Hello, everybody. Ladies and gentlemen, thank you for taking the time to join Giordano's 2022 Annual Results Briefing. I'm Peter Lau, Chairman CEO. On my far right is Loretta. She's our Financial Director, and she will be giving you a briefing on the, our financial results. On my near right is Dr. Chan, and he will answer most of the questions later on, probably. To my left is Mr. Loynd. We can begin with Loretta's giving us a quick rundown of the final results. Thank you. Thanks, Peter. I will start the presentations of the annual financial results for 2022 with the following overview. The group's sales increased by 12.4% to HKD 3.8 billion. The second half outperformed the first half and grew by 13.1%. The group gross margin was virtually unchanged by 36.5%, and the retail gross margin increased slightly to 59.5%. Operating expenses were flat and constitute 47.2% of total sales, reflecting improved cost leverage. The net profit attributable to the company shareholders surged to HKD 268 million, an increase of 41.1%. The Gulf Cooperation Council and Southeast Asian markets were the main contributors to the net profit. As a result of the sales recovery, the inventory turnover cost declined by 18 days to 135 days. Inventories at year-end were HKD 612 million. The cash and bond balance, net of bond loans, rose to HKD 948 million as of the year-end. The company's board of directors recommended a final dividend of HKD 0.15 per share to reach a total dividend of HKD 0.235 per share for the year. The final dividend payable, if approved, the amount of approximate HKD 237 million. The group sales increased by 12.4% or 15.7% at constant exchange rate. Sales rebound in Southeast Asia and the GCC markets were remarkable. The severe movement control measures in mainland China continued to weigh on our offline and wholesale business. Although online sales grew by 9.9% or 14.2% at a constant exchange rate, it was insufficient to counter the decline in overall sales. Hong Kong and Macau sales declined due to the outbreak of Omicron variant and also the reductions in stores. All business channels recorded sales growth and the online sales in mainland China continued to improve, whereas the ex-mainland China markets has longed as consumers resumed offline shopping after easing social distancing measures. Wholesale to franchise record a notable increase due to the sales recovery of our franchisee markets. The operating expenses was flat at 47.2% of sales due to the sales increase and effective cost control. The Southeast Asia and the GCC markets were the key recovery drivers. Sales rebound after elevation of the COVID-related measures and boosted by the successful market campaigns and also the brand image enhancement. Hong Kong and Macau turned to profits aided by the increase in gross margin and the operating expenses reductions, especially on shop rental. Mainland China's performance was adversely affected by the COVID-related lockdown measures. The inventory turnover on cost decreased 18 days to 135 days, representing healthier inventories. The inventories at suppliers and franchisees do not belongs to the group. We keep tracking the balance to ensure no excessive off-balance-sheet inventories. Inventories at suppliers and franchisees remain stable. The cash and bank balance, net of bank loans, was HKD 948 million, an increase of 8% due to the increase in profit and also the working capital. The cash conversion rate was 99%. The 2023 outlook. The business environment in 2023 will be less volatile as most regions have ceased social distancing measures. We expect the Greater China sales momentum to be rebound in the first half. Rental and staff costs are expected to rise. Increasing selling price and gross margin via product innovations and marketing will continue to cushion the impact. We'll diversify the geographical strategy to mitigate the regional business risk through the balancing development between the Greater China, Southeast Asia, and also the GCC markets. The encouraging progress in both the mature and newly developed franchise markets, example, India and Africa. The global supply chain disruptions, we still present challenges in terms of production capacity and logistics. Our distribution sourcing outside mainland China will be continued and has been increasing for the past years. Also we will continue, for the stock reshuffling between markets to mitigate the supply chain risk. This is the end of my presentations, and we will have the Q&A section right now. If you have any questions, please feel free to ask. Thank you, Loretta. The first question is from Niall. Maybe Gary can take this one. The question is about the Mainland China. Is there any signs about the picking of the business? The answer is positive. After the relaxation of the supposed distancing measures, at the end of December, we start seeing the sales rebound in the offline business. We are cautiously optimistic about the business in 2023. Can you give a sense of how store count will change there at the end of 2023? In 2022, we actually closed some shops subject to the bad situation. Just like what I mentioned, the business start to pick up in the early this year. We expected that the growth engine of the shops will start at the second half of this year. Thank you, Gary. Thank you. Waiting for the next question. From Teresa. Mark, maybe you can talk about this one. Yes. Obviously, the situation in the markets will vary. Some of the markets that opened up earlier from COVID will obviously normalize rents quicker in places such as Greater China, Hong Kong and mainland China, where we're just emerging from COVID. Obviously, there will be some pressure we feel in terms of the rental. We expect there will be some pressure there to increase the rents in the Greater China region. In the other markets, we're already starting to see them normalize. Thank you, Mark. All right. From Lewis. Loretta, do you want to take this one? It's about cash. Hi, Lewis. How much of the cash is kept in at the head office level, and how much is at the subsid levels? It's all more around 30%-40% is at head levels and the other is subsid levels. Right. Anything to add? Actually, our cash position, as mentioned, in the presentations, our cash positions are improving right now. Definitely we are managing the cash quite strictly. Perhaps, you know, to add to that, Lewis, we really don't have any problem repatriating cash from our subsidiaries via dividends or purchase of merchandise. That has never really been a concern or problem, you know, with us. Claire's question, sorry, about African markets. Mark, this is for you. Thank you, Peter. To answer your question. When a couple years ago when we targeted Africa as one of the emerging markets, or the continent, subcontinent as an emerging region that we wanted to develop in, the first thing we did was target South Africa, because the South African market is very much like the Milan for Africa. All the other African nations look to South Africa. We found a franchisee who we're still working with right now to set up our first store in South Africa and just from there, we gradually got more from the other markets. Obviously it's not a passive approach. We also take a very active approach towards finding franchisees in these African countries. One method is to work through our existing franchisees. Franchising are also franchisees for other brands. Another example I can give you is Kenya, where our franchisee is also a franchisee for Levi's. Through our existing franchise network, we can find new franchisees as well. We've also got dedicated sites for our franchise business. We have a very strong LinkedIn presence and other places where we can receive information and receive requests and inquiries about our franchise business and also to post news about our franchise network and the success that we're having, the traction that we're gaining in Africa. Those are the sort of ways that we go about it. We even have customers, loyal customers who've then gone on to start their own businesses that actually walk into our stores and say, "Can I speak to someone about franchising?" That's how we're going about it in the African countries. Another region that's going to be quite exciting for us will be India as well. In 2022 alone, we opened 20+ stores. We think that's gonna be another exciting area for the coming year. Well, back to Africa, we already have shops in about six or seven countries now. That's correct. We have shops in South Africa, we have shops in Ghana, Egypt, Kenya and Mauritius. We are about to launch or open our first store in Algeria, and we're also in advanced talks with Jordan as well. Those are the markets that we're currently in and we're interested in. Thank you, Mark. Anne Ling is interested in Southeast Asian segment margin. Gary, you want to speak to her? Yes, thank you. Yes, Anne Ling, you're correct. Our segment margins in the Southeast Asia regions was about 10% in 2022. Is this sustainable? My answer is positive. Mark just mentioned about the possible rising costs in the coming years, but at the same time, we intentionally raise our selling price and we expected that the gross margin in those regions will be increasing as well. Just for your information or for other people's informations that, in the first two months, our gross margins actually have a very good growth of momentum, and we expected that this will continue in the rest of this year. As Mark alluded to earlier, because of the Southeast Asian countries, they opened up after COVID earlier than Hong Kong and the rest of Greater China. During the last 18 months, I think some of the rents have already been raised. As Mark related, rent have been normalized already. We don't really expect much of a rental hike in SEA. The 20% margin is pretty sustainable in that sense. Okay. Sorry, just going back to Claire's question about the African countries. One thing I forgot to mention is that we're actually hosting our first franchising licensing conference in Dubai, which will take place in early May. The idea is to bring together our long-standing franchise and licensing partners, also prospective ones, hoping to show them that, you know, they can achieve long-term success with Giordano as a franchisee and a licensee. That's the first time we've done that. It'll be hosted by ourselves. Hopefully, we'll be able to pick up some new partners there as well. Would you also add that's been a lot of referral- Yes. from one franchisee to- Absolutely. his, friends, and colleagues. Exactly. Precisely. As I mentioned, Kenya is one of the regions, you know, where the franchisee is actually actively speaking to us about his fellow franchisees from other brands who are interested in talking to us. Okay. Claire is also talking about the franchise, like in Nigeria and Jordan, the logistics have been difficult. I think the only, the only real difficulty is the testing, because in each market, especially in African markets and different countries, have very different standards that they require. We've had to fine-tune our testing when we initially make the products to make sure the testing results fit all the markets, especially our prospective ones. Although I understand where you're coming from, you're probably concerned about, well, if it's a single franchisee, does that make the logistics and the costs very difficult? Not really, because we have a very dedicated team that looks after our new franchisees and our team speak to them very early on, and we show them that the entire collection for the coming year, and then we place the orders very, very early. Our logistics team, our global logistics team, can, you know, catch on and work on it from very, very early on. It's a very smooth process. For example, Algeria, we're already packing items now ready to ship. Logistics-wise, actually, it's not too difficult. We have a very nimble and efficient system. The challenge really lies within the testing requirements in the local markets, but we've overcome this as well. Thank you, Mark. Leo is interested in 2023 profit outlook. Mark, you are the legal person. I'm not quite sure how. We're gonna work very hard and we're positive, but I'm afraid we can't give you a ballpark for that just yet. Sorry about that, Leo. Theresa, 130% payout ratio, do we think it's sustainable? I don't know how to answer that question. This is a very favorite question every year. If you look at our history, we've been paying high, generous dividend year after year. I don't know about 130%, maybe anywhere between 120%-150%, I don't know. Generally speaking, it would be generous dividend payouts. Thank you, Theresa. Perhaps I can just take this opportunity to remind all our analysts and shareholders that on the corporate webpage, we actually have a news section where we update news every single week. On there you can find out about the ESG activities that we're engaging in and also developments within the group in various countries and markets that we're in. Please do visit and you'll find a lot of informative information, data there. Okay. Now again, we're working prices up. Where do you envision you take that? Well, there's certainly a limit. I don't know. I think in Hong Kong, I think we're very comfortable with the pricing right now. For example, last winter we were selling some goose down, really good quality goose down, up to about HKD 5,000 in Hong Kong. They sold out virtually before, I mean around China's New Year. Elsewhere, some of the prices, I think there's still a gap, especially in Taiwan and Mainland China. I think they have room to take their prices up by you know, supported by good marketing and quality products and things like that. No, nobody can give you a exact ceiling. We're moving it, you know, carefully. We're watching the responses from the consumers. So far, so good for Hong Kong. Also, you know, Thailand. I think Thailand has been, you know, raising the prices, fairly, boldly. It's and Singapore as well. It hasn't really hurt their top line. Thank you for that, Niall. Once again, share buyback. Okay. Well, I don't know. We don't really have a definitive buyback program. We are not a huge company that few a systematic way [inaudible]. We do buybacks from time to time. [inaudible] It could be a good gesture to tell a market that a company believes in its value. We don't want to do too much of that all the time. Mark, do you have anything to add? No, I think that's it. You know, to cut the story short, like I said, don't really take a buyback program or the buyback that we have done in the previous months as any indication for future direction. Thank you. Nick? Well, that's a $6 million question. Mark, maybe you can take a shot. Sure. I'll give it a stab. I think one of our core values is that we always say in Giordano, we think local and we act global. Whatever we do, we try and execute at international standards, but we also give a lot of autonomy to our local markets to do things that they see fit because they do know the market the best. By granting the autonomy to our local managers, our country or market managers who know the market the best, they have a lot of freedom to execute programs that they think will best work for their market. Like I said, we're very, you know, we do grant a lot of autonomy. We have core programs that apply to all our markets, but at the same time, we give our markets a lot of freedom to do so, to dictate how they want to push their offering. The other thing I would add is, for example, our emerging market. One of the beauties of moving into emerging markets is that first mover advantage and also being able to set the tone of the conversation with our customers there. In other words, what we can do is we can go into a new market and we can dictate our position. If we say we want to go in as premium, then obviously we will, you know, we will do the necessary work, around our marketing and around our product offering, to ensure that we secure that position there and hopefully maintain it as well. Maybe you can use, like, Korea and Middle East as a couple of examples how they defend the different ways of promoting the brand. For example, in Korea, we're a very premium brand. They like to use a lot of K-pop stars, K-drama stars to act as their brand ambassadors to push the Korean offering. Whereas in the Middle East, they go for location, which is their main, their main tactic is to secure prominent locations in the best malls. Through being neighbors with other premium international brands, they stay relevant that way. In addition to that, the Middle East team like to use a lot of free publicity, getting their faces in the magazines and winning awards left and right. Correct. Yes. Eunice, PLC. Gary is gonna be spending a lot of time on PLC this year. Gary, maybe you can take this one up. Yeah. Thank you, Eunice. I think the challenges in PLC in the meantime to us is about the pricing. Especially last year or last few years, there was lots of lockdown in the different cities. We had to think how to move our stocks, and that's the reason why for the last few years time, I think the key percentage, I think PLC, wasn't doing very well. This year's where we definitely will do different marketings and provide the right merchandise to the consumer. Most importantly is to raise up our selling prices. I think the issue in Mainland China in the meantime is about how we can push up our sales revenue, at the same time to further increase our key percentage and eventually to maximize our gross profit. I think that's the directions on how we address the issue. Just like what we mentioned in the last few years, we have three main streams in Mainland China and the U.S., our wholesale business and also our online business. Loretta just reported that our online business sales is doing quite well in the last few years. In the last years, comparing to the previous year, we're actually up about 15% based on constant exchange rate. The wholesale is the issue in the last few years. We confident that the wholesale business will be back to the growth engine at the second half of this year. Thank you. Well, David has asked a very good question. Some years ago, we had issued quarterly results, for a number of years, and then we found it very time-consuming, so we stopped. You know, I like quarterly results personally, but I have to consider the workload on my staff. I'm familiar with the American system of 10-Q and 10-K and so on. Certainly, David, we'll take it to the board next time when the board meets. We'll see what advice they can give us. Thank you, David. Well, thank you, David. Thank you. Thank you, Niall. We'll wait for a couple more minutes and if they are happy with the numbers and our explanations and everything, then maybe we'll let the ladies and gentlemen go for the happy hour. Enoch, how to ensure. How to ensure the right merchandise to PLC? Oh, no. No, before that. Oh, okay. How that makes... How much is basic fashion? Well, the so-called basic, we call them essentials. Something that you would need, like, on an everyday basis. I think right now it's about, you know, in the group, I think it's about 15%, maybe under 15%. Hong Kong sells a lot of essentials, socks, underwear, everything. Oh, by the way, you know, it's commercial time. We recently launched seamless trends, and they're selling very well. You should, you know, if you do wear trends, I think you should take a look at our products. The rest is probably about fashion content, which is around, you know, 80%-70%. We don't really call it fashion. We call it, you know, appropriate casual wear. If you visit our Hong Kong shops, even of late, you'll probably notice a lot of changes in the visual merchandising and also in the product offering. We have been raising our prices. We also need to drop some of the really basic, you know, T-shirts. We have put in high- quality recently, for example, Liquid Touch, Solana, you know, material. We'll probably maintain the same mix in Hong Kong, because the essentials are very successful. We sell tons of them during Chinese New Year. In the other markets, we think they still have room from increasing from probably right now under 5% of the essentials to maybe about 10% because these are, like, fairly stable and we can sell a lot of them at very, very high margins. Eunice, ensure the right merchandise to PL C. Gary, again, this is a challenge to you. Yeah. I may use another way. I think we always have right merchandise, but the issue is that we always bring in too many merchandise. Eventually we have also to do a lot of discounting to clear the merchandise. I think the crux of the matter is that how we can actually grow the right merchandise with right marketing at the same time to control the quantity. As I mentioned before, the crux of improving our profitability in Mainland China is about improving the gross margin. That's the direction. Thank you. Well, Claire, you are following up on the quarterly results. as I said, we'll take it to the board next time when we meet. we'll see what comes out of it. David is not a fan of buybacks. it was a judgment call. Exactly. yes, you're quite right. this is, you know, kind of a dilemma. Some people like it, some people don't like it. there are a number of ways that we return cash to the shareholders. one of our preferred way of doing it is to give you know, high dividends you know, over over you know, buybacks. that's why we have been doing only sporadic buybacks, not a steady buyback program. Okay. Looks like there's no more questions. Okay. Ladies and gentlemen, thank you very much for your support, and thanks, everyone for your time. Thank you. Thank you. Thank you. See you soon.