Zhongsheng Group Holdings Ltd. · HKEX:881
Zhongsheng — 1H2023 Earnings Presentation
18 slides from Zhongsheng's earnings presentation, August 2023
Slide 1: Interim Results
ZHONGSHENG GROUP LIFETIME PARTNER #& # tk ## Interim Results
Slide 2: We are One of the Largest Auto Services Providers in China
We are One of the Largest Auto Services Providers in China Customer Scale Financial Scale Volume Scale Recognitions Customers serviced1 Revenue Vehicles sold in total Investment Grade 3.54mn 3.63mn RMB 179.9bn RMB 81.9bn 660k 290k by the top 3 rating agencies As of 31 December 2022 As of 30 June 202
Slide 3: Zhongsheng's Strategic Vision
Zhongsheng’s Strategic Vision To become the most trusted auto service brand for premium consumers in China Core Focus on 130mn OEM brand-agnostic Build a household name Strategies high-income families service offerings for auto services Economies of Delicacy Steady Competitive Edges scale management
Slide 4: Our Brand Mix
Economies of Operational Financial Our Brand Mix Scale Fulfillment Development Performance 416 dealership stores as of 30 June 2023 2 stores newly established and 3 stores exited in 1H23 Luxury Brands1 (267 dealership stores) Western Eastern 70 stores 133 stores 17% 32% 107 54 32 Regional Presence 2
Slide 5: Network Density and Organization Structure
Economies of Operational Financial Network Density and Organization Structure Scale Fulfillment Development Performance 32 Core Cities Beijing Tianjin Hebei Liaoning Changchun Dalian Ningbo Qingdao (Shijiazhuang) (Shenyang) 416 stores in total1 Stores 8 Stores 7 Stores 13 Stores 22 Stores 8 Stores 2
Slide 6: Vehicle Sales Breakdown
Economies of Operational Financial Vehicle Sales Breakdown Scale Fulfillment Development Performance New Car Sales Volume Used Car Sales Volume (units) (units) Growth: (1.5)% Growth: 0.5% 2019-22 CAGR: 4.5% 2019-22 CAGR: 25.2% 528,154 520,396 Growth: (7.6)% 139,413 140,121 Growth: 0.6% 242,280 223,9
Slide 7: Continuous Customer Base Expansion
Economies of Operational Financial Continuous Customer Base Expansion Scale Fulfillment Development Performance Customers Serviced Units Serviced (’0,000) (’0,000) 397 535 Growth: 3.7% Growth: 9.8% 2019-22 CAGR: 15.6% 2019-22 CAGR: 15.2% Growth: 6.8% 648 672 354 363 Growth: 11.7% 340 322 373 334 202
Slide 8: Operational Highlights of Used Car Business
Economies of Operational Financial Operational Highlights of Used Car Business Scale Fulfillment Development Performance Robust car High-quality service and sourcing channels consumer experience Trade-in Auction Direct purchase Se rv Street ic Old for new OEMs es g auction $ cin Driving Trusted ur “
Slide 9: Operational Highlights of CRM Centers
Economies of Operational Financial Operational Highlights of CRM Centers Scale Fulfillment Development Performance Products/services CRM1 Auto insurance renewal Other businesses innovation Pain Points Our Solutions 30 After-sales business expansion CRM centers Scattered staff Centralized staff ◼ Tar
Slide 10: Operational Highlights of Collision Centers
Operational Highlights of Collision Centers Economies of Scale Operational Fulfillment Development Financial Performance Overview of collision centers Optimizing procedures between Establishing and optimizing collision centers and dealer outlets SOPs at collision centers In Under Transferring body &
Slide 11: Major Global Auto Incumbents' NEV Roadmaps and Penetration Progresses
Major Global Auto Incumbents’ NEV Roadmaps and Economies of Operational Financial Scale Fulfillment Development Performance Penetration Progresses China NEV Market Growth1 Electrification and smartification progressions R&D efforts and commitments (1H2023 YoY) Increasing NEV Parc Will Further Bolste
Slide 12: Aggregate Profit Breakdown
Economies of Operational Financial Aggregate Profit Breakdown Scale Fulfillment Development Performance Aggregate Profit (Gross Profit + Commission Income) (RMB mn) Aggregate profit (excl. new car segment) CAGR in 2017-22: 16.3% 21,998 19,796 Growth: (10.1)% 16,631 28.2% 19.9% 14,373 2.2% 2.6% 12,32
Slide 13: Total Revenue
Economies of Operational Financial Total Revenue Scale Fulfillment Development Performance Total Revenue (RMB mn) Growth: 2.7% 2019-22 CAGR: 13.2% 175,103 8,133 179,857 9,828 5.5% Growth: (4.8)% 4.6% 24,609 24,505 14.0% 13.7% 86,029 4,396 5.1% 81,902 5,101 6.3% 142,466 81.4% 145,420 80.9% 12,820 14.
Slide 14: Aggregate Profit
Economies of Operational Financial Aggregate Profit Scale Fulfillment Development Performance New Car Gross Profit After-sales Services Gross Profit (RMB mn) (RMB mn) Margin 4.4% 2.7% 3.2% 1.3% Margin 48.1% 47.1% 47.1% 47.2% 11,783 11,586 6,197 3,940 6,043 5,771 2,201 866 2021 2022 1H2022 1H2023 202
Slide 15: Operational Expenses
Economies of Operational Financial Operational Expenses Scale Fulfillment Development Performance Selling and Distribution Expenses Administrative Expenses (RMB mn) (RMB mn) As % of 4.1% 4.4% 4.3% 4.3% As % of 1.5% 1.4% 1.4% 1.3% revenue revenue 7,170 7,841 2,573 2,446 3,721 3,498 1,194 1,104 2021 2
Slide 16: Operational Efficiency and Financial Return
Economies of Operational Financial Operational Efficiency and Financial Return Scale Fulfillment Development Performance Absorption Ratio1 109% 110% 108% 104% 104% 101% 99% 97% 2017 2018 2019 2020 2021 2022 1H2022 1H2023 ROA and ROE2 (%) 23.4% 23.7% 24.9% 21.9% 22.7% 15.6% 16.7% 13.7% 10.9% 8.0% 7.5
Slide 17: Financial Highlights
Economies of Operational Financial Financial Highlights Scale Fulfillment Development Performance (RMB mn) 2021 2022 1H2022 1H2023 Cash, cash equivalent and cash in transit 11,184 11,829 11,747 16,541 Cash flow from operating activities 10,872 8,785 3,653 3,467 (-) Capex 11,400 1,949 898 449 (+) Fin
Slide 18: Ample Liquidity to Secure Our Business
Economies of Operational Financial Ample Liquidity to Secure Our Business Scale Fulfillment Development Performance Total Assets / Net Assets Adj. Debt / EBITDA1 Interest Coverage2 (x) (x) (x) 13.4 11.9 2.2 2.3 10.7 2.1 2.1 2.1 1.6 8.1 1.4 1.3 2021 2022 1H2022 1H2023 2021 2022 1H2022 1H2023 2021 202
Zhongsheng Group Holdings — 1H2023 Earnings Presentation on 6ix