Elevator Pitch
I maintain my "Neutral" rating on Hong Kong-listed Zhongsheng Group Holdings Limited (OTCPK:ZSHGY) [881:HK], the second-largest automobile dealer in Mainland China and a proxy for Mercedes-Benz and Lexus sales in the country.
Zhongsheng Group is a relatively more defensive play in the Chinese automobile dealer sector as compared to its peers, as it derives 80% of its gross profit from income streams other than new car sales. In addition, new car models expected to be launched for the Mercedes-Benz and Lexus brands should act as growth drivers for the company's new