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Chlitina Holding Limited
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Chlitina Holding Limited
Group Introduction
Chlitina Holding Limited
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CONTENTS
A. About CHLITINA
B. Market Environment in China
C. Core Competencies
1. A relatively large market
2. A comprehensive training system
3. Professional R&D and production mechanisms
4. A substantive brand concept
D. Financial Ratios
Chlitina Holding Limited
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A. About CHLITINA
Chlitina Holding Limited
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A.About CHLITINA
Company Information➲ Company Name: Chlitina Holding Limited
➲ Chairperson: Chen Pei-hua
➲ Paid-in capital: NT$757 million
➲ Total number of employees: 631
➲ Market segments:
Channel Management
Skincare ProductsR&D and
Production
Sales Regions
2012 Annual Sales Results
Unit: Thousand RMB
Unit: Thousand NT Dollars
%
Mainland China
505,087 2,365,825 98.23
Other* 9,123 42,734 1.77
Total 514,210 2,408,559 100.00
*Note: Sales results in Hong Kong and Taiwan.
Chlitina Holding Limited
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A.About CHLITINA
Number of CHLITINA stores
Year
1997Chlitina Group set up operations in Shanghai, officially expanding into the Mainland China market
1999Opened the first flagship store in Shanghai
2003Obtained ISO 9001:2000 certification and the GMP certification for cosmetics manufacturers
2012Honored at the 17th China Beauty Expo as a "Leading Brand" and "The Most Influential Beauty Chain Salon"Listed among China's Top 50 High-Growth Franchises (Franchise 50) by ENTREPRENEUR magazine Named one of "Top 10 Most Investment Value Brand in Asia" at ASIA BRAND ANNUAL MEETING 2012
2008Formed an R&D alliance with a French partner;CHLITINA saw the 15,000th person complete its elite skincare consultant training program
2013Named "Most Valuable Beauty Institute" at China Beauty Expo"Most Influential Entrepreneurial Brand" award Gold Medal, Joining China Franchise & China Venture ExhibitionTop 10 Business Models, Business Model Summit for Beauty IndustryListed among China's Top 50 High-Growth Franchises (Franchise 50) by ENTREPRENEUR magazine
1989Launched the CHLITINA brand in Taiwan
2,000
3,000
2011Listed among China Famous Trademarks
Company Milestones
1989 1997 1999 2003 2005 2008 2011 2012 2013
Chlitina Holding Limited
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Category Product Type Function
At-home skincare
Liquid makeup removers, cleansing creams,
toners, lotions, creams
Cleansers
Hydrators
Treatments
Moisturizers
Protectors
Salon Products
Bio-regenerating collection
Eye treatment collection
Anti-wrinkle collection
Fairness (whitening) collection
Hydration collection
NATUREX collection
Skin treatment collection
Aromatherapy Essential oil (including blends)
BodyEssential oil, lotion
Slimming collection
Product and Services A.About CHLITINA
Chlitina Holding Limited
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B. Market Environment in China
"China is a land of opportunities, and we are in a season of harvest."
Chlitina Holding Limited
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B. Market Environment in China
Unit: 100 million RMB
Source: Euromonitor
Size of China's Cosmetics Market"Mainland China: a high-growth, competitive
market despite its relative immaturity"
Compound Annual Growth Rate (CAGR): 8.12%
3,000
2,500
2,000
1,500
1,000
500
02011 2012 2013 2014 2015 2016
1,816 1,9682,130 2,303
2,4882,684
Chlitina Holding Limited
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2011 2012(F) 2013(F) 2014(F) 2015(F) 2016(F)0
200
400
600
800
1000
1200
銷售
額(
人民
幣億
元)
Mainland China Market for Skincare Products, 2011-
2016
Source: Euromonitor ( May 2012 )
Body care
Face care
Hand care
Category/Year
2011 2012(F) 2013(F) 2014(F) 2015(F) 2016(F)
Body care 27.32 29.31 31.41 33.61 35.93 38.37
Face care 695.93 769.65 849.97 937.11,013.761,134.09
Hand care 8.32 9.33 10.42 11.61 12.88 14.25
B. Market Environment in China
Chlitina Holding Limited
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2011 2012(F) 2013(F) 2014(F) 2015(F) 2016(F)0
50
100
150
200
250
300
350
400
450
5002011-2016年中國大陸臉部護理類產品市
場
銷售
額(
人民
幣億
元)
Source: Euromonitor ( May 2012 )
Facial masks
Lip care
Facial moisturizers
Toners
Anti-aging
Acne treatments
Facial cleansers
Category/Year 2011 2012(F) 2013(F)2014(F
)2015(F
)2016(F) %
Acne treatments 5.37 5.74 6.12 6.51 6.91 7.32 0.65%Facial masks 58.62 66.95 76.26 86.63 98.14 110.89 9.78%Facial cleansers 80.64 84.33 88.01 91.71 95.4 99.06 8.73%Facial moisturizers
301.96 329.99 359.88 391.63 425.62 461.65 40.71%
Lip care 4.74 5.11 5.5 5.9 6.31 6.75 0.60%Anti-aging products
199.62 226.01 255.35 287.71 323.26 362.19 31.94%
Toners 44.98 51.52 58.85 67.01 76.12 86.23 7.60%
B. Market Environment in China
Chlitina Holding Limited
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Chain stores
48%Independent
stores 52%
Chain stores 3%
Independent stores 97%
A whopping 45% difference in growth rate!
Source: Annual Survey of Aesthetic, Recreation and Wellness Chains, China Chain Store & Franchise Association
B. Market Environment in China
"China's beauty & recreation services are mostly delivered by independent businesses, without any differentiated industry leaders."
Analysis of China's Beauty & Recreation Industry
Western Countries Mainland China
Chlitina Holding Limited
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Non-franchise beauty brands 291,000 stores (97%)
Franchise beauty brands Approx. 9,000 stores (3%)
Franchise beauty brands (Mainland China)Non-franchise beauty salons (Mainland China)
Only 10% of new stores survive!
Franchising leads to successful brand expansion!
Survival among new stores increases to 90%
Lack of branding leads to isolation
Industry regulatory measures
are inefficient
Some services providers
are unqualified
Competition in the market
is not properly regulated
Source: Annual Survey of Aesthetic, Recreation and Wellness Chains, China Chain Store & Franchise Association 2011-2015 Prospects of Operating a Beauty Chain in China or Making Related Investments , Beijing-based Zhi-Yan Scientific Information Consulting Co. (www.abaogao.com)
Beauty & Recreation Service Providers Worldwide Rely on the
"Chain/Franchising" Business Model for Survival"Economies of scale is key to success for chains and franchises."
B. Market Environment in China
Chlitina Holding Limited
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B. Market Environment in China
Brand Name Business Model Target Markets MainProducts
Number of
Stores
Listed among China
Famous Trade-marks? (Y/N)
CHLITINA
A franchise system(Franchisees must pay the deposit and franchise fee)
Mainland China, Taiwan, Hong Kong and Southeast Asia
Skincare products
Approx. 3,000 Yes
Natural Beauty
A franchise system(Franchisees must pay the deposit and franchise fee)
Mainland China, Taiwan, Hong Kong, Macau and Southeast Asia
Skincare products
Approx.1,500 Yes
AESTHETIC
A franchise system(A "no-franchise-fee" policy during promotional period)
Mainland China
Skincare products
Approx. 2,000
No
SIYANLI
A combination of regular chains and franchisees (Franchisees must pay a franchise fee)
Mainland China
Skin and body care products
Approx. 130 No
BIO JOURDEN
ESS
Mostly comprising regular chain stores
Mainland China, Taiwan, Malaysia and Japan
Skincare and makeup products
Approx. 800 No
Mainland China's Market for Skincare Products
Chlitina Holding Limited
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C. Core Competencies"It's not the only option, but the most
competitive one."
Chlitina Holding Limited
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A relatively large market
A substantive brand concept
A comprehensive training system
Professional R&D and production
mechanisms
Over 3,000 retail chains
Hundreds of stores join the CHLITINA Group each year
11 distribution centers
22 regional training centers
Over 15,000 beauticians
China Famous Trademark
Enlightenment Educational Program
CSR efforts
Customized products/treatments
GMP-certified manufacturing
facilities
A technological R&D alliance with a French
company
C.Core Competence
TOTAL SOLUTION
Chlitina Holding Limited
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Number of CHLITINA stores in China
Number of CHLITINA Stores in Mainland China C.Core Competence
"China's largest professional beauty chain is taking shape."
Market
A re
lative
ly larg
e m
arke
t
2656 26873004 3121
3500
3000
2500
2000
1500
1000
500
02010 2011 2012 2013Q3
Chlitina Holding Limited
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Market
As of 2013Q3, CHLITINA has: 1) 2 regular chain stores and 3,121 franchisees in Mainland
China2) 126 distributors in Taiwan
Heilongjiang Province
32 locations
Jilin Province29 locations
Liaoning Province
79 locationsBeijing City202 locations
Inner Mongolia
Autonomous Region
76 locationsShanxi Province
75 locations
Anhui Province
105 locations
Hebei Province
70 locations
Henan Province
25 locations
Hubei Province
171 locations
Jiangsu Province
343 locations
Jiangxi Province
89 locations
Shandong Province
90 locations
Hunan Province
150 locations
Tianjin City76 locations
Hainan Province
5 locations
Guangdong Province
301 locations
Shanghai City343 locations
Zhejiang Province
525 locations
Gansu Province
4 locations
Ningxia Hui Autonomous
Region6 locations
Shaanxi Province
32 locations
Chongqing City54 locations
Sichuan Province
79 locations
Tibet Autonomous
Region7 locations
Guangxi Zhuang Autonomous
Region25 locations
Yunnan Province
17 locations
Guizhou Province
40 locations
Xinjiang Uyghur Autonomous Region
13 locations
Fujian Province58 locations
Taiwan 126locations
C.Core Competence
CHLITINA's Locations across China
Northeast China
North China
East China
Southeast China
Northwest China
Southwest China
Taiwan
A re
lativ
ely
larg
e m
arke
t
Chlitina Holding Limited
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Presence of CHLITINA Franchisees in Urban Areas C.Core Competence "Rendering superior service in an ever-expanding
franchise network" Market
A re
lative
ly larg
e m
arke
t
Major geographic
regions2010 2011 2012 Sep 2013
Northeast China 31 32 34 32
Southeast China 76 71 72 76
North China 24 24 24 23
East China 124 128 139 146
Northwest China 9 9 13 15
Southwest China 44 46 47 41
Total 308 310 329 333
At least 700 cities in China have enough target customers to support Chlitina stores—suggesting there is much room for further growth.
Chlitina Holding Limited
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High-Quality Storefront and Interior DesignC.Core Competence "A client-oriented, sophisticated service environment"
Market
A re
lative
ly larg
e m
arke
t
Chlitina Holding Limited
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A relatively large marketA substantive brand
conceptA comprehensive training system
Professional R&D and production mechanisms
Over 3,000 retail chains
Hundreds of stores join the CHLITINA Group each year
11 distribution centers
22 regional training centers
Over 15,000 beauticians
China Famous Trademark
Enlightenment Educational Program
CSR efforts
Customized products/treatments
GMP-certified manufacturing
facilities
A technological R&D alliance with a French
company
C.Core Competence
TOTAL SOLUTION
Chlitina Holding Limited
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Hangzhou
Nanjing
Dalian Beijing
Chengdu
Guangzhou
Chongqing
Hubei
Hunan
Shanghai
Shandong
Anhui
Inner Mongolia Tianjin
Hebei
Ningbo
Shenzhen
Kaohsiung
TaichungTaipei
25 Regional Training Centers • Basic storefront management courses for new franchisees• Basic/advanced product-related knowledge and ordinary
skincare skills• Advanced warehousing and market expansion capabilities• High-level seminars on how to expand operations• Knowledge about new products and skincare
Accommodates up to 2,000 trainees and is supported by a highly qualified teaching staff
A total of 15,000 well-trained elite beauty consultants currently work at franchised CHLITINA salons nationwide
CHLITINA has provided nearly 300,000 trainees with professional courses
CHLITINA aims to provide better services while reducing employee turnover
Wenzhou
Jiangxi
Shaanxi
Fukien
Suzhou
Chlitina Holding Limited
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Senior Consultants
Beauty Ambassadors
Basic TrainingSkincare Techniques
(basic)Corporate Culture Customer Service Etiquette
Occupational and Professional Image Building Corporate Culture Skin Physiology
Skincare Techniques (advanced)Skincare Consultancy Product-related Knowledge
Business AdministrationCorporate Culture Consumer Psychology
MarketingTreatment Planning Instructor Training Programs
Beauticians
Skincare Consultants
Store Managers & Aesthetic Consultants
A Three-Stage Training Mechanism for Elite Aestheticians
"Nurturing well-rounded professionals with comprehensive, career-long training solutions"
C.Core Competence
Comprehensive
A co
mp
reh
en
sive tra
inin
g syste
m
Chlitina Holding Limited
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Training FacilitiesC.Core Competence
"A European-style beauty academy where all professional training courses begin in the HEART"
Comprehensive
A co
mp
reh
en
sive tra
inin
g syste
m
Chlitina Holding Limited
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A relatively large marketA substantive brand concept
A comprehensive training system
Professional R&D and production mechanisms
Over 3,000 retail chains
Hundreds of stores join the CHLITINA Group each year
11 distribution centers
22 regional training centers
Over 15,000 beauticians
China Famous Trademark
Enlightenment Educational Program
CSR efforts
Customized products/treatment
s
GMP-certified manufacturing
facilities
A technological R&D alliance with a
French company
C.Core Competence
TOTAL SOLUTION
Chlitina Holding Limited
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Anti-aging and anti-sagging
Expertly rendered salon-quality
skincare treatments
All-purpose products with results that last all day
CHLITINA's technical alliance with a top-notch fashion & beauty consultant from France
Guidelines for the Research and Development of Diversified Products
C.Core Competence
Professional
Pro
fessio
na
l R&
D a
nd
pro
du
ction
me
cha
nism
s
Chlitina Holding Limited
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C.Core Competence
Organization of CHLITINA's R&D DivisionDepartment Location Department Roles
Product R&D Dept.
1st Technology R&D Dept.
Taiwan
R&D Head Office
Training the R&D staff
Developing and introducing new technologies
Developing new products
Providing the Production Dept. and Quality Assurance Dept. with technical support
Evaluating external labs and OEM manufacturers; Implementing partnership projects
Verifying product safety, stability and efficacy
Managing confidential documents with regard to product formulation and technologies
Finding and confirming material suppliers
Maintaining and confirming the legal compliance of products
2nd Technology R&D Dept.
Shanghai
Communicating and coordinating with the Shanghai-based R&D staff to ensure technological consistency
Confirming product formulations/preparations and the legal compliance of product information texts
Handling the conversion, editing, confirmation and output of product information texts
Offering assistance in trial production and technology transfers
Handling the input and output of technology transfer documents
Finding suppliers of China-produced raw materials and conducting experiments accordingly
Providing the Production Dept. and Quality Assurance Dept. with technical support
R&D Center France Tracking the latest developments in global beauty/cosmetics technologies and introducing them to CHLITINA
Professional
Pro
fessio
na
l R&
D a
nd
pro
du
ction
me
cha
nism
s
Chlitina Holding Limited
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C.Core Competence
Flagship Collections
"More than 140 professional skincare products!"
Pure plant extracts of flowers, stems and leaves are formulated with a high-concentration serum to tackle skin conditions caused by excessive sebum secretions, sensitivity, aging, (comedonal) acne, skin damage, dryness, spots or dullness.
The collection adds a jade-like glow to the face by hydrating, revitalizing and nourishing every skin cell. It is a long-lasting moisturizer that keeps the skin functioning properly, while at the same time giving it the much-needed revitalizing touch.
This terrific sun screen collection effectively shuts out UVA/UVB rays. It contains specially formulated porous powder to protect skin without leaving it greasy.
E.P.O. Collection NATUREX toner collection FANTASIA collection ALIGHTS collection
This cellular metabolism-booster keeps skin cells intact with an adequate moisture level despite potential damage. It seals in moisture to effectively reduce signs of aging, symptoms of dryness or chapped skin.
Professional
Pro
fessio
na
l R&
D a
nd
pro
du
ction
me
cha
nism
s
Etc…
Chlitina Holding Limited
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C.Core Competence
Certificates of Compliance with R&D and Manufacturing Standards
Professional
Pro
fessio
na
l R&
D a
nd
pro
du
ction
me
cha
nism
s
Chlitina Holding Limited
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C.Core Competence
CHLITINA's Manufacturing Facilities
Professional
Pro
fessio
na
l R&
D a
nd
pro
du
ction
me
cha
nism
s
Chlitina Holding Limited
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A relatively large marketA substantive brand concept
A comprehensive training system
Professional R&D and production mechanisms
Over 3,000 retail chains
Hundreds of stores join the CHLITINA Group each year
11 distribution centers
22 regional training centers
Over 15,000 beauticians
China Famous Trademark
Enlightenment Educational Program
CSR efforts
Customized products/treatment
s
GMP-certified manufacturing
facilities
A technological R&D alliance with a
French company
C.Core Competence
TOTAL SOLUTION
Chlitina Holding Limited
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➲In a rare example, CHLITINA and Ke-Li-Ti-Na (the Chinese name of CHLITINA) were simultaneously designated as China's Famous Trademarks.
➲ "China Famous Trademark" is the highest-level trademark awarded by the State Administration for Industry and Commerce of the People's Republic of China.
➲ Only 14 Taiwan-based businesses have been awarded the Famous Trademark designation.
➲ China's Famous Trademarks reflect excellence in terms of brand awareness, reputation and customer services, as well as favorable recognition from both authorities and consumers.
C.Core Competence
Substantive
A su
bsta
ntive
bra
nd
con
cep
t
China Famous Trademark CHLITINA is an iconic business that achieved the highest honor for a
brand
Chlitina Holding Limited
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2002-2009:• Sponsored the advertising campaign for Shanghai International Arts Festival in a successful brand positioning effort
2004:• Sponsored Tsai Chin's concert "Under the Moon Light" • Sponsored the 4th China Peking Opera Art Festival• Started a year-round advertising campaign in SHANGHAI TIMES for franchisee recruitment
2006:• CHLITINA published a series of brand stories and new product ads in VOGUE, MODERN WEEKLY and MINI
2007:• Launched a prime-time advertising campaign on CCTV to raise CHLITINA's brand awareness
• Sponsored "Her Village," a TV show hosted by Yang Lan• Started a brand-awareness advertising campaign via Focus Media
Branding and Product Promotion
Chlitina Holding Limited
2008:• Sponsored the 11th Shanghai International Film Festival
• Started a year-round brand-awareness advertising campaign in Hong Kong Daily News
• Started a year-round brand-awareness advertising campaign via Focus Media
• Advertised new products in MODERN WEEKLY and JESSICA
2009:• Advertised the new FANTASIA collection in MODERN WEEKLY
• Published franchisee recruitment ads for regional franchise meetings
2011:• Advertised new products in nearly 10 fashion magazines, including Xinmin BELLA
• Chairperson Chen Pei-hua, CEO Richard Yu and VP Ye Meifeng were interviewed by JESSICA, Top Golf, The Week and many other fashion magazines
• Launched outdoor advertising campaigns in multiple places nationwide to enhance brand awareness
Branding and Product Promotion
Chlitina Holding Limited
2012:• Chairperson Chen Bihua and CEO Richard Yu interviewed by leading business and beauty industry media outlets, including Business Today, Hers and GLOBAL FORTUNE
• CHLITINA's new products featured by Hers among other popular fashion magazines
2013:• Chairperson Chen Pei-hua and CEO Richard Yu interviewed by numerous prominent Internet media outlets
Branding and Product Promotion
Chlitina Holding Limited
• Started a years-long campaign called "Project
Hope" for impoverished people and needy
students
• 2004: CHLITINA Group contributed to
Indonesian Tsunami relief efforts
• 2004: Sponsored the CHLITINA Cup Bridge
Tournament
• 2004: Donated cash to Chongqing City for a
charitable drive
• May 2007: Sponsored the centenary
celebration of Tongji University
• 2008: Donated RMB 3.8 million to Sichuan
earthquake victims
• 2009: Started sponsoring the Enlightenment
Educational Program and Project Hope teacher
training programs35
CSR & Charitable Efforts
Chlitina Holding Limited
3636
C.Core Competence
China Beauty Expo - Shanghai
Leading BrandThe Most InfluentialBeauty Salon Chain
Most ValuableBeauty Institute
Asia Brand Awards Most Promising Chain
China Alliances Industry Association
Substantive
A su
bsta
ntive
bra
nd
con
cep
t
Chlitina Holding Limited
3737
C.Core Competence
Hers magazine
Women's Favorite Brand:CHLITINA
ENTREPRENEUR2012 and 2013
Top 50 High-Growth Franchises (Franchise 50)
2013 China International Investment & Franchise Expo
The Most InfluentialEntrepreneurial Brand award
Gold Medal, Joining China Franchise & China Venture Exhibition
Substantive
A su
bsta
ntive
bra
nd
con
cep
t
Chlitina Holding Limited
3838
C.Core Competence
2013 Business Model Summit for Beauty Industry
Top 10 Business Models
ASIA BRAND ANNUAL MEETING 2012
Top 10 Highest Investment Value Brand in Asia
Substantive
A su
bsta
ntive
bra
nd
con
cep
t
Chlitina Holding Limited
39
D. Financial Ratios
Chlitina Holding Limited
40
In millions of NT DollarsNet operating profit
EPS (after tax)In NT Dollars
CHLITINA's Operating ResultsD.Financial Ratios
1500
1200
900
600
300
0
15
12
9
6
3
0
2010 2011 2012 2013Q3
2010 2011 2012 2013Q3
177388
791612
1.724.12
8.84 7.61
Chlitina Holding Limited
41Source: 2012 annual reports
An Industry with High Gross ProfitsD.Financial Ratios
CHLITINA
82.71%
L'OCCITANE
82.71%
ESTEE LAUDER
80.10%
Natural Beauty
78.57%
Shiseido
76.11%
KOSÉ
73.54%
L’Oréal
70.67%
Chlitina Holding Limited
42
D.Financial Ratios
Net Profit
Source: CPA-audited annual pro-forma affiliation reports, released by the aforementioned companies
2010 2011 2012 2013Q30.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
7.22%
14.10%
24.51%
27.91%
11.42%
Chlitina2012 Bio-tech profitable company in TW
Chlitina Holding Limited
43
D.Financial Ratios
Return on Equity (ROE)
Source: CPA-audited annual pro-forma affiliation reports, released by the aforementioned companies
2010 2011 2012 2013Q30.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
98.08%
90.09%
82.03%
60.25%
11.32%
Chlitina2012 Bio-tech profitable company in TW
Chlitina Holding Limited
44
D.Financial Ratios
Return on Assets (ROA)
Source: CPA-audited annual pro-forma affiliation reports, released by the aforementioned companies
2010 2011 2012 2013Q30.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
15.51%
24.35%
34.79%
31.93%
11.91%
Chlitina2012 Bio-tech profitable company in TW
Chlitina Holding Limited
45
Thanks For Your Attention
Q&A