1H 2014

2014 Interim Result
August 2014
Disclaimer

These materials have been prepared by Zhongsheng Group Holdings Limited (“Zhongsheng”
together with its subsidiaries, the “Group”) independently and have not been independently
verified. No representation or warranty, expressed or implied, is made and no reliance should
be placed on the accuracy, fairness or completeness of the information, statements, opinions
or estimates presented or contained in these materials. The Company or any of its
affiliates, advisers or representatives accepts no liability whatsoever for any loss howsoever
arising from any information, statements, opinions or estimates presented or contained in
these materials. The information, statements, opinions or estimates presented or contained in
these materials is subject to change without notice and its accuracy is not guaranteed.

These materials are highly confidential, are being given solely for your information and for
your use and may not be copied, reproduced or redistributed to any other person in any
manner. Neither these materials nor any copy hereof maybe, directly or indirectly, taken or
distributed into the United States or to any U.S. person as defined in Regulation S under the
U.S. Securities Act of 1933, as amended. You agree to keep the contents of this presentation
and these materials confidential and such presentation and materials form a part of the
Confidential Information as defined in the confidentiality agreement previously executed by
you.
Agenda
I.
Major Achievement … … … … … 1
II.
Business Updated… … … … … … 2-6
III.
Financial Highlights … … … … … 7-13
IV.
Future Strategy… … … … … … … 14-15
V.
Open Forum
Major Achievements
Major Achievements
Performance
Highlights
 Profit attributable to owners of
the parent increased by 19% to
RMB580 million; net profit rate
increased from 2.0% in the first
half of 2013 to 2.2% in this
period
 New car sales volume increased
to 96.7 thousand units; the
contribution from luxury brands
increased to 36.6%
 Revenue from after-sales and
accessories business increased
by
24%
to
RMB3.52
billion , representing 13.1% of
total revenue
Leading Position
 Ranked No. 4 in “The
TOP 100 Automobile
Dealers in China” of 2013
 Ranked No. 109 in “ The
Fortune China 500 ” in
July 2014
 In July 2014, ranked No.
387 in “The Top 500
Chinese
Listed
Companies ” of 2013
Network
Expansion
 Has 180 dealerships in
operation as at 30 June
2014, including 70 luxury
brands stores and 110 Midto-High-End brands stores
 Covering 17 provinces and
regions and nearly 70
cities
 Commission income from other
value-added services increased
by 40% to RMB 335 million
1
Business Updated
Continuously Optimising
Brand Mix
Major Automaker Partners
Luxury Brands
Major Mid-to-high-end Brands
No. of Luxury dealership stores
No. of Mid-to-High-end dealership stores
110
2014.06.30
70
113
2013.12.31
57
53
107
2012.12.31
44
27
CAGR: 52%
96
2011.12.31
71
2010.12.31
10
37
2009.12.31
7
2008.12.31
23
CAGE: 33%
2
Nationwide Network Covers
High-growth Regions
Heilongjiang (1)
Regions where
Zhongsheng has presence
Regions where new stores
are under construction
FAW-Toyota
Jilin (2)
Liaoning (40)
GZ-Toyota
Mercedes-Benz (PV)
Mercedes-Benz (CV)
Jaguar Land-Rover
Lexus
Audi
FAW-Toyota
GZ-Toyota
GZ-Honda
DF-Nissan
DF-Honda
Chrysler
Others
Inner Mongolia (1)
Beijing (6)
Tianjin (3)
FAW-Toyota
Mercedes-Benz (PV)
Porsche
Audi
Porsche
Audi
Lamborghini
GZ-Toyota
Shaanxi (7)
Heilongjiang
Jilin
DF-Nissan
Other
Liaoning
Inner Mongolia
Beijing
Jaguar Land-Rover
Audi
Imported Volkswagen
FAW-Toyota
DF-Nissan
Others
Sichuan (8）
Tianjin
Mercedes-Benz (PV)
Audi
FAW-Toyota
DF-Nissan
Shandong
Shannxi
Shandong (19）
Jiangsu
Jiangsu (14)
Shanghai
Sichuan
Chongqing(1)
Lexus
Hubei
Zhejiang
Chongqing
Fujian
Yunnan
Mercedes-Benz (PV)
Lexus
Audi
FAW-Toyota
Imported Volkswagen
Shanghai (2)
Guangdong
Mercedes-Benz (PV)
FAW-Toyota
Zhejiang (18)
Yunnan (22)
Guangdong (20)
Fujian (16)
Mercedes-Benz (CV)
Lexus
FAW-Toyota
GZ-Toyota
DF-Honda
DF-Nissan
Others
Mercedes-Benz (PV)
Mercedes-Benz (CV)
Lexus
Infiniti
FAW-Toyota
DF-Nissan
Other
Mercedes-Benz (PV)
Mercedes-Benz (CV)
Lexus
volvo
FAW-Toyota
DF-Nissan
Mercedes-Benz (PV)
Mercedes-Benz (CV)
Lexus
Audi
Chrysler
Imported Volkswagen
FAW-Toyota
GZ-Toyota
DF-Honda
3
Steady Growth in New Car Sales Volume
with increased Contribution from
Luxury Brands
New Car Sales Volume Analysis
(Unit)
200,000
175,000
150,000
125,000
100,000
75,000
50,000
25,000
0
184,286
CAGR: 35%
196,689
160,717
YoY increase: 10%
100,187
96,661
87,738
61,463
31,977
2007
41,349
2008
2009
2010
2011
2012
2013
1H 2013
1H 2014
Luxury Brands New Car Sales Volume and Contribution Analysis
(Unit)
80,000
60,000
40,000
20,000
0
CAGR: 47%
30.8%
20.9%
6,687
16.1%
6,661
12.8%
16.6%
35.2%
36.6%
30,860
35,343
22.1%
35,581
40.0%
30.0%
16,589
7,905
34.9%
56,728
68,636
20.0%
10.0%
0.0%
2007
2008
2009
2010
2011
New car sales volume
2012
2013
1H 2013
1H 2014
% to total sales volume
4
Sustainable Increase in After-sales
and Accessories Business
Revenue of After-sales and Accessories
Business and % to Total Revenue
(RMB million)
YoY increase: 24%
CAGR: 52%
7,000
20.0%
6,000
16.0%
13.1%
5,000
11.5%
4,000
8.1%
3,000
2,000
1,000
5.3%
853
9.2%
8.8%
8.7%
11.6%
12.0%
9.6%
6,034
1,256
2,106
3,664
8.0%
4,829
2,845
487
3,520
4.0%
0.0%
0
2007
2008
2009
2010
2011
2012
2013
1H 2013
1H 2014
Revenue of after-sales and accessories business
% to total revenue
5
Robust of Other Value
Added Services
Profit from Other Value Added Services
(RMB million)
YoY increase: 40%
700
600
600
CAGR: 101%
500
446
400
335
300
239
234
200
114
100
9
18
2007
2008
47
0
•
•
2009
2010
2011
2012
2013
1H 2013
1H 2014
Commission income from insurance service, financing and second-hand
car services are the main resource of other value-added service profits.
With our integration of resources, efficient operations, continuous
improvement of service quality and the advantage of scaleeconomy, profits from value-added services have a sustained and stable
growth in the future.
6
Financial Highlights
Income Statement
Highlights
For the period ended 30 June
(RMB million)
2014
2013
Flux
26,785.7
24,608.5
8.8%
2,568.8
2,310.1
11.2%
Gross Margin
9.6%
9.4%
0.2%(pts)
Other income and gain
396.7
321.2
23.5%
1,361,2
1,229.0
10.8%
Operating Profit Margin
5.1%
5.0%
0.1%(pts)
Profit Before Tax
833.8
729.4
14.3%
Profit Attributable to Owners of the Parent
580.4
489.2
18.6%
1,675.2
1,490.6
12.4%
6.3%
6.1%
0.2%(pts)
Revenue
Gross Profit
Operating Profit
EBITDA
EBITDA Margin
7
Revenue and Profit Analysis
Revenue Breakdown
30,000
After-sales
and
accessories
13.1%
25,000
1H 2014
Gross Profit Breakdown
(RMB million)
26,787
24,609
New Car
36%
20,000
15,000
1H 2014
10,000
5,000
0
1H 2013
1H 2014
Total revenue
New Car
86.9%
After-sales
and
accessories
11.6%
(RMB million)
3,000
2,500
1H 2013
2,569
2,310
1H 2013
2,000
New Car
42%
1,500
1,000
500
0
1H 2013
New Car
88.4%
After-sales
and
accessories
64%
1H 2014
After-sales
and
accessories
58%
Total gross profit
8
Gross Profit Analysis
Gross Profit and Margin Analysis
(RMB million)
5,000
4,761
4,500
12.0%
9.4%
4,000
8.8%
9.6%
9.0%
3,500
3,000
9.1%
2,310
2,500
2,451
2,569
6.0%
2,000
1,500
3.0%
1,000
500
0
0.0%
2013
1H 2013
Total gross profit
2H 2013
1H 2014
Gross profit margin
9
SG&A and Financial
Expenses Analysis
Selling Expenses
G&A Expenses
(RMB MM)
2,000
3.90%
4.20%
1,500
1,000
500
951
1,133
0
1H 2013
(RMB MM)
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
800
Office
supplies
7.2%
Advertiseme
nt and
promotion
12.2%
1.76%
800
600
1.50%
600
400
1.00%
400
0.50%
200
200
471
452
0
0.00%
1H 2013
1H 2014
1H 2014
Selling expenses
G&A expenses
% to revenue
% to revenue
Bank Taxes
charges 2.6%
2.8%
Depreciation
and
amortisation
16.1%
(RMB MM)
2.00%
1H 2014 SG&A Breakdown
Rental
4.4%
1.83%
Financial Expenses
Others
14.6%
Salary and
welfare 40%
2.04%
1.98%
502
530
1H 2013
1H 2014
0
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
Financial expenses
% to revenue
1H 2013 SG&A Breakdown
Bank
charges
3.4%
Rental
4.8%
Office
supplies
5.5%
Advertisem
ent and
promotion
7.8%
Taxes
2.6%
Depreciatio
n and
amortisation
20.9%
Others
15.8%
Salary and
welfare
39.2%
10
Financial Position
At 30 June
(RMB million)
At 31 December
2014
2013
Cash and cash equivalents, cash in transit
4,534.4
3,849.9
Pledged bank deposits
1,603.4
1,612.3
Inventories
8,699.5
6,810.5
Total Assets
37,838.7
33,735.2
Short-term bank loans、other borrowings shortterm bonds and senior notes
15,841.3
16,763.8
Long-term borrowings、bonds payable and CB
3,273.5
558.1
Accounts and notes payables
3,413.3
3,915.6
Total Liabilities
25,613.4
24,038.1
Net Assets
12,225.3
9,697.1
11
Key Operational Ratios
Accounts Receivable
Turnover Days
Inventory Turnover Days
60
50
(Days)
(Days)
(Days)
54.5
46.3
Accounts and Bills
Payable Turnover Days
10
50
8
40
6
30
48.3
40
4.6
30
4
4.0
28.8
30.4
27.2
4.1
20
20
10
0
2013
1H 2013 1H 2014
2
10
0
0
2013
1H 2013 1H 2014
2013
1H 2013 1H 2014
12
Cash Flow Analysis
(RMB million)
Net cash (used in) /
generated from operating
activities
Net cash used in from
investing activities
Net cash generated from
/(used in) financing
activities
Cash and cash equivalents
Cash in transit
Total
1H 2014
1H 2013
FY 2013
(643.4)
1,023.7
1,806.6
(1,625.3)
(804.9)
(2,009.8)
2,988.3
(1,142.9)
(238.2)
30 June 2014
30 June 2013
31 December 2013
4,374.0
3,172.3
3,654.0
160.5
358.4
195.8
4,534.5
3,530.7
3,849.8
13
Future Strategy
Development and
Operation Concept
Focus on high-quality scale expansion, building nationwide
network based on enhanced regional advantage
Maintain long-term good relationship with leading
automobile manufacturer
Understand in advance industry change and develop
trend, timely self-adjust
Grasp the core value of the business chain, consolidating
after-sales service, strengthen business diversification
The core value drives
he sustainable
growth in business
The lifetime partner
through trust
achievement
Customer-oriented service concept, staff-oriented
management philosophy
Accelerate the integration of group resources, make full use
of scale-business advantage, improve operating efficiency
Prudent financial policies
Proprietary, efficient and integrated information
management system
14
Development Strategy
Provide
diversified
products,
further expand
the scale of
auto finance
and auto
insurance by
increasing the
penetration
Continuously
accumulate and
expand
customer base
using new car
sales platform
Adhere to market
development,
enhance the focus
on pre-owned cars
business
Build highquality aftersales service
team, improve
customer
satisfactory to
enhance the
sustainable
increase
15
Open Forum

Download Report