The Zhitong Finance App learned that Damo released a research report saying that due to the significant deterioration in profit margins of new cars, the slowdown in after-sales business performance, and the unending recovery in demand for high-end internal combustion engine vehicles, it is predicted that auto dealers such as Zhongsheng Holdings (00881), Meidong Auto (01268), and Yongda Auto (03669) will experience a year-on-year decline in profits in the first half of this year. It is estimated that the second half of the year may be further reduced to stabilize sales prices, and will be required to subsidize the loss-making electric vehicle sales business by providing more rebates.

The bank expects that although dealers' used car industry transactions grew strongly in the first half of the year, their contribution to profit is still limited. The three dealers' profit forecasts for the next few years have been lowered to reflect the decline in new car sales and profit margins due to increased price competition. Looking at the short to medium term, DaiMo is more optimistic about the US East. It is expected that if the automobile industry recovers, the rebound in demand for new cars by Porsche will improve, and the profit forecast for 2023-25 will be cut by 19% to 43%. The bank also pointed out that it is optimistic about the long-term rise, and it is expected that its centralized maintenance center will bring in more after-sales revenue and become the main driving force for long-term growth, but it lowered the profit forecast for 2023-25 by 18% to 25%. Meanwhile, Yongda Auto's profit forecast for 2023-25 was also lowered by 25% to 42%.