Pricing Strategies of Tissue Products - PDF

Document Sample
Pricing Strategies of Tissue Products - PDF Powered By Docstoc
					                 Interim Results 2003

                 Corporate
                 Presentation




September 2003
1
    Agenda


     §   Interim Results Highlights
     §   Business Review
     §   Outlook for 2H
     §   Open Forum




2
    Hengan is …


    China’s   leading domestic
    corporation in personal
    hygiene products


3
    Interim Results
         Highlights




4
    A Landmark Year for Long-term
    Success
    Six months               2003               2002       Change (%)
    ended 30 June
    (HK$’000)

                        Paper     Existing                Paper     Existing
                      Business    Business              Business    Business
                      Inclusive                         Inclusive

    Turnover          696,761       625,748   548,440     +27%       +14%


    Profit            121,143       113,983    89,864     +35%       +27%
    attributable to
    shareholders


    Earnings per         12.03        11.45      9.03     +33%       +27%
    share
    (HK cents)
    Interim                 10            -        8      +25%            -
    dividend
    (HK cents)


5
    Turnover Breakdown by Products


     For the six months   2003   2002   Change(%)
     ended 30 June
     (HK$M)
     Sanitary             348    341     +2%
     Napkins

     Pantiliners          79     71      +11%

     Baby Diapers         131    109     +20%

     Skin Care Products   35      -      N/A

     Tissue Paper         70      -      N/A

     Others               34     27      +26%



6
    Gross Profit Margin
             %
             50




             45                              43.0
                                                        43.0



                                      38.6
             40

                    39.6

                              38.0
             35




             30
                  1999     2000      2001     2002    1H 2003

     § Maintained stable gross margin because of:
        - Stable raw materials price
        - Stringent cost controls
        - Change in product mix to products of higher gross margins
          to offset the reduction in selling prices of certain products
7
Net Profit
    l   Net profit increased as sales went up
    l   Sustained stable gross profit margin
    l   Selling and distribution expenses increased as more investments were
        made to enhance modern channels distribution
    l   Administration expenses decreased as less consultation fee was paid
              HK$M                                                          (%)
                                                Net Profit
              350                                                            25
                                                Net Profit Margin
                      20.0%
              300
                              18.0%   18.6%                                  20
                                              17.9%                 17.4%
              250
                      302                                                    15
              200                      227
                               209             200
              150
                                               +35% over same                10

              100                               period last year
                                                                             5
               50                                               121
                0                                                            0

                     1999     2000    2001     2002         1H 2003
8
    EPS & DPS

    HK cents
    50                                  § Stable and high dividend
                                          payout ratio
    40                                  § Acquisition of tissue paper
         29.9                             enhanced EPS
    30
                25               22.8
                     20.9               20     20.1
    20                      18                        18
                                                             12   10
    10

     0
           1999       2000        2001           2002       1H 2003

                                 EPS    DPS




9
     Key Figures


                            1H 2003     1H 2002

      Cash on Hand          HK$601M     HK$588M

      Finished Goods         63 days    65 days
      Turnover

      Accounts Receivable    36 days    28 days
      Turnover

      Current Ratio         1.9 times   7.5 times

      Gearing Ratio          17.7%        Nil




10
     Business Review




11
     Clear Business Structure
     l      Hengan’s comprehensive products marketed
            under renowned brandnames



          100%             100%       100%             70%                    68.9%
                                                      Cleansing &
           Feminine Care                                                     Tissue Paper Products
         - Napkins           Baby        Adult         Skin Care         -   Facial Tissue
         - Pantiliners      Diapers     Diapers   -   Facial Cleansing
                                                                         -   Pocket Handkerchief
                                                      Foam
                                                  -   Shower Gel         -   Toilet Paper
                                                  -   Soap




12
     Multi Brandnames Strategies



     Sanitary
     Napkins

     Disposable
     Diapers             Nationwide     Customers
                         Distribution   of all walks
                          Network          of life
     Tissue
     Paper


     Cleansing
     Products




13
     Sanitary Napkins
     Market penetration is around 52%, market continues to grow


 • Implement more aggressive
   strategies to ensure the leading
   positions in the market place of the      • Turnover
   following brands:
                                               increased by
                                               3.6% to
                                               HK$427M,
     - Launched “¼b¾A¦w¤ß and “Anle”
                           ”                   representing
       pantiliners to target mid-end           61% of the
       market                                  Group’s turnover
     - Further enhance products quality
     - Competitive pricing strategies
     - Strengthen A&P
     - Broaden existing sales network,
       especially in chain stores
14
     Disposable Diapers
     l   Untapped market with ample growth potential, sales volume is
         growing at over 20% p.a.
     l   Young couples with growing disposable income are spending more
         on their children
     l   Well positioned to capture the future upside in the adult diaper
         market

                                                   • Sales volume of baby
         Improved           Competitive              diapers surged 37%
          product              pricing             • Turnover increased by
          quality            strategies              20% to HK$172m,
                                                     representing 19% of
                                                     the Group’s turnover
                                                   • Adult diapers’ market in
          Increased            Enhance               the PRC is at infant
          sales and         sales through            stage and sales are
          marketing            modern                mostly for export
                                                     market
            efforts           channels

15
     Tissue Papers
     l       Acquisition completed on 16 May 2003
     l       Renowned brandname “Hearttex” (¤ß¬Û¦L), with market
             share of 17% and ranked No.1 in China since 2001
     l       Under-penetrated market with high growth potential, per
             capita tissue paper consumption in the PRC is 28%, below
             global average and 10% of the US



         •    High product quality              • Sales surged 40% as
         •    Widely recognized brand             compared to same
              name                                period last year
         •    Effective promotion               • Profit guarantee will
              strategies                          be met
         •    Competitive pricing


16
     Others – Skin Care & Cleansing
     Products

            Established the Joint Venture in 2002


                                           l   Products are new to the
     l   Leveraging our nationwide             market and more
         distribution network, sales has       marketing efforts are
         started to grow                       required to enhance
     l   Sales for the six months              brand awareness
         amounted to HK$35,000,000         l   Leverage on our
         which doubled that of last year       distribution network
     l   More antiseptic washing               and experience, the
         lotion/soap were sold during          Group will build the
         the SARS period                       regional brandname to
                                               a nationwide one
17
     Outlook for 2H




18
     Outlook for 2H
     l   Sales of sanitary napkin continue to be flat
     l   Baby diapers continue to grow strongly
     l   Tissue paper business as a new growth driver



     l   Continue to enhance product image and build up brand
         loyalty for skin care products
     l   Continue to reinforce sales channels and work closely
         with distributors
     l   Continue to improve efficiency, control costs and
         expenses




            IMPROVED TURNOVER AND NET PROFIT
19
     Brand Building




               Celebrities marketing to
           enhance Hengan’s corporate image



20
     Corporate Mission & Goal

     “Growing with you for a better life” has
       always been the mission of Hengan Int’l

     Our goal is “to build an effective corporate
      management and to develop a quality,
      ethical and enthusiastic staff team”

     To become China’s leading corporation in
       feminine hygiene products, diapers and
       family hygiene products



21
     Open Forum




22

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:50
posted:7/8/2011
language:English
pages:22
Description: Pricing Strategies of Tissue Products document sample