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1H2008 Results Announcement 26 August 2008 FORWARD-LOOKI NG - - PDF document
1H2008 Results Announcement 26 August 2008 FORWARD-LOOKI NG - - PDF document
P.1 1H2008 Results Announcement 26 August 2008 FORWARD-LOOKI NG STATEMENTS Certain statements contained in this presentation maybe viewed as forward-looking statements. Such forward-looking statements represent the Companys expectations or
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1H2008 FI NANCI AL PERFORMANCE
HK$’M June 2008 (Unaudited) June 2007 (Audited) % Change Group turnover 9,519
6,989 + 36.2%
Profit from operations 443
297 + 49.2%
Profit attributable to shareholders 289
210 + 37.6% Basic earnings per share 16.06 HK cents 12.95 HK cents + 24.0% Declared interim dividend per share 6.43 HK cents n/a Shareholders’ funds per share HK$2.57 HK$2.38 (Dec 2007 Audited) + 8.0%
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GROWTH MOMENTUM CONTI NUES Group Turnover
1H2007 1H2008 HK$6,989M HK$9,519M
+36.2%
Turnover of Motor & Motor Related Business
+ 48.1%
Turnover of Food & Consumer Products Business
+ 16.9%
Turnover of Logistics Business
+ 8.2%
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GROWTH MOMENTUM CONTI NUES Segment Profit
1H2007 1H2008 HK$310M HK$488M
+57.4%
Segment profit of Motor & Motor Related Business
+ 77.7%
Segment profit of Food & Consumer Products Business
+ 39.7%
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REVENUE MI X - BY BUSI NESS GROUPS
Food & Consumer Products 31.5% Motor & Motor Related 67.1% Logistics & Others 1.4%
1H2008
Food & Consumer Products 36.7% Motor & Motor Related 61.7% Logistics & Others 1.6%
1H2007
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REVENUE MI X - BY MARKETS
Hong Kong & Macao 40.5% Mainland China 49.9% Overseas 9.6%
1H2008
Hong Kong & Macao 42.2% Mainland China 46.0% Overseas 11.8%
1H2007
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1H 2008 GROUP PERFORMANCE
HK$'m 1H2008 1H2007 Change % (Unaudited) (Audited) Turnover 9,519 6,989
36.2% Cost of sales (8,216) (5,934) 38.5%
Gross profit 1,303 1,055
23.5% GP margin 13.7% 15.1%
Profit from operations 443 297
49.2% Operating profit margin 4.7% 4.2%
Profit attributable to shareholders 289 210
37.6% NPAT margin 3.0% 3.0%
Basic earnings per share (HK cents) 16.06 12.95
24.0%
I nterim dividend per share (HK cents) 6.43 n/ a
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CONSOLI DATED BALANCE SHEET ANALYSI S
HK$'M Jun-08 Dec-07
(Unaudited) (Audited) Current Asset 6,967 6,477 Current Liabilities 3,994 3,672 Net Current Assets 2,973 2,805 Current Ratio 1.74 1.76
Shareholders' funds 4,630 4,282 Shareholders' funds per share (HK$) 2.57 2.38 NAV per share (HK$) 2.65 2.44
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CASH FLOW STATEMENT HI GHLI GHTS
HK$'M Jun-08 Jun-07 (Unaudited) (Audited) Net cash generated from operating activities 90 131 Net cash used in investing activities (155) (68) Net cash generated from/ (used in) financing activities 28 (188) Net decrease in cash and cash equivalents (37) (125)
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LI QUI DI TY ANALYSI S
HK$'M Jun-08 Dec-07 (Unaudited) (Audited) Cash on hand 1,674 1,653 Total debt 2,142 1,947 Net debt 468 294 Shareholders' funds 4,630 4,282 Total capital 5,098 4,576 Gearing ratio 9.2% 6.4%
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Strategic Moves in 1H2008
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STRATEGI C MOVES I N 1H2008
Motor & Motor Related Business
- Forged strategic partnership with Denker
Investment to jointly develop Lexus and FAW Toyota dealership projects
- LOI signed with UMW Holdings to establish a
lube oil blending plant in Xinhui
Food & Consumer Products Business
- Acquired Polyfood to enter into upstream
business of food
- Acquired Guangdong Victory Electrical Appliance
to enter into home appliance manufacturing
Logistics Business
- Yuen Long Logistics centre, with cold storage, is
scheduled to commence operation by 4Q2008
- Cold Chain storage in Xinhui was being
constructed and is scheduled to commence
- peration by 1Q2009
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STRATEGI C MOVES I N 1H2008 – continues
Strategic Partnership with Denker Investment
- Jointly develop Lexus and FAW Toyota dealerships
- Denker is a sizeable city dealership operator in Mainland China
- Rationale
- Speed up the Group’s expansion in Mainland China
- Allow DCH to have greater leverage in expanding our
network and acquiring dealership of new quality brands
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STRATEGI C MOVES I N 1H2008 – continues
Acquired Polyfood Food Services
- A food manufacturing and processing company specializes in niche
market in Hong Kong
- Rationale
- Vehicle to strengthen upstream food processing capability
- To synergize with our existing distribution and retail businesses
- Building DCH as a fully integrated food supply chain service
provider
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STRATEGI C MOVES I N 1H2008 – continues
Acquired Guangdong Victory Electrical Appliance Manufacturing
- Specialized in manufacturing small premium electrical appliances
- Captures about 20% world electrical kettle market through OEM
- Customers including renowned brands such as Kenwood, Braun,
Siemens, Meyer and SEB
- Rationale
- Enable DCH to achieve higher margin by going upstream
- Allow DCH to capture the overseas market and the vast
business potential of small home electrical appliance market in China
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Review on Operations
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MOTOR AND MOTOR RELATED BUSI NESS
6,387 4,313 359 202
Turnover Segment Profit
1H2008 1H2007 3,601 2,269 2,216 1,557
Mainland China Hong Kong & Macao
1H2008 1H2007
HK$’M HK$’M
HK$'M 1H2008 % of total 1H2007 % of total Change % Mainland China 3,601 56.4% 2,269 52.6% 58.7% Hong Kong & Macao 2,216 34.7% 1,557 36.1% 42.4% Others 570 8.9% 487 11.3% 17.0% Turnover 6,387 100.0% 4,313 100.0% 48.1% Segment profit 359 202 77.7% Segment profit margin 5.6% 4.7%
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MOTOR AND MOTOR RELATED BUSI NESS – 1H 2008 Operations Review and Outlook
Mainland China
- Vigorous demand for commercial vehicles and
luxury cars
- Market size of Mainland China in 1H2008
Up 19% for the whole market 17% growth in passenger car 22% growth in commercial vehicle DCH achieved a 90.7% growth in total number
- f commercial vehicles sold
Three 4S shops were added making the total at
33 4S shops for 19 brands
Added Mercedes Benz and Lexus (under
construction) to the portfolio
Hong Kong & Macao
- Achieved growth of 46% in the total number of
vehicles sold for the first six months, while Hong Kong motor market size increased 30%
- Market share of DCH in all vehicles improved from
last year’s 27% to 30%
- Strong demand for environmental-friendly private
vehicles such as Honda Stepwagn 2.0SR and Nissan Serena
- Robust growth in premium brand
- Provide transportation solutions for 2008 Olympic
Equestrian and 2008 Paralympics Equestrian
OUTLOOK
- Expected to add about 10 4S projects by the end of 2008, making a total of 43
- Continue to expand the network and portfolio of dealership by adding about 6-10 4S shops per year in
the next two to three years
- Working on improving the quality of dealership portfolio to further enhance profitability
- Expansion of our leasing network in China
- As for Hong Kong, growth in the second half will be continuously driven by environmental friendly
vehicles, premium brands and new models of various brands
- Explore opportunities for upstream businesses
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FOOD & CONSUMER PRODUCTS BUSI NESS
3,001 2,567 88 63
Turnover Segment Profit 1H2008 1H2007 1,148 938 1,534 1,307
Mainland China Hong Kong & Macao
1H2008 1H2007
HK$'M 1H2008 % of total 1H2007 % of total Change % Mainland China 1,148 38.3% 938 36.5% 22.4% Hong Kong & Macao 1,534 51.1% 1,307 50.9% 17.4% Others 319 10.6% 322 12.5%
- 0.9%
Turnover 3,001 100.0% 2,567 100.0% 16.9% Segment profit 88 63 39.7% Segment profit margin 2.9% 2.5%
HK$’M HK$’M
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FOOD & CONSUMER PRODUCTS BUSI NESS – 1H2008 Operations Review and Outlook
Mainland China Commodities
- Strong demand for frozen foods and
edible oils
- Encouraging sales of poultry and
beef
- Production line for fractionated oil
will commence operation in Xinhui in 3Q 2008, revenues of edible oil could be further enhanced
FMCG
- Strong performance of key FMCG
brands like Almond Roca, Ferrero, Pocari Sweat and UHA
Hong Kong & Macao Commodities
- Significant growth in Edible oil
- Strong demand for beef, poultry and seafood during
the period
FMCG
- Strong growth in key brands such as Barilla, Fibe-Mini,
Ovaltine and Tulip
- Encouraging performance of catering segment
Food Retail
- DCH Food Marts increased to 59 and expected to
reach 65 by the end of the year
Consumer Products
- Outlet points of Shiseido increased 28% to about
1,500
OUTLOOK
- Continue to explore opportunities in M&A in upstream food business to build itself as a fully
integrated food supply chain services provider in Hong Kong and Macao
- Enhancing infrastructure for building the Group as a fully integrated food supply chain services
provider
- Yuen Long food processing centre is expected to start operation in 2009
- A food processing centre will be built in Xinhui
- Enhance small electrical appliance business
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LOGI STI CS BUSI NESS
92 85 8 10
Turnover Segment Profit
1H2008 1H2007 6 10 86 75
Mainland China Hong Kong & Macao
1H2008 1H2007
HK$'M 1H2008 % of total 1H2007 % of total Change % Mainland China 6 6.5% 10 11.8%
- 40.0%
Hong Kong & Macao 86 93.5% 75 88.2% 14.7% Others n/a n/a Turnover 92 100.0% 85 100.0% 8.2% Segmental profit 8 10
- 20.0%
Segmental profit margin 8.7% 11.8%
HK$’M HK$’M
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LOGI STI CS BUSI NESS – 1H2008 Operations Review and Outlook
Mainland China
- Repositioned to focus on higher margin
business such as Vender Managed Inventory (“VMI”)
- Further invest to expand the logistics
platform in Xinhui
Two new third-party warehouses and
started operation in July 2008
Starting to build a cold-chain system
including food processing and cold storage
Hong Kong & Macao
- logistics centre as a platform to
- Support DCH group business
- Provide 3rd party logistics business to
customers
- Expanding cold-chain management and warehouse
capacity to meet rising demand from major hotels and casinos in Macao
- Started trial food inspection for a major hotel
- perator through a JV with the Macau University of
Science and Technology
OUTLOOK
- Seamless cross-border connection with the logistics set-ups in Hong Kong, Macao and Xinhui and
develop DCH as a leading logistics services provider in Pearl River Delta
- In Xinhui, various cold storage, bonded warehouse and third-party distribution centres are in
the pipeline and target to start operation in early 2009
- The Yuen Long logistics centre with cold storage is scheduled to commence operation by the
fourth quarter of 2008
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USE OF PROCEEDS
HK$'M Planned to spend in 2H2008 Used in 1H2008 Used in FY2007 Motor & Motor Related Business 395 125 Food & Consumer Products Business 86 40 5 Logistics Business 103 36 73 Subtotal 584 201 78 Total
863 Total Net Proceeds from I PO 1,003
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BUSI NESS OUTLOOK
- With uncertainty looming in the global economy including fluctuation in
- il and commodity prices, currencies, property, stock markets and high
inflation, we expect growth in the second half of 2008 will not be as robust as in the first half
- We will start to benefit from the following,
- The additional 4S shops acquired in the period
- Major acquisitions in the upstream business
- Completion of logistics centres in Yuen Long and Xinhui
- Contributions from the services contracts to be completed in the
second half of the year
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BUSI NESS OUTLOOK
We remain positive and confident to achieve good results for the full year
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