CICC has issued a research report maintaining its "Outperform" rating on TUHU-W (09690), and raised its target price by 5.3% to HK$15.80, citing the acquisition as a boost to market confidence. The target price corresponds to 30x/24x 2026/2027 price-to-earnings ratios, implying 37.4% upside from the current share price. As the acquisition has not yet been completed, the bank is temporarily keeping its 2026 and 2027 earnings forecasts largely unchanged.
Recently, Tuhu announced a plan to acquire the entire equity of Conti Trade Australia Pty Ltd, a subsidiary of Continental. CICC believes this acquisition will help the company accelerate its overseas market expansion and improve overseas operational efficiency through procurement and supply chain synergies. The main points from CICC are as follows:
Company plans to acquire full equity of Continental's subsidiary Conti Trade Australia Pty Ltd
Recently, Tuhu announced a plan to acquire the entire equity of Conti Trade Australia Pty Ltd, a subsidiary of Continental. The target company operates the "mycar Tyre & Auto" brand through a wholly owned subsidiary. In 2025, it achieved revenue of AUD 524.66 million, after-tax profit of AUD 10.83 million, adjusted after-tax profit of AUD 21.17 million, and EBITDA of AUD 37.91 million, representing year-on-year growth of approximately 33%. Prior to this acquisition, as of the first half of 2026, Tuhu operated 21 overseas stores, mainly concentrated in Hong Kong and Malaysia.
Acquiring a leading Australian auto service chain to accelerate overseas market expansion
mycar is one of Australia's leading tire and auto service chain brands. As of the first half of 2026, it had 279 directly operated stores, forming a nationwide service network, mature brand recognition, and a stable customer base. CICC believes that acquiring mycar will help Tuhu quickly obtain a large-scale overseas offline network, local operating team, and automotive aftermarket operational capabilities, shortening the cultivation period for overseas markets. Looking ahead, this acquisition is expected to further diversify the company's revenue sources and geographic structure, and provide operational experience and business support for subsequent exploration of other overseas markets, opening up long-term growth space.
Medium- to long-term procurement and supply chain synergies to improve overseas operational efficiency
Both Tuhu and mycar focus on tires, auto maintenance, and repair services as their core businesses, and have a strong foundation for synergies in product procurement, supply chain management, and store operations. The bank expects that the company will leverage the combined procurement scale and global supplier resources of both parties to strengthen its bargaining power with tire and auto parts suppliers and optimize procurement costs. At the same time, the company will gradually introduce the digital supply chain capabilities accumulated in the domestic market into mycar, optimize mycar's local procurement system and supply chain network, and improve store operational efficiency. Looking ahead, as overseas business develops and synergies are gradually realized, the bank expects this to further unleash profit elasticity.
Earnings forecast and valuation
As the acquisition has not yet been completed, CICC is temporarily keeping Tuhu's 2026 and 2027 earnings forecasts largely unchanged. The current share price corresponds to 21.7x/17.3x 2026/2027 price-to-earnings ratios. The bank maintains its "Outperform" rating and, considering the acquisition's boost to market confidence, raises its target price by 5.3% to HK$15.80, corresponding to 30x/24x 2026/2027 price-to-earnings ratios, implying 37.4% upside from the current share price.
Risk warnings
Acquisition completion may fall short of expectations, integration may fall short of expectations, and domestic competition may intensify.