Hengdeli Holdings Ltd. (3389.HK), China’s international luxury watch agency and retailer, released its 2013 interim results after the close of trading on September 5th, as of June 30, 2013. It fell 50.8% to 302.2 million yuan, compared with 613.6 million yuan in the same period last year. On August 7, Hengli Eli Holdings Ltd. (3389.HK) issued a profit warning.
Hengdeli Holdings Ltd. (3389.HK) Zhang Yuping, chairman of the board of directors of Hengdeli Holdings Group, said that the decline in profit was mainly due to the decline in gross profit margin and the exchange of shares of Ming Fung Jewellery Group Limited (00860.HK) Ming Fung Jewellery Group Co. , Ming Fung Jewellery Group Limited (00860.HK) caused by the decline in share price of Ming Fung Jewellery Group Limited. Excluding those who are not in charge of the business, net profit in the first half of the fiscal year fell by 27.3% to 353.5 million yuan.
On Friday, the stock price of Hengdeli Holdings Ltd. (3389.HK) Hendeli Holdings Group closed at HK $ 1.57, up 0.57%.
As of June 30, 2013, Hengdeli Holdings Ltd. (3389.HK) Hengdeli Holdings Group’s revenue in the first half of the fiscal year rose 9.5% to 6.294 billion yuan, of which retail sales recorded 48.194 yuan, an increase from the same period last year. 11.1%, accounting for 76.6% of total sales. Among which, retail sales in Mainland China amounted to RMB 2.85224 billion (accounting for 49.1% of total revenue), an increase of 1.0% over the same period last year, and retail sales in Hong Kong reached RMB 15.927 billion (accounting for 24.6% of total revenue), an increase compared to the same period last year 12.6%. Hengdeli said that the rapid development of second- and third-tier cities in Mainland China and the rapid growth of the middle class have provided favorable prerequisites for the better growth of the Group’s mid-range brands. In the first half of 2013, the Group added 10 retail stores to 462. During the period, due to weak sales of the high-end watch market, the Group expanded its mid-end watch retail while expanding to second-, third-, and even fourth-tier cities in mainland China. The retail sales of mid-range watches maintained a good growth trend, with an increase of 13.9%, in line with the Group’s expectations.
As of June 30, 2013, Hengli Eli Holdings Ltd.’s (3389.HK) Hendry Holdings Group’s gross profit was 1,673.4 million yuan, an increase of 9.0% over the same period last year; the gross profit margin was approximately 26.6%, a decrease of 10 basis points from the same period last year. . The main reasons for the decline in gross profit margin were: increased flexibility in sales discounts of high-end watches in an economic downturn, and brand suppliers’ failure to raise their public prices this year, etc., which offset the newly acquired abundant business. High gross profit margin and increased share of mid-range products will increase the gross profit margin.
Hengdeli Holdings Ltd. (3389.HK) The retail stores of Hengdeli Holdings Group mainly include Sanbao watches, Shengshi Watches, Hengdeli and mono-brand stores. Sambo watches mainly sell top-level international watches, and Shengshi Watch Co. and Hengdeli mainly sell mid-range and high-end international watches. As of June 30, 2013, Hengli Eli Holdings Ltd. (3389.HK) Hengdeli Holdings Group operated a total of 462 retail stores in Mainland China, Hong Kong, Macao and Taiwan, a net increase of 10 from the end of last year. Among them, there are 23 Sambo watches (5 in Hong Kong, 17 in Mainland China, and 1 in Taiwan); a total of 369 of Shengshi Watches and Hendry (333 in Mainland China and 36 in Taiwan); 70 brand stores (China 34 in the Mainland, 13 in Hong Kong, 1 in Macau, and 22 in Taiwan). Hengdeli Holdings Ltd. (3389.HK) Hengdeli Holdings Group and Swatch Group AG (UHR.VX) Swatch Group, LVMH Mot Hennessy-Louis Vuitton SA (LVMH.PA) Moët Hennessy-Louis Vuitton The Group, Compagnie Financière Richemont SA (CFR.VX) Richemont Group and Rolex Group and other top international brand suppliers cooperate to distribute and exclusively distribute more than 50 internationally renowned brand watches. Among them, Swatch Group AG (UHR.VX), Swatch Group and LVMH respectively hold 9.1% and 5.9% of Hendry. Brands represented by Hengdeli Holdings Ltd. (3389.HK) include: Breguet, Cartier, IWC, Jaeger-LeCoultre, Longines, Mido, Omega, Rolex, Scatola del Tempo, TAG Heuer, Tissot, Vacheron Constantin, Vanke Albemarle, Zenith, etc.