250_1alexwong
Alex Wong, Director of Asset Management, Ample Capital

Translated by Andrew Vanburen from 內地百貨店狂開 助名牌低成本擴張 (中文翻譯,請看下面)

AS THE global financial crisis continues to show signs of being escorted off the stage once and for all, it is apparent that at least two changes in the psychology of consumers and investors worldwide have taken place.

First, I think it’s fair to say that people are now thinking more short-term, and their analytical “timeframe” has been shrunken, what with the recent disasters –- both man-made (financial tsunami) and natural (Japanese version) – knowing that both share values and concrete assets can be obliterated in the blink of an eye.

In a way, this meshes somewhat with the concept of impermanence, which is deeply imbued within many schools of Eastern philosophy and mysticism.

This has made it a bit more fashionable to take short positions, engage in quick profit-taking and make hay while the sun shines, as the saying goes. This naturally has repercussions for the retail industry as well, both upscale and discount.

The second phenomenon I have noticed since the dual-tsunamis hit the region is that people are generally more gun-shy about making long-term business or investment decisions, and tend to overemphasize risks and understate opportunities.

I can’t say as I blame people for having a bit of a “once bitten, twice shy” attitude to doing business these days. With numerous sovereign debt crises plaguing the EU, North Africa and parts of the Middle East in political upheaval and even well-to-do Dubai suffering financial difficulties of its own, it is not hard to see why even investors and consumers as far away as Hong Kong and the PRC would be a bit bearish on the state of things.

chowgem3-1
Chow Sang Sang believes China is a potential "gold mine" for jewelry sales. Photo: Company



Not only have interest rates risen to help prop up ailing currencies, but the former darlings of the global investment community – the emerging markets – have also been hit hard by the ongoing financial downturn, and with the Mideast crisis pushing up oil prices coupled with the still unresolved nuclear situation in the world’s No.3 economy Japan, it is hard to say when things will get back to “normal” globally, however one defines “normal.”

Meanwhile, other economies are lowering interest rates to pump-prime their economies and get people in a spending mood again, but wreaking havoc on their government bonds.

Post-tsunami short view revolution

chow_metrics
Chow Sang Sang's price: 17.7 hkd

Freer lending policies in select economies, notably the series of quantitative easing (QE) in the US, have enhanced liquidity in the markets. But this situation in tandem with the Acts of God as well as more synthetic crises around the world have put both investors and consumers on the defensive, with a small but growing number whispering about the End Times.

This is hardly the atmosphere in which venture capital, hedge funds and emerging market investments can thrive. Fortunately, cooler heads have prevailed and the benchmark Hang Seng Index has not seen the south side of 20,000 points since the big hit it took at the height of the global financial meltdown in late 2008, when sensationalist media at the time were focused almost exclusively on the negative.

And as for now, I think we will continue to see range-bound volatility in the market with a slight bias to the upside.

The peak of the reporting season has just passed. Most companies are citing rising commodity and raw material prices as upside cost drivers and overall margin killers, but the overall increases in turnover by most listcos will partially or wholly offset this. However, one bright spot... one Golden Boy... has to be the luxury sector, particularly the growing phenomenon of Hong Kong-based or Hong Kong-listed high-end retailers selling either directly to the juggernaut PRC market, or marketing their luxury wares to the growing wave of mainland “shopping tourists” visiting the SAR.

trinity
High end menswear retailer Trinity opened some 100 new stores in 2010.  Photos: Trinity



Originally companies were worried that the second half of 2010 would drag down their overall performance because on a comparative basis, the first half of 2009 was reasonably robust. And then when the People’s Bank of China began using various tools at its disposal in the second half – including interest rate and reserve requirement ratio (RRR) hikes – it was also feared that luxury/discretionary items would be the first to take a hit, not to mention the flood of funds and investors into the market late last year with less regard given to valuations than trends and here-say, and one can well imagine how such a situation was unsustainable.

And now, well into both 2011 and the Year of the Rabbit, we have both heard and read reports that management and staff at luxury retailers in both Hong Kong and the PRC are claiming same-store-sales growth in the first two months are in many cases up around 20% year-on-year. If this trend continues throughout 2011, it is certainly nothing to sneeze at.

trinity_metrics
Trinity's current price: 7.3 hkd

Another factor helping luxury goods is the supportive government policy given to domestic consumption. Part of this is manifested in the drying up of traditional export markets as Europe, North America and Japan struggle with budget crises and sovereign debts. Also, the mushrooming of department stores across the PRC is providing an ever-increasing floorspace from which luxury retailers can market their wares.

Trinity Ltd (HK: 891), retailer of high to luxury end menswear, opened some 100 new stores in 2010, and only spent a total of around 45 mln hkd in the process! Much of this seeming bargain had to do with converting some of the group’s property assets into retailing space.

Another likely winner from the strong expected luxury performance this year is well-known jeweler and gold retailer Chow Sang Sang (HK: 116), which opened nearly 50 new outlets last year, and the Hong Kong-listed firm should have a very standout 2011.

See also: CHOW SANG SANG: Double Digit Growth Seen For 3Q

 


內地百貨店狂開 助名牌低成本擴張
(文: 黃國英, 豐盛融資資產管理部董事)

chowsangsang
周生生平常國內開店,要年半回本。去年開店近五十家,錄得虧損的新店,竟是屈指可數。景氣之好,超乎想像。

金融海嘯後,人類的心理,轉變甚鉅,最顯著的變化有二:首先,是人們分析事情的time-frame,變 得極為短暫-世事無常,一夕之間,股票可盡化雲煙,虛無飄渺,價值投資、長線持有,「你都痴嘅」;其次,「一朝見海嘯,十年怕游水」,每數月甚至更短,就 會傳出一次「危機」:已發生的-杜拜、歐債、雙底衰退、新興市場加息、中東石油危機、日本核電事故;未發生的-利率大升、惡性通脹、美債崩潰、內房泡沫爆 破、中國地方政府債務危機、美國地方政府債務危機、歐豬危機續集等,罄竹難書。

海嘯後人人短視

但流通性過剩,資金苦無出路,加上人人危機意識深重,槓桿減低,注重防守,要再來一次宇宙大爆炸的可能性,不會太 高。從來金融危機,只會發生在人人無限看好,槓桿超高,流通性忽然乾塘,無險可守,怒破大位,意志崩潰,爭相斬倉,才會有低到你唔信的價格。今次日本核電 危機,嚇到「盲搶鹽」,傳媒日撻夜撻,撻你信世界明天末日,恒指也跌不足兩千點,是為明例。無定向上落市,應會維持。短線以快打快,高沽低揸,至為合適。

執筆時,業績公佈期,快將完結。大部分原材料使用者,由於商品價格上升,毛利率受壓,部分抵消了營業額的上升;負債高者,又被利息成本上揚所困,難有極大作為。但有一個亮點,是為在中、港販賣奢侈品的公司。

原先市場,擔心2010年下半年,由於對比09年同期,營業額基數已高,增長率或放緩;第四季時,中央調控經濟,收緊銀根,影響奢侈品的銷量;加上眾散戶,不問估值,破頂後高位衝入戰場,慘遭埋伏,競雙逃亡,股價遂一洩如注。

雖說盛極必衰,但無證據下,太早看淡,可能錯失良機。從已公佈的本地及國內零售數據,以及業績發佈會管理層的口供,今年一、二月份,股市愁雲慘霧,但同店銷售,按年竟然增長近兩成。2010年春節銷售,已經唔小嘢,2011年竟有如此增長率,不可輕視。

另一有利奢侈品股的因素,是國內百貨公司「開店八萬五」。直至現在,開百貨公司,好過印銀紙,從百貨公司股業績,可得印證。有勢,叠注再賭,不難明白,人人擴大版圖,狂建新店,令店面面積,拋物線上升。

商場利誘名牌進駐

百貨新店瘋狂落成,對租客極為有利。據利邦(891)表示,2010年內,國內開店近100家,連翻新原來舊店,資本開支只為4千5百萬。何以低得如此嚇人?原來是國內地主貼錢,邀其到旗下商場開店。租約條件改善,不在話下。周生生(116)平常國內開店,要年半回本。去年開店近五十家,錄得虧損的新店,竟是屈指可數。景氣之好,超乎想像。

值得一提,國內百貨業,採用分成(turnover rent),代替固定租金。店鋪做成生意,百貨公司收某個百分率的營業額。故無用過慮,所謂租金蠶食盈利的情況。

 

 請閱讀: CHOW SANG SANG: Double Digit Growth Seen For 3Q


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