CICC: Maintains Outperform Rating on Zhongsheng Holding (00881.HK) with a Target Price of 18 Hong Kong Dollars.

According to the app of Securities Times, CICC released a research report stating that due to the pressure on new car profitability, Zhongsheng Holdings (00881.HK) has lowered its net profit for 2025/2026 by 35.1%/38.1% to 2.464 billion yuan/3.08 billion yuan. The current stock price corresponds to a P/E ratio of 14.3 times/11.2 times for 2025/2026. Considering the company's active adjustment of its brand matrix, the bank maintains an outperform industry rating and a target price of HK$18.00, corresponding to a P/E ratio of 16.0 times for 2025 and 12.6 times for 2026, with a potential upside of 12.0% from the current stock price. The company announced its 1H25 performance, with 1H25 revenue of 77.322 billion yuan, down 6.2% year-on-year; net profit attributable to shareholders of 1.011 billion yuan, down 36.0% year-on-year. Due to the increased impact of discounts on new car business terminals, the 1H25 performance was lower than the bank's expectations.