<Results First Takes> Zhongsheng (881 HK) – 1H22 net earnings slightly below expectation
- Total revenue declined about 1.5% y-o-y to Rmb86bn, despite total new car sales volume fell 12%. Pandemic lockdowns and unstable new vehicle supplies were the main reasons
- After-sales services revenue and pre-owned car revenue rose 13.4% and 25.5% respectively
- Blended GP margin improved 0.1ppt to 9.8%, translating to flat GP of Rmb8.5bn
- Interim net earnings down 7.3% to Rmb3.4bn
Zhongsheng interim results were slightly below expectation under a tough environment.
Total new car sales slipped 12% y-o-y to 242,280 units. Sales volume of luxury brands were down 11% due to pandemic lockdowns and supply disruption. As a result, new car sales revenue decreased 5.2% to Rm68.8bn. Mercedes Benz is the top auto brand, contributing some 41% of new car sales revenue.
Blended GP margin improved 0.1ppt to 9.8%, but new car sales GP margin eased 0.6ppt to 3.2%.Total gross profit was flat at Rmb8.5bn.
After-sales revenue rose 13.4% to Rmb12.8bn and GP grew 10.9% to Rmb6bn.
Pre-owned car revenue increased 10.4% to Rmb4.4bn but gross profit fell 10.4% to Rmb222.6m.
As at 30 Jun, the company has total 417 dealership stores, of which 261 were luxury brand stores (or 63% of total).
More to follow after results briefing today at 4.30pm.