP homepage, expanding into the smart technology space to meet our users' diverse needs. On our user experience, we systematically promoted new content through upgraded live streaming features to enhance the appeal of our professional content. We also launched the starting price tool, which consolidates government subsidies and OEM discounts, helping users make hard-buying decisions more easily and efficiently.

At the same time, we have been steadily promoting our new retail business. So far, we have added nearly 200

building our solid fundamentals, we are actively driving technological innovation, continuously deepening the application of AI and expanding our business. Currently, our AI technology has already been successfully implemented across our advertising, these membership products, the APP Smart Assistance, Youth Car Smart Tools, and the new media. Notably, at the end of March, again, we upgraded the AutoHome APP with an AI Smart Assistance powered by DeepSea and our own proprietary big data resources. This feature significantly enhances the user Q&A experience in the automotive vertical and efficiently improves efficiency in user decision making. Meanwhile, our new retail business is steadily expanding. To date, we have nearly 200 AutoHome space and satellite franchise stores in operation, providing local partners with cutting-edge technological capabilities, premium offline resources, and a robust ecosystem support to drive mutual growth. In addition, through our participation in the Auto Show in Thailand, we are also actively exploring ways to support Chinese automakers in expanding overseas markets.

AutoHome is a car media, but not only a car media. Over the past 20 years, we have accumulated a vast range of industry data, rich professional experience, broad user base, and strong brand awareness. Today, with the deep structural change in the Chinese car market, we have built a smart service platform for data driving in the field of automotive ecosystem through the forward-looking layout of new retail, smartization, and car. We are promoting a comprehensive upgrade of the car consumption experience. Looking forward to the future, we will start from the needs of users, continue to strengthen business foundation, actively expand the new business field, and strive to build a online and offline integrated service ecosystem. Providing more comprehensive and convenient service for consumers and customers.

We have accumulated a massive amount of industry data, abundant industry expertise, a large and strong user base, and extensive brand recognition. Today, as the Chinese auto market undergoes profound structural changes, we have built a data-driven intelligent service platform across new retail, smart technology, and a broader automotive ecosystem, driving a comprehensive upgrade to the automotive consumer experience. Looking ahead, we remain committed on user needs, continue to strengthen our foundations, actively explore new emerging sectors, and build a fully integrated online to offline ecosystem for services, providing consumers and clients a more comprehensive and convenient one-stop service.

Next, we will have CFO Zeng Yan to introduce the business and financial situation

of the first quarter of 2025. Thank you, Mr. Yang. Hello, everyone. I am CFO Zeng Yan of Car Home. Hello, everyone. I am Craig Zeng, the CEO of Auto Home. In the first quarter, we focused on key new car launches and upgraded the live streaming of our professional content. By live streaming new car reviews, initial showcasing, and initial test drives, we improved the timeliness and reach of professional content, creating an immersive consumer experience. For example, our New Car Express News program organized and customized live streaming of new car launches, attracting more than 200,000 interactions collectively. The related topic also sparked user-generated content and secondary distribution across multiple third-party platforms, extending the reach of our professional content beyond the traditional audience. Today, we have achieved full live streaming coverage for all S-Class New Car Launches. We have created a platform for car users to share their car experiences, and we have achieved comprehensive expansion from vertical to professional depth, and we have integrated the future trend of smart technology to create a multi-dimensional and multi-dimensional content ecosystem. The Q1 mobile data shows that the car home's mobile end of March has reached 76.92 million daily users, and has increased by 10.8%. The user scale and platform impact continues to rise. In addition to our professional content, we also introduced a variety of programs such as Motor Infusus and Grand Tourer, creating interactive platforms for car owners to share and connect over their driving experiences, and marking an expansion of our content coverage from specialized automotive topics to broader car lifestyle and culture. This also integrates the future trends of smart technology into our content, forming a diversified and multi-dimensional content ecosystem. According to Christmobile, our average mobile DAU reached 76.92 million in March 2025, up .8% from the same period last year, reflecting our sustained growth in user scale and expanding platform influence. In the field of energy, the new retail business has launched a new service mode for car buyers, from online to offline, and has been the core of user experience. Through the professional recommendation of gold-plated buyers, the live broadcast of the car, the instant communication of enterprise WeChat, the transparent price of online platforms, and the real car owner's multi-car comparison price, we have fully integrated online and offline -in-one services, providing all-brand one-stop car service for users, and achieving the goal of choosing car to save money and buying car. Currently, we have already set up 29 space stations and 170 satellite networks, forming a powerful offline network, allowing more users to experience the professional and convenient service of -to-home services. According to Christmobile, the total revenue of -to-home energy brands including new retail businesses has continued to rise, and the revenue has increased by 72.6%. Turning to NEVs, our new retail business introduced the Buy4Me service model that integrates online and offline services. With a focus on the user, this model combines export recommendations, real-time vehicle demonstrations, wireless streaming, instant communication through enterprise WeChat, transparent online pricing, and multi-vehicle test drives by real-car owners. By connecting every stage of the buying process, we offer users a one-stop car purchasing experience across multiple brands, marking the progress easier and more cost-effective. Currently, we've established 29 auto home space stores and 170 franchise satellite stores nationwide, forming a strong offline network, enabling more users to experience the professionalism and convenience of our services. In the first quarter, total revenues from NEVs, including those from our new retail business, increased by .6% -over-year. In terms of digitalization, we are currently making a major effort to promote AI-based product upgrades driven by DeepStake. In terms of marketing, we have implemented a traditional AI-based product upgrade from artificial design to AI-based production and data intelligence. Through the production-based AI technology, we have rebuilt the entire network marketing system to make our marketing services more accurate and efficient. In terms of member products, we have deeply integrated DeepStake's open source architecture to continue to enhance AI service capabilities. Through AI, we have reduced costs, improved performance, and helped with decision-making, providing more intelligent operating support to our partners. Our AIGC new media marketing has opened up the content and live-streaming channels, significantly improving the efficiency of our stores and helping businesses achieve high-performance transformation. In addition, for the non-standard vehicle trading difficulties, we have effectively solved the problem of the vehicle matching difficulty and the vehicle selection difficulty by simplifying the non-standard vehicle label and deep-releasing the user's needs. In addition, for the non-standard vehicle trading difficulties, we have effectively solved the problem of the vehicle matching difficulty and the vehicle selection difficulty by simplifying the non-standard vehicle label and deep-releasing the user's needs. In addition, for the non-standard vehicle trading difficulties, we have effectively solved the problem of the vehicle matching difficulty and the vehicle selection difficulty by simplifying the non-standard vehicle label and deep-releasing the user's needs. In addition, for the non-standard vehicle trading difficulties, we have effectively solved the problem of the vehicle matching difficulty and the vehicle selection difficulty by simplifying the non-standard vehicle label and deep-releasing the user's needs. We have developed a new system of user-oriented, manual design and rule-based approaches to an AI-native and data-driven intelligence paradigm. Leveraging generative AI, we've rebuilt our -to-end marketing system to deliver more precise and efficient services. For membership products, we deeply integrated DeepStick's open-source architecture to continuously enhance AI capabilities, utilize AI-enabled task reduction, follow-up optimization and decision support, providing more intelligent operational assistance to our business partners. Our AIGC-powered new media marketing connects content-based and -streaming-based channels to acquire consumers, significantly improving store operational efficiency and helping merchants achieve higher quality traffic convergence. In addition, to address the complexities of non-standard used car transactions, we launched the used car AI smart buyer in April, which refined the labeling of non-standard product tags and analyzed the user needs to effectively solve problems such as poor transaction matches and car selection difficulties. In the first quarter, the revenue from data products increased by over 5% -over-year. We will continue to deepen the application of AI across multiple scenarios to better address user demands and drive business model innovation and efficiency. Online, we established a cross-platform coordination mechanism between AutoHome and TTP to optimize resource allocation and ensure a consistent user experience. Offline, we collaborate with TTP dealers and AutoHome space stores to expand premium inventory sourcing and implement refined layered management of used car resources based on vehicle condition, pricing and other factors to accurately match inventory with different dealer capabilities, creating a high-efficient used car sourcing platform. In summary, we have been vigorously implementing the AI smart buyer in the past year. We are working on a new strategy for the integrated development of auto operations and continuously advancing execution. In this process, we've been constantly strengthening our business foundation and cultivating new growth drivers. We are striving to transform from a pure automotive media vertical into a comprehensive auto lifestyle ecosystem when that is much closer to the transaction and enhance the global automotive consumer ownership experience. This evolution will allow us to deliver superior products and services to users and clients and create long-term value for our shareholders. With that, please let me briefly walk you through the key financials for the first quarter 2025. Please note that I will reference RMB only in my discussion today and as otherwise stated. Net revenues for the first quarter were 1.45 billion. Breaking it down, media services revenues were 242 million. Lease generation services revenues were 645 million. And online marketplace and others revenues were 566 million, up 2% year over year. In terms of cost, the first quarter's revenue was 316 million compared to 301 million in the corresponding period last year. The worst margin in the first quarter was .3% compared to .3% during the first quarter last year. Overall, we delivered an operating profit of 233 million in the first quarter. In the first quarter, compared to 276 million for the same period of last year. Adjusted net income attributable to auto home was 421 million in the first quarter compared to 494 million in the corresponding period of 2024. In the first quarter, the net revenue was 0.88 million compared to 4.07 million in the previous year. Non-GAD basic and diluted earnings per share in the first quarter were both 0.88 compared to 1.02 in the corresponding period of 2024. Non-GAD basic and diluted earnings per share in the first quarter were 3.54 and 3.52 respectively compared to 4.08 and 4.07 respectively in the corresponding period of 2024. In addition, on March 31, 2025, our asset burden table continued to perform well. The cash, cash In addition, on September 4, 2025, our asset burden table continued to perform well. 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Brian, for your question. On February 20, Hire Group announced that its subsidiary, CarTech, had acquired a .91% stake in AutoHome. As of now, the equity transfer has not yet been completed, and the transaction is still under regulatory approval. We will share any updates with our shareholders first up to date.

We will share any updates with our shareholders first up to date.

As the transaction is yet to be completed, we could only disclose public information and opinions. All in all, we believe that we will be committed to the -to-offline new retail model and also the development trend in new energy vehicles and intelligent development strategies.

CarTech is a key link in the Hire car industry, and it will continue to strengthen AutoHome's intelligent interaction and service capabilities. In addition, the public transaction structure will continue to be an important shareholder of CarTech. Our cooperation with CarTech will continue to

deepen.

The first question is that the price war will continue in the short term. Of course, as Mr. Yang mentioned, the price has been reduced. We have also noticed that the profits of the listed companies have been greatly affected. We believe that the price will not be too high. As the cleaning of the car inventory is gradually completed, the policy subsidy period will gradually reduce. We expect that the price competition

will slow down gradually.

As for your second question about when the auto price war is expected to stabilize and also the impacts of dealership closers, whether they are beginning to emerge, we believe that the price war is expected to continue in the short run. Just now we've heard from CEO Yang that now we are seeing a trend of growth in volume while decline in profits. Also, we can see that from the financial reports of automakers that are listed, their profits have been affected. However, we believe that the room for further price decline is limited. We believe that after the current inventory clearance and also the end of the subsidy policy transition, the competition will gradually cool and ease.

The current challenge is mainly a transformation, as the decline in fuel cars is still quite obvious. The current 4S model, especially the fuel car 4S model, is facing a big challenge. So the consumer has to face a challenge of how to deal with the decline in fuel cars and how to sell the new energy car. We have seen that they have tried a lot, including our new energy car, to help them to use a good efficiency

to do the work of car sales.

In the financial reports last year, we are seeing the decline in profits across most of the dealers. We believe that currently the biggest challenge faced by dealers is the need to transform. We are seeing apparent decline in the sales of ICE vehicles. The 4S model that used to be popular is also facing severe challenges. Currently, we need to address the challenge of declining ICE auto sales. They also need to think about how to better sell NEVs. Of course, we are seeing a lot of efforts on their part. Our new retail business also aims to help them improve their sales with greater efficiency.

In the long run,

we believe that the dealers would pivot towards the business of new energy vehicles and also towards greater efficiency. Of course, we see news of dealers exiting the market. However, we believe that the base number is still stable. In the future, with restructuring of the businesses and greater innovation, we believe that leading dealers and those who are able to transform relatively rapidly would still have the potential to hold still in the market. We believe the market would return to a healthy track after temporary adjustments.

I would like to ask you two questions. First, I would like to know what changes will be made in the strategy of the new energy vehicles and the overall sales of ICE vehicles? What is the expected scale of the next quarter's expansion? I would also like to ask you to update our plan of the shareholder return. Please quickly translate my question.

Thank you.

As CEO Yang mentioned earlier, our new retail business has been constantly evolving. It started from version 1.0, which focused on launching space stores in major cities. Then we had version 2.0, where we introduced the satellite plan. We built a one plus end marketing network, extending from core cities to surrounding regional markets. Now we are up to the stage of version 3.0, where we focus on enhancing the car buyers' experience and reducing transaction costs for both buyers and sellers through technology and service upgrades. Our new retail strategy has been consistently upgraded in line with market dynamics. Our first store in Shanghai underwent a comprehensive upgrade in Q1 this year. In addition to existing services, it now features an immersive VR camera experience and an on-demand AI smart purchase assistant, making the car buying journey even more intelligent. The AI smart purchase assistant can match vehicle models to a customer's budget, lifestyle demand, and preferences, cutting information search time by 90%, lowering decision-making costs, and improving overall purchase efficiency, delivering a time-saving car search and cost-saving car purchase. As mentioned by CEO Yang, by the end of this year, Auto Home aims to operate 50 space stores and 500 satellite stores, offering car buying services to nearly all -factor-level cities and counties in China. Over the next three years, we plan to open 1,000 satellite stores. With this rapid scale-up, our new retail business is expected to become a greater contributor to Auto Home's overall revenue.

We will continue to do this. In September, we passed the $200 million repurchase plan. As mentioned earlier, we have now spent nearly $1.3 billion. We have repurchased nearly 5 million shares of ADM. Overall, our annual share of shares and repurchase rates have exceeded 10%. In the future, we will continue to repay the shareholders by continuing to distribute and repurchase policies. This will increase the long-term revenue of

the shareholders. The previous commitments to the market, that is this year's dividend payout, will be no less than $1.5 billion RMB. And about our share repurchase, in September 2024, the board approved a $200 million share repurchase program. As mentioned by CEO Yang, as of now, we have already executed approximately $130 million repurchasing. That is nearly 5 million ADM. Taking both the dividends and share repurchases into account, our annual shareholder return rate has exceeded 10%. Looking ahead, we will continue to reward shareholders through consistent and stable dividends and repurchase policies, aiming to increase long-term and stable returns for our investors.

Thank you, Operator. Next, please.

Thank you. Our next question comes from the line of Richie Sun from HSBC. Please go ahead, your line is open.

Hi, Yang Zhong, Craig, Sterling. Good evening. Thank you for giving me the opportunity to ask. I would like to ask you how you view the trade war's impact on our business and the car market. Thank you, Management, for taking my questions. I would like to ask, how would you think about the impact of trade tensions towards the car market and our business? Thank you.

We believe the trade war will have some impact on our business. We believe the trade war will have some impact on our business. We believe the trade war will have some impact on our business. We believe the trade war will have some impact on our business. We believe the trade war will have some impact on

our business. We believe the trade war will have some impact on China's auto market. There would be price fluctuations because with the U.S. imposing higher tariffs, American auto brands such as Tesla, Lincoln, Chevrolet, and Hammer are expected to rise. However, we believe that currently the domestic auto market is largely driven by the growth of new energy vehicles. We are also seeing very high market share from brands of Europe and Japan, while the proportion, while the share of U.S. brands is relatively limited. So we believe the impact on the overall Chinese auto market will also be limited.

I just want to clarify that

I am talking about imports from the U.S. Not only from the U.S. brands, but also from domestic production.

So just to clarify, by U.S. brands I mean imported U.S. auto. So for auto home, because our main businesses are focused on the domestic market, So for auto home, because our main businesses are focused on the domestic market, so there may be some impact on the macro level of the domestic auto market. So the direct impact is very limited on auto home.

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