Zhongsheng Group Holdings Limited (Stock Code: 00881) issued a profit warning, projecting a loss attributable to owners of the parent of no more than RMB2.00 billion for the financial year ending 31 December 2025. This contrasts sharply with the RMB3.20 billion profit recorded in FY24.

Key factors identified by the board:

1. Automotive Gross Loss Expansion • Persistently weak domestic consumption, supply-demand imbalance and intensified industry competition increased the Group’s gross loss from new and pre-owned vehicle sales by up to 70% year-on-year.

2. Financing Commission Decline • Income from automobile financing commissions is expected to fall by as much as 50% compared with FY24, reflecting adverse policy developments.

3. Non-Cash Impairment Charges • An impairment assessment on underperforming cash-generating units will lead to a non-cash goodwill and intangible-asset charge of up to RMB2.50 billion.

Operational observations:

• New-car sales volumes edged higher, supported primarily by new-energy vehicle brands. • After-sales service gross profit continued steady growth. • Inventory levels stayed healthy and operating cash flow improved, prompting the board to describe the Group’s overall operational and financial position as “stable and sound.”

The figures are based on unaudited management accounts; final audited results are scheduled for release before end-March 2026. The company advised shareholders and potential investors to exercise caution when dealing in its securities.