Ladies and gentlemen, thank you for standing by for Autohome’s First Quarter 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference call is being recorded. [Operator Instructions] It is now my pleasure to introduce your host, Sterling Song, Autohome’s IR Director, Mr. Song. Please go ahead.

Thank you, operator. Hello, everyone, and this is Sterling Song. Welcome to Autohome’s first quarter 2022 earnings conference call. Earlier today Autohome [Technical Difficulty]

Sorry. Mr. Song’s line is disconnected and we will connect him again shortly.

Maybe we can start from – come to our line.

Earlier today, Autohome distributed its earnings press release, and you may find a copy on the company’s website at www.autohome.com.cn. On today’s call, we have Chairman and the Chief Executive Officer, Mr. Quan LONG; and the Chief Financial Officer, Mr. Craig Yan Zeng. After the prepared remarks, our management team will be available to answer your questions. Before we begin, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. 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 Security and Exchange Commission. Autohome does not undertake any obligation to update any forward-looking statements, except as required under applicable law. The earnings press release in this call also includes discussions of certain unaudited non-GAAP financial measures. Our press release contains a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures and is available on Autohome’s IR website. As a reminder, this conference call is being recorded. In addition, a live and archived webcast of this earnings conference call will also be available on Autohome’s IR website. I will now turn the call over to Autohome’s Chairman and CEO, Mr. LONG, for opening remarks. Please go ahead, Mr. LONG.

[Foreign Language] Thank you. Hello, everyone. This is Quan LONG, Chairman and CEO of Autohome. Thank you for joining us today for our discussion of our quarterly results. [Foreign Language] To begin, we are delighted to announce and welcome a new member of Autohome’s senior management team, Mr. Craig Yan Zeng, who joined Autohome as our Chief Financial Officer in the beginning of May. Craig has over 20 years of experience in the capital markets and has held various senior management positions with both public and private companies, making him a rare management talent with a full set of capital market experience across Mainland China, Hong Kong and the U.S. He has in-depth expertise in financial management, finance, innovation, M&A and the risk of control as well as an excellent business philosophy and a strategic mindset. We believe that with his rich experience and outstanding leadership, Craig will be an asset to the company and help Autohome achieve its next stage of growth. [Foreign Language] With that, I will now turn the call over to our CFO, Craig Yan Zeng, for a closer look at our first quarter operating and financial results.

[Foreign Language] Since the beginning of this year, the resurgence of the COVID-19 pandemic in China has impacted most industries, including the automotive industry. Despite the challenging macro environment, Autohome reported an extraordinary first quarter with revenues totaling RMB 1.47 billion of which the contribution from new business rose to 33.7% of total revenues. Our adjusted net income in the first quarter was RMB 438 million, with adjusted net margin of 29.7%. Our overall performance exceeded market expectations and we maintained good profitability as well as a high profit margin level. [Foreign language] We believe our steady financial performance and strong cash flow will support Autohome as we navigate through market uncertainties and focus on long-term development with sustainable competitive advantages. Meanwhile, our healthy balance sheet and ample cash reserves allow us to continue to implement our strategy and generate sustainable returns to our shareholders with our share repurchase program and dividend policy. [Foreign language] Moving on to an overview of our first quarter highlights, during the quarter, we strengthened our collaboration with partners throughout our ecosystem to build an online traffic alliance and explore new ways to grow traffic. According to QuestMobile, Autohome’s aggregated average DAUs grew by 7.5% year-over-year to RMB 45.21 million in March, fortifying our leading position in the auto media vertical and surpassing the total DAU of the second and third largest players in the market combined. We also continue to develop our CN user base and strengthen the diversity of our content platforms through active development of short videos and live streaming content. Furthermore, we upgraded our NEV platform with a refreshed layout and user-friendly functionalities to cater to users’ diverse needs and behaviors, creating a more flexible and convenient user interface. These initiatives have successfully reinforced Autohome’s content ecosystem while delivering a better…

Thank you, management. [Operator Instructions] Our first one is from Brenda Zhao at CICC. Please go ahead.

[Foreign Language] Good evening, management. Thanks for taking my questions. I have three here. First one is about the industry. Could management give some color on the supply chain pressure of auto companies? And to what extent the current chip supply can meet market demand compared with the pre-pandemic period. And what’s management’s expectation of the new car sales market in the second half of this year? And my second question is about the data product. So what’s our R&D strategy in data products? And the third question is about the used car market. What are management’s view on the used car market and please give some color on the operation results of TTP. Thanks.

[Foreign Language] Thank you very much for the question. Let me echo with a question by quoting some of the data to you about the big market. Actually, if you look at the whole market, if we look at the already published data, you can see that in January and February, the market is still doing okay. However, getting into March, it has got into net growth. So because of the pandemic, especially in April, for example, let me quote you with a number, which according to the Passenger Car Association, the retail sales volume had dropped by 35.5% for the passenger car. Actually, according to another data which is released by the China Auto Association, the whole selling volume had dropped by 43.4%. Actually getting into May, situations get even worse. For the first half of May, if you look at the Passenger Car Association’s number, the car sales volume dropped by 21%. It’s only half a month sales volume. It already dropped by 21% comparing with the same period of last year. So actually, in the short-term, we do see the pandemic actually still have some negative impact on the market, and there are a lot of uncertainties tied to the pandemic. Thank you. [Foreign Language] After we talked about the sales in the market, now let’s shift to the supply side. If you look at the supply chain of the Chinese auto market, actually starting from 2022 April, we do see the supply chain experienced a lot of challenges, especially due to the lockdown policies for some of the cities, a lot of companies have to sustain, actually have to stop functioning. And also, there are big challenges on the logistics side. And actually, it already affected the supply chain a lot, especially on the supply side,…

Thank you. Our next question is from Maddie Lee [ph] at Jefferies. Please go ahead.

Thank you, management for taking my question. I have three questions. So the first one is about management providing color on the monthly business momentum and the impact of the Beijing Auto Show in second quarter under the pandemic outbreak and our expectation on the auto industry outlook in the second half? The second question is about the competitive landscape in online auto vertical. And the third, the last question is on the media and the leads generation outlook in the second half this year. [Foreign Language]

[Foreign language] Well, thank you for the question. Now talking about the Beijing Auto Show. Yes, the time has been postponed and the timing is still uncertain of when it will be held. Actually, 40% of the new car launching has already been postponed. So that’s why it already impacted the new car market a lot. If the COVID pandemic can be better controlled, hopefully, for the second half of the year, if we do see less quarantine cities, then we believe that starting from third quarter, we will see some pickup in the auto market. Thank you. [Foreign language] Now talking about the competition. Actually, on the 2B side, we continue to be the number one player in the market. Our market share is more than 50%, which is 52%. And actually, for the rest of the two competitors, they are quite close. If you look at the market share breakdown between the top three players, I believe it was five to three to two. And secondly, for the second half of the year, in terms of how the media and leads business would evolve, actually it depends on the pandemic. And also for the media business, the advertisement and marketing expenditures do get negative impacted. For the leads business, if the COVID-19 pandemic can be better controlled, I believe that starting from third quarter, the leads business would starting to perform better. Thank you.

Thank you. There are no further questions at this time. I will turn the conference back to management for closing comments.

[Foreign language] Thank you, everyone. Thank you very much for joining us today. We appreciate your support and look forward to updating you on our next quarter’s conference call in a few months’ time. In the meantime, please feel free to contact us if you have any further questions or comments. Thank you, everyone. Bye.