Core Viewpoint - H harmonious Automotive reported significant revenue growth and profit increase for the year ending December 31, 2021, driven by strong sales in luxury vehicles and strategic adjustments in operations [1][2]. Financial Performance - Total revenue reached 17.981 billion RMB, a year-on-year increase of 21.9% [2]. - Main business net profit was 757 million RMB, showing a substantial growth of 49.6% year-on-year [1]. - Proposed final dividend of 0.21 HKD per share, up 165.8% from the previous year, with a dividend payout ratio of 40% of the annual net profit attributable to shareholders [1]. Revenue Breakdown - Automotive sales generated 15.61 billion RMB, a 21% increase, accounting for 86.8% of total revenue [2]. - After-sales service revenue was 2.326 billion RMB, up 27.95%, representing 12.9% of total revenue [2]. Profitability and Efficiency - Overall gross margin was 9.7%, an increase of 0.9 percentage points from 2020 [2]. - Gross margin for automotive sales was 4.3%, up 0.8 percentage points, while after-sales service gross margin remained stable at 44.8% [2]. - Average inventory turnover decreased to 25 days, down 7 days from 2020, due to tightened supply from chip shortages [2]. Sales Performance - New car sales reached 407,900 units, a year-on-year increase of 11.5%, outperforming the national luxury car market growth of 4.88% [4]. - Key brands like BMW saw an 11.4% increase in sales, significantly exceeding the national growth rate of 2.5% [4]. - Sales of ultra-luxury brands such as Ferrari and Rolls-Royce experienced substantial growth, with increases of 94.3% and 36.7% respectively [4]. Strategic Initiatives - The company is focusing on enhancing its luxury car business and exploring electric vehicle opportunities [5][6]. - Plans to optimize brand portfolio and improve operational efficiency to boost cash flow and inventory management [6]. - The company is considering potential acquisition strategies to strengthen market share [6]. - Continued investment in "Dangdang New Energy" to support electric vehicle services and sales [4][6].

Core Viewpoint - The luxury car dealership industry has experienced significant growth over the past two years, driven by price increases and a strong performance in luxury vehicle sales, particularly amidst supply chain disruptions. The penetration rate of luxury cars in China still has substantial room for growth, and leading luxury car dealers are expected to maintain considerable growth moving forward [1][2]. Group 1: Market Opportunities - The luxury car penetration rate in China reached 16% in 2021, compared to approximately 27% in developed countries, indicating significant potential for growth [2]. - The compound annual growth rate (CAGR) for luxury car sales in China is projected to be 6% from 2021 to 2030, supported by a focus on vehicle replacement and upgrades [2]. - The company, Harmony Auto, is positioned as a leading luxury car dealer with a portfolio of 14 brands, including major luxury and super-luxury brands [1][2]. Group 2: Electric Vehicle Strategy - Harmony Auto has proactively engaged in the electric vehicle (EV) market, establishing partnerships with leading EV companies such as Tesla and NIO, and has received service authorizations from brands like Xpeng and Li Auto [3]. - The electric vehicle penetration among luxury brands in China remains low, with Porsche, Volvo, and BMW having electric vehicle ratios of 10.3%, 6.2%, and 6% respectively in 2021, but upcoming models are expected to focus on electric vehicles [3]. - Harmony Auto plans to expand its electric vehicle product line significantly, with BMW expected to offer 25 new energy models by 2023 and to fully utilize a new electric vehicle platform by 2025 [3]. Group 3: Performance and Market Confidence - Despite challenges from the pandemic and economic pressures, the demand for luxury cars remains stable and manageable, with notable growth in super-luxury brands like Ferrari and Rolls-Royce during the first half of the year [4][5]. - The company has initiated a share buyback plan of 200 million HKD, reflecting confidence in its long-term value and addressing current undervaluation [6].

Group 1 - The Hong Kong automotive dealership stocks are experiencing a strong upward trend, with Zhongsheng Holdings (00881.HK) rising nearly 7.5% [1] - Yongda Automobile (03669.HK) has seen an increase of nearly 2.5% [1] - Other companies such as Harmony Auto (03836.HK) and Tuhu (09690.HK) are also following the upward trend [1]

Market Performance - In 2024, China's passenger car market retail sales reached 22.89 million units, a year-on-year increase of 5.5%[18] - New energy vehicle sales in 2024 totaled 10.9 million units, representing a year-on-year growth of 40.5% and a penetration rate exceeding 47.6%[18] - In 2024, the luxury car market sales reached 2.7 million units, a year-on-year decline of 7.8%[19] - BMW delivered 715,000 new cars in China, maintaining its sales champion position, but this represents a 13.4% decrease compared to the previous year[19] - In 2025, China's passenger car retail sales are expected to reach 23.4 million units, a year-on-year growth of 2%, with new energy vehicle sales projected to grow by 20% to 13.3 million units[20] Company Strategy and Expansion - The company aims to expand its overseas market for new energy vehicles by establishing a dealer network internationally[11] - The strategic focus includes building overseas distribution networks for leading Chinese automotive brands such as BYD and Tengshi[13] - The company emphasizes leveraging its expertise in luxury car retail to create synergies between Chinese manufacturing capabilities and global market opportunities[13] - The company is committed to actively adapting to the unprecedented opportunities brought by the global new energy vehicle revolution[14] - The company accelerated its overseas expansion strategy, establishing a service network across Southeast Asia and Europe, with 39 outlets in the Asia-Pacific region and 7 in Europe[23] Financial Performance - The company's total sales in 2024 were 40,247 units, a year-on-year increase of 4.6%, with BYD deliveries surging 146 times to 6,274 units[22] - The company's revenue for 2024 was RMB 15,617.4 million, a decrease of 5.8% from RMB 16,579.2 million in 2023[26] - The gross profit for 2024 was RMB 699.7 million, down 27.4% from RMB 964.0 million in 2023, resulting in a gross margin of 4.5%[28] - The sales and service cost for 2024 was RMB 14,917.7 million, a decrease of 4.5% compared to RMB 15,615.2 million in 2023[27] - The company recorded a net loss of RMB 285.7 million for the year, an increase of RMB 44.2 million compared to a loss of RMB 241.5 million in 2023[33] Debt and Cash Management - As of December 31, 2024, the company's cash and bank balances totaled RMB 1,108.0 million, compared to RMB 1,048.2 million in 2023[34] - The company's capital expenditure for 2024 was RMB 700.5 million, significantly higher than RMB 489.8 million in 2023, mainly for purchasing properties, plants, and equipment related to sales points[36] - Total bank loans and other borrowings as of December 31, 2024, were RMB 3,419.0 million, a 56.7% increase from RMB 2,181.5 million in 2023[39] - The company's debt-to-asset ratio increased to 57.1% as of December 31, 2024, compared to 47.7% in 2023, reflecting a 9.4% increase[40] Employee and Management Information - Employee expenses for 2024 totaled RMB 515.2 million, up 6.8% from RMB 446.2 million in 2023, with a total of 4,403 employees as of December 31, 2024[46] - The company has a strong management team with over 20 years of experience in the automotive industry, led by CFO Mr. Zhang Lei[64] - The company secretary, Ms. Huang Huier, has over 23 years of experience in corporate services and governance[65] - The company appointed Mr. Song Jiahua as an independent non-executive director and chairman of the remuneration committee, effective from June 3, 2024[66] Corporate Governance - The company ensures compliance with listing rules and maintains transparency in director appointments and resignations[66] - The board of directors has no significant relationships with other directors or major shareholders, ensuring independence[59][60][62] - The company is committed to enhancing corporate governance through experienced board members and management[65] - The board consists of a balanced composition, including at least three independent non-executive directors, fulfilling the listing rules requirements[160] Risk Management - The company has established a three-tier risk control structure to implement internal control and risk management policies[198] - The internal audit department plays a crucial role in monitoring the company's internal governance and conducts regular comprehensive audits of all branches and subsidiaries[196] - The company has not identified any significant control deficiencies or weaknesses for the year ending December 31, 2024[196] - The board of directors is responsible for overseeing the overall risk management related to business operations[198] Shareholder and Stock Information - The company has 42,191,000 unexercised stock options as of January 1, 2024, representing approximately 2.8% of the issued shares[47] - The company adopted a share incentive plan on February 28, 2019, allowing for the issuance of up to 60,000,000 shares, representing 3.94% of the total shares issued as of December 31, 2024[48] - The company reported no dividend for the year ending December 31, 2024, compared to a dividend of HKD 0.037 per share totaling HKD 56.4 million (approximately RMB 49.7 million) paid in 2023[71] - Major shareholder Eagle Seeker holds 708,364,660 shares, representing 46.50% of the total equity[122] Community and Social Responsibility - The group made donations amounting to RMB 1,600,000 for the year ending December 31, 2024, compared to RMB 19,216 in 2023[149]

Financial Performance - For the year ended December 31, 2024, the group's revenue was approximately RMB 15,617.4 million, a decrease of about RMB 961.8 million or approximately 5.8% compared to the same period in 2023[2]. - The group's gross profit for the year ended December 31, 2024, was approximately RMB 699.7 million[2]. - The net loss for the year ended December 31, 2024, was approximately RMB 285.7 million, with an adjusted loss of RMB 146.1 million after excluding non-recurring losses[2]. - The group reported a total comprehensive loss of RMB 343.7 million for the year ended December 31, 2024, compared to RMB 268.8 million in 2023[6]. - The group's revenue for 2024 was RMB 15,617.4 million, a decrease of 5.8% compared to RMB 16,579.2 million in 2023[51]. - The group's gross profit for 2024 was RMB 699.7 million, a decrease of approximately RMB 264.3 million or 27.4% from RMB 964.0 million in 2023, with a gross margin of 4.5%[54]. - The group recorded a net loss of RMB 285.7 million for the year, an increase of RMB 44.2 million compared to RMB 241.5 million in 2023, primarily due to declining gross profit and rising administrative expenses[58]. Revenue Breakdown - Revenue from automobile sales and other income was RMB 13,373,660 thousand in 2024, down from RMB 14,209,334 thousand in 2023, representing a decline of 5.9%[23]. - Revenue from after-sales services was RMB 2,200,713 thousand in 2024, compared to RMB 2,319,816 thousand in 2023, a decrease of 5.1%[23]. - Revenue from financing leasing services was RMB 43,074 thousand in 2024, down from RMB 50,082 thousand in 2023, a decline of 13.9%[23]. - Revenue from external customers in mainland China was RMB 13,828,956 thousand in 2024, a decrease of 16.6% from RMB 16,562,908 thousand in 2023[21]. Assets and Liabilities - The total non-current assets as of December 31, 2024, amounted to RMB 5,223.8 million, an increase from RMB 4,498.9 million in 2023[7]. - Current liabilities increased to RMB 5,803.8 million in 2024 from RMB 4,308.1 million in 2023, primarily due to an increase in bank loans and other borrowings[8]. - The total assets less current liabilities amounted to RMB 6,443.5 million as of December 31, 2024, compared to RMB 6,527.0 million in 2023[8]. - The total equity attributable to the owners of the company decreased to RMB 5,173.7 million in 2024 from RMB 5,572.3 million in 2023[8]. - The total amount of bank loans and other borrowings was RMB 3,419.0 million as of December 31, 2024, a 56.7% increase from RMB 2,181.5 million in 2023[64]. - The group's debt-to-asset ratio increased to 57.1% as of December 31, 2024, compared to 47.7% in 2023, reflecting a 9.4% increase[67]. Sales and Market Performance - The new car sales for the year ended December 31, 2024, were 40,247 units, representing a year-on-year growth of 4.6%, with sales in Hong Kong and overseas markets increasing approximately 95.9 times to 6,974 units[2]. - The company's total sales in 2024 were 40,247 units, a year-on-year increase of 4.6%, with BMW deliveries down 15.3% to 24,115 units[48]. - In 2024, the cumulative retail sales of passenger cars in China reached 22.89 million units, a year-on-year increase of 5.5%[44]. - The retail sales of new energy vehicles (NEVs) in 2024 reached 10.9 million units, a year-on-year increase of 40.5%, with a penetration rate exceeding 47.6%[44]. - The luxury car market sales reached 2.7 million units in 2024, a year-on-year decrease of 7.8%, with BMW, Mercedes-Benz, and Audi (BBA) holding over 70% market share[45]. - The export volume of Chinese NEVs reached 3.2 million units in 2024, a year-on-year increase of 45%, making China the largest NEV exporter globally[45]. Strategic Initiatives - The company established a strategic partnership with BYD, becoming the sole dealer for BYD in Hong Kong, where BYD achieved the highest monthly sales of private cars in January 2025[49]. - The company's overseas expansion strategy accelerated in 2024, establishing a service network across 39 locations in the Asia-Pacific region and 7 locations in Europe[50]. - The company's collaboration with leading NEV brands aims to penetrate the Asia-Pacific and European markets, enhancing global recognition[48]. - The company plans to focus on expanding the overseas NEV market while solidifying its core automotive business in mainland China[50]. Employee and Operational Metrics - The group employed a total of 4,403 employees as of December 31, 2024, compared to 3,642 employees in 2023, representing a year-on-year increase of 20.9%[70]. - Total employee expenses for 2024 amounted to RMB 515.2 million, up from RMB 446.2 million in 2023, reflecting a year-on-year growth of 15.5%[70]. Corporate Governance and Future Outlook - The board of directors did not recommend any dividend for the year ending December 31, 2024, compared to a dividend of 0.037 HKD per share in 2023[43]. - The company has not conducted any significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures during the reporting period[79]. - The company maintained sufficient public float as required under the listing rules during the reporting period[80]. - The company has established an audit committee in compliance with listing rules and corporate governance codes, consisting of three independent non-executive directors[84]. - The company will hold its 2025 Annual General Meeting on June 18, 2025[81]. - There were no significant events affecting the group after the reporting period[74].

Sales Performance - In the first half of 2024, the retail sales volume of passenger cars in China reached approximately 9.9 million units, a year-on-year increase of 2.9%[4] - The company's sales volume for the first half of 2024 was 19,100 units, representing a year-on-year growth of 8.7%[5] - The delivery of BMW vehicles (including the MINI brand) decreased by 8.5% to 12,351 units in the first half of 2024[5] - The sales of new energy vehicles (NEVs) in China reached approximately 4.1 million units, a year-on-year increase of 33.1%, with a domestic retail penetration rate of 48.4%[4] - The luxury car market in China saw a decline of 5.6% in cumulative sales, with the company's three major luxury brands (BMW, Mercedes-Benz, Audi) collectively selling approximately 1.1 million units[4] - BYD's sales reached 2,245 units in the first half of 2024, following the opening of its first showroom in Hong Kong in October 2023[5] - The penetration rate of NEVs among Chinese domestic brands reached 72.5%, with BYD leading the market with a share of 33.8%[4] Financial Performance - The company recorded revenue of RMB 7,466.3 million for the six months ended June 30, 2024, a decrease of 7.9% compared to RMB 8,109.5 million in the same period last year[6] - Revenue from automobile sales and others decreased by 8.4% to RMB 6,273.6 million, accounting for 84.0% of total revenue for the first half of 2024[6] - Gross profit fell by 37.0% to RMB 366.3 million, with a gross margin of 4.9%, down 2.4 percentage points from the previous year[8] - The company reported a loss attributable to owners of RMB 76.3 million, compared to a profit of RMB 201.2 million in the same period last year[13] - Operating profit decreased significantly to RMB 14,118 thousand, compared to RMB 336,778 thousand in the prior year, reflecting a decline of 95.8%[55] - The company reported a loss before tax of RMB 64,825 thousand, compared to a profit of RMB 271,483 thousand for the same period in 2023[55] - The net loss for the period was RMB 74,703 thousand, a significant decline from a profit of RMB 208,255 thousand in the previous year[55] - Basic and diluted loss per share for the period was RMB (0.051), compared to earnings of RMB 0.113 per share in the same period last year[56] Expenses and Costs - Selling and distribution expenses increased by 15.6% to RMB 459.3 million, primarily due to the expansion of international distribution networks[10] - Administrative expenses rose by 24.5% to RMB 131.1 million, also linked to the expansion efforts[10] - Financial expenses increased to RMB 78,937,000 for the six months ended June 30, 2024, compared to RMB 64,303,000 for the same period in 2023, representing a 22.8% increase[74] - Income tax expense decreased significantly to RMB 9,878,000 for the six months ended June 30, 2024, from RMB 63,228,000 in the same period of 2023, a reduction of 84.4%[75] - The cost of automobile sales was RMB 6,377,811,000 for the six months ended June 30, 2024, down from RMB 6,801,967,000 in the same period of 2023, a decrease of 6.2%[77] Inventory and Assets - The average inventory turnover days increased to 40.3 days in the first half of 2024, compared to 35.6 days in the same period of 2023[5] - Inventory increased by RMB 179.0 million to RMB 1,658.7 million, with average inventory turnover days rising to 40.3 days[17] - As of June 30, 2024, non-current assets totaled RMB 4,597,225 thousand, an increase of 2.2% from RMB 4,498,947 thousand as of December 31, 2023[57] - Current assets decreased to RMB 6,004,388 thousand, down 5.2% from RMB 6,336,219 thousand as of December 31, 2023[57] - Total liabilities decreased to RMB 5,023,242 thousand, down 1.5% from RMB 5,169,999 thousand as of December 31, 2023[58] Capital and Financing - Bank loans and other borrowings increased by 9.2% to RMB 2,382.1 million, with a debt-to-asset ratio of 47.4%[18] - Capital expenditures for the reporting period were RMB 178.2 million, significantly higher than RMB 18.4 million in the same period last year[16] - The company borrowed RMB 250,000,000 from Henan Harmony Real Estate Co., Ltd. at a fixed annual interest rate of 4.2%, with interest payments totaling RMB 5,250,000 during the reporting period[91] - The company reported a net cash outflow from financing activities of RMB 130,804 thousand, a significant improvement from a net outflow of RMB 314,667 thousand in the same period of 2023[60] Employee and Shareholder Information - As of June 30, 2024, the company employed a total of 3,902 employees, an increase from 3,642 employees as of December 31, 2023[22] - Employee costs amounted to RMB 235.9 million for the six months ended June 30, 2024[22] - The company has 42,191,000 unexercised share options under the share option plan, representing approximately 2.8% of the issued shares as of June 30, 2024[22] - The share incentive plan allows for a maximum of 60,000,000 shares to be purchased, equivalent to 3.94% of the issued shares as of June 30, 2024[23] - The company will regularly review its compensation policies and employee benefits based on market practices and individual performance[23] Corporate Governance and Compliance - The company maintains a prudent financial management approach regarding its treasury policy, ensuring a robust liquidity position as of June 30, 2024[21] - The company did not declare an interim dividend for the period, consistent with the previous year[45] - The company has adopted all new and revised Hong Kong Financial Reporting Standards effective from January 1, 2024, with no significant impact on its financial statements[62] - The company maintained sufficient public float as required by listing rules during the reporting period[46] - No significant events affecting the group occurred after the reporting period up to the date of the interim report[47]

Sales Performance - The group recorded new car sales of 19,100 units, an increase of 8.7% compared to 17,571 units in the same period last year[1]. - Vehicle sales amounted to 19,100 units in the first half of 2024, representing an increase of 8.7% year-on-year, with BMW (including MINI) deliveries at 12,351 units, down 8.5%[32]. - The penetration rate of new energy vehicles in the domestic market reached 48.4%, up from 34.9% in the previous year, with sales of approximately 4.1 million units, a growth of 33.1%[30]. Revenue and Profitability - The group reported revenue of RMB 7,466.3 million, a decrease of 7.9% from RMB 8,109.5 million in the same period last year[1]. - Revenue from automobile sales and other services decreased by 8.4% to RMB 6,273.6 million compared to the previous year[1]. - The gross profit decreased by 37.0% to RMB 366.3 million in the first half of 2024, with a gross margin of 4.9%[36][37]. - The after-sales service revenue was RMB 1,170.5 million, a decrease of 4.9% from RMB 1,231.4 million in the previous year, accounting for 15.7% of total revenue[34]. - The group recorded a net loss of RMB 74.7 million, compared to a net profit of RMB 208.3 million in the same period of 2023[1]. - The group recorded a loss of RMB 76,275,000 for the six months ended June 30, 2024, compared to a profit of RMB 201,224,000 for the same period in 2023[21]. Financial Position - The group's non-current assets totaled RMB 4,597.2 million as of June 30, 2024, an increase from RMB 4,498.9 million as of December 31, 2023[4]. - Current assets amounted to RMB 6,004.4 million, a decrease from RMB 6,336.2 million as of December 31, 2023[4]. - The total liabilities decreased from RMB 4,308.1 million to RMB 4,136.9 million during the same period[4]. - The equity attributable to the owners of the company decreased from RMB 5,572.3 million to RMB 5,578.4 million[6]. - As of June 30, 2024, the group's cash and deposits totaled RMB 1,192.2 million, with a net cash inflow from operating activities of RMB 125.2 million for the six months ended June 30, 2024[41]. - The company maintained a stable liquidity position, with a debt-to-asset ratio of 47.4% as of June 30, 2024, slightly down from 47.7% as of December 31, 2023[45]. Expenses and Costs - Financial expenses increased to RMB 78,937,000 from RMB 64,303,000, reflecting a rise of 22.9%[15]. - The sales and service costs decreased by 5.7% to RMB 7,100.0 million compared to RMB 7,528.1 million in the previous year[35]. - The cost of automobile sales was RMB 6,377,811,000, compared to RMB 6,801,967,000 in the previous year, indicating a reduction of 6.2%[18]. - Financial expenses increased by 22.7% to RMB 78.9 million due to rising leasing interest from the expansion of international distribution networks[38]. Capital Expenditures and Investments - Capital expenditures for the reporting period were RMB 178.2 million, significantly higher than RMB 18.4 million for the six months ended June 30, 2023, primarily for properties, plants, and equipment related to sales outlets[43]. - The group acquired property, plant, and equipment amounting to RMB 204,174,000 during the six months ended June 30, 2024[22]. - There were no significant investments, acquisitions, or disposals involving subsidiaries, associates, or joint ventures during the reporting period[56]. Corporate Governance and Compliance - The company has adhered to the Corporate Governance Code as of June 30, 2024, ensuring high standards of governance to enhance transparency and accountability[55]. - The Audit Committee has reviewed the unaudited interim results for the six months ending June 30, 2024, and confirmed compliance with relevant accounting standards[58]. - The company maintains sufficient public float as required by listing rules as of the announcement date[57]. Employee and Operational Metrics - The group employed a total of 3,902 employees as of June 30, 2024, an increase from 3,642 employees as of December 31, 2023, with employee costs amounting to RMB 235.9 million for the six months ended June 30, 2024[48]. - The average inventory turnover days increased to 40.3 days in the first half of 2024, compared to 35.6 days in the same period last year[32]. - Inventory increased by RMB 179.0 million to RMB 1,658.7 million as of June 30, 2024, with an average inventory turnover period of 40.3 days, up from 35.6 days in the same period of 2023[44]. Dividends - The group did not declare an interim dividend for the six months ended June 30, 2024, compared to no dividend declared in 2023[19]. - The board resolved not to declare an interim dividend for 2024, consistent with the previous year[54]. Strategic Focus - The company plans to continue focusing on its core business in mainland China while strategically participating in mergers and acquisitions to enhance market share[33]. - The company has established over 20 international distribution points as part of its global expansion strategy in the new energy vehicle sector[32].

Financial Performance - The company reported a loss attributable to owners of the company of RMB 15 million per share, compared to a loss of RMB 1.08 million per share in the previous year, indicating a significant decline in performance[76]. - The total comprehensive income for the year ended December 31, 2023, was reported as (1,654,057) thousand RMB, reflecting a significant loss compared to the previous year[84]. - The company reported a net profit of (1,627,762) thousand RMB for the year, indicating a decline in profitability[84]. - The total revenue for the year was 5,941,682 thousand RMB, showing a decrease from the previous year's revenue[84]. - Gross profit decreased to RMB 964,034 thousand in 2023 from RMB 1,079,669 thousand in 2022, reflecting a decline of 10.67%[103]. - The operating loss significantly improved to RMB 37,630 thousand in 2023 compared to an operating loss of RMB 1,382,308 thousand in 2022[103]. - The net loss for the year was RMB 241,524 thousand, a substantial reduction from RMB 1,622,804 thousand in the previous year, indicating a decrease in loss of 85.14%[103]. - The company reported a total comprehensive loss of RMB 268,838 thousand for 2023, down from RMB 1,654,057 thousand in 2022, marking an improvement of 83.76%[103]. - Cash generated from operating activities was RMB 357,354 thousand, a decrease from RMB 781,120 thousand in 2022, reflecting a decline of 54.30%[115]. - The financial expenses for the year were RMB 132,036 thousand, compared to RMB 121,289 thousand in 2022, showing an increase of 8.69%[103]. Assets and Liabilities - Non-current assets totaled RMB 4,498,947 thousand in 2023, down from RMB 4,860,204 thousand in 2022, reflecting a decrease of approximately 7.4%[79]. - Current assets increased to RMB 6,336,219 thousand in 2023 from RMB 5,942,353 thousand in 2022, representing an increase of about 6.6%[79]. - Current liabilities rose to RMB 4,308,122 thousand in 2023, compared to RMB 3,899,527 thousand in 2022, marking an increase of approximately 10.5%[79]. - The total equity attributable to owners of the company decreased to RMB 5,665,167 thousand in 2023 from RMB 6,026,707 thousand in 2022, a decline of about 6%[82]. - The company’s cash and bank balances decreased to RMB 1,048,193 thousand in 2023 from RMB 1,161,992 thousand in 2022, a reduction of approximately 9.7%[79]. - The company’s non-current liabilities totaled RMB 861,877 thousand in 2023, slightly down from RMB 876,323 thousand in 2022, indicating a decrease of about 1.6%[82]. Risk Management and Internal Controls - The company has established risk management procedures, requiring each operational department to identify key risks related to their work and the company's strategy[42]. - The company has received confirmation from management regarding the effectiveness of its risk management and internal control systems[41]. - The audit committee assists the board in reviewing financial information and internal control systems[50]. - The company has not identified any significant control deficiencies or weaknesses during the reporting period[41]. - The company has established a whistleblowing policy to allow employees and stakeholders to raise concerns confidentially and anonymously, enhancing internal governance[72]. - The internal audit department plays a crucial role in monitoring the company's internal controls and compliance, conducting regular audits across all branches and subsidiaries[69]. - The company aims to improve its internal control and risk management processes through regular audits and assessments[92]. - The company has implemented anti-corruption policies to prevent bribery and corruption within its operations, reinforcing ethical standards among employees[72]. Employee and Board Diversity - The group employed a total of 3,642 employees as of December 31, 2023, a decrease from 3,925 employees in 2022[11]. - The company achieved a target of having at least 40% (1,437) female employees, indicating a satisfactory level of gender diversity[31]. - The board is committed to diversity, with 11% of board members being female, while 40% of the overall workforce is female[55]. - The board has conducted annual reviews of the implementation and effectiveness of its diversity policy[57]. Shareholder and Dividend Information - The company declared a dividend of (281,012) thousand RMB for the year, which is a reduction compared to the previous year's dividend[84]. - The board may propose a final dividend of HKD 0.066 per share for the year ending December 31, 2023, totaling HKD 100.1 million, equivalent to RMB 88.7 million, which was paid on August 11, 2023[177]. - The company has adopted a dividend policy without a preset payout ratio, allowing the board to propose dividends based on the financial condition and other factors[131]. - The company’s major shareholder, Eagle Seeker Company Limited, holds 99.9927% of the total shares, indicating a highly concentrated ownership structure[132]. Strategic Focus and Market Position - The company plans to enhance its market expansion strategies and invest in new product development to drive future growth[84]. - The company is focused on maintaining shareholder communication and transparency through its annual general meetings and updates on its website[88]. - The company has a strategic focus on enhancing its market presence and operational efficiency in the automotive sector[141]. - The company is actively involved in the management and expansion of its luxury automotive service offerings[136]. - The company reported a significant focus on expanding its brand portfolio, including luxury brands such as BMW, Lexus, Ferrari, and Rolls-Royce[136]. - The competitive landscape includes not only automotive dealers but also the automotive repair industry and e-commerce, necessitating timely strategic adjustments to maintain service levels[188]. Economic and Industry Considerations - The automotive industry is highly correlated with macroeconomic fluctuations, and the company must adjust its business planning and marketing strategies in response to economic changes[161]. - The company is closely monitoring industry policy changes in China's automotive sector, which may impact profitability due to new taxes and sales restrictions imposed by local governments[186]. - The company is actively monitoring the economic environment to mitigate potential impacts on vehicle sales due to macroeconomic cycles[161]. Management and Leadership - The company has not appointed any new directors or made significant changes in the past three years, maintaining stability in its leadership[135]. - The company’s executive director and chairman, Feng Changge, has been involved in the automotive industry since 2005, indicating significant experience in the sector[135]. - Liu Fenglei, the president, has approximately 19 years of experience in the automotive industry and has been with the group since 2003[138]. - Zhang Lei, the Chief Financial Officer, has 20 years of experience in the automotive finance sector and has been with the company for 17 years[147]. - The management team has a strong background in both operational and financial roles within the automotive industry[138]. Procurement and Supply Chain - Approximately 88.0% of the total procurement was made from the top five suppliers, with the largest supplier accounting for 59.6%[164]. - The company has a significant reliance on a few suppliers, indicating potential risks in supply chain management[164].

Revenue and Sales Performance - Total revenue from customer contracts reached RMB 16,529,150 thousand in 2023, up from RMB 16,261,600 thousand in 2022, representing a growth of approximately 1.6%[8] - The revenue from after-sales services was RMB 1,437,264 thousand in 2023, up from RMB 1,152,069 thousand in 2022, marking an increase of approximately 24.8%[21] - For the year ended December 31, 2023, the company's revenue was approximately RMB 16,579.2 million, an increase of 1.6% compared to RMB 16,321.7 million in the same period of 2022[51] - The company sold 38,475 new vehicles in the year ended December 31, 2023, representing an increase of 8.4% compared to the same period in 2022[51] - Total revenue from automobile sales and other income was RMB 14,209.3 million in 2023, accounting for 85.7% of total revenue, a slight decrease of 0.8% from RMB 14,324.8 million in 2022[95] - After-sales service revenue increased by 19.8% to RMB 2,319.8 million in 2023, compared to RMB 1,936.8 million in 2022[95] Financial Performance - The company reported a net loss for the year, with total expenses including depreciation and amortization amounting to RMB 15,615,198 thousand in 2023, compared to RMB 15,241,990 thousand in 2022[21] - The company recorded a net loss of RMB 241.5 million for the year ended December 31, 2023, compared to a net loss of RMB 1,622.8 million in 2022[51] - The adjusted profit for the year, excluding non-recurring losses, was RMB 171.6 million[51] - The group's annual loss for 2023 was RMB 241.5 million, while the adjusted profit, excluding non-recurring losses of RMB 413.1 million, was RMB 171.6 million[102] - The basic and diluted loss per share for the year ended December 31, 2023, was RMB 0.17[51] Costs and Expenses - The cost of automobile sales was RMB 14,177,934 thousand in 2023, compared to RMB 14,089,921 thousand in 2022, indicating an increase of about 0.6%[21] - The financial expenses for 2023 totaled RMB 132,036 thousand, an increase from RMB 121,289 thousand in 2022, reflecting a rise of approximately 8.7%[15] - The cost of sales for 2023 was RMB 14,177.9 million, up 0.6% from RMB 14,089.9 million in 2022, while after-sales service costs rose by 24.8% to RMB 1,437.3 million[122] - Employee benefits expenses included in the after-sales service costs were RMB 167.8 million for 2023, compared to RMB 142.4 million in 2022[47] Assets and Liabilities - The company’s equity attributable to owners decreased to RMB 5,572,299 thousand in 2023 from RMB 5,946,823 thousand in 2022, a decline of about 6.3%[22] - The company’s total liabilities included lease liabilities of RMB 806,261 thousand in 2023, slightly down from RMB 819,071 thousand in 2022, a decrease of about 1.6%[3] - As of December 31, 2023, the company's current liabilities totaled RMB 4,308,122,000, an increase from RMB 3,899,527,000 in 2022[77] - The company's trade receivables amounted to RMB 253,424,000 as of December 31, 2023, compared to RMB 197,882,000 in 2022[76] - The total non-current assets decreased to RMB 4,498,947,000 in 2023 from RMB 4,860,204,000 in 2022[76] - The company's debt-to-asset ratio increased to 47.7% as of December 31, 2023, compared to 44.2% as of December 31, 2022, reflecting a growth of 3.5%[156] Market and Operational Insights - The total retail sales volume of the Chinese passenger car market reached 21.7 million units in 2023, representing a year-on-year growth of 5.6%[71] - The luxury car market in China saw sales of 3.4 million units in 2023, with BMW leading at 824,900 units, followed by Mercedes-Benz at 765,000 units, and Audi at 729,000 units[115] - The forecast for 2024 predicts a 3% increase in overall retail sales of passenger cars to 22.2 million units, with the new energy vehicle market expected to grow by 22% to 11 million units[117] - The company maintained a cautious optimism regarding market recovery, emphasizing efficient operations and strong cash flow to enhance profitability and market share[72] Share Repurchase and Dividends - As of December 31, 2023, the company repurchased a total of 7,340,000 ordinary shares at a total cost of approximately HKD 6,821,944.79, excluding transaction costs[139] - The total number of shares repurchased reached 22,271,500, which were canceled on May 2 and June 7, 2023[139] - The board may propose a final dividend for the year ended December 31, 2023, with the previous year's dividend being HKD 0.066 per share[143] Employee and Operational Changes - The company employed a total of 3,642 employees as of December 31, 2023, down from 3,925 employees in 2022[158] - The company has adopted a share incentive plan effective from February 28, 2019, allowing for the grant of existing shares to selected participants, with a maximum of 60,000,000 shares available for purchase[137] - As of December 31, 2023, 30,000,000 shares have been granted and vested under the share incentive plan, with 59,987,500 shares purchased since the plan's adoption[137]

Financial Performance - Operating profit for the reporting period was RMB 336.8 million, a turnaround from an operating loss of RMB 774 million in the first half of 2022[11] - Profit attributable to equity holders of the parent was RMB 201.2 million, compared to a loss of RMB 914.8 million in the same period of 2022[12] - The company recorded revenue of RMB 8,109.5 million for the first half of 2023, an increase of 2.1% compared to RMB 7,940.1 million in the same period last year[73] - Revenue from automobile sales and others decreased by 0.8% to RMB 6,852.6 million, accounting for 84.5% of total revenue in the first half of 2023[73] - Revenue from after-sales services increased by 23.0% to RMB 1,231.4 million, representing 15.2% of total revenue in the first half of 2023[73] - Gross profit decreased by 16.0% to RMB 581.3 million compared to RMB 691.8 million in the first half of 2022[74] - The group reported a net profit of RMB 208,255 thousand for the period, compared to a net loss of RMB 908,360 thousand in the same period last year[175] Assets and Liabilities - Total bank loans and borrowings amounted to RMB 1,864.2 million, a reduction of 10.5% from RMB 2,083 million as of December 31, 2022[5] - The group's debt-to-asset ratio was 41.6% as of June 30, 2023, down by 2.6% from December 31, 2022[5] - Current assets net increased by 12.1% to RMB 2,289.4 million compared to RMB 2,042.8 million as of December 31, 2022[19] - As of June 30, 2023, the total current liabilities decreased to RMB 3,555,071 thousand from RMB 3,899,527 thousand, representing a reduction of approximately 8.8%[159] - The total assets less current liabilities rose to RMB 7,056,442 thousand compared to RMB 6,903,030 thousand, reflecting an increase of approximately 2.2%[159] - The equity attributable to the owners of the parent company increased to RMB 6,110,421 thousand from RMB 5,946,823 thousand, marking an increase of about 2.8%[159] Inventory and Sales - Inventory decreased by RMB 147.4 million to RMB 1,393 million as of June 30, 2023, with an average turnover period of 35.6 days, up from 30.6 days in the same period of 2022[4] - In the first half of 2023, the company achieved sales of 17,571 units, representing a year-on-year growth of 2.2%[40] - The sales of luxury brands such as Lincoln, Volvo, Audi, and Land Rover increased by 17.2%, 10.1%, 9.6%, and 36.0% respectively[40] - The sales of BMW electric vehicles reached 44,900 units in the first half of 2023, a significant year-on-year increase of 283%[34] - The overall profit margin from new car sales for dealers dropped from 19.7% at the end of 2022 to 4.9% in the first half of 2023[34] - The group sold 3,799 used cars in the first half of 2023, reflecting a year-on-year growth of 24.0%[52] Employee and Operational Efficiency - The group employed a total of 3,787 employees as of June 30, 2023, down from 3,925 employees as of December 31, 2022[8] - The group plans to continue optimizing expense ratios and improving operational efficiency to enhance profitability[53] - The group has established a systematic training system to enhance employees' business capabilities and professional skills, emphasizing talent development[65] Cash Flow and Financial Management - The group's cash and deposits totaled RMB 1,255 million as of June 30, 2023, with a net cash inflow from operating activities of RMB 448.5 million during the first half of 2023[13] - Net cash generated from operating activities was RMB 448,548 thousand, down from RMB 618,081 thousand year-on-year, indicating a decrease of approximately 27.5%[175] - Cash and cash equivalents as of June 30, 2023, amounted to RMB 1,254,957 thousand, a slight decrease from RMB 1,622,352 thousand at the end of 2022[178] Corporate Governance and Compliance - The company complied with the Corporate Governance Code and maintained high standards of corporate governance throughout the reporting period[137] - The audit committee reviewed the unaudited interim results for the six months ended June 30, 2023, and found them to comply with relevant accounting standards[153] Market Trends and Future Outlook - The government policies supporting the new energy vehicle market are expected to continue driving growth, with a stable outlook for the second half of 2023[39] - The luxury car retail market showed strong performance with a year-on-year growth of 11% from January to July 2023[38] - The company aims to actively collaborate with domestic new energy vehicle brands to support industry development[41] - The cumulative retail sales volume of new energy vehicles in China for the first half of 2023 was 3.086 million units, representing a significant year-on-year growth of 37.3%[49] Share Options and Awards - As of January 1, 2023, the company had 42,191,000 unexercised stock options, representing approximately 2.7% of the issued shares[73] - As of June 30, 2023, the company still had 42,191,000 unexercised stock options, now representing approximately 2.8% of the issued shares[73] - The company adopted a share award plan on February 28, 2019, aimed at incentivizing and retaining employees and aligning their interests with shareholders[117] - The share award plan does not grant new shares but allows for existing shares to be awarded to selected participants[117] - The company has no outstanding stock options that were granted under the stock option plan as of June 30, 2023[110]