The Zhitong Finance App learned that car dealers declined in the afternoon. As of press release, Meidong Auto (01268) fell 4.47% to HK$24.55; Zhongsheng Holdings (00881) fell 4.09% to HK$55.05; and Yongda Auto (03669) fell 2.38% to HK$7.81.

Damo said that among the car dealers it covered the study, based on the same stores, the bank expects new car sales in the first half of this year to fall by double digits year over year, but profit margins are expected to increase year by year. Daimo expects Zhongsheng Holdings and Meidong Auto to have better growth in the first half of the year, while Yongda Auto's profit is estimated to fall by double digits year over year due to the April to May closure of Shanghai.

The bank lowered earnings forecasts for Zhongsheng, Yongda and Meidong this year, reflecting the loss of after-sales service revenue during the pandemic. As for next year and 2024, the earnings test was also lowered due to early purchase revenue for the second half of this year. At the same time, the target prices of the three companies were lowered.