Dynasty Fine Wines Group Limited · HKEX:828
Dynasty Fine Wines — H1 2011 Earnings Presentation
25 slides from Dynasty Fine Wines's earnings presentation, August 2011
Slide 1: Corporate Presentation 2011 Interim Results
Corporate Presentation 2011 Interim Results August 2011
Slide 2: Disclaimer
Disclaimer • The presentation is prepared by Dynasty Fine Wines Group Limited (the“Group”) and is solely for the purpose of corporate communication and general reference only. The presentation is not intended as an offer to sell, or to solicit an offer to buy or to form any basis of investment decis
Slide 3: Management Team
Management Team Mr. Bai Zhisheng Chairman & Executive Director Mr. Francois Heriard-Dubreuil Vice Chairman & Non-executive Director Mr. Gao Feng Executive Director & General Manager Mr. Huang Yaqiang Executive Director Mr. Yeung Chi Tat, Rex Financial Controller & Company Secretary 3
Slide 4: Agenda
Agenda Financial Highlights Business Review Strategies & Prospects Q&A 4
Slide 5: Financial Highlights
DYNASTY Dynasty Fine Wines Group Limited ERBARARAR SE F
Slide 6: Financial Highlights
Financial Highlights HKD HKD ’000 ’000 1H 2010 1H 2011 Revenue 790,686 784,848 Gross profit 329,286 391,726 Profit attributable to equity holders 52,652 114,110 Basic earnings per share (HKD) 0.042 0.092 Gross profit margin 42% 50% Net profit margin 7% 15% Proposed interim dividend for 2011 is 1.5HK
Slide 7: Financial Highlights
Financial Highlights Revenue Net Profit HKD ’000 HKD ’000 1% 790,686 784,848 800,000 120,000 114,110 54 % 600,000 90,000 400,000 52,652 60,000 200,000 30,000 0 0 1H 2010 1H 2011 1H 2010 1H 2011 The mild growth in revenue was mainly due to an improved average ex-winery sales price despite a drop in s
Slide 8: Margin Analysis
Margin Analysis 1H 1H Breakdown of Cost of Sales 2011 2010 % % Gross profit margin declined to Cost of raw materials 68 73 42% (1H 2010 : 50%) as a result of (i) increase in the cost of raw •Grapes and grape juice 41 40 materials and manufacturing overheads (ii) decrease in •Yeast and additives 2 3
Slide 9: Expense Analysis
Expense Analysis 1H 2011 1H 2010 % % Revenue 100 100 Cost of sales (58) (50) Gross profit 42 50 Distribution costs (27) (26) Administrative expenses (8) (7) Others - (2) Net profit 7 15 Distribution costs were relatively stable mainly attributable to the effective management in monitoring and contro
Slide 10: Business Review
DYNASTY Dynasty Fine Wines Group Limited ERBARARAR SE F
Slide 11: Sales Analysis
Sales Analysis Total number of bottles of wine sold Bottles (million) 40 3.7% 20 32.10 30.90 0 1H 2010 1H 2011 Red wine sales remained as the principal source of turnover, representing 81% of the Group’s total revenue Sales of premium wine products recorded encouraging growth during 1H2011 Average e
Slide 12: Sales by Region
Sales by Region Nationwide sales network covering many provinces, autonomous regions and 4 directly administered municipalities Domestic market remained as the primary focus Huadong region (ie Eastern region of the PRC), comprising Shanghai city, Zhejiang and Jiangsu provinces remained as our strong
Slide 13: Strengthen Sales Channels
Strengthen Sales Channels Enhance “Dynasty Brand” Dynasty Club targeting the high-end market and cultivating a group of loyal and sophisticated customers Dynasty retail shop to cater for different needs and preferences of customers: Self-operated retail shops: 2 in Tianjin and 1 in Shanghai Franchis
Slide 14: Franchised Retail Shops
Franchised Retail Shops Franchised retial shops : Opened the first franchised retail shop in Qingdao in 2010 Planned to establish approximately 100 franchised retail shops by the end of 2011 Region No. of franchised retail shops South-Central region 13 Eastern region 3 North-West region 1 Northern r
Slide 15: Strengthen Sales Channels (cont'd)
Strengthen Sales Channels (cont’ (cont’) The online platform (www.i9wang.com) set up in 2010 runs smoothly and records a steady income Relatively low operating cost allowed Dynasty to enjoy higher gross profit margin Serve as an additional marketing and promotion channel for the “Dynasty” brand Onli
Slide 16: Reform on Sales & Distribution Model
Reform on Sales & Distribution Model Reform Measures Co-operate with distributors to strengthen the control on retail price structure Enhance the management in monitoring and controlling sales and marketing spending Streamline the existing multi-layered sales and distribution system Goals Strengthen
Slide 17: Imported Wines
Imported Wines Carries over 350 imported products under more than 100 brands Mainly imported from France, Italy, Germany and the US Increasing disposable income of consumers aspiring to higher status and the trappings of upper class enjoyment enables the sales of premium Dynasty and imported wines t
Slide 18: Enhance Premium Products
Enhance Premium Products Further upgrade product mix and enhance product portfolio Chateau Dynasty- Dynasty Dynasty Dynasty Grand Wine 2005 Merlot Dry Red Wine Merlot Series- Merlot Series- Reserve Gold Label Black Label 18
Slide 19: Expand Production Capacity
Expand Production Capacity Expanded production capacity to capture the market demand Expanded production capacity to 70,000 tonnes (equivalent to approximately 93.3 million bottles) in October 2010, enhancing overall cost effectiveness Over 10 major grape juice suppliers with long-term relationships
Slide 20: Chateau Dynasty
Chateau Dynasty Chateau Dynasty - opened in mid Oct 2010 20
Slide 21: Strategies & Prospects
DYNASTY Dynasty Fine Wines Group Limited ERBARARAR SE F
Slide 22: Business Strategies
Business Strategies Continue reform on sales and Evaluate acquisition opportunities distribution model Upgrade product mix Secure distributorships for foreign brand wines Strengthen and Capture new business expand sales channels opportunities and distribution networks Dynasty Premier Royal Selection
Slide 23: Potential Acquisition
Potential Acquisition Target… A boutique wine company in New Zealand Located at the top of New Zealand’s South Island Aims to… Diversify and enrich our product portfolio and brand Expand the source of supply of grapes and grape juice from overseas 23
Slide 24: Prospects
Prospects Market Opportunities Initiatives for seizing opportunities Low average consumption volume Expand sales and distribution network Rising per capital disposable income Shift sales mix further to high end products Increasing health consciousness and popularity of drinking wine Refine brand and
Slide 25: China's Premier Winemaker
DYNASTY Dynasty Fine Wines Group Limited ERBARRAARM A F
Dynasty Fine Wines Group — H1 2011 Earnings Presentation on 6ix