Chow Sang Sang Holdings International Limited · HKEX:116
Chow Sang Sang Holdings International — FY2019 Earnings Presentation
47 slides from Chow Sang Sang Holdings International's earnings presentation, March 2020
Slide 1: 2019 Annual Results Presentation
CHOW SANG SANG HOLDINGS INTERNATIONAL LIMITED 周生生集團國際有限公司 Stock code: 116 2019 Annual Results Presentation March 2020
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. Business Update IV. Strategy Outline V. Q&A Session VI. Appendix 2
Slide 4: Business Overview
Date Here Business Overview 3
Slide 5: Business Segments
Business Segments Chow Sang Sang Holdings International Limited Wholesale of Securities and Jewellery Futures Broking Precious Metals ⚫ Manufacture of jewellery ⚫ Retail of jewellery (Gold, Gem-set, Platinum/Karat Gold and Watch) ⚫ Branded stores ⚫ Watch boutique: Rolex and Tudor 4
Slide 6: Distribution Network as at Dec 2019
Distribution Network as at 31 Dec 2019 Mainland China Number City Number Region of stores tier of stores Heilongjiang North 86 1 144 Jilin East 113 2 268 Inner Mongolia South 196 3 135 Xinjiang Beijing Liaoning West 107 4 59 Tianjin Beijing Surrounding 104 - - Gansu Hebei Provinces Ningxia Shanxi Qi
Slide 7: Store Expansion
Store Expansion Increasing No. of Stores in Mainland China (No. of Stores) 800 700 700 24 599 70 600 26 519 67 500 472 25 441 24 72 23 400 74 75 300 606 506 200 374 422 343 100 0 2015 2016 2017 2018 2019 Mainland China HK and Macau Taiwan 6
Slide 8: Store Count by Brand
Store Count by Brand As at 31 Dec 2018 Addition Closed As at 31 Dec 2019 Hong Kong and Macau 47 5 3 49 3 2 1 4 5 - - 5 Rolex/Tudor 12 1 1 12 Sub-total 67 8 5 70 Mainland China 469 110 18 561 1 6 - 7 23 3 1 25 Rolex/Tudor 13 1 1 13 Sub-total 506 120 20 606 Taiwan 26 1 3 24 Total 599 129 28 700 7
Slide 9: Financial Highlights
Date Here Financial Highlights 8
Slide 10: Operating Performance
Operating Performance Turnover Gross Profit (HK$M) (HK$M) 6,000 26.9% 30,000 24.0% 24.6% 25.0% 25,000 5,000 4,777 4,631 3,991 20.0% 20,000 18,806 4,000 17,736 2,203 16,633 2,271 15.0% 15,000 3,000 2,033 9,248 8,196 8,621 10.0% 10,000 2,000 2,360 2,574 5,000 1,000 1,958 5.0% 9,558 9,540 8,012 0 0 0.0
Slide 11: Operating Performance (Cont'd)
Operating Performance (Cont’d) Earnings Before Interest, Taxes, Depreciation Profit attributable to equity holders and Amortisation* (HK$M) (HK$M) 1,800 9.0% 1,800 7.0% 8.4% 8.2% 1,600 1,573 8.0% 1,600 6.0% 1,361 5.3% 5.4% 1,400 6.6% 7.0% 1,400 644 1,162 5.0% 1,200 6.0% 1,200 1,012 232 3.6% 4.0% 1,0
Slide 12: Driven by Jewellery Segment
Driven by Jewellery Segment Turnover Breakdown Results Breakdown 100% 3.5% 0.7% 0.3% 0.2% 0.1% 3.4% 1.1% 100% 4.8% 0.2% 0.2% 0.1% 1.5% Wholesale 8.5% 8.1% 0.7% 12.2% 80% 90% 80% 60% 70% 90.2% 94.8% 40% Jewellery 149.4% 60% 20% 50% 91.1% 91.7% 87.3% 40% 0% Broking 30% -50.0% -20% 20% Others -40% -0.1
Slide 13: Jewellery Performance
Jewellery Performance Jewellery – Turnover Jewellery – Operating Results (HK$M) (HK$M) 20,000 2,000 9.0% 7.9% 17,130 8.0% 16,258 7.0% 7.0% 15,000 14,516 1,500 6.2% 1,282 6.0% 8,484 1,205 7,485 5.0% 7,511 10,000 1,000 521 901 472 4.0% 401 3.0% 5,000 500 8,646 8,773 2.0% 7,005 733 761 500 1.0% 0 0 0.0
Slide 14: Jewellery Turnover by Geographical Area
Jewellery Turnover by Geographical Area 2017 2018 2019 Taiwan Taiwan Taiwan 1% 1% 1% HK & HK & HK & Mainland Macau Mainland Macau China Macau China 44% 45% 39% 54% Mainland 55% China 60% 13
Slide 15: Jewellery Gross Profit by Geographical Area
Jewellery Gross Profit by Geographical Area 2017 2018 2019 Taiwan Taiwan Taiwan 1% 1% 1% HK & HK & HK & Macau Macau Macau 40% 40% 35% Mainland Mainland China China 59% 59% Mainland China 64% 14
Slide 16: Hong Kong and Macau Jewellery Sales Mix
Hong Kong and Macau Jewellery Sales Mix 15
Slide 17: Mainland China Jewellery Sales Mix
Mainland China Jewellery Sales Mix (HK$M) 10,000 3% 2% 9,000 9% 11% 2% 8,000 12% 21% 7,000 23% 6,000 25% 5,000 4,000 67% 3,000 64% 61% 2,000 1,000 0 2017 2018 2019 Product: Gold Gem-set Jewellery Platinum/Karat Gold Watch 16
Slide 18: Hong Kong and Macau Jewellery SSSG
Hong Kong and Macau Jewellery SSSG 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% 2017 1H 2017 2H 2018 1H 2018 2H 2019 1H 2019 2H Overall Gold Gem-set 17
Slide 19: Mainland China Jewellery SSSG
Mainland China Jewellery SSSG 15% 10% 5% 0% -5% -10% -15% 2017 1H 2017 2H 2018 1H 2018 2H 2019 1H 2019 2H Overall Gold Gem-set 18
Slide 20: Jewellery: Change of Average Selling Price
Jewellery: Change of Average Selling Price Hong Kong and Macau - Gold Hong Kong and Macau - Jewellery (HK$) (HK$) 6,000 20,000 4,700 5,000 5,000 15,000 4,000 12,000 11,900 11,000 10,000 2,000 5,000 0 0 2017 2018 2019 2017 2018 2019 Mainland China - Gold Mainland China - Jewellery (RMB) (RMB) 5,000 1
Slide 21: E-shop Sales as a Percentage of Mainland China Sales
E-shop Sales as a Percentage of Mainland China Sales 18% 17% 16% 16% 15% 15% 14% 14% 13% 12% 12% 11% 10% 9% 9% 8% 2015 2016 2017 2018 2019 20
Slide 22: Working Capital Trends
Working Capital Trends Average Inventory Turnover Days Average Receivables Turnover Days (No. of Days) (No. of Days) 20 250 231 20 19 19 203 192 200 15 150 10 100 5 50 0 0 2017 2018 2019 2017 2018 2019 Average Payables Turnover Days Cash Conversion Cycle (No. of Days) (No. of Days) 247 250 10 216 20
Slide 23: Financial Highlights (HK$M)
Financial Highlights (HK$M) For the 12 months ended % change 2017 2018 2019 19 vs 18 Turnover 16,633 18,806 17,736 -5.7% Jewellery 14,516 17,130 16,258 -5.1% Other businesses 2,117 1,676 1,478 -11.8% Gross profit 3,991 4,631 4,777 +3.2% Operating profit* 1,055 1,333 926 -30.5% EBITDA* 1,361 1,573 1,
Slide 24: Other Financial Information
Other Financial Information For the 12 months ended (HK$M) or as at 31 Dec 2017 2018 2019 Cash and cash equivalents 1,200 1,303 1,028 Long term listed investments* 854 807 901 Capital expenditure 216 338 415 Gearing# 20.5% 18.6% 25.3% Unused banking facilities 4,128 4,080 3,992 * Long term listed in
Slide 25: Business Update
Date Here Business Update 24
Slide 26: Business Update
Business Update Hong Kong and Macau ⚫ Majority of stores remained open with shortened business hours during Jan-Mar 2020 ⚫ Jan-Feb 2020 SSSG: -44% ⚫ Rental reductions for some stores after assiduous negotiation Mainland China ⚫ Up to 77% of stores suspended operations in first two weeks of Feb 2020
Slide 27: Strategy Outline
Date Here Strategy Outline 26
Slide 28: Strategy Outline
Strategy Outline Store Expansion ⚫ Maintain steady store expansion in Mainland China ⚫ Continue self-run store model to provide consistent and superior service quality ⚫ Multi-brand strategy: EMPHASIS and MINTYGREEN ⚫ In Hong Kong, realign network to take into account fewer tourist shoppers Products
Slide 29: Q&A Session
Date Here Q&A Session 28
Slide 30: Appendix
Appendix 29
Slide 31: Company History
Company History 1930-1970 1970-1980 1980-2000 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 Flagship
Slide 32: Industry Analysis – Hong Kong and Mainland China
Industry Analysis – Hong Kong and Mainland China Value of retail sales of FY2019: Hong Kong Jewellery, FY2019 Mainland China Gold, Silver Watches and Clocks, and Valuable Gifts and Jewellery Sales 10.00 30.0 26.8 8.43 25.3 25.3 25.0 8.00 7.25 21.8 22.0 21.8 21.2 20.5 21.2 6.68 6.68 19.9 20.0 18.6 5.
Slide 33: Marketing Programme Highlights
Marketing Programme Highlights 2019 32
Slide 34: Seasonal Promotions – Chinese New Year
Seasonal Promotions – Chinese New Year ⚫ Celebrating the Chinese New Year, seasonal blessings were brought to the mass audience, wishing them a prosperous year of Pig. Aim to drive top of mind awareness for seasonal gifting. ⚫ Touch points included digital (social media and website), POSM, printing
Slide 35: Seasonal Promotions – Valentine's Day
Seasonal Promotions – Valentine’s Day Key visuals ⚫ Launched a Valentine’s Day campaign – “Love That Binds Us” featuring range of jewellery which are ideal for seasonal gifting. ⚫ Inspired by the “red string” from “God of Love”, the visuals show a princess and a prince playing around with the “red s
Slide 36: Seasonal Promotions – Women's Day and Spring
Seasonal Promotions – Women’s Day and Spring ⚫ To celebrate independent women and to seize business opportunity for self-reward, a spring-themed campaign for 3.8 International Women’s Day was launched together with attractive promotion in store. ⚫ Touch points covered digital and social media campai
Slide 37: Seasonal Promotions – Mother's Day
Seasonal Promotions – Mother’s Day ⚫ Celebrating a lively Mother’s Day, we have extended the spring theme to showcase the jewellery. The beautiful jewellery blended in with nature and flowery, fostering the self-purchase as well as the gifting initiatives. ⚫ Touch points covered digital campaign, so
Slide 38: Seasonal Promotions – Summer
Seasonal Promotions – Summer ⚫ Launching our first Summer Campaign with cool and freshness graphics, blending our sparkling jewellery into the summer vibe to boost up the atmosphere for a greater purchasing desire. ⚫ Touch points covered digital and social media campaign, website and store display.
Slide 39: Seasonal Promotions – Qixi
Seasonal Promotions – Qixi ⚫ Echoing our “Tie-the-knot” platform in Promessa, which was the core promoting platform in 2019, a new set of creative visuals related to the “love knot” had been created for this loving season. Both on-line / off-line campaign has been launched in Mainland China and Taiw
Slide 40: Seasonal Promotions – Mid-Autumn Festival
Seasonal Promotions – Mid-Autumn Festival e-card ⚫ The Mid-Autumn Festival was a key festival to promote gold-related products, especially products with fortune and blessings analogy. ⚫ To further drive awareness to our revamped collection image, media gift has been done, wrapped in Cultural Blessin
Slide 41: Seasonal Promotions – Christmas
Seasonal Promotions – Christmas ⚫ A peak season to celebrate relationships and self- Social media and Store POP rewarding, an energetic, vibrant yet contemporary series of creative assets and contents had been done for Christmas. The shapes and motifs are all 3D rendered with 360° views, echoing wit
Slide 42: Campaigns and Roadshows - Wedding
Campaigns and Roadshows - Wedding ⚫ Leveraged regional level celebrity couple, Yoga Lin and Kiki Ting were appointed as our Key visuals Promessa wedding ambassadors, the mega size 360 campaign across CN / TW / HK had created big impact and talk of town in all markets. ⚫ Besides key visuals, a song <
Slide 43: Campaigns and Roadshows – Cultural Blessings
Campaigns and Roadshows – Cultural Blessings ⚫ In daily wear and gifting segments, gold products are undoubtedly one of the jewellery essentials in Mainland China, especially those carrying special meaning and blessings. With the launch of the 2 new sub-collections “The Oriental” (東方古祖) and “The Leg
Slide 44: Brand Promotions - EMPHASIS
Brand Promotions - EMPHASIS ⚫ EMPHASIS held a store opening event on Sept 7, 2019 at Grand Gateway in Shanghai. One of the most popular idols in Mainland China, also as the ambassador of our “M” collection, Wang Yibo, has been invited to attend the event. The event attracted lots of media and fans s
Slide 45: Brand Promotions - MINTYGREEN
Brand Promotions - MINTYGREEN ⚫ To reinforce and enhance the lively and young image of MINTYGREEN, a series of IP collaborations with exclusive products were launched, and different omni channel promotions were run to reach our target customers. ⚫ A launch event was held in Shenzhen KK One Shopping
Slide 46: New Stores 2019
New Stores 2019 Shenzhen, Mainland China Guangzhou, Mainland China Wuxi, Mainland China Shijiazhuang, Mainland China North Point, Hong Kong Tsuen Wan, Hong Kong Mainland China 120 Hong Kong and Macau 8 Taiwan 1 45
Slide 47: Thank you
Thank you 46
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