Csi Properties Limited · HKEX:497
Csi Properties — FY2016 Earnings Presentation
49 slides from Csi Properties's earnings presentation, August 2016
Slide 1: FY2016 Presentation
Strictly confidential FY2016 Presentation AUG 2016
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is provided by CSI Properties Limited (the "Company") for reference purposes only, and should not be relied upon for the purpose of making any investment decision or for any other purpose whatsoever. The information contained in this presenta
Slide 3: Section 1: FY2016 financial highlights
Section 1 FY2016 financial highlights
Slide 4: FY 2016 final results highlights
FY 2016 final results highlights (Year ended 31st March) FY2016 FY2015 % change (HK$m) (A) (B) (A/B-1) Gross revenue from property business 2,201 746 195.0% Property sale 1,975 543 Rental income 226 203 Gross profit 1,172 360 225.6% Profit from property JV/associates 689 74 831.1% Profit attributabl
Slide 5: FY 2016 key sales
FY 2016 key sales CSI has made a few key sales this fiscal year to capitalize on positive market sentiment, especially in the HK office sector Sale price Projects sold YTD Location (HK$m) 13 Floors of Henan Building Wanchai 510 134 units of yoo Residence (50% interest) Causeway Bay c. 2,000 17-19th
Slide 6: FY 2016 key acquisitions
FY 2016 key acquisitions CSI has made several key acquisitions in the current fiscal year to build up its commercial and residential landbank to accelerate growth of Group in the future Purchase price Projects acquired YTD Location (HK$m) Office land site (government tender) Kowloon Bay 3,039 (30% i
Slide 7: FY 2016 final results highlights (cont'd)
FY 2016 final results highlights (cont'd) Strong cash and cash-equivalent investment balances demonstrate financial stability while allowing for flexibility in capturing future investment opportunities FY 2016 FY 2015 (HK$m) 31st Mar 2016 31st Mar 2015 Properties & related assets 12,667 9,849 Cash &
Slide 8: Summary of historical key financials
Summary of historical key financials FY 2016 FY 2015 FY 2014 (HK$m) (HK$m) (HK$m) Revenue 2,201 746 2,578 Gross profit 1,172 360 940 Margin % 53.2% 48.3% 36.5% EBITDA1 1,998 548 1,105 Margin % 90.8% 73.5% 42.9% Interest expenses2 172 138 133 Cash and cash equivalent 3,529 1,280 1,795 Short-term real
Slide 9: Pro-forma Balance Sheet adjusted for market valuation as at 31 Mar 2016
Pro-forma Balance Sheet adjusted for market valuation as at 31 Mar 2016 Properties valued at historical cost basis on book with no revaluation surplus. Even after revaluation adjustment still represents significant value in terms of a significant discount to pro forma adjusted NAV of HK$1.28 per sha
Slide 10: Company Background
Section 2 Company Background
Slide 11: CSI properties at a glance
CSI properties at a glance One of the leading HKSE listed mid-cap property investment/development companies in Who are we? Greater China with superior profitability and IRR track record Headquartered in Hong Kong with office in Shanghai and approximately 2.0 million sq. ft. of Where do we operat
Slide 12: History of CSI
History of CSI 2004 Mico Chung took control of CSI Net Asset of HK$300 million Total staff around 10 people Commercial Division started focusing on Repositioning and Value Enhancement of Commercial Properties in Prime Hong Kong locations 2006 Started Shanghai Office First Project in Shan
Slide 13: Investment Case
Investment Case Time proven and solid track record of value creation and execution 1 capabilities 2 Highly experienced and disciplined management team Prime commercial and residential property portfolio with strong 3 future pipeline Conservative capital structure backed by prudent financial and risk
Slide 14: Proven track record in net asset growth
Proven track record in net asset growth Proven growth in net asset for group despite challenging markets clearly demonstrates management's capabilities and skills Net assets 12,000 10,000 9,681 8,267 7,778 8,000 7,085 (HK$m) 5,972 6,000 4,237 4,000 3,413 2,521 2,509 2,000 0 1 31-Mar-08 31-Mar-09 31-
Slide 15: Proven track record in profit growth cycle
Proven track record in profit growth cycle Proven growth in total profit for our properties' 3 year value enhancement cycle, with all cash profit only with no revaluation gain Net profit1 FY'09–11 total: HK$1,466 million vs. FY'12–14 total: HK$3,473 million 4,000 3,472 3,000 FY14: 815 FY17E FY13: 90
Slide 16: Proven track record in dividend
Proven track record in dividend Proven growth in dividend payout throughout the years with significant upside with additional residential sales in the forthcoming years Dividend payout 350 300 HK$115m share 250 buyback 204.0 200 (HK$m) 198.0 150 131.0 HK$100m 106.0 share 100 82.3 buyback 50 39.5 40.
Slide 17: Highly experienced and disciplined management team
Highly experienced and disciplined management team Group senior management Acquired control in CSI in 2004 as a platform to expand his property investment business Currently a non-executive director of HKT Limited, HKT Management Limited and HKC (Holdings) Limited and was previously a non-execut
Slide 18: Highly experienced and disciplined management team
Highly experienced and disciplined management team Commercial property Joined CSI in 2015, prior to which he worked as Head of China Investment Property of MTR Corporation Managing Director Ltd. Simon Wong Hong Kong Investment Over 20 years of experience in commercial property development and in
Slide 19: Highly experienced and disciplined management team
Highly experienced and disciplined management team Couture Homes ("CH") Execution Director of Joined CSI in 2011, prior to which he worked as the Director of Savills Hong Kong Limited CSI and Managing Jimmy Fong Over 20 years of experience in luxury residential property development and investmen
Slide 20: Strong management team with accolades
Strong management team with accolades Chairman Chung was nominated as one of the “Asia's Business Leaders ” by CNBC Asia in 2014 The Group was also awarded the “Best Small–cap Company in Hong Kong” for 2013 and 2014 in Asia's Best Managed Companies annual poll conducted by FinanceAsia, the leadi
Slide 21: Portfolio of prime properties in premier locations
Portfolio of prime properties in premier locations Portfolio overview (as at 31 Mar 2016) By asset class1 21 high quality assets in prime locations Hotels Commercial across Hong Kong, Shanghai and Macau 24% 22% China with total attributable value of c. HK$17.2 20 billion Office 12% Residential 42% H
Slide 22: CSI's Commercial Projects – Core Income Generating Properties
CSI’s Commercial Projects – Core Income Generating Properties J Plus Hotel by yoo – Causeway Bay Novotel Hotel – Kowloon 21 21-27 Ashley Road – Tsim Sha Tsui In Point – Shanghai
Slide 23: Strong recurring rental income underpinned by solid fundamentals
Strong recurring rental income underpinned by solid fundamentals Stable recurring rental income 500 400 300 168 213 213 84 74 200 100 225 223 208 203 226 0 FY12 FY13 FY14 FY15 FY16 Rental income Rental income from JV's and Associates The four key rental income generating assets, namely Novotel Hot
Slide 24: Diversified funding channels and balanced debt maturity profile
Diversified funding channels and balanced debt maturity profile Diversified funding sources 1 Equity Fixed vs. floating 1 Currency 1 Secured vs. unsecured 1 – Initial Public Offering in 1992 RMB USD Unsecured Debt Fixed 2% 13% 13% 28% – 1st Bonds: Issued USD150 million 6.5% 5-year Notes in Janua
Slide 25: Conservative capital structure backed by prudent financial policies
Conservative capital structure backed by prudent financial policies … Low leverage coupled with high cash resources puts CSI in a favourable position to capitalise on viable acquisition opportunities Adopt a prudent funding and treasury policy with regard to overall business operations Prudent fun
Slide 26: Self-funded business model through capital recycling
Self-funded business model through capital recycling Unique business model with an eclectic project portfolio by asset type and geography ensures lower susceptibility to market risk and greater adaptability to capitalise on market opportunities CSI funds its operations primarily via internally g
Slide 27: Self-funded business model through capital recycling
Self-funded business model through capital recycling Asset Acquisition and redevelopment Capital recycling disposal Paul Y Centre Novel Plaza Acquired: Jan 2006 Acquired: Oct 2007 Disposed: Jun 2007 Disposed: Aug 2008 Cash Conversion Cycle: 1.8 years Holding period: 1.4 years Holding period: 1 y
Slide 28: Support by strong institutional shareholder base
5 Support by strong institutional shareholder base Shareholding interests based on 10,037 million shares currently outstanding Others 30% Mico Chung 45.91% Other key funds1 c. 6.00% Dalton Investments 4.51% Fidelity International Value Partners 5.98% 7.38% Mr. Chung's ownership interest increased
Slide 29: Visible disposal and profitability pipeline
Visible disposal and profitability pipeline¹ FY 2017 Book value 2 Asset Type (HK$m) AXA Centre-remaining units including ground floor shop, 1506 & 1507, sky-sign and 52 car park spaces Commercial 171 232 Wan Chai Road site (50% stake) Commercial 760 10 detached houses in Kau To Shan (kau to HIGHLAND
Slide 30: Portfolio of prime properties in premier locations (as at 31 Mar 2016)
Portfolio of prime properties in premier locations (as at 31 Mar 2016) Commercial properties Current Gross area Market Book committed 1 Date of sq.ft. (000s) value value annual rent Occupancy purchase (approx) (HK$m) (HK$m) (HK$m) (%) G/F, 1506–07, Sky-sign, 52 carparks of AXA Centre Wan Chai Aug-06
Slide 31: Our corporate vision
Our corporate vision Commercial properties Couture Homes Leverage on established market strengths and Commitment to detailed design and top quality network to identify and invest in properties that fit finishing, tailored made to aim at pre-targeted class into our model of value enhancement and
Slide 32: Why invest in CSI properties
Why invest in CSI properties Proven track record 12 years of solid NAV and profitability growth trackrecord with strong earnings and performance pickup in the forthcoming 3-5 years Combining the repositioning of investment properties for value enhancement Profitable twin driver and premium “tailor-m
Slide 33: Q&A
Q&A Ea * ASIA’S * Cc S [ ae COUTURE PROPERTIES COMPANIES ea 2013 & 2014 Best Small-Cap CSI Properties * CSI °
Slide 34: Appendix: Property portfolio highlights
Appendix Property portfolio highlights
Slide 35: Novotel Hotel - Kowloon
Novotel Hotel - Kowloon Novotel Hotel Jordan Our Property : 4-star international branded hotel with commercial podium in Nathan Rd 348 prime Nathan Road. 5-min travelling distance from future Express Rail Link terminus 389 hotel rooms and prime shopping space Consolidated 100% interest of ho
Slide 36: J-Plus Hotel by yoo – Causeway Bay
J-Plus Hotel by yoo – Causeway Bay J-Plus Hotel by yoo Our Property : Boutique hotel in Causeway Bay currently with 55 rooms and running at close to full occupancy Irving Street 1 - 5 1-min walking distance from future EMSD redevelopment site at Caroline Hill Road Hysan Current annual rental i
Slide 37: 21-27 Ashley Road - Tsimshatsui
21-27 Ashley Road - Tsimshatsui 21-27 Ashley Road Our Property : Ashley Road 21 - 27 Ginza-style F&B buildings located in the heart of Tsim Sha Tsui Key landmarks in area including Peninsula Hotel/ Harbour City/ iSquare all with 3-minutes walking distance GFA of 62,000 sq.ft. with current mark
Slide 38: In-Point Shopping Mall - Shanghai
In-Point Shopping Mall - Shanghai In-point Shopping Mall Our Property : Wujiang Rd no. 169, Jing’an Popular shopping mall located in the heart of Shanghai just behind the Four Seasons Hotel on Wujiang Road GFA of 122,000 sq.ft. with current market value at approximately HK$1,008 million versus o
Slide 39: CSI's Major Commercial Property Pipeline – Kowloon East
CSI’s Major Commercial Property Pipeline – Kowloon East Kowloon Bay Office Site Enterprise Square III 41, 43, 45, 47, 49/F JV with Sino Land and Billion Development, the two big landlords Headquarter of Esprit Holdings in the heart of Kowloon Bay in Kowloon Bay CBD2 (CSI - 30%) CBD2 with total g
Slide 40: CSI's Major Commercial Property Pipeline – Soho Central
CSI’s Major Commercial Property Pipeline – Soho Central 2-4 Shelley Street, Central 46-48 Cochrane Street, Central Situated in Central’s Soho area, 25-storeys of chic yet Situated in the core of Central district, adjacent to the Central-Mid contemporary office space with total GFA over 40,000 sq
Slide 41: Couture Homes – Luxury Residential Development Projects
Couture Homes – Luxury Residential Development Projects yoo Residence Grovesnor Place Yan Ching Street Glenealy- Central Causeway Bay Perkins Road Tuen Mun Queen’s Gate - Shanghai kau to HIGHLAND – Sha Tin
Slide 42: Queen's Gate - The Finest Expression of British Elegance
Queen’s Gate - The Finest Expression of British Elegance A luxurious villa district in Dahongqiao area, Shanghai named as Queen’s Gate and only 15 minutes driving distance from the new Hong Qiao International Airport Developed into 224 luxurious villas with additional 96 apartment units Presale in p
Slide 43: kau to HIGHLAND - The Only Pure House Collection in New Kau To
kau to HIGHLAND- The Only Pure House Collection in New Kau To Acquisition of Kau To Shan land site through government tender in May 2012, G.F.A. of approximately 50,000 sq. ft. for a cost of HK$531 million Developed into 20 luxury villas of approximately 2,000 to 4,000 sq.ft. each Sale in progress w
Slide 44: yoo Residence - The First Internationally Branded Residence in Hong Kong
yoo Residence - The First Internationally Branded Residence in Hong Kong A prime residential project in the heart of Causeway Bay within a few walking steps to the Victoria Park 144 high-end lifestyle units ranging from around 400 sq.ft. to over 5,000 sq. ft., 134 units sold and delivered for a tota
Slide 45: Perkins Road Project – JV in Jardine's Lookout
Perkins Road Project – JV with World-class Landmark Development in Jardine’s Lookout Acquisition of residential tower previously named Monterey Court at Jardine’s Lookout, the premier luxury residential district in Hong Kong in December 2012 G.F.A. of approximately 73,000 sq. ft and old structure de
Slide 46: Barker Road Project - Precious Single Lot House Site at the Peak
Barker Road Project - Precious Single Lot House Site at the Peak 3 Severn Road 22 Barker Road James Tien’s Acquired the heritage site at 47 Barker (Highest Unit Rate @ $220,426 psf ) Residence Road in February 2011 at HK$204 million Barker Road Project (@ $238,493 psf ) A rare land lot at Barker Roa
Slide 47: Peak Road Project - Residential Development with Victoria Harbour seaview
Peak Road Project - Precious Residential Development with Victoria Harbour seaview Peak Road Project Acquired c. 60.3% interest in this old residential building in June 2015 at HK$1.8 billion Interocean Court 17 apartments and one house with total saleable area of 46,512 sf OPUS Hong Kong AV amounts
Slide 48: Fan Kam Road Project - Luxurious Manor Site in Kwu Tung South
Fan Kam Road Project Luxurious Manor Site in Kwu Tung South The site was acquired by CSI Properties in 2015 and is a very rare manor site next to the Hong Kong Golf Club and Beas River Country Club of The Hong Kong Jockey Club. Other than being adjacent to renowned clubs, it is also extremely conven
Slide 49: Yan Ching Street Project - Luxurious Highrise Residential Project in Tuen Mun
Yan Ching Street Project - Luxurious Highrise Residential Project in Tuen Mun Located at Tuen Mun Yan Ching Street, the street is adjacent to the "New Tuen Mun Town Centre" which is V city and the "Traditional Tuen Mun Town Centre" which is the Tuen Mun Town Plaza, being the very heart of the city.