Chow Sang Sang Holdings International Limited · HKEX:116
Chow Sang Sang Holdings International — FY2022 Earnings Presentation
44 slides from Chow Sang Sang Holdings International's earnings presentation, March 2023
Slide 1: 2022 Annual 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 Annual Results Presentation March 2023
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 3
Slide 4: Business Overview
Business Overview 4
Slide 5: Business Segments
Business Segments Chow Sang Sang Holdings International Limited Retail of Jewellery and Watches Wholesale of Precious Metals E-commerce Platform Securities and Futures Broking (Discontinued Operation) 5
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 customers a personalised and ceremonial shopping experience 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
Slide 8: Store Count by Brand
Chow Sang Sang FE AE AAR + TE 55 20 6 +14 69 Mainland (Oasis by Chow Sang Sang) China Rolex/Tudor 13 1 0 +1 14 MINTYGREEN 34 20 4 +16 50 EMPHASIS 19 4 4 0 19 PROMESSA 18 7 1 +6 24 MARCO BICEGO 1 e) e) ie) 1 Sub-total: 775 146 47 +99 874 Chow Sang Sang a Rolex/Tudor 11 0 1 =I 10 EMPHASIS a Se PROMESS
Slide 9: Jewellery and Watch Store Expansion
Jewellery and Watch Store Expansion Increasing no. of stores in Mainland China (No. of Stores) 1,000 977 34 900 872 69 31 800 748 66 700 26 700 24 69 599 70 600 26 67 500 874 400 775 300 606 653 506 200 100 0 2018 2019 2020 2021 2022 Mainland China HK and Macau Taiwan 9
Slide 10: Jewellery and Watch Store Network as at Dec 2022
Jewellery and Watch Store Network as at 31 Dec 2022 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 Yunnan Guangxi Guangdong
Slide 11: Financial Highlights
Financial Highlights 11
Slide 12: Financial Highlights
(HK$'M) For the year ended % change 2020 2021 2022 22 vs 21 Turnover - Continuing operations 14,998 21,988 20,557 -7% Retail of jewellery and watches 13,098 19,922 19,752 1% Wholesale of precious metals 1,885 2,033 766 62% Others 15 33 39 +18% Gross profit - Continuing operations 4,120 5,556 5,417 -
Slide 13: Group Operating Performance
Group Operating Performance Turnover – Continuing operations Gross profit – Continuing operations (HK$M) (HK$M) 25,000 6,000 5,556 GP GP 5,417 21,988 25.3% 26.3% 20,557 5,000 20,000 4,120 2,538 11,163 4,000 3,146 14,998 15,000 10,465 GP GP 28.1% 24.3% 3,000 2,364 8,595 10,000 2,000 GP 2,879 GP 5,000
Slide 14: Group Operating Performance (Cont'd)
Group Operating Performance (Cont’d) Total segment results – Continuing operations Segment results restatement (HK$M) The Board has reassessed the basis of adjusted 1,400 8.0% profit before tax for the purpose of making decisions about resource allocation and 6.1% 6.0% performance assessment in 20
Slide 15: 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) 1,500 8.0% 1,500 8.0% 6.3% 1,300 6.0% 1,300 6.0% 4.6% 4.3% 1,100 4.0% 1,100 3.4% 4.0% 1,006 2.9% 944 2.4% 900 2.0% 900 2.0% 279 744 700 593 0.0% 700 639
Slide 16: Group Operating Results by Segment
Group Operating Results by Segment Turnover breakdown – Continuing operations Results breakdown – Continuing operations 0.1% 0.2% 0.2% 100% 100% 1.3% 3.7% 1.7% 12.6% 9.2% 0.1% 90% 90% 80% 80% 70% 70% 60% 60% 105.1% 50% 50% 99.2% 101.2% 96.1% 87.3% 90.6% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 2020 202
Slide 17: Jewellery and Watch Retail Segment Performance
Jewellery and Watch Retail Segment Performance Turnover Segment results (HK$M) (HK$M) 2,000 8.0% 19,922 19,752 20,000 6.9% 7.0% 1,500 6.0% 15,000 5.0% 10,146 10,083 13,098 5.0% 4.4% 987 1,000 908 4.0% 872 10,000 7,447 375 213 3.0% 591 500 2.0% 5,000 9,776 9,669 612 658 5,651 1.0% 317 0 0 0.0% 2020 2
Slide 18: 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 13,697 14,000 12,000 12,000 7,151 6,532 10,000 10,000 8,686 8,000 8,000 5,824 6,000 5,003 6,000 5,417 4,261 4,000 4,000 2,884 3,421 7,164 7,165 2,354 2,000 3,683
Slide 19: Retail Turnover by Geographical Area
Retail Turnover by Geographical Area 2020 2021 2022 Taiwan Taiwan Taiwan 1% 1% 1% HK & HK & Macau Macau 27% HK & 33% Macau 30% Mainland Mainland Mainland China China 66% China 69% 72% 19
Slide 20: Mainland China Retail Sales Mix
Mainland China Retail Sales Mix (HK$’M) Products: 20
Slide 21: Hong Kong and Macau Retail Sales Mix
Hong Kong and Macau Retail Sales Mix (HK$’M) Products: 21
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 3,400 8,600 8,600 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 2020 2021 2022 e-shop
Slide 23: 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 40.0% 2,500 13.2% 15.0% 8.7% 10.0% 6.0% 5.4% 30,000 35.0% 5.5% 5.0% 31.0% 2,000 5.3% 3.9% 3.9% 30.0% 0.0% 28.0% 25,000 27.0% -5.9% -5.0% 1,500 25.0% -10.0% 19,922 19,7
Slide 24: Working Capital Trends
Working Capital Trends Average inventory turnover days Average receivables turnover days (No. of Days) (No. of Days) 400 25 21 297 283 20 300 223 14 14 15 200 10 100 5 0 0 2020 2021 2022 2020 2021 2022 Average payables turnover days Cash conversion cycle (No. of Days) (No. of Days) 10 400 8 314 293
Slide 25: Other Financial Information
Other Financial Information * Long term listed investments represents HKEC shares which valued at quoted market prices # Total borrowings to total equity attributable to owners of the Company. Total borrowings includes interest-bearing bank borrowings and bullion loans 25
Slide 26: Business Review
Business Review 26
Slide 27: Retail - Analysis by Geographic Area (Mainland China)
Business Review Retail - Analysis by Geographic Area Mainland China 1H of 2022 was seriously affected by the pandemic, especially in Eastern China. Rebound in sales in 2H and sales from new stores could not offset the impact of the pandemic and the fall in Renminbi. Total 2022 sales decreased by 1
Slide 28: Mainland China Retail SSSG
Mainland China Retail SSSG 200% 150% 100% 50% 47% 4% 0% 0% -26% -50% 2020 1H 2020 2H 2021 1H 2021 2H 2022 1H 2022 2H Overall Gold jewellery and products Gem-set jewellery Watches 28
Slide 29: Retail - Analysis by Geographic Area (Hong Kong and Macau)
Business Review Retail - Analysis by Geographic Area Hong Kong and Macau Hong Kong and Macau operations were hit hard by the pandemic after CNY, with low customer traffic and intermittent closure of stores. Since April, the gradual relaxation of social distancing measures, the distribution of cons
Slide 30: Hong Kong and Macau Retail SSSG
Hong Kong and Macau Retail SSSG 80% 60% 40% 30% 20% 20% 0% 2% -20% -40% -60% -80% 2020 1H 2020 2H 2021 1H 2021 2H 2022 1H 2022 2H Overall Gold jewellery and products Gem-set jewellery Watches 30
Slide 31: Retail - Store Network
Business Review Retail - Store Network Total store number reached 977 with a net addition of 105 stores. Out of the 94 newly opened Chow Sang Sang stores in Mainland China, 72 of which were located in shopping malls. We aimed to expand store sales and increase market share by adding PROMESSA and/o
Slide 32: Retail - Omni-Channel Retailing
Business Review Retail - Omni-Channel Retailing Despite a decline in physical store sales in Mainland China due to the pandemic, online sales continued to grow at a fast pace and accounted for approximately 19% of Mainland China sales (2021: 15%). Online sales in Hong Kong and other regions main
Slide 33: Retail - Product and Marketing
Business Review Retail - Product and Marketing On the product front, gold jewellery sales demonstrated great resilience. Our “Culture Blessings” collection of gold ornaments remained the preferred choice of customers. Newly introduced collections, “Mirror Gold” and “Diamond Symphony”, have been we
Slide 34: Retail - Product and Marketing
Business Review Retail - Product and Marketing The covid-19 epidemic situation remained volatile throughout 2022. It was not conducive to physical marketing campaigns, but we still managed to launch a number of eye-catching events timely, including the “Infini Love Diamond Kaleidoscope Tunnel Exhi
Slide 35: Other Business Segments
Business Review Other Business Segments Wholesale of Precious Metals The pandemic and ongoing cross-border restrictions brought precious metal trading and sourcing activities to a halt. Turnover in 2022 decreased by 62% YOY to HK$766 million. E-commerce Platform We operate an e-commerce platfo
Slide 36: Strategy Outline
Strategy Outline 36
Slide 37: Strategy Outline
Strategy Outline Jewellery and Watch Store Expansion Expand jewellery and watch store network steadily Utilise multi-brand strategy and different decorating styles to appeal to different groups of clientele, to enhance shopping experience and strengthen brand positioning Continue to rebalance
Slide 38: Strategy Outline
Strategy Outline Product and Marketing Focus on product innovation to cater to different customer segments Keep on launching new designs, new product categories and distinctive services for our Personalised Jewellery Service Expand product collections embodying heritage and cultural themes E
Slide 39: Q&A Session
Q&A Session 39
Slide 40: Appendix
Appendix 40
Slide 41: Industry Analysis – Hong Kong and Mainland China
Industry Analysis – Hong Kong and Mainland China Value of retail sales of FY2022 FY2022 Hong Kong Jewellery, Watches and Clocks, and Valuable Gifts Mainland China Gold, Silver and Jewellery Sales 4.50 4.14 35.0 4.00 31.9 31.9 4.00 3.61 3.71 30.0 3.35 3.38 3.29 3.39 26.8 26.6 3.50 25.7 24.7 24.6 25.6
Slide 42: Industry Analysis – Mainland China Luxury Market Overview
Industry Analysis – Mainland China Luxury Market Overview The China luxury market had been on a bull run over the past five years, with the market doubling between 2019 and 2021. Despite a strong start to 2022, the Chinese luxury market declined 10% year over year, ending a five- year run of expon
Slide 43: Definitions
Definitions In this presentation, unless the context otherwise requires, the following terms shall have the following meanings: “Board” the board of Directors “Company” Chow Sang Sang Holdings International Limited “Directors” the directors of the Company “FY” the full year, twelve months ended 31 D
Slide 44: Thank you
Thank you 44
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