Shares of Zhongsheng Group Holdings Ltd. skyrocketed by as much as 31.7% on Monday, hitting a nearly 12-month high of HK$20.55, after the Chinese auto dealer struck a deal to support the expansion of electric vehicle brand AITO's presence in the country.
Zhongsheng signed an agreement with AITO's parent company Seres to expand the EV brand's sales and after-sales service network across China. The partnership will see Zhongsheng aid in opening new AITO stores to boost sales of the vehicles as well as support services for owners.
Analysts at Jefferies viewed the move positively, reiterating their "buy" rating on Zhongsheng and raising their price target to HK$18.10 from HK$15.20. In a note, they said the AITO deal will likely boost Zhongsheng's earnings over 2024 and 2025 as the company factors in the new brand's contribution.
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