MAOYE INTERNATIONAL HOLDINGS LIMITED 
By For Immediate Release
Maoye International Announces 2011 Annual Results * * * Total sales proceeds surge 43.5% to reach 10 billion for the first time Pressing on with consolidation of mature stores and enhancing profitability of new stores(23 February 2012 - Hong Kong) - Maoye International Holdings Limited ("Maoye" or the "Group", HKSE stock code: 848), a leading department store chain in China, today announced its annual results for the year 2011.
Results Highlights• Total sales proceeds for the year 2011 exceeded RMB 10 billion for the first time, growing 43.5% year-on-year to RMB10.43 billion. 16.3% was driven by same store sales growth and 27.2% was driven by new stores
• Same store sales proceeds from concessionaire sales grew 19.7%, of which same store sales proceeds from concessionaire sales of Eastern and Northern China recorded more rapid growth
• Consolidated commission rate was 24.9%
• Average ticket sales reached RMB547, representing growth of 7%
• Operating profit grew 31.5% to RMB1,206.1 million
• Profit attributable to equity holders of the parent was RMB640.3 million, growing 11.1%, basic earnings per share amounted to RMB12.0 cents
• Profit attributable to equity holders of the parent of the department store segment grew
22.5% to RMB735.1 million
• Payment of a final dividend of HK5.9 cents per share was recommended by the board of directors
Operational Review
During the year, the Group adopted a proactive and prudent
expansion strategy, and opened a number of new stores
including the Yangzhou Wenchang Store, Shandong Heze Store
and Shandong Linyi Store. As at 31 December 2011, the Group
operated 38 stores across 18 cities, with the gross floor
area reaching 1.128 million sq. m., of which around 63.5% is
self-owned.
- Cont'd -
Maoye International Announces 2011 Annual Results
Total sales proceeds surged 43.5% to reach 10 billion for the first time
Pressing on with consolidation of mature stores and enhancing profitability of new stores
23 February 2012 | Page 2
In addition, the Group continued to acquire and lease high-quality sites in Northern China and Eastern China regions for department store development, including the acquisition of a parcel of land in Baotou in Inner Mongolia in December 2011 and leasing premises in Liyang in Jiangsu for the establishment of a commercial property in the city's core commercial district. After the reporting period, the Group also successfully bid for a prime commercial site in Nanjing City, where the Group plans to construct a flagship department store, further completing the Group's Eastern China network.
Store Performance by Region
The Southern China region, where the Group possesses a number
of mature stores, remained the biggest profit contributor.
During the year, the region's sales proceeds accounted
for
37.3% of the Group's total sales proceeds and same-store
sales proceeds from concessionaire sales grew 18.3%. In
particular, sales during the annual 68-hour Thanksgiving sale
reached a record high of RMB150 million. Separately, the
Shenzhen Heping Store adopted an operational model similar to
that of an outlet, and the store was renamed the Shenzhen
Outlet. Over 50% of the store's brands are first-class in
China. During the year, the store recorded a stellar
35.8% same-store sales growth from concessionaire sales,
indicating the outlet model was generally accepted by
consumers. The Group will continue to adjust the product mix
and upgrade its brand portfolio by replacing second-tier
brands in China with first-tier international brands with an
aim to enhance customers' shopping experience and provide
products of higher value for money.
The Group continued to implement the dual-brand development
strategy of "Maoye Department Store" and "People's Department
Store" in Southwestern China, with tailored marketing
strategies to suit different customer groups. During the
reporting period, sales proceeds in the Southwestern China
region accounted for 23.5% of Group's total sales proceeds,
and same-store growth of sales proceeds from concessionaire
sales was 19.1%. The sales strategy to target key product
categories at Chongqing Jiangbei Store, one of the region's
flagship stores, brought effective results, helping same
store sales proceeds from concessionaire sales grow 25.2%.
Another flagship store of the region, Yanshikou Store
recorded same store sales growth of 16.1% from concessionaire
sales despite the adverse impact of the surrounding roadwork
and construction. Yanshikou Phase II will adjoin Yanshikou
Phase I by the end of 2012, further solidifying the Group's
market position and influence in the Yanshikou commercial
hub.
- Cont'd -
Maoye International Announces 2011 Annual Results
Total sales proceeds surged 43.5% to reach 10 billion for the first time
Pressing on with consolidation of mature stores and enhancing profitability of new stores
23 February 2012 | Page 3
The Eastern China region is the Group's key strategic
development area. During the reporting period, the Group
established the Shandong Heze Store and Shandong Linyi Store,
increasing the number of stores operated and managed by the
Group in the region to 11. During the year, the region's
sales proceeds accounted for 17.7% of the Group's total sales
proceeds. Driven by the region's many young stores, same
store sales proceeds from concessionaire sales recorded
growth of 27.5%. Taizhou First Department Store recorded
impressive performance since acquisition in 2009 and has
progressively become the region's flagship store, delivering
same-store growth of 27.5% in sales proceeds from
concessionaire sales for the year under review. Since the
acquisition of the four stores of Zibo Dongtai Building Co.,
Ltd., the Group has continued to perform store upgrades and
merchandise mix adjustments, which facilitated its swift
integration with the Group.
The Northern China region is also a key development region of
the Group, where 8 department stores are successfully
operated. In 2011, the Northern China region accounted for
21.5% of the Group's total sales proceeds, while sales
proceeds from concessionaire sales recorded same-store growth
of 23.3%. Since becoming the controlling shareholder of Bohai
Logistics Holdings Co. ("Bohai Logistics"), the Group has
proactively reallocated resources in the Northern China
region, employing its management philosophies and strong new
store integration capabilities to reform Bohai Logistics in
terms of management, operation and finances.
Commenting on the Group's strategies, Chairman and Chief
Executive Officer Mr. Huang Mao Ru commented, "The political
guidance under the "Twelfth Five-year Plan" has placed
consumption as the foremost driver for economic growth, which
will be favourable to the retail industry. Rapid growth of
the aggregate volume of retail sales of China is expected to
be sustained for the next few years. The GDP per capita in
China reached USD4,000, a critical point marking China's
transition into a high-income per capita country. In
addition, the higher purchasing power of the "post-80s" and
"post-90s" generation as compared to their predecessors will
provide strong support for the long-term growth of the
department store sector. Faced with these market
opportunities, the Group will continue to solidify mature
stores while enhancing profitability of new stores. The Group
will also strengthen monitoring and analysis of operational
performance indicators, reinforce cost control and employ
meticulous management, and strive to introduce exclusive
brands with high recognition, quality and sales performance.
We are confident to leverage market opportunities and
stimulate business growth so as to establish Maoye as the
leading department store operator in China."
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Maoye International Announces 2011 Annual Results
Total sales proceeds surged 43.5% to reach 10 billion for the first time
Pressing on with consolidation of mature stores and enhancing profitability of new stores
23 February 2012 | Page 4
About Maoye International Holdings LimitedMaoye is a leading department store chain in China, operating 38 stores across 18 cities in the southern, southwestern, eastern and northern regions of China. The Company's revenues are generated predominantly from commissions on concessionaire sales. Maoye has positioned itself at the mid- to high-end segment of the retail market in China and offers a stylish and diversified merchandise mix suitable for a wide range of customers and preferences.
For further information, please contact:
iPR Ogilvy Ltd.
Natalie Tam/ Canny Lo/ Joey Ho/ Janis Lai/ Cindy Cheuk
Tel: (852) 2136 6182/ 3170 6753/ 3920 7642/ 2169 0646/ 3920
7648
Fax: (852) 3170 6606
Email:
natalie.tam@iprogilvy.com/canny.lo@iprogilvy.com/joey.ho@iprogilvy.com/
janis.lai@iprogilvy.com/cindy.cheuk@iprogilvy.com
Maoye International Announces 2011 Annual Results
Total sales proceeds surged 43.5% to reach 10 billion for the first time
Pressing on with consolidation of mature stores and enhancing profitability of new stores
23 February 2012 | Page 5
APPENDICES Appendix I - Consolidated Income Statement Year ended 31 December 2011 2011 2010RMB '000 RMB '000
CONTINUING OPERATIONS REVENUE 3,357,024 2,197,282
Other income 766,308 551,068
Total operating revenue 4,123,332 2,748,350
Cost of sales (1,335,146) (747,147) Employee expenses
(375,494) (245,640) Depreciation and amortisation (326,202)
(211,107) Operating lease rental expenses (216,236) (172,829)
Other operating expenses (772,064) (488,437)
Other gains 107,873 34,251
Operating profit 1,206,063 917,441
Finance costs (188,793) (113,780)
Share of profits and losses of associates 498 1,659
PROFIT BEFORE TAX FROM
CONTINUING OPERATIONS 1,017,768 805,320
Income tax expense (282,879) (197,840)
Maoye International Announces 2011 Annual Results
Total sales proceeds surged 43.5% to reach 10 billion for the first time
Pressing on with consolidation of mature stores and enhancing profitability of new stores
23 February 2012 | Page 6
Appendix I - Consolidated Income Statement (Continued) Year ended 31 December 2011 PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS 734,889 607,480 DISCONTINUED OPERATION
Profit for the year from a discontinued operation -
16,606
PROFIT FOR THE YEAR 734,889 624,086
Attributable to:
Owners of the parent 640,312 576,597
Non-controlling interests 94,577 47,489
- For net profit for the year RMB12.0 cents RMB11.2 cents
- For net profit from continuing operations RMB12.0 cents
RMB11.0 cents
Diluted
- For net profit for the year RMB12.0 cents RMB11.0 cents
- For net profit from continuing operations RMB12.0 cents
RMB11.0 cents
Maoye International Announces 2011 Annual Results
Total sales proceeds surged 43.5% to reach 10 billion for the first time
Pressing on with consolidation of mature stores and enhancing profitability of new stores
23 February 2012 | Page 7
Appendix II - Consolidated Statement of Financial Position Year ended 31 December 20112011 RMB '000 | 2010 RMB '000 | |
NON-CURRENT ASSETS Property, plant and equipment | 3,646,710 | 2,437,213 |
Investment properties | 428,221 | 292,199 |
Land lease prepayments | 3,963,985 | 3,657,010 |
Goodwill | 641,680 | 537,050 |
Other intangible assets | 6,823 | 4,148 |
Investments in associates | 12,260 | 11,904 |
Available-for-sale equity investments | 782,205 | 635,398 |
Other assets | 2,458 | 2,458 |
Prepayments | 1,102,725 | 1,115,458 |
Deferred tax assets | 83,907 | 61,647 |
Total non-current assets | 10,670,974 | 8,754,485 |
CURRENT ASSETS Inventories | 281,977 | 166,419 |
Completed properties held for sale | 524,734 | 485,287 |
Properties under development | 1,791,198 | 1,177,562 |
Equity investments at fair value through profit or loss | 8,674 | 11,271 |
Trade receivables | 47,912 | 15,794 |
Prepayments, deposits and other receivables | 587,945 | 402,778 |
Due from related parties | 43,772 | 9,919 |
Pledged deposits | 1,530 | 1,350 |
Cash and cash equivalents | 1,425,837 | 1,024,073 |
Total current assets | 4,713,579 | 3,294,453 |
Maoye International Announces 2011 Annual Results
Total sales proceeds surged 43.5% to reach 10 billion for the first time
Pressing on with consolidation of mature stores and enhancing profitability of new stores
23 February 2012 | Page 8
Appendix II - Consolidated Statement of Financial Position (Continued) Year ended 31 December 2011 CURRENT LIABILITIES 2011 2010RMB '000 RMB '000
Trade and bills payables 1,953,827 1,688,373
Deposits received, accruals and other payables 1,972,429
1,611,369
Interest-bearing bank loans and other borrowings 1,485,973
851,024
Due to related parties 31,486 4,249
Income tax payable 111,253 115,076
Total current liabilities | 5,554,968 | 4,270,091 |
NET CURRENT LIABILITIES | (841,389) | (975,638) |
NON-CURRENT LIABILITIES | ||
Convertible bonds | 844,363 | 860,441 |
Interest-bearing bank loans and other borrowings | 1,642,698 | 1,564,776 |
Deferred tax liabilities | 597,406 | 413,079 |
Net assets 6,745,118 4,940,551
EQUITY | ||
Equity attributable to owners of the parent | ||
Issued capital | 481,988 | 461,587 |
Equity component of convertible bonds | 119,125 | 119,125 |
Reserves | 4,851,683 | 3,318,872 |
Proposed final dividend | 256,125 | - |
Total equity 6,745,118 4,940,551
Maoye International Announces 2011 Annual Results
Total sales proceeds surged 43.5% to reach 10 billion for the first time
Pressing on with consolidation of mature stores and enhancing profitability of new stores
23 February 2012 | Page 9
Appendix III - Consolidated Statement of Cash Flows Year ended 31 December 2011Net cash flows from operating activities
2011 RMB '000
807,580
2010
RMB '000
1,663,535
Net cash flows used in investing activities (1,631,559)
(2,292,638) Net cash flows from financing activities
1,217,749 1,201,100
Net Increase/(Decrease) in Cash and Cash Equivalents 393,770
571,997
Effect of foreign exchange rate changes, net 7,994 (9,693)
Cash and cash equivalents at beginning of year 1,024,073
461,769
CASH AND CASH EQUIVALENTS AT END OF YEAR 1,425,837
1,024,073
ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS
Cash and bank balances 1,425,837 1,024,073
Cash and cash equivalents as stated in the statement
of cash flows 1,425,837 1,024,073
