Core Viewpoint - Guosheng Securities initiates coverage on Tuhu-W (09690) with a "Buy" rating, highlighting Tuhu's leading position in the automotive aftermarket and its ongoing expansion of an integrated online and offline platform [1] Group 1: Company Performance - Tuhu has established itself as a leading online and offline integrated automotive service platform since its inception in 2011, building a nationwide service network and a comprehensive ecosystem [2] - The company has achieved profitability, with steady growth in revenue and net profit, and an improving gross margin, indicating strong cash flow [2] - The projected net profits for Tuhu from 2025 to 2027 are estimated at 647 million, 822 million, and 1.055 billion yuan, reflecting year-on-year growth rates of 33.75%, 26.96%, and 28.45% respectively [1] Group 2: Industry Trends - The automotive aftermarket is experiencing continuous demand growth driven by the increasing number of vehicles and aging vehicle structures in China [3] - The Independent Automotive Service channel (IAM) is gaining market share due to its cost-effectiveness, particularly for vehicles out of warranty, indicating a favorable market environment [3] - The rise in penetration of new energy vehicles is creating new service demands, with Tuhu strategically positioning itself to benefit from this growth by expanding its service offerings in this area [3] Group 3: Business Model and Strategy - Tuhu has built a robust online platform that attracts a large number of registered users and maintains high consumer engagement through digital tools for efficient service delivery [4] - The company employs a light-asset franchise model for offline expansion, establishing a standardized store management system to enhance operational efficiency and service quality [4] - 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 [4]