Zhongsheng Group Holdings Ltd. · HKEX:881
Zhongsheng — FY2022 Earnings Presentation
20 slides from Zhongsheng's earnings presentation, 2023
Slide 1: 2022 Annual Results
2022 Annual Results
Slide 2: We are One of the Largest Automobile Dealers in China
We are One of the Largest Automobile Dealers in China Customer Scale Financial Scale Volume Scale Recognitions 3.54mn RMB 179.9bn 660k Investment Grade customers serviced1 revenue2 vehicles sold in total2 by the Top 3 rating agencies 6.72mn RMB 19.8bn 140k #1 units serviced2 aggregate profit1 pre-ow
Slide 3: Adhering to Our Customer-centric Strategy
Adhering to Our Customer-centric Strategy Customer Centricity Customer Satisfaction Economies Delicate Steady of Scale Management Growth % of luxury brands Number of dealerships by sales volume Aggregate profit Acquisition and integration of Dealer network optimization + 360 417 50% 59% RMB14.3bn RM
Slide 4: Our Outstanding Brand Mix
Economies Delicate Steady Financial Our Outstanding Brand Mix of Scale Fulfillment Management Growth Performance Persistent Focus on Core Luxury Brands Number and Distribution of Dealerships in Operation Mid-to-high-end Luxury Brands 1 Brands 2 417 dealership stores as of Dec 31, 2022 Central Northe
Slide 5: Superior Network Across China
Economies Delicate Steady Financial Superior Network Across China of Scale Fulfillment Management Growth Performance Persistent Focus on More Economically Developed Cities and Regions 417 stores in total 32 Core Cities Eastern Southern Northeastern Southwestern & 24 new stores Shanghai Qingdao Chang
Slide 6: Luxury Brands Driven Sales Volume
Economies Delicate Steady Financial Luxury Brands Driven Sales Volume of Scale Fulfillment Management Growth Performance New Car Sales Volume Used Car Sales Volume (units) (units) YoY growth: (1.5)% YoY growth: 0.5% 2019-22 CAGR: 4.5% 2019-22 CAGR: 25.2% 528,154 520,396 139,413 140,121 2021 2022 202
Slide 7: Continuous Customer Scale Expansion
Economies Delicate Steady Financial Continuous Customer Scale Expansion of Scale Fulfillment Management Growth Performance Customers Serviced Units Serviced ('0,000) ('0,000) YoY growth: 3.7% 397 2019-22 CAGR: 15.6% YoY growth: 9.8% 672 648 2019-22 CAGR: 15.2% 354 322 2021 2022 2021 2022 # of WeCom
Slide 8: Middle-office Platform (MOP) Strategy
Economies of Delicate Steady Financial Middle-office Platform (MOP) Strategy Scale Fulfillment Management Growth Performance Our Professional Management Teams, Organizational Structure and Internal Audit and Internal Control Functions Together Lead to Best-in- class Store Operations Efficiency and P
Slide 9: 31 pct 3 bn 10 bn
Filming Captive tow trucks at a CBS center CBS center in Dalian 63% 31pct 36% ~RMB 3bn ~RMB 10bn 67% average cut of average increase in average decrease in annual procurement annual auto insurance service ratio of paint ovens production loading of # of servicemen premium brokered 3-year-old vehicles
Slide 10: Innovation for Customer Experience
Economies of Delicate Steady Financial Innovation for Customer Experience Scale Fulfillment Management Growth Performance We are Leading the Market with Innovative Operations, Services and Products Omni-channel Operations Service and Products Innovation WeCom Operation at Dalian CRM Center Monthly c
Slide 11: Proven M&A Track Records
Economies of Delicacy Steady Financial Proven M&A Track Records Scale Fulfillment Management Growth Performance Our Professional Management Teams and Delicate Management System Ensure Successful Integration M&A Track Records Successful Integration Volume Expansion 1 56 1 1 10% 21% Luxury brands incr
Slide 12: Institutionalization of Used Car Market
Economies of Delicacy Steady Financial Institutionalization of Used Car Market Scale Fulfillment Management Growth Performance Playing to Our Strengths in All Aspects in the Course of Used Car Institutionalization Promising Used Car Market in China Rising Automobile Ownership in China Our Edges (mn
Slide 13: Prudent and Thoughtful NEV Strategy
Economies of Delicacy Steady Financial Prudent and Thoughtful NEV Strategy Scale Fulfillment Management Growth Performance 2022 NEV Price Range by Type 2022 NEV Price Range by Brand Mercedes-Benz EQE SUV (in RMB'0,000) (in RMB'0,000) Minicar 4.8 5.9 Local brands 14.0 18.5 Compact sedan 13.5 14.2 Mid
Slide 14: Rising Aggregate Profit
Economies of Delicacy Steady Financial Rising Aggregate Profit Scale Fulfillment Management Growth Performance Customer Scale and Delicate Management System Bolster Aggregate Profit Growth Aggregate Profit 1, 2 (RMB mn) New car gross margin 4.0% 3.1% 2.7% 3.0% 4.4% 2.7% Aggregate profit CAGR (excl.
Slide 15: Total Revenue
Economies of Delicate Steady Financial Total Revenue Scale Fulfillment Management Growth Performance Total Revenue New Car Sales by Brand Type (RMB mn) (%) YoY growth: 2.7% 22.4% 23.8% 2019-22 CAGR: 13.2% 175,103 179,857 5.5% 2021 2022 8,133 4.6% 9,828 13.7% 24,505 14.0% 24,609 76.2% 77.6% Luxury br
Slide 16: Aggregate Profit
Economies of Delicate Steady Financial Aggregate Profit Scale Fulfillment Management Growth Performance New Car Gross Profit Parts, Packages and After-sales Services Gross Profit (RMB mn) (RMB mn) Margin 4.4% 2.7% Margin 48.1% 47.1% 6,197 11,783 11,586 3,940 2021 2022 2021 2022 Used Car Gross Profit
Slide 17: Operational Expenses
Economies of Delicate Steady Financial Operational Expenses Scale Fulfillment Management Growth Performance Selling and Distribution Expenses Administrative Expenses (RMB mn) (RMB mn) As % of revenue 4.1% 4.4% As % of revenue 1.5% 1.4% 7,170 7,841 2,573 2,446 2021 2022 2021 2022 Finance costs Effect
Slide 18: Average Store Efficiency and Overall Return
Average Store Efficiency and Economies of Delicate Steady Financial Fulfillment Overall Return Scale Management Growth Performance Gross Profit per Store and Absorption Ratio (RMB mn) Absorption 99% 97% 104% 104% 109% 101% Rate 40 45 45 37 39 38 2017 2018 2019 2020 2021 2022 ROA and ROE (%) 23.4% 23
Slide 19: Financial Highlights
Economies of Delicate Steady Financial Financial Highlights Scale Fulfillment Management Growth Performance (RMB mn) 2021 2022 Cash, cash equivalent and cash in transit 11,184 11,829 Cash flow from operating activities 10,872 8,785 (-) Capex 4,073 2,432 (-) Lease payments 728 778 Free cash flow 6,07
Slide 20: Ample Liquidity to Secure Our Business
Economies of Delicate Steady Financial Ample Liquidity to Secure Our Business Scale Fulfillment Management Growth Performance Total Assets / Net Assets Adj. Debt/EBITDA Interest Coverage (x) (x) (x) 13.4 2.1 10.7 2.1 1.6 1.4 2021 2022 2021 2022 2021 2022 Adj. Debt includes trade and bills payables,
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