Q2 2019 Earnings Call
[noise].
Thank you for standing by for Autohomes second quarter 2019 earnings Conference call.
At this time all participants are in listen only mode. A question and answer session will follow the formal presentation.
As a reminder, this conference call is being recorded if you have any objections you may disconnect at this time.
It is now my pleasure to introduce your host any object Autohomes IR director Ms. Chen you may begin.
Thank you operator.
Hi, everyone and welcome to <unk> second quarter.
And for Nike Inc. earnings Conference call earlier today, Autohomes distributing <unk> earnings press release, and you only find out hobby on the Companys website at Www Dot com Dot com and on today's call. We have Mr. me know Autohomes Chairman and CEO . Please the high from shell Autohomes I see then and Mr., James though auto policy at all after the prepared remarks, there do Michelle and these results will be available to answer your question.
Before we begin please note that the discussions today will contain forward looking statements made under the safe Harbor completion of the U.S. Private Securities Litigation Reform Act of 995.
Forward looking statements are subject to risks.
Uncertainties that may cause actual results to differ materially from our current expectations.
Potential risks and uncertainties include but are not limited to the all lighten your copy filings with the Securities and Exchange Commission.
Auto home does not undertake any obligation to update any forward looking statements, except as required under applicable law.
<unk> earnings press release in this call also include a discussion of Carlin UN audited non-GAAP financial measures. The press release contains a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures.
And is available on Autohomes IR website.
As a reminder, this conference is being recorded in addition, a webcast of this conference call will also be available on Autohomes IR website.
Ill now turn the call over to own a home chairman and CEO Mr. Lou.
Thank you Anita.
Hello, everyone.
And thank you for joining us today to discuss our second quarter.
COVID-19 results.
I'm pleased with our quarterly results.
Amid a soft macro economy.
Considerable auto market decline.
Chinese new passenger vehicle itself, so for four consecutive quarters and extending into a double digit decline in Canada.
Despite these headwinds.
We still managed to deliver solid results with total revenue increasing by 24% year over year to RMB 2.31 billion.
During the quarter, we strove to offer high quality content, how users, while you're levering our partners by leveraging our analytics data capacity.
In order to gain more share.
Some highlights.
During the quarter and the most recent include.
In June .
The number of average da use who accessed our mobile website.
Primary application and many assets increased by 48% year over year to 37.8 million.
In July we made a major upgrade older men act by improving.
User interface and the reclassifying our products by functions these upgrades and enhancements to improve the overall user experience.
Attracting more younger demographic users.
AP performance experienced encouraging trade up that way.
For the second quarter.
All of our content categories expanded rapidly.
The a use for each new channel, including covered us easy mute and the Muni shot video.
All reached $2 million to $5 million.
We're also rolling out more call use related content such as a rocker.
Aiming to attract users in addition to car buyers.
As a leading online out of ecosystem.
Idaho always exploring new opportunities and customers that it contributes to the auto industry.
August 18th we will hold the eight A. global Super Auto show.
This show and to initiate a double 11 shopping festival in the auto space.
At this growing event.
We ostrow.
To deploy the integration of our distinguished online auto show and authorize our celebration additives.
For the allies settlement, we will leverage.
Our intelligence technology to present, Meramec multi dimensional shopping scenario.
For the offline Sam I'd like to highlight.
Partnership with a four night TV one of China's most are watching TV channels.
The eight were eight grower Super Auto show Orbi plan to buy Hunan Tvs crop production studio and to make its debut in Prime High August 18.
As the first ever Aldo.
Themed gara.
We also roche various offline activities. Following this industry experts call nurse other phase in addition to a number of other show events across China for both of you and the used cars.
With all of the formation.
We.
We are endeavoring to help automakers and the dealers achieve success in Bradley and this outperformance.
By the end of July modern 80 auto brands and over 2400 dealers have signed up for participating in the event.
Regarding the beta product offerings stood automakers.
We are proactively upgrade to three reading from analytical tools to smart marketing solutions, helping out OMEX not only identified issues, but also providing professionals industry has to solve problems.
By the end of June 21, Oems have purchased the other products. In addition, we plan to further expand our imperatives solution portfolio will search recall.
A brand new based products designed to serve Oems R&D Department.
To help them well positioned to capture future trades.
Such a cool demonstrates our strategic move to go beyond the marketing solutions and the path into the R&D better chip.
In terms of better product for dealers by the end of second quarter, approximately 15000 dealers have purchased our data products.
We are very dry we launched two new AI based data products, which are designed to improve dealers efficiency at a lower level of costs.
With a more innovative products in our pipeline.
We are building a data product metrics that serves as a comprehensive CRM systems to dealers.
We also see potatoes in overseas markets and are currently at the preliminary exploration exploration stage.
Now please let me provide some highlights our business operations.
For our lead generation business in the second quarter cultural lease volumes increased the bye.
30% year over year.
As for our.
C B to C platform by the end of the second quarter.
We were able to get growth very cost competitive merchant loan products to over 4800, a quarter quarter pillars, resulting in a total cumulative credit line of RMB $6.8 billion.
Finally for the auto financing business.
During the second quarter, we facility.
Okay.
Close to RMB 6.2 billion in loans or the insurers, representing a 108% the increase year over year.
To summarize at all has already evolve from a media vertical turn out of ACA system PAREXEL leveraging our in depth insights in the industry for further with our advanced technology.
We are confident to further loss are very under deliver long term growth to our shareholders with that.
Well now turn the call over to our CFO gentle for a closer look at our second quarter financial results on a business outlook for the third quarter.
Thank you Ming hi, everyone ethylene has highlighted we are pleased to report another solid quarter.
Please note that as with prior horse.
Well reference R&D only in my discussion today.
Net revenue for the second quarter was 2.31 spirit.
Slightly above the high end of our original guidance and which is a 24% of gross on a year over year basis.
For detailed breakdown media services revenue increased 11% year over year to 1.028 billion.
Despite a challenging finical auto markets auto home continues to be automakers ARVO partner of choice.
Lead generation services revenue increased 20% year over year to 889 million.
Primarily driven by an increase in ARPU.
Online marketplace, and others revenue increase 97% year over year to 392 million, primarily due to the increased contribution from data products and auto financing business.
Now moving on to costs.
The cost of revenue increased by 26% year over year to 264 million.
Gross margin remained stable at 89% in the second quarter.
For operating expenses sales and marketing expenses in the second quarter or 893 million.
Compared to 588 billion in Q2 2008.
Mainly because of increase offline execution expenses.
To help automakers and dealers generates more leads and ourselves.
Well in the expenses were up 261 million compared to 313 million in Q2 last year.
Again this reflects our R&D headcount increases.
And that was a proof of our commitment to technology and talent.
Finally, gn expenses or 82 million compared to $86 million in Q2 last year.
As a result, we delivered an operating profit of 835 million for a second quarter.
Compared to 748 million in the corresponding period of 2018.
Adjusted net income attributed to auto home.
Was $855 million for the second quarter compared to 744 million in the corresponding period last year.
non-GAAP basic and diluted earnings per share and a per adss for the second quarter was RMB 7.22, and RMB 7.15, respectively.
Compared to RMB, 6.33, and RMB 6.23, respectively.
In the corresponding period of 2018.
As of June Thirtyth 2019.
Our balance sheet remains very strong with cash cash equivalents and short term investments of 10.83 billion.
We generated operating cash flow of $372 million in the second quarter.
Let me now address our third quarter 2019 outlooks.
Which reflects our current and preliminary view on the market operating conditions may be subject to changes.
At this point.
We expect to generate net revenue in the range of RMB 2 billion and $116 million.
To RMB 2 billion.
119 million.
Representing a 14.4% to 16% year over year growth rate.
In summary, we are happy with our second quarter 2019 results.
Each of our business line achieved decent gross coupled with our strong balance sheet.
We are well positioned to capture the future growth opportunities.
And drive long term sustainable growth and maximize value for shareholders.
With that we're ready to take your questions.
Operator, please open the line for kidney.
Thank you well now begin our question and answer session.
If you have questions for today speakers. Please press zero one on it had some.
And you are entered Q2 cancer the quick.
Sure.
Please be reminded to ask only one question at a time.
Okay.
Okay.
Okay.
So once again please press the right one.
On you'd have some keypad to ask a question.
The first question is from.
Anyone and Morgan Stanley . Please.
[noise] lose themselves, though although I'm talking about how it will soon they got Morgan Stanley to Eddie.
Well sure Ben just as you go into something Joe you know central conceit, you charge. It whether you had to use film and <unk> going to go actually to do so and they were losing photos justice onto Samsung some sounded I filled up he run to publish a woman depend just yeah. You can actually do with binge on about research about EGI budgets and they'll food real quick <unk> something sort of connections on the what don't you have not been to Oh, well well woman shots old she's doing a buyback or <unk> or <unk> or <unk> or Europe I suppose your OEM truck with how you do it by saying Gosh Nonqualified <unk> take a a choice I'm going to hold on to the bunker woman Guy Central short to go to just how hard you know trying to Tom said that once you have got a bunch of <unk>.
Nick or should have and he just short truly take a township. Once you would say something like about bunch, just sharpen your like kind of hard to hold on to you warm and dry and good to see the Mediatek one call foam you end up tick up onto that Guy. We should you know that number then okay. What might you see age was to show a color yeah, a one page 100, and I find yourself or my question is that we will start the global Super Auto show next week.
And I believe the such events could help to maintain and further improve our long term relation chip and partnership with Oems and dealers. So my question is that how management expects such events could help our media business in the short term and say like in the second half of this year. Thank you.
Oh, no no, but I tell you the buyback or.
Well I don't know learning.
Okay, and he will equalize imaging and companion he says that whole thing.
Okay I like here I'll take that question I'd actually HM why auto show how will also take some classes you're on track for the first half of this year, we have been preparing for this event.
I think that it's Oh, I've got Paul or Joe what was the only supplemental.
She's or to establishing a plateauing or go to school and a good to warm up quickly.
Uh huh.
Hi.
<unk> fund set it sounds good fishing.
Actually I guess I shall their in clinic mind girlfriend categories has activity blacklist that cover the entire call organized and together with <unk>, China trade promotion agency or whatever they are still association enter into kind of trade promotion agency yard in a lot of work on.
Sure well analysis I should walk away, so yeah, hi, well clearly I show you know although meeting.
The second biggest activity is at a cooperation with Hunan, TV, which will be a guy like performance hosted August at the 18th which will have a lot of superstar Jonah.
It sounded like it.
I was thinking Oh, my goodness, what he says when you see a quick deleveraging by ER.
You can tell me that they are ready.
The fed activity it was called organized or with a China Auto Industrial Association August at the 19th which well be participating by 1000 people, which is a workshop.
The Mckee, who then that's true woman post acute but if I had the chance to figure out the back half of its older sensor that sits out there that probably helps out yet to make sure.
The force activity is that were going to organize offline car exhibition in almost 130 cities in China. So that we can help the dealers to sell cars.
I wish it wasn't like it but she's got it cool thanks, Yeah. Some order besides happened.
And there would be other activities, which I won't go into details for example, like a song Festival Orica car modal competition et cetera, but well just see this will be the passing legal for a dollar number two album will do you good.
Sure sure bound who is oh, yeah. He sends it yeah.
Ah couldn't go to something like one solution.
Actually this is a big portfolio of different activities. The major peppers, if to rejuvenate the industry yeah other than that I course, and he's a good guy say six or something.
Exactly.
The second part first is to expand the influence of auto home among the consumers that you think are things Oh, so if I'm in a thing to see the Sheila I'll take the two since March and it wouldn't be our Chicago down there because we've got a lot of things that can happen again contingent mix sort of people.
And in terms of the financial revenue generated by this activity I like to say that we're not going to actually make money from just kind of auto show. The major pet parents are what I mentioned before I'm, a very nice and I think the.
Uh huh.
He's a quick way to that are you already did I hear that took on him.
It was as high as Tony indicated your job to you we like the fact that not talk to them.
Generally speaking, we are not going to suffer losses by organizing this auto show, but our major objective is to contribute to the entire auto industry in China and also paved the way for future development of Vodafone with International and then Uh Huh.
I would say, though to methodically more she needs et cetera.
This is the very first time, we organize such a large scale virtual auto show woman nice job.
Ah diligent manner, meaning the odds of finding a partner.
Yeah.
Hi, George and get through this first time experience, where it goes we also want to expand this auto show to the global level at 42nd time next year.
Saving one it's you English website.
Good you should read kind of fell off and yes, I would say that.
That is why we also have the English website <unk> auto show. This time, so that people can watch the online auto show.
Anyway, I got them at all.
That's all for me Eddie.
Hi, Hello, though is it.
[noise].
And our next question is from a mirror and Joan at Murrayfield Lynch. Please.
Yeah, you feel that you Oh.
Wasn't a ways away will then do you do the actual which really do that yeah. She's on here.
No woman kitchen, and kind of what was the old <unk> down here at home to make our opinion patches no gene just kinda how comes to Yoga kids are you seeing the whole two he got to see a b to C model like ours will ensure that what was the how good your garage outdoor sushi, you're going to see to see mode or John the goals that you see a horse on now for about four or taking it. So interesting is our true 95 times. You should also told you course Cps agenda Eagle model no juices found out is that just your confidence in that.
They also toured the Bluetooth he or she knows something about it gives you the when I sat also Charlie I only see age you should see Wade through a once weekly by all accounts.
No wasn't down things out with a win T.
So we have seen that in the past auto home has invested <unk> Inc. TPP car, which is the C to be our used car company and recently the company has being cooperating wise are you seeing which is a b to C used car company and also true outdoor which is see to see used car companies and also we know that accompany this year is expanding the CPH model for the used car industry. So just like to understand the company's may people are thinking about.
Your.
Strategy in the used car industry.
Thank you.
Oh.
Well actually.
Well, it's always says how when I apologize you should be Uh huh.
Okay I'd like to take this question Firstly, we are quite bullish about the future use the card business in China.
So you know if you know what we just reported a potential.
I must tell you that I, Oh, I see that certainly has helped to latch on M&A, which issue.
That is why we have been exploring this business over the past few years and now strategically it'd been becomes more clearer.
[noise] Ginger.
Woman.
Finally, the partial touching you ever see yourself on your well parcels earlier.
Okay cool well swap the two parties.
Our sons literally only our hope.
Sales in the second half of last year, we have opened day entering slowed a used car business. We hope that we can expand our traffic for the used car the modem, which here certainly in the Utica December wisely.
So far our daily Diego for used car is about 3 million.
Okay, I'm going to hold up on yet.
So actually I eat instructed my team to hit a target of 4 million by the end of the year.
Taking a natural woman the salad, it's a beautiful thing to a sure way all future GAAP loss.
But you will see the Arsenal should I mean, you know.
So this is to protect part of our strategy, which is to take a very strong hold of the traffic enter into the used car.
Well, if you're hoping that I just.
You Wailea will be on listen John No shares one area within Asia.
The second part of the strategy is that due to the increase of the traffic that the volume of leads will also increase.
Yeah, I will and that's what if you look at what the show for the Bowsher vigil pulp lyric culture to be about and so my job.
Her daughter, so dish anywhere yeah yields are that's helpful too.
Actually the merchants, we are cooperating with our having very high quality, but the number of the total merchants are not very big let's say.
Almost a 30000.
So my question I want to especially those ships, what Allergan John are committed to delivering the shareholder to cool.
Hi for with increasing of the volume of the lease actually we think that the number of Americans are not enough.
I'm sorry.
And GGR sometime yet, but when they say so.
When we analyze it won't but that's what's in switching but I suppose and COFINA ocensa the FY two seasons.
C b seemed to be that because you don't wasn't kind of housekeeping.
Thats why I said that in the second half of the year and also on the Hong Kong boat show, we want to make used car a open platform, which.
It includes that B to C and a fee to be understated. The same I think the sensei you seeing fast into other countries of course I think the.
Okay cool it using the thing.
Okay.
For example, we have been cooperating with you'll see an applied to extend our platform Corporation and will also expand into some regional platforms. Our corporation strategies. The majority of the highlight cleat down this year.
Thanks.
So Linda.
So so far.
In that case, we can fully digested order leap we generated.
How should I am so to your point us in the future.
And same time was also better satisfied the the amount of the consumers.
So you're seeing that.
Tom in the.
Followed by telephone.
Total War Hi, Josh.
And we'll go.
Hi, this is above our homes.
That bumpy myricom.
What happened exactly true gold recoveries on legacy machines.
Okay. So that's helpful.
Angela provide the.
Now on the topic to that and got that automotive has a reduction.
For example, our cooperation with your shape, we have a program called Ituran, Qualcomm, which is our procurement of the used car all over China. Because originally the used cars are mainly treated locally. So this is a new type of service delivered to the consumers by cooperating with you see we can't actually promote more trade up to use trocars nationwide.
It would be safe to assume the woman, okay mentality easily olerup, yes.
Passenger but conservative so well, it's a fantastic, particularly among data.
Got it thanks Joey.
So I guess the nation about the increase of traffic and to leave the certainly a third thing is that we are also developing the integrity alliance, which is the closed loop transaction.
Yes, mostly dry 19 young woman.
So since you guys see the usage, Lisa Palmer Genzyme that have been.
That's a pretty tight.
You are achieving in the significant doesn't happen immediately it wouldn't.
So actually this year, we have revised.
Okay.
The rooftop deck game were going to expand this kind of cooperation because you know Gary the pilot period of last year, we encountered some problems the Mrs and the impact on me quite the sourcing here.
And now actually tend to impact at TPP car have been cooperating with us in this other new indication in pilots and that's really sad when we can have the standard whatsoever.
You also mentioned TTP car, so I like to ensure our strategic cooperation with them no. One can tell them hard to tell if that's also been hurting me.
We do have a close cooperation with TTP online, mainly our goal contamine cadence.
Well it does appear mode of what you what would you. Please go.
Every two weeks, we will organize our PMO conference, which I personally attend.
That's what our messaging ammonia Samsung at the Emagin CTV that they go through.
Hi, Matt.
Yes sort of Pemex.
Yes, we ask that in this kind of cooperation certainly seemed to be business.
The option of the cars and the testing of the car.
Let's see the trigger the ocean.
Thanks Jay.
Sure that's helpful. Yes.
Anything time, it will also generate a lead of the new cars. So obviously the England. This years.
And they have very accurately the or the Permian at BCP capital.
And the secondly to the Corporation now what we can say, it's a continued nice yes.
Yes, Josh I don't know that towards these actions had a two part b to B does it bounce home bounce only the safety.
Hi, Passover shift.
And together with TTP and some are for us stores and the dealers were doing the trading business of the used cars and help the dealers to options you're used to cars you sell it to be perceived as a tool.
Hey, guys, how a tomato, though you this was principally among the tool.
It was a woman the yield something here.
Yes, Josh and campaign management tool.
Yes, it's helping to proceed.
And third Corporation is the BTC corporation, including the integrity aligned and as I mentioned, just now and also what puts that TGP authorized to cause our apps so that to make the consumers assured about equality.
Turning to the stock element.
So to get us through we will leverage our Cushing.
Hi through on the yield would have been thinking well look in five basins I see okay.
So what have you.
But then the other holidays, you only got down to a further the only on that please.
So actually this there are some.
And simple philosophy for our used car business and I think the.
Esurance is to intensify the development of our user products and recently, we are also evaluating our user products and after that were going to strengthen our.
Traffic development 40 used car the maturing in November so share throughout the year.
Youre cleanly.
And actually I love to hear our used car department for the very first time, Tony losses into profits.
You know the home as you are.
The other sort of in the family the fees legal dot our partner you need to know me again.
Hi to follow.
And this year, we have said under the guidance of our Utica development business, we can accelerate the used car business next year.
Well its hotel against overcome adversity.
Thank you that's my answer for the used car business.
Thank you very much very clear.
So once again as a reminder, please.
Yes, there were one on your 10 from keypad to ask the question.
And I was hoping you reminded to ask only one question at a time and I was just for the benefit of all participants on today's call. If you wish to ask a question to management team Chinese. Please immediately repeat your question in English.
Your next question is from.
Frank Chen ads and Macquarie. Please go ahead.
A lose lose all saw zones on NATO Whitehall.
We'll go home are the ones, who use or what is the current though woman took a balance sheet has a phase on the stronger ones here on the whole myself or John is on target or you buy you, though I mean be licensing sell wayzata goals. The Oh, well I enjoyed your questions. You know so much you how many of your Mo what I can have a give it doesn't hurt us.
Dividends you have heard us a potential I made the <unk> Oh translate myself I have a oh I have a quick question on the cash on the balance sheet to your call. It 10 billion RMB, a cash and short term investment and I Wonder what's your all time waste your cash I need time for the potential damage done to all and then I or in the future.
Thank you.
Oh definitely nice to the tissue all it sounds huh.
Okay, Great. That's all you.
Okay I will address the question asked in place.
Yes, and that's why we have abandoned cash on the balance sheet and the.
Dino creates I hate to that poses I wouldn't say Gee, we got out and they need.
After that we were going to intensify our investment.
Well I don't know how many used to what would they use a neighborhood.
There are two parts internally and externally at what level does that they came into play and that was only oh well Mrs that hi, Hi, Wes is huh.
Hi, there I was just kind of thinking about well, let's just how those oceans how's that going I asked it.
Externally as I mentioned before we are looking at the possibility on the upstream market, including United States, Europe , and Southeast Asian countries.
The special woman I mean, it's what's what's included 50.
But the final decision are yet to be made.
No no problem in a.
Well no you will publish on what they are seeing the cannibalization Council.
Oh sure see somewhat due to.
[laughter] bio myositis, well like I said, I guess, one osario, you'll see that thinking they sound today Jean Francois.
Internally, we have several new projects going all of the 818 auto show is one of them altogether. There are six or seven new projects going on I mean really December would look like it's Andrew you'll hear Joshi, our sights on wishes on the ship Julie.
When this project to develop to a certain extent actually Chinese market, there will be opportunity for investment.
He assembled place finish again farther afield.
Yes of course M. B. This project themself also need R&D improved.
[laughter] either.
On me and when you talk about that in the phone not these here I'm a woman cant say annual council.
And ER rule you SLC. The final played uses a thesis on field.
And second late you also mentioned about a dividend actually we are still a study about the plan of dividend. If there is any news, which is close to the market.
Ah deal if we thought that was all that's all from me. Thank you.
Great. Thank you Louis on very clear financings with Fisher.
Yes.
The next question's from a human Chen at Citigroup. Please go ahead.
Let me jump sounds of course on them and how what's the bottleneck electricity sold if you look at what I would tell you that you'll see why do you think do you take a skyline yen.
Take Oh yen flunk out whole Fonda youve gotten far so you come in contact with one should our offline online and you upon by higher because I'm not sure. If they can they can buy Tucker said, it and I guess, how so see something I can pick out how PR event.
So you continue down the bank, we generally don't like it happened in the yoga yeah.
Hello, I'm quite sure that when it is we'll pick had gotten comfortable battle for them that's out by now.
I would take a bite out by higher occupancy they all kind of volatile when he is I think our film and sound by name because you.
Thank God somebody got hit with a new and then how you he can't collect from the summer season, not quite funny, Utah.
So my first question is about the second half outlook for the Oh Hello Hello.
Industry as well as the online.
Oh, yes advertisement.
And my second question is about your margin impact from offline events, including August 18th and also the event for the 130 cities. Thank you very much.
Oh, Oh, Yeah, you win T.
Things are shopping in the OEM that one girl pathology.
Okay. The first question. They owe you an advertising investment in second half of the year.
See though you can know 72, the she's a guy to sell but it's kinda kinda.
You may notice that we have leveraged our guidance in Q3, they should be watching shouldn't as well.
Isn't that pretty cautious move.
Anyway to a chip and she was huh.
She's Uh huh.
Because they market in July it's not that good.
Are you telling me in a.
Hi, Okay.
You'll see a lesser extent into that that's a real push all doses into.
Situation also differs among the Oems sounds do you have the positive gross that quite a few suffer from losses.
A woman that's all the tick the box or the things you do as the ruble. It wasn't just how do you size has been tied to Tim and they sell no. One has a true Tempe Lisa.
So actually and we heard that the budgets of the Oems are go in parallel with their sales volume.
No malicious what's in Doha, Commons that you signed Oh sure harsh I mean, if we can just seem to be powered to show that I'm not sure I guess I just want to ask.
[noise], if they suffer from negative gross it it would be very precautious about releasing budget.
Especially especially to the cigarettes and teaching what that's true.
I got cut off would be either he said sort of telling people what your child would end up at the new again.
And this is Joe again or circumstances under today I also see a moody forecasted which set that at the end of this year the auto industry in China will suffer from a negative 6.5% of gross real good how are you [laughter] upon the shopping yet that's for sure.
Doing that should be a hollow.
If this book has to come true actually the auto market in the second half of the year is quite good. It was something you should simply or no money and shopping a little chenier food, you'll be able to let you weigh the shopping yet attrition or something.
Since the first half is negative 14%. So if the whole year forecast is negative 6.5%. It means that the auto market will go up in the second half.
Well two years ago, it sounds like on the well match well me a kind of on the swing factors are for the rule.
Yes, sure John Sweeney, Todd Oh policies on somebody a woman.
I should buses engines.
Hello Hello.
So according to the statistics are from auto home actually see out of my time.
Investment from the top 15 Oems still remains positive. She would tell you, it's really strange opportunities how to build to suit.
Among the top 15, only straight path to negative growth ought to rest had to positive growth, especially as a woman doing perpetual school.
Yeah, I don't think I could be off to a graduate with it so should eliminate intervention.
That seems that you are not very clear because the auto market is still not very good August and we have to look to September . So there wasn't a bio beacham, yeah, Sean Dargan.
That is why when they so much effort on H, one eight auto show and I will Miss your own nickel bundles, Oh, yeah, well by year falling nickel Lisa Sampson idea.
We hope that actually H, one h. will become a turning point up turning point for the entire auto industry.
One other thing on Wednesday night blazing the here in Michigan.
Okay bio bother liter engine.
Your second question is about that margin for 8.8.
Sure Tim It usually talk lot yours is little to no contemplation woman, both ways to kind of what the make whole kind of true beside the tool.
I already mentioned is that we will not organized this event and to loss.
I'm, Arizona anyway, well me on Monday, you shied away. She sure she is a Taiwanese shame on us.
And secondly, we also have our budget management system. So this is also within our budget.
Well, that's what I mean.
Passage or were those all other things.
Hey, Joe it's a great that was helpful. It way light weight somehow can not to judge.
And I also mentioned before actually most important thing is that this auto show will act.
And people eat influence out of market and into the future it will generate big Daddy.
Or do something with all the places like two years, that's my answers. Thank you.
Islam enjoying it sounds okay.
Next question well D. P 10 home I teach kept hill. Please go.
Yeah, Glenn He's telling me about how a woman she just shrunken downtime in China. When do we did make a they set the ball tissue and then you ship well that of course young but nemacolin in that she Trump once your bio bio city today. She sees John don't limiting here guns high Lasagna surely Shimon Pomona Giga, Pete just come with what is your appetite to do what they do the he or she teaching them. It's just that they're going to ship I love to go hunting. He had shoot you me stupid [laughter] <unk> got to go back up we're going to go to the social assignments actually you may lose all by seeing the demand on board to Oh, there. So I mean, you can't you might cool, yeah, Oh, no secrecy comp put some job cuts jogging [laughter] month, no Mike Seeger companies show this year on Hanam go to see Tim handle a T. Two new bouncing along with dish up month, Okay, which I talked about when that you're going to see it now what you translate your shot.
So and Mr. Louis just mentioned.
You know you hope you know who are older I could T.V.T. [laughter] and Jay can actually become a turning point for China auto industry from a kinship quite chip begged me to a pop up as they possibly you know better situation. What is the logic behind that behind that so I hope [laughter] and jets and the actually the question really behind that is what's the major reason for the current market set a weakness is that because people do not know those automakers or because.
Schumer doesn't have enough in a willingness to buy all the coal cars. So what does that mean the city what is exactly you're not the current situation is in your mind. Thank you.
Uh huh.
Yeah. So.
Uh huh.
She's Uh huh.
So is it true yeah Oh this.
Actually the market is far from being saturated.
The change in volume and now well actually it's not bad either weights.
Actually the auto ownership per 1000 person in China do very low from a a bridging woman title for the love what she's machine.
Thank you Tony Sanchez.
Oh, sorry, Yeah [laughter].
The keys to the Hyatt for what you see here and they are committed and believe this will change the Sally also tier one.
Makena.
Holly energy, but so what we like Oh, yes.
Well that came up and that's okay.
Mhm.
And the reason they actually I heard from the Deputy Director General Shootout me from the National Information Centre. He mentioned that actually in the future the ceiling of new car sales in China is 14 million per year summer.
It's a pretty as I listen to you tie that was nice as well, which is really our company on that so.
[noise] and proceeds that's the negative gross aware suffering this year. It's also the first time effort over the past eight years.
Kevin here the main important.
Easily resolve things a sort of a bottom within that so you know I think in Colombia because.
Because the previous in the previous years out too good and this is the very first time, we have such a big drop that the CCEP specials.
No.
Hi, Jason.
Oh sure, but I think that she took on your computer.
Oh, hi, actually it will.
Someone compared China to Japan in 19 cemeteries actually just a Japanese automaker industry also experienced a lot of twist and turns.
So you are saying fantozzi alike.
Well certainly if she so how are you.
Ben I mean sure.
See I think the thing is I think the fortunes on.
Yes ill take the leases how sometimes when you report the way magnifying gosh.
She sensors.
So if we look at the situation in a long run now we may reach the same can sensors, which is the negative growth was definitely now is only a setback in a longer history. So in the future. We'll still have a bullish about the auto market remote opinion nothing to between your current data.
Okay. So it made a conference call way of friendship you. Let go when you do that so that was.
As I also mentioned in the previous conference call. This year were suffering from a worse additive growth compared comparing with last year. I think this is related to the macro economic situation homeowner policies are much better.
Including the trade will initiated by President Trump.
Oh sure I figure that's over with a single one ball 19 years at all what do you think the imaging downs on the.
If you don't quite slow.
And in order to promote environmental protection.
In China actually they jumped from national five to National six standard is too fast. So you do if and not just Oh Joel.
That's helpful.
Oh yeah.
So we see that actually in June of this year the national five standards as vehicles are also down or when they will then take a shot I should say cheerfully cheerfully shout out to shop your way the other thing teacher Sophie.
Actually now the national sets a standard are already put into place that is why actually themselves in July has dropped them anyways and they see mantra that make the difference.
Oh.
And we also see fading out of the subsidy policy for new energy vehicle. She swayze, yeah for sure.
So thanks.
Sure.
Well everyone. Thank God.
As a result, the consumers would like to wait and see so you know well into a bio bother to shuffle.
Yeah the Sina.
Oh hi.
Sure. He is listening to Oh, yes, it's all things Oh, she sent home furnishings Yuma.
So we hope to have huge at 8.8 auto show the voice. After this industry can be maximized it can be spread out says to rejuvenate this industry and into.
Consolidate the funds the confidence that the consumers.
She Uh huh.
Sure so when I say well, what's the timing on that.
College in Chicago, which is really not easier she Sally.
Hi, guys, you know anybody to know what's going on.
Generally speaking I think the Chinese auto market is still very huge and that enjoys a great potential. Despite the current difficulties, we can't actually drilling has to tide over this difficulties.
What do they thought they definitely last season, that's all for me answer Thank you.
Next question is Jay mission.
From bank of China. Please.
Hey, Glenn kill high since its initial achiever.
Well, how do we go to finish before you go and see [laughter], Colorado Dushyanth, you do kind of go through she can value. He says in Canada to go do include Florida Hotel true do you still feel reading show some core sure to shoot this guy social occasion, social how should we be go purely while she was too high so when youre yeltsin damage associated with it. So why don't you go to call you were talking I was hoping to see that she's actually social Kenosha I feel bound to the Oh, Okay quickly took away my question.
And I just wonder if we continue to witness solved audio speakers were auto home continue to increase the sales and marketing expenses related to offline promotional campaigns to support OEM and dealers. Thank you.
I think a single infusion so, let's just say a woman she was a job.
It's near the fundamental to the interest from Colombia.
Oh, no home has been developing a very fast over the past few years Oh no woman. The money you know how we should be on gold.
And our marketing always remain high and I'm, especially this isn't isn't what she's a she's huh.
Yes, I've got its own kind of returns.
See the Fisher hone a woman.
Well listen pensions Rachel's is Ah money either.
[noise] at when there's an additive growth and the Chinese auto market to weaken jet we cannot just a purely pursue market anyway.
Three shoulder should leave us based upon where should be ready to do that.
So what we have to pursue as they are the biggest profit rather than the biggest of profitability.
Ah I must tell you that one I guess I just visible gold. They are so typically falls into threeq.
Exactly we can actually contribute to the long term return for investors and shareholders.
We want to have some banks he took a piece in here that we showed it to me to shoot me.
At the same time, we also got a mission to a contribution to the entire industry. You would you say I think ER.
In particular in difficult times, knowing me I'm pleased she is always easier margin to do the same.
You want me to policy tool.
That's why we will engage in some lower margin businesses, but that's the thing or just Tony talk later on these two guys Jones she wants to shop.
Two questions on that.
Yeah. So we didn't get as much about so China seem to me to see the trends on this oh geez, the materials and I think and they look good.
Generally speaking, we hope that the Mart auto market can be rejuvenated again, and Oh, we knew this is ER positive growth pathway.
A totally non cyclical.
So that's helpful. My answers thank you.
Next question is from my peanut alone out of credit Suisse. Please go.
Oh hi.
Yeah, Yeah yeah.
So when do you.
Did you mean that you could see what you mean.
<unk> Susan.
Oh no.
Yeah.
<unk> <unk> <unk> <unk>.
John I Wonder if you will.
As you May know your passion for what May or June .
Dealership.
Oh the time yeah.
Sure.
Yeah.
Mm Hmm.
Now how do you think are the ones. We do see that other income should you should be doing what she intends to go go Oh My God.
Oh Gosh I don't see I know kind of thing. So my question is actually regarding the ARX <unk>.
For me for me.
<unk> <unk> <unk>.
I want to know whether it comes from the Oh price hikes. Your from your your base, where actually it's because of what dealers are choosing more value add service and how how much of the chance that stuff.
The price can continue to be high for next year given the current situation and second is my question is about the other income and also.
Where it comes from in second quarter.
Oh that they went to a heavily values are places where they do and.
Your opinions are the ships with the 18 years he is photo printing realizable today.
Sure sure Julie Joel the tight Tamil and she.
Anyway, I didn't see the so you can see that the mailing printing though.
So I will answer the first question I'm talking about lease actually a big things last year and the beginning of this year, we already have agreement the price of the lease as a package.
Ching anything yet for the because I'm trying to think a woman living to fall Johnson's Amazon.
And about the price increase and the end of last year and the beginning of this year our code increased by 20 times.
20% or 20% or so to the diesel side, another woman hail and maybe the cookie.
It was a job or something.
That doesn't mean that nicely through June it is ramping up English for shareholders.
[noise] and sometime we also add our science and technology Department income into that but this is data product and not the lead well convert to EMEA. So well see that all this I got I got your bedroom. This year certainly our senior somebody to pull these and other documents stage.
I also mentioned that actually our price increased by 20 times. However at the same time, our lead increased by 32% number.
Yes, it all genius willing to use these ideologies I do and as I got to you Jim.
You also know that and is there a beginning of this year some actually dealers a challenge at about our price increase say well, maybe we shouldnt ciena is a ah.
Yes, I think that I enjoy a sees a median or see the schedule to muscle fade away.
So we are now study about the price planful to lease up next year I'm doing that yes isn't just housekeeping what type.
Our team also disgusted with some Oems you actually hitting on her good idea what kind of.
And also with some dealers go around to do this out I think you have to watch a true.
And actually the dealers on the OE and the also cannot agree on this topic. The most valuable emission say Ah Ah.
Saudi the seamless is Oh, I know Thats a goal, it's a huge yourself with the calcium check Oklahoma litigation.
And now we developed a new plan and we will communicate with them and we already learned the lessons from last time, which means we will communicate first and then do it okay playful haynesville well when I talk about football that's unbelievable.
And actually we will actually maintained a volume and are also enjoying some floating.
Now, let's see Tonight your share of the currently hold though go to Atlanta animal them away or me at least.
It was.
We will also disclose this information after the communication service.
Hey, how's it going to get price email to <unk>.
Now as a yet to be finalized because we have to do a communicating with them. Okay. Let's go into team that's working.
[noise] hurt you know yeah.
In this quarter in all other income increased by 65% compared to that of last year.
And to the main reason is that after a careful planning we are able to enjoy all government tax refunds and rebate.
And Oh, so basically yes, that's the reason.
Thank you.
Thank you.
There are no further questions at this time I would turn the conference back to management for closing comments.
Please go ahead.
Yes. Thank you. 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 you a few months time in the meantime, please feel free to get in touch with US. If you have further questions or comments. Thank you.
Yes.
Yeah.