CHOW SANG SANG HOLDINGS INTERNATIONAL...
Embed Size (px)
Transcript of CHOW SANG SANG HOLDINGS INTERNATIONAL...
2014 Interim Results Presentation
CHOW SANG SANG HOLDINGS INTERNATIONAL LIMITED
周 生 生 集 團 國 際 有 限 公 司 Stock code: 116
Disclaimer and Forward Looking Statements
• This document carries the information and the opinion is not for the purpose of comprehensive research, financial services or legal opinion. Chow Sang Sang Holdings International Ltd. does not guarantee its accuracy and integrity. This document contains the information only to provide reference. They can not become or deemed to be sold or bought
or subscribe for securities or other part for the invitation.
• This document contains information, opinion that only reflect Chow Sang Sang Holdings International Ltd’s opinion on the date of the presentation. Chow Sang Sang Holdings International Ltd. can change anything on this document without notices. Chow Sang Sang
Holdings International Ltd. is not liable for any losses incurred from the usage of information or opinions obtained from this document.
• This document contains confidential information to be used solely for the purpose of
personal reference. In addition, this document may not be transmitted or transferred to any other person or in any way be incorporated into other files or data.
• This document and the related discussion may include forward-looking statements with risk
and uncertain factors. Forward looking wording such as believe, expect, planning, forecast, target, possible, hope, will, may, etc., will be used in this document. The reader of this document should not excessively rely on such forward-looking statements to form their
opinions. These forward-looking statements are based on our own company and other sources that we believe are reliable.
I. Business Overview
II. Financial Highlights
III Strategy Outline
IV. Q&A Session
Main business segment 380 self-operated stores in
Greater China and Internet platform
Operates under “Chow Sang Sang" and “Emphasis Jewellery”
Generated 88.0% of total revenue for 2014 1H
Physical metals trading service
Commission based Generated 10.7% of total
revenue for 2014 1H
8 HK offices and Internet platform
Commission based No proprietary trading Generated 0.2% of total
revenue for 2014 1H
Investment Properties Shares of HKEx Generated 1.1% of total
revenue for 2014 1H
Chow Sang Sang Group
Business Overview: Jewellery Segment
Product mix: Jewellery
Gold based Items
Licensed Products (Hello Kitty)
International Brands (Gucci, Rolex, Tudor)
(1) Excluding Hong Kong and Macau (2) Reached 303 as of Aug 26, 2014
Hong Kong Macau
Beijing Flagship Store
Hong Kong Flagship Stores
Kunming Flagship Store
Shanghai Flagship Store
Chow Sang Sang directly runs and controls all of its retail stores with no franchise operations
Complementing the extensive retail network, the eshop.chowsangsang.com working with key retail portals in China, offer online shopping service
Chow Sang Sang
China(1) 300(2) –
HK / Macau 47 12
Taiwan - 21 as at Jun 30, 2014
Focus on Growth in Mainland China
Increasing No. of Stores in Mainland China
(No. of Stores)
+37% +5% +20% Same-store
New shops +10*
* as of August 26, 2014, 32 new locations signed up to be completed in 2014.
Operating Performance …
Gross Profit Turnover (HK$ mm) (HK$ mm)
Operating Performance (Cont’d) …
Profit attributable to equity holders Operating Profit (HK$ mm) (HK$ mm)
…Driven by Retail Segment…
Results Breakdown Revenue Breakdown
Retail – Operating Results Retail – Revenue
(HK$ mm) (HK$ mm)
…but Robust Demand from PRC Consumers
2012 2014 1H 2013
Mainland customers’ contribution continues to increase
71% 72% 77% +1% +5%
to PRC Customers(1)
(1) China sales + HK/Macau sales by PRC customers
Consolidated Sales Mix – (Retail)
Gross margin: Gold* : 12%-16% Non gold jewellery: 39%-44% Watches: 22%-24% * Include gold price movement
Consolidated Gross Profit Contribution – (Retail)
2013 1H 2014 1H
Change of Average Selling Price
Hong Kong/Macau - Jewellery Hong Kong/Macau - Gold
China - Gold China - Jewellery
…drop in the price of gold and introduction of lighter pieces.
Working Capital Trends
Average Receivables Turnover Days Average Inventory Turnover Days
Average Payables Turnover Days Cash Conversion Cycle
(No. of Days)
(No. of Days) (No. of Days)
(No. of Days)
(HK$ million) % change2012 2013 2014 13 vs 14
Turnover 9,096 14,089 9,333 -33.8%Jewellery Retail 7,275 10,886 8,214 -24.5%Other businesses 1,821 3,203 1,119 -65.1%
Gross profit 1,597 2,062 2,173 +5.4%Operating profit 560 800 678 -15.3%EBITDA 627 878 770 -12.3%Profit attributable to equity holders 439 615 520 -15.4%EPS (HK cents) 64.9 90.8 76.8 -15.4%Dividend per share (HK cents) 10.0 14.0 12.0 -14.3%Capital expenditure 107 127 64 -49.6%
For the 6 months ended
Other Financial Information
2012 2013 2014Cash and cash equivalents 674 1,009 1,516
Available-for-sale investments1 671 659 735
Gearing2 27.1% 23.4% 24.3%Unused banking facilities 4,052 4,114 3,931
1 Available-for-sale investments mainly represents HKEx shares which valued at quoted market prices
2 Total borrowings to total equity holders’ equity. Total borrowings includes interest-bearing bank borrowings in related tojewellery business and bullion loans.
Expansion with Distinctiveness in PRC
Target mid-high end consumers Brand development and fine-tuning is more
important than growth in the number of stores
Leverage on e-shops to expand coverage and reach
Ensure consistent and superior service quality Leverage on high-end shopping malls and
department stores’ own positioning to enhance image
More flagship and premium-status stores
Self-Run Store Model
Around 50 new stores in PRC in 2014
Product Mix and Branding
Clear presence and visibility of international brands Develop house brands - focus on quality and sophistication appropriate to different customer
Jewellery Focus and Product Differentiation
Continue with existing programs with focus: Expand e-shop, synergizing with physical stores Capitalize on CRM database Revamp VM at stores
1930-1970 1970-1980 1980-1990 1990-2000 2000-2014
Chow Sang Sang
Became sightholder of Diamond
First company in the industry
listed on Hong Kong
Mainland China market
Opened the first Flagship Store in Taiwan
No. of Stores
Turnover (HK$ mm)
Opened the first
Flagship Store in Beijing
Stable growth in
Industry Analysis – PRC Jewellery Market Overview
Source: Bain & Company Luxury Industry Overview 2013
China is forecast to account for the highest overall value sales increase over the next five years of over US$17 billion. This will equate to 26% of the total global contribution.
Mainland China surpassing France, gaining a 4th position globally
China had already become a leading luxury market by 2010 and could overtake Japan to become the biggest such market by 2015.
Source: Euromonitor International
Industry Analysis – PRC Jewellery & Watches Forecast
Continued Strong Growth into 2016: CAGR 11.2% estimated growth rate for PRC jewellery & watches market value from 2011 to 2016. The total value will increase from US$ 43,829.5 million (2011) to US$ 74,470.5 million (2016).
PRC jewellery & watches Market Value Forecast 2011–2016
Chow Sang Sang marketing update Jan to Jun, 2014
To celebrate the year of HORSE, bring New Year blessings to the mass audience and create top of mind awareness for seasonal gifting associating with “Horse” products
Touch points included print, OOH, POSM, Digital and store display
• Extending the concept of Christmas campaign launched in 2013, Valentine’s Day campaign featured Romantic and fantasy through imagination to conceive a world full of extraordinary sweetness and love, integrating our romantic affordable luxury products.
• Touch points included ATL, OOH, digital, social media, Store display and POSM.
Valentine’s Day Promotion
Gifting to mothers are one of the featured segment identified especially for China Market
In May, a mother’s day campaign was launched with a key focus in digital and store display to drive attention to “gifting to mothers”
A recordable gift card was distributed upon purchase during promotional period for customers to express their love to mothers
Mother’s day Promotion
Integrated bridal thematic campaign “Love is All” launched in May 2014. Covering the Greater China Region and targeting wedding couples.
Touch points covered above the line thematic communication, digital engagement campaign, below the line exhibition and events, store POSM and window display
Featured signature collections such as Infini Love, Promessa, La Pelle and Chinese Wedding Collection.
Bridal Campaign – Outdoor Advertising and Video
Bridal Campaign –Mall Exhibitions
Bridal Campaign – CRM Programme
Workshops were conducted in selected stores and HK bridal zone to promote the wedding theme to gain PR coverage. Selected customers were invited to join different wedding theme workshops.
Star Dollars was successfully launched in China and Hong Kong.
Upon designated promotions, star shoppers can gain star dollars which can be spent on any gem set products on their next purchase .
CRM – Star Shoppers Star Dollars Programme
Organized a tuck show with Gucci featuring “Gucci’s Fine Jewelry Precious Collection” started in June 2014
Hosted in Causeway Bay and Canton Road stores in Hong Kong
International Brand Strategic Partnership
Kowloon Bay, HK
2014 New Stores