ZHONGSHENG HLDG(HK:00881)2021-04-22 08:53Financial Performance - In 2020, Zhongsheng Group achieved new car sales of 500,609 units, representing a year-on-year growth of 9.9%, with luxury brand sales reaching 275,417 units, up 20.8%[7]. - The total revenue from after-sales and boutique services reached RMB 20.25 billion, an increase of 13.5% year-on-year[7]. - Net profit attributable to shareholders was RMB 5.54 billion, reflecting a year-on-year increase of 23.1%[7]. - New car sales revenue reached RMB 125,526.7 million, an increase of 18.2% compared to the previous year[20]. - Total revenue for the year ended December 31, 2020, was RMB 148,348.1 million, a growth of RMB 24,305.6 million or 19.6% from the previous year[20]. - The gross profit for the year was RMB 13,481.7 million, reflecting a year-on-year increase of 17.4%[22]. - Operating profit for the year ended December 31, 2020, was RMB 8,936.7 million, an increase of RMB 1,218.4 million or 15.8% compared to the previous year[24]. - Net profit for the year ended December 31, 2020, was RMB 5,580.8 million, representing a growth of RMB 1,061.3 million or 23.5% year-over-year[25]. - Profit attributable to equity holders of the parent for the year ended December 31, 2020, was RMB 5,539.8 million, an increase of RMB 1,038.1 million or 23.1% compared to the previous year[26]. Market Position and Strategy - The company ranked second in the 2020 China Automotive Dealer Group Top 100 list and maintained the top position in comprehensive capability for five consecutive years[8]. - The company plans to further enhance its network layout in economically developed cities to strengthen its leading advantage in key regional sales networks[7]. - The company aims to optimize its brand portfolio and actively participate in market consolidation post-pandemic[7]. - The group aims to strengthen its sales network leadership in high-tier cities, which are showing stronger purchasing demand and power[13]. - The group is strategically focusing on the development of the new energy vehicle sector while maintaining its competitive advantage in luxury fuel vehicles[11]. Dealership and Sales Network - The total number of dealerships increased to 373 by the end of 2020, with 218 luxury brand dealerships and 155 mid-to-high-end brand dealerships[7]. - The overall market share of the company's core brands continued to increase by the end of 2020[7]. - The company plans to expand its distribution network through new store openings and appropriate acquisitions in the luxury and mid-to-high-end passenger car market[38]. Environmental, Social, and Governance (ESG) Initiatives - The ESG committee was established in November 2020 to enhance the group's sustainable development performance, consisting of two executive directors[43]. - The group aims to minimize water usage and establish a circular water system in certain areas, alongside reducing new vehicle emissions and CO2 emissions from factories[42]. - The group is committed to developing or introducing more environmentally friendly products and business models, while effectively managing waste recycling processes[42]. - Continuous communication with stakeholders is essential for identifying market risks and opportunities, forming the basis for sustainable development strategies[45]. - The group emphasizes the importance of stakeholder engagement through annual meetings and regular announcements to address concerns[45]. Employee and Workforce Management - The company employed a total of 31,460 full-time employees at the end of the reporting period, an increase of 2,167 employees compared to the previous year[57]. - 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[59]. - Employee training included 30,971 general employees, all receiving an average of 363 hours of training[64]. - The company provided health check-ups for all employees annually, with a focus on occupational health for workshop workers[65]. - The company has implemented a standardized recruitment management system in compliance with relevant labor laws to ensure fair treatment of employees[57]. Corporate Governance - The company emphasizes high standards of corporate governance to protect shareholder interests and enhance transparency and accountability[102]. - The board of directors consists of 7 members, including 4 executive directors and 3 independent non-executive directors, ensuring compliance with listing rules[105]. - The company has adopted a board diversity policy, recognizing the benefits of diversity and aiming to maintain a competitive advantage through diverse board composition[121]. - The company has established clear written terms of reference for its various board committees, including the Audit, Remuneration, and Nomination Committees[115]. Community Engagement and Social Responsibility - The company donated RMB 15 million to support COVID-19 relief efforts in Hubei Province, demonstrating its commitment to social responsibility[82]. - The company has committed to community investment, focusing on areas such as education, health, and environmental issues[101]. - The company actively engages with local communities through complaint committees to address community needs[82]. Financial Management and Capital Structure - The company issued bonds totaling $450 million with a 3.0% annual interest rate, maturing in 2026, with interest payments due semi-annually starting July 13, 2021[138]. - The company plans to refinance existing debt and extend the maturity of its debt through the issuance of the 2025 convertible bonds[173]. - The total distributable reserves of the company as of December 31, 2020, amounted to RMB 3,130.4 million, with RMB 1,108 million proposed as the final dividend for the year[156]. - The company has no predetermined dividend payout ratio, allowing flexibility in dividend distribution based on various financial and operational factors[157].