ZHONGSHENG HLDG(00881)2024-08-30 04:00Automotive Sales Performance - Revenue from automotive sales decreased by 0.9% to RMB 69,052.3 million[2] - New car sales increased by 3.9% to 232,543 units[3] - New car sales reached 233,000 units in the first half of 2024, a year-on-year increase of 3.9%[11] - New car sales revenue decreased by RMB 3,757.0 million or 5.8% to RMB 60,812.0 million, primarily due to a decline in average selling prices[76] - Mercedes-Benz accounted for approximately 40.5% of the company's new car sales revenue, down from 43.1% in the same period last year[76] - New car sales costs decreased by RMB 901.3 million or 1.4% to RMB 62,802.1 million for the six months ended June 30, 2024[77] After-Sales Services - Revenue from after-sales services increased by 13.8% to RMB 10,964.1 million[2] - Gross profit from after-sales services rose by 12.7% to RMB 5,035.0 million[3] - After-sales service revenue rose by RMB 1,327.5 million or 13.8% to RMB 10,964.1 million, due to increased service visits and higher average revenue per visit[76] - ZhongSheng's after-service business saw a 45.2% year-on-year increase in used car retail sales and a 22.9% increase in insurance renewal policies in the first half of 2024[8] - ZhongSheng's maintenance, manufacturer warranty, and accident repair service visits increased by 3.4%, 17.2%, and 9.1% respectively in the first half of 2024[8] Used Car Business - Used car transaction volume surged by 53.9% to 101,525 units[3] - ZhongSheng's used car business achieved a comprehensive profit of RMB 670 million in the first half of 2024, a year-on-year increase of 25.1%[9] - ZhongSheng's used car retail sales increased from 18,000 units in the first half of 2023 to 26,000 units in the first half of 2024[9] - ZhongSheng's used car flagship stores reached 49 by the end of June 2024, with many stores achieving monthly sales of over 100 units[9] - Used car sales revenue increased by RMB 3,139.6 million or 61.6% to RMB 8,240.3 million, driven by higher sales volume[76] - Used car sales costs increased by RMB 2,854.6 million or 59.9% to RMB 7,622.3 million for the six months ended June 30, 2024[78] Financial Performance - Net profit for the period dropped by 50.3% to RMB 1,500.0 million[3] - The company's revenue for the first half of 2024 was RMB 82,421,409 thousand, compared to RMB 81,901,699 thousand in the same period last year[14] - The company's net profit for the first half of 2024 was RMB 1,500,027 thousand, compared to RMB 3,015,283 thousand in the same period last year[14] - The company's comprehensive income for the first half of 2024 was RMB 1,394,832 thousand, compared to RMB 2,612,033 thousand in the same period last year[15] - Gross profit decreased by RMB 2,043.6 million or 29.3% to RMB 4,926.2 million for the six months ended June 30, 2024[79] - Gross margin decreased to 6.0% for the six months ended June 30, 2024, compared to 8.5% for the same period in 2023[79] - Operating profit decreased by RMB 2,011.9 million or 42.2% to RMB 2,755.8 million for the six months ended June 30, 2024[81] - Net profit decreased by RMB 1,515.3 million or 50.3% to RMB 1,500.0 million for the six months ended June 30, 2024[82] Market Share and Brand Performance - The company holds a 32% market share in Lexus new car sales, 18% in Mercedes-Benz, and 10% in Toyota, Volvo, and Jaguar Land Rover in China[11] - Domestic passenger car sales in China were 9.939 million units in the first half of 2024, a year-on-year increase of 3.9%[12] - New energy vehicle (NEV) sales in China reached 4.048 million units in the first half of 2024, a year-on-year increase of 37.5%, with a penetration rate of 40.7%[12] - Used passenger car transactions in China reached 7.528 million units in the first half of 2024, a year-on-year increase of 6.9%[13] Financial Position and Assets - Total non-current assets decreased to RMB 45,145,794 thousand from RMB 45,669,804 thousand[16] - Total current assets increased to RMB 61,818,198 thousand from RMB 57,598,657 thousand[16] - Total current liabilities rose to RMB 40,915,857 thousand from RMB 33,529,583 thousand[17] - Net current assets decreased to RMB 20,902,341 thousand from RMB 24,069,074 thousand[17] - Total assets minus current liabilities stood at RMB 66,048,135 thousand compared to RMB 69,738,878 thousand[17] - Total non-current liabilities decreased to RMB 20,394,469 thousand from RMB 23,692,302 thousand[17] - Net assets slightly decreased to RMB 45,653,666 thousand from RMB 46,046,576 thousand[17] - Inventory increased to RMB 18,353,521 thousand from RMB 16,366,096 thousand[16] - Cash and cash equivalents rose to RMB 17,146,435 thousand from RMB 15,611,984 thousand[16] - Equity attributable to owners of the parent company decreased to RMB 45,487,875 thousand from RMB 45,797,296 thousand[18] - The company's total equity as of June 30, 2024, was RMB 46,046,576 thousand, with a net profit of RMB 1,579,552 thousand for the period[19] Cash Flow and Financing - The company's operating cash flow for the six months ended June 30, 2024, was RMB 3,673,291 thousand, a decrease from RMB 4,496,260 thousand in the same period last year[21] - The company's net cash from operating activities for the six months ended June 30, 2024, was RMB 2,925,583 thousand, compared to RMB 3,466,967 thousand in the same period last year[21] - The company's depreciation and impairment of property, plant, and equipment for the six months ended June 30, 2024, was RMB 1,022,091 thousand, an increase from RMB 441,543 thousand in the same period last year[20] - The company's finance costs for the six months ended June 30, 2024, were RMB 792,249 thousand, up from RMB 717,969 thousand in the same period last year[20] - The company's inventory increased by RMB 2,009,353 thousand for the six months ended June 30, 2024, compared to an increase of RMB 190,385 thousand in the same period last year[21] - The company's trade payables and bills increased by RMB 2,203,538 thousand for the six months ended June 30, 2024, compared to an increase of RMB 1,048,410 thousand in the same period last year[21] - The company's exchange rate fluctuations reserve decreased by RMB 105,195 thousand for the six months ended June 30, 2024[19] - The company's total comprehensive income for the six months ended June 30, 2024, was RMB 1,394,832 thousand, compared to RMB 2,612,033 thousand in the same period last year[19] - The company's declared final dividend for 2023 was RMB 1,734,665 thousand[19] - Investment activities resulted in a net cash outflow of RMB 433,293 thousand, compared to RMB 513,336 thousand in the same period last year[22] - Financing activities resulted in a net cash outflow of RMB 942,448 thousand, compared to a net cash inflow of RMB 1,689,296 thousand in the same period last year[23] - Net increase in cash and cash equivalents was RMB 1,549,842 thousand, compared to RMB 4,642,927 thousand in the same period last year[23] - Cash and cash equivalents at the end of the period were RMB 17,146,435 thousand, compared to RMB 16,352,611 thousand in the same period last year[23] - Purchase of property, plant, and equipment amounted to RMB 1,238,252 thousand, a decrease from RMB 1,620,616 thousand in the same period last year[22] - Proceeds from the sale of property, plant, and equipment were RMB 662,164 thousand, compared to RMB 825,795 thousand in the same period last year[22] - Bank loans and other borrowings obtained amounted to RMB 51,861,550 thousand, slightly lower than RMB 52,770,810 thousand in the same period last year[23] - Repayment of bank loans and other borrowings was RMB 51,694,222 thousand, compared to RMB 48,107,631 thousand in the same period last year[23] - Interest received from investments was RMB 224,321 thousand, slightly lower than RMB 230,930 thousand in the same period last year[22] Debt and Bonds - The company issued USD 600 million in unsecured senior bonds in July 2024[5] - The company issued 292,166,000 of its 2026 bonds, leaving 600 million in bonds with a 5.98% interest rate, maturing on January 30, 2028[100] - The first batch of Panda Bonds was issued with a total size of RMB 1 billion, a coupon rate of 3.5%, and a maturity period of three years[101] Operational Metrics - Active customer base in four key cities grew by 9% to 900,000[4] - ZhongSheng's enterprise WeChat has nearly 7.4 million customers, and its ZhongShengGo membership platform has about 3.1 million subscribers with an average daily visit count of 840,000[8] - ZhongSheng's social media accounts have a total of 16.6 million followers, and new media leads exceeded 1 million in the first half of 2024[8] - ZhongSheng operates 26 maintenance service centers in 20 cities, with an additional 19 centers under construction or planning[7] - ZhongSheng has deployed nearly 10,000 courtesy cars in central cities and established over 1,000 insurance renewal specialist positions across the group[7] - The company operates 419 dealerships nationwide, including 269 luxury brands and 150 mid-to-high-end brands, with no significant changes since 2022[11] - Inventory turnover days increased to 36.2 days for the six months ended June 30, 2024, compared to 33.6 days for the same period in 2023[90] - The company's employee count decreased to 30,944 as of June 30, 2024, down from 31,180 at the end of 2023[93] Strategic Initiatives - BMW became the first company in China to publicly exit the irrational price war in July 2024, adjusting sales targets to rebalance retail prices and demand[6] - The company plans to expand its core regions and brands through new store openings and acquisitions, focusing on used car and after-sales services[95] Forward-Looking Statements - The company's forward-looking statements are based on existing data and current outlook, subject to risks and uncertainties[113] - The forward-looking statements include business outlook, financial performance estimates, business plan forecasts, and development strategies[113] - The statements are based on subjective expectations, assumptions, and premises beyond the company's control[113] - The forward-looking statements may prove to be incorrect and may not be realized in the future[113] - The company's management accounts are used for the statements, which have not been audited by the company's auditors[113] - Shareholders and potential investors should not overly rely on the forward-looking statements[113]