Q3 2026 AUTOHOME INC. EARNINGS CONFERENCE CALL - AUTOHOME INC

Financial Performance:

• Q3 2026 total revenue was RMB 1.31 billion (Media Services: RMB 241M, Lead Generation Services: RMB 526M, Online Marketplace: RMB 547M).
• Gross margin improved to 67.2% year-over-year (vs. 63.7% in Q3 2025) due to lower cost of revenues (RMB 431M vs. RMB 646M prior year).
• Operating profit was RMB 96 million, down from RMB 147 million in the prior year period.
• Adjusted net income attributable to Autohome was RMB 253 million, compared to RMB 407 million in the same period of 2025.
• Non-GAAP basic and diluted EPS were RMB 0.61 and RMB 0.60 respectively, down from RMB 0.87 and RMB 0.86 in the prior year.
• Cash and cash equivalents, short-term investments, and long-term investments totaled RMB 17.65 billion as of September 30, 2026.
• Net cash provided by operating activities for the quarter was RMB 360 million.
• Share repurchase program: US$400 million authorized for 12 months; US$155 million executed by end of October (approx. 7.06 million ADS).
• Dividend: Board approved a cash dividend of US$1.58 per ADS (US$0.395 per ordinary share), totaling approx. US$1 billion, payable in Q1 2027.

Guidance and Future Outlook:

• Domestic auto market expected to remain under pressure short-term but bottomed; recovery and stabilization anticipated for 2026.
• 2026 full-year passenger vehicle retail sales projected at 18.5 million units (approx. 22% YoY decline), with Q4 sales expected to drop 20-25%.
• 2027 domestic retail sales forecast by CPCA to grow 0-5% (midpoint 2%); management expects low single-digit growth.
• Growth drivers shifting from new purchases to replacement demand and overseas exports; NEV penetration hit 67% in September 2026.
• Long-term strategy focuses on AI integration, end-to-end transaction platforms, and cross-border services to strengthen ecosystem and margins.
• Management commits to maintaining a disciplined cost structure while investing in AI agents, content, and new retail to drive long-term value.

Business Segments and Product Lines:

• New Retail (Zhijia Mall): Online shopping mode covers 38 cities with 1,700+ authorized dealers and 600+ vehicle series listed; offline "Autohome Good Car" has 170+ franchise stores and 700+ cumulative deals.
• Used Cars: Domestic platform piloted in 6 cities (up from 2), focusing on full-process standardized services (inspection, matching, delivery) with improved conversion and satisfaction; Cross-border export platform active with 3,000+ daily online listings and rising monthly transaction volumes.
• AI & Products: Launched "Cheese Car Butler" (AI agent) and "Intellectual Driver" (AI app) in September 2026, integrating user browsing, selection, buying, and lifecycle services.
• Content & Traffic: Q3 average mobile DAUs grew 3.4% YoY to 79.14 million; ranked first in citation rate among six major AI platforms for three consecutive months (June-August 2026).
• Media: Launched variety entertainment gala with global automaker festival, achieving 1.8 billion+ total impressions to drive brand rejuvenation.
• New Products: Launched "at-a-glance" vehicle library feature (8 highlights, 5 scenario tools) and configuration selector tools to simplify NEV decision-making.

Market and Competitive Landscape:

• Industry characterized by deep structural adjustments, price wars ending, and consolidation of weak/second-tier brands; leading brands expected to gain market share.
• NEV penetration rate reached 67% in September; top 10 NEV brands accounted for 72% of total NEV sales in first nine months.
• Global competition driving automakers to evolve from simple exports to localized manufacturing and comprehensive international brand operations.
• Consumer sentiment remains weak due to supply-demand shifts, though NEV demand shows resilience over ICE vehicles.
• Industry profit margins compressed to 3.3% in September, pressuring joint ventures and traditional fuel vehicle channels.

Risks and Challenges:

• Short-term pressure on domestic auto sales volumes and consumer sentiment.
• Industry-wide profitability challenges; reliance on price cuts is becoming ineffective, squeezing margins for weaker players.
• Cross-border export operations face coordination challenges between online international platforms and offline fulfillment/logistics networks; volumes still nascent.
• Continued need for heavy investment in AI and new retail infrastructure while maintaining cost discipline.
• Potential for accelerated market exit of weaker brands and channel partners.

Management Commentary and Tone:

• Tone was measured and pragmatic, acknowledging short-term headwinds while emphasizing the strategic value of AI and ecosystem integration.
• Management expressed confidence in the "bottoming out" of the market and the long-term structural shift toward NEVs and AI-driven services.
• CFO emphasized robust balance sheet strength and a "delicate cost structure" to support shareholder returns.
• Strategic focus clearly articulated: shifting from pure information matching to "trusted decision-making and fulfillment" via AI agents.

Analyst Questions and Answers:

• Market Recovery (Brian Gong, Citi): Confirmed expectation of market bottoming and low-single-digit growth for 2027; highlighted NEV penetration as primary growth driver and consolidation risks for weak brands.
• Offline Store Strategy (Brian Gong, Citi): Confirmed expansion in high-tier cities via authorized dealers (1,700+) and low-tier markets via franchise stores (170+); emphasized quality and O2O synergy over store count.
• Shareholder Returns (Jing Yuan, CICC): Reiterated commitment to dual return framework (dividends + buybacks); 40% of new $400M buyback completed; $1B dividend approved for Q1 2027 payout.
• NEV Performance (Jing Yuan, CICC): Noted NEV sales declined 13% YoY in first nine months but outperformed overall market; brand differentiation evident with top 10 brands holding 72% share.
• Used Car Progress (Thomas Cheung, Jefferies): Domestic pilot in 6 cities showing good conversion/satisfaction; cross-border export volume rising monthly post-first deal in July.
• AI Impact (Richie Sun, HSBC): AI agents (Cheese Car Butler, etc.) currently enhance efficiency and product optimization but do not yet contribute significantly to top-line revenue; acting as underlying infrastructure for service distribution.

Other Key Points:

• First export transaction on cross-border platform completed in July 2026; monthly transaction volumes have risen since.
• "Tangjie" large language model serves as the underlying AI foundation for internal efficiency and partner empowerment.
• The company is actively refining its "dual-platform" (domestic and overseas) strategy for used cars to standardize services.
• All financial figures and forecasts presented in the call were in RMB unless otherwise specified.