Changjiu Holdings LTD. (6959.HK) Officially Launched on the Hong Kong Stock Exchange: Fully Grasping the Industry Opportunities and Highlighting the Long-Term Investment Value
09 Jan 2024, 12:39 p.m. EDT
On 9 January, China’s largest provider of vehicle monitoring services for automobile pledges, Changjiu Company Limited (hereinafter referred to as “Changjiu” or the “Company”, stock code: 6959.HK), was officially listed on the Main Board of the Hong Kong Stock Exchange, becoming a member of the automobile services sector.
Changjiu is principally engaged in the provision of pledge vehicle monitoring services and automobile dealership operation and management services in the PRC. In terms of revenue in 2022 (with a market share of 47.9%) and the number of automobile dealership users as at 31 December 2022, Changjiu is the largest provider of pledge vehicle monitoring services in the automobile distribution sector in the PRC.
Changjiu has been providing pledged vehicle monitoring services for many years and has accumulated extensive experience and expertise in the automotive distribution sector in China. As a natural extension of its business, the company has made every effort to expand its business scope and started to provide operation management services to automobile dealers seeking better business and financial performance in April 2022, thereby forming two business lines, opening up new growth poles and diversifying its revenue sources, making it a forerunner in automobile dealership operation management services.
In 2022, the average gross profit margin of automobile dealerships using ChangJiu’s automobile dealership operation and management services was 7.2%, which was higher than the average performance of automobile dealerships with similar size, brand position and geographical layout. As at 30 June 2023, the Company managed 75 car dealerships, one of which is owned by an independent third party. As at the Latest Practicable Date, the company had entered into non-legally binding letters of intent with 144 car dealerships, all of which are owned by independent third parties.
In recent years, Changjiu’s revenue has achieved steady growth. In 2020, 2021 and 2022, the Company’s revenue will be RMB430.6 million, RMB477.7 million and RMB547.9 million respectively, representing a compound annual growth rate of 12.8%. Revenue also increased from RMB258.7 million in 1H 2022 to RMB309.4 million in 1H 2023. In addition, the number of automobile dealers using the Company’s pledge vehicle monitoring services has also steadily increased from 8,316 as at 31 December 2020 to 9,205 as at 31 December 2021, then to 10,684 as at 31 December 2022 and further to 11,152 as at 30 June 2023.
The continued expansion of its business scale has enabled Changjiu to build up a large and quality user base. As at 30 June 2023, the Company provided pledge vehicle monitoring services to approximately 200 branches of 18 commercial banks (including all the “Big Six” state-owned commercial banks and 12 joint-stock commercial banks in the PRC), 27 automobile finance companies and 11,152 automobile dealers. Ninety-two of the top 100 automobile dealer group companies in China use the Company’s pledge vehicle monitoring services. In addition, the Company extends its services downstream to the industry by providing free access to its mobile application, Jiuzhutong, for tracking pledged vehicles to approximately 50,000 integrated auto traders in China.
From an industry perspective, the penetration of pledge vehicle monitoring services for automobile dealers in the PRC is expected to increase with the development of the passenger car market in the PRC. According to Scorchlight Consulting, the market size of pledged vehicle monitoring services for automobile dealers in the PRC, in terms of revenue, will increase from RMB873.1 million in 2018 to RMB1,054.0 million in 2022, at a CAGR of approximately 4.8%, and is expected to reach RMB1,451.9 million in 2027.
With its rich service supply and strong technological capability, iteratively adding to its high-quality user base, Changjiu will continue to expand its ecosystem in the automotive distribution sector, deeply linking with participants in the automotive distribution industry, enhancing its brand influence, and capitalising on the growth trend of the new energy vehicle market in China’s lower-tier cities.
Stock Information：
At present, Changjiu Group owns two listed companies, Changjiu Holdings LTD.(6959.HK) and Changjiu Logistics(603569.SH), and as a wholly-owned subsidiary of Changjiu Logistics, Changjiu Germany focuses on providing high-quality logistics services for European customers.