Cathay Innovation Portfolio Company Tuhu Car Debuts on Hong Kong Stock Exchange (HKEX)

September 28, 2023

Tuhu Car becomes first automotive aftermarket service company to go public on the exchange, listing at HK$28.00 ($3.58) and valued at HK$22.75 billion ($2.9 billion)


Shanghai, September 26, 2023 — This week, Cathay Innovation portfolio company Tuhu Car (9690.HK), China’s leading integrated online and offline platform for automotive services, started trading on the Hong Kong Stock Exchange. The first independent aftermarket service company in the auto industry to be listed on the exchange, Tuhu’s issue price was HK$28.00 ($3.58), valuing it at HK$22.75 billion ($2.9 billion).

Founder and Chairman of Cathay Capital and Cathay Innovation, Mingpo Cai, stated: “Congratulations to Tuhu Car for its successful listing! We have witnessed Tuhu uphold the core value proposition of ‘customer first,’ overcome challenges in the supply chain, continuously innovate service models, and bring excellent experiences to Chinese consumers, thereby establishing a strong brand reputation. Sine investing in 2021, the Cathay team has worked closely with Tuhu to connect them with key partners and industrial resources, including Fortune 500 companies like Total and Valeo. We look forward to supporting the company in its next stage of growth.”


Seizing Opportunities

Over the past decade, China has become the world’s largest car ownership country — bringing new challenges in maintenance, upkeep and supply.

Tuhu Car was established in 2011 when the number of automobiles owned in China was around 107 million. At the time, the market was highly fragmented, service was inconsistent and the Internet had yet to become a part of the Infrastructure of China’s automobile aftermarket. Car owners faced numerous problems with service such as lack of high-quality, restricted scope, low trust, and the absence of seamless and integrated online and offline options. Meanwhile, the supply chain was inefficient and complex with a myriad of SKUs and auto service shops dispersed across the country.

Tuhu Car got its start with tires, enabling the company to establish clear market recognition and value proposition and becoming known as the go-to outlet for tires. By 2016, the company had grown to become China’s largest tire retailer while car ownership exceeded 280 million. The same year, with the Internet rapidly penetrating the market, Tuhu launched its mobile app along with Workshops to address the issue of quality control in offline services and the urgent need to establish consumer trust. It also brought standardization to services with its unified digital platform for its stores, providing more convenient and transparent maintenance and repair services.

In 2021, the annual sales of Tuhu’s Auto Services surpassed 10 billion, and the cumulative number of user transactions exceeded 20 million. In the first half of 2023, Tuhu has opened 5,129 Workshops in more than 300 cities and has over 100 million registered users. It has also demonstrated strong performance with revenue exceeding 6.5 billion RMB, 19.3% year-on-year growth, and gross profit margin surpassing 24% —setting a new historical high.


Future Growth Potential

The company is positioning itself in a trillion-scale blue ocean market. With the growth in car ownership, the aging of vehicles, and the increase in travel distance in China, the market still possesses vast potential and development opportunities. We believe that this is just the prologue for Tuhu Car with a bright future ahead. A company with a clear value proposition and a customer-centered business will have sustainable and evergreen growth prospects.


About Cathay Innovation

Cathay Innovation is a global venture capital firm, created in affiliation with Cathay Capital, investing in startups at the center of the digital revolution across North America, Latin America, Europe, Asia and Africa. Its global platform unifies technology investment across continents, investors, entrepreneurs and leading corporations to accelerate startup growth with access to new markets, invaluable industry knowledge and introductions to potential partners from the start. As a multistage fund with over $2B assets under management and offices across San Francisco, New York, Paris, Shanghai, Beijing and Singapore, Cathay Innovation partners with visionary entrepreneurs and startups positively impacting the world through technology.

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