麗豐股份有限公司 (4137.TT) Chlitina Holding Limited

Transcription

1 麗豐股份有限公司 (4137.TT) Chlitina Holding Limited

2 Disclaimer The information contained in this document was verified by an independent third party. Chlitina does is not responsible for the accuracy, fairness, and completeness of any information contained in this document. You should not assume any information in this document to be accurate, fair, nor complete. The information or opinions contained in this document is provided on a specified date, which Chlitina reserves all right to update. Chlitina has no obligation to notify you of any updates after a specific date or any development of information in the documents. Chlitina will not accept any liability for any loss resulting from the use of this document or its contents or for other reasons related to this document. This document does not constitute an offer or solicitation of an offer of purchase or acquisition to sell or issue shares of Chlitina or any of its subsidiaries or related parties in any jurisdictions, does not serve as a part an offer or incentive, nor should be interpreted as such. Any part thereof or distribute the facts does not constitute the basis of any contract or commitment, and should not be relied upon in respect of any contract or commitment. Your acceptance of this document constitutes your agreement that the information contained in the document is kept strictly confidential, securities researchers should have eligibility of the securities research and follow any relevant securities laws and regulations and restrictions of the appropriate jurisdiction before publishing research results on Chlitina. This document is provided for the securities researchers for use as their research reference only. Any part of the document cannot be photocopied, copied, forwarded, or in any manner, directly or indirectly transferred to any other person or for public announcement and for any other purpose.

3 Agenda Company Introduction Brand Multiple Channels High Quality Products Large-scale Training Outstanding Financial Performance

4 About CHLITINA Leader in Greater China Skincare Salon Chain Market Capitalization: US$ 611 mn (as of April 19, 2016) NT$ 4.4 bn in sales (2015) NT$ 3.5 bn net cash (as of Dec. 31, 2015) 76% Gross Margin (2015) 26.6% Net Margin (2015) 68% Cash Payout ratio (2015) Over 3600 franchises (2015) Revenue by Geography 3.4% Mainland China HK,TW,others 96.6% 4

5 About CHLITINA Company Milestones Listed on the TWSE on Nov. 27 (Ticker: 4137) - Number of franchise stores in operation surpassed 3,000 - Named "Most Valuable Beauty Chain" at China Beauty Expo 3,000 Number of CHLITINA stores 1989 Launched the CHLITINA brand in Taiwan 1997 Chlitina Group set up its China HQ in Shanghai Honored at the 17th China Beauty Expo as a "Leading Brand" and as "The Most Influential Beauty Chain Salon - Named one of "Top 10 Highest Investment Value Brands in Asia" at Asia Brand Annual Meeting Formed R&D alliance with its French partner - The 15,000 th skincare consultant completed Chlitina s elite training program 2011 Listed among China s Famous Trademarks 2, Flagship store opened in Shanghai Year 5

6 After years of development, Chinese economy now ranks among the top in the world. With the new national leadership, Chinese economy changed from explosive development in the past to rational, stable growth. Starting from 2010, the growth of GDP consciously slowed down. The absolute value of disposable income increased year after year, but the growth rate significantly slowed down. In 2015, the growth of disposable income was only 7.4%, even smaller than that of 2009 (the year of the financial crisis). Historical growth of GDP and living standards 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 11.4% 12.1% 17.2% 14.5% 11.3% 11.3% 12.7% 14.2% 8.8% 10.4% 9.6% 9.2% 9.3% 14.1% 12.6% 9.7% GDP Disposable Income per Capita 8.0% 7.4% 7.7% 7.7% 7.3% 6.9%

7 Significant growth of tertiary Industry In 2015, the tertiary industry accounted for 50.5% of GDP, over half of GDP for the first time. The tertiary industry, especially the service sector grew significantly, driven by industrialization, upgrades in information technology and consumer spending. The contribution of consumption to growth was 66.4%, becoming more significant. The Tertiary Industry as a percentage of GDP Tertiary Industry Secondary Industry Primary industry 7

8 Beauty and Personal Care Industry at a Restructuring Stage Despite the slow down of the overall Chinese economy, the growth rate of beauty and personal care has been higher than the growth rate of GDP, indicating optimistic prospects of beauty and personal care industry. The next two years will be an important restructuring period for this industry. If properly restructured, the companies in this sector will have better future development China GDP and Personal Care Growth 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 12.7% 11.3% 9.7% 8.8% 10.4% 7.4% 9.3% 6.9% 7.7% 7.7% 7.3% 6.9% GDP Growth 7.7% 8.3% 8.8% According to government reports, the growth of GDP in China will be below 7% e 2017e 2018e Source: Chinese national statistics website 8

9 Training Brand Products Channels 9

10 Training Brand Products Channels 10

11 Brand Precise Positioning Benefiting from Brand Positioning & Investment The Chlitina brand is positioned at the affordable luxury level, targeting rising middle-class consumers in China. Chlitina focuses on fast-growing market segments: high-end skincare & high-end beauty products. 1,200 1, Million 1,042 Surging Middle-Incomers in China -4% % CAGR E % < $7,500 $7,501-80,000 > $80,000 Source: Euromonitor (May 2012). Annual Income (US$) 11

12 2015 Branding and Marketing Zhejiang Satellite TV- Love Village Hubei Satellite TV- If you love CTS Nirvana in Fire Taipei Taoyuan International Airport Lightboxes 12

13 2016 Branding and Marketing Brand Awareness Brand ambassador Outdoor Baidu Magazines Brand Reputation Shanghai Movie Festival CSR Programs KOL APP contents Transformation into sales Product promotions Ads in buildings Brand ambassador Alin Shanghai Movie Festival 13 13

14 Training Brand Products Channels 14

15 Diverse Sales Channels Beauty Franchise E-Commerce Brand Licensing 15

16 2016 China Strategy by Region Developed Areas Well-off regions Developing areas Representative Areas Shanghai, Jiangsu etc. Fujian, Guangxi etc. Heilongjiang, Jilin etc. Development Strategy Enhance branding, improve single store profitability Enhance branding, improve market share Enhance brand awareness, open more stores 16

17 CHLITINA The Most Scalable Skincare Franchise in China with over 3,600 Exclusive Stores, and Still Growing. Over 3400 stores in China, and over 200 stores in Taiwan 2015 Beauty Franchise Channel Review Xinjiang Uyghur Autonomous Region 10 locations Tibet Autonomous Region 4 locations Northeast China North China East China Southeast China Northwest China Southwest China Taiwan Qinghai Province 1 location Chengdu Flagship store Inner Mongolia Autonomous Region 106 locations Ningxia Hui Autonomous Region 8 locations Gansu Province 4 locations Shaanxi Province 47 locations Sichuan Province 105 locations Yunnan Province 14 locations Chongqing City 53 locations Hebei Province Shanxi Province 132 locations 79 locations Liaoning Province 78locations Beijing City 236 locations Henan Province 56 locations Hubei Province 187 locations Hunan Province 195 locations Guizhou Province 39 locations Guangxi Zhuang Autonomous Region 23 locations Hainan Province 6 locations Anhui Province 118 locations Tianjin City 150 locations Shandong Province 120 locations Jiangxi Province 104 locations Guangdong Province 335 locations Jiangsu Province 348 locations Heilongjiang Province 33 locations Zhejiang Province 419 locations Fujian Province 57 locations Jilin Province 27 locations Shanghai City 334 locations Shanghai Flagship store Taiwan 227 locations Taipei Flagship store 17

18 There is Still Substantial Untapped Potential in Lower Tier Cities in Mainland China No of Cities Penetrated Total # of Stores % Sales (MN NTD ) % Tier 1 Cities % % Tier 2 Cities % % Tier 3 Cities % % Tier 4 & 5 Cities % % Franchisee sales % 2, % Others* 1,638 Total 4,394 *Others include HK/Taiwan sales, sales from related party, and franchise fees 18

19 A Clear Strategy to Realize Franchise Value Asset-light, franchise-based model to capture growth opportunity in the China beauty industry 25 well-established branch offices to ensure business strategy is effectively carried out to each region and store cover up to 70% of China s population Pleasing our customers is our top priority, but we place equal emphasis on our franchisees. We strive to develop a franchise model that inspires entrepreneurship among franchisees increases franchisee and customer stickiness Resilient Store Portfolio 50% 30% Source: company data > 3 yrs > 5 yrs Store Age 19

20 Diverse Sales Channels Beauty Franchise E-Commerce Brand Licensing 20

21 E-commerce Positioning 020 Platform for health and beauty products Platform Perfecting PC mall, Wechat mall, App, cross-border e-commerce Development Strategy Products Enriching product lines, including beauty products, slimming products, baby products, healthy products Promotion Brand building based on product reputation Integration of online and offline resources, enhance user participation and contribution 21

22 Diverse Sales Channels Beauty Franchise E-Commerce Brand Licensing 22

23 The Growth of Kelti China Regulations Having obtained the direct sales license in 2009 from the government, Kelti China has since received permits from 27 provinces and cities. Macroeconomic trends Direct sales industry has become more popular due to its low barrier of entry, high rate of success for individual entrepreneurs in current economic environment in China. The new social media became successful tools for direct sales. Accumulation of Experience After obtaining the direct sales license in 2009, Kelti China accumulated years of experience in sales, product development, channel management, which contributed to its growth. 23

24 Selling 3DR and Peekaboo through Kelti China s Direct Sales Channel Manufacturing of Licensed Semi-Finished Products R&D+ Raw Materials+ Formula+ Labor Manufacturing of Finished Products Filling and Packaging Selling of Products Direct Sales Channel Licensing of Products Trademark License agreement with Kelti China in 2012: if Kelti s monthly sales from licensed products exceed RMB10mn, Chlitina recognizes 6% of sales as trademark licensing income. GPM: 17-20% Net M: 13-15% GPM: 100% Net M: 83-84% 24

25 Training Brand Products Channels 25

26 Products by Channel Beauty Franchise Professional line High personalization Products+ Service+ Equipment+ Extensions Appx. 150 SKU E-commerce At home skincare Mid-high end e- commerce brand: to enhance the stickiness of the existing franchise salon channel Health-related products Appx. 30 SKU Brand Licensing 3DR : facial skincare products Peekaboo : color cosmetics, at-home skincare, body products Appx. 40 SKU 26

27 Products Well-Received Products More than 145 SKU to provide a full-range of products. 27

28 Diverse Product Lines Signed an exclusive distribution agreement on the brands Spirularin and Skinicer with Ocean Pharma in the Greater China region and Southeast Asia territories. The patented Spiralin ingredient received the 2015 Best Ingredient Award from the German Magazine Aesthetic Dermatology ) The new series Professional Beauty Salon Series will be released in March. Combining natural essences from plants and newest technology, the 5 new serums target different skin types and provide a deep conditioning for an intensive repair and nourishment. 28

29 Training Brand Products Channels 29

30 Training Building a Stable Foundation of Franchise Stores Chlitina training scheme/facility: Accommodates up to 2,000 trainees and is supported by a highlyqualified teaching staff Has provided training to 90%+ of incumbent beauticians We will shift our centralized training to distributed model leveraging 25 branch office to increase training capacity. 30

31 Our 25 Regional Branch Offices Ensure a Uniform Level of Service Across Our Franchisee Network Inner Mongolia Beijing Dalian Hebei Tianjin Shandong Our Branch Offices Provide Franchisees with: Timely advice and supervision for existing franchise stores Strategies for business development and expansion Basic storefront management courses for new franchisees Training in basic & advanced skincare Basic & advanced knowledge on new and existing products Chengdu Shaanxi Chongqing Hubei Hunan Anhui Guangzhou Hangzhou Jiangxi Shenzhen Nanjing Fujian Suzhou Shanghai Ningbo Wenzhou Taipei Taichung Kaohsiung 31

32 Corporate Culture 產銷協調及物流管理 32

33 Corporate Culture Our Mission: Love and Sharing makes a better world Our vision: Happiness, Health and Wealth for all 33

34 Financial Performance 34

35 2015 Performance The consolidated revenue in 2015 was NTD 4,394,264K, a 43.1% increase from NTD 3,071,369K in The consolidated operating profit in 2015 was NTD 1,371,183K, a 56.2% increase from NTD 877,892K in The consolidated net income in 2015 was NTD1,167,087K, the net margin was 26.6%. The consolidated net income in 2014 was NTD755,837K, the net margin was 24.6%. The basic EPS in 2015 was NTD

36 2015 Financial Performance GP margin % Net profit margin % 78.4% 80.7% 76.0% 25.7% 24.6% 26.6% 1, , Q1 Q2 Q3 Q4 Revenue m NTD Q1 Q2 Q3 Q4 PAT m NTD 36

37 2015 Revenue Analysis Revenue Analysis NTD mn Others Manufacturing Trademark licensing 4, % Body products Salon series 4, % At-home Skincare 3,500 3,000 2, % 4.7% 14.2% 1.0% 14.9% 1.4% 1.9% 3.8% 2,000 1, % 38.2% 33.1% 1, % 41.4% 29.1%

38 2015 GPM Analysis GPM by Channels Units: mn NTD Channel Beauty Franchise Revenue GPM Revenue GPM Revenue GPM 2, % 2, % 3, % Semi-FG Sales % % % Trademark Licensing % % Total 2, % 3, % 4, % 38

39 2015 Financial Review EPS(NTD) EPS Trend Y2012 Y2013 Y2014 Y2015 Note: EPS based on shares issued on Dec. 31, 2015 (79,492K) Item Y2012 Y2013 Y2014 Y2015 Net profit (K NTD) 2015 shares balance Basic EPS (NTD) EPS of shares issued(ntd) 590, , ,837 1,167,087 79,492 79,492 79,492 79,

40 Financial Performance High Payout Ratio ( NTD Million ) 2015 Net income 1,167 Cash dividend 795 Dividend p/s (NTD) 10 Cash yield (%) 4 *1 Payout ratio (%) 68 Notes: 2015 yield is based on CHLITINA s latest closing share price on April 19,

41 Financial Analysis Income Statement Summary YOY (%) NTD million Sales Revenue 3,071 4,394 Gross Profit 2,480 3,339 OP Expense 1,602 1,967 OP Profit 878 1,371 Net Income 756 1,167 Basic EPS (NTD) % 34.6% 22.8% 56.2% 54.4% 54.4% Gross Margin 80.7% 76.0% OP Margin 28.6% 31.2% Net Margin 24.6% 26.6% 41

42 Financial Analysis Balance Sheet Summary YOY (%) NTD million Total Assets 4,338 4,399 5, Cash 2,646 2,410 3,396 AR & Other Receivables Inventory Fixed Asset 1,109 1,149 1,067 Total Liabilities 1,372 1,070 2,028 AP & Other Payables Bond Payables Total Equity 2,966 3,330 3,947 ROA 22.0% 17.6% 22.50% ROE 35.0% 24.0% 32.10% Net cash* 2,397 2,627 3,510 (8.9) (7.1) (22.0) *Net cash = cash & cash equivalents + other current financial assets (time deposits, money market fund and government bond related) bank loans Note: The increase of AR and OR mainly due from the increase of trademark licensing revenue and semi-fg sales to Kelti China. 42

43 Thanks For Your Attention!