Core Viewpoint - Guosheng Securities initiates coverage on Tuhu-W (09690) with a "Buy" rating, highlighting its leading position in the automotive aftermarket and expected profit growth from 2025 to 2027 [1] Group 1: Company Performance - Tuhu has established itself as a leading integrated online and offline automotive service platform since its inception in 2011, with a nationwide service network and a robust ecosystem [1] - The company has achieved profitability, with steady growth in revenue and net profit, and an improving gross margin, indicating strong cash flow [1] - The projected net profits for Tuhu are 647 million, 822 million, and 1.055 billion yuan for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 33.75%, 26.96%, and 28.45% [1] Group 2: Industry Trends - The automotive aftermarket is experiencing growth driven by the increasing number of vehicles and aging vehicle structures, leading to rising demand for maintenance and repair services [2] - The Independent Automotive Service Market (IAM) is gaining market share due to its cost-effectiveness, particularly for vehicles out of warranty, indicating a favorable industry outlook [2] - The rapid increase in the penetration of new energy vehicles is creating new service demands, with Tuhu strategically positioning itself to benefit from this growth by expanding its services in this area [2] Group 3: Business Model and Expansion - Tuhu has built a large user base and high customer retention through its online platform, utilizing digital tools for efficient service delivery and improved customer experience [3] - The company employs a light-asset franchise model for offline expansion, establishing a standardized store management system to enhance operational efficiency and service quality [3] - Tuhu has developed a nationwide logistics system combining self-operated infrastructure and third-party service providers to ensure fulfillment capabilities, reinforcing its competitive edge in the market [3]