Thursday, March 28, 2024
 
Columnist
Martin Hennecke
 
INTIME
HKEx Stock Code : 01833 
 
Corporate Profile
Principally engaged in the operation and management of department stores in the PRC.

Business Review - For the year ended December 31, 2012

2012 was a challenging year for the Group. Amid the continuing uncertainties in the recovery of global economy and slowing growth in the economy of China, together with the increasing competitive market environment, the Group reported a total gross sales proceeds of RMB13,939.1 million for the year ended 31 December 2012, representing an increase of 19.8% as compared to that of last year. The year-on-year same store sales growth of the Group was 9.1%. For the year ended 31 December 2012, total revenue of the Group increased to RMB3,907.2 million, representing an increase of 25.3% as compared to that of last year. Profit attributable to owners of the parent was RMB972.5 million, representing an increase of 18.4% as compared to that of last year. The Group adopted a prudent approach in seeking business expansion during the year and managed to alleviate the impact brought by the economic slowdown.

Expansion of Store Network

During the year under review, the Group has not only consolidated and maintained its leading position in Zhejiang province, but also further strengthened its competitive position in Hubei province and Shaanxi province and made strategic expansion into the new markets of Anhui province, Hebei province and Beijing for future growth.

In January 2012, Hefei Yintai Centre, the Group's first shopping centre in Anhui province, commenced operation. Hefei Yintai Centre is located at the core business district of Hefei, occupying a gross floor area of approximately 90,000 square meters. Hefei Yintai Centre has successfully incorporated various luxurious brands with well-known restaurants, high-end supermarket and stylish theatre, offering extraordinary shopping experience for Hefei's residents. The opening of Hefei Yintai Centre has established a solid foundation for the Group's further expansion and development in Anhui province.

In June 2012, the Group strengthened its leading position in northern Zhejiang region by opening the Hangzhou Culture Plaza. Hangzhou Culture Plaza is located at the city centre of Hangzhou, with a gross floor area of approximately 38,000 square meters. The store is the Group's first store in Zhejiang province featuring the operating style of ¡§Your Everyday Outlet, Care Everywhere¡¨ which will bring a new and exciting shopping experience to its customers.

In September 2012, the Group further strengthened its market position in eastern Zhejiang region by opening the Ningbo Fenghua store. With a total gross floor area of approximately 26,000 square meters, Ningbo Fenghua store is being positioned as the most stylish and modern shopping centre in Fenghua city.

As at 31 December 2012, the Group operated and managed a total of 26 department stores and 4 shopping centres with a total gross floor area of 1,367,486 square meters, including 17 department stores and 2 shopping centres located in the principal cities of Zhejiang province, 6 department stores located in Hubei province, 1 department store located in Beijing, 1 shopping centre located in Anhui province, 1 department store located in Hebei province, and 1 department store and 1 shopping centre located in Shaanxi province. All of the Group's stores and shopping centres are located in prime shopping locations of their respective cities and aim to provide the Group's customers with pleasant and perfect shopping experience.

Improvement in Operational Management

The Group aims to provide great trendy retail and one-stop shopping experiences so that shoppers would be willing to spend more time and have their needs fulfilled at one of our newly designed stores and malls. During the year under review, we have made good progress to further enhance and upgrade the merchandize mix and public image of our stores and reinforce their position as the most vibrant and dynamic retail and shopping destinations in their respective communities. ¡§Let's Love¡¨ was the unified brand-building theme of the Group in 2012. Various promotional activities centered on the theme ¡§Let's Love¡¨ were held during the year, which were favorably received by our customers.

The Group has continued its efforts to improve the operational efficiency of its established stores and to shorten the fostering period of those newly opened stores. We have made continuous efforts to achieve greater operating synergy and economies of scale, and to enhance the integration of new stores with existing network. The three-tier management system of the Group (headquarters, regions and stores) has been further strengthened and streamlined during the year. In addition, extra effort has been placed on developing group buying business and on running multi-functional shopping malls. The Group is committed to providing premium shopping solutions that are relevant and rewarding for customers both in store and online.

Disposal of Non-Core Assets

In line with its strategy of continuing to enhance return on capital investments, the Group signed two transfer agreements on 26 December 2011 and 9 January 2012, respectively, to dispose all of its equity interests in Cixi Intime Property Co., Ltd. (¡§Cixi Intime Development¡¨) to an independent third party for a total consideration of RMB200 million. Cixi Intime Development is principally engaged in the development and sales of the residential property portion of the Cixi project. After the completion of the disposal, the Group still owns the department store property portion of the Cixi project, namely the Cixi Intime City shopping mall. By disposing all of its equity interest in Cixi Intime Development, the Group would not be subject to the uncertainties and risks associated with the residential property element in the Cixi project, while securing and realizing the cashflow and profit associated with it. The profit from the disposal of the entire equity interest in Cixi Intime Development is expected to be recognized after the completion of the disposal in 2013.

On 9 January 2013, the Company entered into three equity transfers agreements with Xintai Investment Co. Ltd. to dispose all of its 70% equity interests in Wenling Taiyue Real Estate Development Limited, Wenling Intime Hotel Development Limited and Wenling Intime Properties Limited for a total cash consideration of RMB405,574,900. On the same day, the Company entered into an equity transfer agreement with Taizhou Ouxin Investment Limited to purchase 30% equity interests in Wenling Intime Shopping Mall Development Co., Ltd., for a total cash consideration of RMB90,000,000. Pursuant to the acquisition agreement, Taizhou Ouxin Investment Limited shall also be responsible for managing, developing, building and constructing the Wenling Intime Shopping Mall until full completion of the same in accordance with the standard and schedule specified by the Company and shall be responsible for all the constructions cost of the Wenling Intime Shopping Mall. The Group intends to open a new shopping centre at Wenling Intime Shopping Mall. The above transactions are still subject to the Company's independent shareholders' approval at an extraordinary general meeting to be convened.

Human Resources Development

Human resources are viewed as a key factor to build and sustain the Group's competitive advantage. In 2012, Intime Department Store University, the corporate university of the Group, provided a total number of 5,857 training hours to our employees, with the number of participants reaching a record high of 175,000. The number of trainers increased from 21 persons in 2011 to 84 persons in 2012.

Listed Investment

Pursuant to a tender offer made by independent purchasers in June 2012, the Group completed the disposal of 9,658,431 shares it held in Wushang Department Store Group Co., Ltd. (¡§Wushang¡¨) for a total cash consideration of approximately RMB204 million in July 2012. The disposal generated a gain (net of transaction taxes and fees) of approximately RMB126.9 million. After the completion of the disposal, the Group holds a 22.58% equity interest in Wushang and Wushang remains as an associate company of the Group. The cash proceeds from the disposal provided financial support for the Group to develop its core business in Hubei province.

Business Outlook - For the year ended December 31, 2012

In 2013, China's retail sales growth is expected to maintain a steady and stable growth trend as the Chinese government is committed to continue pushing the process of rebalancing from the traditional export-led growth to domestic demand-driven growth. Despite continuing uncertainties in the recovery of the global economy, fundamental factors such as continued urbanization in China, expansion of the Chinese middle class population and policy initiatives to improve social safety net will continue to provide support for the development of the retail industry.

Going forward, the Group will continue to adhere to its ¡§regional pre-dominance¡¨ strategy to develop itself into a leading national retail chain, managing a portfolio of large department stores and shopping malls, with competitive or dominating presence in various regions in China. The Group will continue to focus on improving the operational efficiency of the existing stores and make every effort to shorten the fostering period of those new stores. We will focus on operating trendy department stores while also actively developing multi-functional, lifestyle-driven shopping malls. In addition, the Group will continue to develop the online store and leverage on the existing physical stores to enhance its onlineoffline interaction.

In the coming year, the Group will further strengthen its customer-oriented corporate culture. The Group will also continue with its talent development programmes with a view of securing the best management talents for the Group's development. Barring any unforeseen circumstances, the Group is confident that it will continue to deliver a healthy performance in the coming financial year.


Source: Intime Retail (01833) Annual Results Announcement
Chairman Shen Guojun Issued Capital (shares) 2,001M
Par Value USD 0.00001 Market Capitalisation (HKD) 17,326M
 
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