Auto Home's CFO discusses Q4 2026 earnings, including non-GAAP financial measures, forward-looking statements, and invites questions for a Q&A session. Participants are reminded of the recording and provided with details on accessing the call's webcast and IR website.

Auto Home has launched initiatives to transform into a comprehensive automotive service ecosystem, achieving a new user engagement high with over 80 million daily active users. The company has expanded its global presence with the official launch of its overseas platform in Thailand, integrating AI into operations, and enhancing its media ecosystem with premium content and influencer engagement.

A new online car purchase feature for new energy vehicles was launched in Shenzhen and Tian, offering competitive pricing, streamlined purchasing, and four key guarantees including certified sources, fund supervision, transparent pricing, and warranty responsibility, prioritizing user security and trust.

Leverages AI and large language models for trend monitoring, automated content generation, and user profiling, enhancing operational efficiency and content relevance. Integrates multidimensional data inputs for smarter distribution, improving alignment with user needs and increasing conversion rates.

Partners from Jiangxi and Henan provinces achieved success in the used car market through their joint efforts and strategic cooperation, highlighting the effectiveness of regional collaboration in business ventures.

The company has launched two core platforms, a car setting and service platform, and a cross-border export service platform, aimed at improving efficiency and quality in domestic services and expanding into global markets. These platforms offer integrated solutions for car owners, dealers, and overseas buyers, featuring standardized inspection reports and maintenance records. The company plans to accelerate the rollout of the domestic platform to more cities and enrich the supply of export-qualified vehicles by introducing more sourcing partners. Financially, the company is committed to shareholder returns, maintaining a healthy balance sheet, and executing share repurchases, focusing on growth areas while controlling costs for long-term value.

The first quarter saw net revenue of 1.05 billion, with media services, lead generation, and online revenues totaling 163 million, 503 million, and 382 million respectively. Cost of revenue increased to 357 million, impacting gross margin to 75.5%. Product development costs remained flat at 274 million, while administrative expenses decreased to 120 million.

A company authorized a share repurchase program, committing up to $200 million to buy back approximately 3.47 million shares at a total cost of around $203 million. The announcement follows a review of the company's financial health, noting a net cash flow from operating activities of $143 million in the first quarter. The company also reported a decline in certain financial metrics, comparing figures from March 31, 2019, to a previous period in 2025.

The Board approved a $0.65 dividend per ADS and ordinary share, totaling approximately $0.5 billion, payable to shareholders by July 30, 2026.

Instructions are given to start a question and answer session, detailing how to ask and withdraw questions using a telephone keypad.

The auto industry faced a sales downturn in Q1, attributed to expired government policies, reduced consumer confidence, and high dealer inventories. Exports, however, emerged as a critical stabilizing factor, with a significant year-over-year increase, especially in NEVs.

Focus remains on synergy execution in used car business and offline services, leveraging extensive online-to-offline operations experience across China.

Discussed collaboration between retail and automotive sectors, focusing on vehicle sourcing, customization, and charging infrastructure. Plans include deepening and expanding operations for mutual benefits.

Despite the ongoing price war and shrinking margins, the company maintains dealer customer coverage through improved capacity matching and distribution efficiency. The focus is on supporting dealers to increase traffic and conversion rates, exploring integrated O2O business initiatives. For new retail, an e-commerce-like auto transaction platform is being piloted, aiming for an efficient, user-friendly vehicle purchasing experience, with plans for city-wide expansion after validation.

The company reaffirms its dedication to shareholder returns through consistent dividend policies and ongoing share repurchase programs, aiming for at least 1.5 billion in annual cash dividends and completing one-third of the authorized share repurchase within three months.

The dialogue covered the progress in the auto home mall business, highlighting strategies for new and used car sales, aiming for standardization, quality assurance, and customer satisfaction. It also expressed optimism about the future growth in both new car and used car transactions, indicating a positive outlook for the industry's direction.