Hong Kong Technology Venture Company Limited · HKEX:1137
Hong Kong Technology Venture — Investor Presentation (July 2018)
39 slides from Hong Kong Technology Venture's investor presentation, July 2018
Slide 1: Corporate Presentation
Corporate Presentation July 2018
Slide 2: Disclaimer
Disclaimer This presentation and subsequent discussions may contain forward-looking statements and information that involve risks, uncertainties and assumptions. Forward-looking statements are all statements that concern plans, objectives, goals, strategies, future events or performance and underlyi
Slide 3: Senior Management Team
Senior Management Team Background Started from Management Co-founder Co-founder Started with the Group Started from Management Trainee in 2003 and since 2003 and progressed Trainee in 2004 and Responsible for the Group’s Responsible for the Group’s progressed to Managing to CFO in 2012 progressed to
Slide 4: 26 Years Proven Track Record – Bring something new to Hong Kong
26 Years Proven Track Record – Bring something new to Hong Kong • Co-founded by cousins Ricky and Paul with 10 Talents and start-up capital of less than US$300,000 • 1st company to shatter the international Direct Dial (IDD) monopoly in Hong Kong 1992 • Listed in Hong Kong Stock Exchange Main Board
Slide 5: Access to Our Platforms
Access to Our Platforms • www.hktvmall.com • www.hokobuy.com • HKTVmall App • HoKoBuy App 5
Slide 6: Our Mission
Our Mission • To build an Ecosystem to transform Hong Kong business operation, trading, retail, finance and daily life onto a digital online platform. • To maintain Hong Kong as one of the leading cities in Asia 6
Slide 7: Our Plan and Strategy
Our Plan and Strategy 1. From online supermarket & grocery (40,000 SKU) online department store/shopping mall (175,000 SKU); 2. From online shopping online insurance/finance platform 3. From online shopping big data (collection and utilization) 4. From consumer benefit value to merchants/ret
Slide 8: Supermarket and Grocery Products for Frequency of Orderings
Supermarket and Grocery Products for Frequency of Orderings • About 40,000 product items to fulfill day-to-day food and grocery needs • An effective way to maintain recurring orders and to bring consistent upward traffic to merchant partners 8
Slide 9: Our Current Positioning – Credibility, Convenience, Pricing and Variety
Our Current Positioning – Credibility, Convenience, Pricing and Variety CONVENIENCE High in one single CREDIBILITY order COMPETITIVE PRODUCT PRICING at VARIETY LOWER >175,000 RUNNING product items COSTS 9
Slide 10: HKTVmall and HoKoBuy - A One-Stop Shopping Experience
HKTVmall and HoKoBuy - A One-Stop Shopping Experience with Wide Spectrum of Products As at 1 July 2018 Offer > 175,000 product items From own FMCG inventory to Merchant offered varieties Beauty & Music, Supermarket Fashion Household Health Video & Books Mother & Digital & Toys, Games & Outdoor & Spo
Slide 11: Our Partners… HKTVmall and HoKoBuy have 2,000 to 3,000 stores
Our Partners… HKTVmall and HoKoBuy have 2,000 to 3,000 stores 11
Slide 12: Are We only a Online Supermarket?
Are We only a Online Supermarket? In 2017, we sold….. Vacuum Cleaner: 15,000 Mattress: 12,800 pieces sold Sofa: 2,600 units sold units sold 12
Slide 13: A Powerful System Flexible to Match All Merchants’ Requirements
A Powerful System Flexible to Match All Merchants’ Requirements Merchant sends product to Merchant HKTVmall Own HKTVmall HKTVmall HKTVmall deliver Business Model directly deliver Inventory Warehousing warehouse upon to customer to customer customer order placement Buy and Sell Consignment by M
Slide 14: Platform user and download metrics
+ As at month end, unless specified No. of Unique Devices landing on PDP or performing search on HKTVmall for 1,129,000 December 2017 (source: 1) No. of Registered Email Subscriptions for 4,522,000 4,280,000 June 2018 and Dec 2017 (source: 2) No. of Apps download for June 2018 and 3,880,000 3,571,00
Slide 15: No. 1 Hong Kong Based Online Shopping Platform
No. 1 Hong Kong Based Online Shopping Platform Top Sites in Hong Kong - as at 4 Jul 2018 Ranking in Hong Kong Sites 1 www.google.com.hk 2 www.youtube.com 3 www.google.com 4 www.facebook.com 5 www.yahoo.com 9 www.taobao.com 18 www.amazon.com 21 www.tmall.com 22 www.price.com.hk 82 www.hktvmall.com 33
Slide 16: Past 18 months Performance – A Proof on the need of Online Shopping
Past 18 months Performance – A Proof on the need of Online Shopping in Hong Kong! Group GMV (HK$000) / Monthly Login User Average Daily Order (HKTVmall Only) GMV (HK$000) Monthly Login User (HKTVmall) Average Daily Order 400,000 15,000 14,000 350,000 13,000 12,000 300,000 11,000 10,000 250,000 9,000
Slide 17: In next 2 years (2018-2019)….
In next 2 years (2018-2019)…. The Largest and “Profitable” Online Shopping Mall : 1. Expanding the penetration by new customers acquisition 2. Increasing Gross Profit Margin 3. Lowering the Costs for Warehousing, Pick and Pack, and Delivery Cost 17
Slide 18: New Customers Acquisition
New Customers Acquisition • Tier One Banks partnership – • Benefit from different database cross selling to accelerate new customer acquisition • Ready for innovative TechFin development – 88 days technical development to launch the first Pay with Points API with highly regulated Tier One Bank • Rea
Slide 19: A New Way of RETAILING – Offline Pick-up points
A New Way of RETAILING – Offline Patronage -> Online Shopping -> 24 (32) Offline Pick-up points 11 19
Slide 20: A New Way of Retail Store Concept
A New Way of Retail Store Concept Pick Up (to suit different customer needs) Education (to reach and convert new group of customers) CS handling (to increase confidence on products and service level) Brand awareness and build-up A few hundreds sq. ft. shop “retailing” 175,000 sku 20
Slide 21: Unrivaled Customer Acquisition Campaign
Unrivaled Customer Acquisition Campaign 21 May – 30 June 2018, we sold more than 41,000 sets 21
Slide 22: Expanding Payment Channels to eWallet
Expanding Payment Channels to eWallet 22
Slide 23: Early FinTech Adopter - First Citi’s Pay with Points Partner in Hong Kong
Early FinTech Adopter - First Citi’s Pay with Points Partner in Hong Kong The first of its kind API partnership enables Citibank credit cardholders to use reward points to “Pay” purchases on 23
Slide 24: Earn rewards at HKTVmall and HKTaxi
x Other than earning at HKTVmall, now you can also earn when ridding on HKTaxi. 24
Slide 25: Increase Gross Profit Margin
Increase Gross Profit Margin A Volume Game, the more orders placed by customers, the better is our purchasing power! Our blended Gross Margin and When GMV increases by 3 – 4 x Commission Rate may increase from existing 21% up to 27% to 33%, just like other Hong Kong Retailers! 25
Slide 26: Retail Market Reference from Bricks and Mortar
Retail Market Reference from Bricks and Mortar Market Cap Key Financials Listed Company Mainly trading as at 3 July Historical GMV/Sales Year Ended NAV GP Remarks (Stock Code) as 2018 P/B (remarks) HK$bn HK$bn HK$bn HKTVmall and HKTV (1137) 2.3 1.26 31/12/2017 1.9 1.1 21.6% HoKoBuy Lifestyle Interna
Slide 27: Lower the Costs for Warehousing, Pick and Pack - Robotic Picking and Conveying System
Lower the Costs for Warehousing, Pick and Pack - Robotic Picking and Conveying System • Hong Kong’s largest robotic warehousing system from Germany, phase I launched at Tsing Yi hub in March 2018. • Turning the loss-making “highly manual fulfilment process” into a stable and profitable “highly autom
Slide 28: Phase II and III of Robotic System at Self-Owned TKO Headquarters
Phase II and III of Robotic System in a Much Larger Scale at Self- Owned TKO Headquarters Investment Estimated Daily Capacity Estimated Launch (HK$) (Number of Orders) Date Phase 1 29,000,000 8,000 to 10,000 Lauched in March 2018 Phase 2 92,000,000 20,000 by 2018 Phase 3 52,000,000 30,000 - 35,000 b
Slide 29: Lowering Delivery cost
Lowering Delivery cost Another Volume Game, the more the order, the higher the density in each district, the shorter the delivery distance – and lower costs! Aim at 6-8% of GMV$ In 3 years’ In 1 year’s time ~ 500 in Now, ~ 200 in time ~ 300 in In 2 years’ operations operations operations time ~ 400
Slide 30: Traditional Retail vs Online Retail
Traditional Retail vs Online Retail Traditional Retail Online Retail Merchants’ At HKTV Warehouses: Warehouse: ~160,000 SKU ~20,000 SKU Pick & Pack, Sorting Automation System at HKTV Distribution Centre 30
Slide 31: HKTVmall P&L model
HKTVmall P&L model We run the Ecommerce Business aiming to reach different stages to attain “Profitable” stage: Stage 1 : Order fulfilment (Primarily Variable costs) Stage 2 : Online shopping mall operation (Primarily Fixed costs) Stage 3 : Supporting functions including Admin, Finance, TM, Technica
Slide 32: Collaboration with Google Partner to groom SME growth – 31X on ROI
Collaboration with Google Partner to groom SME growth – 31 X on ROI According to 2017 experiment, HKTVmall remarketing audience vs Google audience Conversion rate Uplift 31x More precise target marketing in placing digital ad, this is our strength brought by BIG DATA collected from HKTVmall and HoKo
Slide 33: What is the Difficulties We are Facing?
What is the Difficulties We are Facing? Lack of similar online operation in Hong Kong difficult to accelerate the “Online/Digital Ecosystem” momentum Lag-behind scale of Tap & Go, TNG and O! ePay Digital Ecosystem is incomplete Consumer behavior and Merchants commitment 33
Slide 34: Q&A THANK YOU
O&A THANK YOU HONG KONG TELEVISION NETWORK LIMITED SESRRBARDAD 34
Slide 35: Appendix
Appendix 35
Slide 36: Consolidated Income Statement
Consolidated Income Statement 36
Slide 37: Key Highlight on Consolidated Income Statement
Key Highlight on Consolidated Income Statement Improved net loss of HK$204.9mn in 2017 vs HK$257.1mn in 2016, a decreased by HK$52.2mn: 1. Increase in Gross Contribution by HK$145.3mn to HK$192.1mn in 2017; 2. Valuation gain in investment properties increased by HK$73.8mn to HK$80.5mn; 3. Increase i
Slide 38: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position Solid balance sheet with strong liquidity - as at 31 December 2017, 1. Under Property, plant and equipment, included self-owned properties at TKO Headquarters of about 300,000 Sq. Ft. and investment and leasehold properties of about 153,000 Sq. Ft.. 2. St
Slide 39: Managed CAPEX for Sustainable Growth
Managed CAPEX for Sustainable Growth 450 CAPEX HK$'mn 400 385 350 300 250 200 182 150 99 100 50 - 2015 2016 2017 Heavy construction CAPEX for new TKO headquarters was completed during 2017 and the upcoming CAPEX is expected to be business driven and for sustainable growth, mainly including: a) HK$14
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