China Zhengtong Auto Services Holdings (1728) AI Stock Analysis

• Market Cap: HK$1.43B
• Dividend Yield: N/A
• Average Volume (3M): 0.00
• Price to Earnings (P/E): ―
• Beta (1Y): 1.38
• Revenue Growth: -9.07%
• EPS Growth: -26.94%
• Country: HK
• Employees: 5,672
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): -0.25
• Shares Outstanding: 10,016,051,000
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 0
• PEG Ratio: >-0.01
• Price to Book (P/B): -0.56
• Price to Sales (P/S): 0.00966
• P/FCF Ratio: -0.58
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 52 Neutral
• Price Target: HK$0.14 ▲(2.86% Upside)

The overall stock score reflects significant financial challenges as the most impactful factor, with a weak financial performance heavily weighing down the score. While technical indicators suggest a positive price trend, the overbought RSI and negative valuation metrics temper enthusiasm.

China Zhengtong Auto Services Holdings Business Overview & Revenue Model

Company Description

China Zhengtong Auto Services Holdings Limited is a leading automotive services provider in China, primarily engaged in the sale of luxury and ultra-luxury vehicles, as well as offering a comprehensive range of automotive-related services. The company operates through various segments, including vehicle sales, after-sales services, and vehicle financing, catering to a growing demand for high-end automobiles in the Chinese market.

How the Company Makes Money

The company generates revenue primarily through the sale of luxury and ultra-luxury vehicles from renowned brands, which constitutes a significant portion of its income. Additionally, it earns revenue from after-sales services such as maintenance, repairs, and spare parts sales, which provide a recurring income stream. Furthermore, vehicle financing services contribute to its earnings by offering financing solutions to customers purchasing vehicles. Strategic partnerships with automobile manufacturers enhance its market position and enable access to exclusive vehicle models, further boosting sales potential. Overall, the combination of vehicle sales, after-sales services, and financing solutions forms the core of China Zhengtong's revenue model.

China Zhengtong Auto Services Holdings Financial Statement Overview

Summary

The company's financial health is weak with declining revenues, persistent losses, negative equity, and poor cash flow generation. High leverage and inability to generate positive returns pose substantial risks.

Income Statement

The income statement reflects a challenging period with declining revenues and profitability. Total revenue dropped significantly over the years, particularly from 2019 to 2024. The gross profit margin has decreased considerably, and the company has been experiencing negative net profit margins in recent years, indicating ongoing losses. Additionally, EBIT and EBITDA margins have been negative, reflecting operational inefficiencies and financial struggles.

Balance Sheet

The balance sheet shows high leverage with a negative stockholders' equity in 2024, indicating insolvency risks. The debt-to-equity ratio is unfavorable due to negative equity, and equity ratio is negative, showing the company is highly leveraged. Return on equity has been negative, further reflecting financial distress and inability to generate shareholder value.

Cash Flow

The cash flow situation is concerning with negative free cash flows over the years, highlighting liquidity issues. Operating cash flow has been inconsistent and low relative to net income, indicating poor cash conversion. Free cash flow to net income ratio is not meaningful due to persistent losses, raising concerns about sustainability.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.75B	24.13B	22.61B	20.99B	16.88B
Gross Profit	779.07M	1.01B	1.59B	1.24B	-5.17B
EBITDA	-6.29M	982.32M	900.12M	-178.45M	-8.37B
Net Income	-1.60B	-849.28M	-297.42M	-2.20B	-8.61B
Balance Sheet
Total Assets	29.22B	29.51B	27.73B	26.13B	28.00B
Cash, Cash Equivalents and Short-Term Investments	631.09M	871.20M	837.65M	745.20M	1.09B
Total Debt	21.31B	21.04B	20.02B	18.14B	14.66B
Total Liabilities	28.15B	28.23B	27.51B	25.59B	22.68B
Stockholders Equity	-356.68M	361.83M	193.39M	508.43M	4.11B
Cash Flow
Free Cash Flow	-347.73M	-1.09B	-712.02M	-486.33M	-239.67M
Operating Cash Flow	31.09M	36.79M	158.79M	155.63M	346.23M
Investing Cash Flow	202.72M	-793.48M	1.30B	-345.83M	22.41M
Financing Cash Flow	-406.15M	767.08M	-936.38M	-90.45M	-1.36B

China Zhengtong Auto Services Holdings Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.14
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1728, the sentiment is Neutral. The current price of 0.14 is below the 20-day moving average (MA) of 0.14, below the 50-day MA of 0.14, and above the 200-day MA of 0.13, indicating a bullish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 52.41 is Neutral, neither overbought nor oversold. The STOCH value of 100.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:1728.

China Zhengtong Auto Services Holdings 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$28.51B	9.90	5.65%	5.77%	-9.51%	-25.80%
1728	52 Neutral	HK$1.43B	-0.25	―	―	-9.07%	-26.94%
3669	47 Neutral	HK$3.17B	-0.92	-26.57%	8.89%	-13.69%	-1296.59%
1268	45 Neutral	$2.30B	-0.70	-87.36%	3.15%	-14.04%	-4222.02%
3836	45 Neutral	HK$1.27B	―	-4.42%	4.25%	11.33%	56.94%
1771	45 Neutral	HK$153.00M	―	-8.81%	―	-24.42%	-115.68%

China Zhengtong Auto Services Holdings Corporate Events

China Zhengtong Expands with Major Acquisition of Xiamen Xindeco’s Auto Business

China Zhengtong Auto Services Holdings Limited has announced the acquisition of Xiamen Xindeco’s 4S dealership and automobile sales and export business. This strategic move involves purchasing 100% equity interest in Xindeco ITG Automobile and ITG Auto (Thailand) for approximately RMB793.49 million and RMB22.13 million, respectively. The acquisitions are subject to shareholder approval and are considered major transactions under the Listing Rules, potentially enhancing Zhengtong’s market position and expanding its operational footprint in the automotive sector.

China Zhengtong Auto Services Advances in New Energy Transition

China Zhengtong Auto Services Holdings Limited has announced its strategic transition towards new energy vehicles, enhancing its operations by optimizing management, restructuring underperforming stores, and strengthening digital capabilities. The company has secured 17 new energy brand authorizations and is expanding its business across key regions in China, while also leveraging ITG Holding’s experience to expand internationally. This move is expected to solidify its market position and enhance its operational efficiency.

China Zhengtong Auto Services Granted Waiver on Public Float Requirement

China Zhengtong Auto Services Holdings Limited announced that it has received a temporary waiver from the Hong Kong Stock Exchange, allowing it to not comply with the minimum public float requirement of 25% until December 31, 2025. This waiver comes after the company’s public float fell to approximately 9.29% following a recent offer, leading to the suspension of its trading shares. The company plans to make further announcements regarding the restoration of the public float as necessary.