We maintain "Buy" investment rating and revise our target price to HK$67.08, representing 14.5x 2024 P/E. Autohome's 2023 revenue rose 3.5% YoY to RMB7.18 bn, with net income to shareholders up 4% at RMB1.88 bn, aligning with our previous expectations. The Company bought back US$200 mn in shares by year-end. Given market uncertainties, we've modestly decreased our 2024-2025 revenue outlook by around 2.7%, but maintain our net profit forecasts, expecting EPS to be RMB4.19, RMB4.52, and RMB4.82 for 2024-2026, respectively.
The wholesale volumes of cars reflect an expansion in domestic demand. Based on the China Passenger Car Association's statistics, China's passenger car sales volume saw 22% growth in 2023, with a 19.6% QoQ increase in Q4, indicating robust domestic demand. With current cost control capabilities, the sales prices of 800V fast-charging new energy vehicles are expected to decline to the RMB200,000 level, likely boosting China's car sales growth volume in 2024.
Autohome is enhancing the burgeoning second-hand car market through data and technology-driven products. Its "One-Stop Car Check" service, with over a million monthly uses, provides comprehensive pricing data across the industry, while the "Top-Seller's Toolkit" has improved customer engagement for over 10,000 car dealers. In addition, Autohome has also launched the "Dealer Hub" for the used car market, providing dealers with a comprehensive information management service via a cloud platform, which currently extends to over 20,000 car dealerships.
Autohome faces industry uncertainties but shows promise with its growth initiatives and generous dividend policy. Autohome paid substantial dividends of US$0.58 and US$1.15 per ADS in 2023. Additionally, Autohome announced plans for consistent semi-annual dividends from 2024 to 2026, ensuring a minimum total of RMB1.5 bn annually.
Major Risks: 1) Weaker-than-expected automotive sales in China; 2) Intense competition from peers; 3) A macroeconomic slowdown.