According to the Securities Times app, UBS released a research report stating that it maintains a 'sell' rating on Zhongsheng Holdings (00881) following the announcement of their global strategy, resulting in a stock price increase of approximately 40% or adding 12 billion yuan in market cap. They believe the market has overvalued AITO stores, thus raising the target price for Zhongsheng from 8.2 Hong Kong dollars to 9.4 Hong Kong dollars.

The report mentions that Zhongsheng has signed a strategic cooperation agreement with Chongqing Sokon Industry Group Stock (601127.SH), aiming to operate Huawei AITO exclusive stores under the authorized distribution model, starting operations in January next year. Management indicated that the automotive commission rate for AITO will be 4.5%, and the company will also provide related after-sales, automotive finance, and insurance services.

The bank pointed out that even considering the contribution from AITO stores, it does not expect zhongsheng's profits to significantly rebound, as the retail discounts of Germany's three major automakers Audi, BMW, and Mercedes rose to historical highs last month. The appeal of traditional high-end brands in china has declined due to the increasing competitiveness of domestic brands and the aging of Mercedes and Lexus models. In addition, electric vehicles also have a long-term impact on china's automotive after-sales market. The bank's research indicates that dealers and independent after-sales service providers are affected, primarily due to the decrease in mileage of internal combustion vehicles. The bank expects zhongsheng's after-sales service income growth to be in single digits this year and beyond.