Chow Sang Sang Holdings International Limited · HKEX:116
Chow Sang Sang Holdings International — FY2020 Earnings Presentation
44 slides from Chow Sang Sang Holdings International's earnings presentation, March 2021
Slide 1: 2020 Annual Results Presentation
S CHOW SANG SANG HOLDINGS INTERNATIONAL LIMITED al EE SR BIA IR ZS (Incorporated in Bermuda with limited liability) Stock code: 116 | y "i ] en V wil i il i Ta | 2020 Annual Results Presentation March 2021
Slide 2: Disclaimer
Disclaimer The information, statements and opinions contained in this Presentation and any subsequent discussion do not constitute an offer to sell or solicitation of any offer to subscribe for or purchase any securities or other financial instruments or any advice or recommendation in respect of su
Slide 3: Presentation Outline
Presentation Outline I. Business Overview II. Financial Highlights III. Business Review IV. Strategy Outline V. Q&A Session VI. Appendix 2
Slide 4: Business Overview
Date Here Business Overview 3
Slide 5: Business Segments
Business Segments Chow Sang Sang Holdings International Limited Manufacture and Retail of Wholesale of Precious Metals Securities and Futures Broking Jewellery and Watches 4
Slide 6: Retail Store Brand Category
Retail Store Brand Category ⚫ Our mainline store brand whose stores are fully scaled, carrying all our lines of merchandise ⚫ A new line of stores as a subtext to Chow Sang Sang. Stores are fitted out in a relaxed, “corner-store” style designed to blend into residential neighbourhoods (Oasis by Chow
Slide 7: Retail Store Brand Category
Retail Store Brand Category ⚫ Originated from the name of our signature collection of engagement rings and wedding bands, which we now promote on its own in a specialty store designed to evoke an atmosphere suited for making a marriage proposal ⚫ Aims to define the new daily wear jewellery with bold
Slide 8: Store Count by Brand
Store Count by Brand Region As at 31 Dec 2019 Opening Closure Net change As at 31 Dec 2020 Chow Sang Sang 561 62 32 +30 591 周生生 生生·活宇 0 10 0 +10 10 (Oasis by Chow Sang Sang) Mainland Rolex/Tudor 13 0 1 -1 12 China MINTYGREEN 25 3 3 0 25 EMPHASIS 7 6 1 +5 12 PROMESSA 0 2 0 +2 2 MARCO BICEGO 0 1 0 +1
Slide 9: Jewellery and Watch Store Expansion
Jewellery and Watch Store Expansion Increasing no. of stores in Mainland China (No. of Stores) 800 748 700 26 700 24 69 599 70 600 26 519 67 500 472 25 24 72 400 74 300 606 653 506 200 374 422 100 0 2016 2017 2018 2019 2020 Mainland China HK and Macau Taiwan 8
Slide 10: Jewellery and Watch Store Network as at Dec 2020
Jewellery and Watch Store Network as at 31 Dec 2020 Heilongjiang Inner Mongolia Jilin Xinjiang Beijing Liaoning Tianjin Gansu Hebei Ningxia Shanxi Qinghai Shandong Shaanxi Henan Jiangsu Tibet Anhui Hubei Shanghai Chongqing Sichuan Zhejiang Hunan Jiangxi Guizhou Fujian e-shop Guangdong Yunnan Guangxi
Slide 11: Financial Highlights
Date Here Financial Highlights 10
Slide 12: Group Operating Performance
Group Operating Performance Turnover Gross profit (HK$M) (HK$M) 6,000 20,000 18,806 17,736 5,000 4,777 4,631 15,032 4,155 15,000 9,248 4,000 8,196 2,203 2,271 8,614 3,000 10,000 2,384 2,000 5,000 9,558 9,540 2,574 2,360 6,418 1,000 1,771 0 0 2018 2019 2020 2018 2019 2020 1H 2H 1H 2H 11
Slide 13: Group Operating Performance (Cont'd)
Group Operating Performance (Cont’d) Profit before tax Profit attributable to equity holders (HK$M) (HK$M) 1,800 8.0% 1,800 7.0% 7.0% 1,600 7.0% 1,600 6.0% 6.1% 5.4% 1,400 1,323 1,400 6.0% 5.0% 5.0% 1,200 1,200 5.0% 518 1,012 1,000 921 3.6% 3.6% 4.0% 883 1,000 4.0% 85 800 800 406 3.0% 3.0% 644 600 6
Slide 14: Group Operating Results by Segment
Group Operating Results by Segment Turnover breakdown Results breakdown 0.2% 0.1% 0.1% 0.7% 100% 0.2% 0.1% 0.2% 100% 3.4% 1.3% 8.5% 8.1% 1.1% 12.5% 90% 80% 80% 0.7% 70% 60% 60% 94.8% 102.1%* 40% 149.4% 50% 91.1% 91.7% 87.2% 40% 20% 30% 0% 20% -2.9% # -50.0% ^ -20% -0.5% 10% -0.1% 0% 2018 2019 2020 -
Slide 15: Jewellery and Watch Retail Performance
Jewellery and Watch Retail Performance Turnover Operating results (HK$M) (HK$M) 20,000 2,000 9.0% 7.9% 17,130 8.0% 16,258 7.0% 7.0%* 7.0% 15,000 1,500 13,098 1,282 6.0% 8,484 7,485 1,205 5.0% 10,000 1,000 521 915 7,447 472 4.0% 3.0% 630 ** 5,000 500 8,646 8,773 2.0% 733 761 5,651 1.0% 285 0 0 0.0% 2
Slide 16: Jewellery and Watch Retail Performance
Jewellery and Watch Retail Performance Mainland China retail turnover HK & Macau retail turnover (HK$M) (HK$M) 10,000 9,688 10,000 9,327 9,000 8,686 9,000 8,000 8,000 7,689 4,531 7,000 4,361 7,000 6,436 6,000 5,003 6,000 4,057 5,000 5,000 2,879 4,261 4,000 4,000 3,000 3,000 2,354 4,966 5,157 2,000 2
Slide 17: Retail Turnover by Geographical Area
Retail Turnover by Geographical Area 2018 2019 2020 Taiwan Taiwan Taiwan 1% 1% 1% HK & HK & Macau HK & Macau 33% Mainland Macau 39% China 45% Mainland Mainland 54% China China 60% 66% 16
Slide 18: Mainland China Retail Sales Mix
Mainland China Retail Sales Mix 17
Slide 19: Hong Kong and Macau Retail Sales Mix
Hong Kong and Macau Retail Sales Mix 18
Slide 20: Mainland China Retail SSSG
Mainland China Retail SSSG 200% 150% 100% 50% 0% -50% 2017 1H 2017 2H 2018 1H 2018 2H 2019 1H 2019 2H 2020 1H 2020 2H Overall Gold jewellery and products Gem-set jewellery Watches 19
Slide 21: Hong Kong and Macau Retail SSSG
Hong Kong and Macau Retail SSSG 80% 60% 40% 20% 0% -20% -40% -60% -80% 2017 1H 2017 2H 2018 1H 2018 2H 2019 1H 2019 2H 2020 1H 2020 2H Overall Gold jewellery and products Gem-set jewellery Watches 20
Slide 22: Retail: Change of Average Selling Price
Retail: Change of Average Selling Price Mainland China Mainland China - Gold jewellery and products - Gem-set jewellery (RMB) (RMB) 5,000 12,000 4,000 3,300 8,500 8,600 9,000 7,700 3,000 2,400 2,600 6,000 2,000 1,700 1,340 1,400 2,500 2,500 2,600 3,000 1,000 0 0 2018 2019 2020 2018 2019 2020 e-shop
Slide 23: Omni-Remote Sales as a Percentage of Mainland China Sales
Omni-Remote Sales as a Percentage of Mainland China Sales 33% Omni-Remote sales 32% 28% 23% 21% E-shop sales 18% 17% 18% 15% 16% 13% 15% 13% 14% 10% 12% 8% 9% 2015 2016 2017 2018 2019 2020 22
Slide 24: Retail Performance by Geographical Area
Retail Performance by Geographical Area Retail segment turnover and GP margin Retail segment results and margin (HK$M) (HK$M) 35,000 3,500 20.0% 40.0% 14.0% 11.3% 15.0% 30,000 3,000 9.8% 35.0% 8.3% 10.0% 31.0% 5.2% 3.8% 29.0% 2,500 5.0% 25,000 30.0% 27.0% 2.8% 0.0% 2,000 -4.1% 20,000 25.0% -7.3%* -5
Slide 25: Working Capital Trends
Working Capital Trends Average inventory turnover days Average receivables turnover days (No. of Days) (No. of Days) 400 25 20 21 297 19 20 300 231 192 15 200 10 100 5 0 0 2018 2019 2020 2018 2019 2020 Average payables turnover days Cash conversion cycle (No. of Days) (No. of Days) 10 400 314 8 300
Slide 26: Financial Highlights
Financial Highlights (HK$M) For the 12 months ended % change 2018 2019 2020 20 vs 19 Turnover 18,806 17,736 15,032 -15.2% Retail of jewellery and watches 17,130 16,258 13,098 -19.4% Wholesale of precious metals 1,603 1,436 1,885 +31.3% Others 73 42 49 +16.7% Gross profit 4,631 4,777 4,155 -13.0% Gro
Slide 27: Other Financial Information
Other Financial Information (HK$M) As at Dec-31 2018 2019 2020 Cash and cash equivalents 1,303 1,028 1,654 Long term listed investments* 807 901 1,414 Gearing# 18.6% 25.3% 17.3% Unused banking facilities 4,080 3,992 4,083 * Long term listed investments represents HKEX shares which valued at quoted m
Slide 28: Business Review
Date Here Business Review 27
Slide 29: Business Review Retail - Analysis by Geographic Area
Business Review Retail - Analysis by Geographic Area Mainland China ⚫ Revenue fell 29% YOY in 1H, but rebounded 10% in 2H. Sales were down 10% YOY. ⚫ Rising gold price deterred buyers in 1H. Sales were stabilised in 2H as gold price retreated after its August peak. ⚫ Personalised Jewellery Service b
Slide 30: Business Review Retail - Analysis by Geographic Area
Business Review Retail - Analysis by Geographic Area Taiwan ⚫ The pandemic has had a smaller impact than in other regions where our retail stores were operating. ⚫ Turnover increased by 13% to HK$151 million, benefitting from solid internal consumptions. ⚫ Segment results were increased by 71% to HK
Slide 31: Business Review Retail - Store Network
Business Review Retail - Store Network ⚫ There was net increase of 47 stores in Mainland China in 2020. ⚫ In Hong Kong, we have been realigning our store network aiming at reducing rental and strengthening our service to local customers. ⚫ We introduced 3 new lines of stores, namely 周生生 生生·活宇 (Oasis
Slide 32: Business Review Retail - Omni-Channel Retailing
Business Review Retail - Omni-Channel Retailing ⚫ Omni-channel retailing has become the new phenomenon: customers browse and purchase products online, and shop across physical stores and e-commerce platforms. ⚫ Mainland China online sales were steady in spite of covid-19 and accounted for about 18%
Slide 33: Business Review Retail - Products and Marketing
Business Review Retail - Products and Marketing ⚫ Diamond jewellery sales from Personalised Jewellery Service (“PJS”) surged over 300% to HK$536m, representing 23% of corresponding sales (2019: 5%). ⚫ We have continued to optimise our PJS product offering and enhance customer experience, including l
Slide 34: Business Review Securities and Futures Broking and Other Investment
Business Review Securities and Futures Broking and Other Investment Securities and Futures Broking ⚫ The Board came to the decision to wind down the operations of the securities and futures broking business in Jan 2021. ⚫ It is expected that it will cease its operations in May 2021. ⚫ The Board beli
Slide 35: Strategy Outline
Date Here Strategy Outline 34
Slide 36: Strategy Outline
Strategy Outline Jewellery and Watch Store Expansion ⚫ Speed up the expansion of our network’s geographical coverage and deepen our penetration of the lower- tiered cities in Mainland China ⚫ Continue to adjust our store network in Hong Kong to better serve local customers ⚫ Multi-brand strategy to
Slide 37: Q&A Session
Date Here Q&A Session 36
Slide 38: Appendix
Appendix 37
Slide 39: Personalised Jewellery Service
Personalised Jewellery Service High Level of Personalisation and Seamless Omni-channel Experience Personalise and design your own jewellery with more than 24,000+ exquisite combinations Freely pair up your own choice of diamond and design setting Engrave and set your birthstones to express your pers
Slide 40: C2M Customer-driven Manufacturing
Personalised Jewellery Service C2M ‧ Customer-driven Manufacturing • One ordering platform connects customer frontend to backend production management system • Manufacturing is driven by customer demand and preference ⚫ Link to advanced planning & scheduling system and production management system M
Slide 41: Star Concierge Service
Star Concierge Service ⚫ In February 2020, the one-on-one jewellery sales service was launched. ⚫ We empower our store staff with the communication tools to judiciously approach their customers. ⚫ Customers can shop whenever they want, from wherever they are, and take delivery at home or from virtua
Slide 42: Star Concierge Service
Star Concierge Service Star Concierge Service is designed to fit into social and communication ecosystems, making distance shopping convenient and easy for every customer Mainland China and Hong Kong IM One-on-One Sales Advisor Recommendation Engagement & Purchase Delivery Store Pick-up Delivery 41
Slide 43: Industry Analysis – Hong Kong and Mainland China
Industry Analysis – Hong Kong and Mainland China Value of retail sales of FY 2020 FY 2020 Hong Kong Jewellery, Watches and Clocks, and Valuable Gifts Mainland China Gold, Silver and Jewellery Sales 6.00 28.9 30.0 4.93 25.8 5.00 23.5 25.0 22.2 22.2 20.3 4.00 19.3 20.0 17.9 3.09 15.5 HKD bn RMB bn 3.0
Slide 44: Thank you
Thank you 43
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