Autohome Inc. (HKG:2518)

Investor Day 2021

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Sep 15, 2021

Good afternoon, ladies and gentlemen, and welcome to the Autohome 2020 1 Investor Day and Strategic Upgrade Press Conference. I'm from the IR department, and my name is Sterling Song and I'll be the moderator today. We are very grateful for the support of investors, analysts and journalists, both on-site and online. First, let me introduce the senior executives who are present here today. Mr. Long Quan, Chairman and CEO of Autohome Mr. Xiaohai Feng, President Mr. Shijinkui, Senior Vice President Mr. Liu Yue, Senior Vice President Mr. Wang Xiao, Senior Vice President and Chief Technology Officer Mr. Wang Youdong, Vice President Mr. Jing Wenbing, Vice President and Mr. Charles Zhou, Vice President of Autohome. In the next 90 minutes, the executive team of Auto Home will share with you the current status of China's auto industry ecosystem, the opportunities and challenges it faces and the tremendous growth potential brought by the strategic upgrade of Autohome, followed by a break of 20 minutes and then we will enter into the Q and A session for about an hour. As a reminder, the Q and A session will start around 16:00 Beijing Time. We will first answer questions by e mails and phone calls, and then we will answer questions from the floor. If you want to ask questions, please follow the prompts on the live stream interface and send your questions to the IR e mail address in advance. Before we begin, I would like to provide you with a disclaimer that the presentation and video today will include forward looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially from those forward looking statements contained in our filings with the SEC in the United States. Any forward looking statements made by us at this meeting are based on assumptions made as of today. Except as required by applicable law, Autohome disclaims any obligation to update these forward looking statements. Now please welcome Mr. Long Quan, Chairman and CEO of Autohome, to make the presentation. Mr. Long, please. Dear investors, analysts and friends from the media and all of you who have supported our growth, good afternoon. First, on behalf of Autohome's management team, I'd like to welcome you to the 2021 Investor Day. This is the 3rd Investor Day we've held. And today, we are going to talk about 3 things on the agenda. First is China's auto ecosystem and the second is the ecosystem strategy and implementation. And 3, I'd like to address some of the questions from the Capital Markets lately. First, let's focus on the Chinese auto ecosystem. We believe that there are huge opportunities and challenges. For the auto market in China, I'd like to make 3 points. The first is that China's auto market is the largest in the world with unlimited possibilities. We are the 1 new car market and a fast growing used car market. The second point is that although China's car market is big, however, the players in the system, whether it's the consumers or the dealers or the OEMs and the aftermarket participants have many pain points and needs. And the third point is that as an industry leader, we have upgraded our strategy to meet these new needs. And now I'd like to discuss in greater detail the current status of China's auto market. Whether it is today or in the future, China will be the largest and fastest growing auto market in the world. On this slide, we can see both new car sales and used car sales compared to the number 2, number 3, number 4, number 5 car markets, we are much larger than all of them combined. And by 2025, our new car sales will reach 23,500,000. That's for new cars. And for used cars, the ratio between used car and new car is 0.6%. That means there is tremendous growth potential. In the U. S, that ratio is 2.4. In Germany, it's 2.0. Therefore, the used car market is much, much larger than the new car market. So looking back on the evolution of China's auto market, we have witnessed 3 stages: 1st is the explosive growth stage The second is the fast growth stage and now it's the consolidation stage. Over the last couple of decades, we had double digit GDP growth. However, the car market growth was lagging behind. Even 10 years ago, when the GDP growth slowed, car ownership actually rose sharply. However, since 2018, the government changed the industry policy, especially last year given the COVID pandemic, the entire auto market has been very sluggish. Since the beginning of this year, China has been able to put the COVID situation under control and we have witnessed very strong demand. Therefore, we are now entering a new growth period. That's for the new vehicle market. For the used car market, it also went through a very long preparation and education period. Before 2014, the new car market grew rapidly. However, used car market was quite slow. However, in Phase II and Phase III, I believe you all understand this, a lot of the capital went into the used car market and that caused a boom. However, we thought it was a bit overblown and we have seen huge market consolidation and many players are seeking business transformation. I believe we are now in a more healthy market and that's determined by 2 factors. 1 is that the car ownership is growing, used car ownership is growing and number 2, government policies provide strong support to the used car market. We believe by 2025, the volume the trade volume of the used car market will reach 16,000,000. So that's a very brief overview of the auto market in China. So that brought a lot of opportunities, but also created some challenges. Although for the users as well as the OEMs as well as the dealers, each of them is going through difficulties and each of them has pain points that are waiting to be addressed. So let's first look at consumers. We can see whether they are doing research or whether they are buying cars or whether they are using cars, the customer base is growing. However, for those that are doing research before buying cars, they are focusing more on the vertical medias and this is the survey from BCG. It shows that 96% of the users choose vertical media platforms as the number one choice. Although the Internet industry is growing very fast, still the majority of the people still want to get their information from vertical platforms. And now there are more people trading their vehicles and buying new cars. So we believe the demand will be very robust. But it is a very complicated process and I think this slide shows it very clearly. On this slide, you can see if you are doing research about new vehicles. Every day we have so much information available to you. And sometimes you do not have access to precise information, easy to understand information. So what consumers really want are simple interesting content that they need. Now if you want to buy cars, sometimes you do not have the clear information about the prices. And also it takes a lot of time for you to buy a car. And we see that there are a lot of situations going on throughout the process. So for consumers, they need real price information and also for car using it is the same case for maintenance, repair. Now the prices are not transparent and what consumers need are reliable information and reliable authoritative guidance. These are for consumers, what's the status quo and what's their pain points? And next OEMs. For OEMs in the future, the concentration level will be higher. And on this slide, we estimate that by 2025 top 20 OEMs in terms of the sales percentage of the total auto market would be as high as 90%. That is a very important feature. And then, NEV is another. China has AUV specific plans. And if you read the plan in 2025, NEV penetration rate will be 25%. But if we look at this year's situation by August, AUV penetration in the Chinese market was already 12%. For the whole year, it's already higher than 10%. So we think that we've been underestimating the growth potential of NEV. NEV market will grow very rapidly. For OEMs we think that in the future there will be 3 challenges for them. 1st, more competition and a thinner profit for the industry even though they are leading top enterprises. However, their share in terms of sales has been declining and the profit is very same. That's the first challenge. And second challenge is customer loyalty is declining gradually as well. And thirdly, we could see that AUV market is growing and for these kind of customers they would like to have direct connections with the OEMs. In front of these three challenges, there would be 3 demands. 1st of all, boost new car sales and second, improve customer loyalty and thirdly, to build new channels fast and with a lower cost. These are the 3 demands for OEMs. Then let's talk about dealers. We have listed some information about the dealers. We have more dealers who are making profit, but also there are more dealers who are losing money. And for dealers' market in the future, there would be a certain part of dealers who cannot breakeven. If you look at this slide, this illustrates what I just mentioned. And the second point is that in the past dealers could make money by selling new cars, but now they have to rely more on aftermarket business for profit. So that's a change for dealers. What are the pain points for dealers? There are 2 challenges which stand out to us for dealers. First of all, 37% of dealers actually are losing money by selling cars and per store dealer profit is very, very thin, just a 0.5%. That's the first challenge. And the second challenge, we already talked about that before. Aftermarket business would be a major source of revenue, but there would be unbalanced business performance and very high idle rate for dealers and the survey shows that it's more than 50%. So the pursuits for dealers is to improve efficiency and reduce cost. These are about dealers. Then used car market, We already mentioned before now used car market is growing very healthily. There are several pieces of good news for used cars. First, national policy support. There have been so many supportive policies. If you understand used car markets, you should be clear about the extension of the VAT or rather the reduction from 2% to 0.5% and also the elimination of cross regional restrictions, etcetera. These are supportive policies for cross regional sales of used cars. That is the first piece of good news. And secondly, more supply of used cars with the age of 3 to 8 years old. And the quantity of these kind of vehicles is on the rise. Last year, we already saw about 11,300,000 and we estimate that in 2025 the number could be even higher. Thirdly, 61% of Gen Zs are more willing to buy used cars. These are the opportunities for used cars. However, in the Chinese market as compared with overseas market, there are so many differences. I have listed 3 major features in the used car market in China. First, in China the used car market is very fragmented. Companies usually are very small, 84% of the companies have less than 10 units, so very small scale. That's the first feature. And secondly, very slow sales turnover. 50% of the dealers are with 30 day or more than 30 days of sales cycles. So, So these dealers they need to sell cars faster. I mentioned that the first feature is a fragmented market and that requires an integrated market to be connected with customers. The third feature is that in China over 60% of vehicles are not with historical data. Then what are the demands? Dealers need a reliable 3rd party platform. These are about the status quo of a used cards market in China, which is very different compared with overseas markets. And then let's take a look at aftermarket in China. Aftermarket has been developing very fast. We estimate by 2025 aftermarket will reach RMB1.9 trillion, but because of the car age increasing, some car owners will be without car insurances that means they will choose cheaper maintenance. In other words, many car owners will have to go to repair shops. That's the second feature. And thirdly, repair shops have excessive capacity and by 2025, the number of shops will be reduced by 40,000. That's about aftermarket. And also for the aftermarket, there were several pinpoints or challenges. 1st, we think the first challenge is very high CAC. We have a survey done by 3rd party organization for a leading dealer. The average CAC is RMB800 that's very high. And the second challenge is very little operating projects. Every year there haven't been many opportunities for aftermarket companies to be directly connected with customers. And the 3rd challenge is that customers rely so much on individual technicians instead of the overall company. Sometimes they may have 20 or 30 employees, but car owners only trust 2 to 3 experienced technicians working there. So the demands of aftermarket, first of all, is to reduce customer acquisition cost and second is to improve customer retention and the third is to improve customers' overall trust in the store. These are about the demands for the aftermarket. We have just explained the auto market in China both in terms of opportunities and also challenges to you. As Autohome as a leading platform in China, how can we better serve whole ecosystem? I have a slide. It may look complicated, but I will elaborate a little bit. Dark blue is about today and light blue represents the situation after our strategic upgrading. For consumers, we will have more scenario and more formats, so as to provide better services to more consumers. And for OEMs, we will continue to strengthen our advantage as number 1 vertical media and also we will focus on leading OEMs so as to help them address their pain points. And for our ecosystem partners, on one hand, we will help them to transform, enable them throughout the whole process to reduce cost and improve efficiency. We have acquired TTP in the future. Hopefully with this platform, we will have more synergy in terms of used car business. Today, we are releasing our strategic or rather upgraded strategy, which means Autohome will be completely integrated into Ping An Group's strategy. Over the years, Peline Group has a lot of accumulation in auto industry and also they have 2C and 2B capabilities and resources. We will tap into that resource to address pinpoints so as to build a bigger and a better market. This is about our ecosystem strategy as to how we will implement. We will elaborate from 2C Business and 2B Business. Thank you. Thank you, Chairman Long, for his summary of China's auto industry ecosystem status. As Mr. Long said, on the 2B and 2C businesses, our OEMs and dealers are facing many challenges and pain points. So how can we empower them and help them address these pain points? Now let me invite Mr. Vice President, Charles Zhou and President, Xiaohai Feng to talk about our strategic upgrade and the implementation of the new ecosystem strategy. Please. Thank you very much for coming to our Investor Day. And I want to thank Chairman Long for his presentation. Now Mr. Xiaohai Feng and I will talk about our ecosystem strategy both on the 2B and 2C sides. I am in charge of the 2C business. In part 2, I'd like to share with the investors, analysts and journalists share 3 things with you. First is what we did with our ecosystem strategy, what is it? And second, it's not just about giving presentations, it's about exploration, It's about pilot programs. And I want to talk with you the progress we've achieved so far. And number 3, all of you know, whenever you do something new, especially given the importance of a strategic upgrade, it's very difficult that we are very confident that we can succeed. And we have succeeded in the last few strategy changes and I believe this time will be no different. First, let me review the key pillars of our ecosystem strategy. So on the consumer side, I want you to remember 3 more, so more users, more formats and more scenarios and more scenes. Now let me focus on this part first. And for the OEM business, we want to focus on the top 20 OEMs and we are and we will be the number one vertical media platform for the auto market. And we will, of course, expand our business scope. For dealers, we want to empower them with technology and to help them make progress. First, on the consumer side, in the last few years, we've had very intense competition. However, we are the number one platform in the vertical media space for auto. And on the mobile Internet side, we have DAU of over 10,004,410 DAU, and we have achieved a 16% growth year on year. It's bigger than the 2nd and third player combined. And number 3, we are a 16 year old Internet company, and we've been through everything that the other companies have went through. And this is the coverage of our core users. So for all three processes, both reviewing cars, buying cars and using cars, we cover 58%, 76% and 26% respectively. So this is not based on the online users. It's about online plus offline users. And when you look at the numbers, so 185,000,000, 29,000,000 or 65,000,000, that is just about our registered users or app users. We do not include people who have just casually browsed our websites. So these are very exciting data. So we hope to achieve 70%, 80% 40% of the users in the interim. So more users, more formats and more scenarios. And if you are familiar with Autohome, when we talk about users, it's 2 groups. 1 is our users, they are our lifeline and these are the key customer base that we need to serve. And the second group is content creators. We are a little bit different from other content providers. We have about 300 professional editors. We have engineers as well as professional drivers who are providing excellent content. And we also have some very, very good KLLs that are contributing to our content. So let's watch a short video first. Okay. I want to thank our creators and users for creating such wonderful content. Let me summarize some key numbers. Maybe you didn't notice that we worked with some consulting firms and we are already the number 2 or the top 2 auto content service provider. And 40% of our users are under the age of 30, and they're also the fastest growing group of users. And we have over 24,000 creators and they about 80% of them have more than 1,000,000 followers and 31 of them were incubated actually from our vertical media business. And Mr. Leo, as you saw in the video, attracted 1,000,000 followers in just 10 days. And you're also very familiar with our online auto show. In the last 3 years, we have held an auto festival for 3 consecutive years, and that's the biggest event in the auto till now, we have over 300,000,000 views of our online auto show. Maybe foreign investors are not familiar with the online auto show market. For the largest auto shows in the world, usually the visitors are about 2,000,000. So that means we're doing 150 such large live shows. And we have attracted a lot of visitors, and the growth has been over 158%. And here, I want to talk about more of our formats. And I'd like to address your some of your stereotypes. Probably you know that in the last 16 years, we have been providing a text and pictures to users. However, we are embracing many new technologies. For example, at the end of June early July, there is a new highway opened, that's G7, and we had a slow live streaming show for the road trip. And in the middle, we made a short film about restoring old cars. And in the last 2 years, we've already launched over 80 highly viewed short films. And number 3, we also had a lot of cross sector cooperation. For example, we worked with Bilibili and Chirhoo and Koishou and explored many new different forms of content. So I'm going to leave you in suspense. You can see there's an icon on the right side, it's called shanliang. This is a new experiment. We are launching a new mobile video apps, providing unlimited possibilities to our content creators. Okay. So after I talked about more users and more formats, I'd like to talk about more scenarios. As Chairman Long said that there are many pain points on the consumer side. As you can see that for customers, our 2C business is different ecosystem. For customers, offline experience is very important and that also matters to us. In the past 1 year, we've done a lot of things in terms of offline experience with our customers and we have listed an experience which is NEV owner festival. And also we have trials and open day and also some physical activities with teenagers etcetera. And I guess these can help trigger growth in the future. In addition to these, Mr. Long introduced that in terms of car use, the Chinese market actually lacks an authoritative guidance. Our foreign investors may think that driving vehicle is very simple. Why do you need guidance? But for the Chinese people, it's a little different. Some of the Chinese people are not that experienced with driving experiences when they were young, probably 90% of the customers wouldn't be willing to read the manuals. But in case of accidents, they don't know who to turn to or sometimes they may cause for us shops or hotlines of the OEM to inquire for functions etcetera. That is not convenient. And because of that we have some ideas that we have the most comprehensive and most accurate vehicle library that is our asset and we have created the so called vehicle library in Q4 2021. This library will be launched and in this library you could see different elements about maintenance, driving, playing, etcetera, different functions and also many fun ways of driving cars. And also if you have any problems driving car, now you have a resource to go to. And then thirdly, Mr. Long also mentioned this before, in the future, when our economy grows people are more willing to spend money on cars. So there are several new scenarios that we can generate for example modification. As you probably know that when you have available money available for consumption then you want to modify your car. And in June this year, we launched a specific channel for this. And in the future, based on the pinpoints, we would have more resources, for example, for motorcycles, etcetera. I was sharing with you with my own words, but now I'm going to play a video, so you could understand better. That was the part about our 2C strategy as well as what we have been doing in the past a year or so. I hope that there are takeaways at least three things that we want to do more people, more customers, more formats and more things or scenarios in the future. Next, I want to invite President, Shaohai Feng to share with you our 2B business and also our 2B strategy. I would like to share with you our 2B business and how our ecosystem strategy will be implemented in 2B Business. Following the previous chapter, when Mr. Long said that we have a lot of opportunities, but also challenges as well as pursuits in terms of 2B business. Then how we plan to implement our ecosystem strategy? First OEMs, Where we are and where do we want to go and how? Where we are? For now, in terms of OEM, we are the number one vertical media. We have around 52% of the market share in this aspect. This is our advantage and we will maintain this in the future and solidify and do better in the future. So that's about strengthening our advantage. And then with OEM sales increase and also with their marketing and communication budget improves, then we will also benefit more in the future. Another thing which is also key is about expanding into new businesses. We need to expand new channels so as to get more businesses. We need to find the new ways of getting businesses. Three aspects about sales, about car owners and also about channels, All these 3 are important points. So when we find new channels, how we can through these new channels to get new business that's our skill. First of all, for more customers or users by 2025, this would be a market worthy of about RMB10 1,000,000,000. For Autohome, why do we want to tap into this market? Because we have 3 advantages. 1st, users, user base Secondly, we have data and technologies. And thirdly, we have online operation experience. Mostly we can help OEMs to have private domain platforms so that we help OEMs to provide operational and data services. So data would be shared and that will cover all different touch points for the OEMs. In June this year, we worked with a leading OEM and after 1 month through content creation we for 1 month had about 100,000 fans for OEMs. That was a pleasant surprise. And the second is about digital marketing. This actually can respond to the pursuit of OEMs in terms of higher new car sales. Well, from OEMs perspective, in terms of digital marketing, there will be 3 modules. 1st of all, digital platform secondly, enterprise apps 3rd, digital marketing. Today, I want to elaborate a case about digital marketing. We worked with the Honxi and this is our case. Within the deadline and under the cost framework, we achieved the target with digital approaches. We doubled the growth of leads numbers. To simply put it, with digital approaches, we help improve efficiency and reduce cost. Next, let's take a look at a short video about the case. In the video, you saw people actually working in Autohome and who have been involved in the case. For Honxi's digital marketing, we actually utilized Autohome's and the P Line Group's digital capabilities and technological capabilities. Through hybrid cloud, we used algorithm and models to drive the process plus our industrial experiences. We successfully offered this case for our client. And that is one example of showing how we help OEMs to have digital transformation. Thirdly, From last year till this year, the auto market in China see rapid growth of NEV. Mr. Long, our Chairman, already mentioned from January to August, the NAV penetration rate has been very high. In August, the penetration rate was 20%. So with such fast growth momentum, the NEV OEMs need more empowerment that can help them expand their channels at a low cost and to help them using digitization to increase capacity per store. So this is our new franchise model. It's not something that just came out of the blue. It's invented based on the market trends, and we will continue to leverage our advantages of large customer base and generating leads and online orders. And at the same time, we will focus on RSVP and test drive as well as delivery. We standardized the procedures and built the standards based on systems and people will follow the systems and the procedures to support the direct sales stores of OEMs and to support the franchise stores and to support the agents to ramp up their production capacity. Now let's focus on the most important part of our strategy that is the dealer program, the digital dealer program. So where are we now? We are the online platform partner of dealers. About 24,000 dealers are out of 24,000, 21,000 or 22,000 are partners. So we have very large coverage, and we also generate the best leads that are highly recognized by the dealer. So while maintaining quality, we also generate the most leads. We will continue to strengthen our disadvantage. And in the next 5 years, we want to meet the needs of dealers to increase efficiency and reduce cost. So we created a digital dealer solution to increase the end to end operations of dealers. And we offer 3 modules, 10 products. By providing products or platforms, we can help dealers to improve their operations and increase their revenues in the aftermarket. This is a real case study. So this is a program that we worked with a leading dealer in 6 months. Let's just look at the results. So the gross profit increased by 1%. How did we do that? We offered 5 products. So we increased the stay time in the showroom by 300% And we increased leads by 20% and increased the in store visits by 1.6% and reducing the cost of call centers by 80% and labor costs by 0.2%. Now let's watch a short video to see how we did it and what were the I believe that our cooperation with the dealers on the one hand helped our dealer partners to provide better services to their customers And also the digital dealer program will continue to improve. So each dealer have 3.1 modules on average. Going forward with our efforts and product iterations, we hope that each dealer will have 6 of our products. So we'll continue to empower the dealers to help them reduce cost and improve efficiency. And we also worked with used car dealers. They are a very important partner of Autohome. As Chairman Long said, China's used car market has tremendous potential. There are a lot of supply and the growth is very high. And there are also many pain points to be addressed in the used car market. To meet these demands and address the pain points, we need to first understand our position in the market. We are number 1 in the car sales information service. We are 1 in China, and we're also 1 with the acquisition of TTP, especially in the C2B market. Last year, we had the largest trading volume and we are also number 1 in individual purchase of used cars in terms of information service. And secondly, this year, TTP has been integrated into our ecosystem. That's the current status. So where are we going next? So we want to leverage the Ping An platform to integrate TTP further, so that in the intermediate term, we will become the largest real car listing platform in China. In order to do this, we want to be a long term player and continue to invest in the market. So Mr. Long said there are several stages in the development of the youth car market. Those who swam naked have already been identified, and we've had some ups and downs in the market. So we are a long term player, and we will continue to invest in this market. So we are running a marathon, not a sprint. So if you can maintain the speed of a sprint for a marathon, that's terrific, but usually you can't. So we need to have endurance and perseverance. And another condition is that you have to be profit making. The good news is that TTP, for the first half of this year, in the Yangtze River Delta, TTP has already reached breakeven in many cities in the Yangtze River Delta. So it is now able to join Autohome to play in the long term game. And second is to continue to be a platform and very decisively we will always follow this strategy. And then we want to have a closed loop strategy. Our C1 plus TTP option helps us to have a closed loop from leads to transaction to vehicle delivery. This is the second part. In terms of C2B, we will help more car owners by offering more convenient and convenient vehicle transaction services. Also at the same time together with TTP plus Ping An's platform, we can offer more sources of vehicles and also financial support for companies. In terms of B2C, we together with the TTP and Ping An Group can help used car dealers with more leads and financial support for individuals' vehicle purchase, but of course at the same time we can provide SaaS. I spent a little bit of time explaining to you all the details. This is a slide showing the whole chain from selling the vehicle to another individual's purchasing this used vehicle. This is the whole process. Autohome and Ping An Group, Through our knowledge of 100 of millions of users plus models that we have to help identify potential leads. And also throughout the process, TTP plus Ping An Bank can provide financial support as well as vehicle sources. And then Autohome and Ping An Group can offer additional services in terms of information as well as financial support to the dealers. We also have gold standard certification, which is to verify the conditions of a used car situation. That is the whole process. So for individual customers, we shorten the period of time of selling a car and for dealers, we improved the turnover. Aftermarket, I have to speed up a little bit. It seems that I'm already behind schedule. The key point is that we need to work with the Ping An Group, because Ping An already has a big aftermarket ecosystem. We want to build the largest aftermarket ecosystem in China so as to provide services to customers. We have 26,000 car wash, we have lots of component suppliers and we have 124,000 repair shops and 217 charging piles, etcetera. How can we better serve repair shops? With 2 platforms we can offer 3 values to repair shops, so that we can enable repair shops better. Lower CAC, higher retention rate of customers and also improving the trust to the store instead of only individual technicians. We also outlined our solution, which is comprised of several parts, in hand repair shop and private domain operation and also provide repair shop operation platform and a standardized tools and vehicle library. Hopefully, through these tools and systems plus PIO's businesses, we can better serve those over 200,000 repair shops in China. The details of our strategy in 2B business and 2C business have already been shared with you. Since last year, we started upgrading our strategy by working on plans and experimenting with the projects. And I believe that we have achieved a lot of progress. What I want to emphasize today are 2 things. And for the rest you can refer to the slides. First, more users. Two numbers should be remembered. Charles Zhou already mentioned. Our DAU has been increasing by 16%. It's around 40,000,000 already. So large base still 16% growth rate. If that is not enough, then another number. Our auto show on August 18, today this year we have around 300,000,000 views, up by 158% compared with last year. There have been some doubts, but I think these numbers can explain by themselves. And another thing is TTP. This is the 1st year for TTP to be part of Autohome. What I want to share with you is that we have great synergy. Right now with the support of Autohome and Ping An Group, the revenue of TTP has been improved and the operation has been lean and also there has been narrowed loss. And also in some studies along the Yangtze River area, TDP already has broken even. When we are in a market where we should be there for long run, having capability is important, having aspiration is important and also of course having cash is important as well. Having revenue is important. For us to achieve these progress, on one hand, it's the result of the hard work of our teams from heads of different departments and also ordinary staff as shown in one clip. It's because of these great teams and because of their joint effort, it's possible for us to achieve such progress. Also at the same time, it's because of our Chairman and CEO, Mr. Long Quan, who has been very strategic in mapping out the plan for the company. So now I would like to invite Mr. Long to summarize for this session. Thank you, Charles, and also thank you, Haifeng, for providing so many details about our 2C business and 2B business, especially how we're going to implement the ecosystem strategy for these 2 businesses. If we look at our ecosystem strategy, we need to have it implemented. That's not easy. But we are confident about the implementation. The reason why we are confident is because in terms of 2C business and 2B businesses, we have accumulated a lot in the past. First of all, let's look at our 2C business. If together with the Ping An Group, we can cover 150,000,000 car owners, so it's very wide coverage. That's number 1 as our advantage. Our number 2 advantage is that Autohome is a vertical media outlet. Every year, we help 29,000,000 potential customers to purchase vehicles. They're very loyal to us. That's number 2. Number 3, as we introduced before, we have very wide array of vehicle models. We are very professional as well. And the 4th advantage is our professionalism and years of experience as a vertical media, which is not to be replaced by other Internet companies. These are our advantages in terms of 2C business. And then 2B business, the reason why we have got so much support from Ping An Group can be explained by just several examples. First of all, in terms of technology, Ping An is great in terms of AI patents. Ping An is world number 3 in terms of the number of AI tech patents that they have applied. We are also very rich in our technological capabilities as well. And secondly, as comparing with other Internet giants, Ping An Group is with a strong offline presence as well and a strength as well. For example, in terms of big data, they have about 157,000 agents and also tons of offline outlets. These are channels for comprehensive interaction with the customers. And thirdly, over 90% of OEMs and over 90% of dealers are both customers for Autohome and Ping An Group at the same time. So Autohome plus Ping An Group have great synergy in 2B business and 2C business and that ensures successful and a smooth implementation of our ecosystem strategy. Recently, we have heard a lot of questions from the market. So the third part, before talking about the exciting future, I would like to help address some of the concerns from the capital market. As shown on this slide, there are 6 or 7 questions raised by the capital market. First about the auto market, shortage of chips and also rising raw materials, etcetera, that affects the production and media budget. As time goes on, we believe the chip shortage will be eased. We estimate that at the end of this year or beginning of next year, the situation would be better. Some competent authorities in China, if you pay attention to news, you would know that they are already working on this. If we can have sufficient chip supply then for traditional businesses they will rebound very quickly. But also at the same time, we're expanding into new businesses, which means there will be more revenue from new businesses. 2nd, some investors are asking about the regulatory clampdown and the closer scrutiny of data security and personal information protection. Actually, if you have followed our company for many years, you can see that before regulatory actions were taken, Autohome had already taken measures to fully comply with laws and regulations. So we're not simply just following laws and regulations on the letter, but in spirit as well. And we believe that a better regulated market will be more favorable for a company like Autohome? The third question is about intense competition. It looks like intensified competition has shifted from peers to platforms and whether other companies can replicate our success. I believe that our ecosystem strategy is in fact a response to more intensified competition because we want to work more closely with Ping An to strengthen our platform. And compared to our peers, the largest competitor is actually Autohome, ourselves. So we need to constantly innovate and to create growth momentum. There are a couple of other questions about our stock price. First, this year, our share price and market cap declined sharply this year, but that's because of the overall market conditions. Chinese stocks listed overseas have all been hammered. But I believe the U. S. Government and the Chinese government will negotiate and we resolve their differences and will look toward the future and try to create win win outcomes. And secondly, we believe that our stock price is highly undervalued. So if you have read our financial reports, you will see that we have ample liquidity and good profitability. If you just take out the cash from the balance sheet, our current PE is only 4 times. So we believe it's reasonably undervalued and that does not fit our business performance. And the other question is about our strategic upgrade. So by participating in the Investor Day event, you have already heard about our ecosystem strategy and our strategic upgrade, and we will continue to disclose more information to investors. And the other question is about the decline in revenue, which is bigger than the decline in the auto market and the sustainability of our used car business. This year, the auto market had a double whammy. The first is the semiconductor chip shortage. Starting from May, the auto market started to decline. And the second hit came from higher raw material prices. I can tell you with confidence that higher raw material prices compressed margins for OEMs and turned the profit from profit margin from 30% in Q1 to negative in Q2. So that was a huge shock to the auto market, both in terms of production and sales. And this double whammy led to lower marketing budgets of OEMs, But I believe this is transitory, and the market will bounce back. For Autohome, we would try to maintain our leading position in our traditional business, while expanding into new businesses. For example, the data products, we'll continue to iterate And our digital dealer solution as well as our support to OEMs and our support of TTP? And finally, what are the factors that will ensure the success of the new strategy? We are restructuring our organizational structure. And for every strategic program, a senior executive will be held accountable to the performance. So those are the answers to some of the questions from the capital market. Now let's look forward to the intermediate term. And it is self evident on this slide that for consumers, we will continue to invest in the increasing the coverage of consumer groups, both for the research, buying and using of cars. And number 2, we will work more closely with our to be partners, both the OEMs and the dealers and used car sailors and aftermarket service providers to diversify our revenue structure. And this ecosystem strategy was launched at the end of 2020. We hope that in 2 years, we will achieve the targets and work with our key partners. As Mr. Shao said, we are working with some very high profile customers and we are both very satisfied with the results of the cooperation. And for the next 2 years, we will have the payback period. Our new initiatives will generate over 50% of our revenue in the next 2 years. And finally, let me recap the highlights of our ecosystem strategy. First, China remains the largest car market with the best potential globally. It offers unlimited opportunities and possibilities. And number 2, our ecosystem strategy will help our partners and empower our partners and consumers to explore new market opportunities. And number 3, we will work more closely with Ping An Group to ensure the successful implementation of our strategy. Thank you very much for your attention. So I want to thank Chairman Long for his summary and his view on the prospects of our strategic upgrade. And I want to thank Mr. Joe and Mr. Shao to talk about our to be and to see businesses by increasing users and by empowering dealers and OEMs. So I believe whether if you are on-site or if you are online, you will now have a better understanding of our ecosystem strategy and our future prospects. So we will take a short break of 20 minutes and then we'll enter the Q and A session. And I want to remind all of you that the Q and A session will start at 16 hours Beijing time. And we will first address questions by e mails and phone calls. So if you have questions, please follow the prompts on the live stream interface and we will collect your questions later. Now please enjoy your break. We'll see you in 20 minutes. Welcome back. Thank you for for still being with us for the Investor Day and we're going to have a Q and A session. And I want to specifically introduce that Co CEO of Ping An Group, Jessica Tan will join us through telephone so that she can help answer some questions as well. And in the next Q and A session, we will answer questions first sent through e mail and telephone. So please send your questions ahead of schedule to the IR e mail box according to the instructions. And time is very limited for us to have a better interaction with the management team. Please just raise one question that you are most interested in. Let's move on with the questions. Now on the platform, we see the first question sent through e mail, which is about the auto market. And the question from this investor is that in 2021, since Q2, Chinese auto market in terms of production and sales has dropped because of a chip shortage. When do you estimate this problem can be solved? And when do you estimate auto production and sales in China can recover? Thank you for your question. About auto market, I would like to invite our Chairman and CEO, Mr. Long, to answer. Thank you for your question. Actually, while I introduced the ecosystem strategy, I already touched on this topic. First, this is a global issue. In the second half of this year, the problem would be most severe and there have been some institutions globally making estimations that because of a chip shortage around the whole world, the auto market sales this year will be affected by 9,400,000, which means 12% of the total sales last year. So it's a big number. Of course, China has been affected as well. About 1,800,000 potential sales have been lost because of this. And secondly, in China, because of chip shortage, we started to see the impact since Q2 because in Q1, we saw quite good growth. Since May this year, we started to see negative growth in the auto market. Looking at this moment, in Q3, we estimate the problem to be continued. According to China Automobile Association's data, in August alone compared with August last year, we saw negative 17.8% growth. That's my second point. Thirdly, we think that chip shortage can be resolved gradually even though in Q3, we will see very severe problem. Maybe this will be continued in Q4 as well. But national competent authorities are already working very hard on this problem. And next year this will be greatly addressed, but as to what's the impact in 2022, We still have to wait and see. That's my third point. And fourthly, trip shortage is just a temporary issue. The whole auto market, especially the Chinese auto market are doing very well. And while I made the introduction about our ecosystem strategy, I already mentioned that chips are just one setback that we have right now. Thank you. Thank you, Mr. Lom. Let's see what are the other questions. Next question is about data security and the investor's question is that since this year, China's regulation has been tighter in terms of data security and also personal data protection. A lot of laws and regulations have been drafted in China. So the question is how auto home has been responding to stricter regulation? What are the measures taken by the company? If it is a question about data security and personal information protection, then I would like to invite Charles Zhou to answer. Thank you. Thank you, first of all, for your question. Autohome as the largest vertical media platform, we always take data protection and the privacy protection seriously. Internally, we have a lot of rules about this and we do regular self checking as well. If you know us pretty well in April, we already did a round of the so called blue sky campaign, so as to protect the leads related personal information and also improve customers' experience. In the last 8 months, we have seen many Internet companies being punished by the regulators. But for us, we have always maintained very good conversation with regulators instead of a punishment in the last 8 months. Thank you very much. Okay. Thank you, Mr. Cho. Next question has been asked through telephone. This is about data products of Autohome. The question is what's the overall plan for data products in the future? What new data products would be launched by Autohome so as to meet the needs of dealers and OEMs? This question will be answered by Mr. Shao. Thank you. Thank you for your question. In terms of data products, our overall strategy can be explained from 2 dimensions. One, from business development perspective, mature, develop are all important aspects. By saying mature, we're talking about data products for dealers. Right now these products are quite mature. As we mentioned in previous session, we have 3 modules, 10 products. And for dealers, on average, they're using 3 modules. Our interim goal is to increase from 3.1 to 6 and then develop. At this stage, what matters is that we develop data products for OEMs. There are 3 categories 1, data platform 2, enterprise apps 3, scenario related products. Data platform is about offering tools to OEMs. For example, if they want to check the transaction price or the valuation of the used car or we have the vehicle library through which you can check functions of cars etcetera. So these are like tools and we call them data platform. And the second is the enterprise apps. This is also very important at this stage. And about this category, as we mentioned today, user operation as 1 and training as another And also DCC invitation probably is another example. These are enterprise level apps. Firstly, scenario related products. For example, digital marketing, digital product launching, etcetera. This is about develop. And then 3rd aspect is that for the used car market, we need to develop SaaS products. This will also be a very important part next stage. Then secondly, our data products right now have shown some features, which I want to use this opportunity to share with you. And also in the interim stage, we will continue this trend. First of all, the number of the products is growing. Previously, we mentioned we had 8 products for dealers, now we have 10 and it will continue to grow in the future. And some products for OEMs, we started with 2 and we are growing to 7 or 8. That's quantity. Secondly, the way service will be delivered will be changed. In the past, mostly it was in the form of tools. But now we are shifting to platforms. And in the past, it was account type products, but in the future, it will be SaaS or public and private cloud products. So it will be integrated into the premise operation of enterprises. That's the 2nd feature or trend. And thirdly, scope will be expanded or domain will be expanded. In the past, we mostly focused on new vehicles, but now we are gradually focusing R and D, sales, training and also user operation as well. So it's about the whole chain, whole process. These are three features concerning our data products. Thank you. Thank you, Mr. Shao. Let's look at the other questions. The next question was raised through telephone and it's about NEV. NEV is relatively new both in terms of communication and channels and services for example user direct connectivity with OEMs. How's the impact of this new model to Autohome? And how's the manifestation of the impact? And specifically, whether the management team of Autohome can share with us some specifics about this. We would like to invite Director of NEV Department, Mr. Wei Bo to answer this question. A brief introduction about Mr. Wei Bo. Mr. Wei has more than 10 years of experience working in Internet Companies and he's been part of us for 9 years, mostly in charge of users and products. So he's a very strong PM with rich experiences as well. At the beginning of 2021, he was assigned new responsibility as Director of the NEV Department for exploring new businesses and implementing corporate strategy. Thank you. Mr. Wei? Thank you for your question and also thank you investors as well. Actually, this question is about 3 aspects. First of all, it's about our overall plan. We make our plan from the pain points of NEV OEMs. There are 2. 1st is the retail business model to be shifted and second is the direct connectivity between users and OEMs. We want to utilize our brand influence and our traffic to enable NEV OEMs so that we can help them to build base with us. So they can shift their offline advantage online with us. So in this way, we could have a word-of-mouth about the brands. And then in terms of retail channels, in high tier cities and low tier cities, we have different models. For high tier cities, we utilize our online capabilities and value added capabilities so as to address information asymmetry information as well as the concerns of users while purchasing a vehicle. So that for OEMs, we can help them to generate very good leads, which have high percentage of conversion rate. And then the dealers can provide the offline services. For lower tier cities, we will leverage our digitalization capabilities and our deep insight into the market to create better results for dealers by increasing store visits and by improving deliveries to lower the cost and increase efficiency for dealers. So that's the first question, our overall plan. And number 2, our current cooperations with dealers. In the first half of this year, we have worked with over 20 NEV brands. So 20 top NEV brands. That means we're covering almost all the things in the NEV space. In Q2, our NEV revenue grew by 2 38% year on year. And if we break that down, it's even faster. So for the 2 38% growth, it's industry leading. And number 3, in terms of our implementation, it has to do with our positioning. We position ourselves as a platform, so we don't want to create 0 sum games. We try to create win win outcomes with our partners. So we will leverage the Internet traffic and the reputation of the OEMs and we can provide content and services to enhance the user experience and increase sales. So that's my answer. Thank you, Mr. Wei, for your very detailed response. So the next question is for Ping An Group and the synergy between Autohome and Ping An. So the question is, what support will Ping An Group provide to Autohome in terms of technology and resources? And what will be the plans for the development of Autohome? So this question will be directed to Jessica Tang. Jessica, can you hear me? Yes. All right. So can you please answer this question? Thank you for the question. Auto Home is a very big part of our ecosystem and it has a strategic importance. And I agree with the senior executives that the auto market in China is a very strategic market in the world. For Ping An Group, we have also very rich experience in auto related businesses. For example, we are the 2nd largest auto insurance provider, and we also provide financing to dealers as well as consumers. Therefore, we have 3 synergistic efforts with Autohome. First, Mr. Shao said that of the 100 +1000000 users, Ping An already covers 150,000,000 of car users, covering both the entire process of research, review, purchase and use. And the second area where we have a lot of synergy is the network that we have. First, we also deal with OEMs as well as dealers and repair shops and aftermarket participants. And 90% of the OEMs and dealers also have relationships with the other branches of Ping An Group. So we will do our very best to support the OEMs and dealers for auto finance, for repairs, for maintenance and for facilitating sales For aftermarket, Ping An Insurance also has very close relationships with the largest components suppliers as well as the repair shops, that's also RMB100 1,000,000,000 market. So we have a lot of synergies in serving dealers. And we also can provide technological support. For example, our blockchain capabilities and cloud computing and AI, we have also a lot of patents and data sharing with Autohome. So Autohome can leverage the technologies of Ping An to better serve its customers and stakeholders. So that's how Ping An will support Autohome. Thank you, Jessica, for your answer. So you talked about the 2B business and 2C business and Ping An will provide technical support and resources. The next question is also from an e mail. It's about market competition. So the question is market competition is becoming increasingly fierce. So in the face of competition, what are the advantages of Autohome? And what would be the competitive landscape going forward. So for market competition, I'd like to ask Mr. Long to address the question. Thank you very much for the good question about market competition. I believe many of the participants both online and offline would like to know about the competition landscape. And first, as I said in the presentation, I want to cite a 3rd party research report by BCG. More than 96% of potential buyers still value vertical media. I hope that you can remember this statement. And Autohome has always been a leading vertical auto media. So what's the state of play at the moment? 1st, auto home has very high DAU on the mobile Internet. We have 44,100,000 DAU and it's larger than the number 2 and number 3 players combined. That means we have the most frequent contact with our users. And number 2, Autohome is a professional and diversified content provider. We have the largest number of creators for vertical media. We are also the top 2 interactive community in China for our auto forum. That's also another advantage. And for the 2B business, we have more than 95% market penetration rate. We continue to maintain our leading position in the vertical auto media space. We are also expanding into digitalization, NEV and used car markets. We have launched many new initiatives and we are already planning for the future. That's the state of play. And number 3, going forward, we will implement and continue to implement the ecosystem strategy by working more closely with Ping An. And as Jessica just said, Ping An Group will increase its support to Autohome by providing technology, Internet traffic and resources on an all around level to enhance our leading position in the 2B and 2C business and we will continue to innovate and expand into new businesses to maintain our market position. Thank you, Chairman Long. Another question from the live stream is from a South Africa based mutual fund. It's a long term investor of Autohome. The question is about the company's plan for the use of cash over RMB10 1,000,000,000? And how will the management deploy that cash given the current low valuation? Now let me direct question to Maggie Jiang, our Director of Finance. Thank you very much for the question. You are absolutely right. We have a lot of cash on our balance sheet. At the end of Q2, we had RMB18.4 billion cash and we continue to generate strong cash flow growing by 25% year on year. So that's very good news for us. And according to our plan, we will invest in new product services and new business models in R and D and marketing. We will also make more strategic investments. We acquired TTP, as Mr. Long said. We already have achieved great synergy with that acquisition. And our strategic investment department is reviewing other possibilities and we will make some acquisitions that will give us more synergy, especially in the ecosystem. Thank you. Thank you, Ms. Cheung. All the previous questions have been collected from online by investors and analysts concerning our strategy, etcetera. Those were questions raised through e mail or a phone call. And next, we're going to collect questions by the floor. We have media outlets with us. We have investors and also analysts with us on-site. Please raise your hand if you want to ask a question. Good afternoon. I have a question for Mr. Long. We heard your introduction about the strategy and the plan for the future. Can I ask what is the most important task for this strategic upgrade? How do we ensure that it will be successful? Thank you for your question. And also thank you for your long term support for Autohome. Our ecosystem strategy, what matters first are 2 things. 1st of all, continue to solidify our advantages. I mentioned we have advantages in 2C business in terms of wide coverage of users and it will continue to grow. And also our penetration in 2B business will be maintained. We will continue to be number 1 vertical media for the auto market, but of course we will develop new businesses. That's the first priority. The second priority is that Autohome has great synergy with Ping An Group in terms of traffic and also technology as well as offline activities. In other words, we want to utilize our advantages in vertical media over the years plus Keyline Group's 2B and 2C business strength, so that we can together serve our customers and also to be business partners. This is the 2nd priority. And I guess this is my answer to your first question. You have a second question about how to ensure the strategic upgrade will be successful. First of all, our organizational structure will be improved. We will have a brand new organizational structure including the management team also the mid level managers and also junior staff. For every innovative project, we have specific teams led by executive members to be responsible for that project. And also in the future, we will continue to explain the progress of every project and also constantly optimize so that every innovation by Autohome will be implemented well. I hope that I answered your question. Thank you. Thank you for your question. Let's continue. Good afternoon. My name is Lojia. I'm an analyst. I have a question about used car business. We see that this year, in addition to the boom of NEV market, used car market has also been booming and the TTP has been quite big. So in the future, because we have 2B and 2C business, but for us to truly develop, would we also have a 2C used car business? And right now, we are quite asset light in terms of the model. Would that be changed in the future? Because for used car business, in terms of the dealers, they are also tapping into this market. Some of the dealers are doing pretty well and making profit with the used car and also CarMax and some other overseas platforms are focusing on 2C. And I wonder whether for Autohome, for a used car, what's your thinking about any potential adjustment of the strategy? Thank you for your question. For used car business strategy, I want to invite our President, Mr. Shao to answer. For Autohome, in previous session, we already introduced about our target for used car business. We want to be the largest platform with real transaction data concerning used car in China. That is our aspiration. We have some core advantages. To answer your question, I think I can outline our advantages together can cover 100 and together can cover 150,000,000 car owners. In China, last time we said we have about 270,000,000 vehicles used. So my point is with P Line Group, we can cover such a large number of car owners. That's the first point and that's our advantage. Secondly, Autohome in the used car market has data and technology enabled models. As mentioned in previous session, we have models to help you find potential customers and also vehicles and tradings, etcetera. With these models, we can help you to be very precisely locate the potential vehicles that you want to trade in. So the efficiency of trading would be improved. Our used car strategy is as follows. First of all, we can have a very comprehensive and perfect platform covering the whole process from generating leads to transaction to financing services to shops etcetera. That's the first point about selling used cars. TTP is very capable in this regard as well. Within 6 months, TTP in the cities around the Yangtze River area already have reached breakeven on a sustained basis. And secondly, about buying used cars, we have traffic and then Ping An Group has traffic as well. So from traffic perspective, with the precise marketing, we can help users to choose the used car that he or she wants. We have information service plus technology service, so we can deliver about this. So we can help address so many aspects including selling the used vehicles as well as buying used vehicles and we can also offer financing services as well. We are planning on certain loan products for this in the future. And then secondly, if we look at the interim target with our platform, online, transaction and financing as the 4 pillars of our strategy for used cars. In the future, in terms of the offline used car business, we're still observing because of course we have quite a large number of used vehicles and the potential is very high, but still we are observing. As we shared with you, this is a long run battle. We need to stay here for long. So we need to make the right choice. That's the first thing. Secondly, we need to observe constantly about different choices and then collaborate with the right partners. There would be more opportunities in the future. Thank you. Thank you, Mr. Shao. Let's continue with our questions. I have a question for Mr. Long. We have noticed that since the beginning of the year, there have been 3 management positions, which have changed. So how is that impacting the business of Autohome? And any changes in terms of operation philosophy and also team management strategy, etcetera? Thank you, first of all, for your question because if you don't raise it, other colleagues may still have the doubts. Yes, even though we have 3 changes concerning management position, but these are normal changes because our previous Chairman, Lu Ming, retired. That's for one change. And another 2 executive members, if you look at their experience, you would see that they already worked in Autohome for more than 4 years. We are Internet company. Internet company has been developing very fast. Working in 1 Internet company for 4 years and then leave is a very normal change. So that's my first point. Secondly, for Autohome, we have a very good and a stable team and organizational structure, any project is the result of the whole team and departure of any individual would not have too much impact on our business. For example, me, myself, even though one day if I leave, the impact would be limited because Autohome is here for 16 years, especially in the past 5 years. We already have a very good and stable organizational structure and very stable team as well. That's my second point. Thirdly, according to our new strategy, as well as our plans for the future, we are choosing the best talents from the industry to be part of Autohome. If you keep tabs, you will see in the future probably 1 to 3 months, there probably would be the addition of many experienced talents into Autohome. And Autohome needs to improve our operation management. We need to be agile in executing our strategies. Thank you very much. Thank you for your question. Let's continue with further questions. Hi, good afternoon. I have a question. Since Q2 this year in the U. S. Stock market and Hong Kong stock market, the stock price of Autohome has been quite volatile. Mr. Long briefly said that the valuation is very low and unreasonably sold. Could you elaborate on the specific reasons? Okay. Thank you for the question. The volatility of our share price is due to 3 factors: the first, since 2020, The overall geopolitical and COVID situation had a very big pressure on Chinese stocks. And secondly, from the capital market perspective, since the second half of twenty twenty and the first half of this year. The Fed launched stimulus measures and that boosted the U. S. Stock market. The last half of the second half of last year and the first quarter of this year, we see very high stock prices. However, in Q2, all the Chinese stocks suffered, both listed on the U. S. Market and the Hong Kong market. So there was huge volatility. And number 3, from the Q2 on, the overall auto market was hit by chip shortage and higher raw material prices. And OEMs and dealers cut marketing budgets and that affected our lead generation business and that's why the stock price declined. So these are the three reasons for the volatility of stock price. Thank you, Maggie. The next question please. Good afternoon. I have a question about strategy. For your competitive products, they're relying on large platforms and traffic growth. And what is your strategy for increasing traffic? Now let me direct these questions to Mr. Joe. Thank you very much for your question. You're asking about our traffic growth strategy. Traffic is a very complicated issue. You have to break it down. As I said in the presentation and Chairman Long said previously, we have a very stable base. You can check the numbers. In June, our DAU remained at 44,000,000, a 16% growth. Well, if you just look at the absolute number that means we created another 6,000,000 consumers. We also have consumers on the PC side. So we will focus on the 3 more strategy, more users, more formats, more scenarios. So where do new traffic come from? They will come from younger users. Younger users account for 40% of our overall user base. And number 2, we are exploring lower tier cities. We have covered all the provinces, cities, counties, prefectures. The penetration is 92%. So we believe that these lower tier markets will provide strong growth momentum. And we also accumulated a lot of loyal followers and we will accompany them for their trading needs and for consumption upgrades. So we will see more incremental business from our old customers. And we have also launched many new video apps, for example, short films and live stream, road trips and other initiatives have all achieved great results. I can share with you some numbers. Our video content is now more than 40% of overall content and we want to expand into new scenarios both online and offline. For example, if I want to go to Hainan for an event tomorrow, let's say it's an entrepreneurship for our juniors in the NEV market. So we will target those younger users to give them some basic education about the auto market and that will also increase the contact we have with users. Thank you. Thank you, Mr. Joe, for your answer. Any other questions? Okay. This lady over there. Good afternoon. I'm from Tianfeng Securities. I have a question about the digital dealer solution. First, how is digital dealer different from previous dealer data products? And what is the development strategy going forward? And what kind of value it can bring to dealers? And what are the advantages of digital dealer compared to competing products? Thank you very much for your question. So to answer the digital dealer question, I want to direct this question to Tian Chengbei. Mr. Tian is the Senior Director of our dealer business. He has over 20 years of experience in the Internet industry. And for the last 10 years, he's been the Head of the DCC Business and Capacity Building Business. Now let me direct this question to Mr. Tian. Thank you very much for the question. So let me review your questions. You actually asked 4 questions instead of 1. So the first is about the difference between digital dealer solutions and previous dealer data products. 2nd is about strategy. And then you asked about the values we can create. And then you asked about the competitive advantages. Let me answer your first question. Compared with the previous dealer data product, the dealer digital dealer covers the complete dealer operation value chain and it provides a system level embedding and platform level services. Previous dealer data products focused on the traditional DCC online invitation process based on big data and AI empowerment, while digital dealer will connect online and offline businesses and empower dealers with digital transformation and upgrade before, during and after sales, helping them to greatly improve marketing, personnel and management efficiency. In terms of implementation, Digital Dealer will add PaaS and private deployment to the original SaaS service and integrate the AI and big data capability of Autohome into the OEM system to serve the users and help OEMs achieve digital transformation. This year, we worked with Porsche, FAW, Volkswagen, Audi and SAIC, Volkswagen and other brands and we won recognition from these customers. They are very, very satisfied with the performance of our products. So the second question is about our strategy and value creation. Going forward, we will further refine and broaden the business and enrich our products and increase the purchase volume and ARPU of customers and increase customer loyalty. And I can also share with you a few case studies. For example, for Audi, we had very good cooperation with them. We had some data tracking the progress. I can share with you a set of data. So dealers who frequently use our products have 2.3x arrival rate and 2.4x conversion rate versus average dealers. And also, in the control group, so it's much, much lower. And the conversion rate is also much higher than average dealers who don't use our products. So we are also very satisfied with the results. And we also helped Porsche to enhance its digital capabilities, so that Porsche can on a real time basis monitor presentations to help Porsche identify weak performers and also to have more targeted measures to improve performance. And we have also worked with several other dealers to help them with their trading services and maintenance businesses so that we can increase their visits and value. And you asked about our advantages. As the 1st player to enter the field of digital transformation of dealers, our 5 products have now covered more than 70 dealers and achieved a system level integration of capability modules with dozens of OEMs. That means these OEMs have already integrated our capability modules and that has provided us with a lot of useful experience. And with the huge database of Autohome and with the technical support of Ping An Group, we have accumulated rich technology and data reserves such as algorithms, knowledge, mapping and the vertical label library. For example, our voice model can process 5,000 offline voice messages and the accuracy ratio has reached 92%. And all of these products will create huge potential and unlimited possibilities for us and that will be our moat. Thank you for your detailed answer. We are running out of time. It's already 5 o'clock almost. So we only have time for one last question. And for those questions that were not answered, we will reply in written form. Hi, I'm from Snowball. My question is about the content. Now we see that Bilibili and Douyin and other video apps are attracting KOLs away from Autohome. So I want to ask whether that will have any impact on your business and how can you maintain or retain these creators? Thank you for your question. This is a question about Internet content ecosystem. So I would like to invite Mr. Fanxin, Senior Director of the Content Department to answer this question because Mr. Fan has been working on Internet content ecosystem. He joined us in 2013, so it's already 9 years. He has established a new media team, etcetera. And also he has contributed a lot to the product evaluation system of Autohome. So he knows pretty well about content. So let me ask Mr. Fan to answer this question. Thank you for your question. Actually, I want to correct a little bit. You mentioned KOL ecosystem. We have our own We media community. And for us, we have 4 components. We have original creation team, we have We media community, we also have a forum, which we call UGC and also the 4th one is about new media which covers 36,000,000 users. So these are 4 pillars. Many people asked this question before. I want to share with you my thoughts from different perspectives. First of all, scale, you mentioned TikTok, Bilibili, etcetera. Their auto KOL creator in terms of the percentage is very low, while for Autohome, our We media and our has over 24,000 creators. Now in vertical media, we are the largest in terms of content. And overall speaking, 80% of the top content creators have joined us. These top creators are working on different platforms. We mentioned many external platforms. They do not have high concentration of these high caliber creators. So we have a large size of content creators. Secondly, the traffic and also nature. Auto plays a very important part in our life. While Internet platforms develop and grow, content always is important for these Internet platforms to attract traffic. They start as portal and then started to add auto related content and then we have Bilibili and TikTok and we also have auto KRL, etcetera. But for us, since we were established, we focus on auto content. Over the years, our traffic hasn't been affected by the rising of other platforms. Our executive members mentioned before about ups and downs with our traffic, but we see 16% of mobile DAU growth compared to the last year. So size wise and traffic wise, we're still very competitive in the industry. And then another point I want to share is that you mentioned content from those different platforms. We are different in how we position our content. For TikTok and Dabilibili, their position is to be entertaining, sometimes too entertaining instead of concerned whether these content are authoritative. For us, we emphasize on content being useful and also truthful. That's the biggest difference. So TikTok and Bilibili as compared with us, while users purchase a car, they only play a role while ceding the interest. They help the OEMs to spread the word about vehicles. But for us, we cover 11 scenarios in 3 stages: reviewing, buying and using vehicles. We have rich content. We have very comprehensive set of tools. So we help customers to make a decision better and quicker. So in terms of content, we are confident. In addition to help users to make decisions, we also utilize our big data and also our digital tools to help enterprises, to help our ecosystem partners to operate better, to help OEMs to develop better. You also asked about our future strategy. In terms of content strategy for the future, what I want to share is that those platforms provide interesting content, mostly in the form of videos to attract a younger generation, which we have learned a lot and we have made a lot of strategies. Our executive team has been emphasizing on 3 mores. Let me share some specific scenarios for us to implement the 3 Mores strategy. First of all, more people. In the past, we didn't pay much attention on user operation. Our content was mostly about vehicles. In the future, we will focus on people, on users and then to construct a very good user growth and user operation system and to create more formats. For example, co generate content with users, co create vehicle products so that they would have a sense of belonging and feel that they are part of us. And in terms of content creation, we want to create projects and creators who can attract millions of followers and KOLs, etcetera, who are quite influential not just in the auto sector. So we in the future can be a very professional leader in the playing scenario. So we will create more formats. And as introduced before, we will have more videos, more live stream programs. Our video generating capability right now is more than 45%. We use our technology capabilities to come up with the 3 d tools, virtual hosts, immersive vehicle purchasing scenario, etcetera. So just imagine the unlimited possibilities. In the past, we created very good platform to help users to make decisions. We focus on the whole chain starting from browsing and then buying and then using vehicles. We have libraries, which provide 17 categories of content and also 4 categories of tools, which will cover driving, maintaining and playing with your vehicles. Only imagine playing with the vehicles. This is a big market in China, a lot of potentials. So we hope that in the future with our size, with our influence, we hope that we can help create the China auto industry culture, for example, to modify old vehicles, classic vehicles, etcetera. Hopefully, with these new scenarios, we can contribute for the whole Chinese auto industry. Thank you. Thank you, Mr. Fan. It's a very comprehensive answer. Thank you, our management team and also our mid level managers for your answers to the question, but time is already over. So we have to wrap up the Q and A session. And if you have any further questions, you can send them through e mail or phone calls and then we can have a more in-depth discussion. Lastly, I want to invite our Chairman and CEO, Mr. Long Quan to make a concluding remark for the Investor Day 2021. Mostly, I want to say thank you. I want to thank our investors, analysts, journalists who are joining us online and on-site. In the future, Autohome will follow the ecosystem strategy launched today to further develop our businesses. I also want to thank Ping An Group, Co CEO, Jessica Tang. I want to thank all of the participants and also colleagues from Autohome, we hope to see you next year. Happy Mid Autumn Festival. Stay healthy. See you next year. Thank you, Mr. Long. Thank you all the management team. Thank you colleagues from Autohome. Thank you investors, analysts and the journalists joining us from online and on-site. With that, we have concluded the 2021 Investor Day. Thank you very much. See you next year.