Chow Sang Sang Holdings International Limited · HKEX:116
Chow Sang Sang Holdings International — FY2018 Earnings Presentation
43 slides from Chow Sang Sang Holdings International's earnings presentation, March 2019
Slide 1: 2018 Annual Results Presentation
CHOW SANG SANG HOLDINGS INTERNATIONAL LIMITED 周生生 PPT集TITLE 團 國 HERE 際有限公司 Stock code: 116 Date Here 2018 Annual Results Presentation March 2019 1
Slide 2: Disclaimer and Forward Looking Statements
Disclaimer and Forward Looking Statements • This document carries the information and the opinion is not for the purpose of comprehensive research, financial services or legal opinion. Chow Sang Sang Holdings International Ltd. does not guarantee its accuracy and integrity. This document contains th
Slide 3: Presentation Outline
Presentation Outline I. Business Overview II. Financial Highlights III Strategy Outline IV. Q&A Session V. Appendix 3
Slide 4: Business Overview
PPT TITLE HERE Date Here Business Overview 4
Slide 5: Company Structure
Company Structure Physical metals trading Precious Metals service Wholesale Commission based Services Generated 8% of total revenue for 2018 Jewellery Retail Chow Sang Sang Group 7 HK offices and Internet Securities platform Brokerage Commission based Main business segment No proprieta
Slide 6: Business Overview: Jewellery Segment
PPT TITLE HERE Date Here Business Overview: Jewellery Segment 6
Slide 7: Product mix: Jewellery
Product mix: Jewellery Gold based Items Gem-set Items Licensed Products International Brands (Rolex, Tudor) 7
Slide 8: Distribution Network
Distribution Network Chow Sang Sang directly runs and controls all of its retail stores with no franchise operations Beijing Surrounding Complementing the extensive retail network, the Provinces eshop.chowsangsang.com working with key retail portals (83) Heilongjiang in Mainland China, offer onl
Slide 9: Focus on Growth in Mainland China
Focus on Growth in Mainland China Increasing No. of Stores in Mainland China (No. of Stores) 600 500 400 300 506 200 422 374 New New shops shops +63 +105 100 0 2016 2017 2018 Same-store Sales Growth – -4% +5% +3% Mainland China Same-store Sales -25% -2% +18% Growth – HK/Macau 9
Slide 10: Financial Highlights
PPT TITLE HERE Date Here Financial Highlights 10
Slide 11: Operating Performance
Operating Performance … Turnover Gross Profit (HK$ mm) (HK$ mm) 30,000 6,000 25.2% 24.6% 24.0% 25.0% 25,000 5,000 4,631 4,050 3,991 20.0% 20,000 18,806 4,000 16,093 16,633 2,271 15,000 15.0% 9,248 3,000 1,941 2,033 8,292 8,621 10,000 10.0% 2,000 5,000 2,360 5.0% 9,558 1,000 2,109 1,958 7,801 8,012 0
Slide 12: Operating Performance (Cont'd)
Operating Performance (Cont’d) … Operating Profit Profit attributable to equity holders (HK$ mm) (HK$ mm) 1,600 8.0% 1,600 7.0% 7.1% 1,400 7.0% 1,400 6.0% 1,333 6.3% 6.3% 5.4% 5.3% 1,200 6.0% 1,200 1,055 5.0% 4.6% 1,019 536 1,012 1,000 5.0% 1,000 876 4.0% 800 505 4.0% 800 742 406 512 3.0% 600 484 60
Slide 13: Driven by Retail Segment
…Driven by Retail Segment… Revenue Breakdown Results Breakdown 0.6% 0.3% 0.2% 100% 0.2% 0.2% 0.2% 0.8% 3.5% 0.7% 100% 0.6% 8.5% 1.4% 3.4% 11.9% 12.2% 4.8% 1.1% 90% 90% 1.5% 80% 80% 70% 70% 60% 60% 50% 50% 97.2% 94.8% 91.1% 90.2% 87.3% 87.3% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 2016 2017 2018 2016 2
Slide 14: Retail Performance
…Retail Performance… Retail – Revenue Retail – Operating Results (HK$ mm) (HK$ mm) 20,000 2,000 8.0% 7.0% 17,130 6.7% 7.0% 6.2% 15,000 14,516 1,500 6.0% 14,045 8,484 1,205 5.0% 7,174 7,511 10,000 1,000 947 4.0% 901 472 3.0% 465 401 5,000 500 2.0% 8,646 6,871 7,005 733 482 500 1.0% 0 0 0.0% 2016 2017
Slide 15: Steady Demand in Mainland China
… Steady Demand in Mainland China 2016 2017 2018 Others Others 0.7% HK/Macau Others 0.7% HK/Macau 24.6% 0.7% HK/Macau 24.7% 25.0% Mainland Mainland China Mainland China China 52.2% HK/Macau HK/Macau 55.3% 54.4% HK/Macau (PRC (PRC Customers) Customers) (PRC 22.5% 19.3% Customers) 19.9% Sales Attribut
Slide 16: Consolidated Sales Mix – (Retail)
Consolidated Sales Mix – (Retail) 2017 2018 Watches Watches 5% 5% Non gold Non gold jewellery jewellery Gold 31% Gold 33% 62% 64% Gross margin: Gold* : 16%-22% Non gold jewellery: 38%-43% Watches: 23%-30% * Include gold price movement 16
Slide 17: Consolidated Gross Profit Contribution – (Retail)
Consolidated Gross Profit Contribution – (Retail) 2017 2018 Taiwan Taiwan 1% 1% Hong Hong Kong/ Kong/ Macau Macau Mainland 40% Mainland China 40% China 59% 59% 17
Slide 18: Change of Average Selling Price
Change of Average Selling Price Hong Kong/Macau - Gold Hong Kong/Macau - Jewellery (HK$) (HK$) 6,000 20,000 4,700 5,000 4,500 15,000 12,900 4,000 12,000 11,900 10,000 2,000 5,000 0 0 2016 2017 2018 2016 2017 2018 Mainland China - Gold Mainland China - Jewellery (RMB) (RMB) 5,000 12,000 10,200 9,600
Slide 19: Working Capital Trends
Working Capital Trends Average Inventory Turnover Days Average Receivables Turnover Days (No. of Days) (No. of Days) 250 20 19 19 18 201 203 192 200 15 150 10 100 50 5 0 0 2016 2017 2018 2016 2017 2018 Average Payables Turnover Days Cash Conversion Cycle (No. of Days) (No. of Days) 10 250 214 216 20
Slide 20: Financial Highlights
Financial Highlights 2016 2017 2018 18 vs 17 Turnover 16,093 16,633 18,806 +13.1% Jewellery Retail 14,045 14,516 17,130 +18.0% Other businesses 2,047 2,117 1,676 -20.8% Gross profit 4,050 3,991 4,631 +16.0% Operating profit 1,019 1,055 1,333 +26.4% EBITDA 1,201 1,361 1,573 +15.6% Profit attributable
Slide 21: Other Financial Information
Other Financial Information For the 12 months ended (HK$ million) or as at Dec 31, 2016 2017 2018 Cash and cash equivalents 1,283 1,200 1,303 Long term listed investments1 744 854 807 Capital expenditure 197 216 338 Gearing2 20.4% 20.5% 18.6% Unused banking facilities 4,318 4,128 4,080 1 Long term l
Slide 22: Strategy Outline
PPT TITLE HERE Date Here Strategy Outline 22
Slide 23: Expansion with Distinctiveness in Mainland China
Expansion with Distinctiveness in Mainland China Around 60 new stores in Mainland China in 2019 Expansion Philosophy Self-Run Store Model Target entry-mid end consumers Enable consistent and superior service quality Leverage on high-end shopping malls and with seamless delivery department stor
Slide 24: Product Mix and Branding
Product Mix and Branding Jewellery Focus and Product Differentiation Clear presence and visibility of international brands and signature collections Develop house brands - focus on quality and sophistication appropriate to different customer segments Selected cooperations with IP owners Market
Slide 25: Q&A Session
PPT TITLE HERE Date Here Q&A Session 25
Slide 26: Appendix
PPT TITLE HERE Date Here Appendix 26
Slide 27: Company History
Company History 1930-1970 1970-1980 1980-1990 1990-2000 2000-2019 1934 1973 1998 2005 2009 2011 2014 2019 Chow Sang First Re-entered Became Opened Opened Opened Stable Sang company in the sightholder the first the first the first expansion Goldsmith the industry Mainland of Diamond Flagship Flagship
Slide 28: Industry Analysis – HK & Mainland China
Industry Analysis – HK & Mainland China FY2018 HK Jewellery, Watches and Clocks, and Valuable FY2018 Mainland China Gold, Silver and Jewellery Sales Gifts Sales 10.00 35.0 8.09 8.03 8.27 30.0 27.6 8.00 7.27 7.48 25.5 25.5 24.4 23.6 6.88 6.61 6.88 6.94 6.86 23.6 25.0 22.7 22.1 22.3 23.0 6.13 5.91 20.
Slide 29: Marketing Highlights 2018
PPT Program Marketing TITLE HERE Highlights Date Here 2018 29
Slide 30: Chinese New Year Campaign
Chinese New Year Campaign Celebrating the Chinese New Year, seasonal blessings were brought to the mass audience, wishing them a prosperous year like the motif “Koi” fish. Aiming to drive top of mind awareness for seasonal gifting. Touch points included digital (social media & website), POSM, pr
Slide 31: Valentine's Day Campaign
Valentine’s Day Campaign Launched a Valentine’s Day campaign – “Be HK my King Be my Queen” featuring affordable luxury jewellery which are ideal for seasonal gifting. Leverage the insight of giving jewellery as a pampering gesture to girls to express feelings, we created a few key visuals featur
Slide 32: Valentine's Day Campaign
Valentine’s Day Campaign Short digital video for social media Brand website Store display Gift with purchase 32
Slide 33: Mother's Day Campaign
Mother’s Day Campaign Key Visual Celebrating a lively Mother’s Day, we have created a campaign theme in illustration to showcase the jewellery. The beautiful jewellery blended in with nature foster the self-purchase as well as the gifting initiatives. Touch points covered digital campaign, below
Slide 34: Qixi Campaign
Qixi Campaign Chinese Valentine’s Day (Qixi) is a traditional Key Visual (4 version) festival in China as well as a modern gifting season for couples. We have launched a campaign in Mainland China to celebrate and provide gifting ideas for men to impress their significant other half. Leveraging
Slide 35: Bridal Campaign
Bridal Campaign Key Visual Launched “Celebrate Love” Campaign in Sep 2018 to echo the “For the Precious Commitment” wedding platform created in 2016, to continuously communicate the significance of everyday loving moments of a loving marriage. A massive integrated marketing campaign has been lau
Slide 36: Bridal Campaign (Mainland China)
Bridal Campaign (Mainland China) CN roadshow in “Tie the Knot” theme, Shanghai CN social media campaign to share celebrity couples’ love stories and their matching rings. CN campaign – sponsored a celebrity couple’s wedding including wedding jewellery and wedding collateral to generate buzz on PR an
Slide 37: Christmas Campaign
Christmas Campaign To capture the massive demand of gifting during Key Visual Christmas festive season, an integrated marketing campaign platform “Gather All Sparkles for Christmas” was launched in Nov 2018. Campaign concept adopted many festive motifs, e.g. X’mas tree, wreath and sugar cane sti
Slide 38: Christmas Campaign
Christmas Campaign Brand website e-card Store display Social Media post 38
Slide 39: MINTYGREEN CN Launch
MINTYGREEN CN Launch To introduce Chow Sang Sang to young audiences, a new Brand MINTYGREEN was launched in 2018 to strategically penetrate the daily wear market of Mainland China. MINTYGREEN is a brand which focuses on carrying Chow Sang Sang’s young affordable daily wear collections. The inter
Slide 40: MINTYGREEN CN Launch
MINTYGREEN CN Launch Store image 1.0 Guilin Store Cheungsha Store Store image 2.0 Chengdu Store Shenzhen Store 40
Slide 41: MINTYGREEN IP collaboration
MINTYGREEN IP collaboration Targeting at young audiences, MINTYGREEN collaborated with popular Mobile Game IP Onmyoji (陰陽師) in Mainland China to exclusively launch feature products in store and designated eCommerce platforms. A launch event was held in Beijing Huiju Shopping Center to unveil the
Slide 42: e-Shops Performance
e-Shops Performance Aside from our own eshop.chowsangsang.com, we partnered with different portals such as TMALL, JD.com to launch various trading events. During ecommerce giants’ sales event on 18th June, 2018 held by TMALL, Chow Sang Sang topped the list of jewellery business. 42
Slide 43: 2018 New Stores
2018 New Stores Yuen Long, Hong Kong Shenyang, Mainland China Guangzhou, Mainland China Beijing, Mainland China Shanghai, Mainland China Chengdu, Mainland China 43
Chow Sang Sang Holdings International — FY2018 Earnings Presentation on 6ix