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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, thank you for standing by for Autohome's First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference call is being recorded. If you have any objections, you may disconnect at this time.
It is now my pleasure to introduce your host Aggie Zhao, Autohome's IR Manager. Ms. Zhao, you may begin.
Thank you, operator. Hello, everyone, and welcome to Autohome's first quarter 2021 earnings conference call. Earlier today, Autohome distributed its earnings press release, and you may find a copy on the company's website at www.autohome.com.cn. On today's call, we have Chairman and Chief Executive Officer, Mr. Quan Long; Co-President, Mr. Haifeng Shao; Chief Financial Officer, Mr. Jun Zou; and Chief Technology Officer, Mr. Xiao Wang. After the prepared remarks, Mr. Long, Mr. Shao, Mr. Zou, and Mr. Wang will be available to answer your questions.
Before we begin, please note that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include but are not limited to those outlined in our public filings with the Securities and Exchange Commission. Autohome does not undertake any obligation to update any forward-looking statements, except as required under applicable law. The earnings press release in this call also includes discussions of certain unaudited non-GAAP financial measures. Our press release contains a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures and is available on Autohome's IR website. As a reminder, this conference call is being recorded. In addition, a live and archived webcast of this earnings conference call will also be available on Autohome's IR website.
Now, I will turn the call over to Autohome's Chairman and Chief Executive Officer, Mr. Long.
[Foreign Language]
Thank you. Aggie. Hello, everyone, and thank you for joining us today.
[Foreign Language]
I'm pleased to report a solid quarter with total revenues growing 19.1% to RMB1.84 billion. Revenues from our online marketplace and other business increased by 74% year-on-year and contributed to 29.3% of total revenues. Data Products continued its strong growth trajectory with revenues increasing 64.9% year-on-year primarily driven by increased contribution from OEM data products in particular TTP's revenue contribution was larger than our prior expectations. Adjusted net income in the first quarter continue to expand at 13.7% year-on-year.
[Foreign Language]
Before we start discussing our results in detail, I'd like to share some thoughts about industry lending as a whole and some of our recent developments. We are witnessing that changes are coming to the automobile industry in the face of a challenging macro environment and fluctuation in automobile sales stemming from the pandemic. The auto industry has started to step up efforts towards the digital transformation. Emerging premier electric vehicle brands and the traditional auto manufacturers' investment in the new energy vehicle have also accelerated the growth in the NEV space. In addition, some new players with extensive expertise in internet services are tapping into the smart automobile market, intensifying the competition in this field. All these trends are reshaping the automotive market landscape, including the overall industrial value chain.
[Foreign Language]
Against the backdrop of this new market and industry dynamic, on one hand, in the past two years, we have been consistently optimizing and trimming low-margin businesses such as offline insurance business while staying away from price competition to ensure high quality business portfolio. On the other hand, we roll out our 4.0 strategies last year namely AI, Big Data, and Cloud Capability, and SaaS Strategies. Now, we are also planning an upgrade of the strategies by fine-tuning our action plans to the execution as we seek to better capture industry opportunities and achieve continued high quality development. We expect announced updates on these action plans in the second half of this year. As a platform with a massive and engaged user base of more than 40 million daily active users solid business fundamentals industry-leading innovative capabilities as well as effective and strong execution capabilities, we are confident that Autohome can grow beyond its current standing and tap into new growth potentials.
[Foreign Language]
Next, let's move to our Q1 results. In first quarter, the new energy vehicle market extended the upward growth trend that began in the second half of last year, as sales volumes will -- year-on-year and accounted for over 9% for the total new passenger vehicle sales compared to approximately 6% for full year 2020. The prosperity of the NVE market brought new growth opportunities for us. In the first quarter we expanded and deepened our cooperation with NEV automakers. Revenue from these automakers increased to close to 170% compared to the same period of last year.
[Foreign Language]
In terms of our used car business, we are exploring further opportunities in this area, leveraging our capabilities in e-financing and relevant supported service resources to empower our customers and insert our users. In the first quarter, the transaction volume for TTP Car Inc. increased by 160% year-on-year.
[Foreign Language]
Moving next to our product advances. Recently, we unveiled a new version of our Intelligent New Car Launch integrating VR showroom and mini video products while combining our intelligent activities with offline operations. This is allowing New Car model debuts to gain more precise exposure and attract more auto fans. In the first quarter, a total of 31 automakers utilized our data products and the total number of programs for Intelligent New Car Launch and Intelligent Marketing Solutions was more than 30 by adding product domain automation functions including WeChat Mini Program and marketing as well as promotional tools to the existing public domain function. Our incremental lead product, Smart Shop 3.0 version works as marketing platform for dealers to capture private traffic, their own users and obtain incremental leads.
[Foreign Language]
On the product at the users front, we recently upgraded our main app to offer a streamlined user interface, while optimizing the designs that caters to the younger generations. All these efforts helped us further enhance the user experience. In the meantime, we also took steps to improve the quality of our sales leads by recovering an excellent effort -- execution when users leave their cell phone numbers with them, which further strengthens the protection of user privacy and security.
[Foreign Language]
In conclusion, we have a solid first quarter driven by our resilient core business as well as robust new initiatives. Data Products once again delivered strong revenue growth, while TTP bolstered our used car business line. We also accelerated our product innovation and iteration in order to further enhance our overall service quality. This achievements reflect Autohome's leading position in these key areas. Going forward, we remain committed to better serving the interest of our users and customers and delivering long-term value to our shareholders.
[Foreign Language]
With that, I will now turn the call over to our CFO, Jun for more business details and a closer look at our first quarter financial results.
Thank you, Quan. To start, let me go through some business metrics. In March 2021 the number of average DAUs who access our mobile websites primarily APP's mini apps grew further to 42.3 million, representing an increase of 33.3% compared to the prior year.
For the first quarter all of our OGC, PGC, UGC and other content categories in solid user contraction. Now I will talk you through the key financials for the first quarter. Please note that as with prior calls, I will reference RMB only in my discussion today unless otherwise stated. Net revenues for the first quarter were RMB1.84 billion, a 19.1% increase compared to the corresponding period last year. For a detailed breakdown, media services revenue were RMB605 million, lead generation services revenue were RMB698 million and online marketplace and others revenue increased by 74% year-over-year to RMB539 million, primarily driven by the impact of consolidation of TTP and increased contribution from data products.
Now, moving onto costs. Cost of revenues was RMB243 million compared to RMB178 million in Q1 last year. The increase was primarily attributable to the impact of consolidation of TTP. Gross margin was 86.8% in the first quarter compared to 88.5% in Q1 last year. Turning to operating expenses. Sales and marketing expenses in the first quarter were RMB683 million compared to RMB524 million in Q1 last year. The increase was primarily attributable to the impact from the consolidation of TTP increased execution cost to support customers in the business development. Now, P&D expenses were RMB305 million compared to RMB292 million in Q1 2020. The increase was primarily driven by higher investment in research and development activities.
Finally, G&A expense were RMB129 million compared to RMB89 million in Q1 2020. The increase was primarily attributable to the impact of consolidation of TTP. Overall, we delivered operating profit of RMB567 million for the first quarter compared to RMB586 million in the corresponding period of 2020. Adjusted net income attributed to Autohome Inc. was RMB735 million for the first quarter compared to RMB646 million in the corresponding period of last year. Non-GAAP basic and diluted earnings per share for the first quarter were RMB1.52 compared to RMB1.36 and RMB1.35 respectively in the corresponding period of last year. Now non-GAAP basic and diluted earnings per ADS for the first quarter were RMB6.08 and RMB6.06 respectively compared to RMB5.43 and RMB5.40 respectively in the same period last year.
As of end of Q1 2021, our balance sheet remained very strong with cash, cash equivalents, and short-term investments of 17.27 billion. We generated operating cash flow of RMB546 million in the first quarter of 2021. As a listed company on the Hong Kong Stock Exchange, we will follow the common practices adopted by public companies in Hong Kong market. As a result we will no longer provide guidance on revenues going forward. So in March Autohome successfully listed on Hong Kong Stock Exchange. Additionally, Hong Kong Autohome's Hong Kong Stocks will be added to Hang Seng TECH Index and Hang Seng Composite Index marking a key milestone in our history and opening a new journey for Autohome.
In the past few years Autohome has been leading the development of the industry. As we move forward with our strong balance sheet and profitability, we are confident that Autohome will bring more value to both our users and customers and deliver long-term return and value to our shareholders as well.
With that we're ready to take your questions. Operator, please open the line for Q&A.
Thank you. We will now begin the question-and-answer session. [Operator Instructions] First question is Miranda Zhuang from Bank of America Securities. Please go ahead.
[Foreign Language]
Thank you for taking my question. Can management share your thoughts on the business outlook for the second quarter and the second half this year. Especially for the second half because previously management mentioned that company will announce action plans for strategic upgrades in the second half. So can you give us a sense of what kind of areas where company focused on what kind of products of services upgrades may be taken? Thank you.
[Foreign Language]
Okay, thank you for reading this question. I'd like to take the question, the strategic upgrading. You know that in China our auto-market changes very fast and we do witness three different characteristics. First characteristic is that the sales volume for Autohome has been volatile and has been very dramatic changes over the past several quarters. In Q1, you can see that there is a very big growth comparing with the same period of last year. There is a growth of 69%. Of course this also the factor caused by the COVID-19 pandemic. And in April, we can see that we only have the growth of about 12%. So the growth jumped from 69% to 12% and for the first three weeks of May, actually for the wholesale business, there is a negative growth year-on-year. So the second characteristic is that because of COVID-19 pandemic, the digital transition of those automakers has been accelerated and the third characteristic is that you can see the sales of NEV has been growing very rapidly and from January to April of this year you can see that the sales of the new electric passenger vehicle increased by 288% almost 300%. So there is a lot of new players, including some of the intelligent, some of the premium car brand as well as some of the carmakers with very good expertise on internet services. They all entered into the NEV sector.
[Foreign Language]
At the same time we also find that the entire auto industry has been developing as well as changing very fast. We'll be getting touch with the automakers with those auto OEMs, we also discovered these changes, for example, a lot of the automakers, they have been directly connecting with the users and some of them directly connected with the operation of the users and at the same time, the iteration of the products of the auto OEMs is also accelerated. So for Autohome we think that we are dedicated to pursue long-term sustainable and healthy development of the auto-market, so we continue to adapt the upgrading of our strategy. Last year we launched our 4.0 strategy and this year based on the above mentioned new changes on the market we are considering about the upgrading of this strategy.
[Foreign Language]
And going to the plan of Autohome, we are actually going to announce the update of the fine tuning of the action plan to the execution in the second half of this year. So actually we are dedicated to have the long-term sound, stable as well as a good development, high quality development in the longer term.
[Foreign Language]
Actually for this year we still maintain our estimate about the auto-market growth in China and at the very beginning of the year, which is the estimate of a growth of about 10% and actually we still have to absorb the changes and development on the market. The first thing we have to take notice is about the shortage of the auto level sheet production. There is a shortage for a while. And secondly, we have to take notice of the relax of COVID-19 in specific geography. And the second thing is that I think that for the auto OEM, the budgeting of the full year is closely related to the sales volume of the cars. So this is the two points I'd like to add.
Operator, next question, please.
Thank you, Miranda. Next question is Eddy Wang from Morgan Stanley. Please go ahead.
[Foreign Language]
Thank you Long and Zou for taking my question. My first question is about -- your comments on the new car sales in April, which has been a little bit slow down. And in May -- first three weeks of May actually you see a year-over-year decline in terms of new car sales volume. So would you please give us some color how this will impact our revenue in the second quarter? That's the first question. And second question is that you had been talking about in the prepared remarks that the TTP Car has delivered a largely expected contribution to your top line. So can you give us a little bit more color in terms of, firstly, how this used car industry have been so far this year. And secondly that how did you achieve the -- how the expected the topline growth of the TTP Car and how -- what's your strategy in the overall used car kind of sector? Thank you very much.
[Foreign Language]
So to answer your first question, you can see that in the first of two months of this year in particular from January to April as well as the first three weeks of May, there is a declining trend of the new car sales. So I think that there are basically two reasons for that. The first one is the shortage of the chips and the second one is COVID-19 pandemic. So as we estimated the growth for the whole year, which was about 10%. You can see that so far in comparison there's a downward trend and in Autohome we think that for the automaker, their value chain is closely related to the sales volume as a result you can see that our advertising business is affected because of that however we're still exploring the potential of other businesses. And your second question is about the used car business. You can see that so far the growth of the second hand car, the used car is higher than new car sales. And last year we acquired TTP and now we are thinking about the cooperation between Autohome and TTP that is to say we hope that the business of the used car in Autohome as well as TTP we can form some kind of actions, we can form some synergy. The first one is that in terms of the used car business we still stick to the platform-based business model, which is actually focusing on the light asset.
[Foreign Language]
And for the used car business together with TTP from the seller side we are actually providing lead gen services as well as the auction services as to enable the sellers of the used car. And from the buyer side, we are offering the lead gen services as well as SaaS platform services as to enable the buyers. So I think that in the future we're also considering about launching the trade-in services and the relevant project, so that to better integrate our used car business as well as TTP business.
[Foreign Language]
I would like to add two points. Firstly, just like Mr. Shao mentioned, the advertising budget of those automakers are closely linked with the auto sales. So we are also exploring the acquisition of other businesses by offering more products to our clients. And the other is that, we will pay more attention to the operation of the users so as to enable those auto OEMs automakers. And in terms of NEV I should see that actually our clients would like to pay much higher premiums for the lead gen comparing with the lead of the traditional automakers. So I will not tell you the details about the gap between the two, but I think that this premium is very significant. So I think that through advertising as well as PPS we will continue to empower the traditional automakers as well as those emerging premium EV brands.
Yes, well, also said that we offer a comprehensive suite of services to EV makers and traditional makers, automakers that make EVs through advertisements through leads through orders and through PPS.
So thanks, Eddy. Operator, next question, please.
Thank you, Eddy Wang. Next question is Brenda Zhao from CICC. Please go ahead.
[Foreign Language]
Thanks management for taking my questions. I have a follow-up question on NEV. So could management elaborate a little bit more on the cooperation model of NEV automakers and our future like potential other models for this business? Thank you.
[Foreign Language]
So [indiscernible] question. We have very comprehensive cooperation with this NEV automakers as well as the premium EV brands. Actually I think 2019 we already entered into cooperation with the big names like Xpeng like Nio as well as Li Auto et cetera. So there is very sustainable and very stable cooperation between that. So in terms of the model of the cooperation actually the lead gen has actually produced on the demand and the price of the leads will be based on the quality of the leads. So this the principle of our cooperation model. So we offer a package of total sales increase solutions to those clients.
[Foreign Language]
And generally the upgrading of our strategies will also iterate the cooperation model between us and those NEV automakers. They're assuming directions. The first one is that we will enhance our services, in particular, the order placement services as well as the online reservation of the test drive and the second thing is that actually we will have those NEV automakers to expand your coverage in different geographies and bigger Tier 1 cities.
Okay, thanks.
Operator?
Thank you, Brenda Zhao. Next question is Thomas Chong from Jefferies. Please go ahead.
[Foreign Language]
Thanks management for taking my questions. I have a question relating to our OpEx trend. Can management comment about our cost strategy for this year as well as our headcount spend. And my second question is about the overseas expansion strategy given that COVID is still quite uncertain outside China and our strategic upgrade actually it has some changes in our overseas expansion? Thank you.
[Foreign Language]
Okay, I would like to take the first question and Mr. Long will take the second question. Just like our Chairman said in the opening presentation now we are planning about the upgrading of our strategy. So it's very difficult for me to give you a forecast about the changes in the cost as well as the expenses, but according to our traditional legacy actually we are very good at cost of control as well as the operational efficiency enhancements and for the cost of sales in our business we'll use them in the incubation of the new business. I think that this principle will remain unchanged.
[Foreign Language]
So the second question about our overseas business, we will still follow the principle of empowerment as output. In terms of empowerment, I mean, we will actually empower our users through the content. It means that there will be very rich content provided online as to facilitate the users to see different models online to actually have test drive and to make the reservation online things like that. And in terms of the output we mean technical output, we will continue to enhance our 3G plus the Auto Show capability, so that we can launch different activities online and to provide more convenience to the online users and from these channels it means that we will empower the dealers and distributors through our SaaS capabilities and platform. And in terms of our cooperation with the auto OEM we will empower them with our lead gen capabilities and the content creation capabilities and you can see that in March our total NEV is about 3.12 million and we actually connected with 6,550 dealers and SKU is 1.2 million.
Just add one point to our CTO's answer. For the other market, we don't mind you know looking into the investments or acquisition opportunities to expedite our inroads into those local markets. And so we are still confident that our overall technology content and our ability and experience to work with OEM and dealers will help us to penetrate those markets and thank you.
Next question, please?
Thank you, Thomas. Next question is Brian Gong from Citigroup. Please go ahead.
[Foreign Language]
I will quickly translate for myself. So can management share some thoughts on the deepening cooperation with Ping An Health and what's the role Ping An will play in our strategic upgrade in the second half of this year? Thank you.
[Foreign Language]
In terms of our cooperation with Ping An I think that there are mainly three dimensions can discuss about the cooperation. The first one is technology collaboration and the second one is traffic collaboration and the third one is product collaboration. And first one being technology collaboration I think that we have been greatly empowered and enabled by Ping An in terms of AI automation technology as well as machine learning and the second one is the traffic collaboration. We have been cooperating with Ping An and we have been making our presence on lot of the mini program on Ping An website. For example, the Good Owner as well as the Good Doctor as well as Pocket Bank things like that we have been cooperating with them, but making our presence in those mini programs and the third one is the product collaboration. These are mainly based on specific product say these data products that we have been talking before. In this one we can [indiscernible] precise marketing throughout the users based on the accurate user profiling and take this August the 18th campaign for example Ping An we have been greatly empowered through their communication as well as media resources capabilities.
[Foreign Language]
I'd also like to add one point actually this year Ping An has intensified the collaboration cooperation as well as support with Autohome actually for all the subsidiary affiliated with Ping An which are related to the auto ecosystem. Ping An have been totally and very comprehensively engaged with the cooperation with Autohome and recently you can see that where we are actually dealing with the OEMs as well as the dealers. Actually we get a lot of support from Ping An in terms of the daily work.
Thank you, Brian. Okay, due to time constraints, I will turn the conference back to management for closing comments.
[Foreign Language]
Thank you very much for joining us today. We appreciate your support and we look forward to updating you on our next quarter's conference call in a few months' time. In the meantime, please feel free to get in touch with us, if you have any further questions or comments. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participation. You may disconnect now.