TSL a jewellery corporation
TSL is well-known for its elaborate design. Every style of design comes from excellent designers. Hence, for years TSL is awarded for Southeast Asia even international design awards. What’s more, the company is superior in high quality. This is the reason why the sales of TSL are steadily growing these days and the company is widely accepted by customers. Thus, TSL can continue to establish the advantages of its product to seek for further development. Weaknesses: Generally speaking, the styles of TSL don’t seem to appeal to young targeting customers.
Also, TSL don’t have some influential styles or designs , which is a main drawback of the brand. How to identify market segments can be a tough task for TSL. By contrast, Chow Tai Fook has launched some influential style, such as Water Flower’, ‘Forever One’, aiming at lovers. In addition, the company has traversed some ups and downs in the history of TSL, which brings some credit crisis for the company. As we all know , the brand effect is important, especially in Jewellery industry. TSL ought to establish the reputation again.
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Moreover, the advantages of TSL are not obvious omparing with other big 4 competitors: Chow Tai Fook, LukFook, CHOW SANG SANG, Emperor Watch & Jewellery. How to stand out in the Jewellery market will be a problem to TSL. Opportunities: Nowadays,the Jewellery industry tends to focus on mainland market, due to the increasing demand of the middle class. With the rapid development of PRC, China becomes one of the largest Jewellery purchasing power. Furthermore, professionals of Jewellery industry are familiar with the appetite for Jewellery, which provides opportunities for TSL to capture the market share of Jewellery.
Recently, the company convert the focus of product to 24-karat gold and platinum in order to further and better penetrate into the mass market segment. The transformation offers an opportunity to raise the brand awareness. Threats: In the passed years, the main market of Jewellery is occupied by international luxury brands, such as Cartier, Tiffany and so on. The remaining market aiming at Hong Kong Jewellery is divided up by the big four competitors. In addition, the rise of mainland Jewellery company can also be a threat to TSL. 5. 2 Ratio&Analysis
In the Consolidated Statement of Comprehensive Income,the turnover is HK the Appendix mentions,the turnover from the Group’s largest customer amounted to less than 10% of the Group’s total turnover for the current and prior year. So the increase is mainly due to revenue of external customer, inter-segment. The lift in sales results from the enhancement of its product assortment and the strategic refinement of its sales network including store expansion and relocations. The earnings per share of the company is experiencing a decline, 34. 3 cents the current year comparing 77. ents last year. The decline results from the increase in dividends payment. 5. 2. 1 Liquidity Ratios: Short-term Solvency In Statement of Financial Position, Current ratio is 2. 17 in 2013 and 1. 72 in 2012, while Quick ratio is 1. 72 in 2013 and 0. 92 in 2012. The data is good and above the benchmark. The current ratio is around 2, meaning that half of the current assets cannot be turned in cash in the short term, but all current liabilities can be repaid. And the components of current assets are cash and current tax assets, while the current liabilities are convertible bonds.
Also, the percentage of inventories drops a little, indicating an efficient short-term liquidity. 5. 2. 2 Operating efficiency In Consolidated Statement of Financial Position, days to sell inventory is from 170. 62 days last year to 160 days current year. The improvement in inventory turnover ratio reflects an improvement in liquidity of inventory. lt impies a shortened period of inventory held and quicker turnover of goods sold, which is positive. As a result, the company shows a good operating performance. 5. 2. 3 Asset management The trend of Current Asset turnover is deteriorating from 1. 9 to 1 . 7029, indicating an inefficient utilization of current asset to generate to sales. Meanwhile, the non- current asset turnover as well drops, from a level of 3. 57 to 2. 83 resulting from a great increase in the Interests in subsidiaries. It turns out the ability of asset generating to sales goes bad . 5. 2. 4 Profitability 5. 2. 5 Financial Structure 5. 4 Review of the annual report Comparing with other competitors in Jewellery, TSL has its own advantage on sales Despite the downtrend of profit margin, the turnover has increased greatly. So TSL is orthy of investment in the long term.
We can see its good profitability from the Consolidated Statement of Comprehensive Income. More than 90% turnover is from the Group’s external growth customer for the current and prior year. So it proves that for investors, TSL has the profit available for dividends. Also, the company shows a good operating performance. In Consolidated Statement of Financial Position, days to sell inventory is shorter than last year. The improvement in inventory turnover ratio reflects an improvement in liquidity of inventory, which mpies a shortened period of inventory held and quicker turnover of goods sold.
We can see TSL has increased long term investment in the recent year. The debt ofTSL increased almost 5 times compared with the debt in 2012. Because TSL has issued a large number of convertible bonds, which can lower the interest expense burdened by the company. TSL also purchased quite a lot of inventories available for sale, meaning to increase stores and expand sales. In conclusion, we hold a positive but conservative attitude to expect TSL a steady growing company with the focus of sales on 24-karat gold and platinum.