Core Viewpoint - Tuhu Car Maintenance reported a steady revenue growth of 10.5% year-on-year in the first half of 2025, driven by store network expansion and high-growth businesses such as new energy and quick repair services [1][2]. Group 1: Financial Performance - The company achieved a revenue of 7.877 billion yuan in the first half of 2025, with a gross profit of 1.982 billion yuan, resulting in a gross margin of 25.2% [1]. - Adjusted net profit reached 410 million yuan, reflecting a year-on-year increase of 14.6% [1]. - Core businesses, including tires and chassis components, as well as automotive maintenance, experienced approximately 11% year-on-year growth [1]. Group 2: Business Expansion and User Engagement - The platform's new energy vehicle user base expanded to 3.4 million, a year-on-year increase of 83.5%, with a penetration rate exceeding 12% [2]. - The total number of stores reached 7,205, achieving a 70% coverage rate in counties with over 20,000 passenger vehicles [2]. - The company has strengthened user operations, with 26.5 million transaction users and a repurchase rate of 64% [2]. Group 3: Operational Efficiency and Technological Advancements - The company enhanced operational efficiency through supply chain intelligence upgrades and AI technology, significantly improving overall efficiency [2]. - The automation warehouse in Guangzhou saw a 2.5-fold increase in efficiency, and the introduction of unmanned delivery vehicles was noted [2]. - The intelligent customer service system, based on the DeepSeek model, improved pre-sale conversion rates by 2 percentage points and reduced labor costs by 18% [2]. Group 4: Investment Outlook - In the context of a fragmented and competitive automotive aftermarket, Tuhu Car Maintenance is expected to maintain its leading position through digital capabilities, standardized services, and supply chain advantages [2]. - Projected adjusted net profits for 2025-2027 are estimated at 809 million yuan, 992 million yuan, and 1.203 billion yuan, respectively [2]. - The target price is set at 23.62 HKD, based on a 22x PE ratio for the adjusted net profit in 2025, maintaining a "recommended" rating [2].

Group 1 - The core viewpoint of the report maintains a "recommend" rating for Tuhu-W (09690), with adjusted net profit estimates for 2025-2027 at 8.09 billion, 9.92 billion, and 12.03 billion respectively, and a target price of 23.62 HKD [1] - The company achieved a revenue of 78.77 billion in the first half of 2025, representing a year-on-year growth of 10.5%, with a gross profit of 19.82 billion and a gross margin of 25.2% [1] - The revenue growth is attributed to the expansion of the store network and the contribution from high-growth businesses such as new energy and quick repair services, with core businesses like tires and automotive maintenance also showing approximately 11% year-on-year growth [1] Group 2 - The company's new energy service ecosystem is rapidly expanding, with platform users reaching 3.4 million, a year-on-year increase of 83.5%, and a penetration rate exceeding 12% [2] - The total number of stores has reached 7,205, covering 70% of counties with more than 20,000 passenger vehicles, indicating a strong presence in lower-tier markets [2] - User operations are being strengthened, with 26.5 million transaction users and a repurchase rate of 64%, showcasing significant ecological synergy [2] Group 3 - The company is enhancing efficiency through supply chain intelligence upgrades and AI technology, with automation warehouse efficiency in Guangzhou increasing by 2.5 times and the introduction of unmanned delivery vehicles [3] - The intelligent customer service system, based on the DeepSeek model, has improved pre-sale conversion rates by 2 percentage points while reducing labor costs by 18% [3] - The company is actively leveraging the "old-for-new" policy benefits, achieving a single-day sales record of over 1.5 billion during the 618 shopping festival [3]

Group 1 - The company maintains a "recommended" rating with projected adjusted net profits of 8.09 billion, 9.92 billion, and 12.03 billion for 2025-2027, and a target price of 23.62 HKD [1] - In the first half of 2025, the company achieved revenue of 78.77 billion, a year-on-year increase of 10.5%, with a gross profit of 19.82 billion and a gross margin of 25.2% [1] - The revenue growth is attributed to the expansion of the store network and contributions from high-growth sectors such as new energy and quick repair services [1] Group 2 - The company's new energy service ecosystem is rapidly expanding, with platform users reaching 3.4 million, a year-on-year increase of 83.5%, and a penetration rate exceeding 12% [2] - The total number of stores has reached 7,205, covering 70% of counties with more than 20,000 passenger vehicles [2] - User operations are being strengthened, with 26.5 million transaction users and a repurchase rate of 64% [2] Group 3 - The company is enhancing efficiency through supply chain intelligence upgrades and AI technology, significantly improving overall operational efficiency [3] - The automation warehouse efficiency in Guangzhou has increased by 2.5 times, and the introduction of unmanned delivery vehicles is underway [3] - The intelligent customer service system, based on the DeepSeek model, has improved pre-sale conversion rates by 2 percentage points while reducing labor costs by 18% [3]

Investment Rating - The report maintains a "Recommended" investment rating for the company, indicating an expected outperformance of the benchmark index by 10%-20% over the next six months [12]. Core Insights - The company achieved a revenue of 7.877 billion yuan in the first half of 2025, representing a year-on-year growth of 10.5%. The gross profit was 1.982 billion yuan, with a gross margin of 25.2%, slightly down from the previous year [1][7]. - Adjusted net profit reached 410 million yuan, reflecting a year-on-year increase of 14.6%. The growth in revenue is attributed to the expansion of the store network and the contribution from high-growth segments such as new energy and quick repair services [7]. - The company has expanded its new energy service ecosystem, with 3.4 million users of electric vehicles, a year-on-year increase of 83.5%, and a penetration rate exceeding 12% [7]. - The report highlights the company's operational efficiency improvements, with total operating expense ratio decreasing year-on-year, and AI technology reducing customer service labor costs by 18% [7]. - The company is expected to achieve adjusted net profits of 809 million yuan, 992 million yuan, and 1.203 billion yuan for the years 2025, 2026, and 2027, respectively [7]. Financial Summary - For 2025, the company is projected to have total revenue of 16.478 billion yuan, with a year-on-year growth rate of 11.7% [3]. - The adjusted net profit for 2025 is estimated at 809 million yuan, with a growth rate of 31.6% compared to the previous year [3]. - The earnings per share (EPS) is forecasted to be 0.74 yuan for 2025, with a price-to-earnings (P/E) ratio of 23.8 [3][4].

[Company Information](index=3&type=section&id=Company%20Information) [Company Basic Information](index=3&type=section&id=Company%20Basic%20Information) Tuhu Car Inc. is a limited company incorporated in the Cayman Islands, primarily offering automotive products and services in China via its app, website, and WeChat mini-program - Tuhu Car Inc. was incorporated in the Cayman Islands on July 8, 2019, primarily providing automotive products and services in China through its online platforms[3](index=3&type=chunk)[192](index=192&type=chunk) - Mr. Chen Min serves as the Chairman of the Board and Chief Executive Officer, with Ernst & Young as the auditor[6](index=6&type=chunk) [Dual-Class Share Structure](index=4&type=section&id=Dual-Class%20Share%20Structure) The company employs a dual-class share structure, granting Class B shares ten votes per share compared to one vote per Class A share, ensuring voting control for the Differentiated Voting Rights Beneficiary (Mr. Chen Min) to pursue long-term strategies without majority economic interest - The company adopts a dual-class share structure, with Class A shares having one vote per share and Class B shares having ten votes per share (except for specific resolutions), aiming to ensure the continuous leadership of the Differentiated Voting Rights Beneficiary (Mr. Chen Min)[9](index=9&type=chunk) - As of the Latest Practicable Date, Mr. Chen Min owned and controlled approximately **48.27%** of the company's issued share voting rights[11](index=11&type=chunk) - Class B shares are convertible into Class A shares on a one-to-one basis, and differentiated voting rights will terminate under specific circumstances, such as the beneficiary's death or cessation of board membership[11](index=11&type=chunk) [Financial Summary and Key Operating Metrics](index=6&type=section&id=Financial%20Summary%20and%20Key%20Operating%20Metrics) [Financial Summary](index=6&type=section&id=Financial%20Summary) In the first half of 2025, the company's revenue grew by **10.5%** year-on-year to **RMB 7.877 billion**, with gross profit increasing by **7.4%** to **RMB 1.982 billion**, demonstrating robust profitability amidst market adjustments 2025 H1 Financial Summary (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Period Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 7,876,938 | 7,126,161 | 10.5 | | Gross Profit | 1,982,131 | 1,845,765 | 7.4 | | Operating Profit | 221,929 | 211,884 | 4.7 | | Profit for the Period | 306,535 | 284,332 | 7.8 | | Adjusted EBITDA | 483,349 | 449,619 | 7.5 | | Adjusted Net Profit | 410,460 | 358,164 | 14.6 | [Key Operating Metrics](index=6&type=section&id=Key%20Operating%20Metrics) As of June 30, 2025, the number of Tuhu workshops reached **7,205**, a **14.2%** year-on-year increase, while transacting and registered users also grew significantly by **23.8%** and **18.8%** respectively, indicating continuous user base expansion 2025 H1 Key Operating Metrics | Indicator | June 30, 2025 | June 30, 2024 | Period Change (%) | | :--- | :--- | :--- | :--- | | Tuhu Workshop Stores | 7,205 | 6,311 | 14.2 | | - Self-operated Stores | 160 | 149 | 7.4 | | - Franchise Stores | 7,045 | 6,162 | 14.3 | | Transacting Users (millions) | 26.5 | 21.4 | 23.8 | | Registered Users (millions) | 150.3 | 126.4 | 18.8 | [Chairman's Report](index=7&type=section&id=Chairman's%20Report) [Business Review](index=7&type=section&id=Business%20Review) In the first half of 2025, China's automotive service industry faced significant adjustments with contracting market demand and increased consumer focus on value, while Tuhu Car achieved high-quality growth through standardized service networks, digital efficiency, and government policy collaboration - China's automotive service industry experienced a period of deep adjustment in the first half of 2025, with a temporary contraction in market demand, increased consumer focus on value, and growing demand for car wash, detailing, and quick repair services for new energy vehicles and existing car models[15](index=15&type=chunk) - Tuhu Car achieved high-quality development through its standardized service network, digital efficiency, and active response to government "trade-in" policies, expanding its store count to over **7,000**, with transaction user satisfaction exceeding **95%** and a repurchase rate of **64%**[16](index=16&type=chunk) [Financial Summary](index=7&type=section&id=Financial%20Summary_Chairman's%20Report) In the first half of 2025, Tuhu Car's total revenue reached **RMB 7.9 billion**, a **10.5%** year-on-year increase, maintaining its leading position in China's independent automotive service market, while adjusted net profit grew by **14.6%** to **RMB 410 million** and free cash flow increased by **32.2%** to **RMB 347 million** - Total revenue in the first half of 2025 reached **RMB 7.9 billion**, a **10.5%** year-on-year increase, maintaining its position as the largest independent automotive service market player in China[17](index=17&type=chunk) - Adjusted net profit **RMB 410 million**, a **14.6%** year-on-year increase; free cash flow **RMB 347 million**, a **32.2%** year-on-year increase[20](index=20&type=chunk) - As of the end of the reporting period, the company held approximately **RMB 7.5 billion** in total cash reserves, indicating ample funding[20](index=20&type=chunk) [Platform Operations](index=8&type=section&id=Platform%20Operations) As of the end of the first half of 2025, Tuhu Car's cumulative twelve-month transacting users reached **26.5 million** and average monthly active users reached **13.5 million**, with the company enhancing user experience through AI-powered smart customer service, leading to improved conversion rates and reduced labor costs - As of the end of the first half of 2025, cumulative twelve-month transacting users reached **26.5 million**, and average monthly active users reached **13.5 million**, representing year-on-year increases of **23.8%** and **17.5%** respectively[21](index=21&type=chunk) - Han Han was invited as the first "Professional Brand Ambassador" to reinforce the brand image of "Professional Tuhu, Reliable Car Maintenance"[21](index=21&type=chunk) - Continuous collaboration with authoritative institutions for product testing and establishment of the first professional film product testing laboratory among domestic automotive service platforms[22](index=22&type=chunk) - Deep renovation of the smart customer service system based on the DeepSeek large model resulted in a **2 percentage point** increase in pre-sales conversion rate, a **7 percentage point** increase in smart customer service satisfaction, and an **18%** reduction in customer service labor costs[25](index=25&type=chunk) [Store Expansion and Operations](index=9&type=section&id=Store%20Expansion%20and%20Operations) As of June 30, 2025, Tuhu workshop stores expanded to **7,205** across **320** prefecture-level and **1,855** county-level administrative divisions, with the company supporting franchisees through various programs, leading to improved profitability and increased same-store fulfillment user numbers - As of June 30, 2025, the number of Tuhu workshop stores reached **7,205**, covering **320** prefecture-level administrative divisions and **1,855** county-level administrative divisions nationwide, with county-level coverage increasing to **70%**[27](index=27&type=chunk) - Launched the "Youth Automotive Service Talent Entrepreneurship Support Program" and the "Ten Billion Subsidy, Ten Thousand Stores Together" program to support franchisee development[28](index=28&type=chunk) - In the first half of the year, the profitability ratio of new franchised workshop stores increased by over **5 percentage points** year-on-year, same-store fulfillment user numbers grew by over **7%** year-on-year, and approximately **90%** of franchised stores operating for more than six months remained profitable[31](index=31&type=chunk) - Innovatively launched the "Smart Quotation" function, strengthened store capability building, and ensured service quality through the "New Store Improvement Program" and refined management[30](index=30&type=chunk)[31](index=31&type=chunk) [Products and Services](index=11&type=section&id=Products%20and%20Services) [Tires](index=11&type=section&id=Tires) Facing sluggish growth in the replacement tire industry, Tuhu Car strengthened its market position by deepening cooperation with international brands and leveraging domestic brands, achieving double the year-on-year sales growth in lower-tier markets compared to higher-tier cities - The tire business consolidated its market-leading position by deepening cooperation with international brands like Michelin and Continental, and by capitalizing on the growth dividends of domestic brands[33](index=33&type=chunk) - In lower-tier markets, the year-on-year growth rate of tire sales volume was twice that of higher-tier cities, demonstrating the effectiveness of refined recommendation strategies[33](index=33&type=chunk) [Car Maintenance](index=11&type=section&id=Car%20Maintenance) In car maintenance, Tuhu Car collaborated with international brands to offer high-quality, low-price engine oil products and upgraded its private label entry-level products, resulting in over **60%** year-on-year growth in low-price segment engine oil sales and user volume, while battery services expanded with doubled coverage for "28-minute guaranteed delivery or compensation" service - In the engine oil category, Tuhu collaborated with international brands to launch high-quality, low-price products and upgraded its private label offerings, leading to a significant year-on-year increase of over **60%** in low-price segment engine oil sales volume and user numbers in the first half of the year[34](index=34&type=chunk) - Battery services optimized rapid on-site installation service network coverage, doubling the number of car owners covered by the "28-minute guaranteed delivery or compensation" service year-on-year[37](index=37&type=chunk) - Brake disc and pad sales increased by over **40%** year-on-year, and air filter sales year-on-year increased by approximately **30%**[37](index=37&type=chunk) [Other Products and Services](index=12&type=section&id=Other%20Products%20and%20Services) Quick repair service revenue surged by over **60%** year-on-year, maintaining over **10%** penetration among Tuhu transacting users, while deep detailing services saw private label product revenue exceed **70%**, with approximately **60%** of sales coming from new car owners - Quick repair service revenue increased by over **60%** year-on-year, maintaining a penetration rate of over **10%** among Tuhu transacting users[38](index=38&type=chunk) - Private label product revenue for deep detailing services exceeded **70%**, with approximately **60%** of sales generated from new car owners with vehicles less than one year old[39](index=39&type=chunk) [New Energy Vehicle Business](index=13&type=section&id=New%20Energy%20Vehicle%20Business) Tuhu Car actively expanded its new energy vehicle business by introducing specialized tires and hybrid engine oils, and offering power battery inspection and out-of-warranty "three-electric" repair services, leading to a **83.5%** year-on-year increase in new energy vehicle transacting users to **3.4 million** - Launched new energy vehicle-specific tires, accounting for over **15%** of private label product sales, and offered "lifetime warranty" services[41](index=41&type=chunk) - New energy vehicle hybrid engine oil paying user volume increased by over **120%** year-on-year[41](index=41&type=chunk) - Initiated power battery inspection and out-of-warranty "three-electric" (battery, motor, electronic control) repair services for new energy vehicles[42](index=42&type=chunk) - For the twelve months ended June 30, 2025, the number of new energy vehicle transacting users reached **3.4 million**, an **83.5%** year-on-year increase, accounting for over **12%** of the platform's total transacting users[42](index=42&type=chunk) [Supply Chain and Logistics](index=14&type=section&id=Supply%20Chain%20and%20Logistics) As of June 30, 2025, Tuhu Car operated **258** self-operated delivery routes, covering **32** regional warehouses, **662** front-end warehouses, and **7,205** workshop stores, achieving an **83%** same-day/next-day delivery rate and a **0.5 percentage point** reduction in overall fulfillment cost ratio, while exploring smart logistics with automated warehouses and unmanned delivery vehicles - As of June 30, 2025, the company operated **258** self-operated delivery routes, covering **32** regional warehouses, **662** front-end warehouses, and **7,205** workshop stores[44](index=44&type=chunk) - In the first half of the year, the same-day/next-day delivery rate increased by approximately **6 percentage points** to **83%**, and the overall fulfillment cost ratio decreased by **0.5 percentage points** year-on-year[44](index=44&type=chunk) - The Guangzhou automated benchmark warehouse commenced trial operations, expected to reduce labor costs by **60%** and increase efficiency by **2.5 times**[44](index=44&type=chunk) - Exploring smart logistics and unmanned delivery, with unmanned delivery vehicles deployed in cities like Nanjing and Chengdu[45](index=45&type=chunk) [Environmental, Social and Governance](index=14&type=section&id=Environmental,%20Social%20and%20Governance) In the first half of 2025, Tuhu Car actively fulfilled its corporate social responsibility by joining the "Caihua Convention" to support people with disabilities, launching public service initiatives, and collaborating with the Central Committee of the Communist Youth League to foster young talent in the automotive service industry - Joined the "Caihua Convention" to promote services for people with disabilities and launched public service projects such as "Open During Spring Festival" and "Gaokao Assistance"[46](index=46&type=chunk) - Collaborated with a direct affiliate of the Central Committee of the Communist Youth League to launch the "Youth Automotive Service Talent Entrepreneurship Support Program," nurturing young talent in the automotive service industry[46](index=46&type=chunk) - Awarded "Top 100 Chain Enterprises in Life Service Industry" (first place in automotive aftermarket) and "Minhang District Corporate Social Responsibility Award"[48](index=48&type=chunk) [Concluding Remarks](index=15&type=section&id=Concluding%20Remarks) Founder, Chairman of the Board, and CEO Mr. Chen Min reaffirmed the company's commitment to long-termism, leading industry development with professionalism and resilience, and expressed gratitude to all supporters - Founder Mr. Chen Min emphasized the company's continued commitment to long-termism, leading industry development with professionalism and resilience[49](index=49&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) [Selected Consolidated Statement of Profit or Loss Items](index=16&type=section&id=Selected%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20Items) In the first half of 2025, the company's revenue increased by **10.5%** to **RMB 7.877 billion**, gross profit grew by **7.4%** to **RMB 1.982 billion**, profit for the period was **RMB 307 million**, and adjusted net profit was **RMB 410 million**, up **14.6%** year-on-year 2025 H1 Selected Consolidated Statement of Profit or Loss Items (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 7,876,938 | 7,126,161 | | Cost of Sales | (5,894,807) | (5,280,396) | | Gross Profit | 1,982,131 | 1,845,765 | | Operating Profit | 221,929 | 211,884 | | Profit for the Period | 306,535 | 284,332 | | Adjusted EBITDA | 483,349 | 449,619 | | Adjusted Net Profit | 410,460 | 358,164 | [Revenue Analysis](index=17&type=section&id=Revenue%20Analysis) Total revenue for the first half of 2025 increased by **10.5%** to **RMB 7.9 billion**, driven by a **10.8%** growth in automotive products and services revenue due to network expansion and customer base growth, and a **6.6%** increase in advertising, franchise, and other services revenue - For the six months ended June 30, 2025, total revenue was **RMB 7.9 billion**, an increase of **10.5%** compared to the same period in 2024[54](index=54&type=chunk) 2025 H1 Revenue Breakdown (RMB thousands) | Revenue Category | 2025 (RMB thousands) | Share (%) | 2024 (RMB thousands) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Automotive Products and Services | 7,362,402 | 93.5 | 6,643,280 | 93.2 | | - Individual End Customers | 6,632,821 | 84.2 | 5,970,096 | 83.8 | | -- Tires and Chassis Parts | 3,285,204 | 41.7 | 2,972,618 | 41.7 | | -- Car Maintenance | 2,906,881 | 36.9 | 2,617,725 | 36.7 | | -- Others | 440,736 | 5.6 | 379,753 | 5.4 | | - Qipeilong | 729,581 | 9.3 | 673,184 | 9.4 | | Advertising, Franchise and Other Services | 514,536 | 6.5 | 482,881 | 6.8 | | - Franchise Services | 424,177 | 5.4 | 378,265 | 5.3 | | - Advertising Services | 63,211 | 0.8 | 48,045 | 0.7 | | - Others | 27,148 | 0.3 | 56,571 | 0.8 | | **Total** | **7,876,938** | **100.0** | **7,126,161** | **100.0** | - Automotive products and services revenue increased by **10.8%**, primarily due to the expansion of the Tuhu workshop store network and a growing customer base, though average transaction value decreased as customers favored value-for-money products[59](index=59&type=chunk) - Advertising, franchise, and other services revenue increased by **6.6%**, mainly driven by the expansion of the franchised Tuhu workshop store network and enhanced brand influence, which boosted advertising service revenue[60](index=60&type=chunk) [Cost of Sales](index=19&type=section&id=Cost%20of%20Sales) In the first half of 2025, cost of sales increased by **11.6%** to **RMB 5.9 billion**, primarily due to a **12.0%** increase in automotive products and services costs and a **14.7%** increase in self-operated Tuhu workshop store and other sales costs, aligning with revenue growth and business expansion - Cost of sales for the six months ended June 30, 2025, was **RMB 5.9 billion**, an **11.6%** increase from the same period in 2024[63](index=63&type=chunk) 2025 H1 Cost of Sales Breakdown (RMB thousands) | Cost Category | 2025 (RMB thousands) | Share (%) | 2024 (RMB thousands) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Automotive Products and Services Cost | 5,681,323 | 72.1 | 5,070,842 | 71.1 | | - Individual End Customers | 5,108,569 | 64.8 | 4,517,023 | 63.3 | | -- Tires and Chassis Parts | 2,764,735 | 35.1 | 2,451,589 | 34.4 | | -- Car Maintenance | 1,997,853 | 25.3 | 1,756,918 | 24.7 | | -- Others | 345,981 | 4.4 | 308,516 | 4.2 | | - Qipeilong | 572,754 | 7.3 | 553,819 | 7.8 | | Advertising, Franchise and Other Services Cost | 51,501 | 0.6 | 68,294 | 1.0 | | Self-operated Tuhu Workshop Store and Other Costs | 161,983 | 2.1 | 141,260 | 2.0 | | **Total** | **5,894,807** | **74.8** | **5,280,396** | **74.1** | - The increase in cost of sales was primarily due to a **12.0%** increase in automotive products and services costs and a **14.7%** increase in self-operated Tuhu workshop store and other sales costs, consistent with business growth and network expansion[66](index=66&type=chunk) [Gross Profit and Gross Margin](index=20&type=section&id=Gross%20Profit%20and%20Gross%20Margin) In the first half of 2025, gross profit increased to **RMB 2 billion**, but gross margin slightly decreased from **25.9%** to **25.2%**, mainly due to lower gross margins in automotive products and services (especially tires and chassis parts and car maintenance) as consumers favored value-for-money products, partially offset by improved gross margins in car wash and detailing services and Qipeilong's automotive parts sales - In the first half of 2025, gross profit was **RMB 2 billion**, with gross margin slightly decreasing from **25.9%** in the same period of 2024 to **25.2%**[67](index=67&type=chunk) - The decline in gross margin was primarily attributed to lower gross margins in automotive products and services (especially tires and chassis parts and car maintenance) as consumers favored value-for-money products, and increased cost of sales for self-operated Tuhu workshop stores and other items[67](index=67&type=chunk) - The decrease in gross margin was partially offset by increased gross margin in car wash and detailing services and improved gross margin from Qipeilong's sales of automotive parts[67](index=67&type=chunk) [Other Income and Gains, Net](index=20&type=section&id=Other%20Income%20and%20Gains,%20Net) In the first half of 2025, other income and gains, net, significantly increased by **326.1%** to **RMB 89.7 million**, primarily driven by higher government grants, partially offset by foreign exchange losses due to currency fluctuations - Other income and gains, net, amounted to **RMB 89.7 million**, an increase of **326.1%** compared to **RMB 21.0 million** in the same period of 2024[68](index=68&type=chunk) - The increase was mainly due to higher government grants received in the first half of 2025, partially offset by foreign exchange losses[68](index=68&type=chunk) [Operating and Support Expenses](index=20&type=section&id=Operating%20and%20Support%20Expenses) In the first half of 2025, operating and support expenses increased by **9.4%** to **RMB 309.7 million**, mainly due to higher employee benefit expenses and share-based payments resulting from adjustments to remuneration schemes and share incentive grants - Operating and support expenses were **RMB 309.7 million**, an increase of **9.4%** compared to the same period in 2024[69](index=69&type=chunk) - The increase was primarily due to higher employee benefit expenses and share-based payments, resulting from adjustments to remuneration schemes and the granting of share incentives[69](index=69&type=chunk) [Research and Development Expenses](index=20&type=section&id=Research%20and%20Development%20Expenses) In the first half of 2025, research and development expenses increased by **13.8%** to **RMB 343.6 million**, mainly due to increased investment in R&D talent and higher cloud service procurement to support business expansion and AI technology deployment - Research and development expenses were **RMB 343.6 million**, an increase of **13.8%** compared to the same period in 2024[70](index=70&type=chunk) - The increase was primarily due to greater investment in R&D talent and increased cloud service procurement to support business scale expansion and artificial intelligence technology deployment[70](index=70&type=chunk) [Selling and Marketing Expenses](index=21&type=section&id=Selling%20and%20Marketing%20Expenses) In the first half of 2025, selling and marketing expenses increased by **12.5%** to **RMB 1.022 billion**, mainly due to higher advertising and promotion-related expenses (especially for online traffic acquisition and Tuhu workshop store promotional activities) and increased logistics fulfillment costs driven by higher order volumes - Selling and marketing expenses were **RMB 1.022 billion**, an increase of **12.5%** compared to the same period in 2024[73](index=73&type=chunk) - The increase was primarily due to higher advertising and promotion-related expenses (especially for online traffic acquisition and Tuhu workshop store promotional activities) and increased logistics fulfillment costs driven by higher order volumes[73](index=73&type=chunk) [General and Administrative Expenses](index=21&type=section&id=General%20and%20Administrative%20Expenses) In the first half of 2025, general and administrative expenses slightly increased to **RMB 194.2 million**, mainly due to higher transaction fees resulting from an overall increase in transaction volume - General and administrative expenses were **RMB 194.2 million**, a slight increase compared to the same period in 2024[74](index=74&type=chunk) - The increase was primarily due to higher transaction fees resulting from an overall increase in transaction volume[74](index=74&type=chunk) [Finance Income](index=21&type=section&id=Finance%20Income) In the first half of 2025, finance income remained relatively stable at **RMB 87.1 million** - Finance income remained relatively stable, amounting to **RMB 87.1 million** in the first half of 2025[75](index=75&type=chunk) [Income Tax Expense](index=21&type=section&id=Income%20Tax%20Expense) In the first half of 2025, income tax expense was **RMB 5.1 million**, an increase of **6.4%** compared to the same period in 2024, primarily due to higher taxable income - Income tax expense was **RMB 5.1 million**, an increase of **6.4%** compared to the same period in 2024[76](index=76&type=chunk) - The increase was primarily due to higher taxable income generated in the first half of 2025[76](index=76&type=chunk) [Profit for the Period](index=21&type=section&id=Profit%20for%20the%20Period) In the first half of 2025, profit for the period was **RMB 306.5 million**, an increase of **7.8%** compared to the same period in 2024 - Profit for the period in the first half of 2025 was **RMB 306.5 million**, an increase of **7.8%** compared to the same period in 2024[77](index=77&type=chunk) [Non-IFRS Measures](index=22&type=section&id=Non-IFRS%20Measures) The company uses adjusted EBITDA and adjusted net profit as non-IFRS measures to better assess operating performance, with adjusted EBITDA reaching **RMB 483 million** (up **7.5%**) and adjusted net profit reaching **RMB 410 million** (up **14.6%**) in the first half of 2025 - Adjusted EBITDA and adjusted net profit are used as non-IFRS measures to evaluate operating performance by excluding the impact of income tax expense, finance income, finance costs, depreciation and amortization, and share-based payment expenses[78](index=78&type=chunk)[82](index=82&type=chunk) 2025 H1 Non-IFRS Measures (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period | 306,535 | 284,332 | | Adjusted EBITDA | 483,349 | 449,619 | | Adjusted Net Profit | 410,460 | 358,164 | [Selected Consolidated Statement of Financial Position Data](index=24&type=section&id=Selected%20Consolidated%20Statement%20of%20Financial%20Position%20Data) As of June 30, 2025, the company's total assets were **RMB 12.612 billion**, total liabilities were **RMB 7.584 billion**, and net assets were **RMB 5.028 billion**, with net current assets increasing to **RMB 1.318 billion** June 30, 2025 Selected Consolidated Statement of Financial Position Data (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 4,376,303 | 4,431,963 | | Total Current Assets | 8,235,483 | 8,365,276 | | Total Current Liabilities | 6,917,819 | 7,198,929 | | Total Non-current Liabilities | 666,414 | 738,932 | | **Net Assets** | **5,027,553** | **4,859,378** | | Net Current Assets | 1,317,664 | 1,166,347 | [Trade Receivables](index=26&type=section&id=Trade%20Receivables) As of June 30, 2025, trade receivables amounted to **RMB 203.9 million**, a **9.8%** decrease from December 31, 2024, primarily due to enhanced monitoring and management of receivables collection, which effectively accelerated recovery - As of June 30, 2025, trade receivables were **RMB 203.9 million**, a **9.8%** decrease from December 31, 2024[89](index=89&type=chunk) - The decrease was primarily attributed to enhanced monitoring and management measures for receivables follow-up, effectively accelerating the collection of trade receivables[89](index=89&type=chunk) [Wealth Management Investments](index=27&type=section&id=Wealth%20Management%20Investments) As of June 30, 2025, total wealth management investments were **RMB 4.7 billion**, a **4.7%** decrease from December 31, 2024, mainly due to the redemption of some wealth management products upon maturity during the reporting period - As of June 30, 2025, total wealth management investments were **RMB 4.7 billion**, a **4.7%** decrease from December 31, 2024[94](index=94&type=chunk) - The decrease was primarily due to the redemption of some wealth management products upon maturity during the reporting period[94](index=94&type=chunk) [Restricted Cash](index=27&type=section&id=Restricted%20Cash) As of June 30, 2025, total restricted cash was **RMB 1.231 billion**, primarily comprising margin deposits held in designated bank accounts for the issuance of bills payable and letters of guarantee - As of June 30, 2025, total restricted cash was **RMB 1.231 billion**, a slight increase from December 31, 2024[97](index=97&type=chunk) - It primarily comprises margin deposits held in designated bank accounts for the issuance of bills payable and letters of guarantee[95](index=95&type=chunk) [Cash and Cash Equivalents](index=28&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, cash and cash equivalents amounted to **RMB 1.511 billion**, an increase from December 31, 2024, primarily including cash at bank and in hand, and time deposits with original maturities within three months - As of June 30, 2025, cash and cash equivalents were **RMB 1.511 billion**, an increase from December 31, 2024[100](index=100&type=chunk) - This primarily includes cash at bank and in hand (**RMB 1.356 billion**) and time deposits with original maturities within three months (**RMB 155 million**)[100](index=100&type=chunk) [Trade Payables and Bills Payable](index=28&type=section&id=Trade%20Payables%20and%20Bills%20Payable) As of June 30, 2025, total trade payables and bills payable were **RMB 4.3 billion**, a **4.1%** decrease from December 31, 2024, mainly due to the settlement of outstanding balances with certain suppliers in the first half of the year - As of June 30, 2025, total trade payables and bills payable were **RMB 4.3 billion**, a **4.1%** decrease from December 31, 2024[103](index=103&type=chunk) - The decrease was primarily attributed to the settlement of outstanding balances with certain suppliers in the first half of 2025[103](index=103&type=chunk) [Financial Ratios](index=29&type=section&id=Financial%20Ratios) In the first half of 2025, the company's debt-to-asset ratio decreased to **60.1%**, total revenue growth rate was **10.5%**, and gross margin was **25.2%**, with adjusted EBITDA margin and adjusted net profit margin at **6.1%** and **5.2%** respectively 2025 H1 Key Financial Ratios | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Debt-to-Asset Ratio | 60.1% | 62.0% | | Total Revenue Growth Rate | 10.5% | 9.3% | | Gross Margin | 25.2% | 25.9% | | Adjusted EBITDA Margin | 6.1% | 6.3% | | Adjusted Net Profit Margin | 5.2% | 5.0% | [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company's cash position, including cash and cash equivalents, wealth management investments, and restricted cash, remained stable at **RMB 7.5 billion**, with cash needs funded by operating cash flows and net proceeds from global offerings, maintaining a healthy liquidity profile - As of June 30, 2025, the company's cash position (including cash and cash equivalents, wealth management investments, and restricted cash) remained stable at **RMB 7.5 billion**[106](index=106&type=chunk) - The company primarily funds its cash needs through cash generated from business operations and net proceeds from the global offering, maintaining a prudent funding policy and a healthy liquidity position[106](index=106&type=chunk)[107](index=107&type=chunk) [Selected Consolidated Statement of Cash Flows Data](index=30&type=section&id=Selected%20Consolidated%20Statement%20of%20Cash%20Flows%20Data) In the first half of 2025, net cash flows from operating activities were **RMB 258 million**, net cash flows from investing activities were **RMB 305 million**, and net cash flows used in financing activities were **RMB 422 million**, with cash and cash equivalents at period-end totaling **RMB 1.511 billion** 2025 H1 Selected Consolidated Statement of Cash Flows Data (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 257,729 | 718,700 | | Net Cash Flows from Investing Activities | 304,691 | (1,981,416) | | Net Cash Flows Used in Financing Activities | (422,456) | (105,540) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 139,964 | (1,368,256) | | Cash and Cash Equivalents at End of Period | 1,511,139 | 1,355,581 | [Net Cash Flows from Operating Activities](index=30&type=section&id=Net%20Cash%20Flows%20from%20Operating%20Activities) In the first half of 2025, net cash flows from operating activities amounted to **RMB 258 million**, influenced by profit before tax, adjustments for non-cash and non-operating items (such as share-based payments and depreciation), and changes in working capital (including a decrease in trade payables and contract liabilities) - Net cash flows from operating activities for the first half of 2025 were **RMB 258 million**[110](index=110&type=chunk) - Primarily influenced by profit before tax, adjustments for non-cash items like share-based payment expenses and depreciation, and working capital changes such as decreases in trade payables and bills payable, and contract liabilities[110](index=110&type=chunk) [Net Cash Flows from Investing Activities](index=31&type=section&id=Net%20Cash%20Flows%20from%20Investing%20Activities) In the first half of 2025, net cash flows from investing activities were **RMB 305 million**, primarily due to proceeds from wealth management investments and interest received, partially offset by purchases of wealth management investments and property, plant, and equipment - Net cash flows from investing activities for the first half of 2025 were **RMB 305 million**[113](index=113&type=chunk) - Primarily due to proceeds from wealth management investments of **RMB 6.1 billion** and interest received of **RMB 79.8 million**, partially offset by purchases of wealth management investments of **RMB 5.8 billion** and purchases of property, plant, and equipment of **RMB 133.0 million**[113](index=113&type=chunk) [Net Cash Flows Used in Financing Activities](index=31&type=section&id=Net%20Cash%20Flows%20Used%20in%20Financing%20Activities) In the first half of 2025, net cash flows used in financing activities amounted to **RMB 422 million**, mainly due to the repurchase of ordinary shares totaling **RMB 347 million** and the principal portion of lease payments of **RMB 64.1 million** - Net cash flows used in financing activities for the first half of 2025 were **RMB 422 million**[114](index=114&type=chunk) - Primarily due to the repurchase of ordinary shares totaling **RMB 347 million** and the principal portion of lease payments of **RMB 64.1 million**[114](index=114&type=chunk) [Borrowings](index=31&type=section&id=Borrowings) As of June 30, 2025, the company's bank borrowings totaled **RMB 2.0 million**, all bearing floating interest rates with an average annual rate of **2.7%** - As of June 30, 2025, the company's bank borrowings totaled **RMB 2.0 million**[115](index=115&type=chunk) - All borrowings bear floating interest rates, with an average annual interest rate of **2.7%**[115](index=115&type=chunk) [Contingent Liabilities and Guarantees](index=31&type=section&id=Contingent%20Liabilities%20and%20Guarantees) As of June 30, 2025, the company had no material contingent liabilities or guarantees - As of June 30, 2025, the Group had no material contingent liabilities or guarantees[116](index=116&type=chunk) [Capital Expenditures](index=31&type=section&id=Capital%20Expenditures) In the first half of 2025, capital expenditures amounted to **RMB 135.9 million**, a **27.2%** decrease from the same period in 2024, with the company planning to fund future capital expenditures through internal resources - Capital expenditures for the first half of 2025 were **RMB 135.9 million**, a **27.2%** decrease compared to the same period in 2024[117](index=117&type=chunk) - The company plans to fund future capital expenditures through internal resources, including cash and cash equivalents and net proceeds from the global offering[117](index=117&type=chunk) [Capital Commitments](index=31&type=section&id=Capital%20Commitments) As of June 30, 2025, the company's capital commitments were **RMB 43.6 million**, a **35.8%** decrease from December 31, 2024, primarily related to the construction of new automated warehouses - As of June 30, 2025, the company's capital commitments were **RMB 43.6 million**, a **35.8%** decrease from December 31, 2024[118](index=118&type=chunk) - Capital commitments are primarily related to the construction of new automated warehouses and are planned to be paid within one to two years[118](index=118&type=chunk) [Pledge of Assets](index=32&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group had no pledge of assets - As of June 30, 2025, the Group had no pledge of assets[119](index=119&type=chunk) [Future Material Investment Plans and Capital Assets](index=32&type=section&id=Future%20Material%20Investment%20Plans%20and%20Capital%20Assets) As of the date of this interim report, the Group has no definite plans for material investments and capital assets to disclose, other than those outlined in the prospectus under "Future Plans and Use of Proceeds" - As of the date of this interim report, other than those disclosed in the prospectus under "Future Plans and Use of Proceeds," the Group has no definite plans for material investments and capital assets to disclose[120](index=120&type=chunk) [Foreign Exchange Risk and Hedging](index=32&type=section&id=Foreign%20Exchange%20Risk%20and%20Hedging) The company primarily operates in China with most transactions in RMB, and foreign currency risk mainly arises from USD-denominated bank balances; currently, there is no foreign currency hedging policy, but the company monitors exposure and considers hedging when necessary - The company primarily operates in China, with almost all operating transactions conducted in RMB, and foreign currency risk mainly arises from USD-denominated bank balances[121](index=121&type=chunk) - The company currently has no foreign currency hedging policy but closely monitors foreign exchange risk exposure and considers hedging when necessary[121](index=121&type=chunk) [Material Acquisitions, Significant Investments and Disposals](index=32&type=section&id=Material%20Acquisitions,%20Significant%20Investments%20and%20Disposals) For the six months ended June 30, 2025, the company did not undertake any material acquisitions, significant investments, or disposals of subsidiaries, associates, and joint ventures requiring disclosure under the Listing Rules - For the six months ended June 30, 2025, the company did not undertake any material acquisitions, significant investments, or disposals requiring disclosure under the Listing Rules[122](index=122&type=chunk) [No Material Changes](index=32&type=section&id=No%20Material%20Changes) Except as disclosed in this interim report, no material changes affecting the Group's performance occurred during the reporting period that require disclosure under paragraphs 40(2) and 46 of Appendix D2 to the Listing Rules - Except as disclosed in this interim report, no material changes affecting the Group's performance occurred during the reporting period that require disclosure under the Listing Rules[123](index=123&type=chunk) [Employees and Remuneration](index=32&type=section&id=Employees%20and%20Remuneration) As of June 30, 2025, the company had **4,461** employees, with total remuneration costs of **RMB 924 million**, and determines compensation based on qualifications, experience, position, and performance, while providing regular professional training - As of June 30, 2025, the company had **4,461** employees (compared to **4,506** in the same period of 2024)[124](index=124&type=chunk) - Total remuneration costs for the first half of 2025 were **RMB 924 million** (compared to **RMB 807 million** in the same period of 2024)[124](index=124&type=chunk) - The company determines remuneration based on employee qualifications, industry experience, job level, and performance, and provides regular professional training[124](index=124&type=chunk) [Other Information](index=33&type=section&id=Other%20Information) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=33&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, the company's directors and chief executive held interests in the company's shares, with Mr. Chen Min controlling approximately **48.27%** of the total voting rights through beneficial ownership and controlled corporations, and Mr. Hu Xiaodong also holding Class A shares Directors' and Chief Executive's Interests in Shares (as of June 30, 2025) | Director Name | Nature of Interest | Share Class | Number of Shares | Percentage of Interest in Each Class of Shares | | :--- | :--- | :--- | :--- | :--- | | Mr. Chen Min | Beneficial Owner | Class A Shares | 850,000 (L) | 0.1% | | | Interest in Controlled Corporation | Class A Shares | 13,518,284 (L) | 1.8% | | | Interest in Controlled Corporation | Class A Shares | 5,000,000 (S) | 0.7% | | | Interest in Controlled Corporation | Class B Shares | 67,918,860 (L) | 100.0% | | Mr. Hu Xiaodong | Beneficial Owner | Class A Shares | 300,000 (L) | 0.0(*)% | | | Interest in Controlled Corporation | Class A Shares | 25,223,685 (L) | 3.4% | | | Interest in Controlled Corporation | Class A Shares | 2,996,703 (S) | 0.4% | - Mr. Chen Min exercises voting control over the company through the dual-class share structure, where his Class B shares grant ten votes per share[127](index=127&type=chunk)[130](index=130&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=35&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, key shareholders, excluding directors, include Tencent, Image Architecture Investment (Hong Kong) Limited, Pandanus Associates Inc., Joy Capital GP, Ltd, Ubiquity Holdings Ltd., and Ju Xi Limited, holding significant interests in the company's Class A shares, with Tencent holding **21.1%** through its controlled entities Substantial Shareholders' Interests in Shares (as of June 30, 2025) | Shareholder Name | Nature of Interest | Share Class | Number of Shares | Percentage of Interest in Each Class of Shares | | :--- | :--- | :--- | :--- | :--- | | Tencent | Interest in Controlled Corporation | Class A Shares | 158,895,235 (L) | 21.1% | | Image Architecture Investment (Hong Kong) Limited | Beneficial Owner | Class A Shares | 151,792,350 (L) | 20.2% | | Pandanus Associates Inc. | Beneficial Owner | Class A Shares | 44,058,965 (L) | 5.9% | | Joy Capital GP, Ltd | Interest in Controlled Corporation | Class A Shares | 44,007,640 (L) | 5.8% | | Ubiquity Holdings Ltd. | Interest in Controlled Corporation | Class A Shares | 42,707,045 (L) | 5.7% | | Ju Xi Limited | Beneficial Owner | Class A Shares | 39,167,585 (L) | 5.2% | | | Interest in Controlled Corporation | Class A Shares | 453,132 (L) | 0.1% | - Tencent, through its controlled entities, holds **21.1%** of the company's Class A shares, making it one of the company's significant shareholders[132](index=132&type=chunk)[137](index=137&type=chunk) [Share Incentive Schemes](index=37&type=section&id=Share%20Incentive%20Schemes) The company has adopted three share incentive schemes—the 2019 Share Incentive Scheme, the Post-IPO Share Scheme, and the Second Post-IPO Share Scheme (Existing Shares)—to incentivize directors, employees, and consultants through the grant of share options and restricted share units - The company has adopted three share incentive schemes: the 2019 Share Incentive Scheme, the Post-IPO Share Scheme, and the Second Post-IPO Share Scheme (Existing Shares)[139](index=139&type=chunk) [2019 Share Incentive Scheme](index=37&type=section&id=2019%20Share%20Incentive%20Scheme) The 2019 Share Incentive Scheme was adopted on October 31, 2019, under which Mr. Chen Min and other employees/consultants exercised share options for **637,500** and **1,328,468** Class A shares respectively during the reporting period, with **27,138,884** Class A share options remaining unexercised as of June 30, 2025 2019 Share Incentive Scheme Share Option Movements (as of June 30, 2025) | Grantee Category | Unexercised as of Jan 1, 2025 (shares) | Exercised During Period (shares) | Unexercised as of June 30, 2025 (shares) | | :--- | :--- | :--- | :--- | | Directors (Mr. Chen Min) | 850,000 | 637,500 | 212,500 | | Other Grantees (Employees and Consultants) | 28,270,500 | 1,328,468 | 26,626,384 | | **Total** | **29,420,500** | **1,965,968** | **27,138,884** | [Post-IPO Share Scheme](index=38&type=section&id=Post-IPO%20Share%20Scheme) The Post-IPO Share Scheme, adopted on September 7, 2023, had **40,197,516** restricted shares/units and **8,143,714** share options available for grant as of June 30, 2025, with **30,268** restricted share units vested and **214,487** forfeited during the reporting period - As of June 30, 2025, the total number of restricted shares, restricted share units, and share options available for grant under the Post-IPO Scheme was **40,197,516** shares and **8,143,714** shares respectively[144](index=144&type=chunk) Post-IPO Share Scheme Restricted Share Unit Movements (as of June 30, 2025) | Grantee Category | Unvested as of Jan 1, 2025 (shares) | Vested During Period (shares) | Forfeited During Period (shares) | Unvested as of June 30, 2025 (shares) | | :--- | :--- | :--- | :--- | :--- | | Employees | 2,799,145 | 30,268 | 214,487 | 2,554,390 | Post-IPO Share Scheme Share Option Movements (as of June 30, 2025) | Grantee Category | Unexercised as of Jan 1, 2025 (shares) | Forfeited During Period (shares) | Unexercised as of June 30, 2025 (shares) | | :--- | :--- | :--- | :--- | | Employees | 1,018,094 | 49,582 | 968,512 | [Second Post-IPO Share Scheme (Existing Shares)](index=39&type=section&id=Second%20Post-IPO%20Share%20Scheme%20(Existing%20Shares)) The Second Post-IPO Share Scheme (Existing Shares), announced on June 25, 2024, allows for the grant of **33,000,000** Class A shares, with **132,220** new share options and **6,615,522** restricted share units granted during the reporting period, of which **547,091** vested and **426,694** forfeited - The Second Post-IPO Scheme allows for the grant of a total of **33,000,000** Class A shares, comprising only existing Class A shares[148](index=148&type=chunk) Second Post-IPO Share Scheme Share Option Movements (as of June 30, 2025) | Grantee Category | Unexercised as of Jan 1, 2025 (shares) | Granted During Period (shares) | Unexercised as of June 30, 2025 (shares) | | :--- | :--- | :--- | :--- | | Employees | 60,000 | 132,220 | 192,220 | Second Post-IPO Share Scheme Restricted Share Unit Movements (as of June 30, 2025) | Grantee Category | Unvested as of Jan 1, 2025 (shares) | Granted During Period (shares) | Vested During Period (shares) | Forfeited During Period (shares) | Unvested as of June 30, 2025 (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | | Employees | 12,411,101 | 6,615,522 | 547,091 | 426,694 | 18,052,838 | [Changes in Directors' Information](index=42&type=section&id=Changes%20in%20Directors'%20Information) Mr. Feng Wei resigned as an independent non-executive director and from related committee positions on June 29, 2025, with Ms. Zhou Lingfei appointed on the same day to fill the vacancy, serving as an independent non-executive director and chair of the Corporate Governance Committee - Mr. Feng Wei resigned as an independent non-executive director, Chairman of the Corporate Governance Committee, and a member of the Review Committee and Nomination Committee on June 29, 2025[155](index=155&type=chunk) - Ms. Zhou Lingfei was appointed on the same day as an independent non-executive director, Chairman of the Corporate Governance Committee, and a member of the Review Committee and Nomination Committee[155](index=155&type=chunk) [Interim Dividend](index=42&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[156](index=156&type=chunk) [Use of Net Proceeds](index=42&type=section&id=Use%20of%20Net%20Proceeds) The net proceeds from the global offering were approximately **HKD 1.2733 billion**, of which **HKD 179.4 million** had been utilized as of June 30, 2025, primarily for R&D, supply chain enhancement, and new energy vehicle service investments, with the remaining **HKD 275.8 million** expected to be utilized by December 31, 2025 - The net proceeds from the global offering were approximately **HKD 1.2733 billion**[157](index=157&type=chunk) Use of Net Proceeds from Global Offering (as of June 30, 2025) | Description | Percentage of Net Proceeds | Allocated Net Proceeds (HKD millions) | Amount Utilized as of June 30, 2025 (HKD millions) | Unutilized Amount as of June 30, 2025 (HKD millions) | Expected Timeline for Utilization of Unutilized Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Enhancing supply chain capabilities | 35.0% | 445.6 | 38.4 | 37.1 | December 31, 2025 | | R&D to enhance data analytics technology and improve operational efficiency | 20.0% | 254.7 | 101.1 | 45.8 | December 31, 2025 | | Expanding store network and franchisee base | 15.0% | 191.0 | 6.2 | – | – | | Investments in new energy vehicle services and tools/equipment | 20.0% | 254.7 | 10.5 | 154.5 | December 31, 2025 | | Working capital and general corporate purposes | 10.0% | 127.3 | 23.2 | 38.4 | December 31, 2025 | | **Total** | **100.0%** | **1,273.3** | **179.4** | **275.8** | | [Compliance with Corporate Governance Code](index=44&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company is committed to maintaining stringent corporate governance standards and has adopted the Corporate Governance Code, complying with all applicable code provisions during the reporting period, except for the combined roles of Chairman and CEO, which the Board believes ensures consistent leadership and efficient strategic planning - The company has adopted the Corporate Governance Code and regularly reviews its compliance since the listing date[160](index=160&type=chunk) - The roles of Chairman of the Board and Chief Executive Officer are combined and held by Mr. Chen Min, which deviates from code provision C.2.1, but the Board believes this arrangement ensures consistent leadership and efficient strategic planning[160](index=160&type=chunk) [Compliance with Model Code](index=44&type=section&id=Compliance%20with%20Model%20Code) The company has adopted the Model Code and confirmed that all directors complied with its required standards during the reporting period, with no instances of non-compliance found among senior management and employees - The company has adopted the Model Code and confirmed that all directors complied with it during the reporting period[161](index=161&type=chunk) - No instances of non-compliance with the Model Code were found among senior management and employees[161](index=161&type=chunk) [Purchase, Sale, Redemption or Issue of Listed Securities](index=44&type=section&id=Purchase,%20Sale,%20Redemption%20or%20Issue%20of%20Listed%20Securities) Between January 1, 2025, and August 20, 2025, the company's trustee purchased **19,400,100** Class A shares under the Second Post-IPO Scheme, with no other purchases, sales, redemptions, or issues of listed securities by the company or its subsidiaries during the reporting period - Between January 1, 2025, and August 20, 2025, the trustee appointed by the company purchased **19,400,100** Class A shares under the Second Post-IPO Scheme[162](index=162&type=chunk) - Other than the above disclosure, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, nor issued equity securities or sold treasury shares during the reporting period[162](index=162&type=chunk) [Corporate Governance Committee](index=45&type=section&id=Corporate%20Governance%20Committee) The company has established a Corporate Governance Committee, composed of three independent non-executive directors, responsible for ensuring operations align with shareholder interests, complying with Listing Rules, and maintaining the dual-class share structure, while reviewing and monitoring director training, conflict of interest management, and compliance advisor remuneration - The company has established a Corporate Governance Committee, comprising three independent non-executive directors, responsible for ensuring the company's operations and management align with the interests of all shareholders, comply with the Listing Rules, and maintain the dual-class share structure[165](index=165&type=chunk) - The committee reviewed and monitored matters such as director and senior management training, confirmation of Differentiated Voting Rights Beneficiaries, conflict of interest management, risks associated with the dual-class share structure, and remuneration of compliance advisors[166](index=166&type=chunk) [Independent Review Report](index=47&type=section&id=Independent%20Review%20Report) [Scope of Review](index=47&type=section&id=Scope%20of%20Review) Ernst & Young, the auditor, conducted a review of the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410, primarily involving inquiries with financial and accounting personnel and applying analytical and other review procedures, with a scope less than an audit - Ernst & Young, the auditor, conducted a review of the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[174](index=174&type=chunk) - The scope of review primarily included inquiries with personnel responsible for financial and accounting matters, and applying analytical and other review procedures, but was less extensive than an audit, thus no audit opinion is expressed[174](index=174&type=chunk) [Conclusion](index=47&type=section&id=Conclusion) Based on the review, the auditor found no matters that would lead them to believe the interim financial information was not prepared in all material respects in accordance with International Accounting Standard 34 - The auditor found no matters that would lead them to believe the interim financial information was not prepared in all material respects in accordance with International Accounting Standard 34[175](index=175&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=48&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company reported revenue of **RMB 7.877 billion**, gross profit of **RMB 1.982 billion**, and profit for the period of **RMB 307 million**, with basic and diluted earnings per share both at **RMB 0.4** Interim Condensed Consolidated Statement of Profit or Loss Summary (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 7,876,938 | 7,126,161 | | Cost of Sales | (5,894,807) | (5,280,396) | | Gross Profit | 1,982,131 | 1,845,765 | | Operating Profit | 221,929 | 211,884 | | Profit for the Period | 306,535 | 284,332 | | Basic Earnings Per Share Attributable to Owners of the Parent (RMB) | 0.4 | 0.4 | | Diluted Earnings Per Share Attributable to Owners of the Parent (RMB) | 0.4 | 0.3 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=49&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, profit for the period was **RMB 307 million**, with other comprehensive income, net, of **RMB 90.07 million**, resulting in a total comprehensive income for the period of **RMB 397 million** Interim Condensed Consolidated Statement of Comprehensive Income Summary (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period | 306,535 | 284,332 | | Other Comprehensive Income/(Loss) | 90,066 | (14,910) | | **Total Comprehensive Income for the Period** | **396,601** | **269,422** | [Interim Condensed Consolidated Statement of Financial Position](index=50&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets were **RMB 12.612 billion**, including **RMB 8.235 billion** in current assets, total liabilities were **RMB 7.584 billion**, including **RMB 6.918 billion** in current liabilities, and net assets amounted to **RMB 5.028 billion** Interim Condensed Consolidated Statement of Financial Position Summary (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 4,376,303 | 4,431,963 | | Total Current Assets | 8,235,483 | 8,365,276 | | Total Current Liabilities | 6,917,819 | 7,198,929 | | Total Non-current Liabilities | 666,414 | 738,932 | | **Net Assets** | **5,027,553** | **4,859,378** | [Interim Condensed Consolidated Statement of Changes in Equity](index=52&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, total equity attributable to owners of the parent was **RMB 5.030 billion**, with total comprehensive income for the period at **RMB 397 million**, and key changes including share-based payments, share repurchases, and exercise of share-based payments - As of June 30, 2025, total equity attributable to owners of the parent was **RMB 5.030 billion**[184](index=184&type=chunk) - Total comprehensive income for the period was **RMB 397 million**[184](index=184&type=chunk) - Key changes in equity included share-based payments (**RMB 104 million**), share repurchases (**RMB 332 million**), and the exercise of share-based payments[184](index=184&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=54&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash flows from operating activities were **RMB 258 million**, net cash flows from investing activities were **RMB 305 million**, and net cash flows used in financing activities were **RMB 422 million**, with cash and cash equivalents at period-end totaling **RMB 1.511 billion** Interim Condensed Consolidated Statement of Cash Flows Summary (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 257,729 | 718,700 | | Net Cash Flows from Investing Activities | 304,691 | (1,981,416) | | Net Cash Flows Used in Financing Activities | (422,456) | (105,540) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 139,964 | (1,368,256) | | **Cash and Cash Equivalents at End of Period** | **1,511,139** | **1,355,581** | [Notes to the Interim Condensed Consolidated Financial Information](index=57&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [Company Information](index=57&type=section&id=Company%20Information_Notes) Tuhu Car Inc. was incorporated in the Cayman Islands on July 8, 2019, operating as an investment holding company that primarily provides automotive products and services in China through its online platforms - Tuhu Car Inc. was incorporated in the Cayman Islands on July 8, 2019, primarily providing automotive products and services to consumers in China through its online interfaces, including its application, website, and WeChat mini-program[192](index=192&type=chunk) [Basis of Preparation](index=57&type=section&id=Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and should be read in conjunction with the annual consolidated financial statements as of December 31, 2024 - The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 Interim Financial Reporting[193](index=193&type=chunk) [Changes in Accounting Policies](index=57&type=section&id=Changes%20in%20Accounting%20Policies) The accounting policies used for the interim condensed consolidated financial information are consistent with the 2024 annual consolidated financial statements, with the initial adoption of amended IAS 21 "Lack of Exchangeability" having no material impact as the Group's transaction currencies are convertible - The amended International Accounting Standard 21 "Lack of Exchangeability" was adopted for the first time, with no impact on the interim condensed consolidated financial information[194](index=194&type=chunk)[195](index=195&type=chunk) [Operating Segment Information](index=58&type=section&id=Operating%20Segment%20Information) No operating segment or further geographical segment information is presented as the Group's revenue, reported results, and total assets are derived from a single operating segment in China, with no single customer accounting for over **10%** of total revenue - The Group's revenue, reported results, and total assets are all derived from a single operating segment (China), thus no operating segment and further geographical segment information is presented[197](index=197&type=chunk)[198](index=198&type=chunk) - No single customer accounted for more than **10%** of the Group's total revenue during the period[199](index=199&type=chunk) [Revenue](index=58&type=section&id=Revenue_Notes) In the first half of 2025, revenue from customer contracts totaled **RMB 7.877 billion**, comprising **RMB 7.362 billion** from automotive products and services and **RMB 515 million** from advertising, franchise, and other services, with most revenue from automotive products and services recognized at a point in time, while other services are recognized over time 2025 H1 Revenue Analysis (RMB thousands) | Revenue Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Automotive Products and Services | 7,362,402 | 6,643,280 | | Advertising, Franchise and Other Services | 514,536 | 482,881 | | **Total** | **7,876,938** | **7,126,161** | - Revenue from automotive products and services is recognized at a point in time, while revenue from advertising, franchise, and some other services is recognized over time[201](index=201&type=chunk) - Total recognized revenue included in contract liabilities at the beginning of the reporting period was **RMB 661 million**[202](index=202&type=chunk) [Finance Income / (Finance Costs)](index=60&type=section&id=Finance%20Income%20/%20(Finance%20Costs)_Notes) In the first half of 2025, finance income was **RMB 87.10 million**, primarily from interest income, while finance costs were **RMB 6.20 million**, mainly comprising interest on lease liabilities 2025 H1 Finance Income/(Finance Costs) (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Finance Income (Interest Income) | 87,099 | 90,443 | | Finance Costs (Interest on Bank Loans and Lease Liabilities) | (6,204) | (8,635) | [Profit Before Tax](index=61&type=section&id=Profit%20Before%20Tax) The Group's profit before tax is derived after deducting various expenses, including cost of sales, depreciation and amortization, employee benefit expenses (including share-based payments), advertising and promotion expenses, and transportation expenses - Profit before tax is derived after deducting various expenses, including cost of sales (**RMB 5.742 billion**), depreciation of property, plant and equipment (**RMB 83.32 million**), depreciation of right-of-use assets (**RMB 62.86 million**), and employee benefit expenses (**RMB 924 million**, including share-based payments of **RMB 104 million**)[205](index=205&type=chunk) [Income Tax Expense](index=62&type=section&id=Income%20Tax%20Expense_Notes) The Group's income tax expense for the first half of 2025 was **RMB 5.08 million**, primarily calculated based on applicable corporate income

Group 1: Industry Overview - Morgan Stanley reports that capacity reductions in the mainland automotive industry are driving industry consolidation, with luxury car dealers expected to benefit first [1] - It is anticipated that from 2025 to 2026, there will be an acceleration in dealership closures, as the overall profit margin for new cars fell below 1% in the first half of this year, making it unattractive for small dealers [1] - Automakers plan to reduce their dealership networks in mainland China by 10% to 30% by the end of 2026, which will favor financially stable dealers [1] Group 2: Company Insights - Zhongsheng Holdings (00881) is expected to continue dominating the automotive accident repair business, while independent repair shops like Tuhu-W (09690) will capture market share in maintenance and minor repairs [1] - Excluding the pandemic impact from 2020 to 2021, Zhongsheng Holdings' repair service gross profit has a compound annual growth rate of 14% from 2017 to 2024, which is expected to support core profitability in the future [1] - After four years of a downward cycle, Zhongsheng Holdings is believed to be at a turning point, with a projected 67% year-on-year rebound in profit to 4 billion RMB by 2026, driven by the recovery of new car profit margins and increased market share in accident repair [1] Group 3: Financial Projections - The decline in capital expenditure needs suggests that the expected dividend yield of 5% in 2026 still has upside potential; the target price for Zhongsheng Holdings has been raised from 15 HKD to 21 HKD with an upgrade to "overweight" rating [1] - Tuhu is also rated "overweight," with an expected compound annual growth rate of 25% in earnings from 2025 to 2027, based on user growth in its app and expansion of franchise stores; the target price has been increased from 20 HKD to 23 HKD [2] - For Meidong Automotive (01268), the target price has been lowered from 2.2 HKD to 2.1 HKD, maintaining a "market perform" rating [2]

Core Viewpoint - Tuhu Car Maintenance has officially become the strategic partner of the 2025 Alashan Hero Conference, marking its unique participation as the only invited automotive service platform [1] Group 1: Partnership and Event Overview - The Alashan Hero Conference is the largest off-road modification vehicle and outdoor carnival in China, and Tuhu Car Maintenance is the largest independent automotive service platform in the country [1] - Tuhu Car Maintenance will collaborate with 20 international brands to provide professional vehicle support services during the event, creating a closed-loop service system for off-road enthusiasts [1] Group 2: Product and Service Offerings - Tuhu Car Maintenance will set up an over 5000 square meter "Off-Road Camp" showcasing advanced technologies and products from brands like Michelin, Goodyear, and Shell [1] - In the tire sector, Michelin's Baoluch brand will present the new KO3 all-terrain tire, which features significant upgrades in durability and traction [1] - The maintenance segment will include Shell's extreme clean power formula oil and high-performance brake systems from Brembo, ensuring vehicle safety [2] Group 3: Specialized Support and Online Engagement - A "Dedicated Support Center" will be established to address the unique needs of desert driving, staffed by certified technicians for quick vehicle emergency responses [2] - Tuhu Car Maintenance will also launch a special page on its app for the Alashan Hero Conference, offering online activities and opportunities to win event tickets [2][3] - This initiative represents Tuhu Car Maintenance's significant expansion in the self-driving travel sector, following previous projects like the self-driving theme store and the "Tuhu Self-Driving Guide" IP [2]

Core Viewpoint - The Chinese automotive service industry, driven by over 359 million vehicles, is undergoing a significant transformation, with the market expected to reach 1.9 trillion yuan by 2025 and 2.2 trillion yuan by 2030 [1][3]. Industry Overview - The automotive service sector in China is characterized by a fragmented competitive landscape, comprising 4S dealerships, large chain platforms, regional chains, and numerous independent repair shops [1]. - The industry is currently in a deep adjustment phase, with a reported 5% decline in market value and a 4% decrease in service visits in the first half of 2025 [3]. Company Performance - Tuhu Car Maintenance, a leading player in the automotive service industry, reported a revenue of 7.88 billion yuan in the first half of 2025, marking a 10.5% year-on-year increase, and an adjusted net profit of 410 million yuan, up 14.6% [4][5]. - The company's stock price surged by 11.44% following the release of its strong financial results [5]. Operational Expansion - Tuhu Car Maintenance has established the largest offline automotive service network in China, with 7,205 service locations as of June 30, 2025, a 14.2% increase from the previous year [6]. - The company has focused on expanding into lower-tier cities, with over 60% of new stores opened in second-tier and below cities, significantly boosting its market presence [6]. Product and Service Strategy - Tuhu employs a dual-track strategy, collaborating with both international brands and domestic manufacturers to cater to various consumer needs [7]. - The company has seen a 60% year-on-year increase in revenue from its quick repair services, driven by the rising average age of passenger vehicles [8]. Technological Advancements - Tuhu has integrated AI technology into its operations, enhancing service quality and operational efficiency across its network of over 7,200 service locations [11]. - The company has developed a comprehensive automotive parts database with 9.5 million SKUs, achieving a matching accuracy of 99.99% [12]. Customer Engagement and Satisfaction - Tuhu Car Maintenance boasts a user base of 150 million registered users, with a customer satisfaction rate exceeding 95% and a repurchase rate of 64% [14]. - The company emphasizes long-term strategies and technological investments to maintain its leading position in the automotive service industry [14].

Core Viewpoint - The Supreme People's Court has highlighted a significant case of unfair competition involving JD Yancheng, which serves as a judicial guideline for market competition behavior, emphasizing the importance of ethical marketing practices [1][3][5] Group 1: Case Details - The unfair competition dispute between Tuhu Yancheng and JD Yancheng began in September 2023, with JD Yancheng using the slogan "Zhenhu Price" to engage in disparaging marketing activities [3] - On July 21, 2025, the Shanghai Intellectual Property Court ruled that JD Yancheng's actions constituted commercial defamation and false advertising, misleading consumers [3] - The court ordered JD Yancheng to cease its unfair competition practices and to compensate Tuhu Yancheng for economic losses amounting to 5 million yuan [3] Group 2: Implications for Market Competition - The inclusion of this case as a typical example by the Supreme People's Court aims to regulate market competition rules and combat "involution" in competition, which includes unethical marketing practices [5] - The ruling serves as a warning against using misleading marketing tactics that undermine fair competition, reinforcing the need for ethical standards in the industry [5]

Core Viewpoint - Tuhu Car Maintenance shows steady growth in performance, with improved gross margin and continuous expansion of user base and store network [1] Group 1: Financial Performance - Tuhu Car Maintenance's store network and user base are rapidly growing, which is expected to support stable revenue growth and enhance economies of scale [1] - The latest financial data indicates that Tuhu Car Maintenance's sales and net profit figures are projected to continue rising [1] Group 2: Market Outlook - The efficiency of supply chain and logistics is continuously improving, which will likely contribute to future revenue stability [1] - The company maintains a "buy" rating based on its positive growth outlook [1]