Kerry Properties Limited · HKEX:683
Kerry Properties — FY2021 Earnings Presentation
38 slides from Kerry Properties's earnings presentation, Mar 17, 2022
Slide 1: FY 2021 Annual Results Analyst Briefing
FY 2021 ANNUAL RESULTS ANALYST BRIEFING 17 MARCH 2022
Slide 2: Key Summary
KEY SUMMARY Profit Attributable to Revenue Gross Profit Shareholders Full Year Dividend HK$15.3B HK$8.7B HK$10.4B HK$3.65/share +6% YoY +4% YoY +92% YoY +170% YoY Property Sales -2% YoY Property Sales -1% YoY Underlying Profit HK$ 6.3B +48% YoY Interim HK$0.40 Maintained Property Rental +11% YoY Pro
Slide 3: 2021 Annual Results Highlights
2021 ANNUAL RESULTS HIGHLIGHTS HONG KONG PROPERTY Key Properties Sales ✓ LA MARINA, Mont Rouge, The Bloomsway, 10 LaSalle Land Acquisition ✓ Yuen Long Shap Pat Heung Sites (June 2021), To Kwa Wan (December 2021) 2022 DP Sales Pipeline ✓ 5 Projects: Mont Verra, LA MARINA, Mont Rouge, 10 LaSalle, Bloo
Slide 4: FY 2021 Results Snapshot: Revenue by Segment
FY 2021 RESULTS SNAPSHOT Revenue by Segment Resilient Performance amid Macro and Pandemic-driven Challenges Property Sales -2% YoY Property Rental +11% YoY Hotel Operations +37% YoY HK$ billion YoY HK$ billion YoY HK$ billion YoY Mainland Variance Mainland Variance Mainland Variance HK HK 8.5B 8.4B
Slide 5: FY 2021 Results Snapshot: Gross Profit Margins
FY 2021 RESULTS SNAPSHOT Gross Profit Margins Higher Margins on Property Sales Gross Profit Margin Performance • Property Sales margins of 51% were supported by luxury projects in the Mainland such as FY 2020 FY 2021 Hangzhou Lake Grandeur & Qianhai Phase 1. 77% 75% • Property rental margins decline
Slide 6: Development Properties: Strong Contracted Sales Performance
DEVELOPMENT PROPERTIES Strong Contracted Sales Performance Achieved 133% of Full-Year 2021 Sales Target of HK$13.5B FY 2021 Contracted Sales Surpassed Full Year Sales Net Order to Book +39% YoY Target by 33% +102% YoY HK$ billion YoY HK$ billion 2021 Actual HK$ billion YoY Mainland +39% Variance Mai
Slide 7: Development Properties – 2022 Sales Pipeline
DEVELOPMENT PROPERTIES – 2022 SALES PIPELINE 2022 Contracted Sales Pipeline HONG KONG MAINLAND MAJOR PROPERTIES FOR SALE Shenyang Phase III Qinhuangdao Phase II Zhengzhou Fuzhou Kunming Hangzhou Tianjin Phase II KERRY PROPERTIES LIMITED 2021 ANNUAL RESULTS 7
Slide 8: Investment Properties: Resilient Results from Portfolio
INVESTMENT PROPERTIES Resilient Results from Investment Properties Portfolio Strong Growth and Recovery in Property Rental and Hotel Operations Property Rental Revenue Hong Kong IP – Occupancy rate As at 31 Dec 2021 As at 31 Dec 2020 HK$ million YoY Residential 95% 83% Variance +11% Retail 95% 100%
Slide 9: Investment Properties
INVESTMENT PROPERTIES Total Property Rental Revenue Mainland - Eight Completed Mixed-Use Properties in Major Cities (Including attributable rental income from associates) Shanghai Shanghai Beijing Shenzhen HK$ million Pudong JingAn 1998 2008 2011 2013 Mainland HK +11% 5,806 Tianjin Hangzhou Shenyang
Slide 10: Growth in IP Asset Base with Stable Margin
INVESTMENT PROPERTIES Growth in IP Asset Base with Stable Margin Enables Recurrent Income Growth FY 2021 Gross Profit Breakdown By Segment By Region Property Sales 28% 49% Recurrent Mainland 51% 51% 72% Property Rental & 72% Hotel Operations Recurrent Non-recurrent Mainland HK HK$ million Gross Prof
Slide 11: Land Banking Strategy & Where We Are
LAND BANKING STRATEGY & WHERE WE ARE • In the Mainland, focus on investing in well located mixed-use developments in core and major cities in the Greater Bay Area, Yangtze River Delta and Beijing. • In Hong Kong, continue to invest in high quality, urban gentrification development property opportuni
Slide 12: Land Banking Update – Investment Properties Pipeline
LAND BANKING UPDATE – INVESTMENT PROPERTIES (IP) PIPELINE IP Pipeline to Grow Recurrent Income Base 9.8M s.f. GFA of Additional Major Mixed-Use Projects to Launch by 2025 Mainland IP Completion Pipeline Million s.f 19.7 17.3 1.1 Qianhai 1.8 Tianjin 14.6 1.1 0.6 Wuhan 1.0 1.0 Shanghai Pudong 13.3 1.1
Slide 13: Land Banking Update – Development Properties Pipeline
LAND BANKING UPDATE – DEVELOPMENT PROPERTIES (DP) PIPELINE Residential Pipeline in the Mainland and Hong Kong Total Attributable GFA of 12.9M s.f. of Major DP due for Completion in Next Few Years Development Properties Completion Pipeline Attributable Attributable Equity Equity Mainland Projects GFA
Slide 14: New Acquisition in Hong Kong: To Kwa Wan
LAND BANKING UPDATE – NEW ACQUISITION IN HONG KONG To Kwa Wan Urban Renewal Authority Site Project Particulars Acquisition Date December 2021 Residential GFA (s.f) 370,000 KPL’s Interest 100% Completion 2027 onwards • In December 2021, the Group was awarded the To Kwa Wan Urban Renewal Authority (“U
Slide 15: New Acquisition: Huang Pu, Shanghai – Jinling Road
NEW ACQUISITION: HUANG PU, SHANGHAI – JINLING ROAD A rare placemaking opportunity in the heart of Shanghai to connect The Bund to Huaihai Road, and Xintiandi to the Old City. • In November 2021, the Group was confirmed as the selected tenderer in a tender process of 10 adjacent plots of land for dev
Slide 16: Iconic Mixed-Use Project in Shanghai Huangpu
NEW ACQUISITION: HUANG PU, SHANGHAI – JINLING ROAD Iconic Mixed-Use Project in Shanghai Huangpu featuring Residential Apartments and Shikumen Townhouses, Offices, Retail and Hotel Project Summary for “Batch 1” Land acquisition January 2022 No. of land plots 4 Site Area (s.m) 38,100 GFA (s.m) TOTAL 1
Slide 17: Maintaining a Strong Financial Position
FINANCIAL POSITION Maintaining a Strong Financial Position Cash and Bank Balance and Undrawn Bank Loan Facilities increased 58%; Gearing improved by 790bp HK$ million As at 31 Dec 2021 As at 31 Dec 2020 Change Total Debt 37,479 44,534 -16% Cash and Bank Balance 17,435 16,995 +3% Net Debt 20,044 27,5
Slide 18: Our COVID Relief Support to the HK Community
OUR COVID RELIEF SUPPORT TO THE HK COMMUNITY 100% rental waivers for MegaBox tenants that are forced to close from 7 Jan - 20 Apr 2022 and rental concession for eligible tenants Supporting food banks with daily necessities for vulnerable groups Supporting various NGOs with rapid test kits and masks
Slide 19: Appendix
19 APPENDIX A. Financial Summary and Group Operating Segments B. FY 2021 Contracted Sales – Overview / HK / Mainland C. Investment Properties – HK / Mainland D. Major Properties Under Development – HK / Mainland E. Land Bank – Overview / HK / Mainland KERRYPROPERTIES KERRY PROPERTIES LIMITED LIMIT
Slide 20: A. Financial Summary
A. FINANCIAL SUMMARY HK$ million FY 2021 FY 2020 Change Revenue 15,327 14,526 +6% Gross profit 8,743 8,387 +4% Share of results of associates and joint ventures N1 3,402 1,597 +113% Underlying profit 6,266 4,233 +48% Net increase in fair value in investment properties 1,998 1,170 +71% Gain on dispos
Slide 21: A. Group Operating Segments
A. GROUP OPERATING SEGMENTS HK$ million Revenue Gross Profit Gross Margin Note FY 2021 FY 2020 Change FY 2021 FY 2020 Change FY 2021 FY 2020 Property sales 8,371 8,519 -2% 4,244 4,300 -1% 51% 50% HK N1 3,786 3,264 +16% 1,414 1,313 +8% 37% 40% Mainland N2 4,585 5,255 -13% 2,830 2,987 -5% 62% 57% Prop
Slide 22: B. FY 2021 Contracted Sales – HK
B. FY 2021 CONTRACTED SALES – HK Projects on sale KPL’s Total Units Accumulative units Inventory ASP achieved Sales proceeds in interest project sold in sold as at as at 31 Dec 2021 in FY 2021 FY 2021^ (%) units FY 2021 31 Dec 2021 (units) HK$ psf HK$ bn MAJOR PROJECTS 1 La Marina 50% 600 458 458 14
Slide 23: B. FY 2021 Contracted Sales – Mainland
B. FY 2021 CONTRACTED SALES – MAINLAND Major projects on sale Product Contracted GFA Sold ASP KPL’s (100% subsidiaries + KPL’s interest for type sales ^ s.m achieved interest associates) RMB’M in FY 2021 RMB psm 1 Zhengzhou - residential 鄭州雅頌居 R 1,635 51,695 31,600 55% 2 The Arcadia Shenyang 瀋陽雅頌閣 R
Slide 24: C. Investment Properties – HK
C. INVESTMENT PROPERTIES – HK HK Property Rental ▪ Occupancy at 31 Dec 2021 : 95% Gross rental revenue: HK$1.4B Retail ▪ Megabox’s average unit rent of $29 psf (includes attributable rental income from associates) 1.2M s.f Attributable GFA 4.1M s.f Occupancy @ 31 Dec 2021 ▪ Occupancy at 31 Dec 2021
Slide 25: C. Investment Properties – Mainland
C. INVESTMENT PROPERTIES – MAINLAND Mainland Property Rental • GFA(100%)* 1.5M s.f Beijing • Occupancy (@ 31 Dec 2021) * 95% Gross rental revenue: HK$4.4B Kerry Centre • Yield on Cost * 20% (Revenue includes attributable rental income from associates. Occupancy excludes • Completion 1998 offices and
Slide 26: C. Investment Properties – Mainland GFA & Occupancy by Project
C. INVESTMENT PROPERTIES – MAINLAND GFA & OCCUPANCY BY PROJECT 31 Dec 2021 GFA & Occupancy Attri GFA Beijing Shanghai Shenzhen Hangzhou Others Total Occupancy (000s s.f.) Office 711 1,388 2,839 102 354 5,394 86%# Retail 98 1,096 327 798 921 3,240 88%# Apartment 277 774 - - - 1,051 90% Total 1,086 3,
Slide 27: C. Investment Properties – Mainland Occupancy by Segment
C. INVESTMENT PROPERTIES – MAINLAND OCCUPANCY BY SEGMENT Occupancy rates (by segment) As at 31 Dec 2021 As at 31 Dec 2020 Apartment 93% 92% Office 97% 88% 1 Beijing Kerry Centre Retail 92% 87% Average 95% 89% Apartment 97% 96% Office 99% 95% 2 Jing An Kerry Centre Retail 97% 91% Average 98% 94% Apar
Slide 28: C. Mainland Major Mixed-Use Portfolio
C. INVESTMENT PROPERTIES – MAINLAND MAJOR MIXED-USE PORTFOLIO Jing An Kerry Centre, Shanghai Puxi GFA ( million s.f.) 3.7M s.f Retail 1.0 • Located in the heart of Shanghai’s Nanjing Road business district Office 1.7 • A pre-eminent shopping venue and exclusive office address in Apartment 0.2 Shangh
Slide 29: C. Mainland Major Mixed-Use Portfolio
C. INVESTMENT PROPERTIES – MAINLAND MAJOR MIXED-USE PORTFOLIO Beijing Kerry Centre 2.2M s.f GFA ( million s.f.) Retail 0.1 • Continues to be an iconic presence at the heart of Beijing Office 1.0 • Located in the Chaoyang district, the city's commercial and financial Apartment 0.4 center and within t
Slide 30: C. Mainland Major Mixed-Use Portfolio
C. INVESTMENT PROPERTIES – MAINLAND MAJOR MIXED-USE PORTFOLIO Tianjin Kerry Centre Phase 1 1.7M s.f GFA ( million s.f.) Retail 0.9 • Mixed-use development located on the east bank of the Haihe CBD in Hotel 0.8 Hedong District Total 1.7 • Phase I of the development includes a hotel, upscale residence
Slide 31: C. Mainland Major Mixed-Use Portfolio
C. INVESTMENT PROPERTIES – MAINLAND MAJOR MIXED-USE PORTFOLIO Shenyang Kerry Centre Phases 1 & 2 2.1M s.f GFA ( million s.f.) Retail 0.8 • Mixed-use development located at the east side of Qingnian Street Office 0.6 • Include a hotel, offices, a shopping mall and residences Hotel 0.7 • Phase I of th
Slide 32: D. Major Properties Under Development – HK
D. MAJOR PROPERTIES UNDER DEVELOPMENT – HK Name Location Type Stage of Completion Expected KPL’s Buildable Completion Interest GFA* (%) (s.f.) 1 LA MARINA (THE SOUTHSIDE Wong Chuk Hang R Superstructure work 2023 50 246,496 Package Two Property in progress Development Project 2 THE SOUTHSIDE Wong Chu
Slide 33: D. Major Properties Under Development – Mainland
D. MAJOR PROPERTIES UNDER DEVELOPMENT – MAINLAND Name Location Type Stage of Completion Expected KPL’s KPL’s Completion Interest Attributable (%) GFA (s.f.) MAJOR MIXED-USE DEVELOPMENT 1 Shenyang Kerry Centre Phase III Shenyang R /O/ RT Residential: Curtain wall installation, In phases from 60 3,062
Slide 34: D. Major Properties Under Development – Mainland
D. MAJOR PROPERTIES UNDER DEVELOPMENT – MAINLAND Name Location Type Stage of Completion Expected KPL’s KPL’s Completion Interest (%) Attributable GFA (s.f.) OTHER PROPERTIES UNDER DEVELOPMENT (CON’T) 8 Kunming Development Kunming R/H Superstructure work completed. 2023 55 381,599 Curtain wall instal
Slide 35: E. Land Bank – Overview
E. LAND BANK – OVERVIEW Total Property Portfolio Attributable GFA: Approx. 51.8M s.f. (as of 31 Dec 2021) Held for sale 4% Hotel Macau 9% 4% PUD 56% Mainland Overall – Overall – 70% Overseas 14% By Type By Location HK Completed IP 12% 31% Hotel Retail 4% Apartment for lease 21% 1% Macau 7% Mainland
Slide 36: E. Land Bank – HK
E. LAND BANK – HK HK Land bank Attributable GFA (‘000 s.f) Hotel Apartment for 1% lease 14% Warehouse Completed Investment Properties 4,128 20% Warehouse 1,266 Office 12% 6.2M s.f in Retail 1,213 attributable Office 778 GFA Retail Apartment 871 20% Properties under development & others 1,537 Residen
Slide 37: E. Land Bank – Mainland
E. LAND BANK – MAINLAND Mainland Land bank Attributable GFA (‘000 s.f) Hotel 14% Retail Completed Investment Properties 9,914 22% Retail 3,274 Residential for 36.3M s.f sale 30% Office 5,589 attributable GFA Apartment 1,051 Properties under development 20,765 Office 31% Apartment for lease Completed
Slide 38: Disclaimer
DISCLAIMER The information in this presentation is for personal, non-commercial reference and general information purposes only and should not be relied upon for investment decision purposes. The information in this presentation, including without limitation any stock price, market data information,