Interim results Review for the year ended 31 December 2012:
Revenue during the period increased 31 per cent to HK $821 million, resulting in a profit of HK $96 million:
By the middle of December 31, 2012, the company had received HK $821 million and a gross profit of HK $629 million, while the gross profit margin remained stable at 76.5%. During the period, the company increased its sales expenses in order to consolidate its channel share and market share, rising 41.5 per cent to HK $460 million from HK $320 million last year, or 4 percentage points to 56 per cent of revenue, up from 52 per cent. During the period, the company's overall profit was HK $96.46 million, an increase of 19.5% over the same period last year, and earnings per share were HK9.88 cents. Strengthen channel control and continue to promote brand marketing:
As of December 31, 2012, the company has 288 distributors and 12471 sales outlets. At present, most of the channels are beauty stores and Shang Chao, accounting for 75%. The company continues to strengthen its control over channels and take the initiative to adjust the role of various channels. This year, internal online channels and convenience store merchants have increased their contribution to revenue, accounting for 9.3% and 39.1% respectively. The 4% increase in sales expenses is mainly reflected in market planning and offline promotion, and the company's advertising expenses still account for about 20% of revenue. The company said that online channels are becoming more and more important in the future, and its growth will accelerate, so the company will continue to increase investment to become bigger and stronger. The company began to adjust the offline channels in 2011, and the core of the future is to consolidate the channel share and brand positioning of the core cities. Brand market positioning has initially taken shape, steadily promoting the layout of multi-category and multi-brand:
According to AC Nelson, the share of the American brand in China's mask market increased by 8 percentage points in 2012.
To 26.4%, becoming the first in the industry. The second and third place market shares are 9% and 1.8% respectively. We believe that the company has basically established the market positioning of the beauty brand and has a high degree of brand recognition. In the future, the company will continue to enrich the brand product structure, while steadily promoting the layout of category and multi-brand. KEEP UP brand products account for 1.1% of sales during the period. Outlook for the second half of the year:
We expect the company to achieve revenue growth of more than 20% in fiscal year 2013. In view of the stable brand market position of the company, the gross profit margin can be maintained in the future. Due to the fierce competition in the mask industry, we expect that the company's sales expenses will be high this year, mainly used to seize high-quality channels, so as to create a corresponding channel threshold for new entrants. The company is expected to have an EPS of HK $0.256 in fiscal 2013 and is currently valued at 12 times, a relatively cheap valuation.