2005 Annual Results 2005 Annual Results PresentationPresentation

Member of Li & Fung GroupMember of Li & Fung Group 9 March 20069 March 2006

2005 Annual Result Presentation2005 Annual Result PresentationAgendaAgenda

Overall Hong Kong & Guangzhou Retail MarketsOverall Hong Kong & Guangzhou Retail Markets

2005 Financial Results Highlights2005 Financial Results Highlights

2006 Update & Outlook2006 Update & Outlook

Questions & AnswersQuestions & Answers

2005 Hong Kong Consumer Price Index2005 Hong Kong Consumer Price IndexYear-on-year % ChangeYear-on-year % Change

-3.0-2.6

-0.4

1.1

-0.5

0.8 0.80.5

0.81.2 1.3 1.4 1.6

1.8 1.7 1.8

-4

-3

-2

-1

0

1

2

3

%

20

02

20

03

20

04

20

05

Jan

20

05

Fe

b

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Se

p

Oct

No

v

De

c

Source: Census and Statistics Department, HKSAR

ACNielsen Economic Confidence IndexACNielsen Economic Confidence Index

9595

63

77

73

83

89

7169

76

100102

101

102

73

67

79

99

9697

90

73

7779

9293

87

98

90

949393

87

8384

73

7676

82

85

9191

95

75

85

8784

88

73

50

60

70

80

90

100

110

1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10

PeriodPeriod1994 1995 1996 1997 19991998 2000 2001 2002 2003 2004 2005 2006

Base: January 1985 = 100

Source: ACNielsen Confidence Index

2005 Hong Kong Retail Sales Value2005 Hong Kong Retail Sales ValueYear-on-year % ChangeYear-on-year % Change

-4.1-2.3

10.8

6.8

4.1

16.4

6.2

8.67.1

6.17.1

6.24.9 4.8 4.1

6.8

-10

-5

0

5

10

15

20

%

20

02

20

03

20

04

20

05

Jan

20

05

Fe

b

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Se

p

Oct

No

v

De

c

Source: Census and Statistics Department, HKSAR

2005 Guangzhou City Consumer Price Index2005 Guangzhou City Consumer Price IndexYear-on-year % ChangeYear-on-year % Change

-2.4

0.1

1.7 1.51.0

4.1

2.0

1.4

2.11.8 1.8

0.7

-0.3

0.7 0.7

1.6

-3

-2

-1

0

1

2

3

4

5

%

20

02

20

03

20

04

20

05

Jan

20

05

Fe

b

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Se

p

Oct

No

v

De

c

Source: Bureau of Statistics, Guangzhou

2005 Guangzhou Retail Sales Value2005 Guangzhou Retail Sales ValueYear-on-year % ChangeYear-on-year % Change

9.89

12.113.2

7.1

12.4

21.3

15.9

13.6

16.5

9.911.4

13.912.9 13.2 13.3

0

5

10

15

20

25

%

20

02

20

03

20

04

20

05

Jan

20

05

Fe

b

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Se

p

Oct

No

v

De

c

Source: Bureau of Statistics, Guangzhou

2005 Financial Results Highlights2005 Financial Results HighlightsGroup TurnoverGroup Turnover

1,383.61,515.8

1,736.5

1,995.2

0

500

1,000

1,500

2,000

2,500

HK

$ M

illio

n

2002 2003 2004 2005

No. of store – HKNo. of store – HK 166166 186186 205205 230230

No. of store - ChinaNo. of store - China 22 77 2020 4545

+15%+15%

* Restated

***

60.4 60.566.3

73.6

0

20

40

60

80

100

HK

$ M

illio

n

2002 2003 2004 2005

2005 Financial Results Highlights2005 Financial Results HighlightsGroup Net ProfitGroup Net Profit

+11%+11%

* Restated

***

2005 Financial Results Highlights2005 Financial Results HighlightsNet Profit as % of TurnoverNet Profit as % of Turnover

4.44.0 3.8 3.7

0

1

2

3

4

5

6

% o

f S

ales

2002 2003 2004 2005

- 0.1%- 0.1%

* Restated

***

2005 Financial Results Highlights2005 Financial Results HighlightsStrong Promotions & TurnoverStrong Promotions & Turnover

Mcmug MiffyLucky Star

TissueGarfield

2005 Financial Results Highlights2005 Financial Results HighlightsGross Margin / Other IncomeGross Margin / Other Income

32.3 32.2 32.3

33.0

30

31

32

33

34

% o

f S

ales

2002 2003 2004 2005

* Restated

* * *

2005 Financial Results Highlights2005 Financial Results HighlightsStore Operating ExpensesStore Operating Expenses

9.0

7.0

6.2

9.2

7.0

6.5

9.3

7.3

6.6

9.4

7.9

7.2

0

5

10

15

20

25

30

% o

f S

ales

2002 2003 2004 2005

Labour Cost Rental Cost Other Expenses

22.2%*23.2%*22.7%*

24.5%

* Restated

2005 Financial Results Highlights2005 Financial Results HighlightsBasic Earnings Per ShareBasic Earnings Per Share

9.1 9.19.9

10.9

0

2

4

6

8

10

12

14

HK

Cen

ts

2002 2003 2004 2005

+ 1 Cent+ 1 Cent

* Restated

**

*

2005 Financial Results Highlights2005 Financial Results Highlights

2005 2004 Change

Number of StoresNumber of Stores 275275 225225 + 50+ 50

Group Turnover (HK$M)Group Turnover (HK$M) 1,995.21,995.2 1,736.5*1,736.5* + 15%+ 15%

Group Net Profit (HK$M)Group Net Profit (HK$M) 73.673.6 66.3*66.3* + 11%+ 11%

Net Profit as % of TurnoverNet Profit as % of Turnover 3.7%3.7% 3.8%*3.8%* - 0.1%- 0.1%

Basic Earnings Per ShareBasic Earnings Per Share 10.9 Cents10.9 Cents 9.9 Cents*9.9 Cents* + 1 Cent+ 1 Cent

Total Dividend Per ShareTotal Dividend Per Share Paid Mid YearPaid Mid Year To Be PaidTo Be Paid

1.5 Cents1.5 Cents

4.5 Cents4.5 Cents

1.25 Cents1.25 Cents

3.75 Cents3.75 Cents

* Restated

2005 Financial Results Highlights2005 Financial Results Highlights44thth Quarter Quarter

2005 2004 Change

Group Turnover (HK$M)Group Turnover (HK$M) 524.2524.2 442.9*442.9* + 18%+ 18%

Group Net Profit (HK$M)Group Net Profit (HK$M) 20.920.9 19.4*19.4* + 8%+ 8%

Net Profit as % of TurnoverNet Profit as % of Turnover 4.0%4.0% 4.4%*4.4%* - 0.4%- 0.4%

Basic Earnings Per ShareBasic Earnings Per Share 3.1 Cents3.1 Cents 2.9 Cents*2.9 Cents* + 0.2 Cent+ 0.2 Cent

* Restated

Year-On-Year Profitability GrowthYear-On-Year Profitability Growth

10.3

0.2

9.511.0

0

3

6

9

12

15

% C

hang

e

2002 2003 2004 2005

*

* Restated

*

*

2005 Achievements – New Markets2005 Achievements – New Markets

Circle K MacauCircle K Macau

Circle K ZhuhaiCircle K Zhuhai

Circle K DongguanCircle K Dongguan

Market office set up Market office set up in Shenzhenin Shenzhen

2005 Achievements2005 Achievements

Caring Company Award 2005/2006Caring Company Award 2005/2006

Best Employers in Asia 2005 by Best Employers in Asia 2005 by

Hewitt Associates LLCHewitt Associates LLC

2006 Update & Outlook2006 Update & Outlook

2006 Hong Kong Market Outlook2006 Hong Kong Market Outlook

Local consumer spending continues to increase graduallyLocal consumer spending continues to increase gradually

Pressure on store operating expensesPressure on store operating expenses

Rising rental for stores up for renewalRising rental for stores up for renewal

Retail Rental Changes By AreaRetail Rental Changes By Area

40

60

80

100

120

140

160

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

Central

Causeway Bay

Tsim Sha Tsui

Mong Kok

Overall Prime

Index (Q1 1996=100)Index (Q1 1996=100)

Source: CB Richard EllisSource: CB Richard Ellis

2006 Hong Kong Market Outlook2006 Hong Kong Market Outlook

Local consumer spending continues to increase graduallyLocal consumer spending continues to increase gradually

Pressure on store operating expensesPressure on store operating expenses

Rising rental for stores up for renewalRising rental for stores up for renewal

Inflation on labour and utility expensesInflation on labour and utility expenses

Free newspapers and price war still developingFree newspapers and price war still developing

Fierce competitionFierce competition

Strong promotions to drive comparable store sales growthStrong promotions to drive comparable store sales growth

Consistent increase in store number sales and profitabilityConsistent increase in store number sales and profitability

2006 Pearl River Delta Market Outlook2006 Pearl River Delta Market Outlook

Income per capita and retail spending continue to increaseIncome per capita and retail spending continue to increase

Upward movements in raw material, energy and logistics cosUpward movements in raw material, energy and logistics cos

tingting

Stable rental but upward pressure on labour and utility costsStable rental but upward pressure on labour and utility costs

First full year of multi-city growth in Guangzhou, Dongguan, First full year of multi-city growth in Guangzhou, Dongguan,

Shenzhen, Zhuhai – focus on increasing number of storesShenzhen, Zhuhai – focus on increasing number of stores

Macau to grow at consistent paceMacau to grow at consistent pace

Sun-High Chain acquisition application – finally moving throuSun-High Chain acquisition application – finally moving throu

ghgh

Peak investment year for the Pearl River Delta marketPeak investment year for the Pearl River Delta market

2006 Market Outlook2006 Market OutlookTo SummarizeTo Summarize

Better market conditions but inflation pressure on operBetter market conditions but inflation pressure on oper

ating expenses in Hong Kongating expenses in Hong Kong

Priority of opening stores throughout the PRDPriority of opening stores throughout the PRD

First full year of multi-city expedited growthFirst full year of multi-city expedited growth

Peak investment year for the Pearl River Delta marketPeak investment year for the Pearl River Delta market

Impact on CRA’s profitability growth trendImpact on CRA’s profitability growth trend

Solid cash-flow and balance sheetSolid cash-flow and balance sheet

M&A opportunitiesM&A opportunities

2005 Annual Results 2005 Annual Results PresentationPresentation

Member of Li & Fung GroupMember of Li & Fung Group 9 March 20069 March 2006