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, Autohome's IR Director, Mr. Song. Please go ahead.

Thank you, operator. Hello, everyone, and welcome to Autohome's first quarter 2025 earnings conference call. Earlier today, Autohome distributed its earnings press release, which can be found on the company's IR website at ir.autohome.com.cn. Joining me on today's call are Chief Executive Officer Ms. Song Yang and Chief Financial Officer Ms. Craig Yanzeng. 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 four resolution statements made under the Safe Harbor provisions of the U.S. Private Security Dedication 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. AutoHome doesn't undertake any obligation to update any forward-looking statements except as required under applicable laws. Please also know that AutoHome'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'll now turn the call over to Autohome CEO, Ms. Yang, for opening remarks. Please go ahead, Ms. Yang. Yang Dongqiang.

Thank you, Song Kai. Hello, everyone. I'm Yang Song. Thank you for attending our phone call today.

Thank you, Sterling. Hello, everyone. This is Song Yang. Thank you for joining our early conference call today.

In the first quarter, we focused on business basics, deepening innovation, to build a solid foundation and lead to innovative breakthroughs, steadily advance the online and offline integration development strategy, and achieve good stage results.

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 breakthroughs in innovation, steadily advancing our online to offline integration strategy, and achieving solid progress.

基础建设方面 我们通过在扩品扩类和用户体验升级 两大方向上发力 保障对用户的价值 助劳业务根基 内容产品上 我们扩充了邮寄 露营 出行等饭车内容 并在APP首页开辟了机器人专区 将产品延伸至智能科技领域 满足用户的多元需求 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 travel 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 car 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 car buying decisions more easily and efficiently.

On the business infrastructure, we actively promote technological innovation, continuously strengthen AI depth of application, to expand new sales and business expansion, and to cultivate a new engine for future business development. Currently, our AI technology has successfully landed in the various business fields and scenarios such as advertising, clue member products, app smart assistant, second-hand car smart tools, and new media. It is worth noting that at the end of March, the new AI smart assistant will be upgraded again. The new version is characterized by AI smart assistant. by using DeepSeq's large model and our exclusive large data resources, significantly improved the Wenda experience of the automotive vertical field, effectively improving the decision-making efficiency of users. At the same time, the layout of our new retail clothes is also steadily advancing. As of now, the total number of automotive space stations and satellite stores is close to 200, providing advanced technical capabilities, high-quality offline resources, and rich ecological support for local partners.

Building on our solid fundamentals, we are actively driving technological innovation, continuously deepening the application of AI and expanding our new retail business to establish engines for future growth. Currently, our AI technology has already been successfully implemented across our advertising. These membership products, the APP smart assistance, used car smart tools, and the new media. Notably, at the end of March, again, we upgraded the Auto Home 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 old-home space and satellite franchise stores in operation, providing local partners with cutting-edge technological capabilities, premium offline resources, and 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.

汽车之家始于汽车媒体,但又不止于汽车媒体。 成立20年来,我们积累了海量的行业数据, 丰富的专业经验,广阔的用户基础和强大的品牌认知。 In today's time when China's car market has undergone profound structural changes, we will build up a smart service platform that drives data in the field of smart sales, naturalization, and trucking with the help of preemptive layout. Looking forward to the future, we will start from the needs of users, continue to consolidate the business foundation, and actively develop new business areas, trying to build up a comprehensive system Autohome began as an automotive media and has evolved far beyond.

In the two decades since our establishment, We've 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've built a data-driven intelligent service platform across new retail smart technologies 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 foundation, 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, let's have CFO Mr. Zeng Yan introduce the business and financial situation of Zhijia in the first quarter of 2025.

With that, I will now turn the call over to our Chief Financial Officer, Ms. Craig Yanseng, for a closer look at our first quarter 2025 operating and financial results. Thank you, Mr. Yang. Hello, everyone. I'm Craig Yanseng, the CFO of Autohome. In the first quarter, we focus on the key points of the new car. to fully upgrade the live presentation of professional content. Through a series of customized live broadcasts such as the first release, the first show, and the first test of the new car, we aim to enhance the practicality and transmission effect of professional content to create immersive consumer experience for users. For example, the new car straight-up column has more than 200,000 online interactions for the new car's customized first show live broadcast. The relevant topics are broadcasted by users on multiple third-party platforms to promote professional content breakthrough. 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 Ws, 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. In addition to our professional content, we also introduce a variety of programs such as motor enthusiasts and the 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 a multidimensional content ecosystem. According to Quest Mobile, our average mobile DAUs reached 76.92 million in March 2025. up 10.8% from the same period last year, reflecting our sustained growth in user scale and expanding platform influence. In the new energy sector, the new retail business has launched a new service mode from online to offline for car buyers. Using user experience as the core, the professional recommendation of gold-plated buyers, the intuitive display of car-driving live broadcasts, and the timely communication of corporate WeChat, the transparent price of the online platform, and the multi-car comparison price of the real car owner. We completely open up the online and offline chain of services, providing users with full-brand one-stop shopping service, and achieving the users' target of choosing a car to save money and buying a car to save money. Currently, we have set up 29 space stations and 170 satellite shopping malls nationwide, forming a powerful offline network. 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 expert recommendations real-time vehicle demonstrations via live 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 strong offline networks, 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 72.6% year-over-year. Truthfully, We are actively promoting the product AI upgrade driven by DeepSeq. In particular, in the field of marketing, we have achieved a functional upgrade from traditional artificial design plus rule driving to AI origin and data intelligence. Through the birth of AI technology, we have redeveloped the whole chain of marketing systems to make marketing services more accurate and efficient. In terms of member products, we deeply integrate DeepSeq open source architecture to continuously improve AI service capabilities. Through AI operation reduction, improvement of performance, decision-making assistance, and providing more intelligent operation support for partners, our AIGC new media marketing has opened up the content customer and live customer channels, significantly improving the operating efficiency of stores, helping merchants achieve high-efficiency transformation of traffic. In addition, for the trade difficulties of second-hand car non-standard products, we launched the second-hand car smart purchase in April, We are advancing the comprehensive AI upgrade of our products powered by DeepSeq. Specifically in marketing, we have transitioned from the traditional manual design and the rule-based approaches to an AI-native and data-driven intelligence paradigm. Leveraging generative AI, we've rebuilt our end-to-end marketing system to deliver more precise and efficient services. For membership products, we deeply integrated DeepSeq 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 live streaming-based channels to acquire consumers, significantly improving store operational efficiency and helping merchants achieve higher quality traffic conversion. In addition, to address the complexities of non-standard used car transactions, we launched the Used Car AI Smart Buyer in April, which refines the labeling of non-standard product tags and analyzes user needs to effectively solve problems such as poor transaction matches and car selection difficulties. In the first quarter, the revenues from data products increased by over 5% year-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. In the second-hand car business block, we surround the second-hand car transaction chain to build online and offline co-operative ecology. Online, we build a cross-platform system of car-housing and day-to-day parking across platform channels. Use car business. We are building a collaborative O2O ecosystem around the used car transaction chain. 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 old-home 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 dealers' capabilities, creating a high-deficient used car sourcing platform. In summary, we've been vigorously implementing a new strategy for the integrated development of O2O 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 consumers' 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. 接下来,我来向大家简述一下汽车之家2025年第一季度的主要财务情况。 请注意,我将在今天的讨论中仅以人民币作为货币单位,除非另有说明。 With that, please let me briefly walk you through the key financials for the fourth quarter 2025. Please know that I will reference R&B only in my discussion today, unless otherwise stated. The first quarter's total revenue is 14.5 billion yuan. To be specific, the total revenue of each service is 2.42 billion yuan, the total revenue of each service is 6.45 billion yuan, the total revenue of online marketing and other services is 5.66 billion yuan, and the total revenue of the service is 2%. Net revenues for the first quarter were $1.45 billion. Breaking it down, media services revenues were $242 million. Least 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 revenue cost was $3.16 billion. Last year, it was $3.01 billion. The cost of revenues in the first quarter was $316 million compared to $301 million in the corresponding period last year. Worth margin in the first quarter was 78.3% compared to 81.3% during the first quarter last year. Overall, we delivered an operating profit of $233 million 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 income of the auto home was $0.88, and the net income of the auto home was $1.02. In the first quarter, the net income of the auto home was $3.54 and $3.52. The same period last year was 4.08 yuan and 4.07 yuan. Non-GAAP 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-GAAP basic and diluted earnings per ADA in the first quarter were 3.54 and 3.52 respectively compared to 4.08 and 4.05. seven respectively in the corresponding period of 2024. And of March 31st, 2025, our balance sheet remained robust with cash cash equivalents and short-term revamping of $21.93 billion. We generated net operating cash flow of $135 million in the first quarter. On September 4, 2024, the board of directors approved a new stock repurchase plan of less than $200 million in 12 months. As of May 2, 2025, we have repurchased about 4.78 million U.S. stock. The total amount is about $1.28 billion. On September 4, 2024, our Board of Directors authorized a new share repurchase program under which we are permitted to repurchase up to USD 200 million of Auton Homes ADS for a period not exceed 12 months thereafter. As of May 2, 2025, we've repurchased approximately 4.78 million ADS for a total cost of approximately US dollar 128 million. So the above is our financial summary. With that, we are ready to open up the Q&A session. Operator?

Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Our first question comes from the line of Thomas Chong from Jefferies. Please go ahead. Your line is open.

晚上好,谢谢管理层接受我的提问。 我第一个问题是想先问一下, 看到我们就是一季度的话, 整个行业的测试整体表现不错, 对行业还有居家会有什么的影响? 然后管理层可以分享一下 我们对二五年测试的展望吗? Good evening. Thanks, management, for taking my question. My first question is about the auto industry. We see the sector is performing well in Q1. What's the implication to the sector and auto home? What's management expectation about 2025 industry outlook? And my second question is about new retail. Can management comment about the progress so far and our plan going forward? Thank you.

好的,感谢您的提问。 我是杨松。 我来先分享一下在一季度几个市场特征。

Thank you for your question. I am Song Yao. Let me answer your question. First, let me analyze the characteristics of the market for Q1.

首先,新车整体销量增长,新能源表现突出,但增速放缓。 官方数据显示,一季度车市的销量同比增长6%, 其中燃油车销量继续下行,同比下跌12%。

First, the overall new car sales grew, but with new energy vehicles, that is NEV, standing out, although their growth rate has slowed. According to official data, Q1's auto sales increased by 6% year-on-year. Among this, internal combustion engine vehicle sales, that is ICE vehicle sales, continue to decline, down 12% year-on-year, while NEV sales grew by 36% year-on-year. However, this is slower than the growth rate of over 40% seen in the second half of last year.

At the same time, we also see that At the same time, we've observed a clear trend of growth in volume but decline in profits.

In Q1, the average profit margin of China's auto industry was only 3.9%, significantly lower than the 5.6% average for downstream industrial enterprises, reflecting continued margin pressure in the auto sector.

其次,两新政策推动了市场回卵, 刺激了购车需求。 今年1月, The Ministry of Finance and the Ministry of Finance issued a notice on the consumption and consumer goods rescue change policy. For the automotive sector, it proposes to expand the range of automotive waste update support and improve the car change update supplementary standard. According to the calculation of the China Automobile Association, after the waste change model standard is widened, the number of used cars with a national 4% standard is more than 10 million taels.

Second, two new policies have helped revise the market and stimulate car buying demand. In January, the National Development and Reform Commission and the Ministry of Finance released the notice on promoting consumption and the trade-in of consumer goods. Regarding the auto sector, it proposed Expanding support for scrapping and replacing old vehicles and improving subsidy standards for car trade-ins. According to the estimates from the China Automobile Dealers Association, after the scrappage standards were broadened, over 10 million additional National 4 standard passenger vehicles became eligible, and the number of eligible NEVs increased by more than 1 million.

第三,价格战降温,智能化的竞争加剧。 车企开始进足智能化赛道, 不仅满足了消费者对智能化体验的需求, 也让车企在机内的市场竞争中

Third, the price war has cooled while competition in intelligent vehicle technology has intensified. Automakers are now racing into the smart tech track, not only meeting consumer demand for intelligent experiences, but also helping manufacturers overcome the challenges of technological homogenization amidst fierce market competition.

Looking at the test in 2025, we can see the following trends. First, the test continues to adjust the structure. New energy vehicles become the driving force for the growth of the test. Second, the policy is good, and the test continues to be released. The test is stable, and the growth is small.

Looking ahead to the 2025 auto market, we see the following trends. First, ongoing structural adjustments in the market with NEVs becoming the main growth driver. Second, continued policy support leading to steady, modest growth. Third, automakers accelerating their shift toward intelligent transformation. For AutoHome, we will continue to focus on user demand, improving user experience, and enhancing our service capabilities. For one thing, we are developing intelligent professional tools such as the starting price tool and our AI assistance to help users understand regional differences in vehicle discount policies

On the other hand, we are in line with the big trend of structural changes in the test, and we have built up a new sales network, built nearly 200 space stations and satellites nationwide, and recently launched the O2O service mode for buying and selling vehicles. We will transform the pain points in the selection, purchase, and exchange of all networks, and open the service networks of new employees, providing users with high-quality and convenient one-stop service.

The other thing is that we are aligning, we are capitalizing the broader structural changes in the auto market by expanding our new retail network. We are building nearly 200 space doors and satellite stores nationwide. At these space doors, we've introduced the innovative buy car for you O2O service model, addressing user pain points throughout the entire car buying journey, from browsing and selecting to purchasing and trading in. We're also working to integrate the NEV service chain and provide users with high-quality, convenient, and one-stop services.

With the growth of the new energy test, our channel layout is improving, as well as the continuous upgrade of the company business model,

我们相信新临收业务将为之家未来的发展提供新的动能。 With the continued growth of the NEV market, the improvement of our channel network, and the ongoing evolution of our business model, we believe our new retail business will become a new engine driving Autohome's future growth.

接下来我回答您的第二个问题。

Now, let me answer your second question.

So first about our store opening progress.

As of the end of the first quarter this year, we have established 29 space stores and 170 franchise satellite stores across the country. These stores cover both major cities and lower tier markets, enabling more users to experience Autohome's professional and convenient services.

The second is the upgrade of the space station. From the first offline deployment of Zhijia for the first time in September of 2020, to now more than two years of practical exploration, our new beast model is constantly upgrading. At the Shanghai Motor Show that just passed, the upgraded Qizhou Zhijia Shanghai Space Station has already appeared in Shanghai's Shibo Garden, and has been integrated into the Quanxi Warehouse of Luo Yan 3D, Du Bi Sound Effect and AI-based purchase and purchase. Users can choose cars in a quiet way, and actually create a purchase plan. The second point is about our space store upgrades.

Since Auto Home first launched its offline retail strategy in September 2022, we have undergone more than two years of hands-on exploration and continuous iteration of our new retail model. At the recent Shanghai Auto Show, the newly upgraded Auto Home Shanghai Space Store was unveiled at the Shanghai World Expo site. It features cutting-edge technologies, including a glasses-free 3D holographic cabin, Dolby Sound, and an AI smart purchase assistant, enabling users to enjoy an immersive car selection experience. and generate personalized purchase plans in real time. We will rapidly roll out these space doors upgrades nationwide to deliver an even better car buying experience for our users.

The third is our expansion plan. In 2025, we plan to vigorously promote the layout of 70 new retail offline stores. By the end of this year, the total number of spaces in your satellite store The third point is about our expansion plan in 2025.

we plan to aggressively expand our offline new retail presence. By the end of this year, we aim to exceed 500 total locations, combining our space stores and satellite stores. The expansion will focus on lower tier and rural markets. And over the next three years, we intend to extend our reach to cover the vast majority of prefecture-level cities, counties, and rural areas across China. This will allow more consumers to access auto home services, accelerate the adoption of new energy vehicles, and support the broader transformation and upgrade of the automotive industry.

So much for my answer.

Thank you again for your questions.

Okay, thank you, Miss Yang. Operator, please go ahead.

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

Thank you, Manager, for accepting my question. I have two questions. The first one is, how is the development of the Hire acquisition vehicle? When do you expect the transaction to be completed? I will translate myself. Thanks management for taking my question. I have two questions. First one, is uh what's the latest status of highest acquisition and when the deal can be completed in the future what new development strategies will auto home to apply um and the second question is where will uh oem's pricing war to stabilize the management's view and does the impact from bankruptcy of dealers to our lead generation business just emerge thank you

Thank you, Brian. Let me answer your question. On February 20, Hire Group announced the acquisition of 41.9% of the 91% shares of KTX. So far, because this transaction needs a lot of audits, the entire transaction has not been completed yet. Once there is news, we will inform the market as soon as possible.

Thank you, Brian, for a question. On February the 20th, Hire Group announced that its subsidiary, Cartex, had acquired a 41.91% 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.

Speaking of future transactions and the new strategic development of the company, because the transaction is not complete yet, we can also see from the public information and some of the views of the Hire Group. In general, regardless of whether our branch has been communicating with all of our shareholders and investors, we now need to have a kind of online and offline model, a new digital model, and I don't think there will be any changes in the direction of the trend of the smartization of new energy in the market that we are approaching today.

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

We also noticed from the Hai'er Group's press release that they believe that after this transaction is completed, Car Home will be a key pillar of the Hai'er car industry. It will continue to strengthen O2O's smart interaction and operating service capabilities. In addition, according to the public transaction structure of the transaction, Ping'an Transport will continue to be an important shareholder of Car Home. Our cooperation with Ping'an Transport will continue to evolve.

So according to the press release by the higher group, we will be committed to continue strengthening Auto Home's O2O intelligent exchange capability and the Ping An Group will remain our important shareholder. We will also continue to strengthen our partnership with Ping An Property and Casualty Insurance.

When do you expect the price range to stabilize? Will the collapse of the market be affected by the new trend? The first question is whether the price range will continue in the short term. Of course, as Mr. Yang mentioned, the current trend is a decline in volume. We also pay attention to From the stock market company's full-scale financial report, we can see that everyone's profits have been greatly affected. So we don't think there will be much space for the price to go down. As the clean-up of the full-scale inventory is gradually completed and the policy supplementary period is gradually weakened, we expect that the price competition will gradually slow down.

So as for your second question about when the auto price war is expected to stabilize, and also the impacts of dealership closures, whether they are beginning to emerge. We believe that the price war is expected to continue in the short run. And just now we've heard from CEO Yang that now we are seeing a trend of growth in volume while decline in profits. And also we can see that from the financial reports of automakers that are listed their profits has been affected. However, we believe that the room for further price decline is limited. And 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 impact of the price station on sales is also relatively large. Based on the financial statements of the listed dealers, last year's profits were basically in a state of complete decline. We believe that the challenge of the dealers is mainly a transformation challenge, because the decline in fuel trucks is still relatively obvious. The 4S model, which was more popular in the past, especially the 4S model for fuel trucks, is facing a bigger challenge. So the dealers have to face a challenge to deal with the price of fuel vehicles and how to sell new energy vehicles. We also saw that they made a lot of attempts, including our Xilinxou, which is also helping them to use a good enough efficiency to do the work of car sales.

Also, we are seeing a major impact on the dealers caused by the price war, especially in terms of their financial reports last year. We are seeing the decline in profits across most of the dealers. And we believe that currently the dealers, the biggest challenge faced by dealers is the need to transform. And we are seeing apparent decline in the sales of ICE vehicles and the 4S model that used to be popular is also facing severe challenges. So, currently, we need to address the challenge of declining ICE auto sales, and they also need to think about how to better sell NEVs. Of course, we are seeing a lot of efforts on their part, and our new retail business also aims to help them improve their sales with greater efficiency.

So from a long-term perspective, we think that the sales industry will still drive the transformation of new energy and cost efficiency. Although we can often see the news of the return of the sales business, we also see that the technology of the sales business is basically stable. So in the future, with the adjustment of the industry structure and the innovation of the model, the head and transformation of the sales business will have the potential to develop rapidly. After periodic adjustment, We think the industry will also return to a healthy track.

So in the long run, we believe that the dealers would pivot towards the business of new energy vehicles and also towards greater efficiency and cost. Of course, we see news of dealers exiting the market. However, we believe that the base number is still stable. So 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. And we believe the market would return to a healthy track after temporary adjustments.

OK. Please, sir. Please.

thank you our next question comes from the line of xie dan zhang from cicc please go ahead your line is open um What are the expectations for the next quarter's overall scale expansion? I would also like to ask the management to update us on the shareholder return plan. Quickly translate my question. So could management update the strategy for the new retail model as well as its expansion pace for the subsequent quarters? And also any update on the shareholder return plans? Thank you.

Okay, thank you. Regarding the new retail, President Yang mentioned it just now. In general, our retail business has been in the process of upgrading. From the first land space station in the country's key cities to the satellite plan, through the layout of 1 plus N, from the central city to the marketing network of the local market, and also to the experience of improving the owner by using technology and service capabilities to reduce the transaction costs of both buyers and sellers.

As CEO Yang mentioned earlier, our new retail business has been constantly evolving. So it started from version 1.0, which focused on launching space doors in major cities. And then we had version 2.0, where we introduced the satellite plan, and we built a one-plus-N marketing network, extending from core cities to surrounding regional markets. And 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. So our new retail strategy has been consistently upgraded in line with market dynamics.

Our first space station, Shanghai Electronics, has undergone a comprehensive environmental upgrade this year. In addition to its original services, it has also added a VR space movie, and AI intelligence buy-in that responds at any time. 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.

刚才杨总也提到了, 今年底我们的目标是做到50个空间站加500个卫星店, 就这样的一个目标, 能够为中国几乎所有的地级市和现场的消费者提供购车选车的服务,

As mentioned by CEO Yang, by the end of this year, Autohome aims to operate 50 space stores and 500 satellite stores, offering car buying services to nearly all pre-sector 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 Autohome's overall revenue.

Regarding the shareholder return plan, we should continue to have a stable plan. Last year, we also promised that today's share price will not be lower than 1.5 billion yuan. We will continue to do this. As for the repurchase, in September, we passed a repurchase plan of 200 million US dollars. As I mentioned, so far, we have implemented almost 130 million US dollars. We have repurchased nearly 5 million shares of ADN. So as for the shareholder return plan about the dividends, our

Our general plan is to maintain consistent and stable in terms of our shareholder return. We will continue to honor our previous commitments to the market. That is, this year's dividend payouts 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. And as mentioned by CEO Yang, as of now, we have already executed approximately $130 million repurchasing. That is nearly $5 million ADS. So 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, Mr. Yang, Craig, Sterling. Good evening. Thank you for giving me the opportunity. I would like to ask you how do you see the impact of the trade war on the industry and our business? 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.

Trade war will affect some imported brands in China, especially American brands such as Tesla, Lincoln, Chevrolet, and Hama. This price may be affected by some of the key factors. The cost of non-existence may also rise. So the overall price of certain brands may be affected. But in the past few years, you can see that our main growth comes from state-owned energy companies, as well as some state-owned brands, including some European and Japanese brands. In China, there is also a relatively high occupancy rate. The occupancy rate of American cars is not that high.

So 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 brands, 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, and we are also seeing very high market share from brands of U.S. 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 would like to correct what I said, which is that it is imported from the U.S., not only from the U.S. Many U.S. brands are also produced in China.

So just to clarify, by U.S. brand, I mean imported U.S. autos.

So just to clarify, by U.S. brand, I mean imported U.S. autos. So just to clarify, by U.S. brand, I mean imported U.S. autos.

So for auto home, because our main businesses are focused on the domestic market, so there may be some impact on the macro level, but the direct impact is very limited on auto home.

Okay. Operator?

Thank you. There are no further questions at this time. I will turn the conference back to management for closing comments.

Thank you, everyone. Thank you very much for joining us today. We appreciate your support and we look forward to updating you on our 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.