Summary of LUK FOOK Holdings Conference Call Company Overview - **Company**: LUK FOOK Holdings - **Fiscal Year**: 2025 Key Financial Metrics - Overall gross margin increased by 5.9 percentage points to 33.1% [2] - Gross profit grew by 5.8% to HKD 4.4 billion [2] - Total operating expenses rose by 13.7% to HKD 2.6 billion, leading to an increase in operating expenses as a percentage of revenue by 4.6 percentage points to 19.6% [2][5] - Total revenue for FY2025 was HKD 13.3 billion, a decrease of 12.9% year-on-year [3] - Operating profit fell by 33% to HKD 1.4 billion, with an operating profit margin of 10.6% [3] - Earnings per share decreased by 37.9% to HKD 1.87 [3] - Total dividend for the year was HKD 1.1 per share, with a payout ratio of 59% [3] Store Network Changes - Global net decrease of 296 stores, with a net reduction of 317 LUK FOOK brand stores [6] - Net increase of 21 LUK FOOK jewelry specialty stores [6] Market Performance Hong Kong, Macau, and Overseas Markets - Revenue from Hong Kong, Macau, and overseas markets declined by approximately 20% to over HKD 8 billion, accounting for over 60% of total revenue [2][8] - Operating profit from this region decreased by 7.7% to approximately HKD 1.1 billion [8] - Same-store sales in the Hong Kong and Macau markets fell by 25% [4] Mainland China Market - Revenue from Mainland China remained stable at approximately HKD 5.3 billion, but operating profit dropped by 40% to HKD 517 million [10] - Retail business revenue in Mainland China grew by 10% to HKD 3.2 billion, but profit fell by over 70% [11][15] Product Performance Gold and Platinum Products - Sales of gold and platinum products amounted to HKD 8.8 billion, a decrease of 15%, but gross profit increased by 16% [12] - Gross margin for gold and platinum products improved by 7.1 percentage points to over 26% [12] Jewelry Sales - Jewelry sales totaled HKD 3.6 billion, down 7.66%, with a gross margin of 39.4%, a decline of 3 percentage points [13] Strategic Initiatives - A new three-year plan focusing on overseas market expansion, with plans to enter at least three new overseas markets and increase overseas store count by approximately 50 [4][20] - Anticipated net increase of about 50 stores in Mainland China and 20 stores overseas in FY2026 [4] Operational Efficiency - Inventory turnover days increased by over 100 days due to rising inventory and declining revenue [7] - Return on equity (ROE) decreased by 5.4 percentage points to 8% [7] ESG and Market Outlook - Significant progress in ESG initiatives, receiving 40 ESG-related awards [21] - Anticipated continued rise in gold prices due to central bank purchases and geopolitical factors, which may positively impact gross margins despite potential sales declines [21] Future Expectations - Same-store sales growth is expected to achieve single-digit growth in FY2026 due to a relatively low base in FY2025 [31] - The company is actively seeking to enhance its product offerings and brand competitiveness through innovation and strategic partnerships [30][32]

Financial Data and Key Metrics Changes - Revenue reached HKD 13.3 billion, a 12.9% decrease compared to the same period last year, primarily due to a decline in sales of gold products caused by high gold prices [6] - The group's profit for the year decreased by 39.3% to HKD 1 billion, with basic earnings per share decreasing by 37.9% to HKD 1.87 [6][7] - Total operating expenses increased by 13.7% to around HKD 2.6 billion, leading to an increase in the ratio of total operating expenses to revenue by 4.6 percentage points to 19.6% [8][27] - The group's NAV per share was HKD 22.38, a 2.2% increase from the same period last year [11] Business Line Data and Key Metrics Changes - Retailing revenue decreased by 13.5% to HKD 11.1 billion, accounting for 82.7% of the group's total revenue, with segment profit decreasing by 17.7% to HKD 1 billion [14] - Licensing income decreased by 12.6% to HKD 904 million, accounting for 6.8% of the group's total revenue [16] - Wholesaling revenue declined by 8.8% to HKD 1.4 billion, accounting for 10.5% of the group's total revenue, with segment profit decreasing to HKD 14 million [15] Market Data and Key Metrics Changes - Revenue from Hong Kong, Macau, and overseas markets decreased by 19.6% to HKD 8.07 billion, accounting for 60.5% of the group's revenue [11] - Revenue from the Mainland market decreased by 0.2% to RMB 5.3 billion, accounting for 59.5% of the group's total revenue, with segment profit decreasing by 40.7% to HKD 577 million [12] - Retailing revenue in Mainland increased by 10.4% to HKD 3.1 billion, accounting for 59.9% of Mainland market's total [21] Company Strategy and Development Direction - The group has set a new three-year corporate strategy focusing on overseas market expansion, market-oriented products, and operational efficiency enhancements [29] - Plans to enter three more countries and establish 50 new overseas shops within the next three years [29] - The group aims to net 50 shops in the Mainland market and approximately 20 shops in overseas markets in financial year 2026 [31] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about medium to long-term business prospects in the Mainland and expects improvement in the Hong Kong market [30][52] - The group anticipates a rebound in sales performance in the Mainland market due to new product launches and effective marketing strategies [48][52] - Management noted that the high gold prices have affected consumer sentiment but expect sales of gold products to normalize as consumers adapt [41][42] Other Important Information - The average international gold price increased nearly 30% year on year, impacting sales of gold and platinum products [17] - The group has integrated ESG principles into its corporate planning and received 40 awards in FY '25 [40] Q&A Session Summary Question: Can you elaborate on the recovery in sales momentum for Mainland China? - Management noted strong performance in fixed price gold jewelry products due to new collections and effective promotions, with a new ambassador contributing positively [48][49][51] Question: What is the ASP trend for fixed price gold products? - The contribution of fixed price gold products to overall retailing revenue increased from 33% to 54%, with expectations for continued growth [56][66] Question: What is the guidance for same store sales growth and profitability? - Management expects double-digit growth for same store sales across all regions in FY 2026, with a stable gold hedging ratio maintained around 20% to 27% [61][62]

Core Viewpoint - The 2025 Shangri-La Matsutake Season series of events aims to enhance the local economy by promoting the unique matsutake mushroom industry in Diqing Prefecture, Yunnan Province, through various activities and marketing initiatives [1][2]. Group 1: Event Overview - The series of events will officially commence on July 4, 2025, in Shangri-La City, featuring seven major themed activities to promote highland specialty industries and improve cultural tourism experiences [1]. - The third Shangri-La Matsutake Forum will also take place on July 4, focusing on enhancing the brand and recognition of Shangri-La matsutake mushrooms [2]. Group 2: Marketing and Promotion Activities - From July, Diqing Prefecture will launch promotional activities to expand market channels for highland specialty products and stimulate consumption [2]. - A cultural tourism event showcasing the rich history and natural flavors of matsutake will occur in mid-July, while an exhibition and sales event for matsutake cuisine will be held in mid-August [2]. Group 3: Logistics and Transportation - Yunnan Shunfeng Express Co., Ltd. will deploy two cargo planes at Diqing Shangri-La Airport and Kunming Changshui International Airport to establish a "cold chain + high-speed rail + air" transportation model for the matsutake season [3]. - Upgrades to packaging and the addition of cold storage facilities will ensure efficient and stable quality transportation of matsutake mushrooms [3].

Group 1 - Ekoniva, Russia's largest dairy group, has opened its first brand store in Xi'an, Shaanxi Province, China, on May 28, 2025, primarily selling natural dairy products and coffee beverages [2] - Ekoniva began supplying dairy products to China in the summer of 2020, marking the start of its market entry [4] - The company established a representative office in Xi'an in September 2023 and announced plans for railway transport of products starting in January 2024, with the first shipment being ultra-high-temperature sterilized milk [5] Group 2 - Ekoniva plans to promote its products through social media and e-commerce platforms, offering a range of ultra-high-temperature sterilized milk and cream with varying fat contents, and aims to increase its export varieties, focusing on semi-hard and hard cheeses [6] - The domestic dairy market is facing significant pressure due to declining milk prices, with a report indicating that 90% of the industry is experiencing losses, and the average price of fresh milk has dropped by 10.5% year-on-year [9] - Despite a previous surge in demand for Russian products in China, the sustainability of consumer interest in Ekoniva's offerings remains uncertain, as some consumers have expressed that the products lack distinctiveness [10]

Financial Data and Key Metrics Changes - The company reported a consolidated revenue of $1.1 billion, a decline of 5% compared to the previous year, with comparable sales decreasing by 3% [20][21] - Adjusted operating loss for the quarter was $68 million, with an adjusted loss per share of $0.29 [5][22] - Gross profit dollars were $322 million, with a gross margin of 29.6%, impacted by approximately $75 million in inventory write-downs [21][22] Business Line Data and Key Metrics Changes - American Eagle comparable sales were down 2%, while Aerie comparable sales declined by 4% [5][20] - Aerie faced challenges in soft apparel, particularly in fleece tops and shorts, while experiencing growth in intimates and offline categories [12][14] - American Eagle saw improvements in women's business, particularly in social casual dressing and achieved its best quarter ever in fleece [15][16] Market Data and Key Metrics Changes - Traffic was up across brands and channels, but the company faced pressure from lower average unit retails (AURs) and conversion rates [20][21] - The company is working to reduce sourcing exposure to China to under 10% this year, with plans to further diversify its supply chain [24] Company Strategy and Development Direction - The company is focused on optimizing operations and strengthening its supply chain, including closing two Edge fulfillment centers, which is expected to generate annualized savings of approximately $5 million [7][8] - Capital allocation priorities include investments for long-term growth while returning capital to shareholders, including a $200 million accelerated share repurchase program [9][23] - The company is committed to improving product performance and is preparing for the back-to-school season with fresh merchandise [24][38] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with first-quarter performance but remains optimistic about the second half of the year, hoping for economic stimulation from potential tax plans [28][29] - The company has paused full-year guidance until there is greater visibility but expects improvement as the year progresses [8][24] Other Important Information - The company recorded a $75 million inventory write-down due to product misses and higher costs, leading to increased promotions [5][12] - SG&A expenses increased by 2% due to higher advertising investments, with a focus on customer-facing spend [22][66] Q&A Session Summary Question: What is the company's view of the consumer today and its impact on the retail landscape? - Management is optimistic about the consumer outlook and believes that potential tax plans could stimulate the economy in the second half of the year [28][29] Question: Can you break down the assumptions for gross margin and promotional activity for the second quarter? - The company expects to maintain promotional activity to clean inventory for the back-to-school season, embedding a negative 3% comparable sales expectation [30][31] Question: What are the merchandising issues and how quickly can the company get back on trend? - Management acknowledged product issues but is working swiftly to address them, focusing on clean inventory for the back-to-school season [36][37] Question: How is the company planning its capital allocation and CapEx expenditures? - The company reduced its CapEx guidance to $275 million, recadencing projects to preserve cash in response to business conditions [46][47] Question: How did digital performance compare to stores during the quarter? - The company saw an uptick in digital channels and is leaning into this area for future growth [71] Question: What is the outlook for promotions and SG&A expenses? - The company anticipates continued promotional activity to clean inventory, with SG&A expected to remain flat for the year, focusing on advertising spend [62][66]

Group 1: Company Performance and Strategy - The company achieved a turnaround from loss to profit in 2024 and aims to continue optimizing its product structure and enhancing operational efficiency in 2025 [8] - The company plans to strengthen its supply chain layout by adding a new production line for long-life milk and cream in its New Zealand subsidiary, KAIMAI CHEESE [7] - The company is focusing on product development and channel expansion to improve its overall competitiveness and profitability [10] Group 2: Market and Product Development - The company has launched a new edible oil segment, with a focus on leveraging global supply chain advantages for domestic packaging [2] - The company is committed to exploring opportunities for mergers and acquisitions to enhance its industry position and improve its supply chain [3] - The company is enhancing its beer product line, including the introduction of a non-alcoholic wheat beer, to meet diverse consumer demands [6] Group 3: Consumer Engagement and Marketing - The company is utilizing a multi-channel marketing strategy, integrating online and offline promotions to enhance brand influence and market share [7] - The company is actively monitoring consumer trends and preferences to ensure that new imported food products are competitive and adaptable to the market [9] - The company is responding to national consumption stimulus policies to create favorable conditions for business development [5]

Core Viewpoint - In the digital age, companies face intense market competition, and effective marketing strategies and search optimization techniques are essential for enhancing market competitiveness and achieving better brand exposure and user conversion [1] Group 1: Market Research and Positioning - Companies must conduct in-depth market research before any marketing activities, including understanding target market needs, competitor status, and industry trends [3] - Data analysis helps companies clarify their market positioning and identify potential customer needs to formulate corresponding marketing strategies [3] Group 2: Keyword Research - The selection of keywords is crucial for search optimization, and companies should identify high-search-volume keywords related to their products or services [5] - These keywords reflect user search intent and help improve search engine rankings, allowing for tailored content strategies to attract target users [5] Group 3: Content Optimization - High-quality content is key to attracting users and improving search engine rankings, and companies should provide valuable information through professional articles, case studies, and data statistics [9] - Keywords should be naturally integrated into the content, and the format and structure of the content are important for user comprehension [9] Group 4: Website Optimization - The structure and user experience of a website directly impact search engine optimization, requiring fast loading speeds, user-friendly interfaces, and mobile compatibility [10] - A reasonable internal linking structure facilitates user navigation and search engine crawling, while regular content updates maintain information freshness [10] Group 5: External Link Building - External links are a significant factor in how search engines assess website authority, and companies should collaborate with relevant industry websites to obtain high-quality external links [11] - Participating in industry forums, writing guest articles, and engaging in collaborative marketing are effective methods for enhancing external links, with quality being more important than quantity [11] Group 6: Social Media Marketing - Social media platforms serve as effective channels for brand promotion, allowing companies to interact with target customers and enhance brand awareness [12] - Companies should choose appropriate social platforms based on target user characteristics and develop corresponding content strategies to attract user engagement [12] Group 7: Data Analysis and Feedback - Data analysis is essential during the implementation of marketing strategies, enabling companies to assess the effectiveness of marketing activities and make timely adjustments [13] - Regular evaluation and feedback help optimize current marketing strategies and provide a basis for future decision-making [13] Group 8: Brand Public Relations and Reputation Management - In a fast-paced information environment, brand image can be easily influenced by external factors, making brand public relations and reputation management crucial [14] - Companies should establish effective public relations mechanisms to respond to user feedback and manage negative information while enhancing brand image through proactive public relations activities [14] Group 9: Case Analysis and Success Stories - Analyzing successful brand promotion cases allows companies to learn from others' experiences and avoid repeating mistakes [15] - These cases can include successes from both large enterprises and small businesses that achieved results through innovation and flexible strategies [15] Group 10: Long-term Planning and Continuous Optimization - Search optimization and brand promotion are ongoing processes requiring long-term investment and continuous refinement [16] - Companies should adjust and improve their marketing strategies based on market changes and user feedback, setting clear goals and phased plans to maintain development momentum in a competitive environment [16]

Core Viewpoint - The strategic cooperation agreement among Lao Feng Xiang, Shanghai Jiushi Sports Industry Development Group, and Maybach Luxury Goods Asia Pacific aims to enhance brand promotion and operational synergy in the Chinese and broader Asia-Pacific markets [1][2]. Group 1: Strategic Cooperation Details - The three parties will collaborate on the marketing and promotion of the Maybach brand in the Chinese market, leveraging their respective resources and strengths [2]. - Lao Feng Xiang will assist Maybach in defining brand positioning and developing promotional strategies, utilizing its advantages in product development and executing initiatives across both physical and online channels [2]. - Following initial success in China, Lao Feng Xiang plans to support Maybach's brand promotion in other Asia-Pacific countries, excluding India and Gulf Cooperation Council member states [2]. Group 2: Brand Influence and Collaboration - The collaboration aims to enhance the international recognition and industry reputation of the Lao Feng Xiang and Jiushi Sports brands through cross-industry cooperation [2]. - The three parties will participate in various exhibitions, themed events, and significant competitions in the Asia-Pacific region to showcase their brands and achieve synergistic benefits [2]. Group 3: Long-term Strategic Partnership - To deepen their long-term strategic partnership, the parties may establish a joint committee or project team to engage in strategic discussions and collaborative validation in key areas such as supply chain optimization, technology research and development, talent cultivation, sustainable development, and digital transformation [2].

Core Points - The 2025 Huangshan Cultural Tourism and Tea Industry Promotion Conference was held in Derbyshire, UK, marking a significant step in promoting Huangshan's tourism and tea products internationally [1][4] - Huangshan Qimen Black Tea store in Derbyshire was officially inaugurated, indicating a commitment to expanding Huangshan's brand presence abroad [4] Group 1: Event Overview - The event took place on April 28, 2023, and was attended by officials from Huangshan and Derbyshire, highlighting the ongoing collaboration since 2017 [1][2] - Huangshan's officials expressed hopes for increased international interest in Huangshan's beauty and tourism opportunities [1][2] Group 2: Collaborative Efforts - Huangshan and Derbyshire have established a friendly cooperative relationship, with multiple agreements signed since 2017 to promote cultural and tourism integration [2][3] - The signing of cooperation agreements between Huangshan and Derbyshire tourism authorities aims to enhance joint efforts in tourism route development and brand marketing [4]

Group 1: Current Status and Core Advantages of Xiaohongshu - Xiaohongshu has developed into a lifestyle platform with 350 million monthly active users by 2025, with significant user structure changes, including over 36% from tier two and three cities and a male user ratio of 32% [1] - Daily search volume on the platform has exceeded 600 million, with a 200% increase in content interaction rates driven by international topics like "TikTok refugees," creating a complete ecosystem of "search - planting grass - conversion" [1] - The platform's core advantages include precise traffic filtering, content trust barriers, and upgraded e-commerce infrastructure, with a 3.4 times growth in GMV for buyer e-commerce in 2024 [2] Group 2: Core Strategies for Brand Promotion - Professional account operation involves naming strategies, certification for unlocking features, and building a content matrix that includes brand accounts, employee IP accounts, and dealer accounts [3][6] - SEO optimization techniques include keyword placement and tag strategies to enhance search rankings and cover user search needs [6][7] - Five effective types of content notes are identified: pain point notes, evaluation notes, tutorial notes, checklist notes, and story notes, each with specific engagement metrics to track [8] Group 3: Advertising and Influencer Collaboration - Xiaohongshu's advertising strategy utilizes the "Juguang" and "Chengfeng" platforms for brand exposure and conversion, with specific targeting and bidding strategies to optimize ROI [13] - Influencer collaboration is stratified into three tiers: grassroots influencers for volume, mid-tier influencers for precise conversion, and top-tier influencers for brand exposure [14] - Selection criteria for influencers include interaction rates, fan demographics, and content quality to ensure alignment with brand target users [15] Group 4: Private Domain Conversion and Future Trends - Strategies for private domain conversion include comment section guidance, live stream interactions, and store page operations to enhance user retention [18] - Future trends indicate the application of AI tools, the rise of short drama marketing targeting older demographics, and opportunities in buyer e-commerce with significant growth in white-label products [18] - Recommendations for brands include focusing on authentic experiences, optimizing advertising strategies, and monitoring key performance indicators to adapt to market changes [19][20][22]