ZHONGSHENG HLDG(00881)2024-09-27 08:32Customer Base and Services - Active customer base increased by 9% year-on-year, totaling 900,000 in key cities such as Chengdu, Dalian, Nanjing, and Shenzhen[6] - Regular maintenance services grew by 6%, manufacturer warranty services increased by 10%, accident vehicle repairs rose by 14%, and vehicle insurance renewals surged by 22%[6] - The number of active customers in the company's WeChat platform reached approximately 7.4 million, with the average daily visits to the platform at 840,000[11] - The company operates 26 maintenance service centers in 20 cities, with an additional 19 centers under construction or planning[10] - The company has established over 1,000 renewal policy positions across the group to enhance service offerings[10] - The active customer base in four leading cities (Nanjing, Shenzhen, Chengdu, and Dalian) has increased without expanding the number of brand dealerships[11] - The company aims to leverage its ecosystem to integrate customers into its automotive service network across various markets[6] Financial Performance - The company's revenue for the six months ended June 30, 2024, was RMB 82,421.4 million, an increase of RMB 519.7 million or 0.6% compared to the same period in 2023[19] - 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[19] - The revenue from the after-sales service business increased by RMB 1,327.5 million or 13.8% to RMB 10,964.1 million, driven by growth in service visits and average revenue per visit[19] - The gross profit for the six months ended June 30, 2024, was RMB 4,926.2 million, a decrease of RMB 2,043.6 million or 29.3% compared to the same period in 2023[21] - The operating profit for the six months ended June 30, 2024, was RMB 2,755.8 million, a decrease of RMB 2,011.9 million or 42.2% compared to the same period in 2023[22] - The net profit for the six months ended June 30, 2024, was RMB 1,500.0 million, a decrease of RMB 1,515.3 million or 50.3% compared to the same period in 2023[22] - The gross margin for the six months ended June 30, 2024, was 6.0%, down from 8.5% in the same period in 2023[22] Market Trends and Vehicle Sales - In the first half of 2024, the used car retail volume increased by 45.2% year-on-year, reaching 102,000 units, while the renewal policy number grew by 22.9%[11] - The average profit contribution per used car in the first half of 2024 was RMB 6,600, leading to a 25.1% year-on-year increase in overall used car business profit to RMB 670 million[11] - The penetration rate of new energy vehicles reached 40.7% in the first half of 2024, up seven percentage points from 2023, with significant contributions from PHEV and EREV models[15] - The total retail sales of social consumer goods in China grew by 3.7% year-on-year in the first half of 2024, with the automotive sector remaining flat[15] - The second-hand car transaction volume reached 7,528,000 units in the first half of 2024, a year-on-year increase of 6.9%[16] - As of June 30, 2024, the total number of vehicles in China reached 345 million, maintaining the highest vehicle ownership globally[15] Debt and Financing - The company issued 292 million of existing bonds due in 2026[7] - A total of RMB 5 billion Panda bonds were registered, with the first issuance of RMB 1 billion completed in August 2024[7] - The company secured a 450 million 3.00% bonds due in 2026, with an outstanding principal amount of $157.83 million as of August 1, 2024[107] Inventory and Assets - The inventory increased from RMB 16,366.1 million as of December 31, 2023, to RMB 18,353.5 million as of June 30, 2024, primarily due to increased turnover days for new cars[25] - The average 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[26] - The net current assets as of June 30, 2024, were RMB 20,902.3 million, a decrease of RMB 3,166.7 million compared to December 31, 2023[24] - The total liabilities increased to RMB 61,310,326 thousand from RMB 57,221,885 thousand, representing an increase of approximately 7.06%[37] - The total inventory as of June 30, 2024, is RMB 18,353,521, an increase of 11.9% from RMB 16,366,096 as of December 31, 2023[59] Corporate Governance and Compliance - The financial statements were prepared in accordance with Hong Kong Financial Reporting Standards, ensuring compliance and transparency in financial reporting[43] - The audit committee reviewed the interim financial results for the six months ended June 30, 2024, and confirmed compliance with relevant accounting standards and regulations[122] - The company has adopted the corporate governance code and has complied with its provisions during the reporting period[115] - The board of directors is responsible for overseeing the company's business strategies and performance, ensuring effective internal controls and risk management systems[113] Corporate Social Responsibility - The company is committed to corporate social responsibility by providing employment opportunities for local residents and disabled individuals through its national dealer network[124] - The company has donated funds to assist underprivileged families and students in mountainous areas[124] - The company organizes activities for the elderly and disabled in nursing homes[124] - The company has implemented multiple measures to reduce emissions and enhance energy efficiency during daily operations[123] - The company encourages employees to use public transportation and replace business travel with phone or video conferencing when feasible[123]