China's largest car dealer booked its first loss since listing

Zhongsheng Group is China's largest car dealer by revenue and had been profitable in every year since its Hong Kong listing — until FY2025. The model was the classic one, run better than anyone's: luxury and traditional brands up front, after-sales service carrying the margin behind it. FY2024 still made ¥3.212 billion of attributable profit. Then the price war stopped being a phase and became the structure of the market.

FY2025 (published March 26, 2026): revenue ¥164.403 billion, down 2.2% — and a first-ever attributable loss of ¥1.673 billion. Total gross profit ¥8.838 billion, down 17.2%, with car sales running a gross loss of ¥3.174 billion. New cars sold below purchase price across traditional brands, manufacturer subsidies unable to cover the spread; auto-finance commission income slid at the same time; and ¥2.291 billion of goodwill and intangibles were written off. Volume still grew: 497,300 new cars sold, up 2.5%, luxury sales up 6.2% — AITO/Wenjie at 8.2% of sales.

The response is a managed conversion. After-sales held the line: revenue ¥22.911 billion, up 4.1%, gross profit ¥11.05 billion, up 8.2%. Operating cash flow rose ¥5.966 billion to ¥9.405 billion. From H2 2024 to end-2025 the group closed about 50 inefficient or redundant brand stores while adding 104 — a net gain of 54, of which 30 came in FY2025. For 2026 the stated target is to double the number of NEV stores, expanding Huawei-ecosystem brands and a strategic cooperation with Geely. On April 23, 2026 the share price hit a record low anyway.