Autohome Inc 2023Q2 achieved revenue of 1.83 billion yuan (year-on-year + 5.8%, month-on-month + 19.5%), net profit of 505 million yuan (year-on-year + 16.0%, month-on-month + 23.1%), and Non-GAAP net profit of 570 million yuan (year-on-year + 20.6%, month-on-month + 18.6%). The main reason for the company's higher-than-expected 2023Q2 performance is the obvious pick-up in the media service business and the increase in the contribution of car patting and data products every day. We expect the overall prosperity of the automotive industry to improve in the second half of 2023, with the continuous layout of new retail stores in the energy space station, data products and used cars, the company's revenue and profits are expected to be further boosted.

Raise the 2023 net profit forecast to 1.99 billion yuan (originally forecast to 1.86 billion yuan), raise the target price of Hong Kong stocks to 91 Hong Kong dollars (the original target price is 90 Hong Kong dollars), raise the target price of US stocks to 47 US dollars (original target price is 46 US dollars), and maintain the "buy" rating of Hong Kong stocks and US stocks.

2023Q2 achieved a net profit of 505 million yuan, exceeding market expectations. Autohome Inc 2023Q2 achieved revenue of 1.83 billion yuan (year-on-year + 5.8%, month-on-month + 19.5%). Among them, the company's media service business income was 530 million yuan, + 47.2% year-on-year, accounting for 29% of revenue; clue business income was 760 million yuan, + 11.6% year-on-year, accounting for 41.4%; and online marketing and other new business revenue was 540 million yuan, + 20.4% year-on-year, accounting for 29.5%. The company's 2023Q2 realized a net profit of 505 million yuan (year-on-year + 16.0%, month-on-month + 24.5%), and Non-GAAP achieved a net profit of 570 million yuan (year-on-year + 20.6%, month-on-month + 18.6%). The company's 2023Q2 performance exceeded market expectations, and the main reasons for the year-on-year increase in revenue and profits were as follows: (1) the media services business picked up obviously, with revenue + 2.4% year-on-year and a month-on-month increase of 47.2%, which became the main driving force for the improvement of total revenue; (2) the emerging business performed well, and the revenue from car-shooting and data products rose sharply every day compared with the same period last year. The company's 2023Q2 gross profit margin is 82% (year-on-year-1.9pcts, month-on-month + 4.2pcts). The year-on-year decrease in gross profit margin is mainly due to the increase in operating costs; sales and marketing expenses are 820 million yuan (year-on-year + 11.6%, month-on-month + 57.5%). The year-on-year increase in sales expenses is due to the increase in marketing expenses.

New energy revenue has maintained strong growth, and the retail model of energy space station has started the process of national layout of franchise stores. The company's C-side strategy continues to advance, making phased progress in the aspects of high-quality content, ecological diversification and panoramic flow, effectively improving the number of users of the platform. According to Quest Mobile data, Autohome Inc's average daily number of mobile users reached 62.71 million in June 2023, a year-on-year increase of 31.7%. The company continues to take the lead in the vertical field of automotive media, with the number of users growing faster than expected. According to the company's announcement, 2023Q2's revenue from new energy brands continues to grow, up 60% from a year earlier. According to the Wechat official account Autohome Inc extra, in response to the national new energy policy to the countryside, the company launched China's first caravan holographic module at the offline event of the New Energy Future City Science and Technology Festival held in June to help new energy brands open low-line urban and rural markets.

The energy space station, a new retail model pioneered by Autohome Inc, has officially opened the process of the national layout of new retail franchisees. The energy space station has landed in Haikou, the number of cooperative brands has gradually increased, and 3D holographic modeling has covered more than 40 mainstream models. In addition, the company said at the Haikou store opening ceremony that in the next two years, Autohome Inc Energy Space Station plans to layout 101 cities, including 100% coverage of first-and second-tier cities, and 52 cities of third-and fourth-tier cities, and that the scale of new retail services will gradually expand. It is expected to bring incremental revenue to the company and increase the proportion of new energy revenue and emerging business revenue.

New product format continues to incubate, second-hand car business and data product revenue are both double-digit year-on-year rise. According to the company announcement, the company continues to lay out content ecology and track innovation around the two major industry trends of new energy and artificial intelligence. 2023Q2's emerging business accounts for 30% of revenue in a single quarter. In terms of data products, Autohome Inc has incubated two decision-making assistance products based on the GPT model, which are car selection assistants on the C side and business housekeepers on the B side, to speed up the application of artificial intelligence technology in all business scenarios and help the company reduce costs and increase efficiency. In addition, the penetration of the company's existing data products is also gradually increasing, with more than 21000 customers of 2023Q2 dealer data products, and the core indicators, including the number of cooperative products and average revenue per store, maintained a double-digit year-on-year increase in the first half of the year. In terms of used cars, the total revenue of the company's overall used car sector, including Tiantian car auction, has accelerated in 2023Q2; the penetration of used car information matchmaking and auction services on the platform continues to increase, affecting the national second-hand passenger car transaction volume of about 24.7%, year-on-year + 2.1pcts; in mode, the company links used cars with new retail business, increases offline contacts with users, and excavates more business collaboration scenarios.

Risk factors: the prosperity of the automobile industry is lower than expected; the risk impact of overseas markets on the policy change of US-listed stocks; the recovery of the company's media service business is not as expected; the growth of the company's new business is not as expected.

Earnings forecast, valuation and rating: the company's traditional media service business continues to pick up, revenue from clue service business is steadily rising, and emerging businesses such as data products and used cars are exploring a variety of product models, and the effect is beginning to take shape. we expect the company to maintain a leading position in the industry in the medium to long term. Taking into account the obvious pick-up in the company's media service business, the increase in the contribution of car patting and data products every day, and the higher-than-expected 2023Q2 performance, we raised the company's annual EPS forecast for 2023-24-25 to 4.0pm 4.5pm 4.9yuan (the original forecast was 3.7pm 4.0max 4.5pm), and the current price corresponding to PE was 13-12-11. Due to the short listing time of Hong Kong stocks, taking US stocks as a reference, the valuation center of the company in the past three years is 17 times PE. We expect the overall prosperity of the automotive industry to improve in the second half of 2023, with the continuous layout of new retail stores in the energy space station, data products and used cars, the company's revenue and profits are expected to be further boosted. As a result, the company is valued at 19 times PE in 2023, and Hong Kong shares maintain a "buy" rating with a target price of HK $91 (the original target price is HK $90). Us stocks are given a target price of US $47 in 2023 (the original target price is US $46, the exchange rate of the US dollar against the Hong Kong dollar is 7.8, and US stocks 1ADR = 4 Hong Kong common shares), with a "buy" rating.