Ladies and gentlemen, thank you for standing by for Autohome's second quarter and interim 2026 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow management prepared remarks. As a reminder, this conference call is being recorded. If you have any objections, please disconnect at this time. A live and archived webcast of today's call will be available on Autohome's IR website. It is now my pleasure to introduce your host, Sterling Song, Auto Home's IR Director. Mr. Song, please go ahead.

Thank you, operator. Hello, everyone, and welcome to Auto Home's second quarter and interim 2026 earnings conference call. Earlier today, Auto Home distributed its earnings release, which can be found on the company's IR website at ir.autohome.com.cn. Joining me on today's call is our Chief Financial Officer, Mr. Quate Yan Zeng. Management will go through the prepared remarks first, which will be followed by a Q&A session where they will be available to answer all your questions. Before we begin, please note that today's discussion contains forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Education Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include but are not limited to those outlined in our public filings with the U.S. Securities and Exchange Commission and the Hong Kong Stock Exchange. OTHERHOME undertakes no obligation to update any forward-looking statements except as required under applicable law. Please also note that Autohome's earnings press release and today's conference call include discussions of certain unaudited non-GAAP financial measures. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures can be found in our earnings release. I'll now turn the call over to Autohome's CFO, Mr. Chris Yan Zeng, for opening remarks. Mr. Zeng, please go ahead.

Thank you, Song Kan. Hello, everyone. I am Zeng Yan, Chief Financial Officer of Auto Home.

Thank you for joining our urgent conference call today.

In the second quarter, our innovative business continues to advance and land, promoting the stable upgrade of Auto Home to a one-stop car ecosystem service platform. In the new retail business field, In the second quarter,

Our innovative business continues to make steady progress, driving Auto Home's upgrade towards a comprehensive automotive service ecosystem. For our new retail business, with the authorized dealer model in pilot operation and expanding into more cities, we launched the offline franchise chain brand, Auto Home Good Car, further expanding our offline service network. In addition, our global expansion into used car trading is advancing steadily. Our cross-border export platform completed its first transaction in July, providing valuable experience to further expand our service capabilities.

We have achieved significant progress in the field of artificial intelligence, especially in the field of advanced smart body technology. In early July, Zhijiaqixia Ziyan Smart Body Products and Zhishiche Guanjia launched the project. As the first smart body products in the automotive industry,

We also made major strides in AI, particularly in cutting-edge AI agent technology. In early July, we unveiled our proprietary intelligent agent product, Cheese Car Bustler, and opened it for public data as the automotive industry's first standalone agent product. It represents not only a pioneering exploration of intelligent applications, but also a key milestone in enriching our product portfolio and establishing a differentiated competitive edge for us.

In the second quarter, we have achieved solid progress in terms of content, products, and traffic alliances. In May, the annual IP jointly created by us and the Public Relations Department and China Manufacturing Exploration Program. The program will launch six episodes in a row throughout the year, covering technology hot spots such as low-emission industries, smart warehouses, smart driving, and giant intelligence, and focusing on flying vehicles for the first time. Through immersive one-way manufacturing and exploration, the innovative narrative from the perspective of young people will turn hard-core technology into content that young users can understand and are interested in. This is also a change in content after the change of the brand of Zhijia. Specifically, in the second quarter, we made solid progress across content offerings, product capabilities, and traffic alliances.

On content, in May, we launched our annual IP, China Intelligent Manufacturing Exploration Plan, jointly created with the News and Publicity Center of the Ministry of Industry and Information Technology. Six episodes will be released throughout the year, covering exciting technological trends, including the low attitude industry, intelligent cockpit, intelligent driving, and Embodied AI. The premiere episode focused on flying cars, combining immersive visits to the front lines of intelligence manufacturing with a fresh, innovative, youth-oriented storytelling perspective to make cutting-edge technologies more relatable and engaging for younger users. This series also marks our first major content initiative following Autohome's brand refresh. After its launch, The program sparked lively discussion on social media, was covered by over 20 leading media outlets, and generated over 70 million views across various platforms. On the product side, we launched our intelligent driving channel, which systematically profiles the intelligent driving capabilities of nearly 200 mainstream models and provides easy comparisons. to help users understand differences across models and choose cars efficiently.

In addition, we continue to promote multi-platform, multi-scene traffic, eco-friendly collaboration. In June, in collaboration with Alipay, Zhijia Xiao Chengxu exclusively provided full-scene service for Alipay Car Life channel, for hand-purchasing, purchasing, and purchasing people, and for differentiating content matching. According to Quest Mobile's data,

In addition, we continue to advance collaboration across our multi-platform, multi-scenario traffic ecosystem. A notable example was our partnership with Alipay in June, under which our mini program became the exclusive provider of comprehensive automotive services for Alipay's Autolive channel. offering differentiated content to match the varied needs of first-time buyers, repeat buyers, and those upgrading their vehicles. According to Quest Mobile, in June, our daily active users steadily increased year-over-year, reaching 76.5 million.

In the field of new energy vehicles, at the end of April, Shenzhen and Xi'an launched the online purchase trial. Joint authorization of retailers, will be available on our platform. Consumers can pre-order online, sign up online, and pick a car. During the trial period, more than 400 car dealers have joined the market, and more than 1,000 cars have been sold on the market. Over 1,000 cars have been sold in 70 days, and we have received good feedback from car dealers and users. Based on the experience of the trial period, We will copy this model to Suzhou, Jinan, and Shijiazhuang three cities Gradually expand the authorization network coverage of Huabei and Huadong At the same time, for low-end cities At the end of June, we launched a service blank of the offline joint chain brand Jiajia Good Car Focusing on filling and lowering the market By accurate navigation, output standardized operation management system And lightweight configuration resource support Help low-end city retailers and stores In the new energy vehicle sector in late April,

We launched a pilot online car purchase model in Shenzhen and Xi'an in partnership with authorized dealers. Under this model, local partners' dealerships posted competitive pricing on the mall, enabling consumers to select a vehicle and place a deposit online, and then complete the contract signing and take delivery offline. During this pilot period, over 400 dealers joined across these two cities offering more than 1,000 models and over 1,000 transactions were completed within 70 days receiving positive feedback from both our dealer partners and the users based on the experience gained from the pilot cities in the second quarter we replicated this model to three additional cities Suzhou, Jinan and Shijiazhuang steadily broadening our network coverage in northern and eastern China. At the same time, to address the service gap in low-tier cities, we launched our offline franchise chain brand Auto Home Good Car at the end of June with a focus on the underserved low-tier cities. Through precise traffic redirection and standardized operating and management systems, and a streamlined resource support system will help dealerships in low-tier cities achieve scalable growth. At present, over 100 franchise stores joined Auto Home Good Car. Going forward, the Auto Home APP will remain the core of our online customer acquisition efforts, while offline, Auto Home Good Car franchisees and authorized dealer stores will handle vehicle delivery through standardized Services will aim to support users throughout the entire vehicle lifecycle, from vehicle discovery, selection, to purchase and ownership.

AI and big models. Based on Zhijia's self-proclaimed big model, we have launched the Car Hammer Intellectual Car Manager, which is dedicated to the professional content of Zhijia in the field of cars, product database, answer ecosystem, and core assets such as offline service network. can provide users with a variety of vehicle types, purchase early purchase, use car, raise car, and other full-size services. They have a unique differentiated competitive advantage. At present, knowledge car managers have opened up to users and entered the feedback collection stage. The market has started to reflect positively. In the future, we will continue to treat the underlying model capabilities, optimize product interaction experience, and gradually incorporate richer offline service resources.

In AI and the models powered by Autohome's proprietary large language model, we launched Cheese Car Butler, our intelligent agent product for the automotive vertical. The agent leverages our core assets accumulated in the automotive field, including our professional content, product database, MCN ecosystem, and offline service network. to provide users with a broad range of services, including multi-dimensional vehicle comparison, vehicle purchase guidance, and maintenance services, et cetera, establishing a unique, differentiated competitive advantage. Currently, Chase Car Butler is available to users and has entered the feedback collection phase, with the initial market response being positive. In the future, will continue to enhance the underlying model capabilities, optimize the product's interactive experience, and gradually integrate more offline service resources to steadily improve the product value and the service quality.

We continue to promote the construction of two major core platforms, domestic and overseas. In terms of the full-scale sales service platform, we will continue to improve the service quality with standardization. We completed the upgrade of the vehicle inspection system. The inspection project has been expanded from 128 to 265. Among them, 82 new energy specializations have been added to further improve the accuracy and feasibility of the inspection report. In terms of cross-border export service platforms, in the second quarter, we officially obtained the official autonomy of the second-hand car export and built a multi-language international station and offline travel network at the same time. In the used car business,

We continue to develop both our core domestic and overseas platforms. For our full-process used car sales service platform, we continue to improve service quality through greater standardization. Recently, we completed an upgrade and integration of our vehicle inspection system, expanding the number of inspection items from 128 to 265, including 82 newly added assessments specifically designed for new energy vehicles, further improving the accuracy and reliability of our inspection reports. For our cross-border used car export service platform, we formally obtained the official export qualifications during the second quarter. We also established an online multilingual international website and an offline fulfillment network with business leads spanning over 100 countries. In early July, we successfully completed the first used car export order on our platform, making a breakthrough from zero to one for our business. In the next phase, we'll focus on three key areas. high-quality vehicle supplies upstream, expanding overseas customer acquisition downstream, and improving platform operational efficiency. All of these support our all-out effort to create a new one-stop channel for used car experts.

As mentioned above, we have achieved stage-level progress in all areas of our business since the beginning of the year. While firmly promoting business development, We have always kept a firm commitment to repay our shareholders. In March of this year, we launched a $200 million stock repurchase plan. We completed it in less than six months. Based on our firm's long-term confidence in the company, at the end of July, we once again announced the launch of a new $400 million repurchase plan for 12 months. At the same time, in the first half of this year, the $500 million RMB cash bonus was successfully distributed to shareholders at the end of July. In summary, since the beginning of the year, we achieved meaningful progress across all businesses.

While steadily developing our businesses, we've consistently delivered on our commitment to shareholder returns. The US dollar 200 million stock buy-buy program announced in March 2026 was completed ahead of schedule in less than six months. In late July, we announced a new 12-month US dollar 400 million repurchase plan demonstrating our strong confidence in the company's long-term value. In addition, the RMB 500 million cash dividend for the first half of the year was distributed at the end of July. Looking ahead, we will continue to deepen our new business development, provide high-quality services to users and partners, and deliver sustainable returns to our shareholders.

Next, I would like to explain the main financial situation in the second quarter of 2026. Please note that in today's discussion, I will only use RMB as a currency unit, unless there is another explanation.

With that, let me briefly walk you through the key financials for the second quarter of 2026. Please note that I will reference RMB only in my discussion today unless otherwise stated.

Next revenues for the second quarter

were $1.2 billion. To break it down further, media services revenues were $280 million, leads generation services revenues were $560 million, and online marketplace and others revenues were $357 million.

In terms of cost, the second quarter revenue cost was $2.74 billion, and the same period was $5.03 billion. The second quarter profit rate was 77.1%,

With respect to cost, cost of revenues in the second quarter was $274 million compared with $503 million in the second quarter of 2025. Gross margin in the second quarter was 77.1% compared with 71.4% in the same period last year.

Turning to operating expenses, sales and marketing expenses in the second quarter were 552 million compared with 630 million in the second quarter of 2025.

Product and development expenses were $223 million compared with $263 million in the second quarter of 2025. General and administrative expenses were $96 million compared with $133 million in the same period last year.

Overall, the second quarter of Car Home's revenue was $1.3 billion, and the same year's revenue was $2.97 billion. Overall, we recorded an operating profit of 130 million in the second quarter, compared with 297 million in the same period of 2025.

Adjusted net income attributable to auto home was 277 million in the second quarter, compared with 470 and 6 million in the corresponding period last year.

In the second quarter, the adjustment of the basic and the decoupling of the U.S. stock net profit was divided into 0.62 yuan and 0.61 yuan. In the same period last year, the total was 1.01 yuan. In the second quarter, the adjustment of the basic and the decoupling of the U.S. stock net profit was divided into 2.46 yuan. In the same period last year, the total was 4.06 yuan and 4.04 yuan.

Non-GAAP basic and diluted earnings per share in the second quarter were 0.62 and 0.61 respectively compared with 1.01 for both in the corresponding period of 2025. Non-GAAP basic and diluted earnings per ADS in the second quarter were both 2.46 compared with 4.06 and 4.04 respectively in the corresponding period. of 2025.

As of June 30, 2026, our balance sheet remains robust. Cash, cash equivalent, short-term investment,

and other long-term investments totaled $19.36 billion, which generated net operating cash flow of $261 million in the second quarter of 2026.

On March 5, 2026, the Board of Directors of the company approved a $200 million stock repurchase plan within 18 months. By July 30, 2026, we had completed this repurchase plan in advance. The total amount of repurchase was about

On March 5th, 2026, our board of directors authorized a share repurchase program under which we are permitted to purchase up to US dollar 200 million of auto homes ADS over a period not exceed 18 months. As of July 30th, 2026, we have completed this share repurchase program ahead of schedule with a total of approximately and 10.63 million EDS repurchased.

In addition, on July 28, 2026, our board of directors authorized

a new share repurchase program under which we may repurchase up to US dollar 400 million of auto homes ADS over the next 12 months. As of August 14th, 2026, we had repurchased approximately 1.9 million ADS for a total cost of approximately US dollar 43.6 million. 以上是公司的财务数据汇总 下面我们开始回答 That concludes our financial summary. Now we are ready to open up the Q&A session. Operator, please.

Thank you. As a reminder, if you'd like to ask questions, you can press star 11 and wait for an AMDB announcement. Your first question comes from the line of Thomas Chong of Jefferies. Your line is now open.

Hello, thank you for accepting my question. I have two questions. The first is, in the first half of this year, we saw that the overall performance of the car industry is lower than expected. How do you see the development of Chinese cars in the first half of this year? In addition, we also heard that the management team introduced the export business of second-hand cars. Can you briefly introduce the advantages of this business company and the latest progress? Good evening. Thanks, management, for taking my questions. I have two questions. The first one is about the auto industry, which is softer than market expectations. Can management comment about the second half industry outlook? And my second question is about the export of used car business. Can management comment about our competitive edge and the latest business progress?

Thank you.

Thank you. Let me answer your question. Since the beginning of the year, the overall sales of cars have continued to be suppressed. In the previous seven months, domestic car sales have dropped by 20%. In the second quarter, domestic car sales have also dropped by 22%. Even the new energy that has been growing so far, the sales have also dropped by 8%. Fuel cars have also dropped by 38%. Thank you for your question.

I will answer your question. You know, since the beginning of this year, the overall retail sales in the auto market has remained under pressure. In the first seven months, domestic retail sales of passenger vehicles declined by 20% year-over-year, while the domestic new vehicle sales fell by 22% year-over-year in Q2. Even the new energy vehicle, EV, which had previously been the primary growth driver, it already see a sales decline of 8% in Q2 year-over-year for consecutive periods. and the traditional ICEs, that is internal combustion engine vehicles, performed even worse, the sales declining 38% year over year in Q2. At the same time, the auto industry profitability has been deteriorated. In the first half of the year, the profits for the auto manufacturing industry declined by 20% year-over-year, with the profit margin at just 3.8%, which is a historical low.

In the beginning of the year, the market predicted a relatively stable year for the industry sales. But now it has been downgraded. In the year-over-year meeting, it is predicted that the sales of the car will drop by about 16%. This means that the sales will not be enough for 20 million in the year-over-year. The market expectations for the overall industry sales at the beginning of the year was optimistic, but now this expectation has been revised downwards.

the China Passenger Car Association, CPCA, now forecast that the full year for 2026 passenger vehicle retail sales will decline by 16% year over year. So it brings the overall total annual sales to fewer than 20 million units. So this means that the overall China auto market will continue to face quite a lot of pressure in the second half this year. and we expect the auto industry to be characterized by a combination of weak domestic demand, structural differentiation, and exports providing support.

At the industry level, the acceleration of the transformation of new energy sources and exports has become a new driving force in the industry.

From the industry level, we can see the new energy transition is accelerating and the auto exports are becoming a new growth driver.

The domestic market is also in a stock market stage. The growth of domestic demand is also a major problem. The penetration rate of new energy is still high. It broke 60% in April and rose to 65% in July. So for the China auto market, now it has entered into a

and the existing market stage with the weak domestic demand are becoming a major constraint on growth. And at the same time, you can see the penetration rate for NEV continue to pick up. So in April, the penetration rate is 60%, and now in July, it climbed further to a new high of 65%. So in contrast to the weak domestic demand, the auto export has maintained its strong growth momentum. During the first seven months of 2026, passenger vehicle exports increased by 74% year over year, with NEV accounting for more than half of the total export volumes. and with the weak domestic demand and strong overseas growth simultaneously, you know, auto exports has become a key engine for automakers to offset the weak domestic demand and drive profit growth.

The results are changing at the market level. Consumers' optimism is also increasing.

From the market level, we can see there is an increasing structural differentiation, and consumers are increasingly in a mode of wait and see.

The structure of the segmentation market is also very obvious. From the price point of view, the car market has shown a two-way segmentation. The entry-level car market, which is below 50,000 yuan, is greatly shrinking. In the first half of the year, it dropped by 55%. Currently, the market is experiencing clear structural differentiation across segments. By price range, you can see the auto market is diverging at both ends.

The entry-level market for vehicles priced below RMB 50,000 has contracted sharply, declining 55% year-over-year in the first half. On the other side, sales of high-end EVs priced above RMB 400,000 surged 46%, demonstrating greater market resilience So overall, the sales of traditional ICE and low-end NEVs continue to decline, while the middle- to high-end NEVs have emerged as a growth segment.

So in summary, the auto market in the first half of this year can be characterized as cold, domestically, hot overseas.

domestic demand weakened year over year, while EV penetration continued to increase and auto exports became the primary growth driver for the overall industry. As China's auto market enters an existing market competition stage, currently only those companies who can capture consumers' needs throughout their entire life cycle and provide value added services across the entire customer journey will be best positioned for the future development in the transforming period and the market. So this is also one of the key areas we will continue to focus on and explore going forward.

The second question is about the export of second-hand vehicles. The business of this track is quite scattered. There are also a lot of drivers in the market.

The second question about the used car export, you know, the used car export market is sufficiently fragmented with a sufficiently large and diverse supply of used car vehicles. So this is favorable for us to build our long-term competitive advantage and the sustainable barriers for entry. And if the market was more highly concentrated, it would be more difficult for platform companies.

The advantages of this company are, first of all, the brand. As a brand with a head and a tail, we are also listed in two places in Hong Kong. So our influence overseas is helpful. The second one is that we have a stable driver and standardized system. A stable and consistent 20-car driver and a standard 20-car inspection system for other industries can be fully inspected by the car industry. Overseas buyers are more concerned about the real and complete vehicle inspection report and the health insurance report. This can be used for users and make users more at ease. Digitalized one-stop service is also an advantage of this company. And for our advantages in this area, first is the brand, strong brand from Auto Home. We are the leading auto vertical media platform, so we have a strong brand.

strong brand recognition and credibility. And also, you know, we are newly listed. This also helps us in our branding. Second is the stable supply, used car vehicle supply and a standardized system. You know, we have access to a stable and compliant supply of used cars supported by a standardized industry vehicle inspection system, which can enable comprehensive assessments of the vehicle condition. So all of these buyers value accurate and the complete and the comprehensive vehicle inspection report as well as those maintenance and the inference claim record. So Auto Home can provide all of this. So this gives overseas buyers greater confidence in their purchase process. Third is the digital one-stop service. This is our advantage. We leverage our online digital tools to improve the operational efficiency, including the 24-7 customer support, those dynamic matching of the vehicle supply, and those multilingual website services, et cetera. So all these capabilities facilitate are more effective in the communication between buyers and the sellers.

In terms of progress, as mentioned in the second quarter, we have officially obtained the official authorization for the export of second-hand cars. The first second-hand car export transaction on the home platform has also been successfully completed. The business has achieved a breakthrough from zero to one. As for the follow-up work, on the one hand, we will try our best to expand the quality of our employees, and on the other hand, we will focus on expanding the customer base overseas. At the same time, we will further optimize our second-hand car export service platform

for our business program update on the used car. In the second quarter, we just mentioned we officially obtained the government's qualification for the used car export. And we successfully completed the first used car export transaction on our platform. So this represents are important zero to one breakthrough for this business segment. And for the work ahead of us, on one hand, we'll expand our high-quality used car vehicle sourcing. On the other hand, we will focus on expanding our overseas customer base. And also at the same time, we will continue to optimize our used car export service platform. and improve the overall operation efficiency with the goal to build a one-stop new channel for the used car exports. The next question, please, operator.

Thank you. The next question comes from the line of Zhang Xiaodan of CICC. Please go ahead.

Good evening. Thank you for accepting my question. I have two questions to ask. First of all, we see that the action of the company's recent shareholder return is relatively active. I would like to ask the management to share how to view the continuity of the subsequent shareholder return plan. In the long term, how to balance cash reserves and shareholder returns? The second question is about our current retail business. I would like to ask the management to share the current strategic positioning of the company for this business. I will quickly translate my question. So thanks, management, for taking my questions. And first of all, the company has recently taken proactive steps on shareholder returns. So how do you view the sustainability of the shareholder return program going forward? And over the medium to the long term, how will you balance the cash reserves as well as the shareholder returns? And secondly, regarding the new retail business, what is the company's current strategic positioning for this segment? Thank you.

Thank you. The first question is that Zhijia has always paid great attention to the long-term management of shareholder returns. In order to improve the return mechanism of shareholders and increase the value of investment, we have also established a common stock policy and a double return system for shareholders to buy back. Thank you for your question.

Oldhome has always placed a strong emphasis on the shareholder return and the long-term market value management. To further enhance our shareholder return mechanism and improve investment value, we have established a dual-track return framework combining a regular cash dividend policy with share repurchases. making our shareholder return policy more transparent and predictable.

As for the return, we have already talked about it. On March 5, our $200 million return plan was completed at the end of July. On July 28, there will be a new $400 million return plan for the next 12 months. We also made 10% of the return. Later, we will continue to work on the market

For the share repurchase, as we just mentioned, the US dollar 400 million share buy-buy program, we completed ahead of schedule at the end of July. And also on July 28, the company announced a new US dollar 400 million share repurchase program. And as of last week, approximately 10% of this buyback program has been completed. So going forward in the future, we will continue to actively execute this buyback program in the open market in accordance with our established strategy.

In terms of the dividend, in March, we announced the 500 million RMB cash dividend in the first half of the year. At the end of July, we have successfully completed the distribution of the stock. Today, we will continue to deliver a cash dividend of less than 150 million RMB

For the cash dividends, in March, the company announced the RMB 500 million cash dividends for the first half of this year. And this was successfully distributed to all our shareholders at the end of July. And also this year, we'll continue to execute our commitments to pay at least RMB 1.5 billion in cash dividends for the full year.

For our...

Long-term capabilities, you know, Auto Home has a healthy balance sheet and we have ample cash reserves and stable business operations. So this gives us the capacity to deliver sustainable, stable, and long-term returns to all shareholders. So in the future, we'll continue to improve operation efficiency and strengthen the resilience of our business, ensuring we can fulfill our commitments. to all the shareholders.

As for the offline retail business, this is a direct transaction ecosystem built by Zhijia. It is an important strategic layout for the short-term service of offline services. Online, we rely on Zhijia's ATT to build such an online trading platform, the commercial city of Zhijia. Online, we use online shopping carts to expand the offline service network. For the new retail business, it is an important strategic initiative for Auto Home as we build our transaction ecosystem and address gaps in our offline service

are capabilities. For online, we are leveraging the Auto Home app to build an automotive transaction service platform, Auto Home More. For offline, we leverage offline car purchase and the Auto Home Good Car to expand offline service network, connecting online demand with offline service fulfillment. So on the online to offline scenarios, we are leveraging our AI technologies to provide end-to-end support, including the vehicle selection through our AI car selection assistance and the purchase support through AI price inquiry, et cetera. So going forward, we are planning to expand AI-enabled services into the vehicle ownership stage.

As for the progress of our business, as I mentioned earlier, we are also moving at a relatively fast pace. Online shopping is a starting point for the end of April. It has now covered five cities, Xi'an, Shenzhen, Suzhou, Jinan, Shijiazhuang. These are mainly high-end cities. Jiajia Haoxe opened Jiameng at the end of June. There are currently more than 100 Jiameng stores on the ground, mainly focusing on the mid-to-low-end market. In the end, we hope to form a service platform with a value of the entire period of buying, selecting, purchasing, and exchanging.

In terms of our new retail business update and progress, as you can see that the implementation has been moving at a relatively rapid speed. For online car purchase, it began its pilot program in late April, and now it expanded to five cities, Xi'an, Shenzhen, Suzhou, Jinan, and Shijiazhuang, primarily targeting at high-tier cities. for auto home good car, it opened up its franchise program in late June and has now more than 100 franchise stores with a primary focus on low tier markets. So ultimately, our goal is to become a comprehensive automotive service ecosystem that deliver value throughout the entire auto life cycle from car discovery to car selection to purchasing owning and eventually replacing. Thank you. Next question, operator.

Our next question comes from Richie Sun of HSBC. Please go ahead.

Hello, Managing Director. Thank you for giving me the opportunity to ask a question. I would like to ask, how do you see the recovery of this car? Is there any particular factor that can drive this recovery? Thank you, management, for taking my questions. I want to ask management about how do you feel the recovery timing as well as the drivers behind the auto market, and especially for the media services, how would you feel the trend in the second half of this year? Thank you. . . . . have a certain relationship with the demand for sales. But even so, there is a chance of growth in the segmented track. For example, there is a new demand for rebate updates and consumer upgrades. As we mentioned just now, the sales of high-end new energy vehicles over 400,000 yuan have increased by 46%. In such a market, it is a very bright performance. We think that if domestic cars really want to stabilize, it will depend on the overall improvement of the macroeconomic economy and the increase in consumer confidence.

and so on. Regarding the drivers for the auto industry recovery, as we just mentioned, the auto market sales for the whole year expected to decline about 16% year over year. This has been a downside. However, it doesn't mean there is not any growth opportunities in the market. For example, the vehicles prepaid and replacement will still contribute for more new vehicle purchasing demand. And we just mentioned that sales of the high-end EVs price over RMB 400,000 increased 46% year-over-year. So in our opinion, a sustainable stabilization and recovery of the auto market still depends on improvement in the broader microeconomic environment and a strengthening of the consumer confidence.

Auto exports is another important growth opportunity. In the first half of this year,

About the media business in the second half of the year

For the regarding the media business in the second half of this year as you know there is always a saying that golden September and silver October and besides there will be a multiple of new car

you know, new vehicle and a new car launching in the market. So in our opinion, we believe the market will show kind of a recovery, a second half of this year. Operator, the next question please.

Go for the next question. The next question comes from the line of Brian Gong of Citi. Please go ahead. Your line is open.

Good evening, leaders. I would like to ask about the sales clue business. There is a lot of pressure from the retailers. I would like to ask how the management thinks about the future development of the sales clue business. Thank you. I will translate myself.

Thanks, management, for taking my question. Given the pressure over auto dealers, How does management think about Altamont for our sales piece business? Thank you.

The case of Altamont is more directly related to sales. In the second quarter, the case of Altamont is basically the same as the case of Dash. Another factor is that are still under a lot of pressure. Most of them haven't achieved their half-year sales target. The data from the Car and Vehicle Association shows that in the first half of this year, the goal of 77% of stores to achieve a half-year sales target is less than 90%. There is still a lot of loss in the sales of new cars, and there is also a lot of storage. For the lease, the lease generation performance is highly related with the overall sales volume in the market. In Q2,

the market and the sales of the autos decreased. So that is the main reason for the least generation segment. So on one hand, for dealer, continue to face significant operating pressures in the market. So many of them failed to meet their sales target for the first half this year. And according to the statistics data from the China Automobile Dealer Association, CADA, 77% of the dealerships achieved less than 90% of their first half year sales target. And so many of them, many of those dealers, they respond with more losses and with high volumes of inventory. So that's why we believe, as we just mentioned, the sales volumes for the New cars still face pressure and decrease for the second half of this year.

Of course, in this environment, there are opportunities. We also need to increase our traffic, upgrade our products, and increase the number and quality of our leads, both for this year and the second half of the year, in order to prepare for the next year's deadline. We can use AI as an example. Through AI technology, we can enable new media to run live broadcasts, help businesses to increase sales, So we still see some opportunities in the market

On one hand, we are increasing our traffic and upgrading our products to improve the quality and the quality of the leaves and lay a solid foundation for the renewal of our dealership products. For example, the for the second half of this year and the next year as well. I give you some examples. For example, we're using our AI technology. We use the AI live streaming. We are leveraging the AI technology to empower dealers, new media live streaming operation. So we can help them to reduce costs and improve their efficiency, increase their operation efficiency and help them to enhance their conversion capabilities. and also we have smart stores so we can upgrade the intelligent guided tour function. So when users browse a dealer's online store, AI generated voice commentary can match the content on the screen and it can be played automatically. So it can help to create an immersive watch and listen experience. helping to increase the number of users who will submit and leave their contact information. So we expect through those products and service upgrades and technologies, we can build a solid foundation for the renewal of our products next year. Operator?

No further question at this time. I will turn the call back over to management for closing remarks.

Thank you very much everyone for joining us today. We look forward to speaking with you all again our next quarter's conference call.

and to sharing the latest updates on the company's corporate strategy and business development. Should you have any further questions or suggestions, please feel free to contact us at any time. Thank you, everyone. Goodbye. Thank you, operator.

That does conclude today's conference call. Thank you for your participation. You may now disconnect.