AutoBeta(AutoBeta.net)07/03 Report--

Recently, Zhongsheng Holdings, China's second-largest auto dealer, announced that it plans to acquire all shares of Renfu China from Fu Tung Holdings for US $1.3 billion (about RMB 8.4 billion yuan). After the deal is completed, Zhongsheng Group is expected to surpass Guanghui Group as the largest auto dealer in China. After the announcement of the news, on July 2, the share price of Zhongsheng Holdings opened higher and went higher, closing up 7.82% on the same day, closing at HK $69.65/share, with a total market value of HK $161.3 billion.

According to the information, Zhongsheng Group Holdings Limited (Zhongsheng Group) is one of the national automobile dealer groups, focusing on luxury and mid-to-high-end brands, including luxury automobile brands such as Mercedes-Benz, Lexus and Audi, as well as mid-to-high-end automobile brands such as Toyota, Nissan and Honda. Renfu Motors (China) Limited is a subsidiary of Renfu Hong Limited and a member of Jardine Matheson Group. Renfu China is principally engaged in automobile sales and service business in China and is one of the largest dealer networks of Mercedes-Benz in South China and West China. As a Mercedes-Benz partner, Renfu China's business covers Mercedes-Benz, AMG, Mercedes-Maybach and Tense's sales-level after-sales service.

According to the data of China Automobile Dealers Association, the total sales volume (including used cars) of Zhongsheng Group in 2020 is 607684 vehicles, and the total operating income is 148.348 billion yuan. In 2020, the total sales volume of Renfu China was 44,768 vehicles, and the total operating revenue was 19.224 billion yuan.

According to the list of top 100 automobile dealer groups in China, Guanghui Automobile Service Group Co., Ltd. ranks first in 2020, with sales volume of 1018737 vehicles and total operating income of 157.281 billion yuan. According to the sales data, there is a big gap between Zhongsheng Group ranked second and Guanghui Automobile, but from the perspective of operating income, the gap between Zhongsheng Group and Guanghui Automobile is less than 10 billion yuan. If Zhongsheng Group acquires Renfu China, Zhongsheng Group may become the automobile dealer group with the largest operating income in China.

According to the data, Mercedes-Benz sold 2,164,187 vehicles worldwide in 2020, of which 774,382 vehicles were sold in China, up 11.7% year-on-year, accounting for 35.8% of total global sales. In the first quarter of this year, Mercedes-Benz sold 590,999 vehicles worldwide, of which 222,520 were sold in China, up 60.1% year-on-year and accounting for 37.7% of global sales. It can be seen that Mercedes-Benz sales in the domestic market is increasing, the Chinese market is particularly important for Mercedes-Benz, and Renfu China as a dealer group dedicated to Mercedes-Benz brand, Zhongsheng Group acquisition of Renfu China is really worth looking forward to!

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