Investment Rating - Maintain BUY rating for Tuhu Car (9690 HK) with a target price of HK15 40 [1][4] Core Views - Tuhu Car's 2H24E adjusted net profit is expected to decline 9% YoY and 32% HoH to RMB243mn due to weaker-than-expected 3Q24 sales and delayed new store openings [1] - FY25E revenue growth is projected to accelerate to 13% YoY, driven by new stores opened in 4Q24 and increased support for existing stores [1] - Gross margin is expected to improve from 25 1% in FY24E to 25 7% in FY25E, supported by lower procurement costs and higher sales of high-margin exclusive and private-label products [10] - Adjusted net profit is forecasted to rise 27% YoY to RMB763mn in FY25E, with a net margin of 4 6% (+0 5ppts YoY) [10] Financial Performance - FY24E revenue is projected at RMB14 764mn (+8 5% YoY), with net profit of RMB445mn (-93 4% YoY) and adjusted net profit of RMB601mn (+25% YoY) [2][10] - FY25E revenue is estimated at RMB16 749mn (+13 4% YoY), with net profit of RMB640mn (+43 9% YoY) and adjusted net profit of RMB763mn (+27% YoY) [2][10] - FY26E revenue is forecasted at RMB18 153mn (+8 4% YoY), with net profit of RMB882mn (+37 9% YoY) and adjusted net profit of RMB994mn (+30 2% YoY) [2][10] Operational Highlights - Total store count is expected to exceed 6 900 by the end of FY24, up from over 900 stores in FY24 [10] - 2H24E gross margin is projected to decline 1 5ppts HoH and 0 7ppts YoY to 24 4% due to price cuts on tire products [10] - Selling expense ratio is estimated to rise 1 1ppts HoH to 13 8% in 2H24E to boost customer traffic [10] Valuation - The target price of HK$20 00 is based on 20x revised adjusted FY25E EPS, reflecting Tuhu Car's resilience compared to peers amid economic uncertainties [10] - Tuhu Car trades at a discount to US peers O'Reilly (ORLY US) and Advance Auto Parts (AAP US), which have valuation multiples of around 30x [10] Share Performance - Tuhu Car's share price has declined 21 1% over the past month, 24 1% over the past three months, and 16 8% over the past six months [6] Shareholding Structure - Tencent Holdings holds a 19 4% stake in Tuhu Car, while Mr Chen Min owns 10 1% [5]
途虎-W：FY25 to regain traction after 2H24 slowdown