Recently, China's largest independent car service platform, Tuhu-W (09690HK) disclosed its 2023 earnings forecast.
According to the announcement, Tuhu expects to record a net profit of no less than 6.6 billion yuan in 2023, while a loss of about 2.1 billion yuan in 2022, turning losses into profits. In addition, Tuhu expects adjusted non-IFRS net profit in 2023 to be no less than 4$500 million, compared to an adjusted net loss (non-IFRS measure) of approximately $5 in 20225.2 billion yuan, turning losses into profits.
Tuhu, which has turned around its losses strongly, has won the "applause" of many investment banks. According to incomplete statistics, since February, 5 brokerages have given Tuhu a "**" rating, and 1 brokerage has given a "recommended" rating.
However, Tuhu's share price did not gain momentum as a result, but went in the opposite direction. On February 23, the company announced that on March 6, Tuhu's stock price fell by more than 15%, including a 10% drop on March 569%, a record low.
Tuhu is the largest offline integrated car service platform in China, which is the largest community of car owners in China. As of the end of March 2023, Tuhu's flagship app, Tuhu Yangche, and ** interface had 100 million registered users.
During the same period, Tuhu has more than 4,700 Tuhu factory stores and more than 19,000 cooperative stores across the country, making it the largest car service provider in China.
The auto service market in which Tuhu is located can be described as a long slope and thick snow, which is also an important reason why many brokerages are optimistic about the future development prospects of Tuhu.
China's car ownership has grown rapidly in recent years, and data from the National Bureau of Statistics show that by the end of 2023, the number of civilian cars in China will reach 33.6 billion units, an increase of 17.14 million units from the end of the previous year. According to a CIC report, the number of passenger cars in China is expected to reach 3 in 20277.38 million units, with a CAGR of 63%。At the same time, the average age of passenger cars in China in 2022 is 62 years, 2027 is expected to reach 80 years.
The growing number of cars in China and the increase in the average age of cars will stimulate the continuous growth of demand for car services.
In terms of market size, China's auto service market is a huge market of trillions. According to data from CIC Consulting, the market size is expected to reach 1,931.9 billion yuan by 2027, with a compound annual growth rate of 90%。
Goldman Sachs said in a research reportThe automotive aftermarket in which Tuhu is located is ushering in rapid development, and it is expected that with the recovery of China's automotive industry, Tuhu will have more room for development as an independent aftermarket leader. The bank said that Tuhu is positioned in the stock car market and has benefited from the steady growth of China's car ownership, showing strong anti-cyclicality. The company's ability to provide full lifecycle services provides a broad space for growth.
It is worth mentioning that Tuhu's turnaround in 2023 is largely due to the growth of the auto service market. According to Tuhu's announcement, the reasons for Tuhu's turnaround include: the release of travel demand in 2023, the increase in the total mileage of passenger cars in China, and the increase in demand for tire replacement and maintenance business; The nationwide network of Tuhu factory stores has been further expanded, and the customer base has been effectively expanded.
In the face of such a trillion-dollar market size and a "cake" with good development potential, more and more players have begun to enter the game, which has also brought a lot of challenges to Tuhu.
In terms of the number of stores, many peers have followed closely behind Tuhu to expand their market layout. According to the data, the number of traditional IAM Shell Heineken car centers in China in 2022 will be about 4,000, close to the 4,653 of Tuhu.
What makes Tuhu feel the pressure of competition is the car maintenance chain platform owned by the two major domestic e-commerce giants, namely Alibaba (09988.).hk)(baba.US) and JD.com Group (09618.HK) under JD.com. The brand positioning of these two companies is similar to that of Tuhu, both are engaged in online and offline integrated car services**, and they have Internet genes and traffic advantages, so they are strong competitors of Tuhu.
With the advent of the era of new energy vehicles, the automotive aftermarket is undergoing earth-shaking changes, which has also led to the outbreak of the domestic car maintenance market war.
Since 2019, Tmall has opened its first chain of direct stores, and has continued to expand its territory in China, according to the company's official website, Tmall has opened more than 1,800 stores across the country, with 75.7 billion users, 1700 million car owners. In order to accelerate the expansion of the store, Tmall has opened up the franchise and won more than 270,000 stores applied for **.
Li Yi, general manager of Tmall Car Maintenance, recently said that under the new strategy (franchise policy and preferential terms), the development speed of Tmall Car Care stores in 2024 will be several times faster than that in 2023.
Jingdong car maintenance is also menacing. According to the data, in 2023, the growth rate of the scale of JD's car maintenance stores will double, the number of stores nationwide will exceed 1,500, and the profitability of the stores will increase by 30% year-on-year.
Recently, Jingdong Car Maintenance released the 2024 new business support policy, claiming that 0 yuan will be settled, money, traffic, resources, and quickly get out of the store.
JD Car Care recently said that it will increase support for franchisees in 2024, focusing on expanding JD Car Care stores in 100 core cities to improve the network density of stores.
In the highly competitive automotive aftermarket market, in order to consolidate its market position, Tuhu needs to continue to deepen its technical strength, enhance its brand influence, strengthen service quality, and continuously establish its own channel advantages.
The strong turnaround in 2023 shows that Tuhu has achieved good results in the context of market recovery and industry competition. At the beginning of this year, Tuhu announced a new national franchise policy for factory stores in 2024, which is expected to promote the further expansion of the store network and continue to improve profitability under the scale effect.
As for the new franchise policy, Minsheng ** is optimistic about the progress of Tuhu's store expansion under the new franchise policy, and pointed out that Tuhu, as a third-party service leader in the domestic aftermarket, is expected to benefit from the change in the age structure of passenger cars and the increase in the chain rate of the aftermarket.
The recent significant decline in stock prices has led many investors to speculate that the reason behind this may be closely related to the imminent large-scale lifting of restrictions. Against this backdrop, market participants are generally showing a more cautious attitude.
Finet has learned that Tuhu will enter the share release period in March 2024, and the vast majority of shareholders will achieve the release on March 26. For example, as the cornerstone investors of Tuhu, Tencent, Castrol, Leapmotor, Guoxuan Hi-Tech, and Shanghai Zizhu High-tech Zone will collectively usher in the lifting of the ban on March 26, with a total of 2,802 shares130,000 shares, at a current price of 16At 9 Hong Kong dollars, the market value of the lifting of the ban is 4HK$7.3 billion.
Author: Far away.