Sincere Watch (Hong Kong) Limited Reports Continued Growth as it Positions Itself Strategically to Leverage on Macau's Casino Developments and the Luxury Products Boom in Asia
HONG KONG, Feb. 7 /Xinhua-PRNewswire/ --
KEY HIGHLIGHTS:
-- revenue for nine months jumped 29% to approximately hk$343.7 million
and gross profit surged 32% to approximately hk$98.0 million
-- to open new Franck Muller boutiques at the Venetian Macao, and in
Beijing, and relocation of Franck Muller boutique in Shanghai before
the end of 2007
-- Sincere Watch Co., Ltd, a luxury watch distributor in Taiwan, became
a wholly owned subsidiary of the company since 1 October 2006
-- healthy financial position and no bank borrowings
Sincere Watch (Hong Kong) Limited (Stock Code: 0444) ("the Group"), the leading watch specialist in Asia, today reported a 29% growth in revenue to HK$343.7 million while gross profit surged 32% to reach HK$98.0 million for the nine months ended 31 December 2006 ("Q3 FY07").
The Group maintained a healthy financial position and has no bank borrowings as at 31 December 2006.
This sterling performance is attributed mainly to Asia's rising demand for luxury timepieces and Macau's booming casinos, whose 2006 revenue topped that of the Las Vegas Strip, making Macau the world's biggest casino market. Analysts have predicted that it will overtake all of Las Vegas' gaming centres within four years.
The Group has also benefited from the luxury products boom in North Asia. Swiss watch exports to China, Taiwan and Hong Kong are valued at a total of 224.6 million Swiss Francs (HK$1,408.9 million), making them the largest Swiss watch market in the world, according to the Swiss Watch Federation.
A Merrill Lynch-Capgemini report also said that Asia's wealth is expected to reach US$10.5 trillion (HK$81.9 trillion) by 2010 and this is likely to fuel demand for luxury watches.
Mr. Kevin Chau, the Executive Vice-Chairman of Sincere Watch (HK) said: "We are witnessing a continued uptrend in Asia's luxury millennium. Our strong performance to date reflects the success of our growth strategy in Macau and the other parts of North Asia. The fact that the Taiwan market is now part of the Group is also another positive factor. Taiwan's demand for Swiss watches topped 21.4 million Swiss Francs in 2006 and we expect it to be a good market for us. To capitalise on these positive developments, we have expanded our Franck Muller flagship boutique in Central, Hong Kong and opened the latest Franck Muller boutiques in Ocean Terminal Mall, Kowloon, and in Landmark Hotel, Macau. To further capitalise on Macau's vibrant casino developments, we will be opening a new boutique at The Venetian Macao, which will boast the world's biggest casino, before the end of 2007."
For Q3 FY07, the Group had an unrealised foreign exchange loss of HK$14.9 million against an unrealised foreign exchange gain of HK$22.6 million for Q3 FY06.
In view of the above, net profit attributable to equity shareholders was HK$16.3 million for Q3 FY07, compared to HK$37.7 million for Q3 FY06.
Mr. Chau added: "The Group is in a strong financial position and this allows the Group to take advantage of the myriad opportunities available in the region to initiate new ideas, products and concepts to delight our existing customers and target new market segments especially in view of the rising affluence and rapidly growing wealth in Asia."
To cater to the expected increase in demand for luxury watches in its key markets, the Group will be opening the first Franck Muller boutique in Beijing by the middle of 2007, in Shin Kong Mitsukoshi. The Group's Franck Muller boutique in Shanghai will also be relocated to Plaza 66 by the third quarter of 2007.
In addition to Franck Muller boutiques, the Group also operates the exclusive de Grisogono boutique in the IFC Building in Hong Kong. While in Taiwan, the Group already has a Franck Muller boutique in Regent Hotel, Taipei to support its network of watch dealers.
These mono-brand boutiques are strategic for positioning the Group's portfolio of luxury watch brands. Moving forward, the Group will adopt a dual-pronged strategy of selective expansion of its watch dealer distribution network as well as diversification into new luxury watch brands. Two of the Group's new luxury brands, Cvstos and Pierre Kunz, continue to enjoy good reception from the Hong Kong market. The Group expects business to remain robust and profitable in the next quarter.
Group Earnings Per Share (EPS) stood at 4.0 cents in Q3 FY07. Net asset value amounted to approximately HK$184.7 million, representing 45.28 cents per share as at 31 December 2006.
About Sincere Watch (Hong Kong)
Sincere Watch (Hong Kong) Limited, the leading watch specialist in Asia, is the sole exclusive distributor of Franck Muller watches and accessories in Hong Kong, Macau, Taiwan and China, and has established Franck Muller as one of the most desired and popular fine watch brands in the luxury watch segment. Leveraging on its success with Franck Muller, the Group has expanded its brand portfolio and now carries four other brands, namely de Grisogono, European Company Watch, Pierre Kunz and Cvstos.
The Group has a large network of independent watch retailers through which the luxury timepieces are distributed. As at 31 December 2006, the Group distributes through 38 retail outlets operated by 23 independent watch dealers in Hong Kong, Macau, Taiwan and China.
In addition to its dealer distribution network and as part of its brand management strategy, the Group currently has five mono-brand boutiques: three in Hong Kong, one in Macau and one in Taipei. Retailing under the brands of Franck Muller and de Grisogono, these boutiques are located in prime shopping areas and showcase the full collection of these very exclusive brands.
For more information, please contact:
Ms Tham Moon Yee / Mr Lee Yew Meng / Ms June Yong
Stratagem Consultants Pte Ltd
Tel: +65-6227-0502
Fax: +65-6227-5663
Email: tmy@stratagemconsultants.com /
yewmeng@stratagemconsultants.com /
june@stratagemconsultants.com
