China ZhengTong Auto Services Holdings Limited reported interim 2026 revenue of RMB 9.62 billion, a 22.8% year-on-year decline driven by weaker new-car demand and a sharp drop in mortgage facilitation fees.

Gross profit slid 60.2% to RMB 206.60 million, compressing margin to 2.1% from 4.2% a year earlier. Selling and distribution expenses edged down 4.1% to RMB 586.52 million, but the fall was insufficient to offset top-line pressure; operating loss widened to RMB 726.27 million.

Bottom-line performance deteriorated accordingly: the period closed with a net loss of RMB 1.05 billion versus a RMB 0.90 billion loss in first-half 2025. The company attributed the setback to a 23.4% contraction in new-car deliveries to 26,057 units and reduced commission rebate rates on auto financing.

Segment highlights • New-car sales and mortgage facilitation revenue fell 24.9% to RMB 7.73 billion, accounting for 80.3% of total turnover. • After-sales services generated RMB 1.78 billion, down 12.1% yet raising its revenue share to 18.5%. The group serviced roughly 621,000 vehicles during the period. • Supply-chain logistics revenue fell to RMB 109.70 million amid softer volumes from core automaker clients. • The used-car division achieved a used-to-new sales ratio of 31%.

Network and transformation At 30 June 2026, the dealer network stood at 134 stores in 40 Chinese cities, with six additional sites under development. The company accelerated its new-energy rollout, adding seven NEV customer centres and ranking 22nd on the 2026 China Auto Dealer Group Top 100 list.

International expansion remained a strategic priority: nine new overseas warehouses lifted the total to 20 across Europe, Central Asia, the Middle East, Africa and Latin America. The group launched its first Thailand dealership and began exporting to Italy, Panama and Rwanda.

Balance-sheet metrics Cash and cash equivalents rose to RMB 1.58 billion, supported by a RMB 443.49 million operating cash inflow. Net gearing, however, surged to 1,683.4% as at 30 June 2026, reflecting RMB 18.63 billion in loans, borrowings and lease liabilities against weakened equity. Pledged bank deposits dropped to RMB 3.00 billion from RMB 4.34 billion at year-end 2025.

Strategic actions • Completed the RMB 646.99 million common-control acquisition of Xindeco ITG Automobile in March 2026. • Disposed of Shenzhen real-estate subsidiary for RMB 824.83 million, booking an RMB 87.59 million gain. • Converted additional related-party borrowings into perpetual bonds, keeping coupon payments discretionary.

Capital markets On 30 June 2026, the company agreed to place up to 2.20 billion new shares at HKD 0.15 each to raise HKD 330.53 million for working-capital needs; completion is pending. No interim dividend was declared.

Outlook Management is targeting capital raising, cost containment, NEV channel expansion and overseas growth in second-half 2026 while continuing to streamline underperforming stores and dispose of non-core assets.