FAST NEWS: Autohome’s profit dips on higher operating expenses
The Latest: Online auto trader Autohome Inc. (ATHM.US; 2518.HK) on Wednesday reported its net profit fell 0.6% to $122 million in the first half of this year.
Looking Up: The company’s revenue rose 3.4% to $479 million over the six-month period, mainly due to revenue growth in its lead generation services and online marketplace, which offset a decline in media services.
Take Note: Its total operating expenses increased by 4% to $318 million due to higher sales and marketing, administrative and R&D expenses.
Digging Deeper: Despite a slowing Chinese economy, Autohome recorded an increase in both revenue and net profit last year as a mixture of government policies to stimulate car buying and manufacturer discounts fueled a rise in car sales. But the company’s revenue growth is slowing as those measures fade, leading Autohome to further invest in innovative businesses. In May the company launched a “Satellite Plan,” with flagship Autohome space station stores at its core and satellite stores in lower-tier cities, to broaden its brick-and-mortar store network.
Market Reaction: Autohome’s Hong Kong shares rose slightly on Thursday to end up 0.6% at HK$48.35 by the midday break. The stock now trades near the lower end of its 52-week range.
Translation by A. Au
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