Automobiles Services Holdings Limited...

*Including revenue from finance and insurance agency services

(Hong Kong， 28 August 2018) China Yongda Automobiles Services Holdings Limited ('Yongda Auto' or the 'Company' and， together with its subsidiaries， the 'Group'， stock code: 3669。 HK)， a leading passenger vehicle retailer and comprehensive service provider in China， announced its interim results for the six months ended 30 June 2017 (the 'Period')。

Yongda Auto achieved a strong growth in the Period， the comprehensive revenue and comprehensive gross profit (taking into account the revenue from finance and insurance agency services)， were RMB25，371 million and RMB3，037 million respectively， representing an increase of 12。5% and 14。9%， as compared to the same period last year。 Taking into account the revenue from finance and insurance agency services， the comprehensive gross profit margin for the Period was 11。97%， representing an increase of 0。26 percentage point compared to the same period last year。 In the first half of 2018， its operating profit was RMB1，301 million， representing an increase of 15。2% compared with the same period of 2017。 Meanwhile， the net profit of the Group and net profit attributable to owners of the Company were RMB770 million and RMB723 million respectively， representing an increase of 10。3% and 10。9%， respectively， as compared to the same period last year。

In the first half of 2018， the sales volume of passenger vehicles in China continued to grow stably and the sales volume of luxury brand passenger vehicles achieved a double-digit growth over the same period。 The sales of the Group's luxury brand new vehicles continued to rise。 The Group continued to adhere its customer-oriented strategy。 While continuously improving its own service capabilities， it enhanced its customer experience through digital empowerment and innovation。 The services business has seen rapid improvement every year。 The Group's pre-owned vehicles and finance business maintain steady growth。 Under the premise of fine risk management， it has become a new driving force to the Group's performance growth。

Business Review

The Group achieved strong growth in the first half of 2018， mainly attributed to the steady growth of the new vehicles sales， the increase of after-sales services， and the rapid development of automobile finance and pre-owned vehicles business。 The Group continued to promote channel reform and industry-finance integration， insist refined and digitalized management， strengthen its strategy， and optimize organizational structure and adhere to its customer-oriented strategy to enhance the Group's operating efficiency。

Steady Growth in New Vehicle Sales

During the Period， the new vehicle sales maintained a steady growth， increased by 10。7% to 80，377 units compared to the same period last year， among which， the new vehicle sales of luxury brands increased by 14。3% to 49，082 units The revenue from new vehicle sales of its passenger vehicle sales and service segment amounted to RMB 20，876 million， representing a 10。5% increase compared to the same period last year。 The Group actively optimizes the sales models for its new vehicles。 Through new experience sales models of 'smart retail'， the Group has improved its service efficiency and customer service experience。 Meanwhile， the Group reinforced its advantages in television sales channels and continued to deepen its new vehicle sales model to enhance brand influence and awareness in China。

Rapid and Healthy Growth in After-sales Services

The Group continued to improve through internal management optimization， customer solicitation and cost control。 During the Period， the revenue of the Group's after-sales services business (including repair and maintenance services and automobile extended products and services) reached RMB3，700 million， representing an increase of 20。5% compared to the same period last year。 The gross profit margin of after-sales services was 46。41%， which remained basically flat as compared to 46。76% of the same period last year。

High-speed Growth of its Pre-owned Vehicle Business

During the Period， the sales volume of the Group's pre-owned vehicles was 19，251 units， representing an increase of 19。0% as compared to 16，171 units of the same period last year。 The Group continued to accelerate the building of its 'new retail sales' business model for pre-owned vehicles and saw preliminary results of a brand new business landscape of 'pre-owned vehicles + Internet + physical store + finance + logistics'。 Currently， the Group has built a network with 112 preowned vehicle retail outlets across China， including 83 business outlets officially certified by OEM brands and 29 'Yongda Pre-owned Vehicle Mall' chain outlets。 In the first half of 2018， the Group received the award of 'Leading Enterprise in the Pre-owned Vehicle Industry in China' granted by authoritative bodies including China Automobile Dealers Association。

Strong and Upward Growth Momentum of Automobile Finance

The automobile financing and insurance business of the Group maintained a growth trend。 During the Period， the gross profit of financing and insurance business amounted to RMB630 million， representing a 32。2% increase as compared to the same period last year， and its contribution to the gross profit of the Group also raised from 18。0% of the same period last year to 20。7%。 The revenue from automobile finance and insurance business of the Group totaled RMB712 million， representing a 40。7% increase as compared to the same period last year， of which， the revenue derived from proprietary finance business was RMB245 million， representing a 113。6% increase as compared to the same period last year， and the revenue of its proprietary finance business as a percentage of the revenue of its finance and insurance business significantly increased to 34。5%。 The Group's finance and insurance agency business continued to grow healthily， and achieved revenue of RMB467 million， representing a 19。3% increase compared to the same period last year， among which， the agency revenue derived from its finance business amounted to RMB282 million， representing a 16。3% increase， and the agency revenue derived from its insurance business amounted to RMB185 million， representing an increase of 24。1%。 The group continued to monitor the development and persisting promotion of products combining industry and financing， and bring new momentum for the growth of performance of the Group via product innovation。

Sustainable Growth in Automobile Rental

During the Period， the Group's automobile rental services recorded revenue of RMB191 million， representing an increase of 2。9% compared to the same period last year。 With respect to the long-term rental business， the Group maintained its current advantages as always， with an increasing number of long-term rental contract customers from the world's top 500 and large state-owned enterprises and private enterprises in finance， manufacturing， public services， media entertainment and high-tech sectors。 The Group secured its long-term rental businesses from a number of large customers， such as SAIC-GM， Samsung Semiconductor and Honeywell (China)， and the total amount of orders increased by 7。4% from the same period of last year。 The Group continued to deploy its rental network in China。 Currently， the Group has invested in and established more than 30 rental service outlets in more than ten cities nationwide， and successfully acquired an automobile leasing company with license resources in Shenzhen。 Meanwhile， the Group actively explored opportunities to cooperate with companies and agencies with advantages in terms of customer base and license resources potentials。

Stable Development of New Energy Vehicle Business

The Group expanded its new energy vehicle business。 The Group set up a designated new energy automobile business department and actively cooperated with different emerging new energy automobile brands and broadly conducted the network layout。 The Group also obtained the authorization from domestic renowned innovative new energy vehicle enterprises， such as WM Motor (威馬汽車) and Dearcc (電咖汽車) to prepare to open authorized outlets in Shanghai， Guangzhou and Wuhan; The construction of Shanghai outlet of Dearcc new energy was officially completed， and the construction of the sales and service outlets of WM Motor new energy in the foresaid three cities will be completed in September 2018。 At the same time， the Group is cooperating with the above and other new energy vehicle brands and is closely negotiating the outlet authorization in other cities， laying a good foundation for itself to further expand the scale of sales and services business of new energy vehicles。

Continuous Optimization and Improvement of its Network

In respect of developing self-built outlets authorized by manufacturers， the Group opened 8 new passenger vehicles sales and services outlets which focused on luxury and ultra-luxury brands， including 1 Porsche 4S dealership， 1 Cadilac 4S dealership， 3 Volvo 4S dealerships， 1 Dearcc 4S dealership and 2 Porsche city showrooms。 In regard to new outlets authorizations， the Group obtained authorization to open 12 new passenger vehicles sales and services outlets that focused on luxury and ultra-luxury brands， including 1 BMW 4S dealership， 1 Lexus 4S dealership， 1 Volvo 4S dealership， 1 Infiniti 4S dealership， 4 WM 4S dealerships， 1 Dearcc 4S dealership， 2 BMW motorcycle showrooms and 1 Aston Martin city showroom。 During the Period， the Group completed 2 Lynkco 4S dealships， and are actively negotiating with several potential acquisition targets。 The total number of outlets that are opened and outlets with authorisation to be opened amounted to 254。 These outlets are located over 4 municipalities and 18 provinces in China， including 181 opened outlets with manufacturers' authorization， 55 outlets without manufacturers' authorization and 18 outlets with authorizations to be opened。

Future Outlook and Strategies

In the first half of 2018， the passenger vehicles market in China maintained a sustainable growth。 Tariff adjustment policy on imported automobiles， spare parts and accessories since July 2018 will accelerate the integration of domestic automobile industry and is expected to further speed up the development of luxury brands。 Meanwhile， under the guidance of environmental policy， new energy vehicles will also usher in a historical opportunity period。

The Group will firmly uphold its position as a dealership group of luxury automobiles and continue to develop the business of the sales and services of luxury and ultra-luxury automobiles brands。 In recent years， there have been update cycles of major luxury brands， such as BMW， Porsche and Audi。 Jaguar and Land Rover， Volvo， Cadillac and Lincoln， which are in the second echelon of luxury brands， have also recorded fast growth of sales。 Therefore， the increasing market share of luxury brand vehicles will promote the sustainable growth of its business。 The Group also focused on the high-speed growth of new energy vehicle industry， thus established a professional team and technical reserves and actively cooperated with the current global major brand vehicle manufacturers and the emerging Internet vehicle enterprises to explore market share in the sales and services business of new energy vehicles。

The Group will be committed to upgrading the scale and capability of national sales and services network。 Apart from expanding the outlets of major luxury brands such as BMW， Porsche and Audi and rapidly increasing regional market share through merger and acquisition， as for existing outlets in operation， the Group will break through time and geographical limitations by various means， such as satellite service outlets establishment， 'smart retail' model transformation and Internet technology application， to develop more diversified service carrying capacity of existing outlets。

With respect to its pre-owned vehicle business， the Group will actively push forward the nationwide network expansion of front-end light-asset physical chain outlets ， namely 'Yongda Pre-owned Vehicle Mall' through building the mid- and background system which have the integration of unified quotation， appraisal and certification， and focus on the pre-owned vehicles Internet E-commerce by using the Online-to-Offline (O2O) business model of the one-stop online mall to build its online exhibition and sales platform integrating direct selling， consignment， order matching and inventory financing。

With respect to its finance and insurance services business， with the principle of 'stably developing its proprietary business while actively expanding its agency business'， the Group will uphold asset quality and risk management as the primary basis for development， promote an innovative product strategy of industry-finance integration， adopt a sales model of integrated finance and insurance， implement a partnership program to push forward channel building， further invest in financial technology and continue to explore new finance development model in line with the development of automobile industry。

The Group noted that the travelling services demand of new generation of consumer groups is increasing， so the Group established a professional traveling service company with a professional team， and carried out relevant layout and exploitation of travelling service industry。 Leveraging on its industrial experience in automobile rental industry and competitive edge of asset operation and management， the Group established a strategic cooperation with certain new energy vehicle brands relying on Internet platforms。 The Group hopes to achieve intelligent， compliant and effective operation of localized fleet of automobiles， satisfying the need for safe， convenient and comfortable travelling services。

Mr。 Cheung Tak On， Chairman of Yongda Auto， stated， 'The Company will continue to develop its luxury brand vehicle sales and services business。 While stably enhancing its network and business scale， it has been promoting its pre-owned vehicle and finance business development and through digital empowerment improving its operating quality and customer experience。 In the future， the company will continue to focus on business opportunities in new energy vehicles and related services， and further enrich its customer travel service。 The inclusion of Yongda Auto in the Hang Seng Stock Connect Hong Kong Index will help the company further optimize and upgrade its business through the integration of capital and industry， and achieve mutual benefits for shareholders， employees， customers and the society。'

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About China Yongda Automobiles Services Holdings Limited (Stock code: 3669)

Yongda Auto is a leading passenger vehicle retailer and comprehensive service provider in China， focusing on luxury and ultra-luxury automobile brands， including BMW， Bentley， Aston Martin， Porsche， Mercedes-Benz， Jaguar， Land Rover， Audi， Lincoln， Volvo， Infiniti， Cadillac， and Lexus。 Yongda Auto's extensive 4S dealership network has a strong presence in China。 Yongda Auto initiated the comprehensive vehicle sales industry chain including trainings， purchases， vehicles resales， rental， repairs and inspections。 Yongda Auto is committed to providing a comprehensive range of automobile-related services， which includes new vehicle sales， automobile finance and insurance， auto accessories， after-sales services， pre-owned vehicles replacement and sales， repair chain brand， auto spare parts and maintenance and other related services。 The Group builds an omni-channel retail industry condition combined by online platform and offline networks， creating efficiency auto-life service platform。 The Group has garnered China's Top 500 Enterprises (中國企業500强)， China Well-known Trademark (中國馳名商標)， China's Top 100 Automobile Dealerships (中國汽車經銷商集團百强企業) and Civilized Unit in China (全國文明單位)。

Issued by PR ASIA Consultants Limited on behalf of China Yongda Automobiles Services Holdings Limited。

For enquiries， please contact PR ASIA Consultants Limited:

Mr。 Tsz Lung Chow / Ms。 Stephanie Lai / Ms。 Millie Chan

Tel: (852) 3183 0232 / 3183 0240 / 3183 0266

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E-mail: yongda@prasia。net