21st Century Business Herald reporter reporting to Xiufang in New York
"The development strategy of Autohome is to integrate into the Ping An automotive ecosystem." Autohome Chairman Long Quan recently stated in an interview with a reporter from 21st Century Economic Report, a subsidiary of Southern Finance and Economics, that Autohome is committed to becoming a one-stop automotive comprehensive service provider that combines content ecology, tool platform, and trading platform.
Autohome (ATHM.NYSE/02518. HK) has recently undergone significant personnel changes. The company announced on December 13th that it has appointed Wu Tao as a director and CEO. Longquan, the former CEO who has taken over as Chairman and CEO of Ping An Property and Casualty Insurance, will continue to serve as Chairman of the Board of Directors of Autohome.
Longquan stated that Wu Tao has over 28 years of experience in related professional fields and has held management positions at Autohome for over 4 years. I believe that his leadership skills and rich industry experience will be valuable assets for the future development of Autohome.
When it comes to the future development of Autohome, Longquan told reporters that he is very optimistic about the development of the Chinese car market in the next 10 years, and the development of Autohome is closely related to the development of the Chinese car market. Therefore, he is full of confidence in Autohome in the next 10 years.
Accelerate integration into the Ping An automotive ecosystem
Autohome was founded in 2005 and was listed on the New York Stock Exchange in December 2013. On June 25, 2016, after acquiring 47.4% equity of Autohome from Australia Telecom for $1.6 billion, Ping An of China officially became the largest shareholder of Autohome.
In January 2021, Longquan succeeded Lu Min as the Chairman and CEO of Autohome. During this period, Longquan promoted the secondary listing of Autohome on the Hong Kong Stock Exchange in March 2021 and led Autohome to embark on a strategic transformation path. In September 2021, Autohome launched an "ecological" strategy and announced its full integration into the Ping An car ecosystem.
Until November 13th this year, Longquan officially became the Chairman and CEO of Ping An Property and Casualty Insurance. The focus of future work will shift to Ping An Property Insurance. So, with the new round of executive adjustments for Autohome and Ping An Property&Casualty Insurance, how can they accelerate their coordinated development and empower each other in the future?
Longquan told reporters that the users of Autohome are related to cars, and the car insurance customers of Ping An Property Insurance are also related to cars. The users served by the two have common attributes. If Autohome and Ping An Property and Casualty Insurance are better integrated and developed, they can provide users with a service that covers the entire lifecycle. In other words, the entire chain from viewing, buying, using, to changing cars can form a commercial closed loop.
At the same time, Longquan pointed out that Autohome is an online internet platform, and Ping An Property Insurance has offline service capabilities. The integration of the two can provide users with online and offline services. In addition, Ping An Property and Casualty Insurance has a large amount of data on car users, and when combined with Autohome, it can provide users with many services including used car testing, valuation, and replacement. "I think there is infinite imagination in these areas of cooperation."
Zhou You, Vice President of Autohome and Vice President of Autohome Research Institute, also pointed out to reporters that Ping An is not only an insurance company with significant influence, but also has significant influence in the automotive industry. For example, Ping An's car insurance ranks second in China, Ping An Bank's car financial services rank among the top among joint-stock banks, and Ping An Leasing has also performed outstandingly in car leasing. In his view, Ping An and Autohome have an innate connection in integration.
There is great potential in the new energy and second-hand car markets
Since the beginning of this year, domestic automobile consumption has continued to recover, with a good growth momentum in automobile production and sales, and the performance of new energy vehicles is particularly impressive. According to statistics from the China Association of Automobile Manufacturers, from January to October this year, the production and sales of automobiles reached 24.016 million and 23.967 million, respectively, with a year-on-year increase of 8% and 9.1%. Among them, the production and sales of new energy vehicles reached 7.352 million and 7.28 million, respectively, with a year-on-year increase of 33.9% and 37.8%, and a market share of 30.4%.
The China Association of Automobile Manufacturers predicts that with the continuous accumulation of policy effects of stable economic growth in the country, coupled with the continuation of local car purchase subsidies, promotional activities and other measures, as well as the end of year tail effect, the demand for automobiles will continue to grow in the fourth quarter.
Obviously, the automotive industry has become one of the most promising tracks for the development of the Chinese economy. In order to seize the opportunities brought by the development and changes in the industry, Autohome is continuously expanding its business layout in the new energy vehicle and second-hand car markets.
According to its financial report released in early November, Autohome's total revenue for the third quarter was 1.91 billion yuan, a year-on-year increase of 3.4%; After adjustment, the net profit attributable to the parent company was 604 million yuan, and both total revenue and net profit achieved year-on-year growth for five consecutive quarters; The adjusted net profit margin reached 31.7%. In the third quarter, the company continuously expanded its cooperation with new energy vehicle companies, and the revenue from new energy brands increased by nearly 70% year-on-year in the third quarter.
With the advancement of ecological strategies and the accelerated integration with the Ping An automotive ecosystem, where is the growth potential of Autohome in the future? Zhou You analyzed to reporters that there will be three changes in the development of the Chinese car market in the future. Firstly, the overall growth of new car sales will gradually flatten, but new energy vehicles will grow rapidly.
Secondly, the proportion of used and new cars (ownership) in China is still around 4:5, while compared to developed countries such as Europe and America, this proportion reaches nearly 3:1 or 4:1. Therefore, he believes that the second-hand car market has very good growth expectations in the future. Thirdly, China will gradually develop from a rapidly growing new car market to a stock based market. Therefore, Autohome will increase resource investment and work together with Ping An Property Insurance to do a good job in the "car market". "These three areas are not only the main potential for our future user growth, but also the main potential for our future performance growth."
Zhou You stated that the ecological strategy of Autohome is reflected in empowering participants throughout the entire lifecycle of the automotive industry chain, including the owner ecosystem composed of car viewing, buying, using, and changing users. On the other hand, it serves as a partner in various aspects of the automotive industry chain, including automotive OEMs, mainstream car dealers, and used car dealers. Unlike its competitors, Zhouyou emphasizes that "we are a company with both online and strong offline genes." Ping An Property and Casualty Insurance's team can form a good omnichannel supplement with Autohome, which not only helps to improve transaction lead business, but also provides users with more offline services.
Autohome launched its "Energy Space Station" new retail model based on holographic technology last year, providing users with a one-stop, multi vehicle consumption experience service. According to Autohome, the "Energy Space Station" is expected to be deployed in 20 cities including Beijing, Guangzhou, and Kunming this year. "The new retail model will be a light asset platform," Zhou You emphasized to reporters that Autohome itself will not hold automotive inventory, but will open offline stores through cooperation with franchised investors.