T. H. Data Flash - Autohome Inc. (ATHM) – 4Q19E & January 2020: Challenging Time For Auto Sector In 2020; Impact From Coronavirus Can Be Profound
Just when the market was excited about the potential recovery in China’s economy in 2020 at the beginning of the year, the coronavirus outbreak hit China and manufacturers were negatively impacted. Car sales were down in January and are likely to be worse in February, March and into 2Q20. Several OEMs released their depressing January sales data. Even though we expect ATHM’s 4Q19 revenue to be in line with consensus and margins are likely to be better as the company’s spending may be lower than it indicated on the 3Q19 earnings call, ATHM as a services provider for auto OEM and dealers cannot avoid the impact to its business from the outbreak in 1Q20.