TUHU Car (9690) H1 2024 earnings summary

Executive summary

• Operating revenue reached RMB7.13 billion in H1 2024, up 9.3% year-over-year, with all segments achieving growth and gross profit of RMB1.85 billion; gross margin improved to 25.9% from 24.2% last year.

• Adjusted net profit (non-IFRS) rose 67.3% year-over-year to RMB358.2 million, and adjusted EBITDA increased 27.8% to RMB450 million, with profit margins at historical highs.

• Net profit surged to RMB284.3 million from RMB59.5 million in the prior year period, reflecting significant operational improvements.

• Registered users exceeded 126 million, and 12-month trading users surpassed 21.4 million, up 18.8% year-over-year.

• Store network expanded to 6,311 workshops nationwide, with over 400 new stores added and notable growth in lower-tier cities and Hong Kong.

Financial highlights

• Gross profit increased by 17% year-over-year to RMB1.85 billion; gross margin rose to 25.9%, up 1.7 percentage points.

• Free cash flow grew 42% year-over-year, with end-of-period cash reserves at RMB7.1 billion, up 3.4% from year-end.

• Tire and chassis parts revenue grew 11%, car maintenance revenue up 10.7%, and other automotive products/services up 4.3%.

• Advertising, franchise, and other services revenue increased 4.3% to RMB482.9 million.

• Operating profit rose 217.5% to RMB212 million, and net cash flows from operating activities were RMB719 million.

Outlook and guidance

• Continued focus on expanding store network, especially in low-tier and remote cities and Hong Kong, and further international expansion.

• Ongoing investment in digital tools, supply chain optimization, and new energy vehicle (NEV) service capabilities.

• Plans to deepen user engagement and enhance product/service offerings, especially for NEVs.

• Management expects continued growth, leveraging market leadership and operational capabilities to capture opportunities from the structural recovery in the automotive service market.

• No interim dividend declared for the period.