Zhongsheng Group Holdings Ltd. · HKEX:881
Zhongsheng — FY2023 Earnings Presentation
18 slides from Zhongsheng's earnings presentation, 2024
Slide 1: 2023 Annual Results
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Slide 2: Our Strategic Vision
Our Strategic Vision To become the most trusted auto service brand for premium consumers in China Premium positioning Brand reputation Auto services Local density3 Sales volume of luxury brand Retained customers2 Used car sales volume Avg. # of active customers 305k units 3,790k 164k units 110k Mark
Slide 3: Business Network in Core Cities
Business Network in Core Cities 32 Core Cities 420 Stores in total1 Beijing 1 Tianjin Hebei Liaoning Changchun 1 Ningbo 1 Shanghai 1 (Shijiazhuang) (Shenyang) Stores 7 Stores 7 Stores 13 Stores 21 Stores 8 Stores 10 Stores 11 Customers 50k Customers 100k Customers 200k Customers 80k Customers 80k Cu
Slide 4: Centralized CRM System at Local Level
Centralized CRM System at Local Level Advantages of Zhongsheng’s centralized CRM system Scale of digital CRM channels Traditional model: VIN-based and brand- ZS model: customer-centric CRM catering to customers, vehicles specific store-based services and lifestyle that is unbounded by any brand or s
Slide 5: Centralized CRM System at Local Level (Cont'd)
Centralized CRM System at Local Level (Cont’d) Acquiring customers through cleaning and Acquiring customers detailing services through new car sales Acquiring customers through social media Hainan rental platforms Courtesy car Customers events Roadside Acquiring Free appraisal assistance customers M
Slide 6: Business Updates on Collision Centers
Business Updates on Collision Centers The lens of Coverage and progresses of collision centers Zhongsheng Under In operation Planned construction Higher Greater local mkt efficiency ZS collision consolidation centers No. of collision centers 20 14 12 Growth No. of cities covered1 15 24 29 More brand
Slide 7: Operational Highlights of Used Car Business
Operational Highlights of Used Car Business Robust inventories sourcing channels An example of private traffic on social media ⚫ Trade-ins / auctions / direct ⚫ Increase proportion of purchases retail sales inventories Leads generated Leads Internal circulation / fleets / Identify key profit models
Slide 8: Our Brand Mix and Local Market Share
Our Brand Mix and Local Market Share 420 dealership stores as of 31 December 2023 13 stores newly established and 10 stores exited in 2023 Luxury Brands1 (269 dealership stores) Newly-established and acquired stores 2023 City Mercedes-Benz 4 Suzhou, Nanjing, Guangzhou, Yunfu 109 55 33 Lexus 1 Guangz
Slide 9: Global Major OEMs On-track for EV Transition
Global Major OEMs On-track for EV Transition Electrification roadmap of major foreign car companies NEV model summary1 New electric platform and Growth of NEV Brand NEV sales target (*model to be launched in 2024) technology penetration (%) ⚫ MMA, a modularized platform for small EQA EQS Maybach EQS
Slide 10: Vehicle Sales Breakdown
Vehicle Sales Breakdown New Car Sales Volume Used Car Sales Volume (units) (units) Change: (3.6%) Growth: 17.1% 520,396 164,109 501,570 140,121 2022 2023 2022 2023 Luxury Brands Contribution to New Car Sales Volume Luxury Brands Contribution to Used Car Retail Sales Volume (%) (%) 12.7% 16.2% 40.9%
Slide 11: Continuous Customer Base Expansion
Continuous Customer Base Expansion Customers Serviced Units Serviced (’0,000) (’0,000) Growth: 11.2% Growth: 7.1% 747 379 672 354 2022 2023 2022 2023 Insurance Policies Brokered Auto Financing Penetration Rate (’0,000) (%) Growth: 0.0% Change: (0.2) ppt 200 200 69.4% 69.2% 2022 2023 2022 2023 10
Slide 12: Aggregate Profit Breakdown
Aggregate Profit Breakdown Aggregate Profit (Gross Profit + Commission Income) 1 (RMB bn) As disclosed in financial reports 22.0 19.8 16.6 6.2 17.9 14.4 3.9 1.1 10.5 12.3 3.7 0.5 0.5 4.1 0.9 2.9 0.2 3.5 3.8 2.9 2.9 3.1 3.0 2.4 1.8 11.8 11.6 11.8 7.0 8.6 9.6 5.7 2017 2018 2019 2020 2021 2022 2023 Acc
Slide 13: Total Revenue
Total Revenue Total Revenue New Car Sales by Brand Type (RMB mn) (%) 22.4% 21.6% 179,857 179,290 9,828 5.5% 7.8% 2022 2023 13,985 24,609 13.7% 14.0% 25,090 77.6% 78.4% Luxury brands Mid-to-high-end brands New Car Sales by Brand (%) 145,420 80.8% 140,215 78.2% 11.7% 11.7% 6.6% 6.8% 41.1% 40.9% 2022 2
Slide 14: Aggregate Profit
Aggregate Profit New Car Gross Profit Accessories, Packages and After-sales Services Gross Profit (RMB mn) (RMB mn) Margin 2.7% 0.8% Margin 47.1% 46.9% 11,586 11,766 3,940 4,075 2,472 1,058 9,294 7,511 2022 2023 2022 2023 After-sales Services Gross Profit Accessories, Packages Gross Profit Used Car
Slide 15: Operational Expenses
Operational Expenses Selling and Distribution Expenses Administrative Expenses (RMB mn) (RMB mn) As % of 4.4% 4.3% As % of 1.4% 1.3% revenue revenue 7,841 7,737 2,446 2,419 2022 2023 2022 2023 Finance Costs Effective Tax Rate1 (RMB mn) (%) As % of 0.7% 0.8% revenue 25.9% 26.9% 1,507 1,219 2022 2023
Slide 16: Operational Efficiency and Financial Return
Operational Efficiency and Financial Return Absorption Ratio1 108% 104% 104% 99% 101% 101% 97% 2017 2018 2019 2020 2021 2022 2023 ROA and ROE (%) 23.4% 24.9% 21.9% 22.8% 20.7% 15.7% 10.9% 11.1% 8.0% 7.5% 8.5% 7.5% 7.1% 5.1% 2017 2018 2019 2020 2021 2022 2023 ROA ROE 1 Absorption Ratio = After-sales
Slide 17: Other Financial Highlights
Other Financial Highlights (RMB mn) FY2022 FY2023 Cash, cash equivalent and cash in transit 11,829 15,730 Cash flow from operating activities 8,785 6,426 (-) Capex1 2,432 1,136 (-) Lease payments 778 817 Free cash flow 5,575 4,473 Profit before tax 8,951 6,831 (-) Interest income 240 455 (+) Financi
Slide 18: Leverage and Liquidity
Leverage and Liquidity Total Assets / Net Assets Adj. Debt / EBITDA1 Interest Coverage2 (x) (x) (x) 2.7 2.2 10.7 2.1 1.6 7.0 2022 2023 2022 2023 2022 2023 1Adj. Debt includes trade and bills payables, excluding inventory ；2 Interest coverage = (Profit before tax + financial expenses + depreciation a
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