Chlitina Holding (“Chlitina”, ticker:4137 TT) held a board meeting on Aug. 12 to discuss the company’s 2019H1 operating results and dividend policy. Chlitina also announced July 2019 revenue.
– In the first half of 2019, Chlitina reported consolidated sales of NT$ 2.45 billion. Benefiting from its beauty salon franchise core business, Chlitina maintained a steady performance. Additionally, franchisee recruitment and product sales to franchisees both experienced steady growths. Chlitina achieved a gross profit margin of 84%, an operating profit margin of 35.5%, a net profit after tax of NT$ 712 million and after-tax earnings per share (EPS) of NT$ 8.96. Revenue and profit both hit record highs.
– In July 2019, Chlitina reported consolidated sales of NT$ 363 million and YTD consolidated sales of NT$ 2.82 billion, which grew 14% YoY. In May and June 2019, Chlitina sponsored the Shanghai TV Festival and the Shanghai International Film Festival to enhance its brand image. In the second half of 2019, Chlitina will launch more campaign events in airports, on TV shows, and through travel promotions to prepare for the upcoming Autumn-Winter season skin care campaigns.
– Since last year, Chlitina has strategically expanded the UPLIDER Medical Beauty Clinics’ operating size. The company plans to establish five clinics in Shanghai, Nanjing and other cities. Besides medical beauty projects, Chlitina will provide high-end anti-aging services, hoping to take advantage of its research, product development and innovation abilities in order to improve service quality, as well as build a cornerstone for the company’s future development.
– Looking forward to the second half of 2019, the company anticipates high demand within the Chinese beauty industry and a clear path for growth. Thus, we expect continuous sales growth in individual Chlitina stores. So far, Chlitina has 4,829 global franchise stores, and we are optimistic we can achieve our target of adding 400-500 new stores this year earlier than planned.
Looking back at operation results in the first half of 2019:
Chlitina Holding reported consolidated sales of NT$ 2.45 billion, which translates to a YoY growth of 16.86%, driven by positive performances from Chlitina franchises’ steady expansion, franchisee recruitment and product sales to franchisees. The company also adapted policies to enhance internal operational efficiency. Supported by both internal and external improvement, Chlitina achieved a gross profit margin of 84% and an operating profit margin of 35.5%. In addition to revenue from its skin care business, in the first quarter, Chlitina received a 22.24 million RMB financial subsidy from the Shanghai city government. Overall, Chlitina had a net profit after tax of NT$ 712 million, and after-tax earnings per share (EPS) of NT$ 8.96, growing 21.28% and 20.27% respectively. Revenue and profit both hit record highs.
Chlitina Holding explained that the company’s core business, “CHLITINA”, the beauty salon franchise, accounted for up to 96.87% of the company’s total revenue, which benefited from a successful franchise strategy and development in new markets. Additionally, the company paid attention to employee training and upgraded franchise operation quality, which helped operations improve steadily during the period. Chlitina also invested in a branding and advertisement strategy. The company updated its slogan from “Women Love Bravely” to “Love Bravely, Not Hesitantly” to convey the idea of “beauty in action”. Chlitina held a special exhibition to celebrate this theme at the Shanghai Hongqiao Airport with exhibits on 32 walls, and joined the Shanghai TV Festival and the Shanghai International Film Festival, investing in three documentaries while also conducting charity activities. Moreover, Chlitina made use of social media (Weibo) together with other brands to amplify its messages and boost market share, effectively sustaining its core business’s development.
Looking back at operation results in July 2019:
In July 2019, Chlitina reported consolidated sales of NT$ 363 million, which were influenced by the beauty industry’s seasonality. The YTD consolidated sales achieved NT$ 2.82 billion, or a 13.80% increase YoY. As of the end of July, Chlitina had already added 350 franchise stores and the total store number reached 4,829, a 10% increase compared with the same period last year. This development fully showed the company’s stability. Chlitina will keep hosting training courses, consumer acquisition tea parties and experiential activities to maintain franchise store owners’ active attitude and help prepare for the upcoming Autumn-Winter season skin care campaigns.
Second half year of 2019 operation outlook:
Looking to the second half of 2019, we expect high demand within the Chinese beauty industry, and we will focus on Taiwan, Hong Kong and Southeast Asian markets to maintain our core business’ revenue. At the same time, Chlitina will continue to promote our UPLIDER Medical Beauty Clinics and services. We plan to open two general clinics (in Shanghai and Nanjing separately) and three medical beauty clinics (two in Shanghai and one in Nanjing). Aside from general medical beauty services, Chlitina will provide more services to improve suboptimal health and provide anti-aging treatments with products developed through our joint research platform with Tongji University: the Tongji University-Chlitina Regenerative Medical Research Institution. Additionally, all new products will be distributed in all channels. In other words, Chlitina aims to build omni-channel high-quality services, which will become a cornerstone for the company’s future development.
Moreover, Chlitina’s mission is not to satisfy consumers’ desire of beauty, but instead to satisfy high-end anti-aging medical needs in the future. Thus, since 2017, Chlitina has cooperated with Tongji University and established the Tongji University-Chlitina Regenerative Medical Research Institution to research skin recovery and other anti-aging related topics. Already, stem cell skin repair research has delivered preliminary results. According to our study, adipose tissue-derived mesenchymal stem cells (ADSC) is not only a convenient raw material to acquire, but its derivatives also help promote collagen synthesis, inhibit melanin production, accelerate skin wound healing and delay skin aging in clinical trials. ADSC could become a practical ingredient for medical beauty and health maintenance. Chlitina hopes it will soon bring to fruition current products and aging and regeneration medical beauty projects. At the same time, Chlitina will also develop more competitive new products and projects to increase diversity, improve the company’s operations level and maintain a top position in Asia’s beauty industry.
Chlitina’s core business is franchise beauty salons. The company was founded in 1989, and the founder Dr. W.K. Chen is known as the Father of Amino Acids, the first medical beauty expert to apply amino acids in skincare. In 1997, Chairman Chen Pi-hua expanded Chlitina to the Mainland China market, achieving great renown with high-quality products and a successful business model. The company went public in Taiwan in 2013. The business operates in Mainland China, Taiwan and Hong Kong, and it is expanding throughout Southeast Asia. Chlitina has more than 4,829 franchised shops globally and 4,476 shops in Mainland China. It has trained more than 300,000 professional beauty consultants and become a symbolic Chinese beauty salon chain brand.
Besides the core business’s steady growth, Chlitina is expanding its business with new programs, such as the Xinmeili e-commerce platform, UPLIDER Medical Beauty Clinic, RnD nails and eyelashes salon. Chlitina hopes to seize new development opportunities with these initiatives. Taking advantage of research, production, branding and distribution channels, Chlitina has become a beauty industry chain.
Chlitina Official Website: www.chlitina.com
Some of the statements contained in this press release may be considered forward-looking statements. These statements identify prospective information. Forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. These forward-looking statements are subject to a number of factors that may cause actual results to differ materially from the expectations described, which include but are not limited to economic, competitive, market, currency, governmental and financial factors. Chlitina Holding assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions.