Zhitong Financial APP News, Zhengtong Motor (01728) announced that for the whole of 2017, the group realized income of about 35.474 billion yuan (RMB, the same below), an increase of 12.5% over the same period last year; gross profit of 3.768 billion yuan, an increase of 37.7% over the same period last year; net profit attributable to equity shareholders was 1.191 billion yuan, an increase of 141.6% over the same period last year; basic profit per share was 0.538 yuan, and a final dividend of HK $0.14 per share was proposed.
During the year, the Group focused on enhancing the potential of same-store sales and consolidating the existing regional competitive advantage, realizing 109000 new car sales, an increase of about 12.5% over the same period last year, of which 80000 were for luxury and ultra-luxury brands, an increase of about 17.7% over the same period last year.
The group's income comes from new car sales, after-sales service and other businesses. In 2017, revenue from new car sales was about 30.289 billion yuan, an increase of about 12.0 percent over the same period last year. Of this total, revenue from luxury and ultra-luxury brands was about 26.774 billion yuan, an increase of about 13.8 percent over the same period last year, accounting for 88.4 percent of the revenue from new car sales. The revenue from after-sales service is about 3.899 billion yuan, an increase of about 13.9% over the same period last year. Revenue from new car sales and after-sales service accounted for about 85.4% and 11.0% of the total revenue, respectively.
Gross profit mainly comes from after-sales service business, new car sales business and auto financial services business. In 2017, the gross profit of the new car sales business was about 1.474 billion yuan, an increase of about 88.5 percent over the same period last year, and the gross profit margin of new car sales was 4.9 percent, a substantial improvement over 2016. Of this total, the gross profit of luxury and ultra-luxury brands was about 1.398 billion yuan, an increase of about 93.4 percent over the same period last year.
The gross profit margin of luxury and ultra-luxury brands rose sharply to 5.2% from 3.1% in 2016, mainly due to the agency brand entering a new product cycle and the use of information systems to control the gross margin of new cars.
The after-sales service business realized a gross profit of about 1.839 billion yuan, an increase of about 13.4 percent over the same period last year, and the after-sales gross profit margin was about 47.2 percent, down about 0.2 percentage points from about 47.4 percent in 2016. Dongzheng Financial realized a gross profit of about 410 million yuan and a gross profit margin of about 65.7% in 2017.
On December 31, 2017, the number of operating outlets in 40 cities in 16 provinces and municipalities directly under the Central Government reached 134. In 2017, the Group opened 16 new luxury car operation outlets through self-construction and mergers and acquisitions.
In addition, according to the announcement of December 23, 2017, the Group has adopted an innovative expansion model-strategic business cooperation plan for a period of 10 years from January 1, 2018. The plan adds a total of 10 luxury car outlets in Shenzhen, Guangzhou, Foshan and Jieyang, including six BMW 4S stores, one MINI 4S store, two BMW showrooms and one maintenance center. The Group has set up companies at the registered places of the above-mentioned automobile operation outlets in order to obtain the distribution right and operate the related 4S business.
In January 2018, Li Wangxing and Lin Yihao officially entrusted 10 authorized outlets in Shenzhen, Guangzhou, Foshan, Jieyang and other places to the Group. Group operation, finance and other management team has been stationed, through the operating entity smooth operation of various businesses.