EQS-News : MeiDong Auto (1268.HK) 2020 Annual Results Achieved Steady Growth with Profit for the Year Surged by 38.2% to RMB770.6 million

EQS-News / 25/03/2021 / 21:36 UTC+8 
?For Immediate Release?                                                25 March 2021 
 
 
China MeiDong Auto Holdings Limited 
(Incorporated in the Cayman Islands with limited liabilities) 
(Stock code: 1268.HK) 
 
2020 Annual Results Achieved Steady Growth, 
Significant Enhancement in Operational Efficiency 
*   *   * 
Revenue Increased by 24.7% to RMB20,207.4 million 
Profit for the Year Surged by 38.2% to RMB770.6 million 
Final Dividend of RMB0.2410 per Share as Dividend Payout Hit 64.0% 
Inventory Turnover Days Reached Record Low of 9 days 
 
 
Financial Highlights 
                                                                        For the year ended 31 
                                                                        December 
RMB million                                                             2020      2019      Change 
Revenue                                                                 20,207.4  16,210.0  +24.7% 
Gross Profit                                                            2,035.5   1,557.6   +30.7% 
Profit for the Year                                                     770.6     557.5     +38.2% 
Profit for the Year                                                     850.8     557.5     +52.6% 
(excluding non-operating, non-cash,  one-off exchange loss) 
Total dividend for the Year including interim dividends paid (RMB yuan) 0.3861    0.2610    +47.9% 
Dividend payout ratio                                                   64.0%     55.0%     +9.0p.p. 

(25 March 2021 - Hong Kong) The fast-growing auto distributor with strong focus on high-potential 2nd to 4th tier cities, China MeiDong Auto Holdings Limited ("MeiDong Auto", together with its subsidiaries, the "Group", stock code: 1268.HK), is pleased to announce its annual results for the year ended 31 December 2020 (the "Year").

Results Highlight

Despite the impact of COVID-19 in the first half of 2020, China's automobile industry recovered quickly after the pandemic, with overall sales volume recording a strong rebound in the second half, and the luxury car market has been leading the way. In particular, benefiting from consumption upgrade as well as the rather inelastic demand of luxury brands, the luxury vehicle market has maintained a strong growth since April 2020, with its retail sales in December 2020 increasing by 26% year-on-year ("YoY"), significantly higher than that of the overall market. Such structural growth is expected to sustain in the near future.

Despite operating under the extreme market environment, the Group was able to deliver satisfactory growth, as revenue reached approximately RMB20,207.4 million (2019: approximately RMB16,210.0 million), representing an increase of approximately 24.7% YoY. Driven by the steady growth in total revenue, gross profit increased by approximately 30.7% YoY from approximately RMB1,557.6 million to approximately RMB2,035.5 million.

Supported by its efficient operational management, excellent inventory control and prudent cost measures, profit for the Year increased by 38.2% YoY to approximately RMB770.6 million (2019: approximately RMB557.5 million), with profit margin for the Year also growing by 0.4 percentage point from approximately 3.4% to approximately 3.8%. If excluding relevant non-operating expenses, profit for the Year would be RMB850.8 million, representing an increase of 52.6% YoY, and profit margin for the Year would be 4.2%.

The Group also became more efficient as it grew. During the Year, cash flow from operations exceeded RMB 1,445.8 million. Net margin was 3.8% in 2020, higher than the 3.4% in 2019. ROE and ROA remained at high levels of 23.04% and 9.92%, respectively. Inventory also came down to 9 days from 17 days at the beginning of the year and 12 days at the mid-year. The Group believes it is of the utmost importance to drive efficiency enhancement at all times.

In view of the remarkable financial performance, the Board of Directors (the "Board") of the Company recommended a final dividend of RMB0.2410 per ordinary share for the year ended 31 December 2020 (2019: RMB0.2 per ordinary share). Together with the interim dividend paid of RMB0.1451 per share, total dividend paid for the Year was RMB0.3861 (2019: RMB0.2610), as payout ratio for the Year reached 64.0%. (2019: 55.0%).

New Passenger Vehicle Sales - Accounted for 88.9% of Total Revenue

During the Year, through new-store expansion and same store sales growth, revenue of new passenger vehicles sales amounted to approximately RMB17,956.2 million (2019: approximately RMB14,383.8 million), indicating an increase of approximately 24.8% as compared to the same period of last year. Luxury brands remained as the major revenue source of the Group, accounting for approximately 84.0% of total new passenger vehicles sales. BMW, Porsche, Lexus and Audi recorded sales of new passenger vehicles of approximately RMB7,144.7 million, RMB3,581.7 million, RMB4,210.1 million and RMB144.3 million, accounting for approximately 39.8%, 19.9%, 23.5% and 0.8% of total new passenger vehicles sales respectively. In terms of sales volume, the Group sold 57,200 new passenger vehicles during the Year, representing an increase of 15.9% YoY. Sales of BMW, Porsche, Lexus and Audi reached 20,792 units, 4,467 units, 11,788 units and 541 units respectively.

After Sales Services - Accounted for 11.1% of Total Revenue

During the Year, driven by new store expansion and same store growth, revenue of aftersales services reached approximately RMB2,251.3 million, representing an increase of 23.3% (2019: approximately RMB1,826.2 million) as compared to the same period of last year. The total number of vehicles served was 513,236, representing an increase of 12.5% YoY. Gross profit margin of the segment remained stable and slightly increased to 46.3%.

Current Network

The Group continued to focus on luxury brands and execute its highly-effective "Single City Single Store" strategy in order to further expand its distribution network. In 2020, the Group opened 5 new stores, with 63 self-operated stores situating in provinces and cities such as Beijing, Hebei, Hubei, Hunan, Jiangxi, Fujian, Guangdong, Gansu and Anhui, which includes a joint venture operated by the Group.

Mr. Tao Ye, Chief Executive Officer and Executive Director said, "We believe our strength remains in our efficiency, which is derived from our ability to keep inventory low and turns high. Efficiency and low inventory allow us to optimize cash flow and maximize asset returns, and more importantly, allow us to generate profits with consistency and predictability. We are a strong company because our profit, cash flow, and asset efficiency are not only growing in magnitude, but also becoming more predictable and less uncertain, which in turn, yielding a higher quality return to our shareholders."

- End -

About China MeiDong Auto Holdings Limited

China MeiDong Auto Holdings Limited is a fast-expanding auto distributor focusing on 2nd to 4th tier cities along with the provision of after-sales services. The Group mainly focuses on mid brands and mainstream luxury brands, including Porsche, BMW, Lexus, Audi, BMW Mini, Toyota and Hyundai. As of 31 December 2020, the Group operates 63 stores in Beijing, Guangdong, Hunan, Hubei, Fujian, Jiangxi, Anhui, Hebei, Gansu and Shandong provinces in China.

This press release is issued by DLK Advisory Limited for and on behalf of China MeiDong Auto Holdings limited.

For further information, please contact:

DLK Advisory ????

Michelle Shi ([e-mail])

Jonathan Lam ([e-mail])

Kathleen Mui ([e-mail])

Adrian Chung ([e-mail])

Emily Wei ([e-mail])

Tel: [phone]

Fax: [phone]

25/03/2021 Dissemination of a Financial Press Release, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. Media archive at www.todayir.com

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March 25, 2021 09:36 ET (13:36 GMT)