智通财经APP获悉，中升控股(00881)跌超4%，截至发稿，跌3.34%，报13.9港元，成交额4252.79万港元。 消息面上，招商证券报告指出，中升主销品牌拖累业绩，长期关注从经销向服务转型。豪华车销售方面，奔驰/宝马/奥迪/雷克萨斯2023年在华销量分别为76.5万/82.5万/72.9万/18.1万辆，同比基本持平/+4.2%/+13.5%/-1.4%，宝马/奥迪新能源占比分别为12.1%/4.3%。整体上维持增长，但仍跑输乘用车行业10.6%增速。 中银国际表示，预期中升控股去年新车销量同比下跌4%，去年下半年奢侈品牌汽车折扣增加，不过复苏仍较预期为佳，估计去年下半年新车销售毛利约7,000万元人民币，全年新车销售利润率约0.63%，售后服务收入去年上半年倒退4.6%后，下半年恢复增长超过5%。该行预期，去年纯利同比倒退26%至28%，到48亿至49亿元人民币，主要因为新车利润率下跌。 ...

智通财经APP获悉，大和发布研究报告称，将中升控股(00881)评级由“买入”降至“持有”，将去年新车收入预测下调2%，去年至2025年售后收入预测下调15%至32%，但二手车收入预测则上调2%至14%，目标价由53港元大削至16港元。 该行估计，中升去年下半年至今年，新车销售毛利率进一步削弱，中升将会更加倚赖售后服务及二手车销售，长远并非坏事，但去年盈利可能未达预期，基于该行与管理层的讨论，预期中升去年新车销售量50万辆，同比大致持平，毛利率0.6%至0.7%，反映去年下半年毛利率只有0.2%，低于之前预期，展望今年新车销售持平，毛利率约0.7%。未来几年传统高端品牌增长缓慢，主要因为市场转往智能汽车技术。 ...

Economic Overview - In the first half of 2023, China's overall economy grew by 5.5%, with retail sales of consumer goods increasing by 8.2% year-on-year[7]. - In the first half of 2023, total passenger car sales in China reached 9.6 million units, a year-on-year increase of 4.5%[10]. - Luxury brand passenger car sales amounted to 2 million units, reflecting a year-on-year growth of 15.8%, driven primarily by sales from Tesla and local NEV startups[10]. - NEV retail sales in China reached 3.1 million units, a year-on-year increase of 37.3%, with a penetration rate of 32.4%[11]. - The second-hand car market in China saw a transaction volume of 6.9 million units, a year-on-year increase of 16.1%[11]. Company Strategy and Operations - The company aims to establish 100 Zhongsheng brand maintenance service centers as part of its strategic vision[8]. - The company plans to double the revenue from accident vehicle repair services and achieve a 1.0 ratio of used car to new car sales[8]. - The after-sales and used car segments continue to show steady growth despite weak new car sales demand[7]. - The company has established customer service centers, maintenance service centers, and used car centers to support operational integration[8]. - The company recognizes the need to break down operational barriers to enhance efficiency and integration across its services[8]. - The company is committed to becoming the most trusted automotive service brand for quality consumers in China[8]. - The company is leveraging its network coverage and operational management advantages to drive growth in the after-sales and used car segments[8]. Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 81,901.7 million, a decrease of RMB 4,127.6 million or 4.8% compared to the same period in 2022[19]. - New car sales revenue was RMB 64,569.0 million, down RMB 4,244.1 million or 6.2% year-on-year[19]. - Used car sales revenue increased by RMB 704.9 million or 16.0%, reaching RMB 5,100.8 million[19]. - The company reported a net profit for the same period of RMB 3,015.3 million, down RMB 443.7 million or 12.8% compared to the previous year[24]. - Gross profit for the same period was RMB 6,969.8 million, down RMB 1,497.1 million or 17.7% year-over-year[21]. Market Trends - The new car sales market is becoming increasingly complex as consumers seek signs of pre-pandemic economic conditions[7]. - Government policies aimed at stimulating automotive consumption were introduced, including measures to optimize vehicle purchase restrictions and promote second-hand car markets[12]. - The overall penetration rate and product iteration in the Chinese automotive market are leading the global automotive value chain transformation[7]. Customer Engagement and Technology - The company launched the Zhongsheng GO platform, accumulating nearly 1.8 million members, with 54% being paid subscribers[13]. - The centralized customer service centers now manage interactions covering over 73% of stores, serving 5.5 million WeChat customers[13]. - The company operates 9 repair service centers, with 5 more under construction and 21 planned, aiming to cover over half of its stores[15]. Cost Management and Efficiency - The company continues to focus on operational efficiency and cost management strategies to navigate the current market challenges[39]. - The cost of sales and services for the six months ended June 30, 2023, was RMB 74,931.9 million, a decrease of RMB 2,630.5 million or 3.4% compared to the same period in 2022[20]. - The gross profit margin decreased to 8.5% for the six months ended June 30, 2023, compared to 9.8% for the same period in 2022[21]. Debt and Financing - Bank loans and other borrowings increased to RMB 26,746.9 million as of June 30, 2023, from RMB 21,863.8 million as of December 31, 2022, primarily to meet operational and capital structure needs[28]. - The financing costs for the six months ended June 30, 2023, were RMB 717.969 million, an increase from RMB 560.242 million in the previous year[35]. - The company reported a significant increase in bank loans and other borrowings received, totaling RMB 52,770,810,000 for the six months ended June 30, 2023, compared to RMB 51,040,565,000 in the same period of 2022[41]. Shareholder Returns and Equity - The company declared a dividend for the year-end 2022, which was not specified in the provided data but indicates ongoing shareholder returns[39]. - The company has not recommended declaring any interim dividends for the six months ended June 30, 2023[61]. - The company repurchased a total of 8,372,500 shares at prices ranging from HKD 28.25 to HKD 38.30, with a total cost of approximately HKD 290.1 million during the reporting period[119]. Corporate Social Responsibility - The group is committed to fulfilling its corporate social responsibility and making a positive impact in the community[125]. - The group provides employment opportunities for local residents and disabled individuals through its national dealer network[125]. - The group has made donations to support underprivileged families and students in mountainous areas[125].

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 81,901.7 million, a decrease of 4.8% compared to RMB 86,029.3 million in the same period of 2022[2]. - Gross profit for automotive sales dropped by 50.5% to RMB 1,198.7 million from RMB 2,423.6 million year-on-year[3]. - The company reported a net profit of RMB 3,015.3 million, down 12.8% from RMB 3,459.0 million year-on-year[3]. - Gross profit for the same period was RMB 6,969,810 thousand, down from RMB 8,466,935 thousand in 2022, indicating a decline of about 17.7%[14]. - Operating profit decreased to RMB 4,767,631 thousand from RMB 5,248,069 thousand, representing a decline of approximately 9.1%[14]. - The profit for the six months ended June 30, 2023, was RMB 3,015.3 million, a decrease of RMB 443.7 million or 12.8% compared to the same period in 2022, with a net profit margin of 3.7%[81]. - Profit attributable to the owners of the parent company for the six months ended June 30, 2023, was RMB 3,008.7 million, down RMB 439.9 million or 12.8% from the same period in 2022[82]. Sales and Market Trends - New car sales volume decreased by 7.6% to 223,901 units from 242,280 units in the previous year[3]. - The overall retail sales of consumer goods in China grew by 8.2% year-on-year in the first half of 2023[4]. - In the first half of 2023, total passenger car sales in China reached 9.6 million units, a year-on-year increase of 4.5%[7]. - Luxury brand passenger car sales amounted to 2 million units, reflecting a year-on-year growth of 15.8%, driven primarily by Tesla and local NEV startups[7]. - The retail sales of new energy vehicles (NEVs) reached 3.1 million units in the first half of 2023, marking a year-on-year increase of 37.3% and a penetration rate of 32.4%[8]. - The second-hand car transaction volume in China was 6.9 million units, a year-on-year increase of 16.1%, with nearly 90% of transactions below RMB 150,000[9]. After-Sales and Service Performance - The after-sales service segment saw a gross profit increase of 25.9% to RMB 4,466.1 million compared to RMB 3,547.4 million in the previous year[3]. - The after-sales service market saw a 9.0% year-on-year increase in service visits, with after-sales revenue growing by 13.0%[10]. - The company achieved a 11.7% year-on-year increase in after-sales business visits, with maintenance and repair revenue growing by 11.1%[10]. - The company plans to enhance operational integration and efficiency across its service centers to better serve customers[6]. Strategic Goals and Future Plans - The company aims to establish 100 Zhongsheng brand maintenance service centers as part of its strategic goals[6]. - The target is to double the revenue from accident vehicle repair services and achieve a 1.0 ratio of used car to new car sales[6]. - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency and customer service[22]. - The company plans to increase the density of its core regions and brands through new store openings and acquisitions, while expanding its used car and after-sales service businesses[95]. Financial Position and Assets - As of June 30, 2023, total assets amounted to RMB 63,294,593 thousand, an increase from RMB 62,937,725 thousand as of December 31, 2022, reflecting a growth of approximately 0.57%[16]. - Current assets reached RMB 53,962,862 thousand, up from RMB 46,832,828 thousand, indicating a significant increase of about 15.4%[16]. - Cash and cash equivalents increased to RMB 16,352,611 thousand from RMB 11,679,029 thousand, representing an increase of approximately 39.5%[16]. - Total liabilities rose to RMB 55,029,068 thousand, compared to RMB 46,569,984 thousand, marking an increase of around 18.2%[17]. - The company reported a net current asset of RMB 18,271,224 thousand, up from RMB 17,941,134 thousand, showing an increase of approximately 1.84%[16]. Shareholder and Equity Information - The company did not recommend any interim dividend for the six months ended June 30, 2023[41]. - The company’s total equity was RMB 43,957,163 thousand, slightly lower than RMB 44,064,425 thousand, a decrease of about 0.24%[17]. - The company’s long-term portion of bank loans and other borrowings was RMB 8,973,176 thousand as of June 30, 2023, compared to RMB 7,185,161 thousand at the end of 2022, indicating an increase of about 24.9%[48]. Acquisitions and Investments - The company acquired 100% equity of Beijing Antong Lianfeng Automotive Sales Service Co., Ltd. for a total consideration of RMB 28,370,000 on May 1, 2023[58]. - The acquisition contributed revenue of RMB 63,322,000 and profit of RMB 3,842,396 for the six months ended June 30, 2023[61]. - The fair value of identifiable net assets from the acquisition amounted to RMB 21,777,000, with goodwill generated of RMB 6,593,000[63]. Compliance and Governance - The company has complied with the corporate governance code and the standard code for securities transactions by directors during the reporting period[102]. - The audit committee reviewed the unaudited interim consolidated financial statements for the six months ended June 30, 2023, and confirmed compliance with accounting standards[105].

Company Performance and Growth - The company has successfully navigated uncertainties in 2022, achieving a customer base exceeding 7 million, with rapid growth ongoing[9]. - The company secured approximately RMB 67 billion in automotive financing and facilitated over 2 million insurance contracts, becoming a key partner for major banks and insurance companies in China[9]. - The company is the second-largest dealer for Mercedes-Benz and the largest for Lexus in terms of new car sales in China, with a total of around 140,000 used cars sold during the year[9]. - The group sold 520,396 new cars in 2022, with luxury brand sales reaching 307,434 units, a year-on-year increase of 2.7%, accounting for 59.1% of total new car sales[21]. - Sales of new energy vehicles increased by 69.4% year-on-year, attributed to the strong dealership network for core brand electric models[21]. - The group sold 140,121 used cars, with retail sales accounting for 25.3% or 35,450 units[21]. Financial Performance - The company's revenue for the year ended December 31, 2022, was RMB 179,857.0 million, an increase of RMB 4,753.9 million or 2.7% compared to the previous year[32]. - New car sales revenue was RMB 145,419.9 million, growing by RMB 2,954.2 million or 2.1% year-over-year[32]. - The gross profit for the year was RMB 16,031.6 million, a decrease of RMB 2,438.0 million or 13.2% compared to the previous year[36]. - The gross profit margin for the year was 8.9%, down from 10.5% in the previous year[37]. - Operating profit for the year was RMB 10,168.8 million, a decline of RMB 2,448.4 million or 19.4% year-over-year[39]. - Net profit for the year was RMB 6,614.4 million, down RMB 1,792.9 million or 21.3% compared to the previous year[40]. Market Trends and Strategy - The company is focusing on customer and business partner unmet needs to drive long-term growth, shifting from macro-driven new car sales to a more customer-centric approach[12]. - The company has launched multiple OEM brand showrooms in urban shopping areas and its first branded used car market, aligning with changing customer behaviors[10]. - The company has a strategic focus on high-quality brand portfolios across 32 major cities, with over half of its stores located in economically developed areas[9]. - The used car market in China experienced a transaction volume of 9.52 million units in 2022, a decline of 10.1% year-on-year, indicating a growing but challenging market[17]. - The ratio of used car sales to new car sales in China was 0.7 in 2022, compared to 2.5 in the more mature U.S. market, indicating significant growth potential[17]. Operational Efficiency and Management - The company has implemented a detailed management system to maintain operational flexibility and efficiency amid challenging market conditions[10]. - The group established eight centralized used car centers, with an average turnover time of 12.4 days for used cars[25]. - The centralized procurement platform managed a total procurement amount of RMB 3 billion, covering various automotive parts and capital expenditures[28]. - The average monthly after-sales revenue per employee increased by 25%, while monthly expenses decreased by RMB 18 million, a year-on-year decline of 16%[28]. - The group plans to continue enhancing operational efficiency and adapting to changing customer demands, focusing on market consolidation opportunities[29]. Employee and Workforce Management - The total number of employees decreased from 39,668 in 2021 to 32,943 in 2022, indicating a focus on optimizing human resources[54]. - The group has received the "2022 China Best Employer" award, highlighting its commitment to employee development and retention strategies[90][92]. - The group has implemented strict data privacy policies, ensuring that only a limited number of employees have access to customer data, and conducts annual third-party audits of its information security policies[86]. - Employee turnover for the year reached 15,508, an increase of 8,587 from the previous year, resulting in a turnover rate of 32.01%[96]. - The company emphasizes the importance of employee retention and offers competitive compensation packages to attract high-quality talent[54]. Environmental, Social, and Governance (ESG) Initiatives - The group aims to enhance its ESG governance and has established an ESG committee to oversee its sustainability strategies and initiatives[67]. - The company will continue to actively undertake corporate social responsibility and achieve sustainable development, supporting low-carbon development and energy conservation initiatives[68]. - The company has implemented a risk management system for environmental, social, and governance (ESG) risks, with a dedicated team for risk assessment[70]. - The company has established various ESG working groups, including employee care, energy conservation, and supply chain management, to oversee and implement ESG initiatives[71]. - The company has established a "Climate Change Policy" to mitigate the impact of climate change on its operations and aims to integrate climate change considerations into its risk management system[125]. Corporate Governance - The company has adhered to the corporate governance code principles throughout the fiscal year ending December 31, 2022[155]. - The board consists of executive directors, non-executive directors, and independent non-executive directors, ensuring a balance of skills, experience, and diversity[159]. - The company has established an independence assessment mechanism for the board to ensure strong independence and effective decision-making[166]. - The company has implemented a policy for disclosing inside information and planning shareholder communications to fulfill governance responsibilities[194]. - The board aims to maintain a balanced diversity perspective related to business growth and ensure appropriate recruitment processes at all levels[182].

Sales Performance - For the year ended December 31, 2022, the new car sales volume was 520,396 units, a decrease of 1.5% compared to the previous year[2]. - Luxury brand new car sales reached 307,434 units, an increase of 2.7% year-on-year[2]. - The used car transaction volume was 140,121 units, an increase of 0.5% year-on-year[2]. - The group sold 140,121 used cars, with retail sales accounting for 25.3% or 35,450 units[11]. - Automotive sales increased by 69.4% year-on-year, attributed to the strong dealership network of the group's core brand electric vehicles[11]. Financial Performance - Revenue for the year was RMB 179,857.0 million, representing a growth of 2.7% compared to the previous year[2]. - The profit attributable to equity holders for the year was RMB 6,667.6 million, a decrease of 19.9% year-on-year[3]. - The basic earnings per share for the year was RMB 2.76, down from RMB 3.56 in the previous year[3]. - The group's operating profit for the year was RMB 10,168,839, down from RMB 12,617,281 the previous year[14]. - The company's net profit for the year ended December 31, 2022, was RMB 6,614,434, a decrease of 21.3% compared to RMB 8,407,330 in 2021[15]. Assets and Liabilities - The company's total assets less current liabilities amounted to RMB 62,769,034, an increase from RMB 57,093,165 in 2021[17]. - Current assets increased to RMB 46,832,828 from RMB 40,346,938, reflecting a growth of 16.3%[17]. - The company's total liabilities increased to RMB 18,651,474 from RMB 16,386,674, representing a rise of 13.8%[18]. - The net assets of the company reached RMB 44,117,560, up from RMB 40,706,491, indicating a growth of 10.5%[19]. - The company's inventory increased to RMB 15,237,427 from RMB 11,192,016, marking a significant rise of 36.3%[17]. Revenue Breakdown - Total revenue from customer contracts for 2022 was RMB 179,856,972 thousand, an increase from RMB 175,103,062 thousand in 2021, representing a growth of approximately 1.6%[27]. - The revenue from automobile sales was RMB 155,248,023 thousand in 2022, compared to RMB 150,598,453 thousand in 2021, indicating an increase of about 3.5%[27]. - Other income and gains for 2022 totaled RMB 4,424,144 thousand, up from RMB 3,890,572 thousand in 2021, reflecting a growth of approximately 13.7%[28]. Cost and Expenses - Employee benefits expenses for 2022 were RMB 5,492,475 thousand, a decrease from RMB 5,652,610 thousand in 2021, showing a reduction of about 2.8%[29]. - The cost of goods sold for 2022 was RMB 161,663,435 thousand, compared to RMB 154,664,762 thousand in 2021, which is an increase of approximately 4.5%[30]. - Depreciation and impairment of property, plant, and equipment for 2022 amounted to RMB 1,713,613 thousand, up from RMB 1,428,389 thousand in 2021, representing an increase of about 20%[30]. Cash Flow and Capital Expenditure - Cash flow from operating activities was RMB 8,784.8 million, primarily from operating profit before changes in working capital and tax payments[51]. - Cash used in investing activities was RMB 3,599.8 million for the year[52]. - Cash used in financing activities was RMB 4,526.8 million for the year[52]. - The total capital expenditure for the year ended December 31, 2022, was RMB 1,948.8 million, with no significant investments made during the same period[54]. Shareholder Information - The proposed final dividend is HKD 1.09 per share (approximately RMB 0.97), compared to HKD 0.84 per share in the previous year[42]. - The average number of ordinary shares issued during 2022 was 2,411,562,186, an increase from 2,340,870,937 in 2021[35]. - The company has a total of 11,000,000 unexercised share options as of December 31, 2022, representing approximately 0.46% of the issued share capital[67]. Corporate Governance - The company has complied with the Corporate Governance Code throughout the year ended December 31, 2022[69]. - The company has adopted the standard code for securities transactions by directors and confirmed compliance for the year ended December 31, 2022[70]. - The company has not entered into any related party transactions that require disclosure under the Listing Rules during the year ended December 31, 2022[68]. Future Outlook - The company plans to continue enhancing operational efficiency and adapting to changing customer demands, supported by its scale and management system[13]. - The company plans to expand its presence in the luxury and mid-to-high-end passenger car market through new store openings and appropriate acquisitions[62]. - Forward-looking statements regarding the group's business outlook, financial performance estimates, and development strategies are included, based on existing information[78].

Sales Performance - In the first half of 2022, Zhongsheng Group's new car sales reached 242,280 units, a year-on-year decrease of 12.1%[12] - Luxury brand sales accounted for 59.4% of total sales, totaling 143,857 units, with a year-on-year decline of 11.1%[12] - New car sales revenue was RMB 68,813.1 million, down 5.2% compared to the same period last year[12] - The overall domestic automobile market experienced a decline in production and sales of 3.7% and 6.6%, respectively, in the first half of 2022, but the decline narrowed compared to earlier months[12] - In the first half of 2022, the group's electric vehicle sales grew by 54.0%, reflecting a strong market response to the electrification strategies of traditional manufacturers like Mercedes-Benz, BMW, and Lexus[13] After-Sales and Value-Added Services - After-sales service revenue increased by 13.4% year-on-year, reaching RMB 12,820.3 million, representing 14.9% of total revenue[12] - Value-added services, including automotive insurance and finance, generated RMB 1,502.8 million, a decrease of 4.4% year-on-year[12] - The group launched the "Car Care Without Worry PLUS" service, enhancing customer retention and increasing annual service visits and insurance average transaction value[28] Economic and Market Conditions - The Chinese economy showed signs of recovery with a GDP growth of 2.5% in the first half of 2022, despite the impact of COVID-19[9] - The government introduced various stimulus policies to boost automobile consumption, including a reduction in vehicle purchase tax estimated to reach RMB 60 billion[10] - In June 2022, domestic automobile production and sales saw a significant recovery, with year-on-year growth of 28.2% and 23.8%, respectively[12] Dealership and Market Expansion - As of June 30, 2022, the total number of dealerships increased to 417, comprising 261 luxury brand dealerships and 156 mid-to-high-end brand dealerships, covering over 110 cities across 25 provinces, municipalities, and autonomous regions[13] - The group aims to strengthen its leadership advantage in key regions by optimizing its brand portfolio and expanding its network in high-tier cities and economically developed areas[21] Financial Performance - Total revenue for the six months ended June 30, 2022, was RMB 86,029.3 million, a decrease of RMB 1,332.0 million or 1.5% compared to the same period last year[35] - The operating profit for the six months ended June 30, 2022, was RMB 5,248.1 million, a decrease of RMB 455.0 million or 8.0%[42] - Net profit for the same period was RMB 3,436.0 million, down RMB 296.2 million or 7.9% year-on-year[43] - The company reported a total revenue of RMB 6,612,503 for the six months ended June 30, 2022, compared to RMB 6,710,580 in the same period of 2021[73] Inventory and Cash Flow - Inventory increased from RMB 11,192.0 million on December 31, 2021, to RMB 14,376.9 million on June 30, 2022, due to government lockdown measures[52] - The average inventory turnover days increased during the six months ended June 30, 2022, primarily due to the impact of COVID-19 lockdowns[53] - The net cash used in financing activities for the six months ended June 30, 2022, was RMB 2,418.3 million[48] Acquisitions and Investments - The acquisition of Tianjin Beichen Zhongsheng Lexus Automotive Sales and Service Co., Ltd. was completed on January 1, 2022, for a total consideration of RMB 70 million, with RMB 30 million paid in cash by the end of June 2022[113] - The Group increased its stake in Toyota Hainan Mobility Co., Ltd. to 61.11% through an investment of RMB 8 million, completed on March 30, 2022[115] Shareholder and Corporate Governance - The company has adopted the corporate governance code as set out in Appendix 14 of the Listing Rules and has complied with its provisions during the reporting period[162] - The board expressed confidence in the company's long-term business prospects through share repurchases[168] Digital Transformation and Marketing - The group is advancing its digital transformation, with plans to implement AI decision-making models for improved operational efficiency and data-driven strategies[30] - The group’s digital marketing platform generated over 19,000 leads and a total transaction value exceeding RMB 180 million[30] Corporate Social Responsibility - The company is committed to corporate social responsibility by providing employment opportunities and donations to local communities and disadvantaged groups[173] - The company has implemented measures to reduce emissions and improve energy efficiency, including upgrading emission testing equipment and wastewater treatment[172]

Share Issuance - The net proceeds from the share issuance completed on July 12, 2021, amounted to approximately HKD 2,995.48 million[2] Fund Allocation - As of December 31, 2021, approximately HKD 995.48 million was used for general corporate purposes, and about HKD 2,000 million was allocated for the payment of the acquisition consideration[2]

Financial Performance - In 2021, Zhongsheng Group achieved new car sales of 528,154 units, representing a year-on-year growth of 5.5%, with luxury brand sales reaching 299,304 units, up 8.7%[6]. - The group's total revenue for the year ended December 31, 2021, was RMB 175,103.1 million, an increase of RMB 26,755.0 million or 18.0% compared to the previous year[22]. - New car sales revenue amounted to RMB 142,465.7 million, reflecting a growth of 13.5% year-on-year, while after-sales and premium business revenue reached RMB 24,504.6 million, up 21.0%[22]. - The group's net income from value-added services reached RMB 3.53 billion, reflecting a year-on-year increase of 12% and a comparable growth of 20%[6]. - The group's gross profit for the year ended December 31, 2021, was RMB 18,469.6 million, an increase of RMB 4,987.8 million or 37.0% compared to the previous year[24]. - Operating profit for the year ended December 31, 2021, was RMB 12,617.3 million, an increase of RMB 3,680.6 million or 41.2% from the previous year[26]. - The company reported a profit attributable to equity holders of approximately RMB 8,329 million for the year ended December 31, 2021, with basic and diluted earnings per share of RMB 3.56 and RMB 3.47, respectively[174]. Market Position and Strategy - In October 2021, Zhongsheng Group completed the acquisition of Renfu China for approximately USD 1.314 billion, enhancing its market share in the Mercedes-Benz brand to about 18%[6]. - The company plans to enhance its strategic cooperation with new domestic car manufacturers, including XPeng, to expand its service network and sales centers[8]. - The company aims to strengthen its presence in high-tier cities, where the demand for luxury vehicles is expected to continue growing[12]. - The company is expanding its market presence, with plans to open new dealerships in key cities across China[146]. - Strategic acquisitions are being considered to enhance the company's distribution network and service capabilities[145]. After-Sales and Service - The group's after-sales service revenue increased to RMB 24.5 billion, a year-on-year growth of 21%[6]. - The after-sales business accounted for 14.0% of total revenue, while used car sales revenue surged to RMB 8,132.8 million, a remarkable increase of 215.7% year-on-year[22]. - The company emphasizes high-quality after-sales service as a critical factor for customer selection of 4S dealerships, with a growing customer base driving demand for after-sales services[53]. - The company has been providing after-sales services for over ten years, including parts, maintenance, and used car trading, which are integral to its operational model[53]. Employee and Workforce Management - The total number of employees increased to 39,668 as of December 31, 2021, up from 31,460 in the previous year, reflecting the company's growth[37]. - The employee turnover rate for the year was 22.00%, with a total of 6,921 employees leaving, a decrease of 4,501 from the previous year[64]. - The company has implemented a standardized recruitment management system to ensure fair treatment and opportunities for all employees, in compliance with national labor laws[62]. - The company has established a talent reserve training program for key positions, allowing for multiple selection assessments and recommendations during promotions and replacements[71]. - The employee satisfaction survey indicates that over 90% of employees are satisfied with the company's management across various dimensions, with the remaining 10% having personalized issues addressed[68]. Environmental and Social Responsibility - The company emphasizes the importance of environmental protection and has implemented strict measures to comply with current environmental laws and regulations[155]. - The group sold 11,060 new energy vehicles in 2021, with a year-on-year sales proportion increase of 1.3%, resulting in a reduction of carbon emissions by approximately 19,353 tons per year compared to fuel vehicles[74]. - The company donated RMB 4 million to Dalian Charity Federation in December 2021 to support the procurement of epidemic prevention materials for local schools and kindergartens[87]. - The company provided 249 job positions for disabled individuals in 2021, actively participating in initiatives to enhance employment opportunities for this group[87]. Corporate Governance - The board of directors is responsible for leading and controlling the company, overseeing business strategies and performance, and ensuring effective internal controls and risk management systems[106]. - The company has established a disclosure policy to guide directors and senior management in handling confidential information[133]. - The company has adopted various risk management procedures and guidelines to ensure compliance with monitoring policies across all departments[132]. - The company has established anti-corruption measures and training programs for employees to prevent bribery and fraud[104]. - The company has complied with the corporate governance code as per the Hong Kong Stock Exchange rules throughout the year ending December 31, 2021[194]. Financial Management and Capital Structure - The company aims to use the proceeds from the convertible bonds for further business expansion[172]. - The total distributable reserves of the company as of December 31, 2021, amounted to RMB 7,691.8 million, with RMB 1,665.8 million proposed as the final dividend for the year[157]. - The company has entered into a bond subscription agreement to issue USD 450 million 3.00% bonds due January 13, 2026[176]. - The company reported a strong performance in 2021, with a significant increase in revenue and market share in the automotive sector[144].

Sales Performance - In the first half of 2021, Zhongsheng Group achieved new car sales of 275,570 units, representing a year-on-year growth of 39.7%[6] - Luxury brand sales reached 161,906 units, with a year-on-year increase of 45.0%[6] - The used car segment recorded a transaction volume of 66,735 units, marking a significant year-on-year increase of 64.1%[6] - In the first half of 2021, the luxury car segment saw a cumulative sales volume of 2.051 million units, accounting for 19.4% of the overall passenger car market, with a year-on-year growth of 39.9%[9] - The sales volume of German luxury brands (BBA) in the first half of 2021 was as follows: Mercedes-Benz at 441,000 units (up 27.6%), BMW at 467,000 units (up 44.1%), and Audi at 418,000 units (up 38.6%) compared to the same period last year[9] Financial Performance - Total revenue for the group in the first half of 2021 was RMB 87,361.3 million, a growth of RMB 29,158.2 million or 50.1% year-on-year[21] - The group's gross profit for the six months ended June 30, 2021, was RMB 8,462.9 million, an increase of RMB 3,053.3 million or 56.4% compared to the same period in 2020[23] - The operating profit for the six months ended June 30, 2021, was RMB 5,703.1 million, reflecting a growth of RMB 1,900.9 million or 50.0% compared to the previous year[25] - The net profit for the same period was RMB 3,732.2 million, an increase of RMB 1,423.1 million or 61.6% year-on-year[26] - The net cash generated from operating activities was RMB 6,402.0 million, primarily from operating profit before changes in working capital and tax payments[29] After-Sales and Value-Added Services - After-sales revenue for the first half of 2021 was RMB 11.3 billion, a year-on-year growth of 34.4%[6] - The net income from value-added services, including automotive insurance and financing, was RMB 1.57 billion, up 20.3% year-on-year, with a comparable growth of 39.3%[6] - After-sales service revenue reached RMB 11,302.3 million, reflecting a year-on-year growth of 34.3% and accounting for 12.9% of total revenue[21] Market and Economic Context - The macroeconomic recovery in China saw GDP growth of 12.7% year-on-year in the first half of 2021, supporting the automotive market's recovery[6] - The automotive market in China saw production and sales of 12.57 million and 12.89 million vehicles respectively from January to June 2021, with year-on-year growth of 24.2% and 25.6%[6] - The number of new registered motor vehicles in China reached 18.71 million in the first half of 2021, a year-on-year increase of 32.33%, with new car registrations at 14.14 million, up 35.76%[10] - The second-hand car market saw a transaction volume of 8.43 million units in the first half of 2021, representing a year-on-year growth of 52.9%[10] Strategic Initiatives - The company signed an acquisition agreement for Renfu China, a leading Mercedes-Benz dealer, which is expected to increase market share by 6 percentage points to approximately 18%[6] - The company continues to focus on a "brand + region" strategy, optimizing its brand portfolio and enhancing regional leadership through both organic growth and acquisitions[6] - The company signed strategic cooperation agreements with XPeng Motors and WM Motor in the first half of 2021 to enhance collaboration in the electric vehicle sector[9] - The company plans to strengthen its network layout in high-tier cities and economically developed regions to capitalize on the growing demand for luxury vehicles[11] Capital and Investment - The group's total capital expenditure for the six months was RMB 1,565.9 million, with no significant investments made during this period[32] - The company aims to fund future capital expenditures through cash flows from operations and various resources, including internal funds and bank borrowings[39] - The company has capital commitments of RMB 229,249,000, which includes RMB 170,703,000 for buildings and RMB 58,546,000 for potential acquisitions[85] Shareholder and Equity Information - The company issued convertible bonds in 2020, resulting in an equity increase of RMB 30,484 thousand during the reporting period[46] - The company’s total issued and paid-up ordinary shares increased to 2,315,384,591 as of June 30, 2021, compared to 2,281,860,146 shares in 2020[74] - The company has a total of 11,000,000 unexercised share options with an exercise price of HKD 22.60 per share, valid until April 25, 2028[78] - The company reported a profit attributable to equity holders of approximately RMB 3,695.7 million for the six months ended June 30, 2021[110] Governance and Management - The company’s board is responsible for leading and controlling the company, overseeing business strategies and performance, and ensuring effective internal controls and risk management systems[118] - The company’s daily management and operations are delegated to the CEO and senior management, with significant transactions requiring board approval[119] - The audit committee reviewed the interim financial performance for the six months ended June 30, 2021, and confirmed compliance with relevant accounting standards[126] Environmental and Social Responsibility - The company adopted multiple measures to reduce emissions and improve energy efficiency during the six months ended June 30, 2021[128] - The company has implemented policies to reduce waste and promote environmentally friendly practices[128] - The company has provided employment opportunities and community support through its national dealer network[129]