Group 1 - Zhongsheng Holdings (00881.HK) experienced a nearly 4% increase in stock price, with a current rise of 3.6% to HKD 11.51 [1] - The trading volume reached HKD 36.0959 million [1]

Core Viewpoint - The release of the "Guidelines for Compliance with Pricing Behavior in the Automotive Industry" by the State Administration for Market Regulation signifies a substantial regulatory effort to standardize pricing practices in the automotive sector, which may positively impact companies like Zhongsheng Holdings [1] Company Summary - Zhongsheng Holdings (00881) experienced a stock price increase of approximately 3.6%, reaching HKD 11.51, with a trading volume of HKD 36.1 million [1] - As a leading luxury car dealer in China, Zhongsheng is focused on building a high-end automotive service brand, which supports steady growth in its after-sales business [1] - The company has made significant progress in optimizing its network and brand layout, which is expected to enhance the scale and profitability of its new car business [1] - Since November 2024, Zhongsheng has completed its largest network optimization to date, adding a total of 57 dealerships and 20 service centers, with 48 of the new dealerships being luxury brands [1] Industry Summary - The newly issued pricing guidelines detail compliance requirements for pricing behavior across all aspects of the automotive industry, from vehicle production to sales strategies [1] - According to Shenwan Hongyuan, the guidelines indicate a significant advancement in addressing internal competition within the industry, reflecting the regulatory authority's commitment to price management [1] - The guidelines are expected to create a more structured pricing environment, potentially benefiting established players like Zhongsheng Holdings [1]

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年11月30日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 中升集團控股有限公司 呈交日期: 2025年12月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00881 | 說明 | | | | | | | | | | | | 法定/註冊股份數目 | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 1,000,000,000,000 | HKD | | 0.0001 | HKD | | 100,000,000 | | 增加 / 減少 (-) | | | | 0 | | | HKD | | 0 | | 本月底結存 | | | 1,000,000,000,000 | HKD | | 0.0001 | HKD | | 100, ...

Core Viewpoint - UBS reported that after a meeting with the management of Zhongsheng Holdings, the company updated its recent operational status, indicating that Huawei AITO car sales reached 27,000 units in the first ten months of this year, slightly exceeding company expectations [1] Group 1: Sales Performance - AITO's sales performance has been positive, with new car sales showing a slight year-on-year increase [1] - Despite the growth in sales, the new car gross margin remains under pressure due to industry competition [1] Group 2: Management Confidence - Management expressed confidence in Zhongsheng's long-term growth, citing good positioning in brand portfolio and store location [1] Group 3: Financial Forecasts - UBS has lowered Zhongsheng Holdings' earnings forecasts for 2025 to 2027 by 12% to 18% to reflect ongoing pressure on new car gross margins [1] - The target price has been adjusted from HKD 24 to HKD 20.8, while maintaining a "Buy" rating [1]

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年10月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 中升集團控股有限公司 呈交日期: 2025年11月3日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00881 | 說明 | | | | | | | | | | | | 法定/註冊股份數目 | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 1,000,000,000,000 | HKD | | 0.0001 | HKD | | 100,000,000 | | 增加 / 減少 (-) | | | | 0 | | | HKD | | 0 | | 本月底結存 | | | 1,000,000,000,000 | HKD | | 0.0001 | HKD | | 100, ...

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年9月30日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 中升集團控股有限公司 呈交日期: 2025年10月2日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00881 | 說明 | | | | | | | | | | 法定/註冊股份數目 | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | 1,000,000,000,000 | HKD | | 0.0001 | HKD | | 100,000,000 | | 增加 / 減少 (-) | | | 0 | | | HKD | | 0 | | 本月底結存 | | 1,000,000,000,000 | HKD | | 0.0001 | HKD | | 100,000,000 | 本月底法定/註冊股 ...

Customer Base and Market Presence - As of June 30, 2025, the active customer base reached 4.54 million, representing a year-on-year growth of 15.2% and an increase of 8.3% compared to the end of 2024[12]. - The subscription members of the WeChat platform Zhongsheng GO reached 3.8 million, with nearly 10.5 million customers connected through corporate WeChat[12]. - The company has closed 37 authorized dealerships since November 2024 and opened 57 new authorized dealerships and 20 service centers, primarily new stores[9]. - In the 32 key cities where the company operates, there is an average of 15 dealerships and service centers per city, serving approximately 137,000 active customers[13]. - Over 46% of the company's stores are the leading dealers for their brands in local markets, with 89 stores being exclusive dealers[13]. Business Strategy and Transformation - The company aims to transform into a high-end automotive service brand, focusing on after-sales services driven by the existing customer base[10]. - The company is focusing on digitalization and centralized operations as part of its transformation into a customer-centric automotive service provider[12]. - The company is enhancing local market business density and brand concentration to support its cross-brand operational strategy[13]. - The company has implemented a significant network optimization, marking the largest scale in its history since November 2024[9]. Financial Performance - The company's revenue for the six months ended June 30, 2025, was RMB 77,322.1 million, a decrease of RMB 5,099.3 million or 6.2% compared to the same period in 2024[36]. - New car sales revenue was RMB 57,931.0 million, down 4.7% from RMB 60,812.0 million in the previous year, while used car sales revenue fell by 27.0% to RMB 6,014.6 million[36]. - The after-sales service segment saw a revenue increase of 4.4%, reaching RMB 11,445.3 million, indicating a positive trend in this area[36]. - Gross profit for the six months ended June 30, 2025, was RMB 4,209.3 million, a decrease of RMB 716.9 million or 14.6% compared to the previous year[42]. - Operating profit was RMB 1,905.1 million, a decrease of RMB 850.7 million or 30.9% compared to the previous year, with an operating profit margin of 2.5%[49]. Vehicle Sales and Market Trends - In the first half of 2025, the company sold approximately 229,000 new vehicles, a decrease of about 4,000 units or 1.7% year-on-year, with luxury brand sales accounting for 62.3% of total sales[21]. - The average transaction price of new vehicles decreased by approximately RMB 33,000, a decline of 12.5% compared to the previous year, while manufacturers provided an average subsidy of RMB 19,000 per vehicle, representing 7.0% of the price[21]. - The company sold approximately 111,000 used vehicles in the first half of 2025, a year-on-year increase of 9.6%, but revenue from used vehicles fell by 27.0% to RMB 6.02 billion[23]. - The average profit per used vehicle was compressed to less than RMB 3,000, with overall profit for the used vehicle segment declining by 60.2%[24]. - The company expects continued growth in after-sales service revenue, particularly in the luxury market, as local competitors exit and market consolidation deepens[18]. Cash Flow and Financial Position - As of June 30, 2025, the company's cash balance was RMB 20,037.2 million, a decrease of RMB 2,966.8 million from December 31, 2024, primarily due to cash outflows from financing activities[55]. - The company generated free cash flow of RMB 3,973.0 million for the six months ended June 30, 2025, with net cash inflow from operating activities amounting to RMB 5,948.4 million[55]. - Cash used in financing activities for the six months ended June 30, 2025, was RMB 10,830.2 million, mainly for repaying bank loans and redeeming convertible bonds[60]. - The company's total capital expenditure for the six months ended June 30, 2025, was RMB 818.7 million, compared to RMB 618.7 million for the same period in 2024[62]. - The average inventory turnover days increased from 36.2 days in 2024 to 38.3 days in 2025, reflecting adjustments in inventory levels[65]. Shareholder Information and Corporate Governance - The company declared a final dividend of RMB 1,734,665,000 for the year 2023, reflecting a commitment to returning value to shareholders despite fluctuations in comprehensive income[77]. - The company has issued zero-coupon convertible bonds with a face value of HKD 4,560,000,000, maturing in 2025, with the conversion price adjusted to HKD 43.88 per share as of July 4, 2024[105]. - Major shareholders, including Blue Natural Development Ltd. and Light Yield Ltd., collectively own 49.66% of the company's shares[133]. - The company has a total of 505,816,116 shares held by Jardine Strategic Limited, representing 21.20% of the total shares[134]. - The company’s board members are considered to have interests in the treasury shares due to their voting rights[129]. Environmental and Social Responsibility - The group has implemented multiple measures to reduce emissions and enhance energy efficiency in daily operations, including improving emission testing equipment and wastewater treatment[167]. - The group encourages employees to use public transportation and replace business travel with phone or video conferencing when feasible to reduce carbon emissions[167]. - The group is committed to corporate social responsibility by providing employment opportunities for local residents and disabled individuals through its national dealer network[168].

Summary of Zhongsheng Holdings Conference Call Company Overview - **Company**: Zhongsheng Holdings - **Date**: September 26, 2025 Industry Insights - **Impact of Price Wars**: Traditional brands such as Mercedes-Benz, Lexus, and Toyota are experiencing increased losses due to price wars. However, there are signs of recovery in industry discount rates, with the average price drop for domestic passenger cars in August rising by 0.1% to 20.2% compared to the previous month, which may improve Zhongsheng's new car business margins [2][4]. Key Points - **New Car Business Performance**: - New car sales in the first half of the year were approximately 210,000 units, a year-on-year decrease of 5%. - The gross margin per vehicle was negative 11,300 yuan, worsening from negative 8,900 yuan in the previous year [4]. - The company expects an improvement in new car business margins due to a faster payment schedule from dealers and a decrease in fuel vehicle discount rates [4][2]. - **Huawei Seres Brand Development**: - Zhongsheng has established 36 stores for the Seres brand, achieving a market share of 8%. - In major cities, the market share reaches 18%, double the national average. - Although sales were only about 20,000 units in the first half, growth in sales and profitability is anticipated as the store ramp-up phase concludes [5][2]. - **After-sales Maintenance and Services**: - The after-sales maintenance business is performing robustly, with approximately 8 million visits annually, and 4 million visits in the first half of the year. - The average gross profit per visit is around 1,580 yuan, maintaining a gross margin of about 47%. - This segment has not been negatively impacted by the decline in new car sales and contributed 6.3 billion yuan in gross profit in the first half, accounting for a significant portion of the total gross profit of 4.2 billion yuan [6][2]. - **Profit Forecast**: - The company expects a total profit of approximately 3 billion yuan for the year, with significant improvement in the second half. - Profits are projected to approach 4 billion yuan next year. The current valuation is around 10 times earnings, expected to drop below 8 times next year, coupled with a high dividend yield, indicating strong value [7][2]. Risks - **Key Risks**: - The main risks facing Zhongsheng include lower-than-expected automotive consumption and significant increases in raw material prices, which could adversely affect the company's performance [3][8]. Additional Insights - **Market Trends**: The penetration rate of new energy vehicles is high, but the existing stock remains low, limiting the impact on after-sales maintenance services. The company's focus on major cities is expected to drive overall growth due to favorable foot traffic trends [6][2].

Industry Overview - Morgan Stanley's research report indicates that capacity reductions in the mainland automotive industry are driving industry consolidation, with luxury car dealers expected to benefit first [1] - The report anticipates a significant acceleration in dealership closures from 2025 to 2026, as the overall profit margin for new cars fell below 1% in the first half of this year, making it unattractive for smaller dealers [1] - Car manufacturers plan to reduce their dealership networks in mainland China by 10% to 30% by the end of 2026, which will favor financially stable dealers [1] Company Insights - Zhongsheng Holdings is expected to experience a turning point after four years of decline, with a projected 67% year-on-year rebound in profits to 4 billion yuan by 2026, driven by a recovery in new car profit margins and increased market share in the unexpected repair sector [1] - The decrease in capital expenditure requirements suggests that the expected dividend yield of 5% in 2026 has room for growth; the target price has been raised from 15 HKD to 21 HKD, with a rating of "Overweight" [1] - Tuhu has also been given an "Overweight" rating, with an expected annual compound growth rate of 25% in profits from 2025 to 2027, based on user growth from its app and expansion of franchise stores; the target price has been increased from 20 HKD to 23 HKD [1]

Group 1: Industry Overview - Morgan Stanley reports that capacity reductions in the mainland automotive industry are driving industry consolidation, with luxury car dealers expected to benefit first [1] - It is anticipated that from 2025 to 2026, there will be an acceleration in dealership closures, as the overall profit margin for new cars fell below 1% in the first half of this year, making it unattractive for small dealers [1] - Automakers plan to reduce their dealership networks in mainland China by 10% to 30% by the end of 2026, which will favor financially stable dealers [1] Group 2: Company Insights - Zhongsheng Holdings (00881) is expected to continue dominating the automotive accident repair business, while independent repair shops like Tuhu-W (09690) will capture market share in maintenance and minor repairs [1] - Excluding the pandemic impact from 2020 to 2021, Zhongsheng Holdings' repair service gross profit has a compound annual growth rate of 14% from 2017 to 2024, which is expected to support core profitability in the future [1] - After four years of a downward cycle, Zhongsheng Holdings is believed to be at a turning point, with a projected 67% year-on-year rebound in profit to 4 billion RMB by 2026, driven by the recovery of new car profit margins and increased market share in accident repair [1] Group 3: Financial Projections - The decline in capital expenditure needs suggests that the expected dividend yield of 5% in 2026 still has upside potential; the target price for Zhongsheng Holdings has been raised from 15 HKD to 21 HKD with an upgrade to "overweight" rating [1] - Tuhu is also rated "overweight," with an expected compound annual growth rate of 25% in earnings from 2025 to 2027, based on user growth in its app and expansion of franchise stores; the target price has been increased from 20 HKD to 23 HKD [2] - For Meidong Automotive (01268), the target price has been lowered from 2.2 HKD to 2.1 HKD, maintaining a "market perform" rating [2]