Zitong Financial APP learned that Daiwa released a research report saying that it maintained Zhongsheng Group's (00881) "buy" rating, raised its target price by 5.26% from HK $95 to HK $100, and lowered its 2022-23 revenue forecast by 14%, reflecting a reduction in Mercedes-Benz sales growth forecast for 2022-23.

Zhongsheng Group beat the industry in luxury car sales last year, with Mercedes-Benz up 15 per cent year-on-year, BMW up 15 per cent and Lexus up 15 per cent year-on-year, according to the report. The company's 2022 sales guidance in China is that Mercedes-Benz rose 10%, Audi and BMW 8%, and Lexus 20%.

Zhongsheng raised its inventory level to 0.8 months at the end of 2021 to prepare for promotions during the Lunar New year, the report said. The company guides overall luxury car sales to grow by 25% year-on-year in 2022. The bank expects used-car sales to rise 50 per cent year-on-year this year, compared with the company's guideline of 30 per cent, 40 per cent. As for the sales of new energy vehicles, Zhongsheng has reached cooperation with many brands, such as XPeng Inc.-W (09868), Li Auto Inc.-W (02015), Volvo (Volvo) and so on. In addition, the electric car models of Mercedes-Benz, Toyota and BMW will be the strategic focus of Zhongsheng 2022.