Margin Pressure Persists

Research evidence excerpt

Margin Pressure Persists

Idea

July 20, 2026 03:00 PM GMT

Morgan Stanley Asia Limited+MTUHU Car Inc | Asia Pacific Shelley Wang, CFA

Equity Analyst

Margin Pressure Persists Shelley.Wang@morganstanley.comTim Hsiao +852 3963-0047

What’s Changed Tim.Hsiao@morganstanley.com +852 2848-1982

Joey Xu, CFA

TUHU Car Inc (9690.HK) From To Equity Analyst

Price Target HK$16.00 HK$15.00 Joey.Xu@morganstanley.com +852 3963-0337

Peggy Wang

TUHU has executed its market share-driven strategy well, but ResearchPeggy.Pc.Wang@morganstanley.comAssociate +852 3963-3934

margin pressure looms larger than we expected owing to price

competition and cost increase in 1H26.

Market share gain at the expense of ASP: Our channel checks indicate that TUHU

was actively expanding store coverage in 1H26, particularly in lower-tier cities,

where the penetration of independent auto aftermarket (IAM) chain stores was still TUHU Car Inc (9690.HK, 9690 HK)

low. However, consumption sentiment remained weak. According to F6 Car, an IAM China Autos & Shared Mobility | China

IT solution provider, after-sales service value of the IAM stores it tracks fell 5% YoY Stock Rating Overweight

Industry View In-Line

in 1H26, as aftermarket demand continued to slow amid growing macro Price target HK$15.00

uncertainties and consumption downgrade concerns. Therefore, we think TUHU Up/downside to price target (%) 12

Shr price, close (Jul 20, 2026) HK$13.42

needed to offer incentives to recruit new customers, which could lead to further 52-Week Range HK$21.24-11.36

ASP decline. We estimate that TUHU continued to generate >10% YoY revenue Sh out, dil, curr (mn) 825

Mkt cap, curr (mn) Rmb9,575.0

growth in 1H26, mainly thanks to 15-20% YoY store number growth while same- EV, curr (mn) Rmb8,661.8

Avg daily trading value (mn) HK$21