【行业研究报告】途虎-W-Solid FY23 with better profitability

18Mar2024
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
TuhuCar(9690HK)
SolidFY23withbetterprofitability
TuhuCar(Tuhu)achieveddecentprofitforthefirsttimeinFY23,withrevenue
+18%YoY(inline)andadj.NPatRMB481mn(27%aboveconsensus).Looking
intoFY24E,wearepositiveonitsresilientgrowth(forecastingrevenue+16%
YoY),backedbyworkshopexpansion,richerofferings,monetization
diversificationandtechnologyenhancement.Marginenhancementmay
continue,withdeeperpenetrationofprivatelabelproducts,morefavourable
termsfromsuppliersandoperatingleverage.WekeepourFY24-25Eearnings
barelyunchanged,butadjustedourDCF-basedTPtoHK$35.3(35x/19x
FY24/25EP/E),forlowerlong-termEBITwithcompetitionlandscapechange.
Stockpricemayseeshort-termvolatilityafterlock-upofPEinvestors,butwe
keeppositiveonitsorganicgrowthandimprovingfundamentals.
Upbeatmarginwithprofitabilityforthefirsttime.Tuhudeliveredsolid
FY23resultswithinlinerevenue(+17.8%YoY)andupbeatadj.NPM(3.5%,
FY23resultswithinlinerevenue(+17.8%YoY)andupbeatadj.NPM(3.5%,
exceedingourestimatesof1.5%).GPMimprovedto24.7%(+5pptsYoY),
thankstorevenuemixshifttowardshighmarginbusiness(includingauto
maintenanceandexclusive/privatelabelproduct),andmorefavourable
termsfromsuppliers.Coupledwithstrengthenedoperationalefficiency,
TuhuachievedprofitabilityforthefirsttimeinFY23withadj.NPatRMB
481mn(27%aboveconsensus).Revenuefromexclusive/privatelabel
productsaccountedfor42.4%/25.9%ofautomotiveproductsandservices
revenue.Inaddition,mgmt.announcedtorepurchaseHK$1bnvalueof
shares.
Workshopexpansionintolow-tiercitiestofuelrobustgrowth.Tuhu
increasedno.ofworkshopsby1,256(with64.6%ofnewworkshopsintier-
twoandbelowcities)to5,909byFY23.Automotiveproductsandservices
+17.9%YoY,spurredby1)pent-uptraveldemand(requiringmoretire
changes)postpandemic;2)risingorderswithworkshopsexpansion,
partiallyoffsetbydecreasingQipeilong.Ads,franchiseandotherservices
+15.8%YoY,inwhichincreasingfranchiseservicesandadsbudgetwere
offsetbystrategicshrinkingNEVsales.Lookinginto2024E,wearepositive
onitsresilientgrowth(forecastingrevenue+16%YoY),backedbystores
expansion,richerofferings,monetizationdiversificationandtechnology
enhancement.
Highvisibilityforcontinuousmarginimprovement.Tuhuhasprovedits
clearprofitabilitypathinFY23,andweexpectmarginenhancementto
continueinFY24-26E.Weforecastitsadj.NMupto8.8%inFY26Efrom
3.5%inFY23,backedby:1)revenuemixchange(fromprivatelabel
products,automaintenance);2)scaleeffectwithhigherbargainingpower
onpricing;and3)operatingefficiencyimprovement.
MaintainBUY.WekeepourFY24-25Eearningsbarelyunchanged,but
adjustedourDCF-basedTPtoHK$35.3(35x/19xFY24/25EP/E),forlower
long-termmarginwithcompetitionlandscapechange.