Investment Rating - The report initiates coverage with a "Buy" rating for the company, Tuhu Car, with a target price of HKD 27.59, representing a potential upside from the current price of HKD 21.25 [7][88]. Core Insights - Tuhu Car has established itself as a leading player in the automotive after-service market in China, leveraging an O2O (Online to Offline) model to integrate online and offline services, which has facilitated rapid expansion and a significant user base [1][4][15]. - The company has shown strong growth in user numbers and service offerings, with over 63 million registered users and more than 6,300 service outlets across the country, indicating a robust market presence [2][3][4]. - The automotive after-service market in China is projected to grow significantly, driven by increasing vehicle ownership and the rising average age of vehicles, with a compound annual growth rate (CAGR) of 10.1% from 2018 to 2022 [5][35][38]. Summary by Sections Company Overview - Tuhu Car was founded in 2011 and has evolved from tire sales to a comprehensive automotive service platform, launching its app in 2014 and expanding its service offerings significantly over the years [1][15][18]. - The company has adopted a light-asset franchise model, allowing for rapid store expansion, particularly in lower-tier cities, where it has achieved a coverage rate of nearly 65% in areas with over 20,000 passenger vehicles [3][4][15]. Market Position and Growth - Tuhu Car's service network has expanded rapidly, with over 400 new stores opened in the first half of 2024, and a daily service turnover rate of 2.2 per workstation, significantly higher than the industry average of 1.1 [2][3][4]. - The company has a strong focus on self-owned and controlled products, which accounted for 25.9% of its automotive product and service revenue in 2023, contributing to higher gross margins [2][4][24]. Financial Performance - Tuhu Car's revenue has shown a steady increase, reaching RMB 136 billion in 2023, with projections of RMB 146 billion, RMB 160 billion, and RMB 176 billion for 2024, 2025, and 2026, respectively [4][88]. - The adjusted net profit is expected to grow significantly, from RMB 7.33 billion in 2024 to RMB 15.30 billion by 2026, reflecting a strong upward trend in profitability [4][88]. Competitive Landscape - The automotive after-service market in China is highly fragmented, with Tuhu Car leading the way amidst increasing competition from internet giants like JD.com and Alibaba, which are also expanding their automotive service offerings [4][70][74]. - Tuhu Car's competitive advantages include its extensive store network, strong brand recognition, and effective supply chain management, which enhance its pricing power and service quality [4][74][80]. Future Outlook - The report highlights the significant growth potential in the automotive after-service market, particularly in the context of increasing vehicle ownership and the shift towards electric vehicles, which will require specialized maintenance services [5][35][38]. - Tuhu Car's strategic focus on expanding its service network and enhancing user experience through technology and digital platforms positions it well for future growth in this evolving market [4][63][72].
途虎-W：制造型零售推升盈利，轻资产下沉支撑扩张