Q3 2026 AUTOHOME INC. EARNINGS CONFERENCE CALL - AUTOHOME INC

Explicit Guidance:

• Market Sales Forecast: Full-year 2026 domestic passenger vehicle retail sales projected at 18.5 million units, representing a ~22% year-over-year (YoY) decline. Fourth quarter 2026 retail sales expected to decline 20–25% YoY.
• 2027 Industry Outlook: CPCA forecasts domestic passenger vehicle retail sales growth of 0–5% for 2027, with a midpoint estimate of ~2% (low single-digit growth).
• Dividends: Board approved a cash dividend of US$1.58 per ADS (or US$0.395 per ordinary share), totaling approximately US$1 billion. Record date: January 5, 2027; payment expected in mid-March 2027 (March 15 for ordinary shares, March 22 for ADS).
• Share Repurchases: Board authorized a US$400 million share repurchase program over the next 12 months (announced July 28, 2026). As of October 30, 2026, US$155 million (approx. 40%) has been executed. Management intends to continue active execution under a specific strategy.
• Cost Structure: Management aims to maintain a "delicate" and "streamlined" cost structure while investing in strategic priorities.

Business-Segment Outlook:

• New Retail & Offline Expansion: Online "Zhijia Mall" currently covers 38 cities with >1,700 authorized dealers and >600 vehicle series. Offline "Autohome Good Car" has >170 franchise stores and >700 cumulative transactions. Strategy to deepen high-end city layout and expand coverage in lower-tier markets via franchise stores.
• Used Car Business (Domestic): Piloted standardized full-process sales service in six cities (including Nantong and Changzhou) in Q3 2026; showed improved transaction efficiency and user satisfaction. Plan to further refine the model and replicate nationwide in the future.
• Used Car Exports: Platform averaged >3,000 high-quality vehicles listed daily in Q3 2026. First export transaction completed in July 2026; transaction volume rising month-over-month. Focus on improving operational efficiency and supply chain integration (logistics, customs).
• AI Agent Integration: Launched "Zhijia Qixia" (Intellectual Driver) and "Cheese Car Butler" in early September 2026. Product covers the full user journey (browse, select, buy, use) and integrates offline fulfillment (inspections, charging, maintenance). Management views AI as a strategic shift from "information matching" to "trusted decision-making."
• Revenue Contribution: AI investments currently reflected in cost optimization and product efficiency; no significant revenue contribution from AI agents yet.

Market and Competitive Outlook:

• Market Structure: Industry entering a period of "deep structural adjustments" with competition focusing on existing market share. Market share expected to concentrate among leading brands with core technology and comprehensive ecosystems; "tail-end" brands face accelerated consolidation and market exit.
• NEV Penetration: New energy vehicle (NEV) penetration rate reached 67% in September 2026 (record high). Leading independent brands expected to strengthen positions; weak players face pressure.
• Profitability: Industry profit margin compressed to 3.3% in September 2026. "Price-for-sales" strategies nearing limits; profitability recovery expected for brands with technology capabilities and overseas expansion.
• Demand Drivers: Growth shifting from domestic new purchases to replacement demand and overseas exports. Overseas exports expected to maintain strong momentum in 2026.

Macro / Industry Outlook:

• Domestic Economy: Auto market expected to remain under pressure in the short term but deemed at a "bottom" currently. 2026 forecast for a recovery and stabilization.
• Commodities: High international oil prices expected to weigh on consumer demand for traditional Internal Combustion Engine (ICE) vehicles.
• Policy Impact: Last year's supply and demand policies contributed to a high base effect, leading to lower current sales volumes; 2026 full-year decline of 22% attributed to this base effect.
• Regulatory/Trade: International expansion evolving from simple exports to localized manufacturing, localized supply chains, and comprehensive brand operations.

Strategic Initiatives:

• AI Ecosystem: Deep integration of proprietary "Cangjie" automotive large model with user and merchant services. Goal: Shift service delivery from content placement to intelligent service distribution and precise targeting.
• O2O Ecosystem: Building an integrated offline fulfillment network combining AutoHome Mall, authorized dealers, Autohome Good Car franchise stores, and car tech synergies.
• Cross-Border Platform: Strengthening joint integration of online multilingual international sites and offline fulfillment networks (customs, logistics, vehicle condition verification).
• Brand Rejuvenation: Continued investment in content and brand awareness (e.g., partnership with Mango Excellent Media) to maintain user mindshare.

Risks and Headwinds to Outlook:

• Market Demand: Continued pressure on domestic auto sales and consumer sentiment; potential for sales declines to persist beyond Q4 2026.
• Industry Consolidation: Weak brands, joint ventures with ICE focus, and financially fragile dealerships face high risk of exit or margin compression.
• Profitability Pressure: Industry-wide profit margins remain compressed; reliance on price cuts is becoming ineffective for volume growth.
• Execution Risk: Future success of used car and cross-border export models depends on the ability to standardize and scale operations nationwide and improve cross-border operational efficiency.

Management Tone on the Future:

• Confidence Level: Cautiously optimistic regarding a 2027 recovery (low single-digit growth) and a market "bottom." High confidence in the long-term value of the AI-driven ecosystem.
• Strategic Focus: Emphasis on "long-term competitiveness," "streamlined cost structure," and "sustainable value" creation.
• Shareholder Return: Committed to a dual framework (regular dividends + share buybacks) with ample cash reserves and a healthy balance sheet.

Miscellaneous:

• Currency: All financial figures discussed in the call are presented in RMB unless otherwise specified (dividends and buybacks in USD).
• AI Impact on Costs: AI technology investments are reflected in current financial statements (costs/efficiency gains), but revenue impact is not yet material.
• NEV Resilience: Despite a 13% decline in NEV sales in the first nine months of 2026, the top 10 NEV brands accounted for 72% of total NEV retail sales, indicating strong brand concentration.