2013 Annual Results Presentation

March 2014 Disclaimer and Forward Looking Statements

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2 Presentation Outline

I. Business Overview

II. Financial Highlights

III Future Plan and Strategy

IV. Q&A Session

V. Appendix

3 Business Overview

4 Company Structure

 Physical metals trading Precious service Metals  Commission based Wholesale  Generated 20% of total revenue for 2013

Jewellery Retail Chow Sang Sang Group

 8 HK offices and Internet Securities platform Brokerage  Commission based  Main business segment  No proprietary trading  375 self-operated stores in  Generated 0.1% of total Greater China revenue for 2013  Operates under “Chow Sang Sang" and “Emphasis Jewellery”  Investment Properties Other  Generated 79% of total  Investments Shares of HKEX revenue for 2013  Generated 0.7% of total revenue for 2013

5 Business Overview: Jewellery Segment

6 Product mix: Jewellery

Gold based Items

Gem-set Items

Licensed Products (Hello Kitty)

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  Complementing the extensive retail network, the Surrounding eshop.chowsangsang.com working with key Provinces retail portals in China, offer online shopping (49) service Heilongjiang Beijing Flagship Store

Inner Mongolia Jilin

Xinjiang Beijing Liaoning

Tianjin Shanghai Flagship Store Gansu Hebei Ningxia Shanxi Qinghai Shandong Eastern Northern Shaanxi Jiangsu Henan (51) (92) Anhui Tibet Hubei Shanghai Chongqing Sichuan Zhejiang Hunan Jiangxi Guizhou

Kunming Flagship Store Guangdong Chow Empasis Yunnan Guangxi Sang Sang Jewellery Flagship Stores Hong Kong China(1) 296(2) –

HK / Macau 46 12 Hainan Taiwan - 21 as at Dec 31, 2013 (1) Covered cities Southern (104) (1) Excluding Hong Kong and Macau (2) Reached 298 as of Mar 25, 2014 8 Focus on Growth in Mainland China

Increasing No. of Stores in Mainland China

(No. of Stores)

New New shops shops +50 +32

Same-store Sales 37% 5% 20% Growth

9 Financial Highlights

10 Operating Performance …

Turnover Gross Profit

(HK$ mm) (HK$ mm)

11 Operating Performance (Cont’d) …

Operating Profit Profit attributable to equity holders

(HK$ mm) (HK$ mm)

12 …Driven by Retail Segment…

Revenue Breakdown Results Breakdown

13 … Retail Performance …

Retail – Revenue Retail – Operating Results

(HK$ mm) (HK$ mm)

14 …and Robust Demand from PRC Consumers

2011 2012 2013

Sales Attributable to PRC 66% +5% 71% +1% 72% Customers(1)

Mainland customers’ contribution continues to increase

(1) China sales + HK/Macau sales by PRC customers 15 Consolidated Sales Mix – (Retail)

2012 2013

Gross margin: Gold* : 10%-13% Non gold jewellery: 39%-44% Watches: 22%-24% * Include gold price movement 16 Consolidated Gross Profit Contribution – (Retail)

2012 2013

17 Change of Average Selling Price

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

(HK$) (HK$)

China - Gold China - Jewellery

(RMB) (RMB)

18 Improved Working Capital Trends

Average Inventory Turnover Days Average Receivables Turnover Days

(No. of Days) (No. of Days)

Average Payables Turnover Days Cash Conversion Cycle

(No. of Days) (No. of Days)

19 Financial Highlights

(HK$ million) For the 12 months ended or as at Dec 31, % change 2011 2012 2013 12 vs 13 Turnover 17,158 18,260 25,142 +37.7% Jewellery Retail 12,645 14,861 19,943 +34.2% Other businesses 4,513 3,399 5,199 +53.0% Gross profit 3,254 3,432 4,208 +22.6% Operating profit 1,467 1,261 1,544 +22.4% EBITDA 1,574 1,400 1,712 +22.3% Profit attributable to equity holders 1,098 985 1,218 +23.7% EPS (HK cents) 162.2 145.5 180.0 +23.7% Dividend per share (HK cents) 60.0 55.0 68.0 +23.6%

20 Other Financial Information

For the 12 months ended (HK$ million) or as at Dec 31, 2011 2012 2013 Cash and cash equivalents 631 674 1,009 Available-for-sale investments1 635 671 659 Capital expenditure 190 267 280 Gearing2 33.2% 27.1% 23.4% Unused banking facilities 2,663 4,052 4,114

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 Future Plan and Strategy

22 Expansion with Distinctiveness in PRC

Around 50 new stores in PRC in 2014

Capitalize on Existing Self-Run Store Model Expansion Philosophy Presence

 Large potential for growth:  Ensure consistent and  Target mid-high end consumers smaller store count compared to superior service quality  Brand development and fine- competitors  Leverage on high-end tuning is more important than  Selective shop positioning and shopping malls and growth in the number of stores careful geographic spacing to department stores’ own  Leverage on e-shops to expand maximize efficiency & exposure positioning to enhance image coverage and reach but avoid overconcentration of  More flagship and premium- stores status stores

23 Product Mix and Branding

Jewellery Focus and Product Differentiation Marketing Initiatives

 Clear presence and visibility of international Continue with existing programs with focus: brands  Expand e-shop, synergizing with physical  Develop house brands - focus on quality and stores sophistication appropriate to different  Capitalize on CRM database customer segments  Revamp VM at stores  Collaboration with international brands for unique products  Leverage on licensed products such as Hello Kitty

24 Improving Operating Efficiency

initiatives for sustainable growth

 Build human capital

o Implement training programs to nurture and develop middle management staff in PRC Incentive schemes to attract and motivate sales staff o  Enhance inventory efficiency strengthen the logistical network with supply hubs to facilitate “just-in-time” delivery o  Focus on R&D for quality enhancement and production efficiency

25 Q&A Session

26 Appendix

27 Company History

1930-1970 1970-1980 1980-1990 1990-2000 2000-2013

1934 1973 1998 2005 2006 2009 2011 2013

Chow Sang First Re-entered Became Launch Opened the Opened Stable Sang company in the sightholder brand first the first growth in Goldsmith the industry Mainland of Diamond revamp Flagship Flagship China established listed on China Trading campaign Store in Store in in Hong Kong market Company Beijing Taiwan Guangdong Stock Exchange

No. of 9 375 Stores

Turnover 130 25,142 (HK$ mm)

28 Industry Analysis – PRC Jewellery Market Overview

While global jewellery sales returns to single … China became the world leading jewellery market, digit growth … beating USA and India

Source: Euromonitor International, International Jewellery London 2013, Sept 4th Source: Euromonitor International, International Jewellery London 2013, Sept 4th

29 Industry Analysis – HK & PRC

FY2013 HK Jewellery, Watches and Clocks, and Valuable Gifts Sales

14 13.11 Total jewellery, watches and clocks, and valuable gifts sales growth in HK is 22.97% y-o-y in FY13, according to HK 12 11.53 10.49 10.52 10.73 Census and Statistics Department, whereas the growth in 10.09 9.60 10 9.16 retail revenue from Chow Sang Sang’s HK and Macau 8.68 8.34 8.53 operations hit 36% y-o-y in FY13. 7.54 8 FY2013 PRC Gold, Silver and Jewellery Sales

6 billionHK$

4 35 * * 30.3 2 30 26.5 26.5 26.9 26.8 0 25 23.0 23.8 22.7 22.9 22.1 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 21.8 22.0 Source: HK Census & Statistics

20

15

Growth rate of retail sales for jewellery products in PRC RMB billion 10 stood at 25.8% y-o-y for FY13, whereas the growth in retail revenue from Chow Sang Sang’s China operations 5 hit 32% y-o-y in FY13. 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec * In order to eliminate the impact of the different date of the “Chinese New Year” Source: National Bureau of Statistics of China (CNY) each year, and enhance the comparability of data, in accordance with the national statistical system, the data in January and February 2013 were investigated and released together. Here the data is evenly divided as RMB26.50 billion. 30 Industry Analysis – PRC Jewellery & Watches Forecast

PRC jewellery & watches Market Value Forecast 2011–2016

CAGR: 11.2% Continued Strong Growth into 2016:

CAGR 11.2% estimated growth rate for PRC jewellery & watches market value from 2011 to 2016. The total value will increase from US$ 43,829.5 million (2011) to US$ 74,470.5 million (2016).

Source: MARKETLINE

31 Chow Sang Sang marketing update 2013

32 Diamond in Motion

 All rounded advertising campaign launched in May 2013. Covering the Greater China Region and targeting sophisticated female segment.

 Touch points covered print, outdoor billboard, digital panels network, internet, social media platform & Store POSM.

 Cooperated with Central Saint Martins College of Art and Design to develop collection using the themes “Knot”, “Swirl” and “Dance” to capture the grace and femininity of modern women.

33 Infini Love Diamond

• 2013 sustaining burst in April to reinforce the supreme quality and awareness of ILD. • Touch points covered print, outdoor, online, social media and Store POSM.

34 Platinum Lace Collection  Launched a new Lace collection cooperating with Platinum Guild International, PR events were held in China first tier cities from October to December.

 Cities include Shanghai, , Beijing, Chengdu and Xian. Fashion/lifestyle magazines editors, fashion bloggers and VIP members were invited to review the new Collection. Generated PR noise, social buzz and publication coverage.

35 Christmas Promotion

 Thematic advertising campaign featured signature collections for seasoning gifting launched in end Nov, 2013, covering the Greater China Region.

 Aimed to catch the young consumers’ attention & stimulate sales by creating a whimsical animation.

 Touch points covered TV, print, outdoor billboard, interactive zone in MTR, digital panels network, online, press release, social media platform & Store POSM.

36

International Brand Strategic Partnership

 Maintained strong partnerships with 14 distinctive international jewellery brands from Europe and Japan.  Exclusive distribution rights of Gucci Jewellery in HK, Taiwan and Macau.  Official agent of Rolex and Tudor in Hong Kong and Mainland China. A total of 23 POS as of today.

37 Enhancement in Product Portfolio

 Strengthened product R&D to further develop in-house brands and gold gifting. Product collections developed include Lace, La Pelle Pearl, Yú Yú signature diamond product line and fine jewellery (Jade, semi-precious stones and carat plus diamonds) to capture the high end sector. Product campaign supported by marketing communication and VIP roadshows in tier one cities in China.

38 2013 New Stores

Causeway Bay Bridal zone

Jordan, HK

Mongkok, HK

Heilongjiang, China Kun Ming, China 39