Chow Sang Sang Holdings International Limited · HKEX:116
Chow Sang Sang Holdings International — H1 2022 Earnings Presentation
45 slides from Chow Sang Sang Holdings International's earnings presentation, August 2022
Slide 1: 2022 Interim Results Presentation
CHOW SANG SANG HOLDINGS INTERNATIONAL LIMITED 周生生集團國際有限公司 (Incorporated in Bermuda with limited liability) Stock code: 116 2022 Interim Results Presentation August 2022
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
Business Overview 3
Slide 5: Business Segments
Business Segments Chow Sang Sang Holdings International Limited E-commerce Platform Retail of Jewellery and Watches Wholesale of Precious Metals for Lab-Grown Diamond Jewellery Securities and Futures Broking (Discontinued Operation) 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 ⚫ Line of stores as a subtext to Chow Sang Sang. Stores are fitted out in a relaxed, “corner-store” style, carrying different themes and sales foci. They are located in residen
Slide 7: Retail Store Brand Category
Retail Store Brand Category ⚫ Devoted to offer Personalised Jewellery Service with our signature collections of engagement rings, wedding bands and bridal accessories ⚫ Aims to give a new definition to daily-wear jewellery and offers a wide range of jewellery options to customers who love originalit
Slide 8: Store Count by Brand
Store Count by Brand Region As at 31 Dec 2021 Opening Closure Net change As at 30 Jun 2022 Chow Sang Sang 635 33 15 +18 653 周生生 生生˙活宇 55 7 3 +4 59 (Oasis by Chow Sang Sang) Mainland Rolex/Tudor 13 0 0 0 13 China MINTYGREEN 34 5 2 +3 37 EMPHASIS 19 0 1 -1 18 PROMESSA 18 4 0 +4 22 MARCO BICEGO 1 0 0 0
Slide 9: Jewellery and Watch Store Expansion
Jewellery and Watch Store Expansion Increasing no. of stores in Mainland China (No. of Stores) 1,000 872 905 900 33 31 66 69 800 748 700 26 700 24 69 599 70 600 26 67 500 400 775 803 300 606 653 506 200 100 0 2018 2019 2020 2021 2022 June Mainland China HK and Macau Taiwan 8
Slide 10: Jewellery and Watch Store Network as at Jun 2022
Jewellery and Watch Store Network as at 30 Jun 2022 Mainland China Number of Number of Region City tier stores stores Heilongjiang North 181 1 160 Inner Mongolia Jilin East 206 2 451 South 282 3 129 Xinjiang Beijing Liaoning West 134 4 63 Tianjin Gansu Hebei Total 803 Total 803 Ningxia Shanxi Qingha
Slide 11: Financial Highlights
Financial Highlights 10
Slide 12: Group Operating Performance
Group Operating Performance Turnover – Continuing operations Gross profit – Continuing operations (HK$M) (HK$M) 6,000 25,000 5,556 21,988 5,000 20,000 4,120 4,000 3,146 14,998 11,163 15,000 3,000 2,364 8,595 10,000 2,000 2,879 5,000 10,825 10,092 2,410 1,000 1,756 6,403 0 0 2020 2021 2022 2020 2021
Slide 13: Group Operating Performance (Cont’d)
Group Operating Performance (Cont’d) Profit attributable to owners Profit before tax – Continuing operations – Continuing operations (HK$M) (HK$M) 2,000 8.0% 2,000 7.0% 1,800 1,800 7.0% 6.0% 6.3% 6.3% 1,600 1,600 6.0% 4.8% 1,400 1,400 5.0% 4.3% 4.6% 5.0% 1,200 1,200 3.4% 4.0% 1,006 1,000 944 4.0% 1,
Slide 14: Group Operating Results by Segment
Group Operating Results by Segment Turnover breakdown – Continuing operations Results breakdown – Continuing operations 0.1% 0.2% 0.2% 0.4% 100% 100% 1.5% 4.0% 1.6% 0.03% 11.6% 9.5% 90% 90% 80% 80% 70% 70% 60% 60% 102.6% 50% 50% 98.0% 99.6% 95.8% 88.3% 90.3% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 202
Slide 15: Jewellery and Watch Retail Performance
Jewellery and Watch Retail Performance Turnover Operating results (HK$M) (HK$M) 2,000 8.0% 19,922 20,000 7.0% 7.0% 6.5% 1,500 6.0% 15,000 10,146 4.9% 13,098 5.0% 981 1,000 915 4.0% 10,000 7,447 272 3.0% 630 * 5,000 500 2.0% 9,776 9,669 709 633 5,651 1.0% 285 0 0 0.0% 2020 2021 2022 2020 2021 2022 1H
Slide 16: Jewellery and Watch Retail Performance
Jewellery and Watch Retail Performance Mainland China retail turnover HK & Macau retail turnover (HK$M) (HK$M) 16,000 16,000 14,315 14,000 14,000 12,000 12,000 7,151 10,000 10,000 8,686 8,000 8,000 6,000 5,003 6,000 5,417 4,261 4,000 4,000 2,884 7,164 7,165 2,354 2,000 3,683 2,000 2,533 2,403 1,907
Slide 17: Retail Turnover by Geographical Area
Retail Turnover by Geographical Area 2021 1H 2021 2H 2022 1H Taiwan Taiwan Taiwan 1% 1% 1% HK & Macau HK & 26% Macau HK & 28% Macau 25% Mainland Mainland Mainland China China China 74% 71% 73% 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% -4% -9% -17% -24% -50% 2019 1H 2019 2H 2020 1H 2020 2H 2021 1H 2021 2H 2022 1H 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% +14% 0% -3% -5% -20% -21% -40% -60% -80% 2019 1H 2019 2H 2020 1H 2020 2H 2021 1H 2021 2H 2022 1H 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 9,600 4,000 3,300 3,500 8,600 8,600 3,200 9,000 3,000 1,700 1,700 1,700 6,000 2,000 2,600 3,000 3,000 1,000 3,000 0 0 2020 2021 2022 1H 2020 2021 2022 1H e
Slide 23: Omni-Remote Sales as a Percentage of Mainland China Sales
Omni-Remote Sales as a Percentage of Mainland China Sales 38% Omni-Remote sales 35% 33% 33% 32% 28% 23% 21% E-shop sales 19% 18% 17% 15% 18% 16% 14% 15% 15% 13% 8% 2017 2018 2019 2020 2021 2022 1H 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) 20,000 40.0% 2,000 11.9% 15.0% 7.8% 6.7% 10.0% 35.0% 5.8% 6.3% 31.0% 1.8% 5.0% 30.0% 1,500 5.7% 15,000 30.0% 3.2% 0.0% 24.0% -5.0% 25.0% 1,000 -8.0% -10.0% 9,776 9,669 709 63
Slide 25: Working Capital Trends
Working Capital Trends Average inventory turnover days Average receivables turnover days (No. of Days) (No. of Days) 400 25 21 297 282 20 300 223 14 15 15 200 10 100 5 0 0 2020 2021 2022 1H 2020 2021 2022 1H Average payables turnover days Cash conversion cycle (No. of Days) (No. of Days) 10 400 8 31
Slide 26: Financial Highlights
(HK$M) Six months ended 30 June 2020 Restated Turnover - Continuing operations 6,403 Retail of jewellery and watches 5,651 Wholesale of precious metals 744 Others 8 Gross profit - Continuing operations 1,756 Gross profit margin - Continuing operations 27.4% 301 211 206 31.2 30.5 5.0 Capital expendit
Slide 27: Other Financial Information
Other Financial Information (HK$M) As at Dec-31 Jun-30 2020 2021 2022 Restated Inventories 8,775 11,343 11,109 Cash and cash equivalents 1,624 672 911 Long term listed investments* 1,414 1,515 1,284 Gearing# 15.8% 25.2% 27.2% Unused banking facilities 3,513 3,038 3,770 * Long term listed investments
Slide 28: Business Review
Business Review 27
Slide 29: Retail - Analysis by Geographic Area
Business Review Retail - Analysis by Geographic Area Mainland China ⚫ The new wave of pandemic erased the upward sales momentum generated by the 2022 Spring Festival. Large- scale crowd-control measures were implemented in areas of Mainland China which seriously affected retail and logistics activit
Slide 30: Retail - Analysis by Geographic Area
Business Review Retail - Analysis by Geographic Area Hong Kong and Macau ⚫ Following the outbreak of the fifth wave of pandemic after Chinese New Year, retail environment had been dramatically worsened. A large percentage of stores had to suspend business intermittently. Since early April, the gradu
Slide 31: Retail - Store Network
Business Review Retail - Store Network ⚫ During 1H, 40 new Chow Sang Sang stores were opened in Mainland China and a total of 18 stores were closed. Of the new stores 80% were located in shopping malls. The total number of 生生•活宇 stores (Oasis by Chow Sang Sang) represented about 7% of all stores in
Slide 32: Retail - Omni-Channel Retailing
Business Review Retail - Omni-Channel Retailing ⚫ The online sales in Mainland China maintained its growth momentum despite covid-19 disruptions. Sales accounted for approximately 19% of total Mainland China sales during 1H (2021 1H: 16%). Growth in sales of gold jewellery and products outpaced othe
Slide 33: Retail - Product and Marketing
Business Review Retail - Product and Marketing ⚫ On the product front, gold is still the preferred jewellery choice among different product categories and is relatively resilient to uncertain economic environment. Our “Cultural Blessings” collection of gold ornaments, which is inspired by traditiona
Slide 34: Retail - Product and Marketing
Business Review Retail - Product and Marketing ⚫ The Group strives to engage customers and enhance shopping experience through various pop-up stores, display points, wedding expos and online campaigns. Our culture-themed pop-up stores were well received by customers in Mainland China. ⚫ We launched
Slide 35: Other Business Segments
Business Review Other Business Segments Wholesale of Precious Metals ⚫ The covid-19 pandemic and the continued levels of cross-border restrictions put a halt to manufacturing and trading activities which require bulk precious metal supplies. ⚫ Turnover decreased by 61% to HK$405 million and segment
Slide 36: Strategy Outline
Strategy Outline 35
Slide 37: Strategy Outline
Strategy Outline Jewellery and Watch Store Expansion ⚫ Continue to proactively pursue retail network expansion cautiously and selectively ⚫ Implement multi-brand strategy and target to appeal to different groups of clientele ⚫ Continue to rebalance our store network in tourist and local areas in Hon
Slide 38: Q&A Session
Q&A Session 37
Slide 39: Appendix
Appendix 38
Slide 40: Personalised Jewellery Service extends to Gold Jewellery and Sophisticated Daily Wear
Personalised Jewellery Service extends to Gold Jewellery and Sophisticated Daily Wear Personalised Gold Jewellery ⚫ Mix and match Italian Murano glass and gold pieces at your own choice Sophisticated Daily Wear ⚫ Adding contemporary flair and ⚫ Personalised Jewellery Service extends metropolitan sty
Slide 41: Personalised Jewellery Service Business goes Online
Personalised Jewellery Service Business goes Online ⚫ Under anti-epidemic measures in Mainland China, traffic in offline stores significantly decreases. Through live streaming and online advertising in major social media platforms, increase the exposure of Personalised Jewellery Service and reach mo
Slide 42: Industry Analysis – Hong Kong and Mainland China
Industry Analysis – Hong Kong and Mainland China Value of retail sales of 2H FY2021-1H FY2022 2H FY2021-1H FY2022 Hong Kong Jewellery, Watches and Clocks, and Valuable Gifts Mainland China Gold, Silver and Jewellery Sales 4.50 35.0 31.9 31.9 4.00 3.83 3.61 30.0 28.9 3.53 27.0 3.50 3.35 3.39 26.3 25.
Slide 43: Industry Analysis – Mainland China Luxury Market Overview
Industry Analysis – Mainland China Luxury Market Overview ⚫ In 2021, Mainland China’s luxury market continued the double-digit growth trends of 2020, putting the country on pace to become the world’s largest luxury market by 2025. ⚫ Even as the global luxury market regained 2019 levels, Chinese cons
Slide 44: Definitions
Definitions In this presentation, unless the context otherwise requires, the following terms shall have the following meanings: “Company” Chow Sang Sang Holdings International Limited “Directors” the directors of the Company “FY” the full year, twelve months ending 31 December “Group” the Company an
Slide 45: Thank you
Thank you 44
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