Zhongsheng Group (881) H2 2024 earnings summary

Executive summary

• Total revenue declined 6.2% to RMB 168.1bn, mainly due to lower new car sales and prices, while after-sales and used car segments achieved record revenues and volumes.

• Net profit attributable to owners dropped 36.0% to RMB 3.21bn, with basic EPS down 35.4% to RMB 1.35.

• New car sales volume reached 485,307 units in 2024, down 3.2% year-over-year; used car sales surged 37.9% to 226,231 units.

• The company expanded its active customer base by 10.7% to 4.19 million and enhanced digital engagement with 3.5mn Zhongsheng GO subscribers and 17.2mn live streaming followers.

• Proposed final dividend of HK$0.678 per share, subject to AGM approval.

Financial highlights

• New car gross profit margin remained low at 0.8%, with a gross loss of RMB 3.2bn; used car gross margin was 6.7% and gross profit up 30.8% to RMB 1.23bn.

• After-sales services revenue grew 9.6%–10.8% to RMB 22.0bn, with gross profit up 9.9%–12.0%.

• Total gross profit margin declined to 6.3% from 7.7% year-over-year.

• Operating profit margin dropped to 3.4% from 4.7%; finance costs rose 4.3% to RMB 1.57bn.

• Commission income rose to RMB 4.1bn, 3.0% of vehicle sales.

Outlook and guidance

• Management expects continued intense competition and margin pressure in the new car market in 2025.

• Strategic focus remains on premium after-sales services, local market density, and digital customer engagement.

• Pre-owned and after-sales segments are expected to drive growth amid new car market volatility.