Q3 2026 AUTOHOME INC. EARNINGS CONFERENCE CALL - AUTOHOME INC

Explicit Guidance:

• Revenue: No specific numerical revenue guidance provided for FY2026 or 2027; FY2026 full-year auto retail sales projected to decline 22% YoY to 18.5 million units.
• Earnings/Profit: No specific EPS guidance; industry profit margin for Jan-Sept 2026 compressed to 3.3%, expected to stabilize or improve for market leaders with tech capabilities/overseas presence.
• Cash Flow/Capex/Opex: No specific quantitative Capex/Opex guidance; commitment to "streamlined cost structure" and maintaining "disciplined and prudent approach" to investment.
• Share Count/Dividends:
  • Share Repurchase: Authorized up to $400 million over 12 months (announced July 28, 2026); ~$155 million (40%) executed by Oct 30, 2026.
  • Dividend: Board approved $1 billion aggregate cash dividend (approx. $1.58 per ADS / $0.395 per ordinary share); payment expected March 15–22, 2027.
  • Outlook: Management intends to continue "active" share repurchases and maintain "regular dividend policy" to maximize shareholder value.
• Market Volume: China Passenger Car Association (CPCA) forecasts domestic passenger vehicle retail sales for 2027 to grow 0–5% (midpoint ~2%); AutoHome aligns with this low single-digit growth forecast.

Business-Segment Outlook:

• New Retail (Online): Zhijia Mall (online shopping mode) to expand authorized dealer network (currently 1,700+ dealers in 38 cities) and vehicle supply; aiming to break regional barriers and strengthen the O2O transaction chain.
• New Retail (Offline): "AutoHome Good Car" franchise stores to continue steady expansion (currently 170+ stores, 700+ deals); focus on high-end city layout and service system improvement.
• Used Cars (Domestic): Completed pilot in 6 cities (including Nantong and Changzhou) for standardized full-process service platform; plans to "replicate the model nationwide" in the future after further polishing the service system.
• Used Cars (Cross-Border): "Cross-border export service platform" to expand online multilingual sites and offline fulfillment network (customs/logistics); 3,000+ vehicles listed daily; transaction volume rising monthly since first export in July 2026, though volumes remain small.
• Innovative Business: "Cheese Car Butler" (AI Agent) launched Sept 5, 2026; full lifecycle coverage (browse, select, buy, use) with 265 inspection items for used cars; "Zhijia Qixia" AI agent launched for digitalizing 4S stores and dealers.

Market and Competitive Outlook:

• NEV Trends: New Energy Vehicle (NEV) penetration reached 67% in Sept 2026; NEV retail sales declined 13% YoY in Jan-Sept but outperformed overall market; top 10 NEV brands captured 72% of total NEV sales.
• Consolidation: Industry entering "deep structural adjustments"; weaker brands and joint venture ICE brands face accelerated market exits; leading brands expected to gain market share and profitability.
• Pricing/Profitability: Price-cutting strategy "basically ended"; pressure on industry profit margins expected to persist until late 2026; recovery likely for leaders with tech/overseas capabilities.
• Channel Shift: Industry shifting from "selling cars" to "maintenance/turnover" revenue models; channels moving from pure sales to value-added services.
• Competition: Focus on "existing market shares" competition rather than total market expansion; differentiation driven by technology, ecosystem deployment, and brand equity.

Macro / Industry Outlook:

• Domestic Market: Expected to remain under pressure in short term, but believed to be at "bottom"; 2027 outlook for stable/low single-digit growth (2%).
• Consumer Sentiment: Factors including reduced consumer sentiment and supply/demand policy normalization contributing to current sales decline (Q4 2026 projected to drop 20–25% YoY).
• Global Trade: Overseas exports expected to maintain strong growth momentum; auto OEMs shifting from simple vehicle exports to localized manufacturing and supply chains.
• Cost Factors: High international oil prices weighing on ICE vehicle demand.
• Regulation/Policy: Reference to "supply and demand policy" from last year impacting current sales volumes; future outlook assumes stabilization.

Strategic Initiatives:

• AI Integration: Deep integration of AI capabilities (via "Cangjie" large model) into user service, decision-making, and merchant operations; shifting from "information matching" to "trusted decision-making" and "reliable fulfillment."
• Expansion: Scaling authorized dealer networks and franchise stores to create a unified O2O ecosystem (Online Mall + Authorized Dealers + Franchise Stores + Synergies).
• Cross-Border: Enhancing "online driver display" and "offline travel network" integration for cross-border transactions; focus on customs, logistics, and price conversion.
• Product Upgrades: Launch of "At-a-glance" vehicle library feature and "Configuration Selector" tool to reduce decision friction; "Selection Equipment Tools" for complex NEV purchases.
• Strategic Focus: Continued investment in content, AI agents, end-to-end platforms, and cross-border service platforms to strengthen long-term competitiveness.

Risks and Headwinds to Outlook:

• Market Volatility: Domestic auto sales facing continued pressure; 2026 Q4 projected to see 20–25% YoY decline.
• Profitability Pressure: Industry-wide profit margins compressed (3.3% in Jan-Sept); weaker brands and ICE-focused channels face significant financial stress.
• Adoption/Execution Risk: Cross-border export volumes currently small; new retail offline network expansion requires successful replication of standardized service models.
• AI Revenue Lag: AI agents currently serving as cost-optimization/efficiency tools; "not yet able to provide such contribution [to revenue] in scale."
• Competitive Risks: "Tail end brands" facing accelerated consolidation and potential market exits.

Management Tone on the Future:

• Confidence: Moderate to cautious on short-term macro environment ("under pressure," "bottom," "stable") but confident in structural opportunities (NEV growth, AI, cross-border).
• Strategic Shift: Emphasis on "high-quality" growth, standardization, and ecosystem synergy over pure volume; moving from traffic-based to service-based models.
• Shareholder Returns: Confident and committed to "dual shareholder return framework" (dividends + buybacks); cash reserves deemed "sufficient" to support these actions.
• Hedges: Frequent use of "we believe," "likely to be," and "expected," acknowledging the "deep structural adjustments" and "uncertainties" in the industry.

Miscellaneous:

• Geographic Focus: Dual-platform strategy for domestic and overseas markets; expansion in high-tier cities (via malls) and low-tier markets (via franchises).
• Financial Reporting: All figures discussed in RMB unless noted; Non-GAAP measures reconciled in press release.
• Technology: "Cangjie" proprietary large model and "Tiantian" auction system forming the technical backbone of new service platforms.