Ping An seeks to sell $2.1 bln stake in Autohome -sources (updated)

Autohome

12/11/2021 05:54

(Adds details on Tencent, background)
    By Julie Zhu and Kane Wu
    HONG KONG, Nov 12 (Reuters) - Financial conglomerate Ping An
Insurance Group of China  601318.SS  is seeking to offload its
44% stake in auto services portal Autohome  ATHM.K   2518.HK ,
three people familiar with the situation told Reuters.
    Ping An, which is currently the biggest shareholder of
Beijing-based Autohome via an offshore entity, has held talks
with several strategic and private equity investors for the
stake in recent months, said the people. 
    The stake would be worth around $2.15 billion based on
Authome's current valuation.
    Autohome faces growing difficulties in China where
automakers, in particular electric vehicle (EV) makers,
increasingly rely on their own distribution networks instead of
dealerships for sales, said two of the people. 
    That has affected the business of many dealers in the
world's biggest auto market and then forced them to cut budgets
for online portals like Autohome, said the people. 
    Founded in 2005, Autohome mainly serves as an information
portal for automobile buyers and an online car-trading
marketplace in China. 
    Advertisements and fees from automakers and dealers
generally account for more than 80% of its revenue as they use
its platform for services including brand and sales promotions.
    Ping An, China's largest insurer by market value, declined
to comment on "market rumours". Autohome, which is listed in
both New York and Hong Kong, did not immediately respond to a
request for comment.
    Autohome's U.S.-listed stock was down more than 70% Thursday
from this year's peak of $147.7 in January. It went public in
Hong Kong in March with lukewarm interest and its share price
has fallen more than 60% from a peak of HK$199.60 in March.
    Australian telecom giant Telstra sold its 47.4% stake in
Autohome to Ping An in 2016 for $1.6 billion, saying Autohome
would benefit from the Ping An's expertise in car insurance and
financing as it moved away from being purely online and began
offline sales in China.
    Ping An's insurance business and investment returns have
been hit by weakness in China's economy, which posted its
slowest growth in a year in the third quarter as power shortages
and property sector worries took a toll.  urn:newsml:reuters.com:*:nL1N2RN0LW
    The insurer reported a 31.2% fall in third-quarter net
profit due to lower premium income and losses on investment
assets. 
    Ping An had reached out to Tencent Holdings  0700.HK  for
the stake sale, said two of the sources. The internet and gaming
giant owns Bitauto, an online platform similar to Autohome.
    However, Tencent did not deem the deal viable due to
antitrust concerns, said one of them.
    Tencent did not immediately respond to a request for
comment. 
    Autohome reported $300 million of net revenue and $116
million of net income for the second quarter this year, down 16%
and 9% respectively year-on-year.
    It has 64 million monthly active users on its mobile phone
app and 45 million daily active users on its web portal,
according to its website.

 (Reporting by Julie Zhu and Kane Wu; Editing by Stephen Coates)
 ((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging:
kane.wu.thomsonreuters.com@reuters.net))