Sun Hung Kai Properties Limited · HKEX:16
Sun Hung Kai Properties — FY2015 Earnings Presentation
41 slides from Sun Hung Kai Properties's earnings presentation, Sep 10, 2015
Slide 1: Final Results - FY2015
Final Results - FY2015 1 Sun Hung Kai Properties Limited 10 September 2015
Slide 2: Contents
Contents Page – Final Results Highlights Results Summary 5 Profit Breakdown By Segment 6 Financial Position 7 – Business Overview A) Property Business – Hong Kong Land Bank 9 Property Development 11 Property Investment 14 B) Property Business – Mainland Land Bank 22 Property Developm
Slide 3: Disclaimer
Disclaimer The information contained in these materials is intended for reference and general information purposes only. Neither the information nor any opinion contained in these materials constitutes an offer or advice, or a solicitation, recommendation or suggestion by Sun Hung Kai Properties Lim
Slide 4: Final Results Highlights
Final Results Highlights Sun Hung Kai Properties Limited
Slide 5: Results Summary
Results Summary Year ended 30 June 2015 2014 Change Underlying net profit(1) (HK$ mn) 19,825 21,415 -7.4% Underlying earnings per share(1) (HK$) 7.07 7.95 -11.1% Reported net profit (HK$ mn) 31,082 33,520 -7.3% Reported earnings per share (HK$) 11.09 12.45 -10.9% Final dividend per share (HK$) 2.40
Slide 6: Profit Breakdown By Segment
Profit Breakdown By Segment(1) Year ended 30 June (in HK$ mn) 2015 2014 Change (1) Property rental Hong Kong 12,299 11,428 Mainland 2,520 2,298 Singapore 533 546 Sub-total 15,352 14,272 +7.6% (2) Property sales Hong Kong 4,571 7,568 Mainland 2,764 2,915 Singapore (3) 28 Sub-total 7,332 10,511 -30.2%
Slide 7: Financial Position
Financial Position 30 Jun 15 31 Dec 14 30 Jun 14 Gearing Ratio(1) 11.2% 13.8% 15.7% Shareholders’ Funds (HK$ mn) 451,026 433,141 414,783 Net Debt (HK$ mn) 50,571 59,658 65,203 FY2015 FY2014 Interest Cover(2) 9.3x 11.1x Remarks: (1) Calculated on the basis of net debt to Company’s shareholders’ funds
Slide 8: Property Business – Hong Kong
Property Business Hong Kong Sun Hung Kai Properties Limited
Slide 9: Land Bank
Land Bank – Total land bank: 50.8mn sq.ft.(1)(2) (as at 30 June 2015) Office 35% Residential Shopping Shopping 82% Centre Centre Hotel 6% 37% 12% Office 1% Hotel 4% Industrial 13% Industrial Residential 7% 3% Completed investment properties Properties under development Total: 28.7mn sq.ft. Total: 22
Slide 10: Active Land Acquisitions
Active Land Acquisitions – 6 new sites were added in FY2015 Group’s Location Interest Usage Attributable GFA (%) (sq.ft.) Tin Shui Wai Town Lot No. 33 100 R/S 1,219,000 Tin Shui Wai Town Lot No. 34 100 R/S 1,040,000 Tin Wing Station Development JV R/S 982,000 Tai Po Town Lot No. 225 100 R 901,000 Tu
Slide 11: Property Development
Property Development – Over HK$11bn property sales(1) were booked with satisfactory profit margins W50 One Harbour Square Twelve Peaks The Cullinan – Completed over 1mn sq.ft. of properties in Hong Kong during the year under review – Average annual completion of residential GFA will exceed 3
Slide 12: Strong Contracted Sales
Strong Contracted Sales – Achieved nearly HK$32bn of contracted sales during the year under review, from a wide range of products Well exceeded full year target of HK$25bn Product Type Projects Small– to medium-sized units The Wings IIIA The Wings IIIB Century Link Phase 1 Luxury projects
Slide 13: Upcoming Major Launches
Upcoming Major Launches King’s Hill Stake: 92% Location: Sai Ying Pun Residential GFA: 71,000 sq.ft. Park Vista Phase 1 Stake: 100% Location: Yuen Long Residential GFA: 747,000 sq.ft. Tseung Kwan O Stake: 100% Town Lot No. 118 Location: Tseung Kwan O Residential GFA: 483,000 sq.ft. Tuen Mun Town Lot
Slide 14: Property Investment
Property Investment – Diversified portfolio of over 28.7mn sq.ft. Primarily located along the railway lines Constant upgrades with premium management services Overall occupancy at around 95% Positive rental reversions achieved Provide steadily-growing rental income 14 Sun Hung Kai Properti
Slide 15: Steady Rental Income Growth
Steady Rental Income Growth – Gross rental income increased 7% yoy (1) Rental Income in Hong Kong Gross Rental Income by Sector for FY2015 HK$ mn 15,675 (+7% yoy) 15,000 14,673 13,289 12,185 12,299 (+8% yoy) 11,428 10,812 Shopping 10,249 Office 9,866 Centre 33% 10,000 9,507 53% 8,279 7,532 (2) 5,000
Slide 16: Retail Portfolio
Retail Portfolio – Quality and diversified retail portfolio of over 10mn sq.ft. of GFA Overall tenant sales growth at major malls outperformed the market with high occupancies and positive rental reversions Regional malls, which mainly serve locals, continued to deliver satisfactory performances
Slide 17: Continuous Asset Enhancement Initiatives
Continuous Asset Enhancement Initiatives – MOKO in Mong Kok Reconfiguration recently completed Improved traffic with new layouts and additional escalators Strong growth in rental income – APM in Kwun Tong Conversion of over 150,000 sq.ft. of office space for retail use Extensive greening p
Slide 18: Strong Pipeline for Future Expansion
Strong Pipeline for Future Expansion – YOHO Mall in Yuen Long About 1.1mn sq.ft. of GFA Comparable to the scale of New Town Plaza in Sha Tin Feature a 30,000-sq-ft outdoor gourmet promenade and a 120,000-sq-ft piazza First phase with over 500,000 sq.ft. of GFA is fully leased and houses over
Slide 19: Strong Pipeline for Future Expansion (Cont’d)
Strong Pipeline for Future Expansion (Cont’d) – PopWalk in Tseung Kwan O Over 240,000 sq.ft. of retail space beneath the Group’s developments in Tseung Kwan O 66,000-sq-ft retail space at The Wings II Encouraging pre-leasing responses Open in 2Q2016 – Harbour North in North Point Over 140,
Slide 20: Office Portfolio
Office Portfolio – Gross rental income of around HK$5bn, up 5% yoy for the year – 10mn sq.ft. of well-diversified office space continued to generate promising results Occupancy of IFC improved and stayed high Spot rents at ICC stayed at a high level Millennium City cluster maintained its leadi
Slide 21: Property Business – Mainland
Property Business Mainland Sun Hung Kai Properties Limited
Slide 22: Land Bank
Land Bank – Total land bank: 79.6mn sq.ft.(1) (as at 30 June 2015) Shopping Centre 13% Shopping Residential Centre Office 65% 56% 33% Office 19% Hotel Residential 8% Hotel 3% 3% Completed investment properties Properties under development Total: 11.6mn sq.ft. Total: 68.0mn sq.ft. Remarks: (1) Total
Slide 23: Property Development
Property Development – Completed about 7mn sq.ft.(1) of attributable GFA during the year Around 28% of GFA are investment properties – Booked over HK$10bn property sales(1), mainly from Forest Hills Phase 1A in Guangzhou Shanghai Arch Phase 1 Top Plaza in Guangzhou – Over HK$4bn property sal
Slide 24: Contracted Sales
Contracted Sales – Contracted sales of over HK$5.8bn for the year, mainly from Shanghai Arch Stake: 100% Location: Shanghai Shanghai Cullinan Stake: 100% Location: Shanghai Top Plaza Stake: 33.3% Location: Guangzhou The Woodland Stake: JV Location: Zhongshan – Since July 2015, contracted sales have
Slide 25: Upcoming Launches
Upcoming Launches Shanghai Arch Phase 1 Stake: 100% (new batch) Location: Shanghai Remaining Residential GFA: 81,000 sq.ft. Shanghai Cullinan Stake: 100% (new batch) Location: Shanghai Remaining Residential GFA: 148,000 sq.ft. GCC Stake: 70% (Guangzhou Commerce Location: Guangzhou Centre) Attr. Offi
Slide 26: Property Investment
Property Investment – About 11.6mn sq.ft. attributable GFA of completed investment properties mainly in prime cities Strong presence in Shanghai – Positive reversions with high occupancy – Gross rental income up by 9%(1) yoy to HK$3.3bn(2) in FY2015 Accounted for around 17% of the Group’s total
Slide 27: Growing Rental Income
Growing Rental Income – Achieved strong rental income growth in the past 5 years Gross Rental Income (1) Rental Income on the Mainland by Sector for FY2015 HK$ mn % 3,500 20 3,319 (+9% yoy) (a) 3,045 3,000 (b) 16 2,541 (+12% yoy) 2,500 (a)(b) 2,278 Shopping Office 2,067 35% 12 Centre 2,000 56% 1,614
Slide 28: Shanghai IFC in Pudong
Shanghai IFC in Pudong – Office: 1.6mn sq.ft. (Attr. GFA) Both office towers were fully occupied Prime location in the Lujiazui Finance and Trade Zone, benefiting from the expansion of the free trade zone – IFC Mall: 1.2mn sq.ft. (GFA) Virtually fully leased Healthy growth in both footfall a
Slide 29: Shanghai ICC in Puxi
Shanghai ICC in Puxi – Office: 1.3mn sq.ft. (GFA) High occupancy in One ICC Leasing of Two ICC is progressing smoothly with tenants starting to move in – IAPM Mall: 1.3mn sq.ft. (GFA) Fully leased Both traffic flow and tenant sales experienced strong growth since opening 2 years ago 29 Sun H
Slide 30: Xujiahui Centre Project in Shanghai
Xujiahui Centre Project in Shanghai – 7.6mn sq.ft. integrated project directly linked to Xujiahui metro station – Footbridges will be built to connect the whole project and nearby major properties – Superstructure of Lot 1 will be topped out by end of 2015 Pre-leasing of both office and retail spa
Slide 31: New Malls in Guangzhou
New Malls in Guangzhou – Parc Central Stake: 50% Attr. GFA: 431,000 sq.ft. Location: Tianhe District Encouraging pre-leasing response Open in 1H2016 – IGC (International Grand City) Stake: 33.3% Attr. GFA: 332,000 sq.ft. Location: Zhujiang New Town Pre-leasing has been progressing
Slide 32: Hotel Business
Hotel Business Sun Hung Kai Properties Limited
Slide 33: Hotel Business
Hotel Business – Full-year growth of hotel business was affected by sluggish Hong Kong tourism sector in recent months (1) Revenue and Operating Profit from Hotel Portfolio HK$ mn 5,000 4,838 (+5% yoy) 4,610 4,037 4,000 3,720 3,000 2,594 1,905 2,000 1,252 1,293 (+3% yoy) 1,023 937 1,000 553 Remarks:
Slide 34: Hotel Business (Cont’d)
Hotel Business (Cont’d) – Sustained high full-year occupancy at hotels in Hong Kong Proactive promotion and marketing initiatives amid the challenging environment in recent months – The Ritz-Carlton Shanghai, Pudong continued to perform well Higher room rate and occupancy – Hotel network expansi
Slide 35: Strategy and Prospects
Strategy and Prospects Sun Hung Kai Properties Limited
Slide 36: Market Prospects
Market Prospects – Hong Kong The primary residential market is likely to remain active, particularly in the segment of small- to medium-sized units Leasing demand for grade-A offices remains healthy while regional malls serving mainly locals will continue to outperform those targeting tourists –
Slide 37: Business Strategy
Business Strategy – Group’s long-term strategies Adhere to a balance of income from property development for sale and rental business Continue to enhance the Group’s brand with quality products and excellent services Remain selective with focused approach to investment on the mainland Observ
Slide 38: Business Prospects
Business Prospects – Property Development – Promising Outlook Strong property sales in Hong Kong to be recognized Over half of residential units to be completed in FY2016 already sold Rising production volume expected Higher level of average annual residential completion for the next 3 years
Slide 39: Business Prospects (Cont’d)
Business Prospects (Cont’d) – Property Investment – Strong Pipeline Strong pipeline of new investment properties for future rental income growth Over 1.7mn sq.ft. of retail space will be opened in the coming 2 to 3 years Expect positive rental reversion with sustained high occupancy Ongoing
Slide 40: Business Prospects – A Recap
Business Prospects – A Recap Strong visibility for more bookings in FY2016 High Steady Professional production rental volume in management income next 3 growth team years Robust financial position 40 Sun Hung Kai Properties Limited
Slide 41: Q&A
Q&A 41 Sun Hung Kai Properties Limited
Sun Hung Kai Properties — FY2015 Earnings Presentation on 6ix