China-based, LJ International (ticker: JADE), which is engaged in designing, branding, marketing and distributing
a full range of jewelry, presented at the Roth Capital Conference yesterday. Here are some key points:
JADE distributes to fine jewelers, department stores, national jewelry chains, and electronic and specialty retailers throughout North America, Western Europe, Japan, Hong Kong and China.
- Directly source from mines all over the world, manufacture and produce in own Chinese factory, sell directly to customers.
- Produce over 18,000 designs annually.
- Annual production of more than 2 million pieces of fine jewelry and 3 million carats of cut stone.
- Customers include: Wal-Mart (ticker: WMT), JC Penney (ticker: JCP), Zale (ticker: ZLC), QVC, HSN, Sterling, Fred Meyer.
- Sell to two-thirds of top 40 retail chains in US.
- 74% of sales in US, 14% in Europe, 12% in other.
- Sales by product: Colored stones (90%), Diamond (6%), Other (4%).
- Sales by category: Rings (48%), Pendants (27%), Earrings (17%), Giftware (5%), Other (3%).
- Opening retail stores in China.
- US competitors: E.E.A.C. and Fabrikant.
- International competitors: Pranda International and STS.
China market statistics:
- Largest consumer of platinum and jade in the world over last 3 years.
- Largest consumer of diamonds in Asia.
- 4th largest consumer of gold in the world.
- Now have 3 stores in China.
- Planning to open 100 stores in China.
- Positioned as foreign brand - even though HK-based.
Financials (as of September 30, 2004):
- Cash: $11.6 million.
- LT debt: None.
- 20% historical CAGR since 1999.
- Trading at 8.3X 2005 earnings expectations.
- Opening retail chain in China with low start-up costs. Setup costs for each store: $300,000, of which $200,000 is for inventory.
JADE stock market performance: