Chlitina Holding Limited 1 Chlitina Holding Limited Group Introduction.

Chlitina Holding Limited

1


Group Introduction


2

CONTENTS

A. About CHLITINA

B. Market Environment in China

C. Core Competencies

　　 1. A relatively large market

　　 2. A comprehensive training system

　　 3. Professional R&D and production mechanisms

　　 4. A substantive brand concept

D. Financial Ratios


3

A. About CHLITINA


4

A.About CHLITINA

Company Information➲ Company Name: Chlitina Holding Limited

➲ Chairperson: Chen Pei-hua

➲ Paid-in capital: NT$757 million

➲ Total number of employees: 631

➲ Market segments:

Channel Management

Skincare ProductsR&D and

Production

Sales Regions

2012 Annual Sales Results

Unit: Thousand RMB

Unit: Thousand NT Dollars

%

Mainland China

505,087 2,365,825 98.23

Other* 9,123 42,734 1.77

Total 514,210 2,408,559 100.00

*Note: Sales results in Hong Kong and Taiwan.


5

A.About CHLITINA

Number of CHLITINA stores

Year

1997Chlitina Group set up operations in Shanghai, officially expanding into the Mainland China market

1999Opened the first flagship store in Shanghai

2003Obtained ISO 9001:2000 certification and the GMP certification for cosmetics manufacturers

2012Honored at the 17th China Beauty Expo as a "Leading Brand" and "The Most Influential Beauty Chain Salon"Listed among China's Top 50 High-Growth Franchises (Franchise 50) by ENTREPRENEUR magazine Named one of "Top 10 Most Investment Value Brand in Asia" at ASIA BRAND ANNUAL MEETING 2012

2008Formed an R&D alliance with a French partner;CHLITINA saw the 15,000th person complete its elite skincare consultant training program

2013Named "Most Valuable Beauty Institute" at China Beauty Expo"Most Influential Entrepreneurial Brand" award Gold Medal, Joining China Franchise & China Venture ExhibitionTop 10 Business Models, Business Model Summit for Beauty IndustryListed among China's Top 50 High-Growth Franchises (Franchise 50) by ENTREPRENEUR magazine

1989Launched the CHLITINA brand in Taiwan

2,000

3,000

2011Listed among China Famous Trademarks

Company Milestones

1989 　　　　　　 1997 　　 1999 　　　　 2003 　　 2005 　　 2008 　　　 2011 　 2012 　 2013


6

Category Product Type Function

At-home skincare

Liquid makeup removers, cleansing creams,

toners, lotions, creams

Cleansers

Hydrators

Treatments

Moisturizers

Protectors

Salon Products

Bio-regenerating collection

Eye treatment collection

Anti-wrinkle collection

Fairness (whitening) collection

Hydration collection

NATUREX collection

Skin treatment collection

Aromatherapy Essential oil (including blends)

BodyEssential oil, lotion

Slimming collection

Product and Services A.About CHLITINA


7


"China is a land of opportunities, and we are in a season of harvest."


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Unit: 100 million RMB

Source: Euromonitor

Size of China's Cosmetics Market"Mainland China: a high-growth, competitive

market despite its relative immaturity"

Compound Annual Growth Rate (CAGR): 8.12%

3,000

2,500

2,000

1,500

1,000

500

02011 2012 2013 2014 2015 2016

1,816 1,9682,130 2,303

2,4882,684


9

2011 2012(F) 2013(F) 2014(F) 2015(F) 2016(F)0

200

400

600

800

1000

1200

銷售

額（

人民

幣億

元）

Mainland China Market for Skincare Products, 2011-

2016

Source: Euromonitor （ May 2012 ）

Body care

Face care

Hand care

Category/Year

2011 2012(F) 2013(F) 2014(F) 2015(F) 2016(F)

Body care 27.32 29.31 31.41 33.61 35.93 38.37

Face care 695.93 769.65 849.97 937.11,013.761,134.09

Hand care 8.32 9.33 10.42 11.61 12.88 14.25



10

2011 2012(F) 2013(F) 2014(F) 2015(F) 2016(F)0

50

100

150

200

250

300

350

400

450

5002011-2016年中國大陸臉部護理類產品市

場

銷售

額（

人民

幣億

元）

Source: Euromonitor （ May 2012 ）

Facial masks

Lip care

Facial moisturizers

Toners

Anti-aging

Acne treatments

Facial cleansers

Category/Year 2011 2012(F) 2013(F)2014(F

)2015(F

)2016(F) %

Acne treatments 5.37 5.74 6.12 6.51 6.91 7.32 0.65%Facial masks 58.62 66.95 76.26 86.63 98.14 110.89 9.78%Facial cleansers 80.64 84.33 88.01 91.71 95.4 99.06 8.73%Facial moisturizers

301.96 329.99 359.88 391.63 425.62 461.65 40.71%

Lip care 4.74 5.11 5.5 5.9 6.31 6.75 0.60%Anti-aging products

199.62 226.01 255.35 287.71 323.26 362.19 31.94%

Toners 44.98 51.52 58.85 67.01 76.12 86.23 7.60%



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Chain stores

48%Independent

stores 52%

Chain stores 3%

Independent stores 97%

A whopping 45% difference in growth rate!

Source: Annual Survey of Aesthetic, Recreation and Wellness Chains, China Chain Store & Franchise Association


"China's beauty & recreation services are mostly delivered by independent businesses, without any differentiated industry leaders."

Analysis of China's Beauty & Recreation Industry

Western Countries Mainland China


12

Non-franchise beauty brands 291,000 stores (97%)

Franchise beauty brands Approx. 9,000 stores (3%)

Franchise beauty brands (Mainland China)Non-franchise beauty salons (Mainland China)

Only 10% of new stores survive!

Franchising leads to successful brand expansion!

Survival among new stores increases to 90%

Lack of branding leads to isolation

Industry regulatory measures

are inefficient

Some services providers

are unqualified

Competition in the market

is not properly regulated

Source: Annual Survey of Aesthetic, Recreation and Wellness Chains, China Chain Store & Franchise Association 2011-2015 Prospects of Operating a Beauty Chain in China or Making Related Investments , Beijing-based Zhi-Yan Scientific Information Consulting Co. (www.abaogao.com)

Beauty & Recreation Service Providers Worldwide Rely on the

"Chain/Franchising" Business Model for Survival"Economies of scale is key to success for chains and franchises."



13


Brand Name Business Model Target Markets MainProducts

Number of

Stores

Listed among China

Famous Trade-marks? (Y/N)

CHLITINA

A franchise system(Franchisees must pay the deposit and franchise fee)

Mainland China, Taiwan, Hong Kong and Southeast Asia

Skincare products

Approx. 3,000 Yes

Natural Beauty

A franchise system(Franchisees must pay the deposit and franchise fee)

Mainland China, Taiwan, Hong Kong, Macau and Southeast Asia

Skincare products

Approx.1,500 Yes

AESTHETIC

A franchise system(A "no-franchise-fee" policy during promotional period)

Mainland China

Skincare products

Approx. 2,000

No

SIYANLI

A combination of regular chains and franchisees (Franchisees must pay a franchise fee)

Mainland China

Skin and body care products

Approx. 130 No

BIO JOURDEN

ESS

Mostly comprising regular chain stores

Mainland China, Taiwan, Malaysia and Japan

Skincare and makeup products

Approx. 800 No

Mainland China's Market for Skincare Products


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C. Core Competencies"It's not the only option, but the most

competitive one."


15

A relatively large market

A substantive brand concept

A comprehensive training system

Professional R&D and production

mechanisms

Over 3,000 retail chains

Hundreds of stores join the CHLITINA Group each year

11 distribution centers

22 regional training centers

Over 15,000 beauticians

China Famous Trademark

Enlightenment Educational Program

CSR efforts

Customized products/treatments

GMP-certified manufacturing

facilities

A technological R&D alliance with a French

company

C.Core Competence

TOTAL SOLUTION


16

Number of CHLITINA stores in China

Number of CHLITINA Stores in Mainland China C.Core Competence

"China's largest professional beauty chain is taking shape."

Market

A re

lative

ly larg

e m

arke

t

2656 26873004 3121

3500

3000

2500

2000

1500

1000

500

02010 2011 2012 2013Q3


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Market

As of 2013Q3, CHLITINA has: 1) 2 regular chain stores and 3,121 franchisees in Mainland

China2) 126 distributors in Taiwan

Heilongjiang Province

32 locations

Jilin Province29 locations

Liaoning Province

79 locationsBeijing City202 locations

Inner Mongolia

Autonomous Region

76 locationsShanxi Province

75 locations

Anhui Province

105 locations

Hebei Province

70 locations

Henan Province

25 locations

Hubei Province

171 locations

Jiangsu Province

343 locations

Jiangxi Province

89 locations

Shandong Province

90 locations

Hunan Province

150 locations

Tianjin City76 locations

Hainan Province

5 locations

Guangdong Province

301 locations

Shanghai City343 locations

Zhejiang Province

525 locations

Gansu Province

4 locations

Ningxia Hui Autonomous

Region6 locations

Shaanxi Province

32 locations

Chongqing City54 locations

Sichuan Province

79 locations

Tibet Autonomous

Region7 locations

Guangxi Zhuang Autonomous

Region25 locations

Yunnan Province

17 locations

Guizhou Province

40 locations

Xinjiang Uyghur Autonomous Region

13 locations

Fujian Province58 locations

Taiwan 126locations

C.Core Competence

CHLITINA's Locations across China

　 Northeast China

　 North China

　 East China

　 Southeast China

　 Northwest China

　 Southwest China

Taiwan

A re

lativ

ely

larg

e m

arke

t


18

Presence of CHLITINA Franchisees in Urban Areas C.Core Competence "Rendering superior service in an ever-expanding

franchise network" Market

A re

lative

ly larg

e m

arke

t

Major geographic

regions2010 2011 2012 Sep 2013

Northeast China 31 32 34 32

Southeast China 76 71 72 76

North China 24 24 24 23

East China 124 128 139 146

Northwest China 9 9 13 15

Southwest China 44 46 47 41

Total 308 310 329 333

At least 700 cities in China have enough target customers to support Chlitina stores—suggesting there is much room for further growth.


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High-Quality Storefront and Interior DesignC.Core Competence "A client-oriented, sophisticated service environment"

Market

A re

lative

ly larg

e m

arke

t


20

A relatively large marketA substantive brand

conceptA comprehensive training system

Professional R&D and production mechanisms








CSR efforts

Customized products/treatments


facilities

A technological R&D alliance with a French

company

C.Core Competence

TOTAL SOLUTION


21

Hangzhou

Nanjing

Dalian Beijing

Chengdu

Guangzhou

Chongqing

Hubei

Hunan

Shanghai

Shandong

Anhui

Inner Mongolia Tianjin

Hebei

Ningbo

Shenzhen

Kaohsiung

TaichungTaipei

25 Regional Training Centers • Basic storefront management courses for new franchisees• Basic/advanced product-related knowledge and ordinary

skincare skills• Advanced warehousing and market expansion capabilities• High-level seminars on how to expand operations• Knowledge about new products and skincare

Accommodates up to 2,000 trainees and is supported by a highly qualified teaching staff

A total of 15,000 well-trained elite beauty consultants currently work at franchised CHLITINA salons nationwide

CHLITINA has provided nearly 300,000 trainees with professional courses

CHLITINA aims to provide better services while reducing employee turnover

Wenzhou

Jiangxi

Shaanxi

Fukien

Suzhou


2222

Senior Consultants

Beauty Ambassadors

Basic TrainingSkincare Techniques

(basic)Corporate Culture Customer Service Etiquette

Occupational and Professional Image Building Corporate Culture Skin Physiology

Skincare Techniques (advanced)Skincare Consultancy Product-related Knowledge

Business AdministrationCorporate Culture Consumer Psychology

MarketingTreatment Planning Instructor Training Programs

Beauticians

Skincare Consultants

Store Managers & Aesthetic Consultants

A Three-Stage Training Mechanism for Elite Aestheticians

"Nurturing well-rounded professionals with comprehensive, career-long training solutions"

C.Core Competence

Comprehensive

A co

mp

reh

en

sive tra

inin

g syste

m


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Training FacilitiesC.Core Competence

"A European-style beauty academy where all professional training courses begin in the HEART"

Comprehensive

A co

mp

reh

en

sive tra

inin

g syste

m


24

A relatively large marketA substantive brand concept










CSR efforts

Customized products/treatment

s


facilities

A technological R&D alliance with a

French company

C.Core Competence

TOTAL SOLUTION


25

Anti-aging and anti-sagging

Expertly rendered salon-quality

skincare treatments

All-purpose products with results that last all day

CHLITINA's technical alliance with a top-notch fashion & beauty consultant from France

Guidelines for the Research and Development of Diversified Products

C.Core Competence

Professional

Pro

fessio

na

l R&

D a

nd

pro

du

ction

me

cha

nism

s


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C.Core Competence

Organization of CHLITINA's R&D DivisionDepartment Location Department Roles

Product R&D Dept.

1st Technology R&D Dept.

Taiwan

R&D Head Office

Training the R&D staff

Developing and introducing new technologies

Developing new products

Providing the Production Dept. and Quality Assurance Dept. with technical support

Evaluating external labs and OEM manufacturers; Implementing partnership projects

Verifying product safety, stability and efficacy

Managing confidential documents with regard to product formulation and technologies

Finding and confirming material suppliers

Maintaining and confirming the legal compliance of products

2nd Technology R&D Dept.

Shanghai

Communicating and coordinating with the Shanghai-based R&D staff to ensure technological consistency

Confirming product formulations/preparations and the legal compliance of product information texts

Handling the conversion, editing, confirmation and output of product information texts

Offering assistance in trial production and technology transfers

Handling the input and output of technology transfer documents

Finding suppliers of China-produced raw materials and conducting experiments accordingly

Providing the Production Dept. and Quality Assurance Dept. with technical support

R&D Center France Tracking the latest developments in global beauty/cosmetics technologies and introducing them to CHLITINA

Professional

Pro

fessio

na

l R&

D a

nd

pro

du

ction

me

cha

nism

s


27

C.Core Competence

Flagship Collections

"More than 140 professional skincare products!"

Pure plant extracts of flowers, stems and leaves are formulated with a high-concentration serum to tackle skin conditions caused by excessive sebum secretions, sensitivity, aging, (comedonal) acne, skin damage, dryness, spots or dullness.

The collection adds a jade-like glow to the face by hydrating, revitalizing and nourishing every skin cell. It is a long-lasting moisturizer that keeps the skin functioning properly, while at the same time giving it the much-needed revitalizing touch.

This terrific sun screen collection effectively shuts out UVA/UVB rays. It contains specially formulated porous powder to protect skin without leaving it greasy.

E.P.O. Collection NATUREX toner collection FANTASIA collection ALIGHTS collection

This cellular metabolism-booster keeps skin cells intact with an adequate moisture level despite potential damage. It seals in moisture to effectively reduce signs of aging, symptoms of dryness or chapped skin.

Professional

Pro

fessio

na

l R&

D a

nd

pro

du

ction

me

cha

nism

s

Etc…


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C.Core Competence

Certificates of Compliance with R&D and Manufacturing Standards

Professional

Pro

fessio

na

l R&

D a

nd

pro

du

ction

me

cha

nism

s


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C.Core Competence

CHLITINA's Manufacturing Facilities

Professional

Pro

fessio

na

l R&

D a

nd

pro

du

ction

me

cha

nism

s


30

A relatively large marketA substantive brand concept










CSR efforts

Customized products/treatment

s


facilities

A technological R&D alliance with a

French company

C.Core Competence

TOTAL SOLUTION


31

➲In a rare example, CHLITINA and Ke-Li-Ti-Na (the Chinese name of CHLITINA) were simultaneously designated as China's Famous Trademarks.

➲ "China Famous Trademark" is the highest-level trademark awarded by the State Administration for Industry and Commerce of the People's Republic of China.

➲ Only 14 Taiwan-based businesses have been awarded the Famous Trademark designation.

➲ China's Famous Trademarks reflect excellence in terms of brand awareness, reputation and customer services, as well as favorable recognition from both authorities and consumers.

C.Core Competence

Substantive

A su

bsta

ntive

bra

nd

con

cep

t

China Famous Trademark CHLITINA is an iconic business that achieved the highest honor for a

brand


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2002-2009:• Sponsored the advertising campaign for Shanghai International Arts Festival in a successful brand positioning effort

2004:• Sponsored Tsai Chin's concert "Under the Moon Light" • Sponsored the 4th China Peking Opera Art Festival• Started a year-round advertising campaign in SHANGHAI TIMES for franchisee recruitment

2006:• CHLITINA published a series of brand stories and new product ads in VOGUE, MODERN WEEKLY and MINI

2007:• Launched a prime-time advertising campaign on CCTV to raise CHLITINA's brand awareness

• Sponsored "Her Village," a TV show hosted by Yang Lan• Started a brand-awareness advertising campaign via Focus Media

Branding and Product Promotion


2008:• Sponsored the 11th Shanghai International Film Festival

• Started a year-round brand-awareness advertising campaign in Hong Kong Daily News

• Started a year-round brand-awareness advertising campaign via Focus Media

• Advertised new products in MODERN WEEKLY and JESSICA

2009:• Advertised the new FANTASIA collection in MODERN WEEKLY

• Published franchisee recruitment ads for regional franchise meetings

2011:• Advertised new products in nearly 10 fashion magazines, including Xinmin BELLA

• Chairperson Chen Pei-hua, CEO Richard Yu and VP Ye Meifeng were interviewed by JESSICA, Top Golf, The Week and many other fashion magazines

• Launched outdoor advertising campaigns in multiple places nationwide to enhance brand awareness



2012:• Chairperson Chen Bihua and CEO Richard Yu interviewed by leading business and beauty industry media outlets, including Business Today, Hers and GLOBAL FORTUNE

• CHLITINA's new products featured by Hers among other popular fashion magazines

2013:• Chairperson Chen Pei-hua and CEO Richard Yu interviewed by numerous prominent Internet media outlets



• Started a years-long campaign called "Project

Hope" for impoverished people and needy

students

• 2004: CHLITINA Group contributed to

Indonesian Tsunami relief efforts

• 2004: Sponsored the CHLITINA Cup Bridge

Tournament

• 2004: Donated cash to Chongqing City for a

charitable drive

• May 2007: Sponsored the centenary

celebration of Tongji University

• 2008: Donated RMB 3.8 million to Sichuan

earthquake victims

• 2009: Started sponsoring the Enlightenment

Educational Program and Project Hope teacher

training programs35

CSR & Charitable Efforts


3636

C.Core Competence

China Beauty Expo - Shanghai

Leading BrandThe Most InfluentialBeauty Salon Chain

Most ValuableBeauty Institute

Asia Brand Awards Most Promising Chain

China Alliances Industry Association

Substantive

A su

bsta

ntive

bra

nd

con

cep

t


3737

C.Core Competence

Hers magazine

Women's Favorite Brand:CHLITINA

ENTREPRENEUR2012 and 2013

Top 50 High-Growth Franchises (Franchise 50)

2013 China International Investment & Franchise Expo

The Most InfluentialEntrepreneurial Brand award

Gold Medal, Joining China Franchise & China Venture Exhibition

Substantive

A su

bsta

ntive

bra

nd

con

cep

t


3838

C.Core Competence

2013 Business Model Summit for Beauty Industry

Top 10 Business Models

ASIA BRAND ANNUAL MEETING 2012

Top 10 Highest Investment Value Brand in Asia

Substantive

A su

bsta

ntive

bra

nd

con

cep

t


39

D. Financial Ratios


40

In millions of NT DollarsNet operating profit

EPS (after tax)In NT Dollars

CHLITINA's Operating ResultsD.Financial Ratios

1500

1200

900

600

300

0

15

12

9

6

3

0

2010 　　　　　　 2011 　　　　　　 2012 　　　　　　 2013Q3

2010 　　　　　　 2011 　　　　　　 2012 　　　　　　 2013Q3

177388

791612

1.724.12

8.84 7.61


41Source: 2012 annual reports

An Industry with High Gross ProfitsD.Financial Ratios

CHLITINA

82.71%

L'OCCITANE

82.71%

ESTEE LAUDER

80.10%

Natural Beauty

78.57%

Shiseido

76.11%

KOSÉ

73.54%

L’Oréal

70.67%


42

D.Financial Ratios

Net Profit

Source: CPA-audited annual pro-forma affiliation reports, released by the aforementioned companies

2010 2011 2012 2013Q30.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

7.22%

14.10%

24.51%

27.91%

11.42%

Chlitina2012 Bio-tech profitable company in TW


43

D.Financial Ratios

Return on Equity (ROE)


2010 2011 2012 2013Q30.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

98.08%

90.09%

82.03%

60.25%

11.32%



44

D.Financial Ratios

Return on Assets (ROA)


2010 2011 2012 2013Q30.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

15.51%

24.35%

34.79%

31.93%

11.91%



45

Thanks For Your Attention

Q&A

Chlitina Holding Limited 1 Chlitina Holding Limited Group Introduction.

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