Autohome Inc. Q1 2023 Earnings Call
Speaker 1: For.
Speaker 2: At this time, all participants are in the listen-only mode. A question-and-answer session will follow the formal presentation.
Speaker 2: As a reminder, this conference call is being recorded. If you have any objections, you may disconnect at this time.
Speaker 2: It is now my pleasure to introduce your host, Dirling Song, author, home's I.R. director. Let's the song please go ahead. Thank you, operator. We're giving everyone a certain song. Welcome to author home first quarter, 2023, Erling's conference call. Earlier today,
Speaker 2: Auto Home distributed is earning specialties and you may find a copy on the company's website at www.autohome.com.ca. On today's call, we have Chairman and Chief Executive Officer, Ms. Xiong Long and Chief Financial Officer, Ms.
Speaker 2: Correct. Yes.
Speaker 2: After the prepared remarks, our measurement team will be available to answer your questions. Before we continue, please note that the discussion today will contain further looking statement made under the safe harbor provisions of the US private security education reform act of 1995.
Speaker 2: potential risk and uncertainties include but are not limited to those outlined in our public fighting with the US, the Creative and Exchange Commission, and the subject change of Hong Kong limited. Although home doesn't undertake any obligation to update any for the looping statement except as required and applicable law, please also know that old homes earn especially and the content poor include instructions of certain audits, non-guet financial matters. Please refer to our press release which contains a written
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Speaker 2: We thought of to a solid start in the first quarter with total revenue increasing by 4% year over year despite the challenging auto market. Media services robust revenue growth of 35.5% year over year. Notably, revenues from TPP and data products return to their growth track.
Speaker 2: and the revenue contribution from new energy brands continue to rise with the growth rates once again outperforming the market. If not only met solid progress in our businesses, we also improved our profitability. Adjacent net income as a result of auto home for the first quarter was up by 10% per 5% early year and our Adjacent net margin.
Speaker 2: remained at a comparatively high level of 31.5%.
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Speaker 2: We began the year by rolling out a series of initiatives to broaden the reach of our dual ecosystem comprised of user service and customer service. On the user side, we launched our C&E user-centric, create-oriented, and make-car-line strategy to enrich our platform services.
Speaker 2: expanding from our previous focus on car consumption to capture all aspects of cars' lifespan. This shift is transforming our platform's overall content to address a wider range of automobile consumers' needs. On the customer side, we fully implemented our new Autohome Energy Space retail model and initiated a new technology-based model in the future. The new Autohome Energy Space is a new technology-based model that will be used to capture all aspects of cars' lives. The new Autohome Energy Space is a new technology-based model that will be used to capture all aspects of cars' lives.
Speaker 2: franchise doors to quickly replicate the service model according to plans. It also makes drive in products and technology creation augmenting the application scenarios for digital products and a new AI power data product for dealers. On the equipment, replace the business mode and find a main network.
Speaker 2: have broadened our business horizons with more comprehensive services offerings that help us maintain our competitive edge. Moreover, we also connected to by doing early bulk, becoming a first ecosystem partner in the automotive information industry. Going forward.
Speaker 2: Auto home and by due will jointly explore and prepare the application of large language models.
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Speaker 3: Thank you for your support and support. Take care.
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Speaker 3: help through the current development of continuous products, and help to improve Group Diversity and Development.
Speaker 3: At the same time, we will continue to uphold the concept of open and tolerant development, support the machine and disk business, and support the reduction of decision-making and transaction costs of ecological partners with the innovation of science and technology. We will continue to support the development of high-quality products in the environment of constant change.
Speaker 2: Pei Dong-Gun, 4.50 Wen Ziyuan Looking into 2023, we are seeing positive trends in the automobile market and the status to maintain a steady upward trajectory. The penetration rates of new energy vehicles will continue to rise.
Speaker 2: and greater consumer demands will be reduced. We also look forward to additional supportive government policies, which will help further stabilize the auto market and encourage auto consumption.
Speaker 2: Meanwhile, we strive to create a healthier and more vibrant ecosystem, serving our continuously spending user groups and increasing our influence among hard buyers and users. We remain committed to our open and inclusive development concepts.
Speaker 2: leveraging our core business and technical, technological innovation to reduce the data making and transition costs for partners and achieving long-term high-quality development in this ever-changing environment.
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Speaker 2: Now with that, I will now turn the call over to our chief financial officer, Kraken for Clothalook at the first quarter of Britain and the financial result. Thank you, Longlong. Hello, everyone. I am Qi Chou, the chief financial officer of the Chinese financial company. Thank you, Miss Long. Hello, everyone. I am Kraken, the staff of Otoho.
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Speaker 2: During the first quarter, we continue to implement our CN ecosystem strategies. On one hand, we drive to the bank's content innovation and the in-house product experience to provide users with exceptional services. On the other hand, we focus on our content creator ecosystem.
Speaker 2: empowering creators across the areas of content, incentive, tools and services to politics, to politics, encourage high-quality content creation. They've also formed a diversified content matrix that drives multi-channel user growth through new media and a small program aligned to zero.
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Speaker 2: A sale of 100% with four hundred solar 2030 products vinegared in March to 4,800?, At the beginning of the year, we introduced a series of incentives at the Hotel Home Creative Conference resulting in a significant increase in the number of new authors.
Speaker 2: and the dating amount of new high-quality content totes our platform. On the content front, we launched Made in China in the first quarter on the regional IP, combining auto-evaluation with cross-border elements. It attracted a massive audience, generating more than 130 million views.
Speaker 2: over 840,000 interaction across the entire network.
Speaker 2: In addition, for the Shanghai Auto Show, we utilized AR and the holographic car-reading technology to provide users with an immersive experience. The Auto Show generated over 24,000 pieces of content, resulting in a total exposure of over 4.8 billion.
Speaker 2: According to QuestMobile, auto-phomestripe scale has extended rapidly since the beginning of the year. In March, our mobile DAU increased by 42% year-over-year to reach a record high of 64.50 million demonstrating our continuous leadership.
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Speaker 2: For our traditional business, our lead subscription package provides customers with a comprehensive range of products ranging from direct connection with users, to intelligence, empowerment of daily operations, and competitive landscape inside.
Speaker 2: By leveraging our advantages in traffic and data technology, we are able to support our theatre customers' optimisation and transformation with respect to user operations, expansion of profit points, operating decisions and more.
Speaker 3: I hope you enjoyed this video. Please subscribe to my channel. Thank you for watching. Please subscribe to my channel.
Speaker 2: As we enhance our core business, we use our deep understanding of the industry to identify trends that support our ability to explore new opportunities, create innovative models and expand our business to address potential growth avenues.
Speaker 2: enhance our core business, we use our deep understanding of the industry to identify trends that support our ability to explore new opportunities, create innovative models and expand our business to address potential growth avenues.
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Speaker 2: For our new energy business, we have been continuously optimizing and adjusting the operation process as a first offline experience store in Shanghai since its launch last September . I enrich and use our test driving scenarios and shortening user decision making cycles among other refined.
Speaker 2: Our increase number of cooperative customers clearly demonstrates the efficiency of our multi-brand services model. We've already reached cooperation with more than 30 brands and have started the construction of franchise stores aiming to further expand the scale of our new retail services base in the first quarter the revenue contribution from new energy.
Speaker 2: vehicle brands continue to rise with a year-over-year increase of 67%, significantly outperforming the growth rate of broader industry sales.
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Speaker 3: 70 In addition to continuously upgrading our existing data products.
Speaker 2: In the fourth quarter, we launched our EV-Smart Cloud, a new product designed to address flying spots in new energy vehicle data and provide manufacturers with integrated data solutions. This product will greatly enhance our digital offerings value.
Speaker 2: As for data products, for data customers, we embrace and integrate new technology to launch smart selection, AI driven tool, which helps dealers quickly identify high-neds worth user. In fact, giving an able dealer to release more production to the group.
Speaker 2: capacity and improved service quality. During the fourth quarter, we experienced a rapid upward trend in all of our key indicators for our data products for data. The number of data customers for data products, the average revenue of the data products for data stores.
Speaker 2: and the average number of data products adopted by each data store, open through by double digits compared to the price-eared period. We are now entering the era of active intelligence operation, where model decision-making and human collaboration come together to create a powerful and efficient system.
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Speaker 3: The total number of cars in China has been changed to a total of 21.8% of the total number of cars in the world. The total number of cars in the world is 21.8% of the total number of cars in the world.
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Speaker 3: The full-chain one-stop second-hand car trading platform of buying a car, selling a car, and selling BUS products in China.
Speaker 2: Starting the used car business, flash-racing new car prices in the short quarter to some pressure on the used car industry. However, also home used car business units together with TTP, new achieved bio-wide growth, demonstrating the synergy between our businesses. Our used car business as a whole also maintain profitability.
Speaker 2: In the fourth quarter, through all the home matching and auction services, our platform accounted for about 21.8% of all used car transactions in China, representing worldwide growth of nearly 2% points. It in turn, the product.
Speaker 2: We've taken our comprehensive vehicle condition, included two for youth cars to the next level. The two support queries, including general car repairs and maintenance, collision repairs and new energy battery conditions, providing sellers and inspires.
Speaker 2: is a transparent and reliable consumption environment. So in forward, we will remain at the forefront of the use car industry, creating a one-stop, food service platform for use car users and dealers supported by our staff products.
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Speaker 2: The next step is to develop a new language. We will continue to develop the language. Overlord, both of whom are staying ahead of the curve by trying to develop the other developing markets and the user needs. We consistently push the limits of quality storage, providing users with more comprehensive and diversified content to and services.
Speaker 2: in addition to all the information. As an industry pioneer, we are committed to the concept of development, through scientific and technological innovation. As such, we are regularly advancing our core technologies and producing new models to lead industry development. Looking at you? sheath.
Speaker 2: We will continue to devote ourselves to empowering the industry with cutting-edge technology, amplifying our competitive advantages, opening up new business areas and achieving long-term high-quality development.
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Speaker 2: Next, let me walk you through the key financials for the first quarter of 2023. Please know that as with prior course, our reference R&D only in my discussion today I'll let otherwise state it.
Speaker 3: The first group is the total number of 15.3 billion yuan. The total number of points is 2%. The next group is the total number of 3.6 billion yuan. The total number of points is 3.5.5. The total number of points is 6.8 billion yuan.
Speaker 2: The next revenue for the first quarter was 1.53 billion of 4.2% over year. For detailed breakdown, media salaries is revenue 10 years at 361 million and increased of 53.
Speaker 2: 35.5% year over year. This generation service's revenue was $600.81 million, and online marketplace and other revenues were $492 million.
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Speaker 3: In Com only on GA to our U being comingitted on GA E D to Mar Bas is passenger Ty get five chion cmay fiveenger ary. Moving on to cost, cost of revenues in the fourth quarter was 34 million compared to 255 million in Q1 2020 two.
Speaker 2: The increase was primarily as a bill to go to the growth of operational costs. Growth margin in the first quarter was 77.8% compared to 82.7% in Q1 2022.
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Speaker 2: According to upgrading expenses, still the market expenses in the first quarter were 523 million compared to 592 million in Q1 2022. The decrease was primarily accessible to a decline in marketing and promotional value. Product and development expenses were 324 million.
Speaker 2: compared to $365 million in Q1 2022. Finally, general and administrative expenses were $149 million compared to $137 million in Q1 2022.
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Speaker 2: So we delivered operating profit of 263 million in a foot quarter compared to 241 million in the corresponding period of 2022, representing an increase of 91 percent year over year. A dreaded net income attributable to auto home income.
Speaker 2: was 484 million per quarter compared to 430.
Speaker 2: 8 million in a corresponding period of 2022, representing an increase of 10.5% year-over-year.
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Speaker 2: NAN GAT basically diluted earnings per share in the first quarter for both 0.98 compared to both 0.87 in the corresponding periods of 2022. NAN GAT basically diluted earnings per ADS in the first quarter.
Speaker 2: or 3.92 and 3.91 respectively, compared to 3.47 for both in the corresponding period of 2022.
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Speaker 2: As of March 31, 2023, our balance sheet remains very strong with cash, cash equivalent and certain investments of 22.71 billion. We generated net operating cash flow of 1.03 billion in the first quarter of 2023. REIEN, see you at the bottom.
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On November 18, 2021, our board of directors authorized a shared repurchase program under which we were permitted to repurchase up to $200 million of auto home ADRs.
and intention of the shared budget program for another 12 months, expiring on November 17, 2023. As of May the 6th, 2023, we have repurchased approximately 3.94 million ADN, a total cost of approximately US dollar, 100 and 19 million.
With that, we are ready to take your questions. Operator, please open the line for the Q&A session. Thank you. Certainly. We will now begin the question and answer session. To ask a question, you need to press star 1 1 on your telephone.
You would then hear an automated message of eyes in your hand is raised. To withdraw your question, please press our one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Xiao Dan Zhang from CICC. Please go ahead. Thank you for your time.
So first of all, could you please share your views on the structural opportunities for the outer market in upcoming quarters?
and also could you update us on the progress of the new Rachel model for any weeks and their expansion plans for the offline students and stores for the rest of the year. Thank you.
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Okay, Mr. Nong is taking the first question. As we all say, in the first quarter, we see that the auto market is a little bit sluggish. And according to the statistics of CTCA, from January to March, the cumulative retail sales of passenger vehicle dropped by 13.4%. One reason is because of the early spring festival and the second reason is because of the pandemic.
which further worsened within two attitudes of the consumers. So in March we see that the passenger vehicle sales remain flat. However, if we kept the CPA statistics released in April , there's a worldwide growth of 55.5% and month by month growth of 2.5%.
we see that price will have been fading away as the consumers are getting back to the reasonable consumption and we don't see attitude is also mitigating the entire auto market started to be destabilized and to recover.
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You also asked a comparison between ICE cars and AEV cars. So, generally speaking, you can see that ICE car market continues to be weakening, and you can see that the reduction of the sales continues to expand. In the year 2022, the ICE car sales...
dropped by 13.3% while Y. And in 2Y of this year, does the worldwide decrease of 23.4%. I think March, Ruby Provings take the lead and the production in the price cut as well as promotion and offers that many other OEMs nationwide started to follow up.
and consumers started to hold their money and to wait and see a better attitude. So you can see that these are all imposing negative impacts on the ICE car sales. While at the same time with the further improvements of the AED penetration, we believe that the sales of the ICE cars will be further squeezed.
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In terms of the NEV, the NEV sales growth started to slow down. However, this momentum is very strong and it's time to create some keeping.
that in 2023, domestic NEV penetration is expected to hit 36%. And just to conclude, Shanghai Auto Show, we see the launching of about 150 new car models, among which almost 100 are EV new car models, and among the 1,500 cars in exhibition, almost more than half of them are actually NEV cars and become the mainstream.
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We will continue to work with the public and the public to ensure that the policy is understood and that the public can be heard. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
and further expand the development strengths of the NEB and also accelerate the facility development including the charging power, energy storage, as well as the supportive power grid. Well, at the same time, you can see that many local governments are also launching their consumption incentive policies for Q1 that promote auto consumption.
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as well as the local governments will continue to launch relevant policies to promote the development of the entire auto industry. And auto market will gradually come to the stable development and will also try to get even more promising future.
of experience of multiple new car models and the holistic dynamic breakdown of the EV. And we can also have a lot of horizontal comparison of different types of the car models. These kinds of new retail model really shorten the decision making cycle of the consumers and greatly enhance the car purchase efficiency and also being recognized by the consumers.
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This also gained great recognition from our OEM clients. So you can see that now the retail experience store has already entered into cooperation in terms of the holographic modeling with more than 30 brands. According to the plan in Q2, we're going to launch the franchising model and there will be two franchisee stores gradually being launched online.
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So we think that this is actually a new trial for auto home in terms of the online plus offline convergence model in terms of the retail. And we believe that this will become one of our core contentors as the future will continue to focus on this online plus offline convergence model. Okay, next question.
Thank you. I'll be back to the next question. Thank you. Our next question comes from the line of Richie Sun from HSBC. Please go ahead Richie.
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how is the recovery trend? And also what is the profitability level right now? And how should we think about the 2023 revenue growth and the profit growth drivers for this part of business? Second part of the question is regarding AIGC and also LASH models.
how should we think about the challenges and also opportunities brought to online vertical platforms like Auto Home and what is our plan to tap into this opportunity. Thank you.
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Okay, the first question is about the used car. So I think that in Q1, even though the new car price cut imposes some pressure for the used car business as a whole, however, you can see that for auto home, we have a very good combination of our used car business with TPP business and they have introduced your high-tech assistant, synergy.
So you can see that the used car business as well as CDP business all experienced a growth in terms of the revenue among which CDP revenue grew by a YOY of 25%.
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And in terms of the marketing, you can see that for our traditional use of card business, we have times of very good growth in terms of the marketing. Well, at the same time, TTP also keeps generating process and also realize that the first ever profit per quarter. So you can see that for TTP, this is adopted the...
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So talking about the drivers for the revenue as well as margin, so firstly let's talk about the use of car business. Use of car business growth is heavily dependent on the car parts. You can see that overall car parking.
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Another important driver comes from all of home itself. We can see that in terms of the second hand card business, we have been taking the lead. Besides, you can see that we're also going to place the synergy.
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You'll be able to get money at your local level, This is why we decided to work together with ADI to get AI efforts into this product.
The question is about AIGC. First of all, you see that AIGC is a tool. So the earlier you get familiar with this instrument and tool, the earlier you adopt it and use it, you will gain the early competitive edge. That is why we had the interest into cooperation with Baidu in the first time.
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However, only AGC itself is far from enough, we also need the other components in the entire ecosystem, including OGC, UGC, and TGC, that to create a better content. So together with the content creator, we're going to create a C and ecosystem strategy. So besides, we also have the other AI smart instruments, for example, the smart outbound.
Thank you, Al makes question, comes from the line of Thomas Chong from Jefferies. Please go ahead, Thomas.
Thank you for taking my question. I have two questions. First, I can manage one share on our target for the data product and plan for new product launch. My second question is of the use of cash. I manage one share on future plans. I will translate myself.
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Thank you. I will now go back to the presentation of the data products and the new products. We have the new products. We will continue to talk about the benefits and benefits.
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So let me firstly take the question about the data products. In terms of our existing products, we will continue to optimize and iterate our existing data products and to sort of improve the effectiveness as well as the usability of the products. Because data products is different from the other ones.
The users need to get the media with the product and combine it with their own business so that to let it play the biggest role. So we will continue to further expand the cooperation of the client base and to further enhance the penetration of our data products.
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In terms of the new product, we also keep launching the new products. For example, in Q1, we have launched the eBay Smart Cloud, targeting the OEM clients. And we also have the smart selection, as well as the other data products targeting the dealer clients. So in the future, we're going to combine our decision-making models with the new product.
as well as the menu synergy so as to launch more proactive smart operation products.
and the market is also increasing and the market is increasing. And in 2021 of this year, the paying users for the dealer's data products already exceeds 20,000. And you can see that the per-store average corporation is growing.
So we are quite foolish about the future data products development for the dealers. And we also have already developed a SAS, SAS, the CR, and SAS products matrix. We're going to strengthen our investment and input in data technology as well as product R&D. So as to maintain our competitive edge in this area and also to facilitate and enable our clients in their gift code upgrading and transformation.
The first question is about the current situation and future plan. The current situation in the company is always better, and it is very healthy. So, in the current situation, we are also in a different direction. First, we have been in the same position as the President of the United States this year to report our client. We will be in this direction.
and will be able to continue to run the business. Thank you. Your second question is about how we span our cash as well as the future plan. I think that auto home is always financially sound. So as always, we have been increasing the proportion of dividend payout. And we have been increasing the payout ratio in the future. So we have been increasing the proportion of dividend payout.
of the shared buyback and repurchase, I have already elaborated on that and won't go into any details. So in terms of the business investment, we have been keeping a close eye on the potential business opportunities if there are good chance, we're going to increase the investment in in particular in terms of new rates.
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I will translate myself for management for taking my question dispatch. First quarter, the auto sales. I will translate myself for taking my question dispatch. First quarter, the auto sales.
what kind of wake our OEMs around growth, grow decently. So, you know, so, can management share your view on, you know, the second quarter OEMs growth, given, you know, on one hand, auto sales feel kind of weak, but on another hand, there have been a lot of new models rolled out seeing.
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So to add to this topic, first of all, I want to say that auto industry is a relatively long-term industry. So the short-term sales, volatility and fluctuation will not significantly impact the OEMs as well as their marketing budgets.
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So I think that in terms of the market opportunities, you just also mentioned that Shanghai Auto shows there are a lot of new car models and I believe that in the future there will be continuous launching of the new car models. And I believe that.
And for the traditional ICE vehicles, it will be a little bit more complicated.
you can see that in Q1, the sales dropped by 23% while one. So we think that in Q2, things will be even more complicated because there will be the impact of national 6B policy. So the OEM would have many different choices, for example, press cuts, or they may adopt other measures to mitigate this circumstances.
We'd like to move for talks, can we bring together a growth? So, a general thinking, we think that in Q2, in terms of the as this, we are both opportunities.
Thank you, operator. That is the end of the Q&A session. Thank you. We have reached the end of the question and answer session. Thank you all very much for your questions. I'll turn the conference back to management for closing remarks.
Thank you, operator. That is the end of the Q&A session of beta. Thank you. We have reached the end of the question and answer session. Thank you all very much for your questions. I'll turn the conference back to management for closing remarks.
for joining us today appreciate your support and looking forward to updating you our next quarter early conference for your few months time. So in the meantime you can have any questions or comments feel free to contact us. Thank you very much. Good bye.
Thank you. That concludes today's conference call. Thank you for participating. You may now disconnect. Thank you.
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