2

Group Financial HighlightsGroup Financial HighlightsFor the Six Months Ended June 30

YOY change (%)

2004 2003

Turnover (HK$M) 1,858 1,527 21.7

Gross profit (HK$M) 929 710 30.8

EBITDA (HK$M) 295 164 79.9

Operating profit (HK$M) 235 92 155.4

Profit before tax (HK$M) 243 109 122.9

Profit attributable to shareholders (HK$M) 171 63 171.4

Earnings per share (HK cents) 11.8 4.4 168.2

Interim dividend per share - basic (HK cents)

- special (HK cents)

4.0

1.5

1.5

3.0

166.7

50.0

Dividend payout ratio (%) 46.6 102.3 54.4

3

Selected Financial Highlights & RatiosSelected Financial Highlights & Ratios For the Six Months Ended June 30

2004 2003

Net cash & bank balances (HK$M) 648 784*

Cash inflow from operating activities (HK$M)

148 148

Inventory turnover on sales (days) 23 20

Current ratio (x) 2.6 2.9

Gearing on shareholder’s equity (%) 3.8 3.4

Gross margin (%) 50.0 46.5

Operating margin (%) 12.6 6.0

Net margin (%) 9.2 4.1

* As at December 31, 2003

4

Divisional HighlightsDivisional HighlightsFor the Six Months Ended June 30

Turnover Operating Profit

Division 2004(In HK$M)

2003(In HK$M)

YOY Chg (%)

2004(In HK$M)

2003(In HK$M)

YOY Chg (%)

Retail And

Distribution1,739 1,452 19.8 200 64 212.5

Manufacturing 119 75 58.7 34 26 30.8

Others * - - - 1 2 50.0

Total 1,858 1,527 21.7 235 92 155.4

* Includes interest income and intra-division eliminations

5

Retail and Distribution DivisionRetail and Distribution DivisionFor the Six Months Ended June 30, 2004

Retail and Distribution Turnover Composition by Market

Mainland China24%

(25%)

Hong Kong22%

(22%)

Taiwan 20%

(19%)

Singapore11%

(11%)

Malaysia4%

(4%) Others14%

(15%)

Australia5%

(4%)

Note:1H03’s figures in brackets

6

Retail and Distribution DivisionRetail and Distribution Division (Cont’d)(Cont’d)

For the Six Months Ended June 30, 2004

Retail and Distribution Turnover Composition by Brand

Giordano Ladies4%

(4%)

Bluestar Exchange 9%

(7%)

Giordano core line + Junior87%

(89%)

Note:1H03’s figures in brackets

7

Retail and Distribution DivisionRetail and Distribution Division (Cont’d)(Cont’d)

Giordano Giordano core linecore line + Junior+ Junior

Giordano Giordano LadiesLadies

Bluestar Bluestar ExchangeExchange

Retail Turnover Growth

(YOY % Chg)

17.1 34.5 40.7

• Total comparable store sales 15.3%

• Total comparable store gross profit 20.5%

Brand StatisticsBrand Statistics

8

(In HK$M)

(Six Mths ended June 30)

Percentage Change (%)

Comp. Store Sales Growth (%)

2004 2003

Mainland China 420 363 15.7 7.7

Hong Kong 384 316 21.5 18.8

Taiwan 341 281 21.4 8.0

Singapore 195 155 25.8 26.9

Other Markets &

Distribution Sales

399 337 18.4 9.9*

TOTAL 1,739 1,452 19.8

Retail and Distribution Division Market ReviewRetail and Distribution Division Market ReviewAll markets’ turnover grew by double-digit YOY due to low comparison bases resultAll markets’ turnover grew by double-digit YOY due to low comparison bases resulted from SARS in 2003.ed from SARS in 2003.

*Other market’s comp. store sales growth

9

Retail and Distribution Division Market ReviewRetail and Distribution Division Market Review (cont’d)(cont’d)

45

181

74

545

45

211

84

615

0 100 200 300 400 500 600 700

Singapore

Taiwan

Hong Kong

Mainland China

No.of Outlets

June 2004

June 2003

70

10

30

10

Number of Outlets, by Region and by BrandNumber of Outlets, by Region and by Brand (as at June 30, 2004) (as at June 30, 2004)

Total Giordano core line

Giordano Ladies

Giordano Junior*

Bluestar Exchange

Australia 35 35 0 0 0

Hong Kong 84 50 8 0 26

Indonesia 39 39 0 0 0

Japan 19 19 0 0 0

Korea 172 129 0 43 0

Mainland China 615 586 6 3 20

Malaysia 46 46 0 0 0

Middle East 74 74 0 0 0

Myanmar 17 17 0 0 0

Philippines 40 40 0 0 0

Singapore 45 37 0 8 0

Taiwan 211 140 8 7 56

Thailand 41 41 0 0 0

Others 12 12 0 0 0

Total 1,450 1,265 22 61 102

*Includes stand-alone outlets only

11

Manufacturing DivisionManufacturing DivisionFor the Six Months Ended June 30

2004 2003 YOY change

(%)

Sales including internal sales (HK$M) 405 301 34.6

Sales to external customers (HK$M) 119 75 58.7

Percentage of Retail and Distribution’s total purchase 29% 29% N.A.

Contribution to the Group’s operating profit 14% 28% N.A.

• Sales to Group companies accounted for 71% of divisional sales, down from 75% in 1H03

• Secured new clients from US and Europe, reducing reliance on Japanese market

12

OutlookOutlook• All major markets recovered from SARS

• Consolidated sales and gross profits rose 5.6% and 11.5%, respectively, compared against 1H02

• Optimistic with outlook

• Improvement trend in Taiwan; focus on recapturing market share

• Performance is picking up in Korea; major turn- around in 2005

• Higher CAPEX to fund store refurbishment in the 2H

• Impress customers with high quality products instead of discount offering

13