YGM Trading (375 HK) BUY

15 April 2011
YGM Trading
(375 HK)
BUY
A forgotten China/HK fashion apparel play
Initiation Report
Company description
Rating
BUY
Target Price
$40.00
$17.36
Stock price(14/04/2011)
130%
Upside
375.HK
Bloomberg code
Website
http://www.ygmtrading.com
7.02/24.65
52-Wk Range (HK$)
52-Wk Avg. Daily Vol (m)
0.22
No. of Shares (m)
163
2,823
Market Cap (HK$m)
Major Shareholders (%)
The Chan Family
62%
NTA per share (HK$)
6.24
ROE (%)
31%
Net Cash per share (HK$)
1.04
Results Due
1H: Nov
Final: Jun
Analyst:
[email protected]
(852) 2235 7619
Turnover
(HK$m)
Investment Summary
Luxury brand Acquascutum accounts for 80% of YGM net profit.
Sales from Acquascutum accounted for 60% of total turnover and made
up 80% of YGM total net profit in FY11 (excluding associate
contribution). Such massive profit contribution of Acquascutum makes
YGM a China luxury apparel play.
Capturing the rising purchasing power in lower tier cities. YGM will
further penetrate into tier 3 and tier 4 cities by opening 50 new outlets in
China to capture the rising purchasing power in lower tier cities. The
new store openings will be mainly focus on Aquascutum, J.Lindeberg
and Ashworth, as Aquascutum is YGM’s own brand with higher margin
and J.Lindeberg will be a key new brand promotion for YGM.
Key new brand promotion – J.Lindeberg. It will be the key brand to
introduce and promote in the Greater China region as YGM plans to
open 10 stores in China and Taiwan by the end of 2012. J.Lindeberg
targets high end young menswear market which is an ideal brand to
supplement Aquascutum that targets luxury mature menswear market.
Re-rating on the horizon. FY11 results announcement in June will set
the stage for re-rating of YGM as strong results will attract market
interest of the stock. In addition, management plans share split after
results to improve the trading liquidity and reduce trading spread.
Successful investment property disposal will also yield special dividend.
Under-valued China/Hong Kong fashion apparel play. We apply the
average China/Hong Kong fashion retailers PE of 19.3x to derive our
target price of HK$40 for YGM. Such valuation is consevative as YGM
derives 80% of its net profit from its luxury brand Acquascutum, Trinity
(891 HK) is trading at 27x PE as both companies derive majority of their
net profits from selling luxury apparels with strong European heritage.
Kenneth LI (李勇)
Year to
31 Mar
YGM Trading “YGM” is an old Hong Kong listed company focuses on
apparel retail and wholesale business in Greater China. YGM’s brands
include Acquascutum, Ashworth, J.Lindeberg, Guy Laroche and Michel
Rene. The company own 21% stake in Hang Ten (448.HK)
EBITDA
(HK$m)
Net Profit
(HK$m)
EPS
(HK¢)
EPS Growth
(%)
PE
(x)
EV/ EBITDA
(x)
Dividend
Yield %)
2009
972
119
80
0.52
(53%)
33.3
20.9
2.2%
2010
991
197
197
1.28
145%
13.6
13.0
3.2%
2011E
1,288
301
270
1.66
30%
10.5
8.8
5.7%
2012E
1,520
378
337
2.07
25%
8.4
6.8
7.2%
2013E
1,764
451
401
2.47
19%
7.0
5.5
8.5%
Consensus net profit – FY11: n.a
-- FY12: n.a
Page 1
Hotline: (852)2235 7789
Email: [email protected]
Website: www.cinda.com.hk
15 April 2011
Contents
Executive Summary..................................................... 3
Valuation.......................................................................... 4
Investment Highlights................................................... 7
Earnings Outlook.......................................................... 23
Financials ...................................................................... 25
Risk Factors .................................................................. 26
Appendix ........................................................................ 27
Financial Statements .................................................... 29
Page 2
Hotline: (852)2235 7789
Email: [email protected]
Website: www.cinda.com.hk
15 April 2011
Executive Summary
Luxury brand Acquascutum accounts for 80% of YGM net profit. Sales from
Acquascutum accounted for approximately 60% of total turnover for FY11, while net
profit contribution from Acquascutum accounted for approximately 80% of total
YGM net profit for FY11 (excluding associate contribution). Such massive profit
contribution of Acquascutum makes YGM a China luxury apparel play, the remaining
net profit contribution mainly come from its leading international golf apparel brand
Ashworth.
Key new brand promotion – J.Lindeberg. YGM introduced the J.Lindeberg brand
in Hong Kong in 2010 and has achieved encouraging results since then. Lindeberg
will be the key brand to introduce and promote in the Greater China region as YGM
plans to open 10 stores in China and Taiwan by the end of 2012. YGM will expand
the brand coverage into China by opening flagship stores in tier one cities and
penetrate into lower tier cities through wholesale. We believe J.Lindeberg which
targets high end young menswear market is an ideal brand to supplement Aquascutum
that targets luxury mature menswear market. Furthermore, we believe J.Lindeberg will
serve as another future growth driver for YGM when it penetrates into China.
Capturing the rising purchsing power in lower tier cities. 69% of YGM stores are
located in tier 1 and tier 2 cities, tier 3 and tier 4 cities made up of 21% and 10% of total
stores in China. The store spread among city tiers is similar to Trinity where 63% stores
are situated in tier 1 and tier 2 cities, tier 3 and tier 4 cities made up of 26% and 11%
respectively. YGM will further penetrate into tier 3 and tier 4 cities by opening 50 new
outlets in China to capture the rising purchasing power in lower tier cities. The new store
openings will be mainly focus on Aquascutum, J.Lindeberg, and Ashworth given that
Aquascutum is YGM’s own brand with higher margin and J.Lindeberg will be a key
new brand promotion for YGM in next two years.
Re-rating on the horizon. We believe the upcoming announcement of YGM’s FY11
results in June will set the stage for re-rating as strong results will attract market interest
of the stock. In addition, management plans share split after results to improve trading
liquidity and reduce trading spread. Furthermore, YGM management is starting to
become more active in marketing and roadshow. YGM has recently appointed an IR
company for investor relation and management recently attended access day with a
leading European broker in Europe and the US.
Under-valued China/Hong Kong fashion apparel play. We use the average
China/Hong Kong fashion retailers forward PE of 19.3x to derive our target price for
YGM, which is equivalent to HK$40. We believe such valuation is consevative given
that YGM is a luxury apparel play that derives 80% of its net profit from luxury brand
Acquascutum (excluding associate contribution). We believe YGM should deserve to
trade close to the PE multiples of 27x for Trinity (891 HK) as both companies derived
majority of their net profits from selling luxury apparels with strong European heritage.
Page 3
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Website: www.cinda.com.hk
15 April 2011
Valuation
Given that YGM’s financial year is March year-end, YGM’s FY2012 is effectively
FY2011 in comparing to other December year end companies. We use the average
China/Hong Kong fashion retailers forward PE of 19.3x to derive our target price for
YGM, which is equivalent to HK$40. We believe such valuation is consevative given
that YGM is a luxury apparel play that derives 80% of its net profit from luxury brand
Acquascutum (excluding associate contribution). We believe YGM should deserve to
trade close to the PE multiples of Trinity (891 HK) at 27x as both companies derive
majority of their net profits from selling luxury apparels with strong European heritage.
The current large valuation cap between YGM and other China/Hong Kong listed
fashion apparel plays is due to a number of reasons. 1) No analyst coverage of the stock,
2) low trading liquidity, the stock traded at an average daily volume of 219k, 3) high
trading spread, 4) Unawareness of the stock in the market, 5) inactive investor relation.
We believe the upcoming announcement of YGM’s FY2011 results in June will set the
stage for re-rating as strong results will attract market interest of the stock. In addition,
management plans share split after results to improve the trading liquidity and reduce
trading spread. Furthermore, YGM management is starting to become more active in
marketing and roadshow. YGM has recently appointed an IR company for investor
relation and management recently attended access day with a leading European broker
in Europe and the US.
Figure 1: 1-Year Share Price Performance of YGM
HK$
25
23
21
19
17
15
13
11
9
7
5
Apr10 May10 Jun10
Jul10
Aug10 Sep10 Oct10 Nov10 Dec10 Jan11
Feb11 Mar11
Sources: Companies, CIRL
Page 4
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Email: [email protected]
Website: www.cinda.com.hk
15 April 2011
Figure 2: Peer Comparison in Valuation I
Ticker
Company
Price
Market cap
LC
(US$m)
PE(x)
11F
PB(x)
12F
11F
ROE
12F
%
China/HK fashion retailers
375 HK
YGM Trading
891 HK
Trinity
1234 HK
China Lilang
238 HK
Evergreen
589 HK
Ports Design
210 HK
Daphne
17.36
363
8.4*
7.0*
2.2*
2.0*
30.5*
8.09
1,763
28.5
21.5
4.8
4.4
18.6
11.32
1,748
20.7
16.5
5.1
4.3
26.9
4.10
518
16.4
13.0
2.1
1.8
13.4
20.65
1,509
17.1
14.2
5.1
4.4
31.7
6.57
1,384
13.9
11.6
3.1
2.6
23.8
19.3
15.4
4.0
3.5
22.9
Average
China/HK department stores
3368 HK
Parkson
11.80
4,265
23.3
19.1
5.2
4.5
24.4
331 HK
PCD Stores
2.19
1,190
18.4
14.4
3.0
2.6
17.0
1212 HK
Lifestyle
20.40
4,408
22.9
20.1
4.2
3.8
19.2
3308 HK
Golden Eagle
21.90
5,472
29.4
23.1
8.1
6.5
30.0
1833 HK
Intime Dep
12.28
3,017
26.6
20.9
3.6
3.3
14.0
825 HK
New World Dep
6.32
1,370
17.5
14.9
2.0
1.9
12.6
23.0
18.7
4.4
3.8
19.5
Average
China/HK sportswear
2331 HK
Li Ning
14.50
1,964
14.2
12.7
3.3
2.8
24.4
3818 HK
Dongxiang
2.61
1,902
9.6
9.3
1.4
1.3
16.3
2020 HK
Anta Sports
12.48
4,003
14.5
12.4
4.1
3.6
29.0
1968 HK
Peak Sports
5.89
1,589
10.2
8.8
2.6
2.2
25.4
1361 HK
361 Degree
5.32
1,415
9.1
8.0
2.2
1.9
27.8
1368 HK
Xstep
5.73
1,603
10.8
9.1
2.6
2.3
25.9
11.4
10.0
2.7
2.4
24.8
Average
China/HK supermarkets
291 HK
CRE
32.45
10,009
29.8
23.9
2.4
2.3
8.2
8277 HK
Wumart
4.77
n.a
7.6
6.3
1.3
1.2
19.6
980 HK
Lianhua
35.15
2,812
24.5
20.6
5.4
4.7
23.7
814 HK
Jingkelong
10.44
553
17.1
14.5
2.1
2.0
12.4
19.8
16.3
2.8
2.6
16.0
Average
Sources: Bloomberg
* YGM’s financial year is March year-end, YGM’s FY2012 is effectively FY2011 in comparing to other December year end
companies.
Page 5
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Website: www.cinda.com.hk
15 April 2011
Figure 3: Peer Comparison in Valuation II
Stock code
YGM Trading
Trinity
Ports Design
China Lilang
Evergreen
375 HK*
891 HK
589 HK
1234 HK
238 HK
2823
13,706
11,737
13,590
4,027
Mainstream
Mainstream
Aspirant
Aspirant
Men business casual
Men business casual
Market cap (HK$ m)
International high end International High end International High end
Brand positioning
luxury/ mainstream
luxury
luxury
Affluent/Aspirant
Affluent
Affluent
Men & women
Men business formal,
Ladieswear, men
business casual
business casual
casual wear
1976
2006
1990
1995
2000
Acquascutum
Kent & Curwen
Ports 1961
LILANZ
V.E. Delure
Ashworth
Cerruti 1881
Ports International
L2
Testantin
J.Lindeberg
D'urban
BMW Lifestyle
Guy Laroche
Gieves & Hawkes
Ferrari
Michel Rene
Intermezzo
Retail & Wholesale
Retail
Retail
Wholesale
Retail & Wholesale
295
451
353
2,805
328
Total revenue (HK$ m)
1288
2011
1718
2503
600
YoY (%)
30%
22%
12%
32%
47%
Gross margin (%)
66%
77%
79%
38%
64%
Net profit (HK$ m)
270
341
556
493
180
Net profit margin (%)
21%
17%
32%
20%
30%
Net cash on hand (HK$)
169
-65
-8
847
1,138
FY 10 PE
10.5
40.2
21.1
27.6
22.4
FY 11 PE
8.4
28.5
17.1
20.7
16.4
Target customer
Product range
Year of establishment
Brand names
Business model
Total store network
Key financials for FY10E
Sources: Companies, CIRL estimates
* YGM’s financial year is March year-end, YGM’s FY2012 is effectively FY2011 in comparing to other December year end companies.
Page 6
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15 April 2011
Company information
YGM Trading “YGM” is an old Hong Kong listed company focuses on apparel
retailing and wholesaling both in Hong Kong and China. YGM’s brand portfolio
includes Acquascutum, Ashworth, J.Lindeberg, Guy Laroche and Michel Rene. The
company also own 21% stake in Hang Ten (448.HK). YGM derives approximately
80% of its net profits (excluding associate contribution) from its own luxury brand
Acquascutum and the remaining profit contribution mainly comes from the other
leading international golf brand Ashworth.
Figure 4: YGM Brand Portfolio
Brand
History
Country of
Origin
Relationship
Licensing
Terms
Ownership
Intellectual property right in 42 Asia
Aquascutum
1851
UK
Since 1998
Pacific countries
Ashworth
1987
USA
Since 1998
License right
30 Years
License right: Exclusive distribution in
J.Lindeberg
1996
Sweden
Since 2010
the Greater China
Michel Rene
1976
In-house
Since 1976
Global ownership
-
Guy Laroche
1956
France
Since 2004
Global ownership
-
Hang Ten
1960
USA
Since 1996
Global ownership
-
10 Years
Sources: Company, CIRL
Figure 5: Wide Range of Fashion Brands
A wide spectrum of fashion brands
Luxury European Brands
International fashion
& sports apparel
Mainstream
fashion
Sources: Company, CIRL
Page 7
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15 April 2011
Figure 6: Brand Profile
Brand
Brand Profile
Website
British label founded in 1851 with iconic tailoring heritage and house
check designs from the world of authentic quality and fine
craftsmanship. A popular choice of wear by British royalty, politicians
& celebrities including Queen Elizabeth, the Queen Mother, Margaret
Aquascutum Thatcher and Pierce Brosnan.
www.aquascutum.com
Ashworth is an international golf label, well-known among golf
players, the brand markets a full line of quality men's and women's
Ashworth
golf apparel and casual merchandises.
www.ashworthgolf.com
Established in Sweden in 1997, the brand combines with fashion and
sportswear, targeting high end young menswear market. J.Lindeberg is
sold in more than 30 countries with flagship stores located in
J.Lindeberg Stockholm, Copenhagen, Los Angeles, New York.
www.jlindeberg.com
The brand founded by YGM, carries a full line of men's and women's
executive and city wear. Michel Rene has a high reputation for its
detailed tailoring and quality fabrics of its formal wears while the
casual wear collection provides more trendy and comfortable choices
Michel Rene for customers.
www.ygmtrading.com
A renowned French brand that has long been recognised by its
signature elegant style. Popular choice of fashion for Hollywood
Guy Laroche actresses.
www.guylaroche.com
Sources: Company, CIRL
Figure 7: Gross Margin by Brand
90%
83%
75%
75%
67%
60%
50%
50%
30%
0%
Acquascutum
(Self-operating
store)
Acquascutum
(Wholesale)
Ashworth (Selfoperating store)
Ashworth
(Wholesale)
J.Lindeberg (Self
operating store)
J.Lindeberg
(Wholesale)
Sources: Company, CIRL estimates
Page 8
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15 April 2011
Acquascutum accounts for 80% of YGM net profit
Acquascutum is a luxurious British label founded in 1851. It is a popular choice of
wear by British royalty, politicians and celebrities including Queen Elizabeth, the
Queen Mother, Margaret Thatcher and movie star Pierce Brosnan.
Sales from Acquascutum accounted for approximately 60% of total turnover for FY11,
while net profit contribution from Acquascutum accounted for approximately 80% of
total net profit for FY11 (excluding associate contribution). Thus, such massive profit
contribution of Acquascutum makes YGM a China luxury apparel play, the remaining
net profit contribution mainly come from the Ashworth brand.
YGM first obtained the licensing right of Aquascutum for the Greater China region in
1998. During the financial crisis in 2009, the Japanese company Renown which held
the global IP right of Acquascutum was in financial trouble. In September 2009, YGM
successfully acquired the Asia Pacific intellectual property rights of Acquacutum from
Renown for HK$174m.
Figure 8: Sales by Brand in 1H2011
Aquascutum - 56%
Ashworth - 14%
Michel Rene - 11%
Guy Laroche - 6%
J.Lindeberg - 0%
Export - 9%
Others - 4%
Sources: Company, CIRL
Benefits of obtaining Acquascutum IP rights
There are numerous advantages in obtaining the IP right of Acquascutum rather than
operating through licensing rights. Firstly, obtaining the IP right eliminates the
uncertainty in terminating licensing rights by the holder. This will help to enhance
future operational certainties and turnover visibilities. Secondly, obtaining the IP
rights will also generate an addition income source in the form of royalty income to
YGM. In 1H2011, licensing of trademarks from the Aquascutum brand accounted for
3.7% of total turnover or HK$17.5m.
Thirdly, obtaining the IP right enables YGM to expand to other new Asia Pacific
countries either through opening self-operating stores, wholesale or licensing.
Currently, YGM is in final stage of negotiation for opening Acquascusum stores for
the Korean market. Given the Acquascutum brand performs exceptionally well in
Hong Kong, China and Japan, we believe expanding into Korea is suitable for YGM
given consumers in the region have similar preferences on luxury items. We expect
the Korean market will have a meaningful contribution to YGM by FY2013. Fourthly,
Page 9
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15 April 2011
IP rights also enables YGM to introduce new product lines including high margin
accessory items such as belt, handbags and cufflinks as well as developing golf
collections that can enhance their profitability under the brand name.
Furthermore, YGM will also aim to increase the square footage of existing stores by
splitting menswear and ladieswear into two separate stores inside one department store.
The company achieved great success by having two separate menswear and
ladieswear stores in Sogo department store in Causeway Bay Hong Kong. However,
such strategy cannot be implemented widely in Hong Kong given high store rental
rates and scarcity of good store locations. Management is confident such strategy will
be suitable in China given store rental rate are much cheap in department stores in
China and there are more store locations to select. We recently visited Aquascutum
stores in Friendship department store in Guangzhou which is famous for selling high
end items. The store split strategy was implemented in the department store where
menswear Acquascutum store was located in the menswear level next to Trinity’s
Kent & Curwen and opposite of D’URBAN. The Aquascutum ladieswear store is
situated in the ladieswear level next to brands such as Max Mara, Moiselle and Kookai.
We believe by splitting into menswear and ladyswear in the same department store
will help to enhance brand exclusivity and free up more selling space for additional
product lines.
Figure 9: Acquascutum Menswear Store in Friendship Department Store Guangzhou
Sources: CIRL
Page 10
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Figure 10: Acquascutum Ladieswear Store in Friendship Department Store Guangzhou
Sources: CIRL
Figure 11: Acquascutum Store in Harbour City Hong Kong
Sources: CIRL
Page 11
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Figure 12: Acquascutum Store in Time Square, Causeway Bay Hong Kong
Sources: CIRL
Key new brand promotion – J.Lindeberg
J.Lindeberg was established in Sweden in 1997, the brand combines with fashion and
sportswear, targeting high end young menswear market. J.Lindeberg is sold in more
than 30 countries worldwide with flagship stores located in Stockholm, Copenhagen,
Los Angeles, New York.
YGM obtained 10 years exclusive distribution right of J.Lindeberg for the greater
China market in 2010. So far, YGM has opened up 3 stores in Hong Kong, all in
prime high end locations of The Landmark in Central, Times Square in Causeway Bay
and Harbour City in Tsim Sha Tsui. Management commented the J.Lindeberg brand
has achieved encouraging results given such short operating period in Hong Kong.
J.Lindeberg will be the key brand to introduce and promote in the Greater China
region in the next two years as YGM plans to open 10 stores in China and Taiwan by
the end of 2012. YGM will expand the brand coverage into China by opening flagship
stores in tier one cities and penetrate into lower tier cities through wholesale. We
believe J.Lindeberg which targets high end young menswear market is an ideal brand
to supplement Aquascutum that targets mature luxury menswear market. Furthermore,
we believe J.Lindeberg will serve as another future growth driver for YGM when it
penetrates into China.
Page 12
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15 April 2011
Figure 13: J.Lindeberg Store in Harbour City, TST Hong Kong
Sources: CIRL
Figure 14: J.Lindeberg Store in Time Square, Causeway Bay Hong Kong
Sources: CIRL
Page 13
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15 April 2011
Solid performance
performance from Ashworth
Ashworth was established in the USA in 1987, the brand is well-known among golf
players and markets a full line of quality men’s and women’s golf apparel and casual
merchandises.
YGM obtained a 30 years licensing right of Ashworth for the greater China market
back in 1998. Currently, Ashworth has 58 stores in the Greater China region with all
situated in prime high end locations.
Ashworth sales accounted for 14.4% of YGM’s total turnover in 1H2011. Given that
Aquascutum accounted for approximately 80% of net profit contribution, the
remaining 20% net profit contribution mainly comes from Ashworth (excluding
associate contribution). YGM will continue to expand Ashworth distribution network
in China and Taiwan in near future.
Figure 15: Ashworth Store in Harbour City Hong Kong
Sources: CIRL
Valuable brand portfolio
Guy Laroche is a renown French brand established since 1956 that has long been
recognised by its signature elegant style. It is a popular choice of fashon for
Hollywood actresses. YGM acquired Guy Laroche world wide IP in 2004 and after
consolidated its operations by closing down its high cost factories in Europe. At
present, Guy Laroche has one flagship store in Paris for branding purpose. Given its
rich history and fine cutting of its fashion, YGM is looking for possible ways to
introduce Guy Laroche into the China market. On the other hand, Michel Rene is an
in-house brand, found by YGM in 1976. The brand carries a full line of men’s and
women’s executive and city wear.
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15 April 2011
Turnover from Guy Laroche accounted for 5.6% of total YGM turnover. However,
95% of Guy Laroche turnover is made up of licensing of trademarks. Michel Rene
accounted for 11.3% of YGM’s total turnover in 1H2011. Although both Guy Laroche
and Michel Rene do not make meaningful net profit contribution, they constitute
valuable assets to YGM. Our channel check with apparel retailers in Hong Kong and
China indicate that apparel retailers often looking for acquisition of other brands to
expand their existing business and product line. However, such suitable target is often
hard to find due to favourable retail operating environment in Hong Kong and China
as well as high asking price.
We believe YGM has under utilised the Guy Laroche and Michel Rene brands as
Michel Rene is well known in the Hong Kong market and Guy Laroche has rich
European history and high publicity in Hollywood. Brand ownship by YGM of these
two brands will definitely help in future market expansion.
Figure 16: Michel Rene Store in Tsim Sha Tsui Hong Kong
Sources: CIRL
No provision for Guy Laroche litigation
YGM announced the Guy Laroche litigation case in late Jaunary 2011. The case
involved Guy Laroche’s former licensee in France, GTM initiated counter-claim
against YGM for damage from early termination of the licensing contract for
approximately 2.78m Euro. YGM management has consulted lawyers and auditors on
the lawsuit. Lawyers commented YGM has really high chance on winning the case
and YGM’s auditor decided there is no need to make any provisions for the lawsuit.
According to the announcement, the case is not expected to be heard before 2012.
However, such lawsuit has certainly affected YGM’s share price which dropped from
HK$19.30 right after the announcement to lows of HK$13.00 in March.
Page 15
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15 April 2011
New store expansion focus on Aquascutum and
J.Lindeberg
At the end of 1H2011, YGM’s total number of stores stood at 295. The total number
of stores decreased from 321 in 2009 to 295, mainly due to consolidation in Michel
Rene stores as YGM closed down 30 non-performing stores between FY2009 and
1H2011. Over the period, the number of Aquascutum and Ashworth stores has been
gradually increasing, Acquascutum stores increased from 149 in FY2008 to 159 stores
in 1H2011, and Ashworth stores increased from 72 in FY2008 to 75 in 1H2011. This
move indicates the company will put more resource on the brand which can enhance
their turnover and create extra value for shareholders.
Figure 17: Number of Store by Brand
Brand
FY2008
FY2009
FY2010
1H2011
Aquascutum
149
153
163
159
Ashworth
72
78
75
75
Michel Rene
91
89
64
59
Guy Laroche
1
1
1
1
J.Lindeberg
-
-
-
1
313
321
303
295
Total
Sources: Company, CIRL
In terms of market coverage, YGM’s Aquascutum has wider market coverage with
159 stores located in Greater China, compared to Trinity’s Kent & Curwen of 117
stores, 103 stores for Cerruti 1881, 92 stores for Gieves & Hawkes and 76 stores for
D’URBAN.
Figure 18: Comparison of Sales Network in Greater China by Brand
160
159
117
120
103
92
76
80
58
40
19
0
Aquascutum
(YGM)
Kent &
Curwen
(Trinity)
Cerruti 1881
(Trinity)
Gieves &
Hawkes
(Trinity)
D'URBAN
(Trinity)
Ashworth
(YGM)
Intermezzo
(Trinity)
Sources: Company, CIRL
Page 16
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15 April 2011
Out of the 295 total stores in 1H2011, China accounted for 194 stores or 66% of total
stores. Hong Kong and Macau account for 56 stores while Taiwan accounted for 32
stores. YGM targets to increase the number of stores to 378 by 1H2014, which implies
9% growth rate per year. The new store openings will be mainly focus on Aquascutum
and J.Lindeberg, given that Aquascutum is YGM’s own brand with higher margin and
J.Lindeberg will be a key new brand promotion for YGM.
Figure 19: Number store by location
Location
Sept 2009
Mar 2010
Sept 2010
Sept 2013
China
215
198
194
250
HK & Macau
43
53
56
65
Taiwan
49
39
32
40
SE Asia
13
12
12
22
Europe
1
1
1
1
321
303
295
378
Total
Sources: Company, CIRL
Capturing the rising purchasing power in lowerlower-tier cities
According to McKinsey, the number of Chinese wealthy households with annual
household income in excess of Rmb250,000 reached 1.6m in 2008, and it is expected
this number to increase to more than 4.4m households by 2015. In addition, more
wealthy Chinese consumers are expected to come from lower tier cities. The number of
wealthy households in tier 1 cities should increase from 0.5m in 2008 to 1.2m in 2015.
The number of wealthy households in tier 2 and other lower tier cities should increase
from 0.5m and 0.6m in 2008, to 1.4m and 1.8m in 2015.
Figure 20: Number of Wealthy Households in China
m
5
4
1.8
3
2
1.4
0.6
0.5
0.5
1
0
1.2
2008
Tier 1 cities
2015E
Tier 2 cities
Other cities
Sources: McKinsey, CIRL
Page 17
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15 April 2011
Wealthy households in lower tier cities will account for 41% of total wealthy
households in China compared to 38% in 2008. In addition, 75% of wealthy consumers
will inhabit lower tier cities like Chengdu and Wenzhou by 2015 as wealthy trickles
down into China’s interior according to McKinsey.
Figure 21: Consumption Pattern in China
%
100
80
60
Others - 29%
Others - 36%
Others - 39%
Basic food - 13%
Basic food - 36%
40
Dining Out - 17%
Dining Out - 12%
20
Apparel, shoes and
accessories - 31%
0
Wealthy
Apparel, shoes and
accessories - 16%
Mass affluent
Basic food - 53%
Dining out - 7%
Apparel, shoes and
accessories - 11%
Mainstream
Sources: McKinsey, CIRL
In addition, wealthy people in China also spend much more of their income in apparel,
shoes and accessories. According to McKinsey, Wealthy people spend about 31% of
their disposable income on apparel, shoes and accessories, compared to 16% for the
mass affluent and 11% for mainstream people.
At the end of February 2011, 69% of YGM stores are in tier 1 and tier 2 cities, tier 3 and
tier 4 cities made up of 21% and 10% of total stores in China. The proportion of cities is
similar to Trinity in which 63% stores are situated in tier 1 and tier 2 cities, tier 3 and
tier 4 cities made up of 26% and 11% respectively. YGM will further penetrate into tier
3 and tier 4 cities by opening 50 new outlets in China to capture the rising purchasing
power in lower tier cities.
Figure 22: Location of Stores in Percentage (YGM)
1st & 2nd tier cities - 69%
3rd tier cities - 21%
4th tier cities - 10%
Figure 23: Location of Stores in Percentage (Trinity)
1st & 2nd tier cities - 63%
Sources: Company, Trinity, CIRL
3rd tier cities - 26%
4th tier cities - 11%
Sources: Company, Trinity, CIRL
Page 18
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15 April 2011
Mainland tourist factor
Retail sales in Hong Kong accounted for 50% of YGM’s turnover in 1H2011. However,
management guided that 60%-70% of Acquascutum sales in Hong Kong derived from
mainland tourist. Mainland tourists tend to purchase luxury goods in Hong Kong due to
huge savings on the price difference. There is a 20-30% price gap for luxury menswear
between Mainland China and Hong Kong. In addition, YGM’s presence in Hong Kong,
Macau and Taiwan markets also enhance the international brand image and keep brand
aspiration among Chinese consumers. Mainland tourist arrival in Hong Kong grew by
26% yoy in 2010 and 15% yoy on average for January and February 2011.
Figure 24: Mainland Tourists to Hong Kong & Growth
(m)
3.0
2.5
2.0
1.5
1.0
0.5
0.0
60%
40%
20%
0%
Jan06
Apr06
Jul06
Oct06
Jan07
Apr07
Jul07
Oct07
Jan08
Apr08
Jul08
Oct08
Jan09
Apr09
Jul09
Oct09
Jan10
Apr10
Jul10
Oct10
Jan11
-20%
Number of mainland tourist (LHS)
Growth - YoY (RHS)
Sources: Hong Kong Tourism Board, CIRL
According to Hong Kong Census and Statistic Department, wearing apparel retail sales
in Hong Kong recorded 20.1% yoy growth in 2010 and such growth momentum remain
into the beginning of 2011 as wearing apparel retail sales grew by 20.4% yoy in the first
2 months of 2011.
Figure 25: Hong Kong’s Wearing Apparel Retail Sales & Growth
60%
4,000
40%
3,000
20%
2,000
0%
1,000
-20%
0
-40%
Jan06
Apr06
Jul06
Oct06
Jan07
Apr07
Jul07
Oct07
Jan08
Apr08
Jul08
Oct08
Jan09
Apr09
Jul09
Oct09
Jan10
Apr10
Jul10
Oct10
Jan11
(HK$ m)
5,000
HK wearing apparel retail sales (LHS)
Growth - YoY (RHS)
Sources: Hong Kong Census and Statistic Deparment, CIRL
Page 19
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15 April 2011
Fast growing menswear market in China
According to Frost & Sullivan, total retail sales of menswear in China surged by a
CAGR of 18% in 2001-2008. This is due to rising disposable income led to modern
Chinese men becoming more attentive to their appearance. Frost & Sullivan forecasts
that menswear sales in China will rise at a similar CAGR annually between 2010 and
2013. In addition, the growing size and affluence of China’s middle-class has
contributed significantly to higher luxury items and branded foreign products. YGM is
benefiting from this change as more Chinese consumers purchase for higher quality
apparel products. And there remains plenty of headroom to grow in our view, given the
country’s growing enthusiasm for quality menswear and the fact that per capita annual
spending on menswear is still relatively low.
Figure 26: Menswear Market in China
US$b
100
80
60
40
20
0
Menswear market
30%
25%
20%
15%
10%
5%
0%
2013E
2012E
2011E
2010E
2009
2008
2007
2006
2005
2004
2003
2002
2010-2013 menswear market CAGR 18%
Growth rate yoy
Sources: Frost & Sullivan, CIRL
Figure 27: Retail Sales of Luxury Menswear in China
Rmb b
80
73
2006-2011E CAGR 21%
70
60
60
51
44
50
36
40
30
28
20
2006
2007
2008
2009E
2010E
2011E
Sources: Frost & Sullivan, CIRL
Page 20
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15 April 2011
The latest China Union Pay’s Bankcard Consumer Confidence Index climbed to a
13-month high in March 2011. This implies strong consumption sentiment in
middle-to-high consumer group in both tier 1 and tier 2 cities.
Figure 28: Bankcard Consumer Confidence Index gradually increased in 1Q2011
87
1.0%
0.5%
86
0.0%
85
-0.5%
BCCI (LHS)
Mar-11
Feb-11
Jan-11
Nov-10
Oct-10
Sep-10
Aug-10
Jul-10
Jun-10
May-10
Apr-10
Mar-10
-1.0%
Jan-10
84
Growth - MoM (RHS)
Sources: China Union Pay, CIRL
Luxury item purchase is all about branding
Chinese consumers are becoming increasingly sophisticated and knowledgeable about
foreign brands. Wealthy consumers are willing to pay premium prices for well-known
foreign brands and they demonstrate strong preference for international luxury brands.
Wealthy consumers pursue brands that convey status and bring recognition.
In addition, it is extremely difficult for new entrants to join the top-tier of luxury brands
as it takes years for a brand to establish its market position and network. Mainland
customers still favor European brands the most. The leading players in the luxury goods
market contain the same brand names that were around many years ago.
Strong Share Purchase by Controlling Shareholder
YGM is a family run business, in which the Chan family members collectively hold
about 62% interest in YGM shares. According to Hong Kong Stock Exchange, the Chan
Family Investment Corporation, purchased over 3m shares of YGM shares in the market
with an average cost of HK$15.57 or a total consideration over HK$47m. The highest
price paid was HK$21.19 in December 2010 and the lowest price paid was HK$10.64
back on July 2010. We believe the consistent purchase by the Chan Family
demonstrates the Chan family’s confidence on YGM’s business and outlook.
We believe the Chan Family will stop buying shares of YGM starting April 2011 due to
results blackout. YGM will be announcing its FY2011 results in June 2011.
Page 21
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15 April 2011
Figure 29: Consistent Share Purchase by the Chan Family Investment Corporation
HK$
22
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
20
18
16
14
20
/7
2 6 /20 1
/7 0
/
2 4 20 1
/8 0
/2
1 /9 0 10
1 3 /2 0
/1 1 0
2
1 7 /2 0
/1 2 1 0
2 8 /2 0
/1 1 0
2
0 4 /2 0
/0 1 0
2 4 1/2 0
/0 1 1
1
1 6 /2 0
/0 1 1
2
2 1 /2 0
/0 1 1 1
1 0 /2 0
/0 1 1
3
1 7 /2 0
/0 1 1
2 4 3/2 0
/0 1 1
3
2 9 /2 0
/0 1 1
3
1 / /2 01
04 1
1 1 /20
/0 11
4/2
01
1
12
10
Volune
Share price
Sources: HKEX, CIRL
Share split likely to occur after June 2011
Management is planning a share split for YGM shares to improve liquidity and narrow
the bid-ask spread. We believe share split is really important for the re-rating of YGM
as institutional investors are concern on the liquidity of the stock which only traded
219k shares on average daily for the past year. The share split is likely to occur after the
final results announcement in June 2011. Furthermore, management is also thinking of
changing the name of the company to company names relating to Aquascutum as the
brand accounts for approximately 80% of its net profit (excluding associate contribution)
to better reflect the nature of its business.
Properties disposal enhance hidden value
YGM announced the potential disposal of two investment properties in Park Lane
Shopper’s Boulevard in Tsim Sha Tsui, Hong Kong by way of public tendering.
According to management, the market value of the two properties is estimated to be
around HK$400m, and the company has already received bids close to HK350m.
Looking back at YGM’s track record, the company disposed of another investment
property in 2008, the realized disposal gain of HK46.6m was returned to shareholders
through special dividend. We believe once the sale of two investment properties is
completed, YGM is likely to distribute the profits in the form of special dividend.
Page 22
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15 April 2011
Earnings Outlook
YGM reported 1H2011 turnover of HK$475m, or 15% YoY growth. We forecast
FY11 turnover to reach HK$1,288m or 30% YoY growth. Second half of YGM’s
financial year is peak season due to more holiday breaks such as October Golden week,
Christmas in December and Chinese New Year in February. YGM usually generates
about 55-60% of its sales in second half of the year. YGM’s FY2011 is a little bit
different than previous years due to colder winter weather, and winter items have
higher ASP than summer items. We forecast higher sales contribution in 2H2011 and
sales split will reach 63%. We are comfortable forecasting sales growth of 18% YoY
for FY2012 and 16% YoY growth for FY2013. Management commented that the
Aquascutum’s trade fair for winter collection for FY2012 is very encouraging and
anecdotal evidence suggested that sales for the trade fair grew by high 20% YoY.
We expect gross margin of YGM to remain at around 66%-67% for FY2011 to
FY2013. We forecast net profit to reach HK$270m in FY2011, We believe the
seasonal net profit split has been neglected by investors which led to share price
selling down after 1H2011 results announcement. We forecast net profit of HK$337m
in FY2012 and over HK$400m by FY2013.
Figure 30: YGM Turnover Forecast
HK$ m
2,000
1,520
1,600
1,200
1,764
C AGR 2 1 %
1,288
972
991
2009
2010
800
400
0
2011E
2012E
2013E
Sources:Company, CIRL estimates
Figure 31: YGM Net Profit Forecast
HK$ m
450
400
350
300
250
200
150
100
50
0
401
C AGR 2 7 %
337
270
197
80
2009
2010
2011E
2012E
2013E
Sources:Company, CIRL estimates
Page 23
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15 April 2011
Figure 32: YGM Gross Margin Forecast
67%
66%
66. 2%
66. 0%
65%
66. 5%
64. 6%
64%
63%
62%
61%
61. 0%
60%
2009
2010
2011E
2012E
2013E
Sources:Company, CIRL estimates
Figure 33: YGM EBIT Margin Forecast
25%
23. 0%
20%
23. 8%
21. 3%
17. 3%
15%
10%
8. 9%
5%
0%
2009
2010
2011E
2012E
2013E
Sources:Company, CIRL estimates
Figure 34: ROE
35%
30%
30. 5%
25%
32. 8%
26. 6%
20%
21. 3%
15%
10%
10. 3%
5%
0%
2009
2010
2011E
2012E
2013E
Sources:Company, CIRL estimates
Page 24
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15 April 2011
Financials
YGM seemed to have reported fluctuating financial results for the past three years. This
is mainly due to revaluation of property assets in Hong Kong. Without the exceptional
items, net profits were HK$112m FY08, HK$93m in FY09, HK$168m in FY10 and
HK$90m in 1H11.
FY08 results. YGM recorded a turnover of HK$1,110m, representing an increase of 9%
yoy. Core net profit increased by 13% yoy to HK$112m. Gross margin as 60.5% in
FY08 compared to 61.8% in FY07.
FY09 results. YGM recorded a turnover of HK$972m, representing a decrease of 12%
yoy as a result of the financial tsunami in Asia The company recorded core net profit of
HK$93m for the year, which declined by 17%. Gross margin improved from 60% in
FY08 to 61% in FY09 due to the cost control program implementation. However, net
profit declined more than gross profit due to higher effective tax rate which increased
from 8% in FY08 to 13% in FY09 as well as less contribution from Hang Ten which
decreased from HK$34m in FY08 to HK$17m in FY09.
FY10 results. YGM’s turnover increased by 2% yoy to HK$991m. As a result of the
acquisition of Acquascutum Asia Pacific License, total royalty and related income from
external customers increase from HK$60m in FY08 to HK$76m in FY09. Core net
profit was up 80% yoy to HK$168m. Gross margin improved from 61% in FY09 to
65% in FY10. Profit contribution from Hang Ten increased from HK$17m in FY09 to
HK$29m in FY10.
1H11 results. For 1H11, YGM’s turnover increased by 15% yoy to HK$475m.
Turnover from sales of garment increased by 13% yoy to HK412m while royalty
income increased by 38% due to increased contribution from the Aquascutum trademark
which YGM acquired in September 2009. Core net profit was up by 116% yoy to
HK$90m. Overall gross margin was up by 2.7 ppt to 65.9% due to limited markdowns
on sales of garments and savings from royalty expenses.
Figure 35: Financial Review
Year ended 31 Mar
Revenue
Growth - YoY
FY08
1,110
8.5%
FY09
972
-12.4%
FY10
991
2.0%
FY11E
1,288
30.0%
FY12E
1,520
18.0%
FY13E
1,764
16.0%
Gross profit
Gross margin (%)
671
60.5%
593
61.0%
641
64.6%
850
66.0%
1,006
66.2%
1,173
66.5%
Net profit
Growth - YoY
Net margin – %
171
44.8%
15.4%
80
-53.1%
8.3%
197
145.2%
19.8%
270
37.2%
20.9%
337
25.1%
22.2%
401
18.9%
22.7%
Sources: Company, CIRL estimates
Page 25
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15 April 2011
Risk Factors
Management risk – YGM will expand the Aquascutum brand into the Korean market
in 2011, any brand mismanagement could affect sales in China given close proximity
to Korea.
Lawsuit risk – YGM announced that it is involved in a lawsuit with its former Guy
Laroche franchisee in France. The chance of winning the case is really high according
to lawyers. However, if the final judgment is against YGM, then YGM to subject to
damage payment of 2.78m Euro.
New product launch risk – YGM will speed up the roll-out of the J.Lindeberg brand
in China in 2011 by opening flagship stores in top tier cities and through franchise
network in other cities. Negative reception of the brand in China will affect YGM
earnings.
Macro risk – Higher inflation rate in China will erode purchasing power of
consumers and will ultimately affect YGM sales.
Page 26
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15 April 2011
APPENDIX
Figure 36: Shareholding Structure
The Chan Family Investment
Corp and family members
Public Shareholders
62%
38%
Figure 37: Profiles of Key Management
Name
Position
Profile
Mr. Chan Wing
Join the group in 1969, he was appointed as the Vice Chairman in 1987 and Chairman in
Fui, Peter
2010. Mr. Chan has rich experience in garment manufacturing and marketing in the Far
((陳永奎)
Chairman East and in the US for over 30 years.
Mr. Chan Wing
Join the group in 1974, he was the Managing Director of the company from 1987 to 2006
Sun, Sammuel Executive and CEO of the company form 2006 to 2010. Mr. Chan was appointed as Vice Chairman
(陳永燊)
Director in 2010.
Ms. Chan Suk
Ling, Shirley
(周陳淑玲)
Executive Join the group in 1973, Ms. Chan was the Managing Director from 2006 to 2010. She has
Director extensive experience of management in the garment retail and wholesale business.
Mr. Fu Sing
Yam, William
(傅承蔭)
Executive Joined the company in 1985, appointed as Managing Director in 2010. Mr.Fu has
Director extensive experience in fashion retailing, marketing and merchandising.
Mr. Chan Wing Executive Joined the group in 1970, was appointed as director since 1977. Mr. Chan is independent
Kee (陳永棋)
Director non-executive director of a numerous companies.
Sources: Company, CIRL
Page 27
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15 April 2011
Figure 38: Company History
Year
Major Events
1976
- Established and launched own brand Michel Rene.
1988
- YGM Trading listed on Hong Kong Stock Exchange.
1996
- Acquired Hang Ten Worldwide.
- Obtained licensing right of Aquascutum for the Greater China.
1998
- Signed a 30 year licensing right of Ashworth.
2002
- Spun off Hang Ten Group (448 HK).
2004
- Acquired Guy Laroche worldwide.
2009
- Acquired all intellectual property right of Aquascutum in 42 Asia Pacific countries.
2010
- Obtained the exclusive distribution right of J.Lindeberg for the Greater China.
Source: The Company, CIRL
Page 28
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15 April 2011
Figure 39: Profit and Loss Statement
Year ended 31 Mar, HK$ m
Revenue
Gross Profit
EBITDA
Depr/Amort
Other revenues
Operating profit
Finance costs
Share of profit from Hang Ten
Exceptional
Pretax profit
Tax
Minority Interests
Net profit
EPS - HK$
FY09
972
593
119
(33)
18
86
(2)
17
(13)
91
(12)
1
80
0.52
FY10
991
641
197
(25)
6
172
(1)
29
28
229
(31)
(2)
197
1.28
FY11E
1,288
850
301
(27)
8
274
(2)
38
0
314
(44)
0
270
1.66
FY12E
1,520
1,006
378
(29)
9
349
(2)
44
0
394
(57)
0
337
2.07
FY13E
1,764
1,173
451
(31)
11
420
(2)
50
0
472
(71)
0
401
2.47
FY09
226
107
140
19
492
181
318
499
992
15
155
9
179
3
11
15
193
798
992
FY10
205
125
102
13
445
191
558
749
1,194
47
168
18
234
2
14
16
249
944
1,194
FY11E
251
163
127
13
554
194
558
752
1,306
47
211
18
276
2
14
16
291
1,014
1,306
FY12E
326
192
150
13
680
195
558
753
1,433
47
247
18
312
2
14
16
328
1,106
1,433
FY13E
427
223
172
13
835
194
558
752
1,587
47
284
18
349
2
14
16
365
1,222
1,587
Source: The Company, CIRL estimates
Figure 40: Balance Sheet
Year ended 31 Mar, HK$ m
Cash and securities
Accounts receivables
Inventory
Other current assets
Total current assets
Net fixed assets
Other long-term assets
Total Non-current assets
Total assets
Short term debt
Accounts payable
Other current liabilities
Total current liabilities
Long term debt
Other long term liabilities
Total long term liabilities
Total liabilities
Shareholders equity
Total Equity and liabilities
Source: The Company, CIRL estimates
Page 29
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15 April 2011
Figure 41: Cash Flow
Year ended 31 Mar, HK$ m
OPERATING
EBIT
Depreciation/Amortisation
Change in working capital
Others
Net Operating Cash Flow
INVESTING
CAPEX
Others
Net Cash Flow From Investment
FINANCING
Dividends paid
Change in debt
Change in equity
Others
Net Cash Flow from Financing
Net change in cash flow
FY09
FY10
FY11E
FY12E
FY13E
90
33
(4)
(17)
102
229
25
33
(72)
215
312
27
(21)
(80)
238
393
29
(15)
(99)
308
470
31
(16)
(119)
366
(27)
22
(4)
(14)
(188)
(202)
(30)
0
(30)
(30)
0
(30)
(30)
0
(30)
(111)
(16)
(0)
(2)
(128)
(66)
32
0
(1)
(35)
(162)
0
0
0
(162)
(202)
0
0
0
(202)
(241)
0
0
0
(241)
(31)
(21)
46
75
95
Source: The Company, CIRL estimates
Figure 42: Key Ratios
Year ended 31 Mar
Growth ratios
Revenue growth – %
Operating profit growth – %
Net-profit growth – %
EPS growth – %
Profitability ratios
Gross margin – %
Operating margin – %
Net margin – %
ROA – %
ROE – %
Other ratios
Net debt/equity (net cash) – %
Effective tax rate – %
FY09
FY10
FY11E
FY12E
FY13E
-12%
-12%
-53%
-53%
2%
99%
145%
145%
30%
60%
37%
30%
18%
27%
25%
25%
16%
20%
19%
19%
61.0%
8.9%
8.3%
8%
10%
64.6%
17.3%
19.8%
16%
21%
66.0%
21.3%
20.9%
21%
27%
66.2%
23.0%
22.2%
24%
31%
66.5%
23.8%
22.7%
25%
33%
-25%
13%
-15%
13%
-19%
14%
-24%
15%
-30%
15%
Source: The Company and CIRL estimates
Page 30
Hotline: (852)2235 7789
Email: [email protected]
Website: www.cinda.com.hk
15 April 2011
Rating Policy
Rating
Buy
Stock Rating
Neutral
Sell
Accumulate
Sector Rating
Definition
Outperform HSI by 15%
Between -15% ~ 15% of the HSI
Underperform HSI by -15%
Outperform HSI by 10%
Neutral
Between -10% ~ 10% of the HSI
Reduce
Underperform HSI by -10%
Analysts List
Castor Pang
Research Director
(852) 2235 7127
[email protected]
Senior Research Analyst
(852) 2235 7677
[email protected]
Kenneth Li
Research Analyst
(852) 2235 7619
[email protected]
Lewis Pang
Research Analyst
(852) 2235 7847
[email protected]
Hayman Chiu
Analyst Certification
I, Kenneth Li hereby certify that all of the views expressed in this report accurately reflect my personal views about the
subject company or companies and its or their securities. I also certify that no part of my compensation was / were, is / are
or will be directly or indirectly, related to the specific recommendations or views expressed in this report / note.
Disclaimer
This report has been prepared by the Cinda International Research Limited. Although the information and opinions
contained in this report have been compiled or arrived at from sources believed to be reliable, Cinda International cannot
and does not warrant the accuracy or completeness of any such information and analysis. The report should not be regarded
by recipients as a substitute for the exercise of their own judgment. Recipients should understand and comprehend the
investment objectives and its related risks, and where necessary consult their own financial advisers prior to any investment
decision. The report may contain some forward-looking estimates and forecasts derived from the assumptions of the future
political and economic conditions with inherently unpredictable and mutable situation, so uncertainty may contain. Any
opinions expressed in this report are subject to change without notice. The report is published solely for information
purposes, it does not constitute any advertisement and should not be construed as an offer to buy or sell securities. Cinda
International will not accept any liability whatsoever for any direct or consequential loss arising from any use of the
materials contained in this report. This document is for the use of intended recipients only, the whole or a part of this report
should not be reproduced to others.
Page 31
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Email: [email protected]
Website: www.cinda.com.hk