JS Global Lifestyle Company Limited

and Analysts. Good morning. Welcome you to JSGlobal 2023 Interim presentation. Before we start, please allow me to introduce the management of JSGlobal. They are Madam Han Run, Executive Director and Chief Financial Officer of JSGlobal. Mr. Liu Ningxin, Financial Director of JSGlobal. Mr. Kan Jianggang, Chief Financial Officer of Qian Yi Jiuyang. And Mr. Miao Ningxin, Secretary of the Board. I'm Chen Bin of the Investor Relationship Department. So without further ado, let's invite Madame Hai-Ren to make an opening speech. Distinguished analysts and investors, good morning. Welcome you all to participate in this 2023 Interim Results presentation. First, I would like to represent Global, thank you so much for the long-term support and attention. So for each one of this year, we still have like a different complicated situation domestically and internationally. We have like a big fluctuation of the currency. It has also influenced the overall operation and business of our business we can also see that we still having all these being complicated so we also have seen that the jy still focusing on our internal business competence and then trying to support all the different customer needs we have already got several different products dealing with is the pain point of the consumers. For example, like this entry level solution and also top technology ones at the same time. We also constantly improve our digital supply chain management. We hope to have this flexible, agile and lean management. So for channel perspective, JY is constantly having all those different departments. And then we also are expanding our new stuff. And we also constantly promote this content E-commerce and then trying to focus on that. So from this Essence pack, you can also see that the Shakunicha, this is also very good for the business results. I will not expand too much. So because of this spinning off of this American and the European business of Essence has already been finished. at the end of July. So for each one, we still include the performance of that. However, in order for you to have a better understanding of the spinoff, so today we will focus more on this sustainability and as an apex vision and development. Except for that, we also will talk about this structure and the related transaction after the spinoff, first of all. So welcome, Leon. Financial Director of JS Global to introduce this H1's financial performance. Okay, thank you, Madam Han. Good morning, I'm Liyang. Welcome you all to this JS Global 2023 Interim Results presentation in H1. On the whole, our balance sheet and the reports still perform strongly. So we have this net income of... The company including SN is 2.294 billion up by 2.8% YOY. If we calculated on this constant Currency, we have about 5.6% YOY and then the Inc. Revenue was a 2.358 billion. So for gross margin, it reached 975 million in H1 up by 13.1% YOY. This should be attributed to this optimization of our products and the decline of cost. So for this, the total adjusted EBITDA and EBITDA rates was 335 million and 14.6% respectively, up by 5.3% and 0.3% respectively. While the adjusted net profit was 210 million U.S. dollars, up by 1.4% respectively. So the adjusted net profit margin rate was 9.1%. So in terms of EPS, the earnings per share in H1 was 3.7 U.S. dollars down. from the same period of last year. This is actually, as we mentioned, the fluctuation of the currency. And then we also have this one-time spin-off fee. And we also have this marketing investment of this SN side. So now let's look at the overall performance of JS. So the continued business in H1. So revenue side, we have reached 574 million U.S. dollars, so down by 18.5% YOY. And H1, the gross profit was 179 million U.S. dollars with the increase of 1.1%. The adjusted EBITDA was the 79 million U.S. dollars. by 18.8% YOY. The EBITDA rate was 15.8%, which was a flat YOY. So adjusted net profit was a 52 million. The adjusted net profit margin was a 9.1%. And then the earnings per share in each one was a one cent of US dollars. Next, for this continued business for the performance, let's do the analysis. Among that, Shark Ninja APAC revenue in H1 increased by 73% YOY. According to constant currency, it increased by 84.6%, almost 85%. So our APEC business, we have this great vitality. So the main growth points are the Japanese vacuum cleaners, the constant growth of that, and then some other strategic merger and acquisitions of other countries of APEC. Enjoy, Jan. Revenue of H1 dropped by 23.2%, so down by 17.3% at the fixed exchange rate, the constant currency. We can also see that there's a weak consumer demanding market and fierce competition of the domestic market. So for this macro economy of the whole industry is not very ideal. This has led to our... revenue declined to a certain extent. For faster growth of S&APAC, it has made the proportion of the revenue for this JS continuous business compared with same period of last year, it has been increased to 9% for this year. So now let's see the revenue of different regions according to Constant currency, the revenue of China dropped by 16.5%, but the increase of Japan is as high as 40.5%. This is also because, as I said, the effective business strategy and our constant improvement of the cordless vacuum and then the technology has also been optimized constantly and this has also been favored by Japanese consumers while the different regions this has reached about 28.6 percent this mainly comes from Australia and New Zealand growth from the new markets Now let's keep going. This is about the gross profit and gross profit margin rate of this continued business. In 2023 H1, the gross profit margin procurement service was 33.2%. So it is up by 1.1%. It is also mainly, as I said, is actually due to this product mix. of high gross margin operational perspective. And in H1 this year, we have done certain optimization for this inventory turnover. So it has been decreased by seven days to 22 days from 29 days in the same period of last year. So the turnover days, has also been decreased from this 95 days to 88 days for this accounts receivable. So the turnover days of this account payable, so to be decreased from 114 days to, from 117 days to 114 days by three days. So our CapEx, it is 64 million in each one for 2 million for the continued operation. On June 30th, the company's book interest-bearing loan was $770 million. It continues to decline from $857 million at the end of last year. And then at the end of July, we have already paid it in full. So the debt to equity ratio has dropped from 0.46 times at the end of 2022 to 0.4 times in the semi-annual period. And we will continue to reduce that at the end of this year. So return on investment. is 11.4%, which is lower than the end of last year. It's actually due to the decline of net profit. It's including this loss of exchange rate and then the one-time sting of expense.

And then let's carry on. We will also see the dividend update. We plan to issue

about 136 million of Hong Kong dollar. It's actually like this 50% of the share benefits of H1. So JS Global's dividend policy will adhere to the principle of maximize the shareholders interest and adhere to our high dividend basis as we always did in the past and also consider this expansion and capital usage experience and efficiency to continuously bring return to the shareholders. We can see the dividend distribution of JS Global 2019 is the special dividend after listing and then the 2020 to 2021 the dividend payment is definitely at the top of this loan restriction terms. In March, 2022, our annual performance report due to that we are carrying out this big spinoff. So we need to keep this capital structure stable. So we fail to pay the annual dividends as the biggest composition of JS Continued Business, Joy Yang, has already paid dividends for 18 times in the 15 years since existing in 2008. So we also have as high as 96.3% of this dividend rate in the past five years. So you can see the historical data and our promise to the investors. The dividend will definitely give this a very good return to the shareholders. Now let's have with us Secretary of Board, Next, Mr. Liu to share this update of JS Global's business. Hello, I'm Miao Mingxin. Now, let me talk about H1's Zhuo Yang's business. Since this year, we still stick to this one plus three strategy, focusing on small kitchen appliances while focusing on this development of water appliances, clean appliances, and cooking ones. So in H1 of this year, Zhuo Yang launched some new series of high technologies focusing on the mid and high-end products. We have this B1, the quiet blender. We also have got this brushless variable frequency high speed motor, which fundamentally solved this pain point of this loud noise. And then we have already got the double layer soundproof cup noise reduction as low as 37 decibels. So Joy Young has actively laid out this N1S, the first ever zero-coated non-stick rice cooker. So we also had this Joy Young's original unique air-coated water moisturizing membrane technology combine this 200,000 micro-sized lettuce pits on the inner wall. So to make the structure of this water-moisturing membrane to more stable and then further improve the non-stick So this has increased the Joy Young's growth of revenue and the market share increase. In order to better adapt to the changes of the market, Joy Young has also increased the investment in this innovative technologies and launched this entry-level products, such as we have this Roam Life and then this domestic fashion series to have this differentiated competition. We also know that the competition advantage has already been upgraded from this single advantage to this competition of this comprehensive advantage and the supply chain advantage. And on the basis of adhering to this dependent research and innovation, Joyon has also improved our operation efficiency. And the quality of this efficiency and the supply chain So for the long time, Zhuo Yang has achieved this large scale cost reduction and efficiency improvement through resource focusing, management optimization, and collaborative empowerment. And we also have got this continuous improvement of this brand image. So we have this company's repair rate and turnover rate have also been gradually reduced. So our NPS, has also been significantly improved. Of course, relying on this global development background of the group, Joy Young actively exerted its advantage in R&D and supply chain management under this domestic a share, so Joy Young's export business income increased by 49.2% YOY, and this has also shown Joy Young's synergy with Shark Ninja, which has been maximized constantly at present. Joy Young has provided OEM, business covering, air fryer, blender, Sparkling Beverage Machine, et cetera, and gradually become one of the main suppliers of SN. In the future, Joyang will not only export high-quality products to SN, we also will export more low-differentiated products with a high value, especially in APEC market, we will have more localized and differentiated products. So because... cooking and dietary habits of consumers in APEC. They are closer to domestic consumers. So the synergy between Joy Young and SN APEC will be better developed. For channel perspective, you can also see that we have this constantly developing channels being developed in China and now we try to control the channel better to have a more synergized channel operating system to have this synergized development of this shelf e-commerce and content e-commerce in each one. We constantly focus on this mainstream channels to rapidly develop our direct sales to improve the proportion of that. Until the end of this year, we hope to have over 20% of our direct control sales. At the same time, we also focus on this content e-commerce to develop Xiaohongshu and TikTok to have this content e-commerce to have like content creation, food, live streaming, and then there's the photographing team and the editing team to have this quite complete matrix of live streaming. We also have this closed loop for planting the seed and then purchasing and then finishing the transaction. We can also see that the early start advantage, considering the constant changes of this content platform, is actually quite weak. So this is an opportunity for Joyeon as well. We believe content e-commerce will become one of the major sources of our revenue for offline channel. Currently, we have still like a 30% of this offline business. So we also can see that we also have achieved this positive growth. So we also have this better performance compared with our competitors in the market. And recently, this offline channel has also been changed significantly. So their traditional sources the traditional channels of KA to go to some new retail channels, for example. It has also brought about some new opportunities, for example, like a cooker and water purifier. They still have over 50% of the percentage in the offline channel, and they're faced with this complicated and ever-developing and changing channel. We have already got this layout and then the risk prevention, and we have already got this quite safe. and highly competitive revenue channel. So we always emphasize this demonstration of the products and communicating with our consumers. We have already got improvement of this revenue of retail and then to increase this offline business. In order to cater to this current sales market, we not only have this counselors training, we also got this direct Sales Construction and then the similar direct sales channels. So I hope to have this better sales of that. And now let's have Mas to share with us about this Shark Ninja APAC. So hello, we are very happy to share with you this Shark Ninja APAC. So we have taken over 40% of this global sales. population is about 870 million families, which will be very amazing. And their purchasing power is also rising steadily. Our strategy is focused on the top 25 major cities in the region. It will include the 75 million families. So it is worth noticing that these 75 million families account for about 50% of the GDP of APEC. Now we have rented Japan, South Korea, Australia, and New Zealand in these existing markets. So the annual retail terminal sales are about 7 billion US dollars according to our existing product mix. With our proven strategy in the next three to five years, we are confident that we will have about a 4.7 billion US dollars of this APEC sales target. Speaking of our vision, we are having this unshakable belief that it's actually improved the quality of every life in every family, every day. So now I will talk about specific strategy. First of all, we always stick to this summer centered. We not only sell products, we also provide solutions in order to better meet the needs of different consumers in APEC. We will deeply understand their living habits and preferences as a new player in this region. We also think it's very important to improve the brand awareness and image. We will introduce our excellent products to consumers through our strong marketing. So the Growth Pillar will still stick to this three different strategies. The first one is to have this continuous excellence of this existing core categories. And then the second one is the expansion of the new categories. We not only will be satisfied with existing ones, we will also have some new fields. The third is actually to have this market expansion to enter new areas and release the potential of these areas. So now I'm going to share with you like how do we implement in APEC. The first one is the pillar is to maintain leadership in the existing ones. For example, for the cordless vacuum is a very good example. In June, this one, we have this clean sensor IQ Plus, and this is a brand new like lightweight cordless vacuum cleaner. As we all can see that this one helps shock to further improve proves this market share of Shark in Japan. We also have like a bigger position, better demonstration. That means that our partners, especially the major retail partners are full of confidence of our products. This is not only their recognition of our products, but also like a high trust of our brand. Now I would like to share with you, how do we realize the second growth pillar for this new categories? We hope to achieve that.