Dah Chong Hong Holdings Limited 2018 Annual Results Briefing Feb - - PowerPoint PPT Presentation

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Dah Chong Hong Holdings Limited 2018 Annual Results Briefing Feb 26, 2019 FORWARD-LOOKING STATEMENTS This document has been prepared by Dah Chong Hong Holdings Limited (the Company) solely for general information purposes and is not, and

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Dah Chong Hong Holdings Limited 2018 Annual Results Briefing

Feb 26, 2019

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FORWARD-LOOKING STATEMENTS

This document has been prepared by Dah Chong Hong Holdings Limited (“the Company”) solely for general information purposes and is not, and should not be construed as, an offer or solicitation of an offer to buy or sell any securities or financial instruments

  • r to provide any investment services or advices.

This document contains statements that constitute “forward-looking statements”. While these forward-looking statements represent our judgments and future expectations concerning the development of our business, various known and unknown risks, uncertainties and other factors could lead to actual developments and results to differ from our expectations. Information and opinions contained herein have been compiled in good faith by the Company, but no representation or warranty, expressed or implied, is made as to their accuracy or correctness. All opinions and estimates contained in this document are provided in good faith but without legal responsibility and are subject to change without notice. The Company or any of its subsidiaries or affiliates, nor any of its or their officers or persons accepts any responsibilities or liability whatsoever from any actions or claims arising from any use or interpretation of information contained herein. This material may not be reproduced or redistributed or transmitted to any other person or incorporated in any way into another document or other material without the prior consent of the Company.

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2018 Annual Results I Financial Highlights

Revenue

HK$50,878 million

2017: HK$51,238 million (-0.7%) Profit attributable to shareholders

HK$820 million

2017: HK$802 million (+2.2%) Basic earnings per share

44.10 HK cents

2017: 43.71 HK cents (+0.9%)

Total dividend per share

17.43 HK cents

2017: 16.95 HK cents (+2.8%) Revenue

(excluding HKFRS 15 & 9)

HK$53,104 million

2017: HK$51,238 million (+3.6%) Profit attributable to shareholders

(excluding HKFRS 15 & 9)

HK$856 million

2017: HK$802 million (+6.7%)

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Liquidity Analysis (HK$’M) 31 Dec 18 31 Dec 17 Chg. Cash and Bank Deposits 1,093 1,138

  • 4.0%

Total Debt 6,971 6,927 +0.6% Net Debt 5,878 5,789 +1.5% Total Capital 16,160 15,934 +1.4% Net Gearing Ratio 36.4% 36.3% +0.1 ppt

2018 Annual Results I Key Financial Data

Financial Position (HK$’M) 31 Dec 18 31 Dec 17 Chg. Current Assets 16,208 16,225

  • 0.1%

Non Current Assets 11,055 11,026 +0.3% Current Liabilities 12,092 11,589 +4.3% Non Current Liabilities 4,378 4,950

  • 11.6%

Net Asset 10,793 10,712 +0.8% Net Asset Value Per Share (HK$) 5.72 5.80

  • 1.4%

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75.0% 24.9% 0.1%

61.6% 28.5% 9.9%

Revenue by Segment

67.9% 32.0% 0.1%

Revenue by Geography

Mainland China Hong Kong and Macao Other Markets Motor Business Consumer Products Business Others

2017

2018 2018

2017

2018 Annual Results I Revenue

67.3% 25.8% 6.9% 5

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2018 Annual Results I Five Year Summary

100 200 300 400 500 600 700 800 900 40,000 42,000 44,000 46,000 48,000 50,000 52,000 2014 2015 2016 2017 2018

DCH’s Five Year Performance Summary

Revenue Profit attributable to shareholders

Revenue (HK$M) Profit (HK$M)

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Consumer Products Business

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Consumer Products Business I Overview

4,710 3,592 8,809 7,151 2,887 1,946 2017 2018

Revenue by Geography

(HK$’M) 4,710 3,693 8,809 8,647 2,887 2,420 2017 2018

Revenue by Geography

(excluding HKFRS 15)

(HK$’M)

Mainland China HK & Macao Other Markets

  • 198
  • 284

309 350 53 37

Operating Profit By Geography

(HK$’M) 2017 2018

164 103 16,406 12,689 16,406 14,760

↓37.2% ↓10.0% ↓22.7%

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Consumer Products Business I Food and FMCG Mainland China

Revenue

  • 13.8%

Operating Loss +40.9% Revenue Excluding HKFRS 15

  • 13.8%

Mainland China

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Consumer Products Business I Food & FMCG Mainland China

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Consumer Products Business I Food and FMCG Hong Kong & Macao

Hong Kong & Macao

Revenue

  • 12.0%

Operating Profit +7.2% Revenue Excluding HKFRS 15

  • 0.9%

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Consumer Products Business I Food and FMCG Hong Kong & Macao

Brands Channels Distribution | Food trading | Own Brands | Food Processing | Food Retail

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Consumer Products Business I Food and FMCG Hong Kong & Macao

Distribution | Food trading | Own Brands | Food Processing | Food Retail

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Consumer Products Business I Food and FMCG Hong Kong & Macao

Distribution | Food trading | Own Brands | Food Processing | Food Retail

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Consumer Products Business I Food and FMCG Hong Kong & Macao

Distribution | Food trading | Own Brands | Food Processing | Food Retail

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Consumer Products Business I Food and FMCG Hong Kong & Macao

Distribution | Food trading | Own Brands | Food Processing | Food Retail

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Consumer Products Business I Electrical Products

Revenue +1.5% Operating Profit +20.0% Revenue Excluding HKFRS 15 +2.2%

Electronics

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Consumer Products Business I Electrical Products

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Consumer Products Business I Logistics

Logistics

Revenue

  • 12.7%

Operating Profit +2.4% Revenue Excluding HKFRS 15

  • 12.7%

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Consumer Products Business I Food and FMCG Other Markets

Other Markets

Revenue

  • 34.6%

Operating Loss +68.4% Revenue Excluding HKFRS 15

  • 31.6%

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Consumer Products Business I Healthcare

Revenue

  • 52.1%

Operating Profit +19.6% Revenue Excluding HKFRS 15

  • 15.0%

Healthcare

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Consumer Products Business I Healthcare

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Consumer Products Business I Healthcare

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Motor Business Review

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Motor Business I Overview

26,865 30,637 5,748 5,924 2,171 1,576 2017 2018

Revenue by Geography

(HK$’M) 868 826 422 428 204 160 2017 2018

Operating Profit by Geography

(HK$’M)

Mainland China HK & Macao Other Markets

3.2% 2.7% 7.3% 7.2% 9.4% 10.2%

Operating Margin By Geography

2017 2018 2017 2018 2017 2018

34,784 38,137 1,494 1,414

↑9.6% ↓5.4%

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Motor Business I Mainland China

Revenue (+14.0%)

HK$ 30,637M

Operating Profit (-4.8%)

HK$ 826M

Vehicles Sold (+8.8%)

112,226 Units

Mainland China

Aftersales revenue

+14.4%

Vehicles serviced (+6.2%)

1.2 million units

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Motor Business I Mainland China

2,809 1,718 2,656 2,319 2,288 2,274 1,889 2,103 2,394 2,380 2,548 2,662

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

2018 Mainland China Market - Monthly Vehicles Sales Volume

('000)

2017 2018 2H18 ↓10.3% 1H18 ↑5.3%

Source: China Association of Automobile Manufacturers 27

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Motor Business I Mainland China

10,629 5,566 8,792 8,588 8,929 7,904 9,745 9,865 10,158 10,170 10,591 11,289

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

DCH – Monthly Vehicles Sales Volume 2017 2018 2H18 ↑3.8% 1H18 ↑8.3%

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Motor Business I Mainland China

  • 20.0%
  • 10.0%

0.0% 10.0% 20.0% 30.0% 40.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

DCH vs Mainland China Market Overall

(YoY % change in terms of number of vehicle units sold)

Mainland China Market DCH

DCH

+8.8%

Market

  • 2.8%

Source: China Association of Automobile Manufacturers 29

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Motor Business I Mainland China

4S Shops by Brand At Dec 31 2015 At Dec 31 2016 At Dec 31 2017 Opened in 2018 At Dec 31 2018 Pipeline 2019/2020 Audi 6 6 7 7 2 Bentley 7 7 7 7 1 Ferrari / Maserati / Alpha Romeo 3 3 3 2 5 Lexus 6 6 8 1 9 Mercedes Benz 3 4 6 6 3 Buick 4 4 5 5 Chevrolet 4 3 3 3 Honda 11 11 11 1 12 Nissan 5 5 3 3 Toyota 21 21 21 1 22 Lynk & Co 1 1 5 Isuzu / Qingling 5 5 4 2 6 Man 1 Haima 1 1 Others 4 3 1 1

Total 79 78 80 8 88 12

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Motor Business I Mainland China

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Motor Business I Mainland China

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Motor Business I Hong Kong and Macao

Revenue (+3.1%)

HK$ 5,924M

Operating Profit (+1.4%)

HK$ 428M

Vehicles Sold (-1.3%)

11,452 Units

Hong Kong & Macao

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Motor Business I Initiatives

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Motor Business I Other Markets

Revenue (-27.4%)

HK$ 1,576M

Operating Profit (-21.6%)

HK$ 160M

Vehicles Sold (-12.5%)

3,692 Units

Other Markets

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Motor Business I Current Initiatives

Strategic alliance with Tencent for “Smart” 4S Shops Double Decker buses on HKZM Bridge Launched C2C usedcarmart.hk 15 years contract as sole operator

  • f GSE at HKIA

Princess Yacht expansion and showroom +8 4S Shops in Eastern and Southwestern China Parts+ Mobile App Development Expansion of motor leasing into 33 cities

Expand Digitise Diversify Diversify Expand Expand Digitise Digitise

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Corporate Strategies | Strategic Initiatives

2017 2018 2019

Business enhancement program begins

  • Invest in growth
  • Balance our portfolio
  • Optimise our footprint
  • Manage our brands
  • Leverage CITIC

Acquisition of LF Asia

solidfiing DCH as an FMCG leader in Hong Kong, expands operations across Southeast Asia and into Healthcare

Acquisition of 3 Audi and Mercedes-Benz dealerships

and 3 authorisations for new stores In the Zhejiang province

CITIC-DCH Joint Fund Established

in partnership with CITIC to invest directly in FMCG and healthcare brands expanding into Asia.

DCH delivers 57% increase in profit

  • f HK$802 million with a

revenue increase of 8.7%. Profit doubled in the largest segment, mainland China motor

Consolidation and Internal synergy

  • 3 year investment in IT

systems

  • Cultural transformation
  • Back office consolidation
  • f GFN, IT and HR
  • Efficiency programs for

interest rates, taxes and receivables management

Growth in motor related business

  • 10 year contract for

ground service at Midfield airport in Hong Kong

  • Sole supplier of double

decker buses for Hong Kong-Zhuhai-Macao bridge

  • Motor leasing grows to 33

cities

  • Princess yachts delivers

record revenue with sales

  • f 11 crafts

Alliance with Tencent and digital innovation

  • New CRM system
  • Launch of

usedcarmart.hk

  • Development of Parts+

app

  • Car sharing trial in

motor leasing

Network expansion with 8 new 4S shops

strengthens market presence in Eastern and Southwest China and brings total count to 88. DCH achieves +100k units in sales as 8th largest dealer group in China

DCH signs agreement with Lynk & Co.

  • Receives authorisations

for 6 shops in two years

  • First store opens in 2018
  • Represents DCH’s first

domestic vehicle brand

  • Expands exposure to

electric vehicle segment

Consolidated Yuen Long facilities

  • pened

Food processing and logistics relocated to ISO22000 and HACCP Yuen Long Food Processing Centre

Flagship Auriga distribution centres

in Hong Kong and Thailand with state-of- the-art capabilities, including RFID tracking, robotic shelving and specialty storage

45,000 sq meter Hengqin logistics facility completed

to serve the Greater Bay Area with specialty logistics and cold chain services

Tamar Alliance Invests in Nature’s Care

Tamar purchases equity stake in Australia’s 3rd largest vitamin company, position the company to grow across Asia with DCH distribution services

Pipeline of 12 New 4S Shops

strengthens market presence in Eastern and Southwest China and brings total count to 88. DCH achieves +100k units in sales as 8th largest dealer group in China

Development of

  • wn brands

with specialised team and a portfolio of over 50 in- house brands in the food business

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For more information, please contact:

ir@ir.dch.com.hk 38