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- Multi-branding Strategy and Strong Pricing Power Drive Growth
- Net Profit Increases by 94% to HK$600,610,000 |
HONG KONG, Mar 24, 2014 - (ACN Newswire) - China Haidian Holdings Limited (the "Group"; stock code: 256), a watches and timepieces designer, manufacturer and retailer owning several celebrated Chinese and global watch brands, announced its annual results for the financial year ended 31 December 2013. The Group achieved substantial revenue and profit growth in 2013.
Revenue was HK$3,176,423,000 during the year, an increase of 42% from HK$2,240,304,000 compared to 2012. Leveraging the Group's superior positioning advantage and strong pricing power, gross profit increased by 21% to HK$1,478,839,000. Gross profit margin was 47% (2012: 54%). Profit after tax also notably increased by 94% from HK$310,287,000 last year to HK$600,610,000.
Mr. Hon Kwok Lung, Chairman of the Group, said, "China Haidian achieved a satisfactory performance during the year. We have built a sophisticated vertically integrated business model for our proprietary brands, enabling the Group to monitor and control the quality of products effectively, respond to customers' needs quickly, and allowing more operational flexibility."
Business Review
By major business segments, proprietary brands and non-proprietary brands of watches and timepieces accounted for 65.3% and 30.6% of the Group's turnover respectively.
Watches and Timepieces - Proprietary Brands
The Group's flagship brand "Rossini" achieved an excellent performance during the year. Its revenue in 2013 was HK$904,479,000, a growth of 25% from HK$725,910,000 compared to 2012. The brand's internet sales conducted through major e-commerce platforms in China increased from HK$29,161,000 in 2012 to HK$65,513,000 in 2013. Its respective proportion of internet sales to the Group's total revenue increased from 4% to 7.2%. "EBOHR" generated revenue of HK$764,951,000 in 2013, an increase of 14% comparing with 2012. The brand's internet sales conducted through online stores in China were HK$59,077,000, accounting for 7.7% of total revenue. "Eterna" successfully expanded sales into new markets such as Brazil, Columbia and Mexico and contributed revenue of HK$53,272,000. "Corum" generated revenue of HK$351,289,000 in 2013.
"Rossini" has been recognised as Asia's 500 Most Influential Brands, the only watch company from Mainland China that obtains the award for the last six years and as the China's 500 most valuable brands. The value of the brand is the highest among all the local watches brands. "Rossini" has also been awarded the 2013 Guangdong Government Quality Prize, being the only enterprise in the watch industry awarded such prize. The distribution outlets of "Rossini" numbered 2,348 as of 31 December 2013, a year-on-year increase of 437. Another Mainland proprietary brand, "EBOHR," which has been awarded as one of China's 500 most valuable brands together with "Rossini", operated a total of 2,095 distribution outlets, increasing by 373 year-on-year.
As for global brands, "Eterna" owned 235 distribution outlets, of which 207, 8 and 20 were in Europe, America and Middle East respectively. "Eterna" has also established 31 distribution outlets in Asia, including 18 outlets in Hong Kong and 7 in Mainland China. The acquisition of "Corum was completed during the year under review. While that brand focuses on manufacturing and distributing top-end products and serving top-end markets, this acquisition enabled the Group to enter into the high-end luxury watch segment. "Corum" sold it watches through an exclusive global distribution network of nine premier branded boutiques and 580 high-end independent specialty retailers in over 90 countries.
Watches and Timepieces - Non-Proprietary Brands
The Group has distributed its market share of non-proprietary brands in different provinces and cities in Mainland China. Revenue was HK$971,265,000 in 2013. Through the watch distribution companies, the Group has around 280 self-owned brand image retail shops and distribution outlets, distributing over 25 international brands in Beijing, Chongqing, Fujian, Guangdong, Henan, Jilin, Liaoning, Shenyang, Sichuan, and other leading cities in Mainland China.
Watches and Timepieces - Production
The Group is capable of producing mechanical movement ranging from basic mechanical movement to tourbillion and fashion watches on OEM basis for leading global brands at a competitive cost. Net profit after tax from this business segment was HK$20,177,000.
Prospects
Looking ahead, as the global economy has returned to moderate growth along with the increased market recognition of the China Haidian's brands portfolio, the Group will be able to capture the enormous potential of the Mainland China's imported watch market. It will continue to maintain organic growth riding on the strategic plan of developing both proprietary brands and non-proprietary brands.
As for the four major brands, "Rossini" continues to benefit from the strong track record and leading market position in the watch industry in Mainland China. It also offers a business model with products present in all price segments, great brand awareness and strong pricing power. The Group believes it will continue expanding all over Mainland China. With new product lines and different sub-brands introduced by "EBOHR", it will target different market segments as to enlarge market share. Targetting on Asia, especially Mainland China and Hong Kong, has become the network development focus of "Eterna". It is expected to open significant number of operating entities and distribution outlets to cater for the increasing demand for Swiss-made premium watches. With "Corum" clear penetration potential in Mainland China, the Group will leverage its expertise and extensive distribution channels in Mainland China to capture the market opportunities.
Mr Hon Kwok Lung concluded, "Going forward, we will continue to focus on the organic growth of the proprietary brands in Mainland China and expand overseas products and markets. Management will quickly respond to market movement, adjust product mix and capture the competitive advantages brought by multi-branding synergies. With the recurring income generated from the strong growth in China's proprietary brands, we will invest in Swiss proprietary brands and develop overseas distribution channels. These initiatives are set to drive our further expansion in the future."
Contact:
Strategic Financial Relations Limited
Joanne Lam +852 2864 4816 joanne.lam@sprg.com.hk
Cornia Chui +852 2864 4853 cornia.chui@sprg.com.hk
Janet Fong +852 2864 4817 janet.fong@sprg.com.hk
Website: www.sprg.com.hk
Topic: Press release summary
Source: Citychamp Watch & Jewellery Group Limited
Sectors: Daily Finance, Daily News
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From the Asia Corporate News Network
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