CorpXSasia are pleased to invite you to the fourth call in our Hong Kong/China Small Cap Series

In the Hong Kong Small Cap Series we are pleased to offer a Small Group Video Meeting with Mr. Chris Yuen of Le Saunda (738.HK) (Mcap HKD 529 million). The Le Saunda Group is engaged in the design, development, manufacturing and retailing of fashionable footwear, handbags and accessories in Mainland China, Hong Kong and Macau under a vertically-integrated business model.The major proprietary brands include Le Saunda, Le Saunda Men, Linea Rosa, Pitti Donna and SNE, high aim to appeal to diversified target customer groups with their distinctive product lines.

Due to Covid the revenues over 1H 2020 dropped by 30% in comparison to the same period last year. However, the Gross Profit Margin is still around 63%. Significant cost cutting and closure of production facilities led to significant administrative one-offs this year. However the company has cash on hand which is higher than its current market cap and no outstanding debt contributing to a negative Enterprise Value.

Le Saunda has a retail network comprised of 396 (of which are 350 self owned and 46 franchised) stores in Mainland China, Hong Kong and Macau, which was reduced with 69 stores compared to the corresponding period of last year. The company has been adjusting its overall store inventory over the last years in order to accommodate new e-commerce trends and strategies and is selling increasingly online via new and emerging e-commerce platforms.

Le Saunda opened up online and online sales channels through the adoption of social media and accelerated the development of enterprise informatisation. But it's no secret that with the social unrest in Hong Kong, the resulting decrease in tourism, increasing unemployment on top of the Covid Pandemic the retail climate could hardly have been more challenging.

E-Commerce remains one of the key growth strategies for the company and now that the Shunde Factory is closed and all of the production is outsourced the company will focus fully on the design, marketing and branding of its products