HSBC's research report indicates that Autohome (02518.HK) is facing a gloomy outlook, but some unfavorable factors have been buffered by shareholders. The target price has been lowered from HKD 68.25 to HKD 66.3, with a rating of "buy". The bank pointed out that among the internet stocks they cover, Autohome is expected to have a dividend yield of 6% this year, ranking fourth. Net cash is equivalent to 96% of the market cap, and it is estimated that it still holds USD 3.2 billion in cash after distributing the interim dividend. Excluding cash, the forecasted P/E ratio for this year is 0.5 times, with a compound annual growth rate of 9% for adjusted operating excess profits from 2021 to 2026. The valuation is not high.

The bank pointed out that the sales of mainland internal combustion engine vehicles have declined, and currently, internal combustion engine vehicles are the main driving force behind automobile advertising. The bank believed that the advertising prospects of Autohome still face challenges and estimated that the relevant revenue will decline by 12% this year, exceeding the original estimate of 4%. The bank lowered the profit forecast for the company from 2% to 3% from 2021 to 2026. They believe that the stock lacks catalysts in the short term until the industry outlook improves. If potential improvement in shareholder returns appears, it may lead to a rating reassessment.