AutoBeta(AutoBeta.net)10/02 Report--

Yongda Automobile Group is one of the top ten car dealers in China, mainly engaged in luxury car brand dealers. Yongda announced on Oct. 2 that it would buy the seller's 4S store business for 830 million yuan, including Porsche, Mercedes-Benz, Lexus 4S and a Tesla authorized maintenance center.

Yongda Motor announced that the Company entered into a sale and purchase agreement with InchcapeOverseasLimited, a direct wholly-owned subsidiary of the seller Inchcape, pursuant to which the Company conditionally agreed to acquire and the seller agreed to sell all the issued shares of the target company Yingzhijie Asia Pacific Limited at a consideration of $830 million. After delivery, Yingzhijie Asia Pacific will become a direct wholly-owned subsidiary of the Company and the financial results of Yingzhijie Asia Pacific will be incorporated into the company's consolidated financial statements.

Yingzhijie Asia Pacific and its subsidiaries operate a Porsche 4S dealership and a Tesla authorized maintenance center in Nanchang, Jiangxi Province, a Mercedes-Benz 4S dealership in Jiujiang, Jiangxi Province, and a Lexus 4S dealership in Shaoxing, Zhejiang Province.

According to Yongda, the acquisition will enable the company to further expand its Porsche, Mercedes-Benz and Lexus 4S dealership network and Tesla authorized maintenance network, as well as further diversify its portfolio of luxury and ultra-luxury brands.

As of June 30, 2019, a total of 245 Yongda Automobile outlets have been opened and authorized to open, including 201 authorized outlets, 29 non-authorized outlets and 15 authorized outlets.

Yongda Motor mainly deals in luxury brand 4S stores, and eight 4S stores were completed in the first half of this year, including 2 Porsche 4S stores, 3 Volvo 4S stores, 1 Lincoln 4S store, 1 Lecker 4S store and 1 Porsche city showroom.

According to the performance report for the first half of 2019, Yongda's comprehensive income (including financial and insurance agency services) in the first half of the year was 29.633 billion yuan, an increase of 16.8% over the same period last year, and the net profit attributable to owners of the company was 734 million yuan, an increase of 1.5% over the same period last year and 38.6% higher than in the second half of 2018.

Yongda believes that the performance difference between overall passenger cars and luxury cars is mainly due to the continuous domestic demand for consumer upgrading, the expanding product line of luxury brands and a wealth of auto financial products. The rapid growth of new car sales, after-sales service, used car business, auto finance and insurance business, car operating leasing services and even new energy vehicle business have all continued to develop steadily, which are the main reasons for the company's revenue growth in the first half of 2019.

Specifically, Yongda new car sales rose 17.9% to 94800 units in the first half of 2019 compared with the same period last year, and new car sales revenue reached 24.482 billion yuan, an increase of 17.3% over the same period last year. Among them, new car sales of luxury brands increased by 24.2 per cent to 61000 vehicles compared with the same period last year; sales revenue of new cars of luxury brands rose 19.3 per cent to 20.169 billion yuan over the same period last year, that is, the proportion of new car sales of luxury brands in total new car sales revenue further increased to 82.4 per cent.

While the environment of the car market changes, luxury brands are growing against the market, which is a major growth point of dealer group profits.

Take Meidong Automobile as an example. The profit attributable to shareholders in the first half of the year rose 49.6% from a year earlier to 235 million yuan. Industry insiders believe that Meidong Automobile Group has 6 Porsche, 11 Lexus, 12 Toyota and 23 BMW, but there are no Mercedes-Benz stores, which are all profitable brands this year.

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