Chow Sang Sang Holdings International Limited · HKEX:116
Chow Sang Sang Holdings International — H1 2023 Earnings Presentation
46 slides from Chow Sang Sang Holdings International's earnings presentation, August 2023
Slide 1: 2023 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 2023 Interim Results Presentation August 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. Q&A Session IV. 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 Fade AE AEE + TE 69 6 4 +2 71 Mainland (Oasis by Chow Sang Sang) China Rolex/Tudor 14 2 2 fe} 14 MINTYGREEN 50 2 1 +1 51 EMPHASIS. 19 0 2 -2 17 PROMESSA 24 7 1 +6 30 MARCO BICEGO _ 0 — - 4 Sub-total: 64 911 Chow Sang Sang ee ee Rolex/Tudor EMPHASIS ee ee PROMESSA Macau Shiedo 41 1 Sub
Slide 9: Jewellery and Watch Store Expansion
Jewellery and Watch Store Expansion Increasing no. of stores in Mainland China (No. of Stores) 1,200 1,016 1,000 977 35 34 70 872 69 31 800 748 66 700 26 24 69 70 600 874 911 400 775 606 653 200 0 2019 2020 2021 2022 2023 June Mainland China HK and Macau Taiwan 9
Slide 10: Jewellery and Watch Store Network as at Jun 2023
Jewellery and Watch Store Network as at 30 Jun 2023 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 e-shop Guizhou Fujian ⚫ chowsangsang.com Guang
Slide 11: Financial Highlights
Financial Highlights 11
Slide 12: Financial Highlights
(HKSM) 2021 2022 2023 Turnover - Continuing operations 10,825 10,092 13,000 +29% Retail of jewellery and watches 9,776 9,669 12,672 +31% Wholesale of precious metals 1,031 404 315 -22% Others 18 19 13 -32% Gross profit - Continuing operations 2,410 2,879 3,637 +26% Gross profit margin - Continuing o
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 5,417 21,988 25.3% GP 20,557 26.3% 5,000 20,000 2,538 GP 11,163 4,000 3,146 GP 24.3% 10,465 28.1% 15,000 3,000 10,000 2,000 3,637 GP 13,000 28.0% 2,879 GP 5,000 10,82
Slide 14: Group Operating Performance (Cont'd)
Group Operating Performance (Cont’d) Total segment results – Continuing operations (HK$M) ⚫ For the segment results measurement, the following 1,400 8.1% items are excluded: 8.0% ⚫ dividend income 1,200 ⚫ finance income and costs 4.4% 4.0% 4.0% ⚫ foreign exchange differences 1,000 976 ⚫ fair value g
Slide 15: Group Operating Performance (Cont'd)
Group Operating Performance (Cont’d) Profit attributable to owners Profit before tax – Continuing operations – Continuing operations (HK$M) (HK$M) 1,500 1,500 8.2% 8.0% 8.0% 1,300 1,300 6.4% 4.6% 2.9% 4.0% 3.4% 4.0% 2.4% 1,100 1,100 1,006 0.0% 0.0% 900 900 279 744 -4.0% -4.0% 700 593 700 207 1,063 -
Slide 16: Group Operating Results by Segment
Group Operating Results by Segment Turnover breakdown – Continuing operations Results breakdown – Continuing operations 0.2% 0.2% 0.1% 100% 2.4% 100% 4.0% 1.5% 0.0% 9.5% 90% 90% 80% 80% 70% 70% 60% 60% 103.4% 50% 97.5% 50% 100.0% 102.5% 95.8% 90.3% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% -0.1% 2021 1H
Slide 17: Jewellery and Watch Retail Segment Performance
Jewellery and Watch Retail Segment Performance Turnover Segment results (HK$M) (HK$M) 2,000 10.0% 19,922 8.6% 19,752 20,000 8.0% 1,500 6.0% 5.0% 4.4% 15,000 10,146 10,083 4.0% 987 1,000 2.0% 872 10,000 375 213 0.0% 12,672 1,094 500 -2.0% 5,000 9,776 9,669 612 658 -4.0% 0 0 -6.0% 2021 2022 2023 2021
Slide 18: Jewellery and Watch Retail Performance
Jewellery and Watch Retail Performance Mainland China retail turnover HK & Macau retail turnover (HK$M) (HK$M) 16,000 16,000 14,315 14,000 13,697 14,000 12,000 12,000 7,151 6,532 10,000 10,000 8,000 8,000 5,824 6,000 6,000 5,417 8,715 4,000 2,884 3,421 4,000 7,164 7,165 2,000 2,000 3,825 2,533 2,403
Slide 19: Retail Turnover by Geographical Area
Retail Turnover by Geographical Area 2022 1H 2022 2H 2023 1H Taiwan Taiwan Taiwan 1% 1% 1% HK & HK & HK & Macau Macau Macau 25% 34% 30% Mainland Mainland Mainland China China China 74% 65% 69% 19
Slide 20: Mainland China Retail Sales Mix
Mainland China Retail Sales Mix (HK$’M) Products: 20
Slide 21: Hong Kong and Macau Retail Sales Mix
Hong Kong and Macau Retail Sales Mix (HK$’M) Products: 21
Slide 22: Online Sales as a Percentage of Mainland China Sales
Online Sales as a Percentage of Mainland China Sales (HK$M) 3,500 19.0% 18.0% 18.0% 16.0% 18.0% 3,000 15.0% 15.0% 2,666 13.0% 2,500 2,194 1,271 8.0% 2,000 1,532 +1% 1,546 1,071 1,500 1,410 3.0% 685 765 613 1,000 -2.0% 1,594 1,395 500 1,123 -7.0% 797 847 781 0 -12.0% 2018 2019 2020 2021 2022 2023 1H
Slide 23: 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 4,000 9,600 3,500 3,400 3,300 8,600 9,000 7,600 3,000 1,700 1,700 1,700 6,000 2,000 3,000 3,000 2,900 1,000 3,000 0 0 2021 2022 2023 1H 2021 2022 2023 1H O
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 35.0% 2,000 9.8% 10.0% 30.0% 9.6% 29.0% 30.0% 7.3% 7.1% 8.0% 8.2% 15,000 1,500 6.9% 24.0% 25.0% 5.1% 6.0% 12,672 6.0% 133 3.3% 1,094 4.0% 20.0% 3,824 13 9,776 9,669 10
Slide 25: Working Capital Trends
Working Capital Trends Average inventory turnover days Average receivables turnover days (No. of Days) (No. of Days) 300 283 15 14 14 223 232 11 200 10 100 5 0 0 2021 2022 2023 1H 2021 2022 2023 1H Average payables turnover days Cash conversion cycle (No. of Days) (No. of Days) 10 400 8 293 300 234
Slide 26: 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 26
Slide 27: Q&A Session
Q&A Session 27
Slide 28: Appendix
Appendix 28
Slide 29: Business Review
Business Review 29
Slide 30: Business Review Retail - Analysis by Geographic Area
Business Review Retail - Analysis by Geographic Area Mainland China ⚫ Strong rebound of gold jewellery and products with SSSG of +26%. ⚫ Diamond jewellery sales, particularly sales of diamond jewellery at higher price ranges, was on a downward trend. ⚫ Sales of Rolex and Tudor watches recorded SSSG
Slide 31: Mainland China Retail SSSG
Mainland China Retail SSSG 200% 150% 100% 50% 37% 26% 19% 0% -18% -50% 2020 1H 2020 2H 2021 1H 2021 2H 2022 1H 2022 2H 2023 1H Overall Gold jewellery and products Gem-set jewellery Watches 31
Slide 32: Business Review Retail - Analysis by Geographic Area
Business Review Retail - Analysis by Geographic Area Hong Kong and Macau ⚫ With all travel restrictions lifted, turnover in Hong Kong and Macau increased 59% YOY, and segment results jumped 156%. ⚫ Overall, SSSG was +93% in 1Q of 2023 as compared to the same period of 2022 which was battered by covi
Slide 33: Hong Kong and Macau Retail SSSG
Hong Kong and Macau Retail SSSG 100% 80% 78% 60% 56% 40% 34% 20% 16% 0% -20% -40% -60% -80% 2020 1H 2020 2H 2021 1H 2021 2H 2022 1H 2022 2H 2023 1H Overall Gold jewellery and products Gem-set jewellery Watches 33
Slide 34: Business Review Retail - Store Network
Business Review Retail - Store Network ⚫ During the period, 53 new Chow Sang Sang stores of which 6 being 生生•活宇 (Oasis by Chow Sang Sang) stores were opened in Mainland China and a total of 21 stores were closed. 35 of the new stores were located in shopping malls. ⚫ In Hong Kong and Macau, we added
Slide 35: Business Review Retail - Omni-Channel Retailing
Business Review Retail - Omni-Channel Retailing ⚫ The online sales in Mainland China maintained its growth momentum and accounted for approximately 18% of total Mainland China sales during the period (2022 1H: 19%). Growth in sales of gold jewellery and products continue to outpace other product cat
Slide 36: Business Review Retail - Product and Marketing
Business Review Retail - Product and Marketing ⚫ Our ever-popular collections of gold ornaments, “Cultural Blessings” and “Charme”, bolstered by the new ones “gin” and “Mirror Gold”, achieved good results. ⚫ Sales of high unit price gem-set jewellery was sluggish. Total sales conducted through Perso
Slide 37: Business Review Retail - Product and Marketing
Business Review Retail - Product and Marketing ⚫ We have resumed efforts to engage customers and enhance shopping experience through various Chinoiserie (國潮) pop-up stores, display points, wedding expos and online campaigns. Chinoiserie Pop-up Store PROMESSA Infini Love Diamond Love Journey Roadshow
Slide 38: Business Review Other Business Segments
Business Review Other Business Segments Wholesale of Precious Metals ⚫ Turnover decreased by 22% to HK$315 million during the period. E-commerce Platform ⚫ The subsidiary “The Future Rocks Company Limited” was set up to explore the market for laboratory-grown diamond and gemstones (“LGD”). ⚫ It oper
Slide 39: Business Review Other Business Segments
Business Review Other Business Segments Securities and Futures Broking – the Discontinued Operation ⚫ The business has since early May 2021 ceased operation. We have been processing unclaimed assets. ⚫ Complete shutdown will occur when all such assets are returned or placed into court custody. ⚫ Sin
Slide 40: Strategy Outline
Strategy Outline 40
Slide 41: Strategy Outline
Strategy Outline Jewellery and Watch Store Expansion ⚫ Expand jewellery and watch store network selectively and prudently with priority on improving operating efficiency rather than expanding geographical coverage ⚫ Continue with multi-brand strategy for store opening ⚫ Adopt self-run business model
Slide 42: Strategy Outline
Strategy Outline Product and Marketing ⚫ Focus on product innovation to cater to different customer segments ⚫ Expand product collections embodying heritage and cultural themes ⚫ Engage customers through live streaming shows, thematic events, in-store VIP salons and workshops ⚫ Develop live-streamin
Slide 43: Industry Analysis – Hong Kong and Mainland China
Industry Analysis – Hong Kong and Mainland China Value of retail sales of 2H FY2022-1H FY2023 2H FY2022-1H FY2023 Hong Kong Jewellery, Watches and Clocks, and Valuable Gifts Mainland China Gold, Silver and Jewellery Sales 7.00 40.0 34.2 34.2 6.00 5.56 35.0 5.01 5.07 5.26 5.08 28.8 5.00 30.0 26.8 26.
Slide 44: Industry Analysis – Mainland China Luxury Market Overview
Industry Analysis – Mainland China Luxury Market Overview ⚫ The global market will increase to USD444.7 billion at a compound annual growth rate of about 11% by 2025. And the Asia-Pacific region has become an important growth engine of the global luxury market, and China, as the main driving force,
Slide 45: 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 “Director(s)” the director(s) of the Company “FY” the full year, twelve months ended
Slide 46: Thank you
Thank you 46
Chow Sang Sang Holdings International — H1 2023 Earnings Presentation on 6ix