ZHONGSHENG HLDG(00881) 开源证券·2025-01-26 06:57Investment Rating - The report assigns a "Buy" rating for Zhongsheng Holdings (00881.HK) [4] Core Views - Zhongsheng Holdings is a leading automotive dealer in China, focusing on luxury and mid-to-high-end brands, with a strategic shift towards new energy vehicles [4][22] - The company is expected to see revenue growth from 2024 to 2026, with projected revenues of 1794.76 billion, 1841.02 billion, and 1807.36 billion CNY respectively, and net profits of 25.45 billion, 31.64 billion, and 49.40 billion CNY [4] - The current price-to-earnings (P/E) ratio is projected to be 11.0, 8.9, and 5.7 for the years 2024, 2025, and 2026, indicating a low valuation compared to peers [4] Summary by Sections Company Overview - Zhongsheng Holdings ranks first in the 2024 list of China's top automotive dealers, with a focus on brands like Mercedes-Benz and Lexus [4][22] - The company operates 419 4S outlets across 32 major cities, providing comprehensive automotive services [23] Financial Performance - In the first half of 2024, the company reported revenues of 824.21 billion CNY, with a year-on-year growth of 0.6% [31] - New car sales revenue was 608.12 billion CNY, down 5.8% year-on-year, primarily due to price competition [31] - The net profit for the first half of 2024 was 15.8 billion CNY, a decline of 47.5% compared to the previous year [33] Business Segments - The new car segment faced challenges with a gross margin of -3.3% in the first half of 2024, marking the first loss in this area [5][37] - The after-sales and used car segments showed resilience, with after-sales revenue growing by 9.3% and used car revenue increasing by 61.6% year-on-year [31][37] Market Position and Strategy - The company is transitioning towards new energy vehicle sales, having partnered with Seres to enhance its offerings [4][22] - Zhongsheng's centralized operations have improved efficiency, particularly in after-sales and used car businesses [6][31] Valuation Metrics - The projected P/E ratios for 2024, 2025, and 2026 are 11.0, 8.9, and 5.7 respectively, indicating a favorable valuation compared to industry averages [4][7]