Autohome's Stock Soars on Accelerated Revenues Amid China's Auto Sales Slowdown
Online automobile marketplace operator Autohome Inc. (NYSE: ATHM) reported positive revenue growth for the fourth quarter on Wednesday, while China's car sales plunged 18% in January.
The Beijing-based company's net revenues in the fourth quarter of 2019 reached $334.6 million, up 7% from one year ago. Net income hit $159 million.
Autohome earned $1,209.6 million revenue with a 16.4% increase for the full year 2019, according to its statement. The company also reported a $0.77 annual dividend, which is expected to be paid on April 22 in 2020.
The company highlighted its new data product unveiled in mid-2019 in the statement. As of December, 13 automakers have signed up the new advertising service used to launch new car models on Authomne's platform.
"With a broadened array of data products available for our partners, Autohome creates more value for the auto ecosystem." Min Lu, the chief executive officer of Autohome, said in the statement.
China's car industry, however, suffered a big drop in January as the coronavirus outbreak came with supply-chain disruptions and labor shortages.
Data from China's Association of Automobile Manufacturers showed that major automakers sold 1.94 million vehicles with an 18% plunge from a year earlier. The manufacturers' association said sales could decline even more in February.
Investors' concerns over the Wuhan coronavirus effect on the markets will represent a significant roadblock to success in 2020. The region is home to roughly 10% of China's car-making capacity according to The Wall Street Journal.
"Despite challenging operating conditions, we managed to deliver steady revenue growth with a decent profit level," Jun Zou, the chief financial officer of Autohome, said in the statement.
Looking ahead, the company said it expects net revenues between $219.8 million to $227 million in the first quarter of the fiscal year 2020.
Shares in Autohome were trading at $82.63 per American depositary share, up 5% Wednesday morning.
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