FAST NEWS: Autohome rolls out $200 million share buyback
The Latest: Online auto trader Autohome Inc. (ATHM.US; 2518.HK) on Wednesday announced a new plan to buy back up to $200 million worth of its shares over the next 12 months, including both its Hong Kong-listed H-shares and its American Depositary Shares (ADS).
Looking Up: A complete exercising of the plan’s authorized $200 million would represent about 6% of the company’s current market value of $3.2 billion, potentially helping to lift the stock.
Take Note: Autohome’s board will review the size of the program periodically and could revise down its scale or discontinue it at any time.
Digging Deeper: Auto sales have been a major casualty of China’s slowing economy, dealing a blow to car sellers and traders like Autohome. To boost its business in such difficult times, the company launched a “Satellite Plan” in May, using brick-and-mortar Autohome space station stores at its core and satellite stores in lower-tier cities to better serve potential car buyers. In the first half of this year, the company’s revenue rose 3.4% to 3.48 billion yuan ($490 million), while its net profit rose by a slight 0.6% to 889 million yuan.
Market Reaction: Autohome’s ADSs rose 7% to close at $26.50 on Thursday. The stock now trades in the middle of its 52-week range.
Translation by A. Au
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