Zhongsheng Holdings (00881) resumed profit in the first half of the year, net profit of 111 million yuan, and gross loss of new cars narrowed 73.6% year-on-year

Zhitong Finance App learned that on August 31, Zhongsheng Holdings (00881) announced the 2026 interim results. According to financial reports, the company achieved operating income of 63,022 billion yuan in the first half of the year; net profit to mother was 111 million yuan, a year-on-year decline, but compared with a net loss of 1,673 billion yuan for the full year of 2025, the current period has returned to the profit range. The gross loss of new cars narrowed sharply from 2.131 billion yuan in the same period last year to 580 million yuan, reaching 72.8%. The gross margin of new cars improved from -4.1% to -1.4%, and the profit recovery signal was clear.

In the first half of 2026, the Chinese automobile market continued its trend of total pressure and structural differentiation. Passenger car retail sales fell 18.6% year on year, weak terminal demand compounded by normalized price competition, and the overall dealer industry was at the bottom of the cycle. In this context, the core reason why Zhongsheng Holdings' profit side is under pressure comes from the delayed impact of China Auto Finance Product Policy adjustments in 2025. Financial reports show that the company's commission revenue for the first half of the year was 392 million yuan, a year-on-year decrease of 78.7%, mainly reflecting the double impact of adjustments in financial rebate levels and sales volume.

It is worth noting that Zhongsheng Holdings' bicycle cross-sales profits in the first half of the year have shown signs of month-on-month stabilization, indicating that the one-time impact of financial policy adjustments is gradually being digested. Despite pressure on the profit side due to financial policy resets, the Group's total gross profit increased 20.0% year over year, reflecting the steady restoration of core operating capacity.

The gross loss of new cars has been drastically reduced by more than 70%, and the new energy matrix has contributed positive gross profit

Compared with the gross margin of new cars in the negative range of -3% for the full year of 2025, there was a substantial improvement in the new car business in the first half of 2026. The gross loss of new cars narrowed from 2.131 billion yuan to 580 million yuan, a decrease of 72.8%; the gross margin of new cars improved from -4.1% to -1.4%. Although it is still in a negative range, the improvement trend is obvious. At the gross profit level, the Group's total gross profit increased by 20.0% year on year, becoming one of the core operating improvement signals in the current financial report. Although the new car business is still at a slight loss, the overall gross profit pool has expanded positively.

Behind this change is a shift in the company's business focus from “pursuing sales scale” to “bicycle economy and financial efficiency.” While the market share of traditional luxury brands such as Mercedes-Benz, BMW, Audi, and Volvo remains stable, new energy brands have become new engines of growth. The company has formed a new energy brand matrix including Rantu, Zero Run, Extreme Krypton, Linker, Geely Galaxy, Qijing, and Yijing. In the first half of the year, new energy brands contributed 10.3% of sales and continued to contribute steadily to positive gross profit.

After-sales revenue and gross profit increased, and 4.6 million active customers built a basic market

In the context of the continuous growth of automobile ownership in China and the acceleration of the competitive focus of the industry from new car sales to after-sales service quality and full life cycle operation capability, Zhongsheng Holdings' after-sales business is becoming the core pillar of its stable operation and restoration of profitability.

In the first half of 2026, the company achieved after-sales revenue of 11.539 billion yuan, a year-on-year increase of 0.8%; after-sales gross profit of 5.586 billion yuan, a year-on-year increase of 2.7%, gross margin further increased to 48.4%, and profitability continued to be optimized. It is worth noting that in the face of a year-on-year decline in the number of entrants to the factory, Zhongsheng Holdings' after-sales revenue and gross profit still achieved both growth. This structural shift of “volume reduction and profit increase” indicates that the company's after-sales business is shifting from being driven by the traditional number of warranty policies to a high-quality development path of increasing bicycle output value and optimizing the service structure.

In terms of the customer base market, the number of active customers of the company reached 4.6 million, the number of subscribers on the Zhongsheng Go membership platform reached 4.12 million, and the number of corporate WeChat customers reached 12.12 million, continuing to rise. The large active customer base not only provides a stable market foundation for the after-sales business, but has also become a key gripper for customer operations throughout the life cycle — under the long-term trend of the industry's transformation from “car sales” to “car maintenance”, the customer pool with a high retention rate will continue to unleash after-sales consumption potential, further consolidating the company's ability to resist cycles.

Network structure optimization, new energy layout opens up medium- to long-term incremental space

Based on the foundation of profit restoration, Zhongsheng Holdings continues to promote the transformation of the electrification strategy. Unlike the “contractionary” adjustments common in the industry, the core logic of the company's channel restructuring has shifted from pursuing network scale to improving single-store efficiency and regional business density, and exploiting sales and profit growth in the new energy business through a systematic layout.

On the channel side, the structural adjustment of Zhongsheng Holdings is not simply an increase or decrease in the number of stores; it goes hand in hand with “clearing out inefficient traditional stores” and “increasing the number of new energy outlets.” In the first half of the year, the Group withdrew from 66 inefficient traditional brand stores, focusing on optimizing repetitive outlets and inefficient assets in the same city; simultaneously adding 62 new energy brand stores, and continuously improving the network layout around core cities, advantageous regions and high-value customers. By the end of June 2026, the total number of Group dealerships reached 461, including 102 new energy stores, and the network structure was significantly optimized.

The expansion of new energy sources is still accelerating. According to management, as of the end of August 2026, dozens of other stores are in the preparatory construction phase. According to the plan, the company aims to reach 300 new energy brand stores by the end of 2026, accounting for 35% of new energy sales in a single month in December 2026. As high-return outlets are put into operation one after another, the new energy business is expected to release clear sales and profit increases and become the core engine driving the company's medium- to long-term development.

A sound financial base provides solid support for the implementation of the above strategies. Zhongsheng Holdings maintained a high level of liquidity, with cash and cash equivalents of $13.578 billion at the end of the period, time deposits and secured deposits of $3.381 billion, totaling about $17 billion in cash, which can fully cover all long-term and short-term liabilities, and the operating cash flow continues to be positive. The total capital expenditure of the Group in the first half of the year was about 456 million yuan, and the overall investment in new stores and store renovation was manageable. At the same time, the company took the initiative to manage debts and completed repurchases of USD 118 million after the period, continuing to reduce financial costs and establish a financial security cushion for network restructuring and new energy matrix construction.

Taken together, the profit recovery results achieved by Zhongsheng Holdings in the first half of 2026 showed the strategic strength of leading car dealers to actively seek change at the bottom of the cycle. As the clearance of inefficient assets comes to an end and the new energy business enters a climbing period, Zhongsheng Holdings is expected to consolidate its leading edge in industry integration and further improve the quality of profits.