Chow Sang Sang Holdings International Limited · HKEX:116
Chow Sang Sang Holdings International — FY2021 Earnings Presentation
42 slides from Chow Sang Sang Holdings International's earnings presentation, March 2022
Slide 1: 2021 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 2021 Annual Results Presentation March 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 2020 Opening Closure Net change As at 31 Dec 2021 Chow Sang Sang 591 78 34 +44 635 周生生 生生˙活宇 10 45 0 +45 55 (Oasis by Chow Sang Sang) Mainland Rolex/Tudor 12 1 0 +1 13 China MINTYGREEN 25 13 4 +9 34 EMPHASIS 12 8 1 +7 19 PROMESSA 2 16 0 +16 18 MARCO BICEGO 1
Slide 9: Jewellery and Watch Store Expansion
Jewellery and Watch Store Expansion Increasing no. of stores in Mainland China (No. of Stores) 900 872 31 800 748 66 700 26 700 24 69 599 70 600 26 519 67 500 25 72 400 775 300 606 653 506 200 422 100 0 2017 2018 2019 2020 2021 Mainland China HK and Macau Taiwan 8
Slide 10: Jewellery and Watch Store Network as at 31 Dec 2021
Jewellery and Watch Store Network as at 31 Dec 2021 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
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 4,753 20,000 17,712 4,120 4,000 3,146 14,998 11,163 2,191 15,000 8,184 3,000 2,364 8,595 10,000 2,000 5,000 10,825 2,562 2,410 9,528 1,000 1,756 6,403 0 0 2
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% 7.4% 1,800 1,800 7.0% 6.3% 5.6% 6.0% 1,600 1,600 6.0% 1,400 1,312 1,400 5.0% 4.3% 4.6% 5.0% 1,200 1,200 4.0% 534 1,006 1,000 3.4% 1
Slide 14: Group Operating Results by Segment
Group Operating Results by Segment Turnover breakdown – Continuing operations Results breakdown – Continuing operations 0.1% 0.1% 0.2% 0.1% 100% 100% 1.3% 8.1% 0.3% 1.8% 12.6% 9.2% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 99.6% 99.6% 100.7% 91.8% 90.6% 87.3% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 2019
Slide 15: Jewellery and Watch Retail Performance
Jewellery and Watch Retail Performance Turnover Operating results (HK$M) (HK$M) 2,000 9.0% 19,922 20,000 7.9% 8.0% 7.0% 16,258 7.0% 1,500 15,000 10,146 1,282 6.0% 13,098 7,485 4.9% 5.0% 1,000 521 915 981 10,000 7,447 4.0% 272 * 3.0% 630 5,000 9,776 500 8,773 2.0% 761 709 5,651 1.0% 285 0 0 0.0% 2019
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 9,688 10,000 8,686 8,000 8,000 4,531 6,436 6,000 5,003 6,000 5,417 2,879 4,261 4,000 4,000 2,884 7,164 2,354 5,157 2,000 3,683
Slide 17: Retail Turnover by Geographical Area
Retail Turnover by Geographical Area 2019 2020 2021 Taiwan Taiwan Taiwan 1% 1% 1% HK & HK & HK & Macau Macau Mainland Macau 33% 27% China 39% Mainland 60% Mainland China China 66% 72% 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% 2019 1H 2019 2H 2020 1H 2020 2H 2021 1H 2021 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% 2019 1H 2019 2H 2020 1H 2020 2H 2021 1H 2021 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 9,600 4,000 3,300 3,500 8,600 9,000 7,700 3,000 2,600 6,000 2,000 1,700 1,700 1,400 3,000 2,500 2,600 3,000 1,000 0 0 2019 2020 2021 2019 2020 2021 e-shop
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 33% 33% 32% 28% 23% 21% 18% 17% E-shop sales 15% 18% 15% 13% 16% 15% 13% 14% 12% 8% 2016 2017 2018 2019 2020 2021 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) 14.0% 30,000 31.0% 3,000 15.0% 11.3% 29.0% 30.0% 8.3% 10.0% 28.0% 2,500 5.8% 25,000 5.2% 5.1% 5.0% 25.0% 4.4% 2,000 2.8% 0.0% 19,922 20,000 190 -7.3% -5.0% 20.0% 16,258 5,417
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 20 300 231 223 14 15 200 10 100 5 0 0 2019 2020 2021 2019 2020 2021 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$M) For the year ended % change 2019 2020 2021 21 vs 20 Restated Restated Turnover - Continuing operations 17,712 14,998 21,988 +47% Retail of jewellery and watches 16,258 13,098 19,922 +52% Wholesale of precious metals 1,436 1,885 2,033 +8% Others 18 15 33 +120% Gross profit
Slide 27: Other Financial Information
Other Financial Information (HK$M) As at 31 Dec 2019 2020 2021 Restated Restated Cash and cash equivalents 940 1,624 672 Long term listed investments* 901 1,414 1,515 Gearing# 22.7% 15.8% 25.2% Unused banking facilities 3,472 3,513 3,038 * Long term listed investments represents HKEX shares which va
Slide 28: Business Review
Business Review 27
Slide 29: Retail - Analysis by Geographic Area (Mainland China)
Business Review Retail - Analysis by Geographic Area Mainland China ⚫ Revenue for 1H increased by 94% due to pandemic-impacted low base of 2020 1H and new store openings. With a moderate increase of 43% in 2H, full-year segment revenue grew 65%. ⚫ Segment results declined 40% because overall gross m
Slide 30: Retail - Analysis by Geographic Area (Hong Kong and Macau)
Business Review Retail - Analysis by Geographic Area Hong Kong and Macau ⚫ Revenue increased by 27% YOY. The easing of the pandemic in 2Q & 3Q, and the release of consumption vouchers in August and October, benefited domestic spending. ⚫ Sales in 1H 2020 were hit hard by the pandemic, resulting in a
Slide 31: Retail - Store Network
Business Review Retail - Store Network ⚫ Total store number reached 872 with a net addition of 124 stores. Net store number change for Mainland China, Hong Kong, Macau and Taiwan region are +122, -4, +1 and +5 stores respectively. ⚫ 生生·活宇 (Oasis by Chow Sang Sang) has been a key driver in expanding
Slide 32: Retail - Omni-Channel Retailing
Business Review Retail - Omni-Channel Retailing ⚫ In-store sales, sales conducted through various e-commerce platforms, Personalised Jewellery Service and remote inventory sales have integrated online and offline environments to create a seamless customer experience. Its percentage to total sales in
Slide 33: Retail - Product and Marketing
Business Review Retail - Product and Marketing ⚫ Gold ornaments designed with Chinese themes are still the favourite choice of customers. Sales of our “Cultural Blessings” collection delivered prominent growth. ⚫ The new "mini-Charme" products were also well received by customers, driving the overal
Slide 34: Retail - Product and Marketing
Business Review Retail - Product and Marketing ⚫ Aiming at attracting young couple clientele, the Group participated in a total of 27 (2020: 10) wedding expos in Mainland China, Hong Kong and Taiwan in 2021. ⚫ Live streaming has become a new trend in omni-channel marketing. We hosted over 7,900 hour
Slide 35: Other Business Segments
Business Review Other Business Segments Wholesale of Precious Metals ⚫ Percentage of other precious metals wholesale versus that of gold and platinum increased further and gave rise to higher gross margin. ⚫ Turnover increased by 8% to HK$2,033 million and segment operating profit increased by 57% t
Slide 36: Strategy Outline
Strategy Outline 35
Slide 37: Strategy Outline
Strategy Outline Jewellery and Watch Store Expansion ⚫ Continue to expand store network selectively and cautiously ⚫ 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 Hong Kong to better serve
Slide 38: Q&A Session
Q&A Session 37
Slide 39: Appendix
Appendix 38
Slide 40: Industry Analysis – Hong Kong and Mainland China
Industry Analysis – Hong Kong and Mainland China Value of retail sales of FY2021 FY2021 Hong Kong Jewellery, Watches and Clocks, and Valuable Gifts Mainland China Gold, Silver and Jewellery Sales 6.00 35.0 30.0 28.9 27.3 27.3 26.3 27.0 25.9 26.2 25.0 24.8 24.0 3.83 25.0 22.2 4.00 3.53 3.37 3.32 3.31
Slide 41: 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 42: Thank you
Thank you 41
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