Release Date: May 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Autohome Inc (NYSE:ATHM) achieved a 72.6% year-over-year increase in revenues from new energy vehicles (NEVs), including their new retail business. The company has successfully implemented AI technology across various platforms, enhancing user experience and decision-making efficiency. Autohome Inc (NYSE:ATHM) expanded its content offerings, including travel logs and camping, to enrich user experience and broaden its automotive-related content. The company reported a robust balance sheet with cash equivalents and short-term investments totaling 21.93 billion as of March 31, 2025. Autohome Inc (NYSE:ATHM) plans to aggressively expand its offline new retail presence, aiming to exceed 500 total locations by the end of 2025.

Negative Points

The company's gross margin decreased to 78.3% in the first quarter, down from 81.3% in the same period last year. Operating profit declined to 233 million in the first quarter, compared to 276 million for the same period last year. Adjusted net income attributable to Autohome Inc (NYSE:ATHM) decreased to 421 million in the first quarter from 494 million in the corresponding period of 2024. Non-GAAP basic and diluted earnings per share both decreased to 0.88 from 1.02 in the corresponding period of 2024. The ongoing price war in the auto industry is expected to continue in the short run, impacting dealer profitability and leading to potential market instability.

Q & A Highlights

Warning! GuruFocus has detected 5 Warning Signs with ATHM.

Q: What is the outlook for the auto industry in 2025, and how does it impact Autohome? A: Song Yao, CEO, explained that the auto industry is experiencing structural adjustments with NEVs as the main growth driver. The market is expected to see modest growth supported by policies, and automakers are shifting towards intelligent transformation. Autohome will focus on user demand, improving user experience, and expanding its new retail network to drive future growth.

Q: Can you provide an update on the new retail business and its expansion plans? A: Song Yao, CEO, stated that Autohome has established 29 space stores and 170 franchise satellite stores. The company plans to expand aggressively, aiming to exceed 500 locations by the end of 2025, focusing on lower-tier and rural markets. This expansion will support the adoption of NEVs and enhance the automotive consumer experience.

Q: What is the status of the Haier Group's acquisition of a stake in Autohome? A: The equity transfer of Haier Group's acquisition of a 41.91% stake in Autohome is still under regulatory approval. The company will update shareholders once the transaction is completed. Autohome remains committed to its online-to-offline new retail model and NEV development strategy.

Story Continues

Q: How is Autohome addressing the challenges faced by dealers due to the price war and declining ICE vehicle sales? A: Autohome is helping dealers improve sales efficiency and pivot towards NEVs. The company believes that restructuring and innovation will allow leading dealers to maintain market presence, and the market will return to a healthy track after temporary adjustments.

Q: What impact do trade tensions have on China's auto market and Autohome's business? A: The trade war may cause price fluctuations, particularly affecting American auto brands. However, the domestic market is largely driven by NEVs, with significant market shares from European and Japanese brands. The impact on Autohome is limited as its main business focuses on the domestic market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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