CHOW SANG SANG HOLDINGS INTERNATIONAL LIMITED 周 生 生PPT集 TITLE團 國 HERE際 有 限 公 司 Stock code: 116 Date Here 2017 Annual Results Presentation

March 2018

1 Disclaimer and Forward Looking Statements

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• This document contains information, opinion that only reflect Chow Sang Sang Holdings International Ltd’s opinion on the date of the presentation. Chow Sang Sang Holdings International Ltd. can change anything on this document without notices. Chow Sang Sang Holdings International Ltd. is not liable for any losses incurred from the usage of information or opinions obtained from this document.

• This document contains confidential information to be used solely for the purpose of personal reference. In addition, this document may not be transmitted or transferred to any other person or in any way be incorporated into other files or data.

• This document and the related discussion may include forward-looking statements with risk and uncertain factors. Forward looking wording such as believe, expect, planning, forecast, target, possible, hope, will, may, etc., will be used in this document. The reader of this document should not excessively rely on such forward-looking statements to form their opinions. These forward-looking statements are based on our own company and other sources that we believe are reliable.

2 Presentation Outline

I. Business Overview

II. Financial Highlights

III Future Plan and Strategy

IV. Q&A Session

V. Appendix

3 PPT TITLE HERE Business Overview Date Here

4 Company Structure

 Physical metals trading Precious Metals service Wholesale  Commission based Services  Generated 12% of total revenue for 2017 Jewellery Retail Chow Sang Sang Group

 8 HK offices and Internet Securities platform Brokerage  Commission based  Main business segment  No proprietary trading  519 self-operated stores in Greater China and Internet  Generated 0.2% of total platform revenue for 2017  Operates under “Chow  Investment Properties Sang Sang" and “Emphasis Other  Shares of HKEx Jewellery” Investments  Generated 0.3% of total  Generated 87% of total revenue for 2017 revenue for 2017

5 PPT TITLE HERE Business Overview: JewelleryDate Here Segment

6 Product mix: Jewellery

Gold based Items

Gem-set Items

Licensed Products

International Brands (Gucci, Rolex, Tudor)

7 Distribution Network

 Chow Sang Sang directly runs and controls all of its retail stores with no franchise operations Beijing Surrounding  Complementing the extensive retail network, the Provinces eshop.chowsangsang.com working with key retail portals (70) in Mainland China, offer online shopping service Heilongjiang Northern (63) Inner Mongolia Jilin

Xinjiang Beijing Liaoning Western Tianjin (74) Shanghai Flagship Store Gansu Hebei Ningxia Shanxi Qinghai Shandong Eastern Shaanxi Jiangsu Henan (82) Anhui Tibet Hubei Shanghai Chongqing Chongqing Flagship Store Sichuan Zhejiang Hunan Jiangxi Guizhou Fujian Emphasis Kunming Flagship Store Guangdong Taiwan Yunnan Guangxi Chow Sang Sang Jewellery Hong Kong Flagship Stores Hong Kong Macau Jewellery Watch

(2) Hainan Mainland China 411 11 – Covered cities HK / Macau 47 17 8 (1) (1) Excluding Hong Kong and Macau Southern Taiwan - – 25 (2) Reached 432 as of Mar 27, 2018 (133) as at Dec 31, 2017

8 Focus on Growth in Mainland China

Increasing No. of Stores in Mainland China

(No. of Stores) 450

400

350

300

250

200 422 374 343 150 New New shops 100 shops +47 +63 50

0 2015 2016 2017 Same-store Sales Growth – +6% -4% +5% Mainland China Same-store Sales -11% -25% -2% Growth – HK/Macau

9 PPT TITLE HERE Financial Highlights Date Here

10 Operating Performance …

Turnover Gross Profit

(HK$ mm) (HK$ mm) 30,000 6,000 25.2% 24.0% 25.0% 25,000 5,000 22.2%

4,228 4,050 20.0% 20,000 19,069 3,991 4,000 16,093 16,633 15.0% 15,000 2,094 1,941 9,824 3,000 2,033 8,292 8,621 10.0% 10,000 2,000

5,000 9,245 1,000 2,134 2,109 1,958 5.0% 7,801 8,012

0 0 0.0% 2015 2016 2017 2015 2016 2017 … 2016 benefited from gold price increase 1H 2H Gross Margin

11 Operating Performance (Cont’d) …

Operating Profit Profit attributable to equity holders

(HK$ mm) (HK$ mm) 1,600 7.0% 1,600 7.0% 6.3% 6.3% 6.0% 1,400 5.9% 1,400 6.0% 6.0% 5.3% 1,200 1,150 1,200 1,130 5.0% 5.0% 1,019 1,055 4.6% 1,000 1,000 401 876 4.0% 519 4.0% 742 800 505 800 512 3.0% 3.0% 488 600 600 378 2.0% 2.0% 400 400 729 631 550 507 1.0% 1.0% 200 200 364 392

0 0.0% 0 0.0% 2015 2016 2017 2015 2016 2017 … include a gain on disposal of HKEx shares in 2015 and 2017

1H 2H Operating Margin 1H 2H Net Profit Margin

12 …Driven by Retail Segment…

Revenue Breakdown Results Breakdown

0.2% 0.6% 0.3% 100% 0.3% 0.2% 0.8% 0.2% 100% 3.9% 3.5% 0.6% 1.4% 11.8% 11.9% 12.2% 2.4% 90% 4.8% 90% 2.1% 1.5%

80% 80%

70% 70%

60% 60%

50% 50% 97.2% 87.7% 87.3% 87.3% 91.6% 90.2% 40% 40%

30% 30%

20% 20%

10% 10%

0% 0% 2015 2016 2017 2015 2016 2017

Retail Wholesale Broking Other Retail Wholesale Broking Other

13 …Retail Performance…

Retail – Revenue Retail – Operating Results

(HK$ mm) (HK$ mm) 20,000 2,000 8.0%

16,723 6.7% 7.0% 6.2% 6.0% 14,516 15,000 14,045 1,500 6.0%

8,558 5.0%

1,007 7,174 7,511 10,000 1,000 947 901 4.0%

446 3.0% 465 401

5,000 500 2.0% 8,165 6,871 7,005 561 482 500 1.0%

0 0 0.0% 2015 2016 2017 2015 2016 2017 1H 2H Margin

14 … Robust Demand in Mainland China

2015 2016 2017

Others Others Others 0.7% HK/Macau 0.7% HK/Macau 0.6% HK/Macau 24.6% 24.7% 25.3%

Mainland Mainland Mainland China China China 46.0% 52.2% HK/Macau HK/Macau (PRC 55.3% HK/Macau (PRC Customers) Customers) (PRC 22.5% Customers) 19.3% 28.1%

Sales Attributable 74% +1% 75% 75% to PRC Customers(1)

(1) Mainland China sales + HK/Macau sales by PRC customers

15 Consolidated Sales Mix – (Retail)

2016 2017

Watches Watches 4% 5%

Non gold Non gold Gold jewellery Gold jewellery 61% 33% 62% 35%

Gross margin: Gold* : 16%-23% Non gold jewellery: 38%-42% Watches: 20%-28% * Include gold price movement

16 Consolidated Gross Profit Contribution – (Retail)

2016 2017

Taiwan Taiwan 1% 1%

Hong Hong Kong/ Kong/ Mainland Macau Mainland Macau China 40% China 59% 59% 40%

17 Change of Average Selling Price

Hong Kong/Macau - Gold Hong Kong/Macau - Jewellery

(HK$) (HK$) 6,000 20,000 4,700 4,500 14,200 4,100 15,000 12,900 4,000 12,000 10,000 2,000 5,000

0 0 2015 2016 2017 2015 2016 2017

Mainland China - Gold Mainland China - Jewellery

(RMB) (RMB) 5,000 12,000 11,000 10,200 9,600 4,000 9,000 3,000 2,300 2,400 2,500 6,000 2,000 1,350 1,200 1,280 3,200 2,800 2,700 1,000 3,000

0 0 2015 2016 2017 2015 2016 2017 e-shop Exclude e-shop e-shop Exclude e-shop

18 Working Capital Trends

Average Inventory Turnover Days Average Receivables Turnover Days

(No. of Days) (No. of Days) 19 250 20 18 201 203 200 173 15 14 150 10 100

50 5

0 0 2015 2016 2017 2015 2016 2017

Average Payables Turnover Days Cash Conversion Cycle

(No. of Days) (No. of Days) 10 250 214 216 8 200 184 6 6 5 150

4 3 100

2 50

0 0 2015 2016 2017 2015 2016 2017

19 Financial Highlights

2015 2016 2017 16 vs 17 Turnover 19,069 16,093 16,633 +3.4% Jewellery Retail 16,723 14,045 14,516 +3.4% Other businesses 2,346 2,047 2,117 +3.4% Gross profit 4,228 4,050 3,991 -1.5% Operating profit 1,150 1,019 1,055 +3.5% EBITDA 1,582 1,201 1,361 +13.3% Profit attributable to equity holders 1,130 742 876 +18.1% Basic EPS (HK cents) 167.0 109.6 129.5 +18.2% Dividend per share (HK cents) 62.0 43.0 51.0 +18.6%

20 Other Financial Information

For the 12 months ended (HK$ million) or as at Dec 31, 2015 2016 2017 Cash and cash equivalents 1,621 1,283 1,200 Available-for-sale investments1 825 763 874 Capital expenditure 172 197 216 Gearing2 19.3% 20.4% 20.5% Unused banking facilities 3,831 4,318 4,128

1 Available-for-sale investments mainly represents HKEX shares which valued at quoted market prices

2 Total borrowings to total equity holders’ equity. Total borrowings includes interest-bearing bank borrowings, bullion loans and interest-bearing bank borrowings arising from securities and futures broking.

21 PPT TITLE HERE Strategy Outline Date Here

22 Expansion with Distinctiveness in Mainland China

Around 50 new stores in Mainland China in 2018

Expansion Philosophy Self-Run Store Model

 Target entry-mid end consumers  Enable consistent and superior service quality  Leverage on high-end shopping malls and with seamless delivery department stores’ own positioning to  Brand development and fine-tuning are more enhance image important than growth in the number of  Expand coverage and reach via e-shops stores  Refresh store image to meet consumer preferences

23 Product Mix and Branding

Jewellery Focus and Product Differentiation

 Clear presence and visibility of international brands and signature collections  Develop house brands - focus on quality and sophistication appropriate to different customer segments

Marketing Initiatives

Continue existing programs with focus:

 Expand e-shop, synergizing with physical stores  Capitalize on CRM database  Reinforce Wedding; expand on Daily wear  Revamp VM at stores

24 PPT TITLE HERE Q&A Session Date Here

25 PPT TITLE HERE Appendix Date Here

26 Company History

1930-1970 1970-1980 1980-1990 1990-2000 2000-2017

1934 1973 1998 2005 2009 2011 2014 2017 Chow Sang First Re-entered Became Opened Opened Opened Stable Sang company in the sightholder the first the first the first expansion Goldsmith the industry Mainland of Diamond Flagship Flagship Flagship in Mainland established listed on China Trading Store in Store in Store in China; in Hong Kong market Company Beijing Taiwan Shanghai healthy Guangdong Stock growth in e- Exchange business

No. of 9 519 Stores

Turnover 130 16,633 (HK$ mm)

27 Industry Analysis – Mainland China Luxury Market Overview

 The personal luxury goods market posted positive growth across all key regions. Chinese consumption bounced back in 2017, fueled by renewed consumer confidence and the rapid emergence of a new middle class. Sales in Mainland China grew by a remarkable 15% at current exchange rates, to a total market size of €20 billion.

 Chinese consumers have slightly increased their contribution to the global luxury market—from 30% in 2016 to 32% in 2017.  Longer term, Mainland China remains an engine of growth for luxury goods as the country’s middle class continues to grow in size and purchasing power. The behavior of Chinese consumers epitomizes a larger global trend: the * Note: RoW is rest of the world re-localization of luxury.

Source: Bain & Company 28 Industry Analysis – HK & Mainland China

FY2017 HK Jewellery, Watches and Clocks, and Valuable Gifts Sales 12.00 According to HK Census and Statistics Department, total jewellery, watches and clocks, 10.00 8.70 and valuable gifts sales increased 5.2% y-o-y in

8.00 7.31 FY2017. 6.65 5.99 6.21 6.19 6.02 6.12

bn 6.00 5.56 5.31 5.56 5.43 HKD

4.00 FY2017 Mainland China Gold, Silver and Jewellery Sales 2.00 35.0 30.9 28.4 28.4 0.00 30.0 25.3 25.6 25.4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 25.1 24.5 24.5 25.0 23.6 22.9 20.7 Source: HK Census & Statistics

20.0 bn Retail sales for jewellery products in Mainland

RMB 15.0 China stood at RMB 305.3 billion for FY2017 as against RMB 299.6 billion in FY2016. 10.0 5.0 * In order to eliminate the impact of the different date of the “Chinese New Year” (CNY) each year, and enhance the comparability of data, in accordance with the national statistical system, the data in January and February 2017 were 0.0 investigated and released together. Here the data is evenly divided as RMB28.4 Jan* Feb* Mar Apr May Jun Jul Aug Sep Oct Nov Dec billion. Source: National Bureau of Statistics of People’s Republic of China

29 MarketingPPT ProgramTITLE HERE Highlights Date2017 Here

30 Daily Wear Campaign

 To seize business opportunity on daily wear jewellery, we have launched an annual marketing platform for Chow Sang Sang daily wear across affordable luxury and sophisticated collections named #StateYourStyle in Greater China. The platform started with a hashtag campaign and the idea will keep evolving with more new excitement.

 We advocate every woman to be her best self by mixing & matching jewellery in daily attire to make a fashion statement.

 Touch points covered always-on brand platform i.e. website, above-the-line advertising, digital & Style shoot in social media, PR, store POSM, brand book and New York City window display.

31 Daily Wear Campaign

Brand website Online advertising banners

32 Daily Wear Campaign

Daily wear theme display and light box

33 Infini Love Diamond

 After launching Infini Love Diamond rebranding in 2015, a new wave of brand campaign was in place in June 2017 to reinforce the emotional bonding of our top-notch diamond brand with the customers.

 On top of above-the-line advertising, we have brought a few artists who share the same vision towards “craftsmanship”, to well elaborate the “Passion for Brilliance” stories.

 Our revamped roadshow tour was first launched in HK at Festival Walk in May. It will continue its footprint to cities in Mainland China such as Shanghai & Zhengzhou.

 Other touch points included above-the-line advertising, digital (social media), PR, store display and promotions.

34 Infini Love Diamond

3 videos featuring 3 award-winning artists around the world, together with Infini Love Diamond Technical Director Ronald Daems, sharing their passion towards craftsmanship.

Jasenko Djordjevic Naoki Konogawa Jon Almeda from US from Bosnia from Tokyo (Miniature Pottery) (Pencil Engraving) (Origami)

35 Wedding Campaign

 After launching “The Precious Commitment結婚是 一件認真的事” communication platform in 2016, we continuously carried on the communication in 2017 by localizing the creative concept in HK & Mainland China and drove a viral digital campaign.

 In HK, we launched “我們同樣認真” Digital Campaign to strengthen our image on wedding product by penetrating into the young market. The message of “embracing all kinds of love” was well received by Hong Kong public especially on social media. Digital advertising, PR and celebrity endorsement was adopted throughout the campaign.

 In Mainland China, we launched “愛情大贏家” Digital Campaign to celebrate true love no matter how difficult and extraordinary the marriage are. The campaign focused on popular 3rd party social media platform to raise awareness.

36 Wedding Campaign

“我們同樣認真” Digital Campaign featuring different kind of couple/ single girl who long for love, had created tremendous impact on social media and successfully penetrated into the young market.

37 Qixi

 To leverage the annual peak sales season of Qixi in Mainland China, we have enhanced the Marketing Campaign with our Dailywear icon “Cassie” based on Valentine’s Day creative. New products were also introduced via this sales occasion.

 Touch points included digital campaign, website, below-the-line PR and activations, gift with purchase, store POSM and window display.

38 Christmas Campaign

 As a popular gifting season for Christmas, we have created a campaign idea “It’s Christmas time. It’s jewellery time!” to enhance our brand as the top-of-mind gifting choice.

 A set of creatives were created to target different users: Couple, Bestie and Family. A warm illustration theme and witty usage of product shot were blended together to create a vivid image. A festive digital video was launched to deliver festive ambience as a jewellery brand.

 Touch points included digital campaign, website, below-the-line PR and activations, gift with purchase, store POSM and window display. Key Visual

39 Christmas Campaign

Festive digital video

Website

Instore display 40 e-Shops Performance

 Aside from our own eshop.chowsangsang.com, we partnered with different portals such as TMALL, JD.com to launch various trading events and achieved some very positive results.

 During ecommerce giants’ sales event on 18th June, 2017, Chow Sang Sang topped the list of jewellery business.

41 2017 New Stores

Kwai Fong, Hong Kong Yoho Mall, Hong Kong Jiufang Plaza, Shenzhen

Shijiazhuang Wanda, Hebei Tee Mall, Tianjin Tianhui Plaza, Guangzhou

42