Huachuang Securities has issued a research report maintaining a "Recommend" rating on TUHU-W (09690), with projected adjusted net profits of RMB 809 million, RMB 992 million, and RMB 1.203 billion for 2025-2027 respectively, and a target price of HK$23.62.

Given the fragmented and disorganized competitive landscape in China's automotive aftermarket, TUHU continues to strengthen its industry-leading position through digital capabilities, standardized services, and supply chain advantages. In the first half of 2025, the company achieved revenue of RMB 7.877 billion, up 10.5% year-over-year, with gross profit of RMB 1.982 billion, up 7.4% year-over-year, representing a gross margin of 25.2%. Adjusted net profit reached RMB 410 million, up 14.6% year-over-year.

Huachuang Securities' key points are as follows:

**Steady Revenue Growth with Continued Profitability Enhancement**

In the first half of 2025, the company achieved operating revenue of RMB 7.9 billion, up 10.5% year-over-year, maintaining steady growth. Adjusted net profit reached RMB 410 million, up 14.6% year-over-year, showing impressive growth. Revenue growth was primarily driven by store network expansion and increased contributions from high-growth businesses such as new energy vehicles and quick repair services.

By business segment, core businesses including tires & chassis components and automotive maintenance both achieved approximately 11% year-over-year growth, demonstrating steady performance. Quick repair services revenue surged over 60% year-over-year, becoming an important growth driver. On the expense side, the company significantly optimized operational efficiency, with adjusted total operating expense ratio declining year-over-year. AI technology empowerment drove customer service labor costs down 18% year-over-year, improving net profit margin.

**New Energy and Market Penetration Working in Synergy, Ecosystem Advantages Continuously Strengthened**

The company's new energy service ecosystem expanded rapidly, with platform new energy vehicle users reaching 3.4 million, up 83.5% year-over-year, achieving a penetration rate exceeding 12%. The company launched differentiated products such as new energy-specific tires. The store network continued to penetrate lower-tier markets, reaching a total of 7,205 stores, covering 70% of counties with passenger vehicle ownership above 20,000 units. User operations continued to strengthen, with 26.5 million transaction users and a 64% repurchase rate, demonstrating significant ecosystem synergy effects.

**Supply Chain and Technology Dual-Engine Driving Efficiency Improvements**

Through intelligent supply chain upgrades and comprehensive AI technology empowerment in operations, the company significantly improved overall efficiency: the automated warehouse in Guangzhou achieved efficiency improvements of over 2.5 times, with unmanned delivery vehicles deployed. The intelligent customer service system based on the upgraded DeepSeek large model drove pre-sales conversion rates up by 2 percentage points while reducing labor costs by 18%. Additionally, the company actively capitalized on the "trade-in" policy dividend, with 618 single-day sales exceeding RMB 150 million.

**Risk Warnings:** Intensified industry competition beyond expectations, macroeconomic fluctuations and automotive sales volatility, new business expansion falling short of expectations, policy and regulatory changes.