Sunfonda Group Holdings Limited

新豐泰集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1771.HK)

 

Announces 2020 Annual Results
*   *   *

Record High Revenue of over RMB10 Billion, with Improved Profitability

Expanding Business Nationwide with New BMW Brand Authorisation in Wuhan

Generous Returns to Shareholders, with Dividend Payout Ratio over 25%

 

Financial Highlights

		For the Year ended 31 December
RMB Million	2020		2019	Change
Revenue	10,634.4		9,314.7	+14.2%
Sales of passenger automobiles: Luxury and ultra-luxury brands	8,221.9		7,049.6	+16.6%
Sales of passenger automobiles: Mid-end market brands	1,269.8		1,172.5	+8.3%
After-sales services	1,142.7		1,092.6	+4.6%
Gross profit	748.8		654.2	+14.5%
Profit before tax	203.7		141.1	+44.4%
Profit for the year attributable to owners of the parent	145.2		119.9	+21.1%
Final dividend per share (HK$)	0.08		0.04	+100.0%

 

(Hong Kong - 30 March 2021) Sunfonda Group Holdings Limited ("Sunfonda" or the "Company", together with its subsidiaries, collectively the "Group"; stock code: 1771.HK), a leading luxury and ultra-luxury car dealer in China, is pleased to announce its annual results ended 31 December 2020 (the "Year").

 

In the first half of 2020, the novel coronavirus pandemic (COVID-19) took the world by storm and hit the automobile dealership industry. However, as China began to show signs of recovery from the impact of the pandemic, the automobile retail market picked up in the second half of the year, with the luxury automobile retail market rebounding rapidly. During the Year, the Group's revenue reached a record high at RMB10,634.4 million, representing a year-on-year increase of 14.2% (FY2019: RMB9,314.7 million). Profitability improved significantly, with gross profit up 14.5% from RMB654.2 million for 2019 to RMB748.8 million for the Year. Gross profit margin reached 7.0%, same as that of 2019. Profit for the year attributable to owners of the parent increased by 21.1% year-on-year to RMB145.2 million (FY2019: RMB119.9 million).

 

In return to the continuous support of shareholders, the board of directors proposed a final dividend of HK$0.08 for the year ended 31 December 2020 (FY2019: HK$0.04), with dividend payout ratio exceeding 25%.

 

New auto sales business - 89.3% of total revenue

During the Year, the Group achieved revenue of RMB9,491.7 million from sales of new automobiles (FY2019: HK$8,222.1 million), representing a year-on-year increase of 15.4%. Luxury and ultra-luxury brands remained as the major revenue source of the Group, and accounted for 86.6% of the revenue for new auto sales business; mid-end market brands accounted for approximately 13.4% of the segment revenue. Gross profit of the segment amounted to HK$256.9 million, representing a significant increase of 50.1% compared with that of FY2019.

 

The Group actively adjusted its operation strategies, such as integrating new media with traditional sales models to achieve sales. The Group has set up accounts on various video platforms including Douyin, and tried new online sales methods such as live-streaming sales of automobiles, which have seen initial results. During the Year, thousands of live-streaming activities were launched across all the stores under the Group, attracting a total of 0.312 million followers, which further drove up the overall new auto sales volume in 2020. During the Year, the Group achieved a sales volume of new automobiles of 32,175 units, representing an increase of 9.7% year-on-year.

 

After-sales services business - 10.7% of total revenue

The Group's after-sales services business maintained stable in 2020, with a revenue of approximately RMB1,142.7 million (FY2019: approximately RMB1,092.6 million), representing a 4.6% increase year-on-year. Gross profit for the segment increased by 1.8% to RMB491.9 million, with gross profit margin of 43%. During the Year, the Group increased overall after-sales business volume by strengthening the repair and maintenance business, improved the efficiency of after-sales service, enhanced brand promotion and marketing, aggressively carried out marketing for high quality projects, and increased communication and cooperation with insurance companies, with the aim of improving client retention rate.

 

Newly authorized by BMW in Wuhan; Number of sale points in operation increased to 37

During the Year, the Group was newly authorized by the BMW brand in Wuhan, Hubei Province, which further expanded the Group's business to 8 provinces and 14 cities across the country. The Group set up three new dealership stores during the Year, including a new Xi'an Lexus 4S store, a new Xi'an GAC Toyota 4S store and a new Nanjing GAC Toyota 4S store. As of 31 December 2020, the Group had 14 brand distribution agency rights (including 9 luxury and ultra-luxury brands: Bentley, Porsche, Mercedes-Benz, BMW, Audi, Lexus, Cadillac, Hongqi, imported Volkswagen) and 37 sale points in operation.

 

"FUN TIME LANE" automobile street zone project progressing steadily, with a promising future

The construction of the "FUN TIME LANE" automobile street zone project in Xi'an is progressing in an orderly manner. The project is expected to commence operation in 2022, targeting to house a number of luxury automobile brands, and reduce the customer acquisition cost of each of the brand stores. By offering catering service, parent-child experience and other integrated entertainment services, the project will enhance customer experience and develop into an automobile themed regional consumption center to capture the opportunities arising from national policy of internal circulation and consumption upgrades. The business model of the project has been recognized by all stakeholders, which will help continue to optimize and enhance the industrial structure and further demonstrate its comprehensive competitiveness. The Group also endeavours to promote the project in other regions nationwide, targeting to help the Group achieve greater economies of scale and improve operational efficiency, thereby further consolidating its leading position in the national luxury automobile retail market.
 

Future strategy and prospects

According to figures released by the China Association of Automobile Manufacturers ("CAAM"), the annual sales volume of 2020 reached 3.588 million units, representing an increase of 11.7% year-on-year. With the steady recovery of the national economy, the recovery of consumer demand will be accelerated, and the overall potential of the Chinese automobile market remains huge. The CAAM forecasts that the Chinese automobile market will achieve positive recovery growth in 2021. In 2021, China's total automobile sales may reach 26.30 million units, representing an increase of 4% year-on-year. Specifically, the sales volume of passenger vehicles will reach 21.70 million units, representing an increase of approximately 7.5%.

 

The Group will take advantages of the dual benefits from the development of "dual-circulation" economy and domestic consumption upgrades to enhance the overall brand influence, increase its joint cooperation with multi-brands across the industry to hold innovative online and offline activities through acquisition of customer traffic, accurately improve customer experience and highlight the advantages of collective branding. The Group will also implement intelligent management and delicacy operations to achieve efficient online and offline sales, so as to continue to improve its operating capabilities; the Group will also continue to use the membership center to further improve its membership system-based marketing segment, explore opportunities for used car sales and replacement business while retaining customers, and build a new media professional team, optimize and use WeChat public account, Douyin account and other new media platforms to attract traffic to various brand stores to achieve efficient operation.

The Group will further seize market opportunities arising from the favourable national policies such as the "Belt and Road Initiative", strive to improve its network layout and continuously expand its national business footprint, and take into account of the introduction of more luxury car brands and M&As of potential peers. In the future, the Group will certainly continue to move forward firmly for development and bring more substantial and long-term returns to shareholders at the same time.
 

 

About Sunfonda Group Holdings Limited

• Established in 1997, Sunfonda Group explores business opportunities in Northwest China in particular Shaanxi, the center of the region. It also focuses on developing Jiangsu region, the prospering province, including construction of new automobile park with half-hour access to Xi'an. Sunfonda Group will beneft from synergies, economies of scale and enhanced customer experience with the development plan of the automobile park.
• Sunfonda Group mainly engaged in sales and after-sales service of luxury and ultra-luxury car brands, including Bentley, Porsche, Benz, BMW, Lexus, Audi, Cadillac, Volkswagen Imported etc. As of 31 December 2020, Sunfonda's business covered 8 provinces and 14 cities in China, operating 37 stores in Beijing, Shaanxi, Jiangsu, Shangxi, Ningxia, Gansu, and Inner Mongolia.

 

Company Website: http://www.sunfonda.com.cn/

 

This company news is issued by DLK Advisory Limited on behalf of Sunfonda Group Holdings Limited

 

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