ZHONGSHENG HLDG(HK:00881) Zhong Guo Qi Che Bao Wang·2025-11-10 02:36Core Viewpoint - The automotive dealership industry in China is facing significant challenges, with a notable decline in the number of authorized dealerships, while Zhongsheng Group is expanding its network by opening new service points amidst this downturn [2][4]. Industry Overview - The number of authorized dealerships in China is projected to decrease by 1.9% in the first half of 2025 compared to the end of 2024, with a net reduction of approximately 625 dealerships this year [2]. - In the first half of this year, the total number of 4S dealerships in China fell from 32,000 to 31,400, a net decrease of over 600, with 2,749 dealerships closing [4]. Zhongsheng Group's Expansion Strategy - Zhongsheng Group opened 15 new service points in the third quarter, collaborating with major brands such as Mercedes-Benz, Audi, Volvo, AITO, and Toyota [3]. - The new service points are strategically located across various provinces, including Hainan, Guangdong, Shandong, and others, with a significant focus on traditional brands despite the overall industry trend towards contraction [3][4]. Market Dynamics - The closure of traditional dealerships has created gaps in certain regions, prompting new investors like Zhongsheng Group to establish a presence to serve existing brand loyal customers [4][5]. - Zhongsheng Group's expansion includes a mix of traditional and new energy vehicle dealerships, with a notable emphasis on the AITO brand, which is part of their strategy to capture the growing market for electric vehicles [6][7]. Financial Performance - Zhongsheng Group reported a revenue of 168.12 billion yuan in the first half of the year, a decrease of 6.23% year-on-year, with net profit dropping by 35.99% [8]. - Despite the decline in vehicle sales, the after-sales service segment achieved a revenue of 11.445 billion yuan, marking a 4.4% increase, indicating a shift in focus towards service offerings [9]. Service Innovation - The company is innovating its service model by introducing digital showrooms and immersive experience zones to enhance customer engagement and streamline the purchasing process [8][10]. - Zhongsheng Group is also diversifying its service offerings, including a new energy vehicle maintenance service package priced between 7,667 and 29,778 yuan, aimed at new car owners [9][10]. Ecosystem Development - The company is building a comprehensive user ecosystem by integrating high-frequency consumer services, such as coffee shops and car wash services, into its dealership model to enhance customer loyalty and brand recognition [10].