On June 29th, fashion jewelry brand APM Monaco submitted a prospectus to the Hong Kong Stock Exchange for listing in Hong Kong shares.

More than 60% of the shares held by the founder's family were bought by TPG, CICC, etc.

APM Monaco (Ariane Prette Monaco), which has been all the rage in recent years, is a contemporary fashion jewelry brand that combines the fashion of Monaco with the leisurely attitude of South France. Its history can be traced back to 1982, when Philippe Prette started its initial jewelry business.

According to the prospectus, before this IPO, its largest shareholder was the founder's family. Founder Philippe Prette holds 62.19% of APM Limited through wholly-owned ownership, wife Kika Prette holds 1.2%, and son Louis Prette holds 0.8%.

In addition, the jewelry company's shareholders include well-known private equity firm TPG Capital, European private equity firm TRAIL, and China International Capital Corporation (invested through Synergy Investment), with a combined pre-IPO stake of 29.75%.

The global luxury fashion market where APM is located has seen rapid growth in sales in recent years, especially in China.

Frost Sullivan was quoted in the prospectus as saying that sales in the market grew from $189.9 billion in 2016 to $282.7 billion in 2019, with a compound annual growth rate of 14.2%. Although it decreased by 9.6% due to the COVID-19 epidemic in 2020, it is expected to recover later. The compound annual growth rate is expected to be 12.8% from 2020 to 2022 and 11.0% from 2022 to 2025.

Specifically, the Chinese market is growing particularly fast, with a compound annual growth rate of 25.5% from 2016 to 2019, almost double the world average of 14.2%And expect2020Year to 2022YearAnd 2022Year to 2025A compound annual growth rate of 20.5%And 16.0%The tallest in the world.

With the rapid development of the industry, APM Monaco has grown from an initial family business to a total of 344 stores (including 246 specialty stores, 70 tourism retail stores, 28 franchise stores) and six production bases.

Chinese consumers contribute a lot to the gross profit margin of more than 76%.

The main financial data of APM have been solid over the past three years, especially with a small increase in revenue and gross profit despite the influence of COVID-19 in 2020.

On the revenue side, it increased from HK $1.44 billion in 2018 to HK $1.84 billion in 2019, an increase of 27 per cent year on year, and HK $1.92 billion in 2020, an increase of 4.5 per cent over 2019.

In terms of gross margin, it increased from HK $1.1 billion in 2018 to HK $1.44 billion in 2019, an increase of 30 per cent year-on-year and HK $1.47 billion in 2020, an increase of 2 per cent. At the same time, gross profit margin remained stable, above 76% from 2018 to 2020.

Profits during the year were greatly affected by the epidemic, with HK $191 million, HK $290 million and HK $152 million in 2018, 2019 and 2020, respectively, and net interest rates of 13.3% and 15.8% in 2018 and 2019, respectively, but fell to 7.9% in 2020.

The prospectus pointed out that the decrease in profit in 2020 was mainly due to the expected reduction in cash flow from the promotion company's stores due to the COVID-19 epidemic, and that the profit was affected by an impairment loss of HK $72.7 million recognized in accordance with HKAS 36.

It is worth noting that Chinese consumers contributed more than half of APM's performance. According to the prospectus, APM's total revenue in 2020 was HK $1.92 billion, of which mainland China accounted for 57.2 per cent.

In addition, there is a high proportion of repurchase customers among the company's consumers.

In 2018, 2019 and 2020, customers who made multiple purchases within a 12-month period accounted for 30.1%, 35.3% and 32.0% of direct sales (including specialty stores and online sales), respectively.