Rescued in 2021, record loss in 2025: Zhengtong's unchanged bet

Zhengtong, founded by Wang Muqing — once Hubei's richest man — ran its 4S network out of Wuhan, with stores concentrated in Hubei and Guangdong. By June 2020 total debt stood at ¥28.975 billion, the asset-liability ratio at 70.19%, current liabilities 78.65% of it. On July 21, 2020 the group defaulted on about $100 million of an installment loan. That year revenue halved to ¥16.8 billion and the loss reached ¥8.5 billion; Wuhan stores were hit hard by the pandemic, and customer prepayments swept to headquarters left stores unable to hand over purchased cars.

The rescue came from Xiamen state capital. After first buyer Xiamen Xinda withdrew in July 2021, Xiamen ITG Holding took 29.9% at HK$1.74 a share — HK$1.427 billion, at least a 30% premium; control changed on August 31, 2021, and Wang Muqing stepped down. The finance arm Dongzheng Finance was lost anyway: its opening approval revoked by regulators, its stake frozen and force-auctioned by the Shanghai Financial Court after a ¥260 million half-year loss and a 10.7% bad-loan rate in H1 2021.

Under the new owner the bet did not change: BMW, Audi and Porsche — combustion-engine luxury — stayed 93.6% of new-car sales. FY2025 (published March 30, 2026): revenue ¥18.711 billion, down 9.81%; an attributable loss of ¥2.674 billion, up 56.53%, a record — worse than the company's own warning of no more than ¥2.5 billion. Loss per share 37 cents, no dividend; goodwill, intangibles and property were all impaired, and new-car margins sat at or below zero, selling one car at a loss per car. At end-2025 Zhengtong paid ¥816 million for nearly 50 more outlets from Xiamen Xinda.

Kept the same BMW/Audi/Porsche mix after the 2021 rescue, then paid ¥816M for 50 more outlets, turning scale into a record ¥2.674B loss.

93.6% of new-car sales stayed in BMW, Audi and Porsche combustion luxury — exactly the segment the price war inverted, until every car sold lost money.

The 2021 rescue fixed the balance sheet, not the model: Xiamen state capital arrived, but the network kept selling combustion premium into an NEV market.

Expansion into the loss: ¥816 million for nearly 50 more outlets at end-2025 bought scale with negative unit economics.

Zhengtong defaulted in 2020 and was rescued by Xiamen state capital — but kept 93.6% of sales in BMW/Audi/Porsche combustion cars. The rescue bought time, not a pivot; 2025 set a record ¥2.674B loss.

The playbook now is hedging inside the same model: after-sales and used-car trade-ins against the new-car bleed, procurement tightened, new-media marketing pushed; inventory depth fell month by month through H2 2025. No dividend was proposed, and the ¥816 million Xiamen Xinda acquisition adds 50 doors that must be turned around. Whether after-sales can outrun the combustion mix — or whether the record loss of 2025 is a ceiling or a floor — is the open question.