[881 Performance] Zhongsheng's Annual Results Turn from Profit to Loss, Recording a Loss of 1.673 Billion Yuan; No Final Dividend Distribution; Two Founders Will Reduce 2026 Salary to 1 Yuan to Demonstrate Determination

Zhongsheng Holdings (00881)
Last year’s results turned from profit to loss, recording a loss of RMB 1.673 billion, while the same period in 2024 was a profit of RMB 3.212 billion, mainly due to a sharp increase in other expenses by 21.9 times to RMB 2.29 billion; basic and diluted loss per share was 71 cents, compared to a profit of 135 cents per share in the same period last year; no final dividend is paid, whereas the same period last year paid a dividend of 67.8 HK cents per share.

Revenue for the period was RMB 164.403 billion, down 2.2% year-on-year; among them, car sales revenue decreased by 1.7% to RMB 138.3 billion; luxury goods and after-sales service revenue fell by 4.7% to RMB 26.1 billion.

During the reporting period, Zhongsheng’s gross profit decreased by 17.2% year-on-year to RMB 8.838 billion; gross profit margin was 5.4%, down 0.9 percentage points year-on-year; pre-tax loss was RMB 2.058 billion, compared to a pre-tax profit of RMB 4.103 billion in the same period last year.

The company sold 497,000 new cars last year, an increase of 2.5% year-on-year. Among them, the luxury brand sales accounted for 62.6%, effectively offsetting the decline in traditional fuel vehicle sales. As for the used car business, last year’s sales volume was 221,000 units, down 2.2% year-on-year, but the average price per vehicle fell by 17.6% to RMB 56,000, with gross profit per vehicle halved.

Continuing to optimize brand layout

Looking ahead, the transformation and upgrading of the automotive industry are still deepening. Zhongsheng will continue to build Zhongsheng into “the most trusted automotive service brand for quality consumers,” while continuously optimizing the matrix layout of traditional luxury brands and new energy brands, steadily progressing toward long-term development goals.

To demonstrate the company’s determination to overcome difficulties with all employees and promote high-quality development, the two founders have decided to reduce their salaries to RMB 1 for 2026.

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Additionally, Zhongsheng Holdings announced on the same day the appointment of Yu Jian as Executive Director and Chief Financial Officer; Yu Ning has resigned as Executive Director and has been promoted from CFO to Financial Director, both effective from Thursday (26th).

Source: HKEX Announcement