HONG KONG SAR – Media OutReach – 29 November 2022 – HONMA Golf Limited (“HONMA”; together with its subsidiaries, the “Group”; HKEx stock code: 6858), one of the most prestigious golf brands in the world, is pleased to announce the unaudited consolidated interim results for the six months ended 30 September 2022 (the “Period”).
Financial Highlights
During the Period, the overall golf business continued to experience a positive uptake in both participation and purchase interest with some countries either easing or abandoning Covid-19-related restrictions and some experiencing various degrees of home shelter and retail operation disruptions. Notwithstanding this, the Group delivered robust sales growth, continued and visible improvements in all of its financial metrics.
Most markets demonstrated robust sales growth
During the Period, the Group steadfastly followed its growth strategies and delivered positive achievements, on the back of a strong rebound of consumer demand, continued marketing activities to drive HONMA’s brand and product awareness, and the successful activation of various HONMA products.
Geographically, most of the Group’s main markets recorded a strong sales growth versus the same period last year. Korea led the way in terms of growth, delivering a year-on-year revenue growth of 97.1%, due to a continued uptake in golf participation and successful launch of new products since early 2022. Revenue from Japan grew by 3.4%, on the back of a complete sales recovery in all channels and product categories. Revenue from China (including Hong Kong and Macau), North America, and other regions recorded a year-on-year growth of 11.1%, 31.6%, and 41.2%, respectively. Meanwhile, revenue from Europe fell by 46.0%, reflecting the Group’s decision to change its distribution model to an indirect one.
On a constant currency basis, revenue from China dropped slightly by 4.3%, primarily due to the negative impact from epidemic prevention and control measures implemented in different parts of the country, which caused negative and material impact on the Group’s retail operations and supply chain.
Comprehensive product improvement stimulated sales
During the Period, sales from golf clubs as well as accessories and other related products showed double digit growth across different product families, with golf clubs recording a year-on-year growth of 31.2%, and accessories and other related products recording a growth of 52.2%, thanks to continued improvements in HONMA’s product development, merchandise planning and retail operations.
Following the Group’s decision to strengthen and focus its product offering on super-premium and premium-performance consumer segments, the Group made considerable efforts to enrich its TOUR WORLD club family to include a performance enhancement series targeting avid golfers with an 8-12 handicap, and to upgrade its legacy BERES club family with a modern and sophisticated design and development approach to appeal to today’s affluent golfers. For the six months ending September 30, 2022, revenue from the BERES and TOUR WORLD family grew by 37.1% and 17.1% respectively, as compared to the six months ended 30 September 2021.
However, revenue from apparel and golf balls exhibited a slight downward trend of 1.7% and 2.7% from the same period last year, respectively. Such declines were primarily caused by continued disruptions to epidemic prevention and control activities in China as well as continued supply chain constraints in the sourcing of raw materials critical to the production of golf balls.
Extended retail presence with upgrading self-operated stores
During the Period, the Group continued to maintain an extensive sales and distribution network that allowed it to address a broad customer base in its target markets.
Throughout the period, HONMA operated the largest number of self-operated stores among major golf companies, providing consumers with a 360-degree experience of the HONMA brand and its products. As at the end of the Period, the Group owned 83 HONMA-branded self-operated stores, all of which were in Asia, posting a steady year-on-year revenue increase of 29.9% to JPY 4,566.9 million.
The Group also made continuous upgrades to the design, visual display and consumer experience of its self-operated stores to project one consistent brand image and consumer experience. Additionally, to better serve avid golf enthusiasts, some of these self-operated stores offered fitting centers equipped with high-speed cameras and launch monitors to capture players’ swing data.
In parallel, sales from third-party retailers and wholesalers increased by 24.0% year-on-year to JPY 10,360.5 million, thanks to pent-up demand and full-channel sales and distribution strategy. In particular, sales to the Group’s retail partners in Japan grew by 24.0% as most retailers had recovered from extended business closures during the Covid-19 pandemic. The Group had approximately 3,831 POSs by the end of the Period.
Re-defining the HONMA brand
The Group took several steps to improve its global brand positioning and communication throughout its product offering around super-premium and premium-performance consumer segments. To re-define the HONMA brand as a dynamic, relevant and global brand among internet-savvy younger golfers, the Group completely revamped its global website and social media platforms to promote HONMA’s brand and product awareness. The rapid increase in HONMA’s digitalized marketing content has generated continuous improvement in organic traffic, conversion and other consumer engagement matrices.
To create an end-to-end digital ecosystem around the re-defined brand and golfers in the super-premium and premium-performance segments, the Group upgraded its customer relationship management (“CRM”) systems in multiple markets and added various e-commerce capabilities and consumer-centric custom tools, with a view to provide consumers with the ultimate brand experience, and to eventually drive sales both online and offline.
Business Outlook
As Covid-19 related restrictions begin to ease in most parts of the world, the Group expects pent-up demand to expand golf participation as well as a continuous and visible uptick in new orders from both golfers and HONMA’s retail partners. The Company will continue to bring satisfactory business advancements and results in the future.
Moving forward, the Group will continue to execute its mid- to long-term growth strategy to build a world-leading golf lifestyle business by leveraging HONMA’s brand legacy, its expanding distribution network, innovative technologies and traditional Japanese craftsmanship. In the face of uncertainties posed by the Covid-19 pandemic, the Company will also pursue active actions to reduce costs, maximize liquidity and protect its employees’ health.
The Group will also continue to improve and transform HONMA’s brand value into brand awareness and customer loyalty by executing multiple branding and marketing strategies. The Group will continue upgrading its offline and online retail experiences based on the updated HONMA brand image, retail and visual guidelines. The Group aims to further increase its market share in home markets by maintaining its leading position in the super-premium segment while making solid inroads into the fast-growing premium-performance segment. In terms of products, the Group will continue to nurture complementary non-club product lines such as golf balls, apparel and accessories to provide customers with a complete golf lifestyle experience, as well as continue product innovation and development to cater for the latest market trends.
Mr. LIU Jianguo, Chairman of the Board, President and Executive Director of HONMA Golf Limited, said: “Although multiple challenges remain in the second half of the fiscal year, we are expecting a positive rebound in participation and purchase interest for the overall golf industry under encouraging recoveries. The HONMA team is confident in its ability to execute our growth strategies and will seize every possible opportunity to optimize its operational efficiencies in order to foster a solid foundation for mid- and long-term development. To optimize HONMA’s sales results, we constantly evaluate our existing product and channels and explore new ones, and are delighted to witness our products being sold in approximately 50 countries worldwide. We will endeavor to promote sustainable business development and strive to create long-term value for our shareholders.”
Hashtag: #HONMAGolf
The issuer is solely responsible for the content of this announcement.
HONMA is one of the most prestigious and iconic brands in the golf industry. Founded in 1959, the Group utilises the latest innovative technologies and traditional Japanese craftsmanship to provide golfers around the world with premium, high-tech and the best performing golf clubs, balls, apparels and accessories. HONMA’s products are sold in approximately 50 countries worldwide, primarily in Asia and across North America, Europe and other regions. The Group was successfully listed on the Main Board of The Stock Exchange of Hong Kong Limited on 6 October 2016 (SEHK stock code: 6858). As the only vertically integrated golf Group with in-house design, development and manufacturing capabilities, a strong retail footprint in Asia and a diverse range of golf clubs and golf-related products, HONMA is perfectly positioned to continually grow its business in Asia and beyond, benefitting from the return of golfers in mature golf markets such as the US and Japan and from increased participation in golf’s new and under-penetrated markets such as Korea and China.
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