According to the research report released by gtja, TuHu (09690) has significant cost-performance advantages due to its supply chain procurement, economies of scale and strong store management compared to 4S stores and traditional small auto repair shops. According to F6 Automotive Technology, the output/unit of the automotive aftermarket in H1 2024 increased by 1% YoY, among which the tire output remained stable YoY, while the maintenance output decreased by 3% YoY. The performance of medium-to-large chain stores was significantly better than that of small stores. TuHu's business operation is significantly stronger than the industry, and is expected to grab more market share from 4S stores and other small auto repair shops in the future, continuously increasing its market share.
The bank believes that due to the consumption trend of cost-performance, the company's revenue in H1 2024 is slightly lower than previously expected, and the company's revenue for 2024-2026 is reduced to RMB 14.608/16.127/17.755 billion yuan respectively with growth rates of 7%/10%/10%. It is expected that the net income adjusted for 2024-2026 will be RMB 0.749/1.194/1.664 billion yuan with growth rates of 56%/59%/39%, corresponding to PE ratios of 16/10/7x. Considering the company's strong growth potential and comparable company valuations in the same industry, the bank gives the company a 25x PE, which is higher than the industry average in 2024, and a target market value of HKD 20.4 billion yuan. It gives the company a "shareholding" rating.
