Chow Sang Sang Holdings International Limited · HKEX:116

Chow Sang Sang Holdings International — H1 2019 Earnings Presentation

39 slides from Chow Sang Sang Holdings International's earnings presentation, August 2019

  1. Slide 1: 2019 Interim 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 2019 Interim Results Presentation August 2019 1

  2. 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

  3. Slide 3: Presentation Outline

    Presentation Outline I. Business Overview II. Financial Highlights III Strategy Outline IV. Q&A Session V. Appendix 3

  4. Slide 4: Business Overview

    PPT TITLE HERE Date Here Business Overview 4

  5. Slide 5: Company Structure

    Company Structure  Physical metals trading Precious Metals service Wholesale  Commission based Services  Generated 8% of total revenue for 2019 1H Jewellery Retail Chow Sang Sang Group  6 HK offices and Internet Securities platform Brokerage  Commission based  Main business segment  No propri

  6. Slide 6: Business Overview: Jewellery Segment

    PPT TITLE HERE Date Here Business Overview: Jewellery Segment 6

  7. Slide 7: Product mix: Jewellery

    Product mix: Jewellery Gold based Items Gem-set Items Licensed Products International Brands (Rolex, Tudor) 7

  8. 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 (88) Heilongjiang in Mainland China, offer onl

  9. Slide 9: Focus on Growth in Mainland China

    Focus on Growth in Mainland China Increasing No. of Stores in Mainland China (No. of Stores) 600 500 400 300 506 534 New New 200 New 422 374 shops shops shops +63 +105 +37 100 0 2016 2017 2018 2019 1H Same-store Sales Growth – -4% +5% +3% +1% Mainland China Same-store Sales -25% -2% +18% +2% Growth

  10. Slide 10: Financial Highlights

    PPT TITLE HERE Date Here Financial Highlights 10

  11. Slide 11: Operating Performance …

    Operating Performance … Turnover Gross Profit (HK$ mm) (HK$ mm) 12,000 3,000 30.0% 27.0% 24.4% 24.7% 10,000 2,500 25.0% 8,000 2,000 20.0% 6,000 1,500 15.0% 2,574 9,558 9,540 2,360 4,000 8,012 1,000 1,958 10.0% 2,000 500 5.0% 0 0 0.0% 2017 1H 2018 1H 2019 1H 2017 1H 2018 1H 2019 1H Gross Margin 11

  12. Slide 12: Operating Performance (Cont’d) …

    Operating Performance (Cont’d) … Operating Profit Profit attributable to equity holders (HK$ mm) (HK$ mm) 1,200 10.0% 1,200 8.0% 8.8% 9.0% 8.3% 7.0% 1,000 1,000 6.3% 6.4% 8.0% 6.0% 6.9% 7.0% 800 800 4.9% 5.0% 6.0% 600 5.0% 600 4.0% 4.0% 3.0% 400 797 838 400 3.0% 606 615 2.0% 550 2.0% 200 200 392 1.0

  13. Slide 13: …Driven by Retail Segment…

    …Driven by Retail Segment… Revenue Breakdown Results Breakdown 0.4% 0.2% 0.1% 0.7% 0.2% 0.4% 100% 0.2% 0.2% 0.1% 100% 7.8% 3.2% 3.1% 2.6% 9.1% 1.2% 0.4% 12.0% 1.2% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 92.0% 94.9% 95.5% 96.6% 87.4% 90.5% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 2017 1H 2018 1H 2019 1

  14. Slide 14: …Retail Performance…

    …Retail Performance… Retail – Revenue Retail – Operating Results (HK$ mm) (HK$ mm) 10,000 1,000 10.0% 8.5% 8.7% 9.0% 8,000 800 8.0% 7.1% 7.0% 6,000 600 6.0% 5.0% 8,646 8,773 4,000 400 4.0% 733 761 7,005 3.0% 500 2,000 200 2.0% 1.0% 0 0 0.0% 2017 1H 2018 1H 2019 1H 2017 1H 2018 1H 2019 1H Margin 14

  15. Slide 15: … Steady Demand in Mainland China

    … Steady Demand in Mainland China 2017 2018 2019 1H Others Others Others 0.7% HK/Macau 0.7% HK/Macau 0.7% HK/Macau 24.7% 25.0% 22.4% Mainland Mainland Mainland China HK/Macau China China HK/Macau 55.3% 54.4% HK/Macau 58.8% (PRC (PRC (PRC Customers) Customers) Customers) 19.3% 18.1% 19.9% Sales Attri

  16. Slide 16: Consolidated Sales Mix – (Retail)

    Consolidated Sales Mix – (Retail) 2018 1H 2019 1H Watches Watches 5% 7% Non gold Non gold jewellery Gold jewellery 32% 63% 28% Gold 65% Gross margin: Gold* : 16%-23% Non gold jewellery: 38%-42% Watches: 22%-34% * Include gold price movement 16

  17. Slide 17: Consolidated Gross Profit Contribution – (Retail)

    Consolidated Gross Profit Contribution – (Retail) 2018 1H 2019 1H Taiwan Taiwan 1% 1% Hong Hong Kong/ Kong/ Mainland Macau Mainland Macau China 38% China 37% 61% 62% 17

  18. 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 5,000 4,700 4,300 15,000 4,000 12,000 11,900 11,500 10,000 2,000 5,000 0 0 2017 2018 2019 1H 2017 2018 2019 1H Mainland China - Gold Mainland China - Jewellery (RMB) (RMB) 5,000 12,000 9,600 4

  19. Slide 19: Working Capital Trends

    Working Capital Trends Average Inventory Turnover Days Average Receivables Turnover Days (No. of Days) (No. of Days) 250 20 205 203 17 16 16 200 185 15 150 10 100 5 50 0 0 2017 1H 2018 1H 2019 1H 2017 1H 2018 1H 2019 1H Average Payables Turnover Days Cash Conversion Cycle (No. of Days) (No. of Days)

  20. Slide 20: Financial Highlights

    Financial Highlights (HK$ million) For the 6 months ended % change 2017 2018 2019 19 vs 18 Turnover 8,012 9,558 9,540 -0.2% Jewellery Retail 7,005 8,646 8,773 +1.5% Other businesses 1,007 912 767 -15.9% Gross profit 1,958 2,360 2,574 +9.1% Operating profit 550 797 838 +5.1% EBITDA 640 929 952 +2.5%

  21. Slide 21: Other Financial Information

    Other Financial Information (HK$ million) As at Dec-31 Jun-30 2017 2018 2019 Cash and cash equivalents 1,200 1,303 1,147 Long term listed investments1 854 807 982 Gearing2 20.5% 18.6% 20.7% Unused banking facilities 4,128 4,080 4,084 1 Long term listed investments represents HKEX shares which valued

  22. Slide 22: Strategy Outline

    PPT TITLE HERE Date Here Strategy Outline 22

  23. 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

  24. 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

  25. Slide 25: Q&A Session

    PPT TITLE HERE Date Here Q&A Session 25

  26. Slide 26: Appendix

    PPT TITLE HERE Date Here Appendix 26

  27. 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

  28. Slide 28: Industry Analysis – HK & Mainland China

    Industry Analysis – HK & Mainland China Value of retail sales of 2H FY2018 - 1H FY2019 2H FY2018 - 1HFY2019 Mainland China Gold, Silver and HK Jewellery, Watches and Clocks, and Valuable Gifts Jewellery Sales 10.00 30.0 27.6 8.24 8.43 25.3 25.3 24.4 23.6 8.00 7.27 7.48 7.25 25.0 22.3 23.0 6.86 6.68

  29. Slide 29: Industry Analysis – Mainland China Luxury Market Overview

    Industry Analysis – Mainland China Luxury Market Overview  Mainland China continues to dominate the global market as local consumers demonstrate a strong preference for purchasing luxury goods at home thanks to price harmonization, consumer-centered strategies, and governmental initiatives. Solid c

  30. Slide 30: Industry Analysis – Mainland China Luxury Market Overview

    Industry Analysis – Mainland China Luxury Market Overview  The Chinese government’s reduction in import duties and stricter controls over gray markets— combined with brands’ efforts to narrow the price gap with overseas markets—have led more Chinese consumers to make their luxury purchases in China

  31. Slide 31: Marketing Program Highlights 2019 Jan - Jun

    Marketing Program Highlights 2019 Jan - Jun 31

  32. Slide 32: 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 of Pig. Aim to drive top of mind awareness for seasonal gifting.  Touch points included digital (social media & website), POSM, printing collaterals and

  33. Slide 33: Valentine’s Day Campaign

    Valentine’s Day Campaign Key Visual  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 string” and for

  34. Slide 34: Valentine’s Day Campaign

    Valentine’s Day Campaign Brand website Animated Gif for social media Store display 34

  35. Slide 35: 3.8 Women’s Day & Spring Campaign

    3.8 Women’s Day & Spring Campaign  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 & social media campaign, website a

  36. Slide 36: Mother’s day Campaign

    Mother’s day Campaign  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, social media se

  37. Slide 37: Summer Campaign

    Summer Campaign  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 & social media campaign, website and store display. Store display S

  38. Slide 38: MINTYGREEN (CN)

    MINTYGREEN (CN)  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 Mall, featurin

  39. Slide 39: New Stores

    New Stores Whampoa, Hong Kong Guangzhou, Mainland China Chongqing, Mainland China Taizhou, Mainland China Luoyang, Mainland China 39

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