Zhongsheng Group Holdings Ltd. · HKEX:881
Zhongsheng — H1 2024 Earnings Presentation
17 slides from Zhongsheng's earnings presentation, 2024
Slide 1: 2024 Interim Results
2024 Interim Results
Slide 2: Zhongsheng Strategic Vision: Most Trusted Auto Service Brand for Premium Consumers
Zhongsheng Strategic Vision: To Become the Most Trusted Auto Service Brand for Premium Consumers in China New Car Sales Volume Market Share of Luxury Brands1 Premium Positioning 502k units 233k units 16.0% 17.1% 2023 1H2024 2023 1H2024 Active Customers2 Zhongsheng GO Subscribers Brand Reputation 3.7
Slide 3: Context of Zhongsheng Branded Auto Services Strategy
Context of Zhongsheng Branded Auto Services Strategy #1: Transforming to Car Parc Market #2: More Sophisticated Customers #3: Expediting Market Consolidation China passenger vehicle repeat purchase rate1 100% 60.9% ~ 15.1mn 80% ~80% % of ownership for 60% Car parc of traditional ALL luxury brands in
Slide 4: Business Presence in Core Cities
Business Presence in Core Cities 32 Core Cities 419 Stores in total1 Liaoning Yantai and 1 Qingdao Hebei 1 Jiangsu 2 Zhejiang 1 Dalian 2 (Shenyang) Weihai (Shijiazhuang) (Nanjing) (Hangzhou) Stores 22 Stores 21 Stores 13 Stores 12 Stores 11 Stores 26 Stores 16 Customers 250k Customers 200k Customers
Slide 5: Customer-centric Orientation and Brand-agnostic Operations
Customer-centric Orientation and Brand-agnostic Operations Brand-agnostic New Car Servicing and OEM Collision Cleaning and Used Car Customer Insurance Courtesy Roadside Sales Maintenance Warranty Repair Detailing Sales Service Renewal Car Assistance Operations Customer Engagement Customer Customer A
Slide 6: Centralized Operations Driving Growth in All Business Segments
Centralized Operations Driving Growth in All Business Segments Taking the aggregated data from Shenzhen, Dalian, Chengdu and Nanjing (leading core cities in four regions) as an example1 Shenzhen Unchanged 9 +6% +10% +14% Number of Collision # of servicing / Collision Warranty visits dealership store
Slide 7: Continuous After-sales Services Business Expansion
Continuous After-sales Services Business Expansion Customers Serviced Units Serviced (0’000) (0’000) Luxury 61.5% 62.3% 62.4% 62.4% % Growth: 11.2% Growth: 7.1% Growth: 8.5% 747 Growth: 5.6% 394 672 379 363 354 373 394 2022 2023 1H2023 1H2024 2022 2023 1H2023 1H2024 Insurance Policies Brokered After
Slide 8: Centralized Used Car Business
Centralized Used Car Business Performance highlights: Zhongsheng model: Resilient profitability against pricing pressure Refined operations across all business procedures Against the backdrop of new car price volatility… Price Reduction Index 1 Robust inventories Omni-channel -20% Refined operations
Slide 9: New Car Sales Brand Mix and Market Share in Core Cities
New Car Sales Brand Mix and Market Share in Core Cities 419 Dealership Stores as of 30 June 20241 29% 52% 18% 18% 32% 6% 111 55 33 Luxury Brands 269 dealership stores2 18% 40% 36% 6% 10% 10% 30 20 18 24% 40% 25% 10% 3% 2% Mid-to-high-end Brands 105 22 22 150 dealership stores3 Number of Stores Marke
Slide 10: Vehicle Sales Breakdown
Vehicle Sales Breakdown New Car Sales Volume Used Car Sales Volume (units) (units) Change: (3.6)% Growth: 17.1% Growth: 53.9% 520,396 501,570 164,109 Growth: 3.9% 140,121 212,962 196,788 101,525 223,901 232,543 65,977 307,434 83,663 89,909 304,782 140,238 142,634 2022 2023 1H2023 1H2024 2022 2023 1H
Slide 11: Aggregate Profit Breakdown
Aggregate Profit Breakdown Aggregate Profit (Gross Profit + Commission Income)2 (RMB bn) Accessories, Disclosure in New car Used car packages and after- Commi- As disclosed in financial reports Financial ssion gross profit gross profit sales services gross Reports income1 22.0 profit 19.8 17.9 6.2 3
Slide 12: Proactive and Prudent Liabilities Management
Proactive and Prudent Liabilities Management • With robust debt management capability, we have proactively developed a debt repayment plan, clearing all uncertainties in operations to the extent possible • Tapping diversified onshore and offshore refinancing channels, including but not limited to: ✓
Slide 13: Revenue Breakdown
Revenue Breakdown Total Revenue Accessories, Packages and After-sales Services Revenue (RMB mn) (RMB mn) Growth: (0.3)% Growth: 2.0% 179,857 179,290 5.5% 7.8% 13.7% Growth: 0.6% 24,609 25,090 14.0% Growth: 9.3% 29.4% 20.0% 81,902 82,421 13,369 6.3% 10.0% 12,232 80.8% 78.2% 14.9% 16.2% 18.0% 80.0% 21
Slide 14: Aggregate Profit Breakdown
Aggregate Profit Breakdown New Car Gross Profit Accessories, Packages and After-sales Services Gross Profit (RMB mn) (RMB mn) Margin 2.7% 0.8% 1.3% (3.3)% Margin 47.1% 46.9% 47.2% 47.1% 11,586 11,766 3,940 2,472 4,075 5,771 6,298 1,058 866 1,263 9,294 1,305 7,511 4,466 5,035 (1,990) 2022 2023 1H2023
Slide 15: Operational Expenses
Operational Expenses Selling and Distribution Expenses Administrative Expenses (RMB mn) (RMB mn) As % of As % of 4.4% 4.3% 4.3% 4.2% 1.4% 1.3% 1.3% 1.3% revenue revenue 7,841 7,737 2,445 2,419 3,498 3,447 1,104 1,091 2022 2023 1H2023 1H2024 2022 2023 1H2023 1H2024 Finance Costs Absorption Ratio1 (RM
Slide 16: Other Financial Metrics
Other Financial Metrics Total Assets / Net Assets ROA and ROE1 (x) (%) Net 6.6bn 5.0bn 3.0bn 1.5bn Income 2.2 2.3 2.3 2.1 15.7% 13.7% 11.1% 7.5% 6.3% 6.5% 5.1% 2.9% 2022 2023 1H2023 1H2024 2022 2023 1H2023 1H2024 ROA ROE Adj. Debt / EBITDA2 Interest Coverage3 (x) 3.3 (x) 2.7 2.2 10.7 8.1 1.6 7.0 5.6
Slide 17: Financial Highlights
Financial Highlights (RMB mn) 2022 2023 1H2023 1H2024 Cash and cash equivalent 11,679 15,612 16,353 17,146 Term deposits 500 1,955 659 1,897 Pledged bank deposits 1,309 1,916 1,550 1,810 Cash in transit 150 118 188 349 Cash, cash equivalent and cash in transit 13,638 19,601 18,750 21,202 Cash flow f
Zhongsheng Group Holdings — H1 2024 Earnings Presentation on 6ix