Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company has passed its earnings low point and is recovering growth while managing competition calmly [1] - Key operational metrics show a year-over-year increase in user repurchase rate by 3.4 percentage points to 64.5%, and monthly active users on the app increased by 17.5% to 13.5 million [3] - The company is actively investing in marketing resources to expand traffic due to competitive pressure affecting store profitability [3] Financial Performance and Forecast - The company achieved a revenue of 7.88 billion yuan in the first half of 2025, a year-over-year increase of 10.5%, returning to double-digit growth [8] - Adjusted net profit for the same period was 410 million yuan, up 14.6% year-over-year, with a net profit margin of 5.2% [8] - Revenue forecasts for 2025 have been slightly adjusted down from 16.7 billion yuan to 16.4 billion yuan, while forecasts for 2026 and 2027 have been raised to 19.4 billion yuan and 22.2 billion yuan respectively [3] - The company maintains a profit forecast of 630 million yuan for 2025 but has slightly lowered profit forecasts for 2026 and 2027 to 830 million yuan and 1.21 billion yuan respectively [3] Key Operational Metrics - The company opened 894 new stores in the first half of 2025, with over 60% of new stores located in second-tier and lower cities [3] - Self-controlled products account for nearly 70% of the product mix, with mid-to-high-end self-controlled revenue making up 27% [3] - The proportion of new energy users reached 33% [3] Valuation Metrics - The company is projected to have a price-to-earnings (PE) ratio of 24, 18, and 13 for the years 2025, 2026, and 2027 respectively [3] - The price-to-earnings growth (PEG) ratio for 2025-2027 is below 1, indicating potential for high profit growth in the future [3]

Core Insights - The 10th Guangzhou International Auto Parts and Accessories Aftermarket Exhibition (AAG) opened on August 27, 2025, at the Poly World Trade Center in Guangzhou, showcasing the growth and influence of the automotive aftermarket in the Guangdong-Hong Kong-Macao Greater Bay Area and Southeast Asia [1][3]. Industry Overview - Since its inception in 2015, the AAG has developed into a significant professional exhibition for the automotive aftermarket, with a display area of 80,000 square meters, a 14% increase from the previous year, and participation from 1,781 brand enterprises, a 17% increase [3]. - The theme for this year's exhibition is "Intelligent Manufacturing, Driving Change, and Linking the Future," highlighting innovation in the automotive aftermarket [3]. Key Participants and Exhibits - The exhibition features over 1,200 auto parts companies, with more than 500 from the aftermarket sector and over 350 involved in the new energy sector [5]. - Notable exhibitors include leading brands such as Sumax, Anhui Dain, and Ningbo Tianwei, showcasing products ranging from suspension systems to brake components and electric vehicle solutions [6][9]. Thematic Areas and Activities - The exhibition includes three major thematic areas: auto consumables, commercial vehicles, and UTS modification salon, emphasizing the integration of automotive customization culture and aesthetics [12][14]. - A series of forums and discussions will be held, focusing on the future trends of the aftermarket service industry [14][24]. International Engagement - The event attracted 44 professional buyer groups from various regions, including Southeast Asia and the Middle East, indicating strong international interest [21][23]. - The overseas invitation efforts covered numerous countries, enhancing global participation [23]. Future Trends and Conferences - The exhibition aligns with Guangzhou's strategy to build a modern industrial system, focusing on intelligent connected new energy vehicles [26]. - Upcoming conferences will address critical topics such as the globalization of the automotive aftermarket and digital transformation [27]. Special Initiatives - AAG has planned various activities to celebrate its 10th anniversary, including art installations made from recycled auto parts and interactive experiences for attendees [28][32].

Core Insights - The company reported a strong performance in the first half of 2025, with total revenue of 2.345 billion yuan, a year-on-year increase of 27.35%, and a net profit attributable to shareholders of 480 million yuan, up 24.29% [1] - The launch of new AI-enabled smart repair terminals has led to significant revenue growth, particularly in the TPMS product line, which saw a remarkable 56.83% increase in revenue [1] - The energy smart hub business achieved revenue of 524 million yuan, a 40.47% increase, with successful contracts from major clients including LAZ Parking and Shell [2] - AI and software business revenue reached 281 million yuan, growing 30.13%, with a gross margin exceeding 99% [3] Group 1: Financial Performance - The company achieved operating revenue of 2.345 billion yuan in H1 2025, reflecting a 27.35% year-on-year growth [1] - The net profit attributable to shareholders was 480 million yuan, marking a 24.29% increase [1] - The non-recurring net profit was 475 million yuan, showing a significant growth of 64.12% [1] Group 2: Product and Business Development - The smart repair terminal segment generated 1.54 billion yuan in revenue, a 22.96% increase, with high market recognition for AI features [1] - The automotive comprehensive diagnostic products generated 694 million yuan, up 14.14%, while ADAS calibration products reached 207 million yuan, a 17.22% increase [1] - The TPMS series products achieved 516 million yuan in revenue, reflecting a 56.83% growth, driven by policy benefits in the automotive aftermarket [1] Group 3: Strategic Partnerships and Market Expansion - The energy smart hub business reported 524 million yuan in revenue, a 40.47% increase, with contracts from top-tier clients [2] - The company secured a significant order from LAZ Parking for 50,000 commercial AC charging piles, valued at 238 million yuan [2] - Collaboration with Shell to deploy charging networks in Europe, marking a strategic expansion into the public charging sector [2] Group 4: AI Integration and Future Prospects - The AI and software business generated 281 million yuan in revenue, with a 30.13% growth and a gross margin exceeding 99% [3] - The establishment of a subsidiary for AI+inspection robots indicates rapid progress in this area, with successful validation in oilfield inspection projects [3] - Future expansion plans for AI applications across various industry scenarios are anticipated [3]

Group 1 - The core viewpoint of the report is that Tuhu-W (09690) is expected to achieve double-digit revenue growth and stable profit margins in the second half of the year, with a potential recovery in profit growth by 2026 [1] - The target price for Tuhu-W has been raised from HKD 21 to HKD 25, based on an 18 times price-to-earnings ratio for 2026, while maintaining a "Buy" rating [1] - In the first half of the year, Tuhu outperformed the industry through consumer insights and supply chain management technology, with revenue showing accelerated year-on-year growth [1] Group 2 - The company managed to improve gross profit margins on a quarter-on-quarter basis despite downward pressure on average transaction value by optimizing product category structure and supply chain management [1] - Operating expense ratios continued to show an optimizing trend, indicating effective cost management [1] - The performance and store opening progress in the first half of 2025 were generally in line with expectations [1]

Core Viewpoint - The report from CMB International indicates that Tuhu-W (09690) is expected to achieve double-digit revenue growth and stable profit margins in the second half of the year, with a potential recovery in profit trends by 2026, leading to an adjustment in valuation based on an 18x P/E ratio for 2026, raising the target price from HKD 21 to HKD 25 while maintaining a "Buy" rating [1] Group 1 - In the first half of the year, Tuhu outperformed the industry through insights from the consumer end and supply chain management technology [1] - The performance and store expansion in the first half of 2025 were generally in line with expectations, with revenue showing accelerated year-on-year growth [1] - Despite downward pressure on average transaction value, Tuhu improved its gross profit margin quarter-on-quarter by optimizing product category structure and supply chain management, while also continuing to optimize operating expense ratios [1]

Core Viewpoint - The company is experiencing a recovery in same-store sales and anticipates an improvement in gross margin in the second half of the year [1] Group 1: Financial Performance - The company maintains a "buy" rating, forecasting revenues of 16.3 billion, 18.1 billion, and 20.0 billion yuan for 2025-2027, representing year-on-year growth of 10.8%, 10.7%, and 10.3% respectively [1] - Adjusted net profits are projected to be 774 million, 972 million, and 1.123 billion yuan for 2025-2027, with year-on-year growth of 24.0%, 25.6%, and 15.5% respectively [1] - For the first half of 2025, revenue reached 7.877 billion yuan, a year-on-year increase of 10.5%, with a gross profit of 1.982 billion yuan, up 7.4% year-on-year [1] Group 2: Operational Metrics - The number of stores increased to 7,205 in the first half of 2025, with a net addition of 331 stores, reflecting a year-on-year growth of 14.2% [2] - Average revenue per store decreased by 4% year-on-year in the first half of 2025, an improvement from a 10% decline in 2024 [2] - The number of transaction users reached 26.5 million, representing a year-on-year increase of 23.8% [2] Group 3: Margin and Cost Structure - The gross margin for the first half of 2025 was 25.2%, down 0.7 percentage points year-on-year, primarily due to a decline in the gross margin of tires and chassis components [2] - Despite increased sales volumes in chassis components and repair services, consumer preference shifted towards more cost-effective products, leading to lower average transaction values [2] - Adjusted sales expense ratio increased by 0.1 percentage points year-on-year, while operational and support expenses decreased by 0.3 percentage points [2]

Core Viewpoint - In the first half of 2025, the company achieved revenue of 7.877 billion RMB, a year-on-year increase of 10.54%, and a Non-IFRS net profit of 410 million RMB, a year-on-year increase of 14.60%, with a profit margin of 5.21%, compared to 5.03% in the same period last year, with revenue slightly below Bloomberg consensus expectations and profit exceeding expectations [1] Revenue and Profit Analysis - The company reported revenue of 7.877 billion RMB in the first half of 2025, with automotive products and services revenue at 7.362 billion RMB, a year-on-year increase of 10.82% [1] - Revenue from tires, chassis components, automotive maintenance, and auto parts reached 3.285 billion, 2.907 billion, and 730 million RMB respectively, with year-on-year growth of 11%, 11%, and 8% [1] - Advertising, franchise, and other service revenue was 515 million RMB, a year-on-year increase of 6.56%, with franchise service revenue at 424 million RMB, a year-on-year increase of 12% [1] User Growth and Market Expansion - As of June 30, 2025, the company had a total of 7,205 service stations, an increase of 331 from the end of 2024, indicating steady expansion in the market [1] - The cumulative registered user count reached 150 million, a year-on-year increase of 19%, with monthly active users at 13.5 million, a year-on-year increase of 17.5%, and transaction users (TTM) at 26.5 million, a year-on-year increase of 24% [1] New Energy Sector Performance - The total number of new energy payment users (TTM) reached 3.4 million by the end of June, a year-on-year increase of 83.5%, with a new energy user penetration rate exceeding 12%, positioning the company as an industry leader [2] AI and Supply Chain Efficiency - The company has implemented AI models that significantly improved sales conversion rates and customer satisfaction, with customer service labor costs decreasing by 18% year-on-year [2] - The automated benchmark warehouse in Guangzhou has been operational, reducing labor costs by 60% and increasing efficiency by 2.5 times, while pilot projects for unmanned vehicle delivery have been launched in cities like Nanjing and Chengdu [2] Future Revenue and Profit Forecast - The company forecasts revenues of 16.703 billion RMB and 19.127 billion RMB for 2025 and 2026, representing year-on-year growth of 13.18% and 14.51% respectively, with adjusted net profits of 752 million RMB and 909 million RMB, reflecting year-on-year growth of 20% and 21% [2]

Core Viewpoint - Tuhu's 1H25 earnings were solid despite industry challenges, with strong management capabilities likely to help it gain market share and mitigate short-term volatility [1]. Financial Performance - Tuhu's 1H25 revenue increased by 11% YoY to RMB7.9 billion, driven by a 14% YoY increase in the number of stores [2]. - The trailing 12-month number of transacting users rose by 24% YoY to 24 million as of June 30, 2025, indicating substantial market share growth [2]. - Gross margin for 1H25 was 25.2%, a 0.3 percentage point increase HoH, but 0.2 percentage points lower than forecasted due to lower margins in tires and chassis parts [2]. - Net profit for 1H25 rose by 8% YoY to RMB307 million, which was 3% lower than forecasted due to higher share-based payments [2]. - Adjusted net profit (excluding share-based payments) increased by 15% YoY to RMB410 million, exceeding forecasts by 11% [2]. Store Expansion and Operational Efficiency - Tuhu's store count increased by 331 to 7,205 as of June 30, 2025, on track to meet its full-year goal of 900 new stores [2]. - Approximately 90% of stores were profitable, with nearly all achieving positive cash flow in 1H25 [2]. - Positive free cash flow in 1H25 positions Tuhu favorably against peers amid industry headwinds [3]. Future Projections - FY25E revenue forecast was cut by 1%, and gross margin projection was reduced by 0.9 percentage points due to macro uncertainties and a focus on store expansion over short-term margin improvement [3]. - FY25E adjusted net profit forecasts were reduced by 8% to RMB761 million, reflecting a 22% YoY growth expectation [4]. - Revenue is projected to rise by 9% YoY in FY26E, supported by ongoing store expansion and customer acquisition efforts [4]. - Gross margin is expected to widen slightly to 25.9% in FY26E, with adjusted net profit projected to grow by 15% YoY to RMB876 million [4]. Valuation - The target price for Tuhu was raised from HK$21.50 to HK$23.00, based on a 20x adjusted FY26E P/E ratio [4].

Core Viewpoint - The automotive aftermarket presents a significant investment opportunity due to market saturation in other sectors like chain restaurants and beverage shops, with a focus on automotive repair and maintenance as a potential blue ocean market [3]. Market Overview - As of June 2025, the total number of vehicles in China is projected to reach 359 million, leading to a steady increase in the automotive service market size [4]. - The traditional 4S dealership model is declining, with over 4,400 dealerships closing last year, creating a more favorable environment for third-party repair services [4]. Company Performance - Tuhu's recent mid-year report for 2025 shows revenue of 7.88 billion yuan, a year-on-year increase of 10.5%, and an adjusted net profit growth of 14.6% [4]. - Tuhu has over 7,200 service centers and boasts a 90% profitability rate for stores operating for over six months, indicating strong financial performance for franchisees [4][15]. User Engagement - Tuhu's platform has seen a 23.8% increase in transaction users, reaching 26.5 million, with a customer satisfaction rate of 95% and a repurchase rate of 64% [10][11]. Standardization and Supply Chain - Tuhu addresses industry pain points through product and supply chain standardization, ensuring transparency and quality in parts sourcing [8][10]. - The company has implemented a data-driven supply chain model, achieving an 83% next-day delivery rate, enhancing operational efficiency [10]. Service Standardization - Tuhu has standardized service processes to improve service quality and reduce disputes, ensuring consistent customer experiences across locations [11]. Franchisee Success - Franchisees report stable profitability, with some achieving monthly gross profits of 120,000 to 130,000 yuan, supported by Tuhu's cost-reduction initiatives [15][17]. - The company has a growing number of franchisees, with many opening multiple locations, indicating strong market confidence [17].

Core Insights - The company, TuHu-W, reported a strong performance in the first half of 2025, with revenue reaching 7.88 billion RMB, a year-on-year increase of 10.5% [2] - The user base continued to grow rapidly, with registered users reaching 150 million, a year-on-year increase of 18.8% [2] - The company expanded its workshop network significantly, with a total of 7,205 service centers across 320 prefecture-level and 1,855 county-level administrative regions [2] Financial Performance - The adjusted net profit for the first half of 2025 was 410 million RMB, reflecting a year-on-year growth of 14.6% [2] - Total operating expenses were 1.77 billion RMB, accounting for 22.4% of revenue, showing continuous optimization compared to the same period in 2024 [4] - Free cash flow increased by 32.2% year-on-year, reaching 350 million RMB, with total cash reserves exceeding 7.5 billion RMB [4] User and Market Expansion - The company achieved a 64% user repurchase rate and maintained a service satisfaction rate exceeding 95% [2] - The number of transaction users over a 12-month period reached 26.5 million, a year-on-year increase of 23.8% [2] - The company’s fast repair business saw revenue growth exceeding 60% year-on-year, becoming a new growth driver [3] Supply Chain and Operational Efficiency - The company invested in supply chain automation, resulting in a 60% reduction in labor costs and a 2.5 times increase in efficiency compared to traditional warehousing [3] - The next-day delivery rate improved to 83%, while fulfillment cost rates decreased by 0.5 percentage points [3] - The company is piloting unmanned vehicle deliveries in cities like Nanjing and Chengdu, laying the groundwork for automated last-mile logistics [3] Strategic Initiatives - The company launched several support initiatives for franchise workshop stores, including "10 Billion Subsidy, 10,000 Stores Together" and "New Store Improvement Plan," which enhanced store operational vitality [3] - The company is focusing on fine-tuned operations and advanced technology investments to further improve operational quality and profitability [5]