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2005 Annual Results Presentation

2005 Annual Results Presentation. 9 March 2006. Member of Li & Fung Group. 2005 Annual Result Presentation Agenda. Overall Hong Kong & Guangzhou Retail Markets 2005 Financial Results Highlights 2006 Update & Outlook Questions & Answers.

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2005 Annual Results Presentation

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  1. 2005 Annual Results Presentation 9 March 2006 Member of Li & Fung Group

  2. 2005 Annual Result PresentationAgenda • Overall Hong Kong & Guangzhou Retail Markets • 2005 Financial Results Highlights • 2006 Update & Outlook • Questions & Answers

  3. 2005 Hong Kong Consumer Price IndexYear-on-year % Change Source: Census and Statistics Department, HKSAR

  4. ACNielsen Economic Confidence Index 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Period Base: January 1985 = 100 Source: ACNielsen Confidence Index

  5. 2005 Hong Kong Retail Sales ValueYear-on-year % Change Source: Census and Statistics Department, HKSAR

  6. 2005 Guangzhou City Consumer Price IndexYear-on-year % Change Source: Bureau of Statistics, Guangzhou

  7. 2005 Guangzhou Retail Sales ValueYear-on-year % Change Source: Bureau of Statistics, Guangzhou

  8. 2005 Financial Results HighlightsGroup Turnover +15% * * * * Restated

  9. 2005 Financial Results HighlightsGroup Net Profit +11% * * * * Restated

  10. 2005 Financial Results HighlightsNet Profit as % of Turnover - 0.1% * * * * Restated

  11. Mcmug Miffy Garfield Lucky Star Tissue 2005 Financial Results HighlightsStrong Promotions & Turnover

  12. 2005 Financial Results HighlightsGross Margin / Other Income * * * * Restated

  13. 2005 Financial Results HighlightsStore Operating Expenses 24.5% 23.2%* 22.7%* 22.2%* * Restated

  14. 2005 Financial Results HighlightsBasic Earnings Per Share + 1 Cent * * * * Restated

  15. 2005 Financial Results Highlights * Restated

  16. 2005 Financial Results Highlights4th Quarter * Restated

  17. Year-On-Year Profitability Growth * * * * Restated

  18. 2005 Achievements – New Markets Circle K Dongguan Circle K Macau Market office set up in Shenzhen Circle K Zhuhai

  19. 2005 Achievements Best Employers in Asia 2005 by Hewitt Associates LLC Caring Company Award 2005/2006

  20. 2006 Update & Outlook

  21. 2006 Hong Kong Market Outlook • Local consumer spending continues to increase gradually • Pressure on store operating expenses • Rising rental for stores up for renewal

  22. Retail Rental Changes By Area Index (Q1 1996=100) Source: CB Richard Ellis

  23. 2006 Hong Kong Market Outlook • Local consumer spending continues to increase gradually • Pressure on store operating expenses • Rising rental for stores up for renewal • Inflation on labour and utility expenses • Free newspapers and price war still developing • Fierce competition • Strong promotions to drive comparable store sales growth • Consistent increase in store number sales and profitability

  24. 2006 Pearl River Delta Market Outlook • Income per capita and retail spending continue to increase • Upward movements in raw material, energy and logistics costing • Stable rental but upward pressure on labour and utility costs • First full year of multi-city growth in Guangzhou, Dongguan, Shenzhen, Zhuhai – focus on increasing number of stores • Macau to grow at consistent pace • Sun-High Chain acquisition application – finally moving through • Peak investment year for the Pearl River Delta market

  25. 2006 Market OutlookTo Summarize • Better market conditions but inflation pressure on operating expenses in Hong Kong • Priority of opening stores throughout the PRD • First full year of multi-city expedited growth • Peak investment year for the Pearl River Delta market • Impact on CRA’s profitability growth trend • Solid cash-flow and balance sheet • M&A opportunities

  26. 2005 Annual Results Presentation 9 March 2006 Member of Li & Fung Group

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