Friday, March 29, 2024
 
Columnist
Martin Hennecke
 
MING FUNG JEWEL
HKEx Stock Code : 00860 
 
Corporate Profile
Engaged in export of manufactured jewellery products on ODM or OEM basis; trading of jewellery products for the Group's retail and wholesale business in Mainland China; and the mining, exploration and sale of gold resources.

Business Review - For the year ended September 30, 2012

Complete Product Range in Fine Jewellery

In April 2012, the Group completed the acquisition of 90% of OMAS International S.A. (¡§OMAS Int'l¡¨), a business venture partnership with LVMH. OMAS Int'l owns and manufactures fine writing instruments and accessories bearing the trademark ¡§OMAS,¡¨ which is an Italian brand established in 1925 famous for its fabulous designs. The acquisition of OMAS Int'l enabled the Group to establish a brand new OMAS Jewellery line with related luxury accessories (leather, etc). The new OMAS branded luxury products will continue upon 87 years of proud Italian heritage for OMAS, tracing back to its origins with founder Armando Simoni. The addition of the self-owned OMAS brand further strengthens the Group's fine jewellery product range offered in China. The Group will strive hand-in-hand with LVMH to establish the OMAS as one of world's influential fine jewellery brands.

The Group is now the distributor for several European prestige fine jewellery and watch brands in China, and is the exclusive distributor of jewellery and watches of ¡§Damiani¡¨, ¡§Bliss Gioielli¡¨, ¡§Calderoni¡¨, ¡§Salvini¡¨, ¡§Rocca 1794¡¨, ¡§Pomellato¡¨, ¡§Pasquale Bruni¡¨ and ¡§Alfieri & St John¡¨ in Mainland China, Macau, Taiwan and Hong Kong. The Group is also the exclusive distributor of fine jewellery and watch items of ¡§Gucci timepieces¡¨ in Mainland China, Macau and Hong Kong. Our strategic investment partnership with L Capital Asia, L.L.C. (¡§L Capital¡¨), the fourth fund from L Capital sponsored by global luxury leader LVMH, will also facilitate brand collection enrichment for the Group. We believe our full spectrum of high-end fine jewellery and watch products will meet the growing demand in pursuit of exquisite tastes in the Greater China market.

Steady Performance Despite Weak Global Economy

For the year ended 30 September 2012, the Group withstood the effects of the global economic slowdown and maintained stable operating performance in its jewellery business. The new wholesale and retail distribution business of branded jewellery and watches also gathered momentum. The Group's strategy managed to weather the downturn in the global economy by continuously focusing on the steadily growing fine jewellery and watches market in the Greater China region by acquisition of new wholesale distribution rights of world-famous brands and ongoing retail network expansion.

The Group reported decent 25.6% growth in domestic sales, which was mainly driven by increased demand for the Group's fine jewellery and luxury watches products, followed by the Group's dynamic expansion strategy. The overall demand for luxury goods in China remained robust in 2012. During the year under review, the Group reported total revenue and gross profit of HK$919.4 million and HK$253.0 million, respectively. Domestic sales constituted 93.9% of total sales. Export sales were dented by strained demand for jewellery products from the United States and Europe, reflecting the impact of sluggish economic performance on consumption of luxury products. The reduction of export sales also indicated the gradual change in the Group's business orientation towards domestic sales through its wholesale and retail distribution channels. The Group is currently distributing fine jewellery and watch items through the Group and Hengdeli retail network.

For the gold mining business, the Group cooperated with a PRC based leading professional mining institution which started to produce in the gold mines located in Chi Feng City, Inner Mongolia Autonomous Region, PRC, in September 2012. It is expected that the gold mines will start revenue contribution for the years ahead. As for the gold mines located in Chi Zhou City, Anhui Province, PRC, the detailed exploration work has been successfully launched during the year under review and we will continue to carry out such work as necessary to prepare for the exploitation of these mines in the future.

Business Outlook - For the year ended September 30, 2012

In the year ahead, we believe the China luxury market will register positive growth. Our strategy of focusing on fine jewellery and luxury watch items is delicately positioned to capture business opportunities arising from a change in the demand structure within China's jewellery market which is being slightly tilted towards fine jewellery, luxury watches and lifestyle products. In 2012, gold jewellery consumption growth was stagnant but overall jewellery demand was still resilient. The impact of overseas markets including the United States and Europe will be mitigated after a deepening of business transformation to put more emphasis on wholesale and retail operations in the Greater China region. To capture business opportunities from the lucrative luxury market in China, we will continue to expand our sales network and proactively look out for strategic partnerships with national chain-store operators in order to establish our national brand name in fine jewellery and luxury watch distribution.

Source: Ming Fung Jewellery (00860) Annual Results Announcement
Chairman Wong Chi Ming, Jeffry Issued Capital (shares) 4,366M
Par Value HKD 0.01 Market Capitalisation (HKD) 1,113M
 
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