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With its efforts in implementing the ecosystem-based strategy paying off, the firm rolls out US$200 million share repurchase plan
BEIJING, Nov. 18, 2021 /PRNewswire/ -- On the evening of November 18, 2021 (Beijing Time), Autohome Inc., a leading online destination for automobile consumers in China, announced its unaudited financial results for the third quarter of 2021. According to the financial report, total revenue reached 1.764 billion yuan (approx. US$280 million) during the reporting period, with the proportion of revenue from new businesses increasing to 32 per cent. The adjusted net profit was 583 million yuan (approx. US$91.3 million) and the adjusted net profit margin stood at 33.1 per cent. In addition, in view of its greatly undervalued share price, Autohome's board of directors announced a plan to repurchase US$200 million worth of shares in the open market with its own funds over the next 12 months.
Autohome facilitates implementation of its upgraded strategy via an in-depth collaboration with Ping An Insurance Group's ecosystem
Autohome announced its new upgraded strategy on September 15, an ecosystem-based strategy designed to create an integrated service platform for consumers to view, buy, sell and use vehicles through an in-depth collaboration between and integration of Autohome and Ping An's ecosystems. With the further implementation of the upgraded strategy, the firm has achieved multiple outcomes.
Autohome has developed a strategy which involves investigating and developing more gameplay models, creating more scenarios and reaching more consumers with the end goal of meeting the various expectations of end users. This has resulted in a significant increase in the proportion of original videos and live content while facilitating cross-industry collaborations and offline marketing events, many of which are already in full swing. As of the end of September, the platform's daily active mobile users had reached 43.87 million, up 12.3 per cent from the same period of the prior year, ranking it No.1 in the automotive vertical media sector.
Thanks to Autohome's efforts in deepening partnerships with electric vehicle (EV) manufacturers, revenue from EV brands showed a year on year rise of 104 per cent during the third quarter of 2021, with the number of such brands with which the company has established relationships growing to 22 during the first three quarters of the year. In addition, the firm's secondhand car trading platform, in cooperation with ttpai.cn, an online auction platform for used vehicles, has continuously increased the average revenue per vehicle by improving the operating efficiency through a streamlining of the workflow. Notably, with a comprehensive enhancement in the quality of leads, data and management procedures, the customer base of secondhand car merchants expanded by 77 per cent year on year as of the end of the third quarter. Benefiting from the content and technology upgrading of its smart 3.0 system, Autohome's product penetration gained 36 per cent on a year-on-year basis. Moreover, with the launch of a full array of digital dealer solutions that include 12 products across three key categories, the number of products purchased by a single dealer increased from 3.01 to 3.55 on average.
With the upcoming rebound in the Chinese automobile market, Autohome launches US$200 share repurchase plan
During the third quarter of the year, with the automotive sector continuously buffeted by multiple negative factors, including the lack of chips and rising prices for raw materials, Autohome's traditional business faced challenges as a result of carmakers delaying their expectations for capacity recovery and reducing marketing budgets. Nevertheless, according to industry forecasts, the market is expected to return to a normal growth rate by the first quarter of 2022.
Facing increasing pressure from the industry, Autohome is seeking to achieve breakthrough growth by facilitating the implementation of its strategies. In addition, given its greatly undervalued share price, Autohome's board of directors announced a plan to repurchase US$200 million worth of shares in the open market with its own funds over the next 12 months. According to Autohome, backed by sufficient capital and stable profitability, the share repurchase plan demonstrates the firm's strong confidence in its future growth.
"We firmly believe that the current challenges facing the automotive sector are temporary and that our media advertising business will improve once the Chinese auto market gets back on a growth track," indicated Autohome chairman and CEO Long Quan. "Going forward, Autohome plans to continue strengthening ties with Ping An while steadily promoting the growth of the firm's innovative businesses based on its healthy business model and solid business foundation in addition to aggressively expanding into new fields, with the aim of achieving long-term sustainable growth."
SOURCE Autohome Inc.