In 2025, China's automotive aftermarket entered a challenging adjustment phase, presenting a contrasting "fire and ice" dynamic. This is not merely a cyclical fluctuation but a profound structural reshuffle. On the supply side, traditional business models are undergoing a harsh consolidation process. Industry data shows that total vehicle workshop entries for 2025 fell by 4% year-on-year, with nearly two-thirds of independent repair shops facing a survival crisis due to shrinking customer traffic. These signals indicate the accelerated decline of an era reliant on information asymmetry, personal connections, and extensive management practices.
However, against this backdrop of intense industry competition and battles for market share, TUHU-W (09690) has charted an independent upward trajectory. As the first global platform to surpass 8,000 automotive service stores, TUHU has achieved steady, synchronized growth across three core metrics: user base, revenue growth, and profit generation. This resilience in a challenging environment reveals the company's core business logic: an efficiency revolution deeply driven by technological infrastructure. Through over a decade of dedicated effort, TUHU has successfully transformed automotive services—once non-standardized, chaotic, and highly dependent on individual expertise—into a replicable, standardized, and scalable modern industrial offering.
**Independent Performance Amid Headwinds: Net Profit Growth Outpaces Revenue Growth** In 2025, amidst overall pressure on the automotive aftermarket, TUHU's performance stood out distinctly. By the end of 2025, the net increase in TUHU Workshop stores reached 1,134, demonstrating the strong adaptability of its business model across different market conditions. Financial data further corroborates the "winner-takes-more" Matthew Effect: while the industry generally saw declining workshop visits, TUHU's full-year revenue grew 11.5% year-on-year to RMB 16.462 billion. More notably, adjusted net profit reached RMB 700 million, a 12.2% increase. The fact that adjusted net profit growth surpassed revenue growth for the first time is a significant inflection point. It indicates the company has moved beyond simply relying on scale expansion for market share and has entered a high-quality profit release cycle characterized by "increasing profits faster than revenue." Adjusted net profit, which excludes non-operational items like share-based compensation and one-time projects, more accurately reflects the core business's profitability and operational resilience. This marks the point where TUHU's scale effects are translating into substantive profit barriers.
While deepening its presence in the domestic market, TUHU has also begun early-stage pilot exploration of an overseas strategy. From Hong Kong, China to Kuala Lumpur, Malaysia, the validation of the TUHU model in high labor-cost and mature markets has achieved phased success. The steady operation of Hong Kong stores proves the viability of its single-store profit model even in intensely competitive environments. The successful establishment of stores in Malaysia, the first stop for its overseas expansion, signifies that TUHU's entire standardized operational system possesses cross-cultural and cross-border transferability. Currently, TUHU has over 10 stores in operation or preparation in Malaysia, providing a reference model for Chinese automotive service brands going global.
**Decoding the Efficiency Formula: The Three Pillars of Technological Infrastructure** TUHU's ability to navigate industry cycles stems not from simple capital investment, but from a sophisticated digital infrastructure built over more than a decade. This system upgrades traditional workshops reliant on "master technician" experience into a "digital factory" that converts non-standard services into standardized industrial products. Its efficiency formula primarily consists of three pillars: data infrastructure, intelligent supply chain, and digital store management.
Firstly, data infrastructure encapsulates the industry's "uncertainty" into an algorithmic black box. The fundamental challenge of the automotive aftermarket lies in extreme adaptation complexity: the combination of tens of thousands of vehicle model years and tens of millions of parts creates a vast, chaotic system. Traditionally, parts matching heavily relied on a technician's personal experience, leading to high mismatch rates, high return rates, and low efficiency. TUHU has digitally reconstructed this system. Its self-built database now covers over 3,000 domestic and international automotive brands, with the number of transaction SKUs growing approximately 20% year-on-year. This is not merely a static lookup table but a dynamic intelligent decision engine. The moment a user inputs a license plate number, backend algorithms can perform precise matching—a task requiring half an hour for an experienced technician—in milliseconds, reducing human uncertainty to deterministic data instructions. With real-time feedback from massive transaction data, the system continuously self-optimizes, forming TUHU's deepest and most difficult-to-replicate technological moat.
Secondly, the intelligent supply chain system trades "density" for "speed" and "algorithms" for "cost." Addressing the chronic issues of lengthy distribution chains, markups at every level, and slow inventory turnover in traditional auto parts distribution, TUHU has built a multi-layered network comprising 31 regional distribution centers, 738 front-end warehouses, and over 8,000 workshop stores. The front-end warehouses, akin to capillaries, penetrate deep into urban areas, enabling stores to operate with "zero inventory," significantly relieving franchisees' cash flow pressure. The Guangzhou automated benchmark warehouse, operational in Q2 2025, introduced advanced automated sorting systems and intelligent route planning, reducing manual handling costs by over 50% compared to manual modes and increasing operational efficiency to 2.5 times that of traditional warehousing. This intensive system creates a powerful "virtuous cycle": lower intermediate distribution costs lead to more competitive end-user prices, which increases order density and inventory turnover speed, further diluting fixed costs.
Finally, digital store management represents a profound experiment in "de-skilling" management. The biggest bottleneck in scaling service industries is "people." TUHU addresses the long-standing challenge of "chain stores lacking consistency" in the franchise industry by decomposing complex repair services into standardized action sequences and embedding them into a digital management system. From vehicle intake inspection and repair operations to final quality checks, every step follows standards and is traceable through data. For example, tire replacement is broken down into 18 standard steps, ensuring consistency across all 8,008 stores. This not only guarantees highly consistent service quality between the 1st and the 8,008th store but also means franchisees are purchasing a proven, replicable profit system, not just a brand name, enabling exponential network expansion.
**The Endgame Emerges: Structural Moat and Winner-Takes-Most Dynamics** Business history repeatedly shows that fragmented and disorganized industries eventually trend towards high concentration. Looking at the US automotive aftermarket, giants like AutoZone and Advance Auto Parts already command a significant share. In contrast, the combined market share of China's top five players remains below 5%, indicating the industry consolidation wave has just begun. China's car parc is projected to exceed 370 million vehicles by the end of 2025, with the average vehicle age rising to 7.3 years. Industry patterns indicate that maintenance expenditures surge significantly once vehicles surpass 6 years of age, suggesting a massive wave of demand from the existing fleet is poised for release. The substantial gap between "extremely fragmented supply" and "increasingly concentrated demand" creates a pivotal moment for industry leaders to reshape the landscape.
Through its heavy investment in technological infrastructure, TUHU has built a structural moat that is difficult for latecomers to cross, encompassing the response speed of its technical systems, the fulfillment efficiency of its supply chain network, and the data feedback capabilities derived from its user scale. This is a classic "winner-takes-most" battlefield, where only platforms with comprehensive systemic capabilities can thrive. TUHU's 2025 data strongly validates this logic: its number of new energy vehicle transaction users reached 4.27 million, a 60% year-on-year increase. On the burgeoning new energy vehicle track, TUHU has swiftly secured a position leveraging its deep technological infrastructure, proving its moat is wide and deep enough to accommodate new technological shifts.
The era of fragmented "independent operators" in China's automotive aftermarket is drawing to a close, making way for a new epoch dominated by large, standardized chains. TUHU is positioned as the definer of these new rules. Bolstered by the Matthew Effect, market share will further concentrate towards the top players. In a trillion-RMB存量 market (stock market), the player with the strongest infrastructure and highest operational efficiency is destined to capture the largest market share, leading the industry towards maturity and standardization.
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