Zhongsheng Group Holdings Ltd. (0881) AI Stock Analysis

• Market Cap: HK$29.61B
• Dividend Yield: 5.79%
• Average Volume (3M): 9.15M
• Price to Earnings (P/E): 10.3
• Beta (1Y): 1.43
• Revenue Growth: -9.51%
• EPS Growth: -25.80%
• Country: HK
• Employees: 26,357
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): 0.48
• Shares Outstanding: 2,385,668,500
• 10 Day Avg. Volume: 8,374,825
• 30 Day Avg. Volume: 9,153,716
• PEG Ratio: -0.28
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 0.19
• P/FCF Ratio: 23.28
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$20.90
• Price Target Upside: 79.40% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: HK$13.00 ▲(11.59% Upside)

The overall stock score of 58 reflects the moderate financial performance of Zhongsheng Group Holdings Ltd., with stable but challenged financials. The technical analysis indicates bearish momentum, which is a significant risk factor. However, the valuation is attractive with a low P/E ratio and high dividend yield, offering potential value for investors.

Positive Factors

Diversified Revenue Streams

Zhongsheng's mix of vehicle sales, after-sales services and financing creates multiple durable revenue engines. After-sales and financing tend to be higher margin and recurring, smoothing cyclicality from new-car sales and supporting cash generation and customer lifetime value over time.

Leading Market Position

Scale and a broad brand portfolio in China give Zhongsheng negotiating leverage with OEMs, superior dealer coverage and brand-recognition advantages. This structural market position supports stable sales channels, supply access and ability to capture rising affluent demand over the medium term.

Stable Operating Cash Flow

Consistent operating cash generation indicates the core dealership model converts sales into cash reliably, enabling reinvestment, working capital funding and servicing debt or dividends. Even with uneven free cash flow, positive OCF underpins near-term financial flexibility.

Negative Factors

Revenue and Margin Pressure

Persistent margin decline and volatile revenue signal structural pressures—pricing, competition or mix shifts—that erode profitability and limit reinvestment. Over 2–6 months this can reduce competitive resilience and constrain the company's ability to fund growth initiatives sustainably.

Rising Leverage Trend

An upward debt trend reduces financial flexibility and increases fixed costs from interest. If margins remain under pressure, higher leverage raises refinancing and liquidity risks, constraining strategic investments and increasing vulnerability to macro or industry shocks over the medium term.

Margin Variability and Declining Returns

Volatile and declining margins, coupled with uneven free cash flow, weaken return on equity and shareholder returns. This undermines the firm's capacity to sustain dividends, reinvest in the franchise or absorb pricing shocks, harming long-term competitiveness and growth prospects.

Zhongsheng Group Holdings Ltd. Business Overview & Revenue Model

Company Description

Zhongsheng Group Holdings Limited, an investment holding company, engages in the sale and service of motor vehicles. The company operates 4S dealerships for various automobile brands consisting of luxury automobile brands, including Mercedes-Benz, Lexus, Audi, Jaguar, Land Rover, Porsche, and Volvo; and mid-to-high end automobile brands, such as Toyota and Nissan. It also provides spare parts, automobile accessories, repair and maintenance services, detailing services, and other automobile-related products and services. As of December 31, 2021, the company had 412 automobile dealerships that include 254 luxury brand dealerships and 158 mid-to-high-end brand dealerships covering 25 provinces, municipalities, and autonomous regions, and approximately 110 cities in the People's Republic of China. Zhongsheng Group Holdings Limited was founded in 1998 and is headquartered in Dalian, the People's Republic of China.

How the Company Makes Money

Zhongsheng Group makes money primarily through the sale of new and used vehicles, as well as through after-sales services such as maintenance and repair. The company generates significant revenue from its dealership operations, which include both direct sales and commissions from manufacturers. Additionally, Zhongsheng offers financing solutions for vehicle purchases, which further contributes to its earnings. Key partnerships with major automobile manufacturers provide the company with favorable terms and access to a wide range of vehicles, enhancing its sales capability. The growing demand for luxury vehicles in China, coupled with the expansion of the company's dealership network, plays a critical role in driving its revenue growth.

Zhongsheng Group Holdings Ltd. Financial Statement Overview

Summary

Zhongsheng Group Holdings Ltd. demonstrates moderate financial health with challenges in declining profit margins and inconsistent revenue growth. The balance sheet is stable, but rising debt levels could pose future risks. Cash flow remains steady but shows potential for enhancement.

Income Statement

Zhongsheng Group Holdings Ltd. exhibits moderate income statement performance. The gross profit margin and net profit margin have shown variability, with a noticeable decline in recent years. Revenue growth rate has been inconsistent, showcasing a decrease from the previous year. Despite this, the company maintains a reasonable EBIT margin, although the EBITDA margin is inflated due to potential data errors.

Balance Sheet

The balance sheet of Zhongsheng Group Holdings Ltd. reflects a stable equity base with a moderate equity ratio. The debt-to-equity ratio indicates a manageable level of leverage, but there's an upward trend in debt levels. The return on equity shows a declining trend, suggesting challenges in generating returns for shareholders.

Cash Flow

Cash flow analysis shows Zhongsheng Group Holdings Ltd. has a steady operating cash flow, though free cash flow growth has been uneven. The operating cash flow to net income ratio is positive, suggesting effective cash generation relative to reported profits, but there is room for improvement in free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	163.02B	168.12B	179.29B	179.86B	175.10B	148.35B
Gross Profit	9.95B	10.67B	13.76B	16.03B	18.47B	13.48B
EBITDA	2.06T	2.06T	10.56B	13.02B	15.00B	10.88B
Net Income	2.64B	3.21B	5.02B	6.69B	8.33B	5.54B
Balance Sheet
Total Assets	107.93B	110.17B	103.27B	91.66B	85.47B	68.50B
Cash, Cash Equivalents and Short-Term Investments	20.14B	18.87B	15.88B	11.93B	11.34B	8.54B
Total Debt	33.85B	40.82B	36.76B	30.64B	28.73B	28.28B
Total Liabilities	60.25B	63.25B	57.22B	47.54B	44.77B	41.62B
Stockholders Equity	47.68B	46.83B	45.80B	43.81B	40.24B	26.46B
Cash Flow
Free Cash Flow	6.10B	1.34B	3.53B	4.93B	5.79B	6.04B
Operating Cash Flow	6.46B	3.44B	6.43B	8.78B	10.87B	9.32B
Investing Cash Flow	111.80M	619.53M	-497.01M	-3.60B	-9.42B	-3.23B
Financing Cash Flow	-10.89B	-1.00B	-2.00B	-4.53B	1.30B	-3.96B

Zhongsheng Group Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.65
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0881, the sentiment is Positive. The current price of 11.65 is below the 20-day moving average (MA) of 11.82, below the 50-day MA of 11.70, and below the 200-day MA of 12.64, indicating a neutral trend. The MACD of 0.14 indicates Negative momentum. The RSI at 62.25 is Neutral, neither overbought nor oversold. The STOCH value of 66.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0881.

Zhongsheng Group Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
0881	58 Neutral	HK$29.61B	10.29	5.65%	5.79%	-9.51%	-25.80%
1728	52 Neutral	HK$1.43B	-0.25	―	―	-9.07%	-26.94%
1268	50 Neutral	HK$1.71B	-0.52	-87.36%	4.01%	-14.04%	-4222.02%
3669	47 Neutral	HK$3.06B	-0.89	-26.57%	9.05%	-13.69%	-1296.59%
3836	45 Neutral	HK$1.67B	-6.90	-4.42%	3.49%	11.33%	56.94%
1771	45 Neutral	HK$156.00M	-0.72	-8.81%	―	-24.42%	-115.68%

Zhongsheng Group Holdings Ltd. Corporate Events

Zhongsheng Clarifies Governance-Driven Resignation of Long-Serving Independent Director

Zhongsheng Group Holdings Limited has issued a supplemental announcement clarifying the reasons for the resignation of independent non-executive director and audit committee chairman Mr. Ying, effective 19 December 2025. The company explained that his departure is driven by Hong Kong listing rules, which restrict independent non-executive directors from serving beyond nine years following the conclusion of the relevant annual general meeting, and by Mr. Ying’s desire to devote more time to other commitments. All other information in the earlier announcement on board and committee changes remains unchanged, underscoring the group’s need to refresh its board composition in line with evolving corporate governance requirements while maintaining continuity in its overall governance framework.

The most recent analyst rating on (HK:0881) stock is a Buy with a HK$20.80 price target. To see the full list of analyst forecasts on Zhongsheng Group Holdings Ltd. stock, see the HK:0881 Stock Forecast page.

Zhongsheng Group Tightens Governance With Updated Nomination Committee Terms

Zhongsheng Group Holdings Limited has revised and reissued the terms of reference for its Nomination Committee, originally established in 2008, to clarify its constitution and governance structure. The updated document sets out that the committee must comprise at least three directors, with a majority being independent non-executive directors, and must be chaired by either the board chairman or an independent non-executive director, while also requiring at least one director of a different gender on the committee. These changes underscore the company’s adherence to Hong Kong listing rules and evolving corporate governance practices, with an emphasis on board independence, diversity and formal oversight of director and senior management appointments, which may bolster confidence among shareholders and other stakeholders in the robustness of its governance framework.

The most recent analyst rating on (HK:0881) stock is a Buy with a HK$20.80 price target. To see the full list of analyst forecasts on Zhongsheng Group Holdings Ltd. stock, see the HK:0881 Stock Forecast page.

Zhongsheng Group Revamps Audit Committee Leadership With New Independent Director

Zhongsheng Group Holdings Limited has announced a change in its board composition, with long-serving independent non-executive director and audit committee chairman Ying Wei resigning after more than nine years on the board, with the company emphasizing there is no disagreement or issues requiring shareholder attention related to his departure. The company has appointed tax specialist Bai Fengjiu as an independent non-executive director and the new chairman of the audit committee, effective 19 December 2025; his background includes senior tax advisory roles at PricewaterhouseCoopers and Deloitte, and he will serve until the 2026 annual general meeting with eligibility for a three-year extension, a move that reinforces the board’s financial oversight and governance capabilities by adding deep tax and compliance expertise.

The most recent analyst rating on (HK:0881) stock is a Buy with a HK$20.80 price target. To see the full list of analyst forecasts on Zhongsheng Group Holdings Ltd. stock, see the HK:0881 Stock Forecast page.

Zhongsheng Group Details Board and Committee Composition

Zhongsheng Group Holdings Limited, a company incorporated in the Cayman Islands and listed in Hong Kong under stock code 881, has announced the current composition of its board of directors, comprising executive, non-executive and independent non-executive members.

The company has also detailed the structure and membership of its six board committees—Audit, Remuneration, Nomination, Compliance, Risk, and Environmental, Social and Governance—clarifying which directors serve as chairmen or members of each. This updated disclosure enhances transparency in corporate governance, outlining clear oversight responsibilities across key risk, compliance, remuneration and ESG areas for investors and other stakeholders.

The most recent analyst rating on (HK:0881) stock is a Buy with a HK$20.80 price target. To see the full list of analyst forecasts on Zhongsheng Group Holdings Ltd. stock, see the HK:0881 Stock Forecast page.