Goldman Sachs: TUHU-W (09690) strategically acquires Australia's mycar, maintains target price of HK$13
Goldman Sachs believes that after the transaction is completed, TUHU will own sizable, high-quality assets in Australia, which can diversify domestic competition risks and bring potential synergies in areas such as online customer acquisition, store operation experience, and supply chain scale.
Goldman Sachs released a research report maintaining the target price of TUHU-W (09690) at HK$13. The company announced the acquisition of Conti Trade Australia Pty Ltd, which operates the Australian automotive repair and maintenance brand "mycar Tyre & Auto," with an enterprise value of AUD 403 million, equivalent to approximately HK$2.25 billion. The estimated payment at closing is approximately AUD 278 million, equivalent to approximately HK$1.55 billion.
Goldman Sachs believes that after the completion of the transaction, Tuhu will possess quality assets of scale in Australia, which can diversify domestic competition risks and bring potential synergies in online customer acquisition, store operation experience, and supply chain scale. Sales of private label products may help improve mycar's gross margin, but the integration of the overseas wholly direct-operated network and cross-border supply chain execution remain key.
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