chow tai fook jewellery group limitedcorporate.chowtaifook.com/en/ir/presentations/pre12corp.pdf ·...
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Chow Tai Fook Jewellery Group Limited
Presentation
2012
Strictly private and confidential
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Disclaimer
T
THESE MATERIALS HAVE BEEN PREPARED BY CHOW TAI FOOK JEWELLERY GROUP LIMITED OR A SUBSIDIARY (THE “COMPANY”) SOLELY FOR USE AT THIS PRESENTATION AND ARE NOT FOR
PUBLIC DISSEMINATION. THE SLIDES AND ANY OTHER MATERIALS USED IN THIS PRESENTATION ARE STRICTLY CONFIDENTIAL AND MUST BE TREATED AS SUCH BY THE ATTENDEES TO SUCH
PRESENTATION. THE INFORMATION CONTAINED IN THIS PRESENTATION IS BEING FURNISHED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE TAKEN AWAY, FORWARDED, PUBLISHED
OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, TO ANY OTHER PERSON (WHETHER WITHIN OR OUTSIDE YOUR ORGANIZATION/FIRM), IN WHOLE OR IN PART, FOR ANY PURPOSE AND MAY NOT BE
REPRODUCED IN ANY MANNER WHATSOEVER. ANY TAKING AWAY, FORWARDING, PUBLICATION, DISTRIBUTION OR REPRODUCTION OF THIS DOCUMENT IN WHOLE OR IN PART IS
UNAUTHORIZED. BY ATTENDING THIS PRESENTATION OR ACCEPTING THESE MATERIALS, YOU ARE AGREEING, (i) THAT YOU HAVE READ AND AGREE TO COMPLY WITH THE CONTENTS OF THIS
NOTICE AND (ii) TO MAINTAIN ABSOLUTE CONFIDENTIALITY REGARDING THIS PRESENTATION AND THE INFORMATION DISCLOSED IN THESE MATERIALS AS WELL AS INFORMATION PRESENTED
ORALLY OR OTHERWISE DURING THIS PRESENTATION UNLESS SUCH INFORMATION IS PUBLICLY AVAILABLE. ANY FAILURE TO COMPLY WITH THE RESTRICTIONS MAY CONSTITUTE A VIOLATION
OF THE RELEVANT SECURITIES LAWS. THE DISTRIBUTION OF THIS DOCUMENT IN OTHER JURISDICTIONS MAY BE RESTRICTED BY LAW AND PERSONS INTO WHOSE POSSESSION THIS DOCUMENT
COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, ANY SUCH RESTRICTIONS. CERTAIN INFORMATION IN THIS PRESENTATION, INCLUDING INFORMATION PRESENTED ORALLY OR
OTHERWISE, CONSTITUTES “CONFIDENTIAL INFORMATION”. BY ATTENDING THIS PRESENTATION AND ACCEPTING THIS DOCUMENT, THE RECIPIENT AGREES TO USE ANY SUCH CONFIDENTIAL
INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE POLICIES, CONFIDENTIALITY UNDERTAKING (IF ANY) AND APPLICABLE LAW. COPIES OF THIS DOCUMENT WILL BE COLLECTED AFTER THIS
PRESENTATION. THE INFORMATION CONTAINED IN THIS PRESENTATION DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER FOR SALE OR SUBSCRIPTION OF OR SOLICITATION OR INVITATION
OF ANY OFFER TO BUY OR SUBSCRIBE FOR ANY SECURITIES OR OTHER INTERESTS OF THE COMPANY OR ITS HOLDING COMPANY OR ANY OF ITS SUBSIDIARIES IN ANY JURISDICTION OR AN
INDUCEMENT TO ENTER INTO ANY INVESTMENT ACTIVITY, NOR SHALL IT OR ANY PART OF IT FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH ANY CONTRACTS, COMMITMENT OR
INVESTMENT DECISION WHATSOEVER. NO SECURITIES OF THE COMPANY MAY BE OFFERED OR SOLD IN THE UNITED STATES OF AMERICA WITHOUT REGISTRATION WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT
OF 1933, AS AMENDED. NO PUBLIC OFFERING OF THE COMPANY’S SECURITIES IS BEING MADE IN ANY JURISDICTION OUTSIDE HONG KONG. IN PARTICULAR, THE COMPANY DOES NOT INTEND TO
REGISTER ANY PORTION OF ANY OFFERING IN THE UNITED STATES OR TO CONDUCT A PUBLIC OFFERING OF ANY SECURITIES IN THE UNITED STATES. THIS PRESENTATION CONTAINS FORWARD-
LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON A NUMBER OF ASSUMPTIONS ABOUT THE OPERATIONS OF THE COMPANY AND OTHER FACTORS, MANY OF
WHICH MAY BE BEYOND THE COMPANY’S CONTROL. BY THEIR NATURE, FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES BECAUSE THEY RELATE TO EVENTS AND DEPEND
ON CIRCUMSTANCES THAT MAY OR MAY NOT OCCUR IN THE FUTURE. ACCORDINGLY, THE COMPANY’S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY
SUCH FORWARD-LOOKING STATEMENTS (INCLUDING, BUT NOT LIMITED TO STATEMENTS RELATING TO THE GROUP’S ABILITY TO IMPLEMENT ITS BUSINESS STRATEGY, EXPECTED NEW STORE
OPENINGS, EXPECTED DIVIDEND DISTRIBUTIONS, EXPECTED CAPITAL EXPENDITURE AND EXPECTED USE OF PROCEEDS). IN ADDITION, EVEN IF THE COMPANY’S FINANCIAL POSITION, RESULTS
OF OPERATIONS AND CASH FLOWS AND THE DEVELOPMENT OF THE JEWELLERY INDUSTRY ARE CONSISTENT WITH THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PRESENTATION,
THOSE RESULTS OR DEVELOPMENTS MAY NOT BE INDICATIVE OF RESULTS OR DEVELOPMENTS IN FUTURE PERIODS. IN SOME CASES, YOU CAN IDENTIFY THOSE FORWARD-LOOKING
STATEMENTS BY WORDS SUCH AS “COULD”, “MAY,” “PLAN,” “WILL CONTINUE,” “EXPECTS,” “ANTICIPATES,” “BELIEVES,” “INTENDS” OR SIMILAR WORDS. THE COMPANY AND ITS AFFILIATES,
ADVISORS AND REPRESENTATIVES HAVE NO OBLIGATION AND DO NOT UNDERTAKE TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE. THE INFORMATION CONTAINED IN THIS PRESENTATION HAS BEEN COMPILED AS OF THE DATE OF THIS PRESENTATION, SPEAKS AS OF THE DATE
OF THIS PRESENTATION (OR EARLIER, IF SO INDICATED) AND WILL NOT BE UPDATED TO REFLECT MATERIAL DEVELOPMENTS WHICH MAY OCCUR AFTER THE DATE OF THIS PRESENTATION, AND
IS SUBJECT TO CHANGE, INCLUDING SUBSTANTIAL CHANGES, WITHOUT NOTICE. THE SLIDES FORMING PART OF THIS PRESENTATION HAVE BEEN PREPARED FOR THE PURPOSES OF PROVIDING
BACKGROUND INFORMATION ABOUT THE COMPANY. THIS PRESENTATION MAY CONTAIN, AMONG OTHER THINGS, INFORMATION AND STATISTICS RELATING TO THE JEWELLERY INDUSTRY. THE
COMPANY HAS DERIVED SUCH INFORMATION AND DATA FROM UNOFFICIAL SOURCES THAT IT BELIEVES ARE RELIABLE. THE COMPANY CANNOT ENSURE YOU THAT SUCH INFORMATION IS
ACCURATE OR COMPLETE. YOU SHOULD NOT PLACE UNDUE RELIANCE ON STATEMENTS IN THIS PRESENTATION REGARDING THE JEWELLERY INDUSTRY. THIS PRESENTATION MAY INCLUDE
MEASURES OF FINANCIAL PERFORMANCE WHICH ARE NOT A MEASURE OF FINANCIAL PERFORMANCE UNDER IFRS, SUCH AS ”EBITDA”. THESE MEASURES ARE PRESENTED BECAUSE THE
COMPANY BELIEVES THEY ARE USEFUL MEASURES TO DETERMINE THE COMPANY’S OPERATING CASH FLOW AND HISTORICAL ABILITY TO MEET DEBT SERVICE AND CAPITAL EXPENDITURE
REQUIREMENTS. “EBITDA” SHOULD NOT BE CONSIDERED AS AN ALTERNATIVE TO CASH FLOWS FROM OPERATING ACTIVITIES, A MEASURE OF LIQUIDITY OR AN ALTERNATIVE TO NET PROFIT OR
INDICATORS OF THE COMPANY’S OPERATING PERFORMANCE ON ANY OTHER MEASURE OF PERFORMANCE DERIVED IN ACCORDANCE WITH IFRS. BECAUSE IT IS NOT AN IFRS MEASURE, “EBITDA”
MAY NOT BE COMPARABLE TO SIMILARLY TITLED MEASURES PRESENTED BY OTHER COMPANIES. THE INFORMATION CONTAINED IN THIS PRESENTATION HAS NOT BEEN INDEPENDENTLY
VERIFIED. NO REPRESENTATION, WARRANTY, OR UNDERTAKING EXPRESS OR IMPLIED, IS MADE AS TO, AND NO RELIANCE SHOULD BE PLACED ON, THE FAIRNESS, ACCURACY, COMPLETENESS
OR CORRECTNESS OF ANY INFORMATION OR OPINION CONTAINED HEREIN. IT IS NOT THE INTENTION TO PROVIDE, AND YOU MAY NOT RELY ON THIS DOCUMENT AS PROVIDING, A COMPLETE OR
COMPREHENSIVE ANALYSIS OF THE COMPANY’S FINANCIAL OR TRADING POSITION OR PROSPECTS. NONE OF THE COMPANY OR ANY OF ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
SHAREHOLDERS, AFFILIATES, SUBSIDIARY, ADVISORS OR REPRESENTATIVES SHALL BE IN ANY WAY RESPONSIBLE FOR THE CONTENTS HEREOF, OR SHALL BE LIABLE (IN NEGLIGENCE OR
OTHERWISE) FOR ANY LOSS HOWSOEVER ARISING FROM ANY USE OF THIS DOCUMENT OR THE INFORMATION CONTAINED IN THIS PRESENTATION OR OTHERWISE ARISING IN CONNECTION
THEREWITH.
1
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Prudent market potential in the PRC
2
Population growth
From 2006 to 2010, total population increased from
1,330mm to 1,360mm at a CAGR of 0.5%
1
Urbanisation growth
From 2006 to 2010, Chinese urbanisation rate was
higher than 40%, increasing from 43.9% in 2006 to
49.7% in 2010
2
Disposable income growth
From 2006 to 2010, per capita disposable income of
the PRC increased from RMB11,759 to RMB19,109
at a CAGR of 12.9%
3
Rise of middle class1
The urban population of middle class in the PRC is
expected to increase from approximately 235mm in
2010 to nearly 330mm by 2025
4
Jewellery ownership
In 2009, per capita jewellery ownership is 1/5 of Hong
Kong and less than 1/10 of the US and Europe
5
Source: Frost & Sullivan Report
1 People with annual disposable income ranging from RMB16,300 to RMB37,300
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Strong fundamentals in the PRC economy
Continuing increase in spending on consumer goods in the PRC
9,169.2 10,705.2 13,018.5 15,041.118,839.8
22,691.027,341.7
32,945.5
39,697.8
47,834.1
2006 2007 2008 2009 2010 2011E 2012E 2013E 2014E 2015E
3,670.3 4,353.9 4,951.0 5,344.6 6,091.9 6,825.7 7,656.5 8,588.4 9,633.8 10,806.511,267.7 14,157.5 17,035.1 18,600.4 22,081.5 25,279.3
28,980.8 33,224.438,089.3
43,666.5
11,019.713,385.8
15,699.3 16,915.819,584.6
22,105.724,898.0
28,036.8
31,564.1
35,527.0
90,000.0
79,287.2
69,849.6
61,535.354,210.7
47,758.040,860.837,685.4
31,897.225,957.7
2006 2007 2008 2009 2010 2011E 2012E 2013E 2014E 2015E
Tier one cities Tier two cities Tier three and other lower tier cities
Strong demographics and proliferation of wealth across the PRC led by growth in Tier II cities
Tier I cities: 2010–2015E CAGR:
Tier II cities: 2010–2015E CAGR:
Tier III and other lower tier cities: 2010–2015E CAGR:
12.1%
14.6%
12.6%
PRC’s nominal GDP by city tier (HK$ billion)
Retail sales of consumer goods in the PRC (HK$ billion)
3 Source: Frost & Sullivan
Data originally presented in RMB; RMB/HK$ exchange rate of 1.2 applied to all figures
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Source: Frost & Sullivan; Euromonitor; Datamonitor; McKinsey Insights China; EconTrends
Note: For all figures originally presented in RMB, a RMB/HK$ exchange rate of 1.2 was applied 1 Luxury goods include fashion ready to wear, leather goods/handbags, and high-end watches and jewellery (McKinsey Insights China) 2 Based on health & personal care net revenue in the PRC (EconTrends) 3 The food & beverage market is estimated as the aggregate of PRC’s packaged food, hot drinks and soft drinks industries (Euromonitor) 4 Food retail is estimated as grocery retail market size in the PRC (Euromonitor) 5 Alcohol market is estimated as the aggregate of PRC’s beer and spirits market; CAGR from 2010 to 2014 (Datamonitor)
The PRC jewellery sector has one of the most exemplary
growths in the PRC’s consumer / retail space
18.0%
13.3%11.7%
9.1%
6.8%
38.6%
Jewellery
retail
High-end
Luxury goods1 Health &
Personal Care2 Food retail4
Fastest growing segment by a wide margin
Alcohol5
Average:
11.8%
2010
Market size
(HK$ bn) 302.2 1,428.4 209.7 3,801.6 600.4
Food &
beverage3
216.0
2010-2015E CAGR of various segments across the consumer and retail space in the PRC
4
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Jewellery retailing industry in the PRC is poised for strong
growth
5 Source: Frost & Sullivan
Data originally presented in RMB; RMB/HK$ exchange rate of 1.2 applied to all figures
Sales of jewellery in the PRC is expected to grow on the back of strong performance of gold products
54.1 70.7 91.9 112.2 155.7 220.5 309.3432.6
604.6843.1
60.585.1
118.8
165.3
229.9
318.9
117.4158.8
214.0
287.9
386.0
21.4 27.8 36.0 43.8
86.033.4 42.5 53.7 64.2108.9 141.0 181.6 220.2
302.2423.0
586.9
811.9
1,122.4
1,548.0
2006 2007 2008 2009 2010 2011E 2012E 2013E 2014E 2015E
Gold products Platinum/K-gold products Gem-set jewellery
Gold products: 2010–2015E CAGR:
Platinum/K-gold products: 2010–2015E CAGR:
Gem-set jewellery: 2010–2015E CAGR:
40.2%
39.5%
35.0%
44.1 55.1 68.3 78.5 101.7 136.1 180.1 236.9 310.6 405.998.6 138.3189.8
258.3353.0
481.0
101.9148.6
217.0
316.7
458.8
661.1
43.633.7 58.0 72.669.155.342.331.1
108.9 141.0 181.6 220.2302.2
423.0
586.9
811.9
1,122.4
1,548.0
2006 2007 2008 2009 2010 2011E 2012E 2013E 2014E 2015E
Tier one cities Tier two cities Tier three and other lower tier cities
Tier III and other lower tier cities are expected to lead the growth of the jewellery retail sector in the PRC
Tier I cities: 2010–2015E CAGR:
Tier II cities: 2010–2015E CAGR:
Tier III and other lower tier cities: 2010–2015E CAGR:
31.9%
37.3%
45.3%
Retail value of jewellery market in the PRC by product (HK$ billion)
Retail value of jewellery market in the PRC by city tier (HK$ billion)
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Broad-based distribution channels ensure accessibility for
consumers in the PRC jewellery market
6
Proliferation of the department store channel (2010) The importance of both operation models (2010)
Self-operated
Franchised
44.7%
30.1%
13.7%
9.8%
1.7%
Department
stores
Stand-alone
branded stores
Stores in
shopping mall
Specialised
markets
Others (including
internet)
Greater confidence and comfort when purchasing
from department stores in the PRC
Adopted by retailers when penetrating into lower tier
cities due to low cost of expansion and more
targeted customer traffic
Jewellery sales from department stores is forecasted
to grow at a 2010-2015E CAGR of 40.1%
Franchising has gained prominence as a cost-
effective and efficient form of expansion,
especially in lower tier cities
Self-operated stores remain important due to:
– Greater operational control
– Increased closeness to end customers
– Higher margin and profit potential due to
elimination of the wholesale-retail spread
68.0%
32.0%
Source: Frost & Sullivan
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Overview of China Jewellery Market: Ranking of Top 10
Players 2010
Jewellery market share by revenue in the
PRC (2010)
Jewellery market share by revenue in Hong
Kong and Macau (2010)
Source: Frost & Sullivan Report
Top 10
players
57.5%
Further consolidation
from top 10 players
expected over 2010-2015E
as a result of product
portfolio and distribution
channel expansion
Top 10
players
51.6%
Further consolidation
from top 10 players
expected over 2010-2015E
as a result of product
portfolio expansion and
rising demand for high-
quality jewellery products
Source: Frost & Sullivan Report
Note: Only includes companies whose revenues exceed RMB 500mm 7
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Chow Tai Fook (“CTF”) at a glance
Largest jeweller in the PRC, Hong Kong & Macau
12.6% market share in the PRC 20.1% market share in Hong Kong & Macau
82 years of history
“Mass Luxury” segment offering diamond, gold, other jewellery
products & watches
Vertically integrated business model from procurement, diamond
cutting and polishing to sales network of 1,500+ POS
Achieved 53% revenue growth in FY11 and 79% in 1HFY12
8
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Our unrivalled competitive strengths
Iconic & trusted brand with over 80 years of
heritage
Loyal, highly-experienced & dynamic
management team
Vertically integrated business model
Extensive retail network with deep access
to rising consumer spending
Broad product portfolio with a focus on the
mass luxury segment
真誠sincerity
永恒eternity
真誠sincerity
永恒eternity
真誠sincerity
永恒eternity
真誠sincerity
永恒eternity
9
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Source: Bain & Company, November 2010
Iconic & trusted brand in the Greater China region with
over 80 years of heritage
“Top Three Brands Most Likely to be Purchased in 2010”
in the PRC on jewellery brands
10
Cartier Tiffany & Co.
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Loyal, highly-experienced & dynamic management team that is unparalleled in the jewellery industry in the Greater China region
Management team spans 3 generations using modern corporate management methods
Core management team has over 25 years of seamless cooperation
3,000 Management,
general & admin staff
6,000 R&D and production staff
16,000 Sales force
11
Adrian Cheng
Executive Director
>4 yrs
Conroy Cheng
Executive Director
>4 yrs
Hamilton Cheng
Finance Director
>7 yrs
Dato’ Dr. Cheng Yu-Tung
Honorary Chairman and Non-executive Director
>63 yrs
Dr. Henry Cheng
Chairman and
Executive Director
>40 yrs
Kent Wong
Managing Director
>34 yrs
Chan Sai-Cheong
Executive Director
>26 yrs
Albert Chan
Executive Director
>34 yrs
Peter Suen
Executive Director
>25 yrs
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Vertically integrated business model giving us effective
operation control & efficiencies
Retail
Upstream Midstream Downstream
Production
4 3
South Africa
1 2 Australia
1
2
2
3
POS in the PRC, HK,
Macau, Malaysia,
Singapore & Taiwan
Shunde
US 1
Europe 1
4
Shunde, Shenzhen,
Hong Kong
Our operation is supported by our advanced IT technology – management has real time access to POS data
DTC Sightholder
Rio Tinto Diamantaire
12
Raw material
procurement
Product design
& development
3 2 1
Diamond cutting
& polishing
1 Includes the procurement of rough and polished diamonds
Colo
r 1
R151
.G114
.B10
3
Colo
r 2
R187.G
163.B
155
Colo
r 3
R232.G
166.B
179
Colo
r 4
R195
.G51.B
78
Hig
hlig
ht
R238.G
119.B
0
White
R255.G
255.B
255
Text
R0.G
0.B
0
Obje
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Object Foundation
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HK, Macau & other
Asian markets
89
Extensive retail network with deep access to rising
consumer spending in the Greater China region
1,500+ POS covering over 320 cities
Target: 2,000+ jewellery POS by 2016
Tier I
216
Tier II
727
Tier III
& others
474
Retail network (Total: 1,506)
Sales channel*
Concessionaire
counters
82%
Others
18%
Operation model
Self-
operated
70%
Franchised
30%
13 Note: Company information as of 1HFY12
* Only include self-operated POS
Colo
r 1
R151
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.B10
3
Colo
r 2
R187.G
163.B
155
Colo
r 3
R232.G
166.B
179
Colo
r 4
R195
.G51.B
78
Hig
hlig
ht
R238.G
119.B
0
White
R255.G
255.B
255
Text
R0.G
0.B
0
Obje
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Object Foundation
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Our product offerings capture customers’ life cycle
Potential in the wedding market
Over 30% of the population in the PRC in 2010 was of the age group for
marriage (age 20 to 39)
Over 12 million marriages were registered in the PRC in 2010
The no. of registered marriage is forecasted to grow at a CAGR of 9.2%
from 2010 to 2015E
Our product offerings:
Source: Frost & Sullivan Report
Touches on every stage of our customers’ life cycle
Birth Teenage Working Woman Anniversary Marriage
14
Colo
r 1
R151
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.B10
3
Colo
r 2
R187.G
163.B
155
Colo
r 3
R232.G
166.B
179
Colo
r 4
R195
.G51.B
78
Hig
hlig
ht
R238.G
119.B
0
White
R255.G
255.B
255
Text
R0.G
0.B
0
Obje
ct title
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Object Foundation
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Our focus: Mass luxury segment
Largest segment of the
jewellery market
► Accounted for >56% in the
PRC in 2010
► Strong 2010 – 2015E CAGR
of >39%
Source: Frost & Sullivan Report
15
Price range
HK$2k
HK$100k
High-end Luxury
Mass Luxury
Young Line
No.1 in jewellery brand awareness
in the PRC, Hong Kong & Macau
73.9%
74.4%
PRC
HK &
Macau
Source: Unaided brand awareness survey, Frost & Sullivan Report, November 2011
Colo
r 1
R151
.G114
.B10
3
Colo
r 2
R187.G
163.B
155
Colo
r 3
R232.G
166.B
179
Colo
r 4
R195
.G51.B
78
Hig
hlig
ht
R238.G
119.B
0
White
R255.G
255.B
255
Text
R0.G
0.B
0
Obje
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Object Foundation
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We outperformed the jewellery market in the PRC, Hong
Kong and Macau during the Track Record Period
16
Turnover (HK$bn)
Source of market growth data: Frost & Sullivan Report
Significantly outperformed
the market when the
economy recovered
Outgrew the market even
at the back of financial
crisis
CTF growth vs market growth
Continued to outperform
the market by an even
wider margin in 1HFY12
1HFY 12
FY 11
FY 10
Colo
r 1
R151
.G114
.B10
3
Colo
r 2
R187.G
163.B
155
Colo
r 3
R232.G
166.B
179
Colo
r 4
R195
.G51.B
78
Hig
hlig
ht
R238.G
119.B
0
White
R255.G
255.B
255
Text
R0.G
0.B
0
Obje
ct title
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Object Foundation
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Robust top-line performance driven by strong organic
growth
Same Store Sales Growth¹ (%)
1 Same Store Sales refers to turnover from our self-owned POS existing as at the end of the relevant financial year/period and which have been opened for at least 24 consecutive
months (for FY2010 & FY2011) / 18 consecutive months (for 1HFY2012) immediately prior to the end of that financial year/period. Turnover from our wholesale channel (i.e. sales
to franchisees) and other direct sales (such as sales from promotional events) are excluded.
POS count
17
Colo
r 1
R151
.G114
.B10
3
Colo
r 2
R187.G
163.B
155
Colo
r 3
R232.G
166.B
179
Colo
r 4
R195
.G51.B
78
Hig
hlig
ht
R238.G
119.B
0
White
R255.G
255.B
255
Text
R0.G
0.B
0
Obje
ct title
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Object Foundation
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Optimal sales strategy and product portfolio
Turnover by product category Turnover by channel Turnover by geography
Retail
82%
Wholesale
18%
Gold
products
53%
Watches
7% Platinum/
K-gold
16%
Gem-set
jewellery
24%
18
The PRC
56%
HK, Macau
and other
Asian Markets
44%
Settled in
RMB/China
UnionPay
1HFY 12 turnover: HK$24bn
49% of total HK
and Macau
retail sales
Colo
r 1
R151
.G114
.B10
3
Colo
r 2
R187.G
163.B
155
Colo
r 3
R232.G
166.B
179
Colo
r 4
R195
.G51.B
78
Hig
hlig
ht
R238.G
119.B
0
White
R255.G
255.B
255
Text
R0.G
0.B
0
Obje
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Object Foundation
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Strong and stable profitability
Net profit (HK$bn) Gross profit (HK$bn)
Stable gross profit margin Improving net margin
19
Colo
r 1
R151
.G114
.B10
3
Colo
r 2
R187.G
163.B
155
Colo
r 3
R232.G
166.B
179
Colo
r 4
R195
.G51.B
78
Hig
hlig
ht
R238.G
119.B
0
White
R255.G
255.B
255
Text
R0.G
0.B
0
Obje
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Object Foundation
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Inventory turnover analysis
Inventory turnover days1
1 Inventory turnover days = average inventory / cost of goods sold x 365 (for FY 09, FY 10 and FY 11) and 183 (for 1HFY 12)
20
Sales growth 25% 53% 79%
Colo
r 1
R151
.G114
.B10
3
Colo
r 2
R187.G
163.B
155
Colo
r 3
R232.G
166.B
179
Colo
r 4
R195
.G51.B
78
Hig
hlig
ht
R238.G
119.B
0
White
R255.G
255.B
255
Text
R0.G
0.B
0
Obje
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Object Foundation
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Future strategies
Continue to recruit, develop and retain talent 1
Increase Same Store Sales and continue to encourage repeat
customer purchases
2
Further expand jewellery POS network and geographical footprint
in the Greater China region
3
Focus on diversifying sales channels to broaden customer base 4
Further enhance upstream vertical integration business model 5
Further enhance the synergy between jewellery business and
watch business
6
21