Modern Beauty PostsSatisfactory Results for 1H 2011/2012

Profit attributable to shareholders surges 381.9% to HKD32,663,000

Enhancing skincare and wellness product lines

Expanding the sales network

HONG KONG, Nov. 23, 2011 /PRNewswire-Asia/ --

Modern Beauty Salon Holdings Limited ( "Modern Beauty" or the "Company", together with its subsidiaries the "Group", stock code: 919), a leading beauty centre group in Hong Kong, announced its interim results for the six months ended 30 September 2011 (the "period under review").

During the period under review, the Group developed its business steadily and proactively with satisfactory results. The Group recorded turnover of HKD325,466,000, a year on year increase of 17.5% from HKD276,937,000, while gross profit increased 29.7% to HKD158,828,000. Profit attributable to shareholders significantly increased 381.9% to HKD32,663,000. Gross profit margin and net profit margin are 49.0% and 10.0% respectively. The satisfactory results and the adequate surplus cash balances have resulted in the Board recommending payment of an interim dividend of HKD3.38 cents per share. The payout ratio is approximately 75%.

Revenue from the provision of beauty and wellness services and expiry of prepaid beauty packages continued to account for the largest share of the Group's total turnover. In Hong Kong, revenue of HKD287,807,000 was recorded, representing an increase of 16.3%. In mainland China, revenue increase 13.9% to HKD17,560,000. The Group recorded total revenue from provision of beauty and wellness services and expiry of prepaid beauty packages of HKD305,367,000, an increase of 16.2% when compared with the figure of the same period of the pervious year.

Ms. Tsang Yue Joyce, Chairperson and Chief Executive Officer of Modern Beauty, said, "Thanks to the strong economic growth in China, the domestic consumption and consumer spending maintain a continue growth. Driven by this positive factor from mainland China, Hong Kong consumer sentiment is trending up with an increasing demand for high-quality beauty and skincare services. During the period under review, the Group has seized the opportunities in the thriving consumer market, persisted in adhering to a prudent financial management and continued to implement cost control initiatives. The Group is proud of the satisfactory results achieved."

During the period under review, in light of the enhancement of services and product marketing efforts with encouraging results, the Group's sales in Hong Kong continued to grow. The Group has 29 beauty and wellness service centres, with a total gross floor area of approximately 257,000 square feet. In addition, the Group has a total of 13 retail outlets under the names of "p.e.n", "be Beauty Shop" and "FERRECARE Concept Store", scattering across Hong Kong, Kowloon and New Territories. Those outlets primary sells high-quality skincare and wellness products under own brand of "p.e.n", "be" and "FERRECARE". The outlets of "be Beauty Shop" also sell high-quality brands of skincare and beauty products which the Group has distribution rights.

The Group's performance of the business in mainland China is steady. Despite swift changes in the PRC consumer market and ferocious competition amongst peer industry players, during the period under review, the Group's business in certain service centres of mainland China has continued to be profitable. The Group has a total of 9 beauty and wellness centres in Beijing, Shanghai and Guangzhou, with a total gross floor area of approximately 46,000 square feet. These centres provide customers with professional and quality integrated services, including beauty and facial care, spa, massage and slimming services, which are targeted on high-consumption professionals and more affluent middle-class with continuous growth, with a view to increase the luxury customer base.

As a market leader in the beauty industry, the Group seized market development opportunities to expand its market share and improve the returns for its shareholders. During the period under review, the Group announced a certain acquisition of beauty skincare services business in Singapore and Malaysia for a consideration of HKD250,000,000 which was a major acquisition and connected transaction and involved an issuance of convertible note. This acquisition had been approved in a shareholder extraordinary general meeting held on 27 October 2011.

With the Group's enthusiasm for the beauty industry and commitment to provide high quality services to customers, coupled with effective marketing tactics, the Group has attained a remarkable success. During the period under review, the Group is proud of being a winner of the "My Most Favourite Hong Kong Brand" presented by China Enterprise reputation and Credibility Association. In addition, the Group has attained the "Capital Outstanding Administrative Brand 2011" Award in the annual selection of "Capital". In another annual selection co-organized by "JESSICACODE" and "JESSICA", the Group has attained the "JESSICACODE Beauty Award 2011" and the "Hottest Award 2011" awards. Besides, during the period under review, Ms. Tsang Yue Joyce, Chairperson and Chief Executive Officer of the Group was awarded the "Women Entrepreneur of the Year" in the Asia Pacific Entrepreneurship Awards Hong Kong by Enterprise Asia. During the World Chinese Entrepreneur Conference held in October, she was awarded the "The 4^th Excellence in Achievement of World Chinese Youth Entrepreneurs", which served as the recognition of the capability of the Company and the management.

Ms. Tsang concluded, "The Group believes that Hong Kong's retail sector will continue to thrive vibrantly. As European economic outlook remains uncertain, the Group will make incessant efforts to practice a prudent financial management by implementing cost control initiatives, and make a strategic move to strive for steady growth. Looking ahead, upon the completion of the Singaporean and Malaysian businesses acquisition, we would expect the enlarge Group to further expand our retail network in Hong Kong, Singapore and Malaysia, and enhance our skincare and wellness product lines; continue to expand our service centres and improve our brand awareness; and continue to implement cost control for improvement of the future incomes and enhancement of profit growth, generating satisfactory returns for our shareholders and the community."

About Modern Beauty Salon Holdings Limited

Established in 1991, Modern Beauty Salon Holdings Limited is a leader of the beauty industry in Hong Kong, offering professional treatments as well as quality services and products. Its services include beauty and facial care, slimming, spa and massage and fitness. Modern Beauty has established service centers in Hong Kong with a network in mainland China. The Group is marketed under brands including "Modern Beauty Salon", "Giman", "Slim Express", "Well Nutrition", "be Sanctuary Spa", "Yue Spa", "Moment of Serenity", "Modern Fitness", "SooYoga", "be Homme", "Modern Elite for hair", "be Beauty Shop", "Ferrecare" and "p.e.n". Currently, the Group operates 29 and 9 service centres in Hong Kong and mainland China, respectively. The Company was listed on the main board of Hong Kong Stock Exchange on 9 February 2006. For more information about the Modern Beauty, please visit its official website (http://www.modernbeautysalon.com/).

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