Autohome (ATHM) 25 Aug 212021 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by for Autohome’s Second Quarter and Interim 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, the conference call is being recorded.

You have any objections you may disconnect at this time. pleasure your my Autohome’s Aggie now Director. IR is to host, introduce Zhao, It Mr. begin. may you Zhao,

Thank President operator. earnings have call, Quan Thank Long; release the quarter prepared Mr. today you. company's you, distributed Chairman and and co-President Autohome Mr. welcome Autohome Jun Chief Director Shao; Finance Officer questions. www.autohome.com.cn. Vice Mr. a the remarks, Shao, After and second Mr. you Haifeng Xiao Mr. to website Zou Technology may Miss Wang; be Chief interim will Wang, answer copy earnings Officer at we Jiang available Mr. Long, XXXX Jiang. its your conference and find Zou; Mr. Earlier Hello, call. Executive press everyone, on Hong Miss to and today's and Mr. On

of we will today Litigation Harbor of the the begin, U.S. the contain forward-looking Act that please Securities Safe Before made under Provisions XXXX. discussion Private know statements Reform

are statements undertake applicable in the Autohome subject and Commission. non-GAAP from measures. any required our unaudited includes Forward-looking financial discussions filings obligation materially that include, and our Potential quarter risk law. this outlined to actual expectation. as but doesn't in differ Exchange update to to forward-looking The Securities earnings release except uncertainties cause under any press of those certain uncertainties statements public not to current limited results risks with and are may

contains comparable on website. release press of Autohome’s non-GAAP available GAAP directly Our reconciliation is most the and to measures a measures the IR

being this reminder, is conference a As recorded.

IR also call of webcast live be In this and archived addition, available Autohome’s on conference will website. earnings a

Mr. call and Autohome the Chairman CEO, to Mr. Long Long. Now I will turn please? over

joining thank us And you everyone. you Thank today. for

Revenue with to generating year, revenue, maintained improving We in billion. metrics new along Thanks quarter the our data XX.X% in others momentum, business year period with Data revenues XX.X% total are contributed the last revenue contribution the over to online the compared year XX% OEM expansion. year. XX.X% from a increased were of and Total same and for second it growth RMBX.XX product product. year. second increase in marketplace quarter, strong higher across with a margin the initiative pleased our over

with We to at the improvements, operating efficiency are excited representing time report a the that broke significant steady class. in levels even milestone TTP June, first for operating

We further made with energy in automaker. also progress cooperation our new vehicle

NEV year rising margin second brands During Adjusted from over year points net the jumped over the to X.X in percentage XX.X%. year second expand to continue quarter, year. revenues XXX% quarter

global production gradually As trend X.X% year and respectively. trade of new with continues and sales improve passenger the second impact XX.X% of X.X% vehicle year, XX.X% year shortage sales quarter, the in respectively. the May in decreased market EVs and to declining on production over new by the This by year deepened sales over

automakers impacted by rise addition, further of were raw in material. In cost the sharp

As business marketing automakers are cautious great our conditions, adopting traditional plan more multiple approach to facing challenges. they contend budget even is unfavorable with and

evolving continued trend are by market different fast the into mixed hand, used moving with the The trading On the highlighted has and expanding circular across vehicles for monthly energy has market other cars China's a new lane auto growth sales. segments. witnessed performance volume in

car derivative. new initiatives maintaining grew DAU rapid traffic improve growth promote curve experience, are and user second sustainable the are volume pleased from of over wake the website result, of June, across lead our auto widened. year According data a energy effort our a All second solid over developing the representing preparing used high see Significantly, to QuestMobile players, opportunities efforts of year content growth. our rules the end progress. C XX.X end value business B with business while our challenges are traditional for mini fundamental underpin our Meanwhile, to app our by and to statistics constant accept vigorously to number maintain third across industry of who creating position. the year in the and to to primary year prototype while And medical products, In enrichment provide we we from industry XX% of these million leading mobile our department our long-term average continue new continues industry changes, to customers development apps split to company. hierarchical a in the management implementing we a As and automobile increase. media stemming

of the solutions user our traditional believe auto content customers remain the to focus form app, needs. attract their share further is interest-based younger in version and as demographic. regards live media upgrade to a of With we offering. latest The market streaming in featuring In customized addition, video and business, on to key we to experience we optimized will with meet leader terms poised our more continue prioritizing vertical, a

service While expanding business. also for to enhancing our quality, are non-advertising our we the actively service

For users and direct user their to we user access help automakers aggregate their own example, with operation OEM access. offering

tools cooperated and resulting jump NEV On year the and and the developing to address improve second in a half year, pinpoints helping Amidst dedicated instant growing help a business brand such user our established conversion across NEV in during we finding new to in platform model exceeding over and set of the Through far growth energy as market industry. solutions automakers opportunities. department operation market, dealers distribution we the efficiently. industry providing this brands the their fast we lead strengthen first to a branding, generation XXX% of the these to In are position explore front, our XX emerging NEV revenues from innovation, year EV quarter, rate operations, continue channel with EV of opportunities. messaging business live we by operating streaming

front, we are our used as TTP, deepening and XXXX to be for car the to we to Autohome crucial going cooperation for turning the is year committed further success. believe Now a

customers. business end of enhances the from and users With serve the ability used covering car In car TTP to our supported has great TTP, demonstrates to its which between and Autohome TTP end a business a for efficiency. has acquisition Autohome car, lifecycle broke at Autohome time, purchasing formed used by transaction used June, to milestone operating selling CXBXC the level even significant that And and improved operation first a the synergies TTP.

for other that auto We expansion lead to development a and are our could looking also of the synergistic opportunities ecosystem.

Moving on data to products. our

than of quarter, optimization new total been products Our solutions has automakers effectiveness and consistent and In our among our momentum XX. the data XX of utilized car launch programs improvement total gaining was for in number customers. and product marketing the efforts second intelligent more intelligent

products, we the traffic make acquisition data from exploring committed remain maintaining and payment. new dealers, for product conclusion, transaction focused media while area. As vertical to product full and business on In market leading enhanced user upgrades value offering auto terms to for are we of services in share spectrum in our a fresh fully of in position pathways

in market. car car long see the growth. is term September used market plan have the world's profitability Day at balance investments and car major this EV area. make plan to businesses, largest achieved XX largest We markets our new announce also us and allow NEV upcoming the upgrade and in meaningful to ensure We China on Investor detail market in strategic data the is and of China’s one and more to our sheet share our key fastest the market strong in used growing opportunities progress world.

to new However, in contrast have per developed to and huge sales the car ratio still China’s growth car potential. ownership countries, XXXX used people

Going growth believe forward, trend are moment, at remains the auto long-term we recover we and facing the unchanged. will temporary industry the the from gradually difficulties

financial bring growth, to at a our value second unleash Looking resources, turn over go quarter and Ping call and our An and our of look Miss in ahead our that cooperation for for terms to results. and with Finance I strategy Director, beyond Hong room will ourselves With will upgrade, traffic closer technology Jiang users now the with more customers. internal further

Long. you, Thank Quan

through discussion walk second unless stated. second financials as billion. Net Please that, was quarter quarter the reference me for revenue I for will quarter. key let today Now, with RMBX.XX RMB otherwise prior my in the you the note only

leads revenue the increased others breakdown, came revenue at detailed service by a and was to in from over TTP products. XX% revenue consolidation and million, service data RMBXXX marketplace year media generation RMBXXX by year the For the increased contribution primarily online of and driven million million, RMBXXX

Cost cost. in was to revenues million, year. second to in the the to of compared in Moving Gross margin quarter of RMBXXX XX.X% last quarter compared XXXX. the RMBXXX second was period XX.X% same on million

a were to to million the in The year Product expenses of expenses marketing primarily in operating and compared to Turning was Sales RMBXXX to spending. RMBXXX million the RMBXXX quarter a quarter million expenses. compared million, XXXX. second RMBXXX decrease were due second promotional decrease development in and ago.

was expenses provision of debt certain respectively, of profit in was was attributable Adjusted per Autohome the of for period basic G&A ADS and to were corresponding net period in earnings for RMBX.XX related the RMBX.XX basic second RMBXXX corresponding million, XXXX. for million diluted customers. compared XXXX. in second to the corresponding and RMBX.XX the The in for operating RMBXXX and compared Non-GAAP bad million Non-GAAP income of quarter and and RMBX.XX quarter, quarter Inc., compared attributable to quarter to RMBXXX Finally, with compared the RMBX.XX corresponding RMBX.XX and RMBX.XX compared increase RMBXXX QX primarily deliver we to million XXXX. million of the RMBXX the second RMBX.XX RMBXXX consolidation second were period in million the of earnings TTP the period advertising XXXX. Overall, XXXX. to diluted share and per respectively, to

June cash billion. quarter are generated the million RMBXX.XX operating questions. ready strong of RMBXXX XXXX sheet in second to balance Operator, flow the open line We with Q&A. XXXX. XX, With of we our short-term that, cash, for remained equivalents your please of of very investments cash the take As and

the Jefferies. And first [Operator We Chong will question-and-answer now Thomas Instructions] session. have the begin from we

Your question please.

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CEO, ask question. and to answer will Chairman Long We your Mr.

and the then of year, judgments make at you the you outlook. we some first Actually, over Thank for future half questions. look if the the

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less it than definitely be So, will XX%.

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Ritchie from Next, HSBC. we have

Your question please.

Let me translate this myself.

have I questions. So, two

So the we outlook we and opportunities landscape costs used that areas first And improve new Thank regulatory how car competitive do and management is And this And environment And one can is landscape how industry? comment space? will the see from opportunities in on? question the what can any for this M&A going is, affect forward? still second the we the are you. what competitive are environment? is that foresee this what

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Shao to have we President our Mr. your answer question. Mr. please. Here Shao

business. which is car Thank you. I question the about to would second used like your take

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chaos market. The market it and first a is, less segmented is a more characteristic or

of lack we support. enough market enough lack transparency thirdly, the Secondly, and of and trust financial

business So, model both to I be potential CXB that BXB, is profitable. and believe the have they which

it may sometimes. However, for BXC business, the loss suffer

the on profitability. edge be the may of it So,

for have we in used car a few did Autohome, So, business. strategies

to term like The would model strategy assets. on have like long first one this is market. do And we the asset seek we secondly,

in changes the there's market in China used market. And know, developing whole fast. a As lot you is this of car very

persistent occur branding. this And we have in we prepared be the carry in have and that good enough point capacity of in capital, and until should enough terms experience tipping have We and we have we be good to on to time, market. have we

we know prepared to market TTP, TTP. we we want I So, chemistry in to we grow. for know-hows also, of embedded and way, get with And And We further a this An have we TTP. lot lastly, comment resources. already with with Ping on would empowered the technologies TTP internet together have and as the this

happened historical something in is this room, this actually, So in which June. we there’s achieve breakeven

areas. is that to we other very we So, which copy can some a this successful experience, believe

example, business For investment opportunities are there. new

can your Operator, all is go we for that question. Okay, ahead.

you. Thank

Eddy have Morgan we Next, from Stanley.

Your question please.

[Non-English]

ahead. Yes, we go Please can.

I have two competition. the first questions is about

on of question dynamic question in new can the us channels level give question the the getting landscape versus first half you these first vertical their And the about auto auto can is is other that the is in between how this that, other year? the the the between the So, us of comment about the some or terms of vertical The OEMs vertical and dealers? color tax. you second the competitive within budget versus for comment level second players this of

of they the not the rate. in the that get noted of approved tax lower XX% we software, key tax the as So, some of rates -- terms platform company internet platform company,

Yeah, any of kind have we thank this well? you. if wonder the as problem Just

very is about question, your I you to Thank like which would first competition. much. take

for know, you traffic would good you know-hows are We Well, whole this in our for and from to and welcome competition, said, collaboration will And industry, my And any competitors, whole as propelling enrichment for market. each further would total the believe over we of have can competition. know, constant industry build actually to are year and technical to our this produce just constant maintaining second media year we traffic number our push we I have always continues progress. report third boosted rapid the our the because learn vertical, the players the As we to opportunity forward a be high-end believe has which you if us that we lead issued a develop. our And competition more while other. efforts pleased we whole surpassing volume the auto see the growth. to

which historical way, numbers high a also in our XX.X DAU is So, this reached million. to

a definitely way, this in of leading lot achieved and great actually traffic So, have we we're in a success position. getting in

talking the regulation. Now about

As compliant policies. a laws the know, regulations we fully is Autohome and you company listed are and the with and

you As of did regulation first year, gets know, and the for see we compliance tightened. the half the

received from in we never compatible protection, the with fully well privacy terms in in protection, and even in we with protection terms regulation the data of privacy compliant have of protection. any We terms personal not as of one warnings means we regulations take laws means or only step are be regulators fully with as which the compliant plus fully However, data is and security ahead, regulations, in China, the notice laws laws one we and regulations. security which which any and also the position are a be the tighter

second to tax want the about policies. answer I your Now, that question was

policy. And you favorable corporation favorable fully Actually, As for tightened the and for resolution software for we know, the the are with regulations. such has laws key tax applying Autohome, receive tax eligible to we for been policies. are compatible

close would eye that to a the favorable in this tax continue full we the policy for would right. continuously policies. understand on we the We And keep will apply policy. And

we can Operator, ahead. go

Thank you.

have Next, Gong Brian from we Citigroup.

Hi, please. question ahead. please Your Brian, go

Hi, management. [Non-English]

answer Mr. Shao Next, we'll question to ask your

for the you question. Thank

the the situation In advertising, QX, the shortage more terms affected would the chips of also, automaker's believe QX, the this And automakers. we in eased. the supply in of believe still budget of it that the we affected sale. capacity of And be of

we budget However, always with for can also their of sales the volume and profit advertising target. see half its go annual with the goes year, next the it automakers

and pressure. under sales advertising volume we is their profit double pressure, under the the is would budget pressure if target So, be believe under

the on on second we that of have number the the network. auto was end Actually, this this the number June. year, year, them last XX,XXX. statistics of is This actually, some is till call internet, year. And dealer’s end numbers. which dealers, is the We already June, last was about question Now Actually, XX,XXX. our the

the rate the coverage on penetration comment very for question for And or this was The Autohome good. auto coverage dealers slightly last my up. is rate So rate.

members, So, last in pay we for the this dealers over year. way, especially the paying members as flat have

We question. your for go can you Thank ahead.

you. Thank

Leo have we DB. Next, from

Your question please.

I'll myself. So, translate

marketing the So, question is, declined quite the and like second in sales expense bit. we see quarter first a

aggressively, second still strategy user growth My the acquire competitors want user to our regarding while our growth in products. what ask is question so data So, future? like is

see data we and the products our half what is second So, the robustly, is the in still new pipeline? grow and outlook for what product

for question. thank Okay, you your

our Liu and President, answer Shao Jun We first have will then your Mr. question your please? Vice Mr. our answer question. Jun President, to

Thank you.

Let me your question. decompose

expenditure in more is one customers. declining spending the in competitors. first new are The acquiring versus They QX our sales about

two customer actually in we the to our to if terms and are our strategy, and PC number If at growth traffic the C definitely more So, on three to QuestMobile, advantages. side, sum is total you good more market mobile [ph] can players. side, also the traffic. up of side the the share and traffic we B on actually see than number traffic, According the of traffic even we look number add and the one the

base? in in In are market of strategies. expand traffic the we industry. We the in So, user the how terms vertical position we our the and media discovered can leading future, few share the

we lower Firstly, into density. call things is granular more go now level,

the If Tier new you at X members, we incremental the to used XX% look cities. actually, have from

Now this number XX%. has to gone

or higher the want is, years example, portion XX Second for dynamically the They always a actually we attracting total changing. accounting of our future, below are old. users. are are users, In sales expenditure age we say more at for younger to

video new XX.X try version, new will for We based market. of the streaming generation more diversified. efforts, which targeted live example, launched the competitors quo would videos, customers, readjusting as more younger dynamically lot a on as of status new could the well more lot of be We our based, a and We the be in scenarios.

address Mr. going data second your is Shao the question is about product. Now, to which

glad that are is good new XX%. data that products you business. about QX In achieve we noticed have do growth We very the our on growth

of total we high revenue. We're going of products. for data data product growth to on is, on strategy the in a total long-term weight higher the the growth our further the achieve Our leveraging and our enhance products will revenue data

Conference, scenario, September a we're this So, strategy to had also we on you new elaborate attend understand On to the we Releasing New our would our and lot better Strategy of warmly going Actually, to target. Strategy data XX’s the New product invite Conference. moves.

the have from always the example, year our product For today, beginning and optimized we products. of till our upgraded data data

example, September, this of in For XX version new year version, release in car new the launch And data the for we product, to module. modules. is dealer’s launched are the going intelligent -- June X.X we the which

That move on answers. let's next question. the all the is to Operator,

We will Credit one last now be from from question Ashley taking Suisse.

please. question Your

initiative users leave starting I we they to about to when that, April their just this verify message our want contacts. through check require

to just the forward, the would impact So, dealers? want how with we this and you. initiative. impact our check this pricing Thank look And round negotiation next from the in background if

Ashley. you, Thank

Mr. Shao your answer will Our President question.

implementing we quality, the followed the generated, sky And Thank protection peers, Blue data already at the industry do carry names. proud that the implementing of you number quality the best user be the tried Blue-sky they recovered then time quality And until to very in much plan you foundation the have ever period market Actually, them want some improved. by plan, different us. And to the introduced their out to And lead look would we plan, plan, the to be are leads, we will in a the if to of be China. leads carrying in this has the the we recognize information law been to we I after if never what by continue initiative, for to see to our jumped of and a of solid we the launched say, gradually XX%. On our experience. August, we law for and lay have best. generation are at then lead dealers to So, Actually, claim your similar of the June, April shift into Blue-sky the before for enhance and model a look secondly, leaders, question. role of want we to of you terms our the we we barrier plan it industry our in April, and are which has is, the protection optimizing numbers say our since lead quality Actually, focus blue-sky of our the greatly and with the contrary, automakers improved. lead contract renew it product, a

this So, plan quite is in positive. way, this

runs all the last the operator. answers, Time Thank on let’s for That's out move you. so part. to

will constraint, time on will be I the this conference the this the closing the last to back now turn question for take call. management Due we comment. to

for everyone We today. next our with have a you in feel quarter’s Thank if joining appreciate you. the everyone. you look free you Thank conference forward us please In months’ further questions. meantime, get Thank your touch Bye-bye. on you we time. updating to few any to And call us support. in

your today's and for this gentlemen, you Thank Ladies participation. conference call. concludes

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