Executive Summary / Key Takeaways

• Autohome Inc. is strategically transforming into an AI-driven, online-to-offline (O2O) automotive ecosystem, moving beyond its traditional media roots to capitalize on the New Energy Vehicle (NEV) market and international expansion.
• Despite a challenging domestic auto market marked by a prolonged price war, the company's "Online Marketplace and Others" segment, driven by its new retail and NEV businesses, demonstrated robust growth, increasing 20.5% year-over-year to CNY 746 million in Q2 2025, becoming its largest revenue contributor.
• Autohome is aggressively expanding its physical footprint, aiming to exceed 500 new retail locations by the end of 2025 and cover most prefecture-level cities, counties, and rural areas in China within three years, complementing its digital offerings.
• The company is deeply integrating AI across its products and services, from consumer-facing smart assistants to comprehensive digital marketing tools for dealerships, enhancing efficiency and user experience.
• Autohome maintains a strong commitment to shareholder returns, with a robust balance sheet of CNY 22.05 billion in cash, cash equivalents, and short-term investments as of June 30, 2025, and a pledge for a full-year cash dividend payout of no less than RMB 1.5 billion for 2025.

Autohome's Evolution and Market Dynamics

Autohome Inc. ($ATHM), established in Beijing in 2008, has evolved from a leading online automotive media platform into a comprehensive, data-driven intelligent service provider for China's vast automotive market. The company's core business revolves around connecting automakers and dealers with consumers through its online platforms, including autohome.com.cn, che168.com, and ttpai.cn. It generates revenue primarily from advertising services, lead generation, and commissions from transactions facilitated through its online marketplace. This strategic shift is critical as the Chinese auto market undergoes profound structural changes, characterized by the rapid growth of New Energy Vehicles (NEVs), an intensifying price war, and the accelerating "going global" trend of Chinese automakers.

The company's journey has been marked by continuous adaptation, including a significant expansion into offline retail starting in 2022 with its Autohome Space stores and an accelerated rollout of satellite stores into lower-tier cities throughout 2024. This "1+N" model, combining Space stores in higher-tier cities with satellite stores in lower-tier markets, aims to achieve comprehensive service coverage. A pivotal corporate development occurred on August 27, 2025, when Haier Group (690.HK), through its subsidiary CARTECH, completed the acquisition of a 41.91% stake in Autohome, establishing Haier as the new controlling shareholder while Ping An Group (PNGAY) remains a major shareholder. This strategic investment is expected to inject new vitality into Autohome, strengthening its online-to-offline (O2O) intelligent exchange and comprehensive service capabilities.

Technological Edge: AI as the Growth Catalyst

Autohome's strategic foundation is deeply rooted in "data plus technology," with Artificial Intelligence (AI) serving as a core enabler for product innovation and operational efficiency. The company leverages its nearly two decades of industrial data accumulation and professional knowledge base to develop end-to-end intelligent solutions.

For consumers, Autohome's AI Smart Assistant now covers all scenarios for both new and used cars, demonstrating industry-leading performance in question and answer capabilities. This tool significantly enhances the user Q&A experience in the automotive vertical and efficiently improves user decision-making. For dealerships, AI technology is integrated across the entire customer journey, from marketing and customer acquisition to transaction conversion and after-sales services, creating a comprehensive digital marketing loop. The company has launched five major digital intelligence product lines: AI Marketing Brain, AI Customer Acquisition, AI Leads Master, AI Sales Champion, and AI Vehicle Inspector. These tools empower accurate marketing decision-making, automate content creation with intelligent distribution, improve user engagement, strengthen frontline sales consultant capabilities, and provide vehicle condition and pricing inquiry systems.

The tangible benefits of this AI integration are evident in enhanced operational efficiency for customers and improved user experience. For example, the AIGC (AI-Generated Content) video generation tool features modular graphics and video production capabilities, greatly enhancing content format and empowering dealers to create high-quality content efficiently. It also supports one-click distribution across multiple mainstream media platforms, significantly improving operational efficiency for dealers. This technological differentiation contributes to Autohome's competitive moat by providing tailored, efficient solutions that rivals with broader, less specialized platforms may struggle to match. The company's continuous investment in AI aims to build a robust knowledge base, further accelerating its professional capabilities and serving as a critical differentiator in the evolving automotive landscape.

Strategic Pillars and Operational Momentum

Autohome's strategic initiatives are designed to solidify its market position and drive future growth, particularly through its O2O ecosystem, new retail expansion, and international ambitions.

New Retail: Fueling NEV Adoption

The new retail business is a cornerstone of Autohome's O2O strategy, committed to building a one-stop automotive ecosystem. Online, the "Buy For Me" live stream enables multi-vehicle comparisons and citywide trial inquiries. Offline, Autohome Space stores offer immersive VR movies, AI-assisted test driving with car owner guidance, and AI-powered purchasing assistance, redefining the automotive consumer experience. These innovations significantly reduce transaction costs for both users and customers.

The expansion of this physical footprint is aggressive. As of the second quarter of 2025, the number of new retail franchise stores (Autohome Space and satellite stores) surpassed 200. The company aims to exceed 500 total locations by the end of 2025, with a strategic focus on lower-tier and rural markets. Over the next three years, Autohome intends to extend its reach to cover the vast majority of prefecture-level cities, counties, and rural areas across China. This expansion is expected to accelerate NEV adoption and support the broader transformation of the automotive industry. Management views the new retail business as a new engine for future growth, anticipating it to be profitable rather than a "cash burning" venture, with franchisees achieving financial balance in the short term.

Used Car Business: Enhancing Transparency

Autohome is actively enhancing the integration of its online and offline services for the used car market, aiming to improve transparency and trust. In late June 2025, the company launched a flagship Certified Used Car section, featuring carefully selected top-tier brands and strict dealer qualification. Each vehicle comes with comprehensive inspection reports to ensure safety and transparency, complemented by reliable after-sales support. The company also develops AI tools, such as the Used Car AI Smart Assistant, photo car recognition, vehicle condition checking, and car price checking tools, to address the complexities of non-standard used car transactions. The China Car Circulation Association predicts used car sales will increase by 6.5% year-on-year in 2025. Autohome's strategy involves promoting trustworthy used car sources to help dealers improve profitability. TTP, a related entity, is expected to make significant transformations in the B2B market, moving beyond its traditional C2B strength to tap into new potential.

International Expansion: A New Growth Curve

Recognizing the accelerating overseas expansion of Chinese automakers, Autohome officially launched the international version of its website in late June 2025. This platform features over 1,900 vehicle models from 52 Chinese automobile brands and currently covers six countries and regions: China, Hong Kong, Thailand, Saudi Arabia, the United Kingdom, Australia, and Brazil. This initiative not only provides substantial support for the globalization of China's auto industry but also marks a crucial step in Autohome's international business expansion, positioning it to capture a new growth curve as Chinese auto exports are projected to reach 7 million units this year and potentially 10 million in the next one to two years.

Strategic Partnerships: Amplifying Influence

Autohome has established an extensive ecosystem of alliances. A strategic partnership with Alipay's Auto Life service sector in May 2025 led to the launch of a dedicated car billing and selection service for Alipay users and certified car owners. The recent acquisition of a 41.91% stake by Haier Group's CARTECH positions Autohome as a key hub in Haier's automotive industry ecosystem. This collaboration is expected to leverage Haier's advanced management experience and operational systems in user experiences, smart software connectivity, and new automotive retail, further strengthening Autohome's O2O intelligence exchange and comprehensive service capabilities. The ongoing partnership with Ping An Group also continues to yield synergies, particularly in co-hosting "Hundred Cities, Trade-in for New" campaigns, piloting in-store financial insurance services, and integrating data products for aftermarket scenarios.

Financial Performance and Resilience

Autohome's financial performance in recent quarters reflects both the challenging macroeconomic environment and the strategic pivot towards innovative growth drivers.

For the second quarter of 2025, net revenues were CNY 1.76 billion, a decrease from CNY 1.87 billion in the corresponding period of 2024. This decline was primarily driven by a significant 36% year-over-year drop in media services revenues to CNY 279 million, as automakers and dealers reduced marketing budgets amidst intense price wars. Leads generation services revenues also fell by 11% to CNY 733 million. However, the "Online Marketplace and Others" segment emerged as a bright spot, with revenues increasing by 20.5% year-over-year to CNY 746 million, making it Autohome's largest revenue contributor for the quarter. This growth was largely propelled by the robust performance of the new retail business, which saw a 27% year-over-year revenue increase in Q2 2025.

Profitability metrics showed some contraction. The gross margin in Q2 2025 was 71.4%, down from 81.5% in Q2 2024. This erosion was attributed to higher transaction costs associated with the company's innovative business in lower-tier cities. Operating profit for Q2 2025 was CNY 297 million, compared to CNY 412 million in Q2 2024. Adjusted net income attributable to Autohome in Q2 2025 was CNY 476 million, down from CNY 572 million in the prior year period. Despite these pressures, the company partly offset the lower gross margin with a 14% reduction in operating expenses.

Looking at the full year 2024, total revenue reached RMB 7.04 billion, with the "Online Marketplace and Others" segment growing 8.1% year-over-year and accounting for 33.8% of total revenue. The NEV business demonstrated strong growth, with revenues increasing by 55.2% year-over-year. Adjusted net income attributable to Autohome in 2024 was RMB 2.05 billion, yielding an adjusted net margin of 29.1%.

Autohome maintains a robust balance sheet, with cash, cash equivalents, and short-term investments totaling CNY 22.05 billion as of June 30, 2025.

The company generated net operating cash flow of CNY 495 million in Q2 2025.

Demonstrating a strong commitment to shareholder returns, Autohome's Board of Directors authorized a share repurchase program in September 2024, committing to repurchase up to USD 200 million of its ADSs. As of July 25, 2025, approximately 5.35 million ADSs had been repurchased for a total cost of approximately USD 142 million, and the program was extended through December 31, 2025. The company has also committed to a full-year cash dividend payout of no less than RMB 1.5 billion for 2025.

Competitive Positioning and Market Dynamics

Autohome operates in China's intensely competitive online automotive advertising and transaction market, facing both direct and indirect rivals. Its specialized focus on the automotive vertical provides a distinct advantage against broader e-commerce and social media giants.

Direct competitors include Alibaba Group (BABA), Tencent Holdings (TCEHY), and JD.com (JD), which offer automotive services through their vast ecosystems. While these competitors benefit from immense scale, diversified revenue streams, and robust financial health, Autohome differentiates itself through deep automotive expertise, specialized content, and a user-centric approach. Autohome's platforms, with their interactive content, lead generation, and transaction tools, are designed to provide significantly greater efficiency in serving automotive-specific needs, such as personalized vehicle recommendations, compared to the more generalized approaches of its larger rivals. Its strong brand recognition and reputation as a leading online destination for automobile consumers in China, ranking first among automotive service platforms in terms of mobile daily active users, according to QuestMobile, further solidify its market leadership.

Autohome's proprietary AI technology and data-driven tools for recommendations offer notably higher efficiency in user interactions, exploiting weaknesses in competitors that may have less tailored automotive experiences. This technological edge contributes to better cash flow from leads generation and positions Autohome for improved profitability in specialized markets. The company's strategy of building a dedicated automotive ecosystem could result in stronger market positioning for niche services, such as lead generation for dealers, giving it a unique value proposition in delivering tailored automotive experiences.

However, Autohome's financial metrics, such as revenue growth and profitability, can appear more volatile and tied to the automotive cycle compared to the more consistent expansion seen in diversified conglomerates like Alibaba and Tencent. The ongoing "bloody price war" in the auto industry has particularly impacted Autohome's media and lead generation services, as automakers redirect budgets towards discounting strategies and increasingly utilize direct-to-consumer (DTC) channels. This trend highlights a vulnerability in Autohome's dependence on OEM advertising budgets and dealer subscriptions.

Indirect competitors include traditional automotive dealerships and emerging mobility solutions. Autohome counters these by expanding its O2O new retail network, offering integrated online and offline solutions that provide convenience and a comprehensive car-buying experience. Barriers to entry in Autohome's industry, such as network effects, data accumulation, and regulatory requirements, help defend its position by limiting new entrants' ability to challenge its financial performance.

Outlook and Risks

Autohome's management expresses cautious optimism for the second half of 2025, particularly for the media services business, anticipating a recovery in OEM advertising budgets during the traditional peak season of "Golden September and Silver October" as the price war gradually eases. The broader auto market is expected to see continued structural adjustments, with NEVs remaining the main growth driver and sustained policy support leading to modest growth.

The company's aggressive expansion of its new retail footprint, targeting over 500 locations by year-end 2025 and comprehensive coverage of lower-tier cities within three years, is a key growth initiative. This expansion, coupled with continuous innovation in store functionality and AI integration, is expected to enhance single-store operational efficiency and customer reputation, driving revenue generation from the new retail module. The international version of the Autohome website is poised to become a new growth curve, capitalizing on the projected increase in Chinese auto exports to 10 million units in the next one to two years.

Despite these growth opportunities, several risks persist. The prolonged price war in the auto industry continues to exert pressure on OEM profitability and dealer operations, impacting Autohome's traditional revenue streams. While government intervention has shown signs of stabilizing prices since July 2025, the market remains volatile. The used car market also faces challenges, including sluggish demand due to new car price pressures and a need for greater transparency. Autohome's focus on certified used car sections and AI tools aims to address these issues, but a full recovery is contingent on broader market stabilization. Furthermore, while trade tensions are acknowledged, their direct impact on Autohome's domestically focused business is considered limited.

Conclusion

Autohome Inc. stands at a pivotal juncture, strategically transforming its business model to leverage technological innovation and expand its market reach. By aggressively pursuing an AI-driven O2O ecosystem, expanding its new retail footprint into lower-tier cities, and embarking on international expansion, the company is actively cultivating new growth drivers to offset challenges in its traditional segments. The robust growth in its "Online Marketplace and Others" segment, particularly from the NEV new retail business, underscores the effectiveness of this strategic pivot.

While the ongoing price war in the Chinese auto market presents headwinds, Autohome's deep integration of AI, strong brand recognition, and strategic partnerships with entities like Haier Group and Ping An Group provide a formidable competitive advantage. The company's commitment to substantial shareholder returns, evidenced by its dividend policy and share repurchase program, further enhances its investment appeal. As Autohome continues to refine its business models and capitalize on the electrification, intelligence, and globalization trends within the automotive industry, its technological leadership and expansive O2O network position it for sustained long-term value creation.