In the first half of 2025, China's automotive market experienced a triple cycle convergence of "intensified inventory competition, persistent price wars, and breakthrough new energy penetration." According to China Passenger Car Association data, domestic passenger vehicle sales increased 10.8% year-on-year to 10.902 million units in H1. However, the oversupplied inventory competition landscape further intensified, with automakers continuously expanding capacity to compete for market share, while demand growth lagged behind capacity expansion. In terms of competition dynamics, price wars remained at high levels, with new vehicle prices dropping an average of 11.4% in H1, placing enormous profitability pressure on upstream parts suppliers, OEMs, and channel dealers. Structurally, new energy penetration reached 50.2% (breaking through 53.3% in June alone), both squeezing traditional fuel vehicle market share and shifting industry competition focus from price wars to technology and service competition. Against this backdrop, transitioning from scale expansion to quality priority has become the core direction for dealer breakthroughs. YONGDA AUTO's (03669) 2025 interim performance report provides an industry resilience development model through its practice of "controlled inventory, stable cash flow, and enhanced services."
Financial data shows the company achieved revenue of RMB 27.072 billion in H1, maintaining profitability after excluding related asset impairment impacts. Meanwhile, the company's operational quality indicators steadily improved: inventory turnover days of 26.3 days, down 0.4 days year-on-year, effectively avoiding new vehicle price volatility risks; net cash from operating activities of RMB 1.167 billion, up significantly 66.9% year-on-year, providing funding support for business adjustments; net debt ratio of 9.8% at period-end, down 0.4 percentage points year-on-year, with financial structure continuously optimizing.
Behind these performances lies YONGDA AUTO's proactive departure from traditional volume-driven logic, achieving volume-profit balance through refined operations. While controlling scale, the company gradually shifted core competitiveness from scale to operational efficiency through inventory control to efficiency enhancement, which is precisely the breakthrough key for quality dealers during industry transformation.
**Significant Refined Operations Results**
Specifically, in inventory management, YONGDA AUTO adopted proactive inventory control and dynamic adjustment strategies. On one hand, it maintained overall new vehicle business stability by actively controlling new vehicle sales and further strengthening fund management for new vehicle inventory (including prepayments) across brands. Meanwhile, through digital system integration between new vehicle sales and inventory funds, it strengthened management of new vehicles with over 30-day excess inventory and implemented binding performance assessments with general managers and management teams, effectively ensuring healthy new vehicle inventory and improved fund turnover efficiency. As of end-June, the company's in-transit and in-stock inventory balance was RMB 4.986 billion, down 6.8% from end-2024. This measure not only reduced inventory capital occupation but also avoided price decline risks from new vehicle price volatility, providing solid guarantee for cash flow health.
In single-store operational quality improvement, YONGDA AUTO promoted network optimization and efficiency enhancement. In H1, the company accelerated closure and consolidation of non-core brand and non-core regional stores, cumulatively closing 19 stores (including 12 traditional brands and 7 new energy brands), concentrating resources on developing higher-potential leading brands. It opened 7 new leading new energy stores (including 5 Harmony stores), added 30 new energy brand authorizations, and prepared 14 new energy stores (13 being Harmony stores). As of end-June, the company operated 209 network points total, with luxury brands accounting for 64.6% and independent new energy brands 16.7%, further improving brand concentration.
The direct result of network optimization was effectively improving single-store operational efficiency and output. Meanwhile, through diversified utilization of showroom and after-sales properties, single-store operational costs further decreased, forming "refined and excellent" network layout advantages.
**New Energy and After-Market Construct New Growth Curves**
Under the irreversible trend of automotive industry electrification transformation, YONGDA AUTO positioned new energy business as strategic core, making it a "ballast stone" against traditional business volatility through sales expansion and service extension. Meanwhile, leveraging its large customer base, it strengthened after-market service capabilities, thickening profit margins through high-margin, high-stickiness after-sales business.
In new energy business, YONGDA AUTO achieved independent new energy brand sales of 10,312 units in H1 (including 4,455 units in dealer mode and 5,857 units in direct sales mode), up 49% year-on-year, with direct sales mode volume up 123.1% year-on-year, reflecting the company's channel advantages in new force brand cooperation. More notably, new energy business demonstrated prominent quality attributes. H1 new energy vehicle average selling price was RMB 267,300, focusing on high-end markets, with comprehensive gross margin per unit maintained above 4%, significantly higher than traditional fuel vehicle new car gross margin levels. As of end-June, independent new energy brand remaining orders approached 6,000, laying foundation for H2 sales growth.
On the after-sales side, new energy business growth potential further released. H1 independent new energy maintenance revenue was RMB 216 million, up 75.8% year-on-year; average output value per vehicle was RMB 3,447, up 16.5% year-on-year; after-sales customer base reached 72,300, up 25.9% from end-2024, with monthly compound growth rate exceeding 5%. This means YONGDA AUTO's new energy business has transformed from simply selling cars to full-cycle "sales + service" operations, with customer lifetime value continuously improving.
With new energy business enhancement, YONGDA AUTO achieved after-sales service revenue of RMB 4.784 billion in H1, including maintenance revenue of RMB 4.660 billion with gross margin of 40.35%; parts and service absorption ratio (proportion of after-sales gross margin covering sales and administrative expenses) improved to 84.2%, up 5.6 percentage points year-on-year.
To further tap incremental opportunities in stock markets, YONGDA AUTO is actively exploring and innovating business models, constructing diversified sales strategies. All measures consolidate YONGDA AUTO's after-market profit contribution, strengthen customer stickiness, and accumulate valuable user assets for long-term development.
Additionally, YONGDA's used car business achieved breakthroughs in stable operations. H1 used car transaction volume was 30,427 units. Through strict inventory turnover control and gross margin structure optimization, the company achieved gross margin of 5.21%, up 0.81 percentage points sequentially; gross profit of RMB 113 million, up 8.2% sequentially; turnover days of 17.7 days, down 2.5 days year-on-year and 4 days sequentially. The company actively explores new models including new energy used cars, bulk vehicle source cooperation, and used car exports, constructing used car ecosystems as important bridges connecting new cars and after-markets.
**"Quality-Type Dealer" Sustainable Development Logic Superior**
From YONGDA AUTO's H1 operational practices, its series of actions to "control inventory, stabilize cash, enhance services" precisely validates the core transition in dealer competition logic after the automotive industry shifted from incremental to stock markets. Industry competition no longer focuses on who can sell more cars through scale, but who can serve customers more efficiently and resist risks with more stable finances.
The "quality-type dealer" characteristics YONGDA AUTO demonstrates construct fundamental logic for long-term sustainable development. This logic's advantages first manifest in operational efficiency taking priority over scale expansion. Currently, many automotive dealer industry companies remain trapped in OEM task binding dilemmas. Dealers over-purchase vehicles for rebates, leading to inventory turnover days commonly exceeding 40 days, with large amounts of capital occupied by inefficient inventory while bearing price decline risks from new vehicle price volatility. YONGDA AUTO optimizes inventory turnover efficiency through proactive inventory control and dynamic adjustment strategies. This efficiency differential directly translates into financial safety margins, not only covering the company's over RMB 100 million dividend payments but also providing funding support for new energy network construction and digital system upgrades.
Second, "quality-type dealers'" core competitiveness lies in constructing profit structures independent of new vehicle sales volumes, particularly evident in YONGDA AUTO's after-market performance. The company's 84.2% parts and service absorption ratio means over 80% of fixed operational costs are covered by after-sales business, with new vehicle sales only needing to contribute minimal gross margins to achieve overall profitability. This after-sales foundation structure precisely distinguishes quality-type dealers from scale-type dealers.
From long-term development perspectives, YONGDA AUTO's quality-type layout's alignment with industry trends further amplifies its development logic sustainability. Current new energy penetration has broken through 50%, with industry competition focus shifting from single price wars to comprehensive competition in "technology + service + ecosystem." Dealers' service attributes are gradually replacing sales attributes as core value. YONGDA's advance-positioned new energy business not only achieved rapid year-on-year sales growth but also accumulated high-value new energy user assets through high-end, full-cycle services. Meanwhile, its luxury car + new energy brand combination both relies on luxury car customers' high consumption capacity to guarantee short-term profitability and captures long-term growth opportunities through new energy business, forming offensive-defensive business structures.
Additionally, the company's explored battery recycling industry, intelligent robot layout, and research on AI technology empowering sales services also open new growth spaces beyond traditional dealer businesses, injecting technology-driven long-term imagination into quality-type logic.
In the context of accelerated industry consolidation, "scale-type dealers" have weak risk resistance due to reliance on incremental dividends, with gradually weakening market competitiveness. "Quality-type dealers" represented by YONGDA AUTO, with triple advantages in efficiency, profitability, and strategy, can not only maintain resilience in current cycles but are also positioned to seize advantages in industry landscape reshaping, with their development logic superiority becoming increasingly prominent.