Zhongsheng Group (881) H1 2026 earnings summary

Executive summary

• Revenue for H1 2026 declined 18.5% year-over-year to RMB63,022.3 million, mainly due to lower new and pre-owned vehicle sales volumes and average selling prices.

• Gross profit increased 20.0% year-over-year to RMB5,052.7 million, with gross margin improving to 8.0% from 5.4% due to after-sales services and better cost structure.

• Profit attributable to owners dropped 89.1% year-over-year to RMB110.6 million, reflecting lower commission income and operational profit.

• The company continued to optimize its dealership network, closing underperforming stores and expanding NEV brand presence.

• No interim dividend was declared for the period.

Financial highlights

• New car sales volume fell 17.6% year-over-year to 188,463 units; pre-owned car sales volume dropped 35.9% to 71,302 units.

• After-sales services revenue was stable at RMB11,538.8 million, with gross profit up 2.7% to RMB5,585.6 million and margin rising to 48.4%.

• Commission income plunged 78.7% to RMB392 million due to regulatory changes.

• Operating profit margin decreased to 1.3% from 2.5% year-over-year.

• Basic and diluted EPS was RMB0.047, down from RMB0.427 year-over-year.

Outlook and guidance

• Plans to operate 300 NEV brand stores by year-end, targeting NEV sales to reach 35% of total volume run rate by December 2026.

• Continued focus on network optimization, cost efficiency, and after-sales service expansion.

• Pre-owned business will remain a supporting function, with resources redirected to core new car and after-sales segments.

• Prudent capex and property utilization will remain a priority in network expansion.