According to the Zhitong Finance App, Zhongsheng Holdings (00881) announced its annual results for the year ended December 31, 2023. The group achieved revenue of RMB 179.29 billion (RMB, same below) during the period, a year-on-year decrease of 0.32%; profit attributable to shareholders of RMB 5.018 billion, a year-on-year decrease of 24.97%; basic profit per share of RMB 2.09; and plans to pay a final dividend of HK$0.797 per share.

According to the announcement, revenue from new car sales was 140.215 billion yuan, down 3.6% from 2022, mainly due to the decline in new car sales in that year. Revenue from the boutique and after-sales service business was 25.090 billion yuan, an increase of 2.0% over 2022. The related changes were minor. Among them, revenue from after-sales service (maintenance, warranty and sheet spray) was 20.076 billion yuan, an increase of 2,699 billion yuan or 15.5% over 2022. This change was mainly due to an increase in the number of after-sales service entrants to the factory during the year and an increase in the average output value contribution of a single unit. Used car sales revenue reached 13.985 billion yuan, an increase of 4.157 billion yuan or 42.3% over 2022, mainly due to the increase in used car sales during the year.

Most of the Group's revenue comes from new vehicle sales, accounting for 78.2% of total revenue for the year ended December 31, 2023 (2022:80.9%). The boutique and after-sales service business accounted for 14.0% of total revenue for the year ended December 31, 2023 (2022:13.7%). Used car sales accounted for 7.8% of total revenue for the year ended December 31, 2023 (2022:5.4%). For the year ended 31 December 2023, almost all of the Group's revenue came from operations in China.

In 2023, the Group's used car business achieved significant growth in terms of transaction volume and comprehensive profit. Since the Group reshaped its used car business strategy in early 2023, the monthly transaction volume has continued to grow from 7,000 units per month in January to 20,000 units per month in December. The total volume of used car transactions increased 17% year over year to over 164,000 units, and the corresponding comprehensive profit increased 55% year over year to more than 1.2 billion yuan, accounting for 6.9% of the annual comprehensive profit, a record high. This achievement is exciting, and strongly validates the Group's new strategy and operational execution, especially in the Chinese used car market environment where pressure is multiplied by fluctuations in the new car market.

By the end of March 2024, the Group operated 20 Zhongsheng brand maintenance service centers in 15 cities. Another 14 were under construction, and 12 additional ones were planned. After all 46 Zhongsheng brand maintenance service centers are completed, they will cover 29 cities (almost all 32 central cities), about 65% of stores, and nearly 70% of active customers. Although the Group is pleased with the progress made in the current centralized maintenance service center strategy, the Group also believes that in order to achieve the goal of integrating the centralized cross-brand local maintenance service market, the Group should bind the two stakeholders, insurance companies and customers, more deeply to the Group's business dynamics, so as to take advantage of potential network effects.