Autohome - Earnings Call - Q3 2020

Transcript

Operator (participant)

Ladies and gentlemen, thank you for standing by for the Autohome's third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference call is being recorded. If you have any objections, you may disconnect at this time. It is now my pleasure to introduce your host, Anita Chen, Autohome's IR Director. Ms. Chen, you may begin.

Anita Chen (Analyst)

Thank you, Operator. Hello everyone, and welcome to Autohome's third quarter 2020 earnings conference call. Earlier today, Autohome distributed its earnings press release, and you may find a copy on the company's website at www.autohome.com.cn. On today's call, we have Chairman and CEO Mr. Ming Lu, Co-President Mr. Haifeng Shao, Co-President Mr. Jingyu Zhang, and CFO Mr. Jun Zhou. After the prepared remarks, Mr. Lu, Mr. Shao, Mr. Zhang, and Mr. Zhou will be available to answer your questions. Before we begin, please note that the discussion today will contain forward-looking statements made under the safeguard of provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations.

Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the Securities and Exchange Commission. Autohome does not undertake any obligation to update any forward-looking statements, except as required under applicable law. The earnings press release in this call also includes discussions of current and audited non-GAAP financial measures. Our press release contains a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures and is available on Autohome's IR website. As a reminder, this conference is being recorded. In addition, a live and archived webcast of this earnings conference call will also be available on Autohome's IR website. I will now turn the call over to Autohome's Chairman and CEO, Mr. Lu.

Ming Lu (CEO)

Thank you, Anita. Hello everyone, and thank you for joining us today. I'm pleased to report a great quarter with revenues exceeding the high end of our original guidance by RMB 35.6 million. Revenues from our new initiatives increased by 31% year over year and contributed to 24% of the total revenues. Data products delivered robust growth with a 51% year over year increase. Notably, adjusted net margin increased by 6.6 percentage points year over year to 38.9%. In the third quarter, to meet the increasing digital demand from customers and to continue building upon our strengths, we are offering more differentiated high-value online services to support and complement customers' offline operations with a high efficiency.

In September this year, the number of average DAUs who accessed our mobile website, primary app, and mini apps further increased to 39 million, an improvement compared with the prior year period and June 2020. Regarding content, in the third quarter, we made a series of moves to optimize our product and content in order to enhance user experience. For example, we launched a light version of Autohome application to attract a younger audience. We also rolled out a micro-post channel, allowing users to post photos and to make very brief comments and encouraging them to synchronize their posts to specific car model forums, which provides OEMs new channels to accumulate more content resources and followers. Aside from these rollouts, our 818 Global Super Auto Show continued to be very popular, with online video views from the night gala exceeding 260 million, further demonstrating its influence in the industry.

Our road trip channel allows Autohome to extend their audience outreach to an even broader level. Through participation in various themed activities, users could improve their knowledge of auto brands and then be motivated to generate their own auto-related content. This content, in turn, becomes the resource of automakers, which helps them further increase their brand's recognition. In our efforts to explore new marketing approaches, we are encouraged to see that our flagship IP Luyuji continues to scale up. In the past four months, we have worked with nine automakers to promote their brand through road trips. In the first nine months, the cumulative GMV for our road trip business totaled RMB 340 million, more than double compared with the number for the full year 2019. During the quarter, we further enriched our end-to-end SaaS platform to reflect our unique capability in providing comprehensive digital services to our customers.

For example, we're pleased to see that our data products continued to benefit from the digital transformation across OEMs as we offered our customers full-scope solutions for each different phase, providing them with better recommendations, helping them make better decisions, and supporting them in more efficient project implementation. In the first nine months, a total of 38 automakers were engaged in our data products, and notably, our intelligent new car launch and intelligent marketing solutions collectively delivered over 100 programs, far more than the total number of programs for the full year 2019. In terms of data products to dealers, we aimed to provide a comprehensive SaaS platform to dealer customers from leads to in-store visits, sales, and ultimately to the after-sales, covering the full spectrum cycle of auto ownership and increasing the conversion rate each step of the way.

In addition, the number of paying dealers for Smart Store 2.0, a product generating incremental leads for dealer customers, has reached approximately 2,700 dealers. In the third quarter, revenues from our used car business unit achieved double-digit year-over-year growth as we deepened our B2B cooperation with TTP Car Inc. In October, we made a follow-on investment in TTP of $168 million to help accelerate our growth in the used car sector. Integrating Autohome's online capabilities with TTP's offline presence, we believe that we are well-positioned to unleash more value to the industry. For auto financing business, in the third quarter, total GMV for consumer loans increased by 80% year over year. Moving to the overseas business, in the third quarter, we continue to focus on expanding our content offerings while actively exploring ways to build our brand awareness.

Our library now covers almost all the major models in the market with VR technology to enhance the user experience. In November, the total monthly unique visitors for YesAuto exceeded 2 million and set a solid foundation for our cooperation with customers. As of last month, we've connected with over 3,700 dealers, and the total SKUs on our overseas platform have exceeded 700,000. Our first dedicated overseas online auto show also received positive feedback. Many customers showed their interest in the format and are willing to participate in further trials with us. To conclude, as we move ahead, Autohome remains committed to developing innovative solutions and investing in strategic areas in order to strengthen our leadership position in the industry.

With that, I will now turn the call over to our CFO, Jun Zhou, for a closer look at our third quarter financial results as well as the business outlook for the fourth quarter of 2020.

Jun Zou (CFO)

Thank you, Ming. Hi, everyone. As Ming has already highlighted, we are pleased to report a great third quarter. Please note that, as with prior calls, I will reference RMB only in my discussion today. Net revenues for the third quarter were RMB 2.32 billion, a little under 7% higher than the same period last year, and exceeding the higher end of our original guidance by approximately RMB 36 million. For a detailed breakdown, media services revenue were RMB 927 million. Lead generation services revenue were RMB 840 million. In online marketplace, service revenue increased by 31% year over year to RMB 548 million, primarily driven by growth of data products. Moving on to costs. Cost of revenue was RMB 215 million compared to RMB 247 million in Q3 last year. Gross margin remained stable at 89%.

Turning to the operating expenses, sales and marketing expenses in the third quarter were RMB 979 million compared to RMB 956 million in Q3 last year. Research and development expenses were RMB 349 million compared to RMB 316 million in the third quarter of last year. Now, finally, G&A expenses were RMB 140 million compared to RMB 109 million in Q3 2019. Overall, we delivered an operating profit of RMB 744 million for the third quarter compared to RMB 641 million in the corresponding period of 2019. Adjusted net income attributed to Autohome Inc. was RMB 902 million for the third quarter compared to RMB 702 million in the corresponding period of 2019. Non-GAAP basic and diluted earnings per share and per ADS for the third quarter were RMB 7.55 and 7.52, respectively, compared to RMB 5.92 and 5.88, respectively, in the corresponding period of last year.

As of September 30, 2020, our balance sheet remained very strong with cash, cash equivalents, and short-term investments of RMB 13.47 billion. We generated operating cash flow of RMB 504 million in the third quarter of 2020. Let me now address our fourth quarter 2020 outlook, which reflects our current and preliminary view on the market and operating conditions, and many subjective changes. At this point, we expect to generate net revenues in the range of RMB 2.475 billion-RMB 2.484 billion. In conclusion, we delivered better than expected top-line results as new initiatives continue to drive overall growth. Non-GAAP net income increased significantly by about RMB 200 million year over year, reflecting the effectiveness of our spending and cost control. In addition, our follow-on investment in TTP will accelerate the development of our used car platform and further solidify our leading position in this area.

Also provide an expanded array of growth drivers, a more balanced revenue mix, and further enhance operating efficiencies. We are well-positioned to achieve our long-term goals and create even greater shareholder value. With that, we're ready to take your questions. Operator, please open the line for Q&A. Operator.

Operator (participant)

Thank you. Thank you, management. So ladies and gentlemen, if you'd like to ask a question to the management, please press 01 on your telephone keypad. To cancel, please press 02. As a friendly reminder, please ask one question each time. Thank you. Our first question is from Andy Wong at Morgan Stanley. Please go ahead.

Thomas Simons (SVP)

lead generation，相关的。这个就说，我们看到就是整个下半年其实车市在转好，然后整个 2020 年其实咱们的 lead generation 的这个 package 其实也没有涨价，然后今年其实给到了整个经销商这边的这个支持力度也是不小的。所以就问一下，就说到年底了，其实也要看，就是这个，这个续约的工作也，马上要开始了吧。就想问一下，就说您这边看，如果看 2021 年的话，咱们这个 lead generation 的 package，有没有这个涨价的一个预期？对，那我可能先，翻译一下。Thank you, management, for taking my question. So my question is, on the lead generation package side. So basically, we can see that this year the auto market has been recovered quite well in the second half, and if you look at our lead generation package, in this year have not been you know any price hike. So just wonder you know if we're approaching the year and I think we are starting the renewal process very soon. So can you give us some color on how you see the you know the lead generation package the price hike chance in next year? Thank you.

Ming Lu (CEO)

我先说一下最后海峰，你再接着来哈。那个，呃，又到了每年这个时候了，那么大家都会关心我们的是不是涨价的问题。

Okay, let me take the question first, then I will invite Mr. Haifeng to follow on the answers. You know, it's the right time every year to ask the question whether we are going to raise the price or not.

那么，呃，去年呢，就是这个时候呢，我们因为车市负增长，所以我们宣布啊，今年不涨价。那么今年呢，又有一个比较特殊情况，今年就是车市不仅负增长，还有疫情的影响加重了这个情况。所以总体来讲，这些之家我们还是要跟行业共进退的。同时我们也是说要服务好这个客户。所以呢，整体来讲还是一个不涨价的策略。但是具体的待会请海峰来讲一下，我们还有一些，啊，不同的定价的方式。

As you know, last year we experienced the negative growth of the auto market, so we said that we are not going to raise up the price. And this year we also experienced the negative growth of the market, and also added on that we have the COVID-19 epidemic. So that's why we decided to follow the tide of the time. So that's why we are not going to raise the price, but our pricing mechanism, the pricing system may change.

To help our customers, yes.

Yeah, to help our customers. Now, let's invite Mr. Haifeng.

好，实际上我们今年呢，这个，呃，正如，呃，刚才董事长陆总说的一样啊，就是第一个共进退嘛。第二个呢，我们今年呢，也是给主机厂呢，主机厂跟经销商嘛，提供呢是两种啊，这个会员的方式。

As our chairman, Mr. Lu, have said that we are going to follow the tide, and also we offered two ways for the pricing, with OEM and the dealers.

也就是一个呢，这个，可以啊，主机厂跟经销商可以选呢，第一个跟 2020 年一样的这个不涨价的这个车商会的会员服务。第二个呢，也可以选择呢，是这个一个新的浮动收费的方式。

They actually have two choices. Choice number one, which is at the flat price as 2020, which means there's no price hike. The second choice, they can choose a floating pricing model based on the new scenario.

对，这个浮动收费的方式呢，实际上最主要就是说是，啊，帮助一些啊，这个经营状况好的，并且有意愿呢，从之家这边啊，获取啊，更多线索的主机厂呢，可以选择跟经销商选择这种方式。因为呢，毕竟呢，之家车商会的线索是整个市场啊，质量最好的线索。

Well, for the floating pricing mechanism, actually we are targeted at those good performing dealers. If they want to get more leads from Autohome, they can choose this second way, which is a floating pricing model. As you know, we generate the best quality leads in the whole market.

从目前来看呢，这个，呃，浮动收费的方式呢，我们沟通下来呢，应该是有目前啊，30%的这个主机厂啊，是有意向的。然后呢，随着我们这个，呃，再继续的沟通吧，跟这个，呃，呃，合同吧，合同的这个，呃，谈判吧，我想这个比例呢，还会继续增加。谢谢。

We already communicated with a lot of OEMs, and actually 30% of them already showed their initial interest in choosing their floating pricing model. With further communicating and also the contract negotiation with real dealers, I believe, with real OEMs, I believe that there will be more and more OEMs may choose this floating pricing model.

对，我再补充一下。那么这个呢，就是浮动的呢，我们会设个上限跟下限，这样呢，对，呃，经销商那边啊，这个主机厂商也会放心啊，就是说，呃，所以这就是一个刚才海峰讲的一种定价，一种新的定价模型。那么我们希望就是给他做的，呃，这个，这个例子啊，那个线索越多呢，这个收费也稍微增加一些。

Another thing I want to add on is that, when we're talking about the floating pricing model, we already put a cap and a floor on the pricing. So there would be a price range with the cap and the floor. So in this way, the dealers and the OEMs can feel assured and eased that the pricing is quite reasonable.

那么当然另外一边呢，如果说我们提供的线索量不够呢，我收费也会降下来。

As long as they get more leads, actually they can take the floating pricing model. If we do not generate enough leads, the price would also go down.

那么其实今年，我们跟主机厂还有一种合作模式叫综合 CPL。那个有，今年是五家吧，是吧？四家，我们已经跟四家主机厂今年尝试了做我们叫做综合 CPL。所谓综合 CPL 就是把广告和线索，从头到尾一起算，有点像海外的那个，海外的那个经销商的那个线索，那种模式。就不管你投什么了，最后就是，线索按线索这样的来记，把广告也含在里面。这也是一种方法。那，已经有四家主机厂跟我们做这方面的合作，目前来看效果也是不错。

Actually, another thing is we already have talked with four OEMs, which they would be doing the comprehensive CPL model with us. Talking about the comprehensive CPL model, which we bundle the advertising and the lead generation business together, which is very similar to the overseas dealers business model, which is aggregated on a bundle.

Jun Zou (CFO)

Let me add on to that as well, you know, the Smart Store 2.0 is also actually an incremental lead.

Ming Lu (CEO)

Mm-hmm.

Jun Zou (CFO)

So we have already, you know, 27,100 plus, you know, just signing up on that, and we'll be going more next year. With that, I guess, you know, Andy, we, that's our answer for you for the first question. Next one, Operator.

Operator (participant)

Thank you. Our next question is from Miranda Zhuang Bank of America Please go ahead.

Thomas Simons (SVP)

Thank you, Operator. 管理层晚上好，希望你们身体健康，感谢接受我的提问。我这边想先让就是 follow up 一下上一个问题的这个回答。我想就是可不可以麻烦你们再跟我们多讲一讲就是我们的这个浮动定价的这个模式，具体的操作模式是什么？比如说它是一个，是在车商会之之外再多买的，就是多 add on 的一个产品，还是说它跟车商会一样是一个并列的，就是经销商二选一的一个产品？那我们这个销售的模式是怎么样？比如说是一个线索包的形式，还是说单个线索，售卖的形式？那这个线索这个价格的话，大概是一个什么样的定价方式？比如说是我们这边来定价，然后，车商这边去接受我们定价，还是说是可能有一个竞价的一个机制？然后这样对应下来，可能每个线索的价格大概是一个什么样的情况？就如果有的话，还希望您跟我们再介绍一下。然后我的那个正式的那个问题是，我想请教一下就是，管理层可不可以跟我们讲一下你们在大数据的这个产品，尤其是我们今年又上线了好几个新的这个数据产品，那这些的数据产品在明年的这个销售的这个策略跟计划是怎么样的？比如说，会把哪些产品跟原来车商会的产品或，其他方法去打包销售，或者说把这些智智智慧的这个产品一起打包，然后做成端到端的这种 SaaS 的产品去销售？还有主机厂的这个智能产品的这个的销售策略怎么样？就比如说是不是，会去跟主机厂去，比如说谈一个年框等等，就是想了解一下，管理层对这边的计划。谢谢。那我想快翻译一下我的问题. thank you, management, for taking my questions. my, I have a follow-up question on the, pricing for the leads generation product. can management give us more color, on the, details of the product? For example, like, is the floating price model an add-on to the leads membership product, or is it a standalone product, and where the, dealers, can choose either of them? And also, any, detailed colors on the, how the, pricing will work for the leads? will it be set by the company or, like, some sort of a bidding basis? And also, how, are the leads sold? Are they sold on, for example, like a package or, like, one-by-one basis? any, you know, detailed colors on, on the product could be helpful.

My question is on the management's plan and strategy for the sales of the big data products next year. For example, will you bundle some of the products with the membership products for sales, or, you know, bundle all of the leads gen, intelligent products for the dealers, altogether to an end-to-end SaaS product to sell to the dealers as a whole? For example, like, will you talk with, negotiate with the OEMs to set an annual framework contract for the intelligent marketing, intelligent new car launch products? Just, you know, please share with us the any color on your side you're implying for your big data product sales strategy next year. Thank you.

Ming Lu (CEO)

好，这个第一个问题关于线索的问题没有那么复杂，就是说这个浮动定价其实很简单。

Now, talking about your first question about the floating pricing model, it is not complicated. Actually, it's very simple.

其实就是我们讲了前面大的前提，我们保持，因为车市啊，还有疫情啊，这个不好，所以我们保持不涨价。那么浮动的这个呢，就是在这个不涨价的基础上给出一个，正负10%的浮动。对，那么最后呢，就根据这个线索量，多了，那么它就多付一点，少了它就少付一点。哎，很简单，不复杂。

Basically it's very simple because, as we said, because the auto market experienced negative growth and we have the COVID-19 epidemic. Based on this big picture, we are not going to raise up the price, but we would have a plus and minus 10% range on the floating pricing based on how many leads they have. The more leads they have, the more pricing. The less leads they have, the less pricing.

那这个，不能去看这个每个品牌，每个 model 它的线索的单价，因为这个品牌那么多，它的那个其实这个线索单价是，每家都不一样的。因为它，有些品牌是，比如说很多人都知道的，那它的线索量就会大。有些品牌，小品牌，那这个线索单价就会高。所以我们是按它，去，今年的同期，今年一年的这个完整的东西挪到明年比，是这样的。这样就比较简单了，不需要同学，同比了，不要去算一条条线索，那个价格是没法算的。

And we don't calculate each of the leads' price because the price varies a lot. It depends on is it a big brand or small brand. It depends on different models. So we don't calculate the unit price for each of the model or each of the branding. Usually for the big brands, they have generated. They will generate a lot of leads. For the small brands, their leads generation would be smaller and the pricing may be more expensive. So we would have to compare the same leads of the same brand. So actually we don't calculate the detailed unit price.

这样子呢，我们在跟，呃，主机厂啊，经销商在，在，呃，呃，谈的过程中，大家就比较好接受，比较好理解。嗯，所以刚才像海峰讲的这个，呃，还是有不少这个品牌商，他是愿意这样的一种定价方式。

Actually, during our communication with the OEM and the dealers, actually the floating pricing model has been well accepted by them, and it's quite easy to understand, and the model is very simple. As Mr. Haifeng said, a lot of our OEMs and the dealers welcome such model.

其实，刚才我讲到的综合 CPL 的那个方式也是这样，那么我们跟四家主机厂已经在做，那做的过程中呢，就是说，就是按单条线索多少钱，做的越多，那么我们收的费就越多。但是这个如果我们线索做的量少，那我就收费就会少。但是呢，单价是跟主机厂是确定的单价，那么你就看这个量能不能产生的更多，是另一种这个端到端的一种定价方式。那这个呢，现在是在做项目，这样子在做，今年已经做了四家。

Yeah, I mentioned about the comprehensive CPL model, which we already started to work with four OEMs. So based on each of the leads, we would calculate how many are the numbers of the leads. The more leads, the higher the price. The less leads, the, you know, less the price. It's an end-to-end pricing model. We already started this comprehensive CPL model with four OEMs.

那么这种方法的底下呢，就是我们的这个自动化的精准营销啊，或者叫智能化的营销，这个技术就我们的大数据的技术来导致的。有了这个你才可以做。那当然我们主机厂也希望有更多的通过这个合作，有更多的这个线索，我们也希望为他产生更多的线索，这样我们的收入也可以提高。所以这是一个 win-win 的情况。那最关键就是因为我们有这个技术才能做到，否则就是说干等了，等到有就有，等不到就没有。

I think the key part is we have the underlying technology, for example, the intelligent marketing technology and the big data technology, so we can generate high-quality leads. The more leads we generate, actually, you know, the more pricing we can get, and actually the OEMs welcome such high-quality leads. It's a win-win situation.

那么第二个问题呢，就是关于大数据这个，呃，大数据这一块呢，我们这几年不断在努力啊，这个应该也今年也看到了，还是有这个在收入端还是有长足的进步啊。那么三季度是同比 50。

是51的。三季度是65。

对，前三季度加起来的增长是跟去年同比是 65% 的增长，那是已经有了长足的进步。

Now, your second question is about our big data business. We have worked really hard on this piece, and we actually have a very good revenue. If you look at the first three quarters, our revenue grew by 65%, 65%, and the third quarter alone we grew by 51%.

那么未来的话，我认为这个里面还有更大的机会，就是在主机厂这一端，OEM 这一端和 dealer 经销商这一端，我们还有很多新的产品开发的机会，就是要需要给我们团队一些时间。

I believe that in the future there will be more opportunities lying ahead of us, no matter if working with OEM or on dealer side. I believe there will be tons of, you know, new business opportunities, but we need to give our team more time.

那么这里面的话，比如说主机厂，那那个，比如经销商，经销商我们现在在做这个他的销售管理的这个系统，那主机厂的话未来除了在那个他的研发端，对吧，整个完整的一个价值链里面都可以有数据的这个大数据产品的进入，或者 SaaS 啊，就是最后。那我们也在跟有些主机厂在做一个完整的这个 SaaS 的应用，向这个方向去努力，我们讲的叫做未来的发展战略，叫产业互联网这个方向去发展。

Now, talking about the future opportunities on the dealer side, we would have a lot of self-management system to launch.

Jun Zou (CFO)

Yeah, CRM.

CRM, yeah, okay, to launch for the dealers. On the OEM side, we can create a lot of value. We can actually fit into a lot of value chain from the R&D. We have a lot of big data products. We have a comprehensive SaaS service to offer to them. That is one of our future strategies, which is industrial internet solutions.

Ming Lu (CEO)

那么后天，我们再有一个 investment open day，也欢迎大家来参加。到时候我们也有一些具体的细节的介绍，景宇这边啊。

The day after tomorrow we will be hosting the Investors Open Day. We would like to welcome you to participate in this wonderful event.

金宇，你还有什么补充？

呃，没有。

没有，OK。好，谢谢。

Okay, thank you.

Next one, Operator.

Operator (participant)

Ladies and gentlemen, so if you'd like to ask a question, please press 0, 1, or on your telephone keypad. To cancel, please press 0, 2. Please be reminded that ask one question each time. Thank you. Our next question is from Brian Gong at Citi. Please go ahead.

Thomas Simons (SVP)

I will translate myself. I still have a question, a follow-up question regarding the floating pricing model. So, management just mentioned some customers already adopted such pricing model. So my question is, based on the sales leads past track record for those customers, what's the initial view of management regarding the impact on our revenue for next year? Thank you.

Ming Lu (CEO)

我简单回答一下吧，我觉得是这样，这个就是对我们线索生产能力的一个考验。因为过去呢，我们是连续了七年八年，就是不讲，当然没什么可讲的，每年涨20%。那么到后面那个2019年，大家也知道，有几家经销商这个非常有意见嘛，是吧？那么后来问题是解决了。但是再往后走呢，我们毕竟是一个平台型的，要跟我们的这个行业，跟我们的，经销商的合作伙伴呢，一起来发展啊，不能说采取一种就是不讲道理的方式。所以呢，我们这次呢，我们就改变了这个叫做浮动定价。

Talking to answer your question, I think floating pricing model actually is a testing of our capabilities to generate high-quality leads. You know, in the past consecutive seven to eight years, every year the pricing would go up by 20%. In 2019, there are some dealers who have some complaints and different opinions over this. You know, we are a platform company, so that's why I said we have to follow the tide.

那么过去的模式呢，就是我反正涨价，线索量多不多是不保证的。那么就是不管的，对吧？就是我们就涨了，那么反正全部涨。

You know, the past model is we just raise up the price. After the price hike, we don't, you know, care whether the leads numbers are growing or, you know, growing up or growing down.

那么现在这种有一部分主机厂已经选择了这种浮动定价呢，意思就是我我们就要生产到那个增长的线索量给他。那这样子我再涨，涨上去价呢，他也同意。

Now, some of the OEMs and dealers started to accept our floating pricing model. That is to say we have to generate excessive high-quality leads to them to be able to generate, you know, more income.

那当然就是说你一头是有涨价的空间，但是你另外一头我们也要承担一些风险。所谓风险就是万一我的线索量没有，就是前一年多，那么最低就到 90%。多的话就到 110%。不是一个完整的绑定，但是呢，它是一个增量和一个到不了那个量的保证。那就对我们有约束，对我们就有约束了，确实这样。

So actually on one side, if we want to raise up the price, on the other side we have to bear the risks whether we can generate enough leads or not. If we cannot generate enough high-quality leads as the previous year, then there will be 10% deduction from the, you know, previous price, so which is the floor, 90%. However, if we can generate very good leads with excessive number, then we can go up by 10%, which would be 110% on the cap.

所以，呃，我呢，对我们团队在这方面的能力我还是很有信心。就是因为这几年我们讲在这个大数据的应用方面，在智能营销方面的长足的进步啊，使得我们有这个能力去确保这个能够增长。

I have to say I'm very confident about our team's capabilities in generating high-quality leads because we have intelligent marketing tools and big data applications to support such generation leads business.

所以我认为就是说，呃，如果签了这个，呃，浮动的这个，呃，定价的这个品牌呢，我们产生的线索量，呃，应该我们会确保增长的。

So for us OEMs who signed the floating pricing contract with us, we want to make sure that they would have excessive leads.

好，谢谢。

Okay, thank you.

Operator (participant)

Our next question is from Ritchie Sun at HSBC. Please go ahead.

Ritchie Sun (Equity Research Analyst)

管理层晚上好，谢谢你们接受我的提问。我有一个问题就想问一下，就是刚才提到过就是这个 leads 的重要性嘛。那我想问，除了管理层刚刚也提到过大数据啊，或者是你们之前运营的能力之外，你们有没有一个其他去增长这种，高质量的 leads 的一些方法？就例如，其实会不会去看一下有什么新的用户，就怎么去增加你们新的用户，例如一些年轻的用户啊，这样子。因为其实我们看到，可能未来几年其实有一些比较年轻的用户，他们也有一个买车的需求嘛。可是你们的用户画像其实大部分都是比较 30 岁以上年长的一些用户。那其实用户增长的动力会不会是将来你们会做多一点去增加你们高质量的 leads 的，这这个是其中一个方法呢？ I will translate the questions myself. Thank you for taking my questions. I have a question about the methods or how to generate more high-quality leads for the future. So other than the methods like, for example, the big data and also the technology behind the platform, so what about the new sort of user growth driver for the future, or what's the strategy behind it? For example, like the younger users, they can be also the potential car owners in the future, but the Autohome's user profile tends to be like 30 years or above old for the age. So could management share what are the user acquisition strategy ahead so as to drive more high-quality growth of the leads? Thank you.

Ming Lu (CEO)

好，那两个方面吧，一个就是，我们在三四线城市，下沉的三四五线城市我们在努力。那么我们最近推出了一个叫极速版汽车之家，就是 Lite version 这个，而且我们从目前得到的线索来看，跟我们的主 app 这个还是有区隔。它侧重在低线城市，在中国的低线城市线索会更多。所以明年我们在这个极速版我们会加大这个推广的力度，让更多低线城市的人来上汽车之家产生线索。

Yes, to answer your question, we have already tried quite hard to go granular into the third tier, fourth tier, even fifth tier cities by launching the light version of Autohome app, which is quite different from our major app. We will start more marketing and promotions of this light version app to attract the young users from the lower tier cities.

第二个呢就是我们的土壤的年轻化进程，包括我们的产品，包括我们的内容。那么现在我们已经在推进的过程中，已经有了一系列的规划，那么一步步往前走啊，那使得我们的应用呢更适合现在的这个年轻，叫 Z 时代的年轻人。

Now, the second way is we have been launching and trying to generate young and fresh content and product on our major app. We will do this step by step to better attract the Z generation users.

我我对我们的内容团队我曾经提过要求，就是在保持我们业内最专业的这个定位的基础上，然后要去弄出很多有趣的东西出来，不能是因为专业而枯燥啊，那年轻人不喜欢，要既要好玩又要又要专业，就是这两条啊，不断的向，呃，吸引更多的年轻人。

Actually, I already stated very clearly to the content generation team of our company. On one side, we have to keep the most professional positioning of the content contribution to our app. On the other hand, we have to keep it fun. It should not be boring. To be funny and very professional in this way, we can attract the young users.

同时，我们也有一些举措，比如说我们的 Young Channel，我们走进大学，是吧？有些活动，那么这些活动还是受到大学生们的喜欢，那么也是培养我们未来的这个 followers。

For example, we have launched the Young Channel, and we also host a lot of activities to go into the college. In this way, we would attract a lot of young users.

另外你看我们也利用818晚会，那么有些明星，比如王一博，这些出来演出，也是这个吸引年轻人，年轻的粉丝是吧。

Also on the 818 Global Super Auto Show, we hosted the gala evening. We invited the superstar Mr. Wang Yibo, who has a lot of young followers and young fans.

当然明年的话我们还可以，呃，再进一步加深了跟相关的这些网站的合作，是吧？那么这样子呢，就是一个叫异业合作或怎么样啊，跟跟一些有比较有年轻人比较多的这些网站做一个互动或者合作交流啊，那么也也这样呢，也可以吸引更多年轻人过来。

Next year we are going to launch more collaboration with some young viewers' websites. Those websites have a lot of young followers, so in this way we can attract a lot of young users.

反正这个你这个问题很好，就是说得年轻人得天下，所以我们会在这个年轻化这个方面啊，坚定不移的去去推动它。

Actually, this is a very good question. I firmly believe that if we can win the hearts of the young users, we can win the market.

Just add a fun fact here, you know, like on the, obviously in the way people open, like, you know, we had more than 260 million reviews, most of them are young viewers. And also, you know, for traffic, in the last quarter, around 90% of our traffic already are coming from tier two and the lower cities. So we are actually, you know, penetrating to younger and lower tier cities.

好，谢谢。

Okay, thank you.

Operator (participant)

Thank you. Our next question is from Thomas at Jefferies. Please go ahead.

Thomas Simons (SVP)

Hi, good evening. Thanks, Management, for taking my question. Can you comment about the outlook about the industry recovery momentum in 2021? Thank you.

Ming Lu (CEO)

这个海峰，你讲讲2021年的那个。

2021年的展望。

展望。啊，这个，呃，2021年呢，呃，是这样的，现在目前呢，包括啊，我们调研主机厂跟我们自己的判断呢，应该是呢，2021年呢，相比2020年是会有增长的。

Now, tell me about the outlook of the market of 2021. We communicated with OEMs, and we also have our own observations. We believe that 2021 would be a growing market over 2020.

增长的幅度呢，大概会在6左右吧，上下吧。

We believe the growth can be around 6%.

但是相比较相比较2019年呢，呃，总量来看呢，还是会下降的。

However, if we compare next year with 2019, actually it still will be down.

当然在这个趋势中呢，实际上，呃，还可以看到呢，就是实际上这个品牌啊，也是一个会，呃，聚集逐渐逐渐聚集的一个效应。

We also see another trend for next year, which would be more and more concentration of the brands in the market.

其中呢，新能源呢，应该会继续啊，保持一个比较快的增速。

For the EV OEMs, we believe that they will keep growing on the faster momentum.

好，谢谢。

Okay, thank you.

Thomas Simons (SVP)

Yeah, now to say that, of course, we already have 23 EV makers working with us this year in different forms: advertising, leads, or CPM. That's going to definitely be a chance for us in the future. Okay, next one please.

Operator (participant)

Thank you. Our next question is from Liping ZHAO CICC .Please go ahead.

Liping Zhao (Research Analyst)

陆总，海峰总，周总，晚上好。那，感谢接受我的提问。我这边有两个问题。首先第一个问题是一个 follow up 的问题，是关于数据这边的。不知道管理层能不能拆分一下，在数据产品当中，来自于 OEM 和来自于 dealer 分别，大概占比是多少。然后第二个问题是关于二手车这边，我们注意到公司再一次，增加了在天，天天拍的投资。那可以更新一下二手车业务发展的这个情况，以及未来的打法吗？啊，我自己翻译一下。 Good evening, Management. Thanks for taking my questions. I have two questions here. First one is a follow-up question on your data product. Could Management help us to break down the data product's revenue by OEM and dealer? Second question is about the used car market. As we noticed, Autohome increased the investment in TTP this quarter. Could Management share with us used car business updates and future strategy? Thank you.

Ming Lu (CEO)

我来回答一下关于数据产品的收入问题。那目前在我们的成熟产品系里面，也就是说我们是关于智能系是主机厂的，关于我们的经销商，是智慧系的。那目前而言，他俩的收入占比，构成的基本是五五开，主机厂稍微高一点点。这是我们目前的成熟产品。但是随着我们的往下，明年刚才陆总说的那个战略的话，其实我们会针对，针对我们的主机厂和经销商会有联动的一体性的整体性打法。那这样的话，可能会把他们两个做一个融合来进行整体性的售卖，包括 SaaS，也是这样。SaaS 的探索，也是一个整体性的 total solution 的概念，所以不是一个单独区分他们俩之间的关系的战略。谢谢。

Thank you. To answer your first question, actually for the matured product, we have a different product targeting at OEMs and these dealers. 智能, which is intelligent based solution is for OEMs, and 智慧, which is smart based solution is for the dealers. The ratio is between 50-50. Maybe OEMs are slightly bigger, but still roughly 50-50. In the future, we are going to offer the total solution approach. The total solution approach would be more convergence. For example, the SaaS product would be a more convergence and the total solution based product.

好，这个二手车这个我来介绍一下，就是第一个呢，这个叫，呃，呃，二手车啊，对这家来说很重要。这个重要性呢，实际上就是这几年呢，实际上二手车的这个增速啊，呃，都是远高于新车的增速的。当然今年呢，今年也高，但是呢，它还是总量来看是一个，呃，下降的一个趋势啊，个位数。

Now, talking about the used car business, we attach great importance to this business because this is a high growth business. If you look at previous years, the used car business growth would be higher than the new car sales growth. This year, it's also the same momentum, but the total volume is down.

呃，之家呢，呃，现在这个，呃，投资啊，投资二手车，投资天天拍。呃，投资以后呢，实际上就能够形成一个之家呢，呃，我们的二手车业务啊，是一个线上的信息流平台，然后加上呢，天天拍啊，它是一个这个，呃，车交易处置平台。那这个信息流加交易流啊，就形成一个很好的战略协同作用。

Now, if you look at our investment in TTP, actually for the used car business, we have the online information flow. We also have the TTP, which is a transaction platform offline. In this way, we can combine online with offline.

之后呢，这个之家的这个二手车的策略吧，我们目前，也在这个陆总的带领下在制定。目前的方向呢，大概是这样，就是之家的二手车的实际上是一个轻资产平台化，以双云呢，帮助车商数字化运营，实现呢，这个 C2B 之后呢，在 B2C 的一个闭环的运作，成为，全球第一的二手车的交易服务平台。

Now, talking about our future strategy, we are designing the future strategy under the leadership of Chairman Lu. Our direction is very clear. We would go with the light asset model. We would be a platform, and we would offer the dual clouds to help the OEMs to digitize their operating. And we want to achieve the C2B2C model, which would be the closed loop model. We want to build the nationwide service network. Our target is to become the global number one used car transaction and the service platform.

好，谢谢。

Liping Zhao (Research Analyst)

Just one thing to add, you know, we are also going to, of course, you know, integrate financing, insurance, and a number of other value-adding services into the entire transaction value chain. And, that is the answer to you. Thank you.

Operator (participant)

Thank you. There are no further questions at this time. I'll turn the conference back to Management for closing comments.

Ming Lu (CEO)

Okay. Thank you very much for joining us today. We appreciate your support, and we look forward to updating you, our next quarter's conference call in a few months' time. In the meantime, please feel free to get in touch with us if you have any further questions or comments.