This article only represents the author's own views.
Online car trader Autohome Inc. (ATHM.US; 2518.HK) is riding a recovery in China’s car market, fueled by Beijing’s efforts to drive up demand to jumpstart the world’s second largest economy. But the brief boom for a market that has struggled recently may prove temporary as the effects of government incentives fade in a wobbly economy. If and when that happens, the brief joy ride for Autohome and its peers could hit the skids just as suddenly as it began.
The nascent rebound was evident in Autohome’s latest quarterly results released last week, which showed the company’s total net revenue grew 4.5% year-on-year to 1.8 billion yuan ($259 million) in the third quarter. While the rise may look small, it marked the company’s first year-on-year sales growth in quite a while, reflecting the industry’s recent malaise. The last time Autohome posted a year-on-year increase was a year and a half ago in the first quarter of 2021.