Zhongsheng Group (881) H1 2026 earnings summary

Executive summary

• Total revenue for 1H2026 was RMB 63,022.3 million, down 18.5% year-over-year, mainly due to lower new and pre-owned vehicle sales volumes and average selling prices.

• Gross profit increased 20.0% year-over-year to RMB 5,052.7 million, with gross margin improving to 8.0% from 5.4% due to after-sales services, better cost structure, and sales mix.

• Profit attributable to owners dropped 89.1% year-over-year to RMB 110.6 million, reflecting significant pressure on core profitability and lower commission income.

• No interim dividend was declared for the period.

Financial highlights

• New car sales volume fell 17.6% year-over-year to 188,463 units; pre-owned car sales volume dropped 35.9% to 71,302 units.

• After-sales services revenue was stable at RMB 11,538.8 million, with gross profit up 2.7% to RMB 5,585.6 million and gross margin rising to 48.4%.

• Commission income plunged 78.7% to RMB 392 million due to regulatory changes.

• Adjusted net profit for 1H2026 was RMB 86 million, with adjusted EBITDA at RMB 924 million.

• Operating profit margin decreased to 1.3% from 2.5% year-over-year.

Outlook and guidance

• Traditional brand new car gross margin is expected to continue recovering, supported by narrowing price gaps and cost controls.

• NEV brand store expansion will continue, targeting 300 stores and NEV sales to reach 35% of total volume run rate by December 2026.

• After-sales service business will focus on optimizing structure, enhancing earnings quality, and expanding market share.

• Prudent capex and property utilization will remain a priority in network expansion.

• Pre-owned business will remain a supporting element, with resources redirected to core strengths.