Chow Tai Fook Jewellery Group Limited

Transcription

1 Chow Tai Fook Jewellery Group Limited Credit Suisse 17 th Annual Asian Investment Conference 24 March 2014

2 Agenda About Chow Tai Fook Business Updates 360 Shopping Experience

3 About Chow Tai Fook

4 About Chow Tai Fook 1929 Started engaging in the jewellery business 1956 The first to launch the gold jewellery products in Hong Kong & Macau 1990 Implemented the Fixed Price policy which enhanced the pricing transparency and customers shopping experience 1998 Opened our first jewellery POS in Beijing 2003 Centralised PRC operations and established the headquarters in Shenzhen 2010 Opened our 1,000 th jewellery POS in Beijing 2011 Listed on the Main Board of The Stock Exchange of Hong Kong (stock code: 1929) Present The largest jeweller by market share in the Mainland of China, Hong Kong & Macau The world s largest pure-play jeweller by market capitalisation 3

5 About Chow Tai Fook Our Unrivalled Competitive Strengths 1 Iconic & trusted brand with 85 years of heritage 2 Loyal, highly-experienced & dynamic management team Vertically integrated business model Extensive retail network with deep access to rising consumer spending Diversified product portfolio 4

6 About Chow Tai Fook Vertically Integrated Business Model Upstream Midstream Downstream 1 Raw material procurement 2 Diamond cutting & polishing 3 Product design & development 3 Production 4 Retail 4 diamond cutting & polishing factories 1 US Partnership with Alrosa, DTC and Rio Tinto Stable diamond supply Europe South Africa 9 jewellery factories Shunde ,000+ retail staff 4 1 Australia POS in the PRC, HK, Macau, Malaysia, Singapore & Taiwan Shunde, Shenzhen, Hong Kong Remark: Data as at 30 Sep

7 About Chow Tai Fook Extensive Retail Network 2,048 POS as at 31 December POS in Hong Kong, Macau and other Asian markets, and 1,938 POS in the Mainland of China Net 200 POS openings expected in FY2015 The Mainland of China (As at 30 September 2013) Network Distribution (Total: 1,844 POS) % Operation Model (Total: 1,844 POS) Tier I cities % Others 12% Franchised % Tier III & other cities Sales Channel (Total: 1,261 self-operated POS) 32% 68% Self-operated Tier II cities 88% Concessionaire counters 6

8 About Chow Tai Fook Diversified Product Portfolio Event-driven Category Self-rewarding Category The Perfect One Wedding Collection Charming Gold Collection Imperial Collection Ombre di Milano Collection Other Collections Wedding segment accounts for over one-third of our Group s retail revenue Enrich product offerings with design-oriented collections Viral marketing to promote wedding proposal culture Bao Bao Family Collection Disney Classic & Winnie the Pooh Collection Broad product offerings include one-of-a-kind pieces, patented, proprietary and licensed collections Collaboration with international diamond miners and brands to launch exclusive collections 7

9 Business Updates

10 Business About Chow Updates Tai Fook Revenue Breakdown Revenue by operation model (HK$ m) 37,768 Revenue by product category (HK$ m) 37,768 Revenue by geography (HK$ m) 37, % 23, % 25, % 86.9% 23, % 53.1% 25, % 55.5% 65.2% 23, % 25, % 51.4% 29.0% 21.4% 23.7% 17.9% 13.5% 13.1% 1H2012 1H2013 1H % 7.7% 15.9% 13.2% 5.9% 4.0% 1H2012 1H2013 1H % 21.1% 19.6% 1H2012 1H2013 1H2014 Retail Wholesale Gem-set jewellery Gold product Platinum / Karat gold product Watch The Mainland of China Hong Kong, Macau and other Asian Markets (Revenue settled in RMB or China UnionPay) Hong Kong, Macau and other Asian Markets 9

11 Business About Chow Updates Tai Fook Same Store Sales Growth Same Store Sales Growth (%) 47% 33% 3% 22% 14% 7% 11% 18% 11% 15% -6% -2% -8% -1% -5% 1H2013 2H2013 1H2014 3Q2014 CNY2014 * The Mainland of China Hong Kong, Macau & Taiwan Overall * CNY period in 2013 and 2014 covers period from 27 January to 13 February 2013 and from 17 January to 3 February 2014, respectively 10

12 Business About Chow Updates Tai Fook Normalising product mix Mass luxury jewellery segment Key driver for recovery in the next 6-12 months Business Outlook Increase penetration into lower tier cities through franchisees Vertically integrated business model E-commerce and Online-to-Offline (O2O) interactions 11

13 360 Shopping Experience

14 360 Shopping Experience Four Key Trends about the Chinese Luxury Shoppers Hong Kong and Macau were ranked as favored shopping destinations Prefer low-key and understated products LOGO In-store experience is increasingly important for customer relationship management Online commerce is exploding US$540bn Source: McKinsey Luxury Without Borders: China s New Class of Shoppers Take on the World 2012 & China s e-tailing revolution, March

15 Shopping Experience Online-to-Offline (O2O) Interactions 360 Customer Relationship Management (CRM) Interactive Shopping Environment at POS Level Exclusive Jewellery Events held beyond POS Level

16 360 Shopping Experience Online-to-Offline (O2O) Interactions Singles Day Marketing Campaign Online purchase discount coupons distributed at store level Tmall Singles Day s online sales US$5.7bn VS US Black Friday s online sales US$1.2bn >4x Online games collaborated with Tmall CTF Singles Day s sales on Tmall Platform CTF +84% US$2.0m 2012 US$3.6m 2013 Source: Tmall, Bloomberg, USD/RMB exchange rate as at 11 Nov

17 360 Shopping Experience Online-to-Offline (O2O) Interactions The Power of Social Media Long queue showed up starting from 7am outside store Grand launch of the collection on Tmall platform Beads of Elements Collection The collection was outof-stock at the end of the day 2014 Prior to Feb 16 Feb 16 Feb 21 Feb 23 Widespread discussions and selfies posted on WeChat and Sina Weibo about the collection CTF responded quickly by launching a preordering service via WeChat In 3 days, daily revenue for this collection was ~2x average and >38,000 views online 16

18 Shopping Experience Interactive Shopping Environment at POS Level The First Experiential Jewellery POS in Wuhan, China At store entrance Virtual receptionist to greet customers and serve as an interactive shopping guide Inside the store Large touchscreen for customers to select and purchase jewelleries via mobile phone

19 Shopping Experience Interactive Shopping Environment at POS Level The First Experiential Jewellery POS in Wuhan, China Virtual showcase to rotate and display the features of the jewellery in one touch Interactive storefront display enables virtual jewellery fitting and games entertainment featuring our collections characters

20 Shopping Experience Exclusive Jewellery Events held beyond POS Level L HISTOIRE DE COLEURS COLLECTION Fine Jewellery Private Appreciation ONE-OF-A-KIND PIECES High Jewellery Previews and Auction Dinner CTF x SIMON MA - NATURE CHANT COLLECTION Designer Collection Preview Grand Hyatt, Hong Kong Three On The Bund, Shanghai Ritz-Carlton, Hong Kong Hong Kong Jockey Club Clubhouse, Beijing Grand Hyatt, Hong Kong Paris Fashion Week

21 360 Shopping Experience Customer Relationship Management (CRM) Members proportion Diamond, Platinum and Gold members Virtual flight experience 2013 Christmas party 12% Fascinating 6-day trip in Paris Art jamming Shiseido skincare and makeup workshop Basic members 88% Remark: Data as at 30 Sep Hello Kitty halloween party Inner beauty sharing session by leading psychologist in China WeChat & Sina Weibo as the key communication tool with basic members 20

22 Q&A Session

23 Thank You

24 Disclaimer These materials have been prepared by Chow Tai Fook Jewellery Group Limited (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 the property of the Company and must be treated as such. The information contained in this presentation is being furnished to you solely for your information and may not be forwarded, published or distributed, directly or indirectly, to any other person (whether within or outside your organisation/firm), in whole or in part, for any purpose and may not be reproduced in any manner whatsoever. Any forwarding, publication, distribution or reproduction of this document in whole or in part is unauthorised. 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. 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. The Company has no obligation and does 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. This presentation may include measures of financial performance which are not a measure of financial performance under IFRS, such as EBIT. 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. EBIT 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, EBIT 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.