AUTOHOME-S(02518.HK)：STRATEGIC GROWTH IN NEW ENERGY AMID MARKET CHALLENGES-格隆汇

机构：国泰君安国际
研究员：Teddy Lin

We maintain "Buy" investment rating and revise our target price to HK$53.60; representing 13.0x 2024 P/E. Autohome reported total revenues of RMB3.48 bn in 1H2024, up 3.4% YoY. Online marketing and other business segments maintained double-digit growth in 1H2024, contributing 33.7% to total revenue. Data products and new energy sectors showed strong growth. Adjusted net profit was RMB1.05 bn in 1H2024, with a net profit margin of 31.3%. We project Autohome's EPS to be RMB3.44, RMB3.75, and RMB3.92 for 2024-2026, respectively.
We revise our revenue forecasts for Autohome's Media Services segment downwards by 13.7%, 15.4%, and 15.5% for 2024-2026, respectively. In contrast, we revise upwards our revenue forecasts for the Lead Generation Services by 1% for 2024-2026. For the Online Marketplace Services segment revenue, we anticipate an increase of 2% each year. Overall, we project 2024-2026 total revenue to decline by 2.3%, 2.7%, and 2.6%, respectively.
The reason for this adjustment is the unexpectedly severe price war among original equipment manufacturers (OEMs), which decreased both advertising income and the pre-owned vehicle market. We foresee a potential worsening of the new energy vehicle (“NEV”) industry in 3Q2024. However, early signals suggest an improvement by 4Q2024. Despite these positive developments, the reduction in high-margin advertising revenues is likely to lead to a consistent drop in profit margins for the NEV industry in the latter half of 2024. We therefor adjust our earnings per share (EPS) projections downward for 2024-2026 by 19.5%, 17.6%, and 18.4%, respectively.
By integrating online and offline services, leveraging AI for enhanced data analysis, and facilitating sales between dealerships and car manufacturers, Autohome demonstrates its commitment to long-term growth. Autohome has established a direct and franchise sales network across East, South, Southwest, and North China in the NEV sector after a year of experimenting with its franchise model, and added 8 NEV service stations in 1H2024. The Company strategically uses these service stations as nodes, extending its reach to surrounding areas through "satellite stores". This is in alignment with national initiatives to promote NEV services. Revenue from services related to NEVs has grown from less than 5% in 2021 to approximately 30% by 2Q2024, reflecting rapid market penetration in the NEV service chain and robust commercial partnerships with leading brands. This effectively addressed market concerns about establishing new collaborative relationships.