Zhongsheng (881 HK) Cumulative repressed Demand for Car Purchase is Expected to be Gradually Released June 3, 2020 199

PSR Recommendation: ACCUMULATE Status: Maintained
Target Price: HKDHKD45

Investment Summary
Constant Enhancement of Profitability
Zhongsheng Group’s turnover in 2019 increased by 15% yoy to RMB127.03 billion. Due to its outstanding performance of after-sales and other businesses, and the further optimization of its model structure, its operating profit increased by 20% yoy. At the same time, effective inventory management and expense control have stabilized the expense ratio, and ultimately the profit attributable to the parent company reached RMB4.5 billion, increasing by 23.8% yoy. Basic EPS was RMB1.98, dividends were RMB0.4, and the dividend payout rate remained stable at 20%.

About the author

Profile photo of Zhang Jing

Zhang Jing
Phillip Securities (HK)

Bachelor Degree in Tongji University of Engineering; Master Degree in East China Normal University of finance. Currently covering the automobile and air sectors. She has years of experience in investment research and is good at combining analysis for the companies with industry prospects.

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