Chow Sang Sang Holdings International Limited · HKEX:116
Chow Sang Sang Holdings International — H1 2021 Earnings Presentation
43 slides from Chow Sang Sang Holdings International's earnings presentation, August 2021
Slide 1: 2021 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 2021 Interim Results Presentation August 2021
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 Securities and Futures Broking Retail of Jewellery and Watches Wholesale of Precious Metals (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 (Oasis by Chow Sang Sang) and sales foci. T
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 ⚫ For today’s sophisticated woman, bold but with an eye for elegance. It aims at serving daily fine jewellery market with its contemp
Slide 8: Store Count by Brand
Store Count by Brand Region As at 31 Dec 2020 Opening Closure Net change As at 30 Jun 2021 Chow Sang Sang 591 20 17 +3 594 生生˙ 活宇 10 19 0 +19 29 (Oasis by Chow Sang Sang) Rolex/Tudor 12 0 0 0 12 Mainland China MINTYGREEN 25 1 1 0 25 EMPHASIS 12 4 0 +4 16 PROMESSA 2 6 0 +6 8 MARCO BICEGO 1 0 0 0 1 Su
Slide 9: Jewellery and Watch Store Expansion
Jewellery and Watch Store Expansion Increasing no. of stores in Mainland China (No. of Stores) 800 778 748 27 700 26 66 700 24 69 599 70 600 26 519 67 500 25 72 400 653 685 300 606 506 200 422 100 0 2017 2018 2019 2020 2021 June Mainland China HK and Macau Taiwan 8
Slide 10: Jewellery and Watch Store Network as at Jun 2021
Jewellery and Watch Store Network as at 30 Jun 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 20,000 17,712 5,000 4,753 14,997 15,000 4,120 8,184 4,000 2,191 8,594 3,000 10,000 2,364 2,000 5,000 10,825 9,528 2,562 2,410 6,403 1,000 1,756 0 0 2019 2020 2021 2019 2020 2021 11
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) 1,800 8.0% 1,800 7.0% 7.4% 1,600 6.7% 7.0% 1,600 6.3% 5.6% 6.0% 1,400 1,312 1,400 6.0% 5.0% 5.0% 1,200 1,200 4.3% 5.0% 534 947 1,000 1,000 1,000 4.0% 4.0
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% 0.4% 0.4% 100% 100% 1.5% 7.8% 0.4% 1.6% 11.6% 9.5% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 99.2% 99.6% 98.0% 92.1% 88.3% 90.3% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0%
Slide 15: Jewellery and Watch Retail Performance
Jewellery and Watch Retail Performance Turnover Operating results (HK$M) (HK$M) 20,000 2,000 9.0% 7.9% 8.0% 16,258 7.3% 7.0%* 7.0% 15,000 1,500 13,098 1,282 6.0% 7,485 5.0% 10,000 1,000 521 915 7,447 4.0% 3.0% 630 * * 5,000 9,776 500 8,773 2.0% 761 709 5,651 1.0% 285 0 0 0.0% 2019 2020 2021 2019 202
Slide 16: Jewellery and Watch Retail Performance
Jewellery and Watch Retail Performance Mainland China retail turnover HK & Macau retail turnover (HK$M) (HK$M) 10,000 9,688 10,000 9,000 8,686 9,000 8,000 8,000 4,531 7,000 7,000 6,436 6,000 5,003 6,000 5,000 5,000 2,879 4,261 4,000 4,000 7,164 3,000 3,000 2,354 5,157 2,000 2,000 3,683 3,557 2,533 1
Slide 17: Retail Turnover by Geographical Area
Retail Turnover by Geographical Area 2020 1H 2020 2H 2021 1H Taiwan Taiwan Taiwan 1% 1% 1% HK & HK & HK & Macau Macau Macau 34% 32% 26% Mainland Mainland Mainland China China China 65% 67% 73% 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% 2018 1H 2018 2H 2019 1H 2019 2H 2020 1H 2020 2H 2021 1H 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% 2018 1H 2018 2H 2019 1H 2019 2H 2020 1H 2020 2H 2021 1H 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 10,100 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 1H 2019 2020 2021 1H
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% 32% 32% 28% 23% 21% 18% 17% E-shop sales 18% 16% 15% 13% 16% 15% 13% 14% 12% 8% 2016 2017 2018 2019 2020 2021 1H 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) 20,000 2,000 11.9% 11.9% 15.0% 40.0% 7.8% 10.0% 35.0% 4.2% 5.7% 5.8% 1,500 1.8% 5.0% 31.0% 15,000 0.3% 29.0% 0.0% 30.0% -5.0% 24.0% 1,000 25.0% 761 -8.0% -10.0% 9,776 1 709 1
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 14 200 15 200 10 100 5 0 0 2019 2020 2021 1H 2019 2020 2021 1H Average payables turnover days Cash conversion cycle (No. of Days) (No. of Days) 10 400 314
Slide 26: Financial Highlights
Financial Highlights (HK$M) For the 6 months ended % change 2019 2020 2021 21 vs 20 Restated Restated Turnover - Continuing operations 9,528 6,403 10,825 +69% Retail of jewellery and watches 8,773 5,651 9,776 +73% Wholesale of precious metals 746 744 1,031 +39% Others 9 8 18 +125% Gross profit - Con
Slide 27: Other Financial Information
Other Financial Information (HK$M) As at Dec-31 Jun-30 2019 2020 2021 Restated Restated Cash and cash equivalents 940 1,624 1,221 Long term listed investments* 901 1,414 1,540 Gearing# 22.7% 15.8% 17.9% Unused banking facilities 3,472 3,513 3,460 * Long term listed investments represents HKEX shares
Slide 28: Business Review
Business Review 27
Slide 29: Retail - Analysis by Geographic Area
Business Review Retail - Analysis by Geographic Area Mainland China ⚫ Revenue surged 94% YOY in 1H, due to the easing of covid-19 restrictions and new store openings. ⚫ Gold jewellery registered substantial growth, with SSSG reached 93%. ⚫ Personalised Jewellery Service business maintained its growt
Slide 30: Retail - Analysis by Geographic Area
Business Review Retail - Analysis by Geographic Area Taiwan ⚫ Taiwan had exhibited a steady growth since 2020 and fared in relatively good shape prior to mid-May 2021. ⚫ However, growth was reversed by the recent wave of covid-19. ⚫ Overall 2021 1H sales were up 29% YOY. 29
Slide 31: Retail - Store Network
Business Review Retail - Store Network ⚫ 生生·活宇 (Oasis by Chow Sang Sang) and PROMESSA are the main engine of store expansion. ⚫ Oasis by Chow Sang Sang line of shops, launched in September 2020, is set to be in a relaxed, “corner-store” style. This line has become the main engine in our store expans
Slide 32: Retail - Omni-Channel Retailing
Business Review Retail - Omni-Channel Retailing ⚫ Our Omni-Remote Sales framework is the lifeline connecting e-shop and physical stores into one ecosystem in which the customer journey can be physical, digital or a mixture of both. ⚫ Mainland China online sales were steady in spite of covid-19 and a
Slide 33: Retail - Product and Marketing
Business Review Retail - Product and Marketing ⚫ We launched new designs and distinctive services for Personalised Jewellery Service. When customers select diamonds for their pieces, they can virtually examine the stones through interactive high resolution videos. ⚫ Our Cultural Blessings collection
Slide 34: Retail - Product and Marketing
Business Review Retail - Product and Marketing ⚫ To reach out to young couples, we participated in 14 wedding expos across major cities. The amounts transacted in the expos were very pleasing. ⚫ We organised 25 point-of-purchase events with different themes to showcase our jewellery collections in M
Slide 35: Retail - Product and Marketing
Business Review Retail - Product and Marketing ⚫ Livestreaming has become an important way for brands to introduce new products and gain awareness in China. We broadcasted over 2,700 hours of live streaming shows in 2021 1H. ⚫ Chow Sang Sang Tmall Flagship Store won the 2020 Outstanding Live Broadca
Slide 36: Other Business Segments
Business Review Other Business Segments Wholesale of Precious Metals ⚫ Gold and platinum wholesale business contracted. ⚫ Trading of other precious metals continued to be active and became a significant part of our trading portfolio. ⚫ Turnover grew 39% to HK$1,031 million and segment operating prof
Slide 37: Strategy Outline
Strategy Outline 36
Slide 38: 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 adjust our store network in Hong Kong to better serve local customers and provide ne
Slide 39: Q&A Session
Q&A Session 38
Slide 40: Appendix
Appendix 39
Slide 41: Personalised Jewellery Service New DIY Experience
Personalised Jewellery Service New DIY Experience ⚫ To further enhance the personalised experience and professional service, a ring fitting kit and earring try-on tool were introduced. The ring with adjustable shank is patented. ⚫ The service covers all branches in Mainland China by the end of Augus
Slide 42: Personalised Jewellery Service New DIY Experience (Cont'd)
Personalised Jewellery Service New DIY Experience (Cont’d) ⚫ In Q4 of 2020, professional filming equipment was introduced to include 360-degree video and top face photo for selected diamonds. When selecting diamonds, customers can virtually examine the stones through the high resolution videos in al
Slide 43: Thank you
Thank you 42
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