CMB International Securities analyst Ji Shi maintained a Buy rating on TUHU Car Inc. Class A (9690 – Research Report) today and set a price target of HK$21.50.
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Ji Shi has given his Buy rating due to a combination of factors that highlight Tuhu Car Inc.’s strong market position and growth potential. The company’s profitability in its franchised stores has been impressive, with over 90% of stores operating for more than six months turning a profit in FY24, outperforming many competitors in the auto after-market sector. Despite challenges in increasing single-store revenue amid macroeconomic uncertainties, the expansion of store numbers is expected to drive revenue growth in the coming years.
Ji Shi also notes that Tuhu is well-positioned to benefit from key industry trends such as the aging vehicle population, a shift towards more cost-effective consumption, and the increasing preference for online purchasing among younger consumers. The company’s revenue growth is projected to accelerate in FY25, supported by an increase in store numbers and improved gross margins due to economies of scale and a higher sales mix of high-margin products. Additionally, Tuhu’s efforts to enhance customer experience and operational efficiency through AI technology are expected to contribute positively to its financial performance, justifying the Buy rating.
According to TipRanks, Shi is ranked #1489 out of 9393 analysts.
In another report released on March 6, Goldman Sachs also maintained a Buy rating on the stock with a HK$20.90 price target.
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