On August 21, TUHU-W (09690), also known as TUHU, delivered a robust set of interim results that reinforced its position as a resilient leader in the automotive aftermarket sector. During the first half of the year, the company generated revenue of RMB 8.78 billion, marking an 11.4% year-on-year increase, while adjusted net profit reached RMB 240 million. Its global store network expanded to 8,825 locations, securing the top spot in the industry. TUHU achieved simultaneous growth in both scale and profitability, while also advancing its dual listing on the US stock exchange and implementing regular share buybacks and cancellations. Through these tangible results, TUHU is sending a clear signal to the capital markets: the structural shift in China's automotive aftermarket from fragmentation toward consolidation is accelerating, and the value re-rating process for industry leaders has already begun. To fully grasp TUHU's long-term growth narrative and its expansive valuation potential, it is instructive to look toward the more mature US automotive aftermarket, where historical data consistently demonstrates that this sector possesses classic "weak cyclicality" and formidable resilience against economic downturns, making it a genuine long-term growth track. The three-decade consolidation journey of the US aftermarket not only provides TUHU with a clear mirror for its own evolution but also reveals the core principle that industry leaders enjoy valuation premiums during sector shakeouts.

The trillion-yuan automotive aftermarket is witnessing certain growth. From a total volume perspective, the US automotive aftermarket exhibits steady expansion akin to a long and rewarding track. Data indicates that the market size reached USD 568.7 billion in 2025 and is projected to grow steadily to USD 676.5 billion by 2029, reflecting a compound annual growth rate (CAGR) of approximately 4.4%. These figures highlight a clear trend: even amid macroeconomic fluctuations, the market maintains consistent growth. More critically, it demonstrates remarkable resilience in navigating economic cycles. During the 2008-2009 financial crisis, US new car sales plummeted 15.4% year-on-year, nearly halting the auto industry, yet the aftermarket contracted only 1.4%. Similarly, when the COVID-19 pandemic struck in 2020, new car sales collapsed again by 16.2%, but the aftermarket shrank merely 5.3%. This weak cyclicality provides a solid foundation for leading companies to thrive across different economic phases.

Turning attention back to China, the domestic automotive aftermarket stands at a starting point strikingly similar to that of the US in the late 1990s. As of the end of June 2026, the national vehicle parc reached 371 million units, with vehicles older than seven years accounting for over 50% of the total, forming a market already valued in the trillions. However, the current domestic independent aftermarket remains extremely fragmented, with the top players holding less than 1% market share. As nearly 80,000 traditional stores have been accelerated out of the market over the past two years, a wave of industry consolidation from fragmentation to concentration is rapidly replaying in China. Amid this profound industry transformation, TUHU is leading the charge, converting macroeconomic tailwinds into tangible operational results. In the first half of 2026, TUHU's revenue grew 11.4% year-on-year to RMB 8.78 billion, and its global workshop store network maintained the top industry position. Meanwhile, the company's user base continues to expand, with registered users reaching 175 million and transaction users over the past twelve months growing 17.2% year-on-year to 31 million. As supply-side consolidation accelerates across the industry, TUHU is leveraging the dual certainty of scale expansion and user growth to rapidly capitalize on the era-defining dividends available to China's automotive aftermarket leader.

Four key advantages establish the logic for leader re-rating. Having undergone three decades of industry consolidation, the US aftermarket witnessed companies like AutoZone and O'Reilly grow from single stores into industry giants. The foundational growth logic that enabled these overseas leaders to navigate cycles—merger and acquisition integration, standardized operations, and supply chain depth—offers valuable reference points for the advancement of domestic leading platforms. Today's TUHU, by thoroughly integrating the unique characteristics of the Chinese market, is pursuing a four-dimensional strategy encompassing scale expansion, supply chain efficiency, standardized operations, and new energy transformation, charting a course better suited to the domestic environment for an auto service industry leader.

First, scale expansion serves as the foundation for leadership. As of the end of June 2026, TUHU's global workshop stores reached 8,825, with a net increase of 817 in the first half, securing the top spot in the auto service industry. Approximately 65% of newly opened stores are located in lower-tier cities, with Gansu and Xinjiang each surpassing 100 stores, while low-penetration regions such as Shanxi and Inner Mongolia saw year-on-year growth exceeding 40%.

Second, supply chain efficiency builds a formidable moat. TUHU has established a "regional warehouse–front warehouse–store" supply network: 31 regional warehouses radiate across the country, 840 front warehouses are positioned close to stores, and over 80% of stores can obtain required parts in a short time.

Third, standardized operations address the pain point of non-standardization. Traditional auto repair relies heavily on individual expertise, but TUHU employs a full-chain digital system and standardized processes to convert non-standard services into definitive instructions, ensuring consistent service standards regardless of store location. Nearly 90% of stores operating for more than six months are profitable, with both same-store fulfillment users and revenue maintaining positive growth.

Finally, new energy serves as a key growth engine. As of the end of June 2026, TUHU's new energy transaction users reached 5.3 million, up 56.7% year-on-year, representing 17.2% of total transaction users. TUHU has become the only independent third-party auto service platform with large-scale three-electric (battery, motor, and electronic control) repair capabilities, and has participated in drafting two national standards for new energy vehicle maintenance. From talent reserves to technical capabilities, and from standard-setting to industry definition, new energy-related businesses are emerging as the pivotal leap for TUHU to lead the transformation of China's aftermarket. Through these four dimensions working in concert, TUHU is steering with a defined industry trend as its compass and endogenous growth as its engine, ushering in a new value cycle for China's automotive aftermarket leader.

Navigating cycles to capture the era dividends of the trillion-yuan track. Looking back from the mid-2026 performance milestone, TUHU's underlying logic for navigating cycles is deeply anchored by triple certainties. Industry certainty lays a solid foundation. China's vehicle parc of 371 million units, with an aging vehicle profile, directly drives up mandatory maintenance spending per vehicle. Combined with the sector's natural weak cyclicality, this trillion-yuan track demonstrates exceptional resilience against risk, providing ample room for steady growth by leading companies.

Structural certainty points to the inevitability of increased concentration. With nearly 80,000 traditional stores exiting the market over the past two years, the industry is transitioning from rapid, disorderly growth to a more standardized and regulated state. Platforms with scale and digital capabilities are emerging as the biggest beneficiaries, accelerating their capture of dividends from industry consolidation.

Company certainty serves as the core engine for realizing these dividends. TUHU has built a deep structural moat through its global network of 8,825 stores, supply chain depth with 31 regional warehouses and 840 front warehouses, standardized operations with nearly 90% of stores profitable, and first-mover advantages in new energy with the only large-scale three-electric repair capability. As the industry moves from noise to rationality, TUHU's value proposition is now clearly defined. This company, driven by data and action, is navigating cycles as a frontrunner, steadily advancing toward a certain future as China's leading auto service enterprise.