Ctf Services Limited · HKEX:659
Ctf Services — NWS Holdings — FY2022 interim Earnings Presentation
39 slides from Ctf Services's earnings presentation, Feb 25, 2022
Slide 1: FY2022 Interim Results Analyst Presentation
FY2022 lnterim Results Analyst Presentation 25 February 2022 New World Group Member
Slide 2: Table of Contents
Table of 1 Business Overview Contents 2 Core Business & Strategic Portfolio 3 Environment, Social & Governance 4 Appendices 2
Slide 3: New Chapter of Growth
New Chapter of Growth FY2018 – FY2021 FY2022 onwards Portfolio optimization Growth & capital deployment with key disposals & acquisitions Quality & visible earnings growth (organic) Key Disposals Well positioned to deploy capital for further c.HK$20Bn growth (inorganic) Improve shareholders’ r
Slide 4: Improve earnings quality through non-core disposals
Improve earnings quality through non-core disposals Achieving better than market valuations Environment Contribution has Total consideration: HK$6,533MM Environment segment FY2018 FY2019 FY2020 been steady but AOP1 (HK$M) 431.52 418.23 354.8 lacks growth / P/E SUEZ NWS 17.9x Derun 16.0x trending d
Slide 5: Business Growth Strategy
Business Growth Strategy Facilities Roads Aircraft leasing Construction Insurance Logistics Management 15 toll roads in the Mainland (total length c.742 km) Organic • Steady traffic growth • Steady recovery • Solid demand from • New products (eg. • Resilient business with • GHK growth from COVID-19
Slide 6: Business Growth Strategy (Cont'd)
Business Growth Strategy (Cont’d) Facilities Roads Construction Insurance Logistics Management 15 toll roads in the Mainland (total length c.742 km) Inorganic • New acquisitions • Civil related projects with • Mainland license • Modern logistics • GHK growth • Average remaining managed risk such as
Slide 7: Resilient Recurring Business
Resilient Recurring Business Recurring businesses AOP1 (excluding Strategic Investments) = ↑ 5% Overall ↓ 9% ↑ 1% ↓ 0% ↑ 6% ↓1% ↑50% ↑5% 2,500 2,252 2,155 2,000 1,500 1,061 969 1,000 462 491 500 402 401 272 274 282 278 0 (162) (500) (323) 2 3 Roads Aviation Construction Insurance Logistics Facilitie
Slide 8: Quality assets with sustainable recurring cash flow & growth potential
Quality assets with sustainable recurring cash flow & growth potential Sustainable recurring income stream & cash flow Sanguine growth prospect Roads AOP 5-yr CAGR 7.5% Premium warehouse Consistently generating Rapidly ramping up due to Expanding market share driven (FY2016-FY2021), provid
Slide 9: Solid balance sheet poised for robust business & dividend growth
Solid balance sheet poised for robust business & dividend growth Net Gearing Swift corporate actions to address investors’ concerns with increased gearing since FY2020 40% (Decreased from 31% to 13% within 2.5 years) 35% 31% 30% 25% 20% 15% 13% 10% 5% 0% FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2
Slide 10: Net Asset Value By Segment Breakdown vs Market Cap
Net Asset Value By Segment Breakdown vs Market Cap HK$B Share of NAV of ATL Logistics Centre increased to HK$7.3Bn upon reclassified as investment property, representing c.11% of 1 Group’s NAV Currently trading at 46% discount to NAV 2 Notes: 1. As of 31 Dec 2021 2. As at 22 Feb 2022 10
Slide 11: Sustainable dividend growth
Sustainable dividend growth Sustainable & progressive 50% payout on net profit dividend policy on absolute DPS 1.6 (HK$) DPS 10.0% 9.8% 9.2% 9.0% 1.4 8.2% 8.0% 1.2 7.0% 0.72 Continue to deliver value 1.0 to shareholders6.0% with 5.4% 0.8 further increase5.0% in DPS 4.6% 4.5% 4.0% 0.6 0.39 0.46 0.34
Slide 12: Financial highlights
Financial highlights 2020 2021 YoY For the six months ended 31 Dec (HK$MM) (HK$MM) change % Revenue1 14,232.5 16,304.2 15 Roads - Temporary partial prohibition of type 5 & 6 trucks on Hangzhou Ring Road Attributable Operating Profit (AOP)2 3,336.3 2,326.3 (30) Wai Kee was reclassified as asset held-
Slide 13: Performance by segment
Performance by segment 2020 2021 YoY change For the six months ended 31 Dec (HK$MM) (HK$MM) % Temporary partial prohibition of type 5 & 6 trucks on Hangzhou Ring Road and other Roads 1,061.0 968.7 (9) disruptions (eg. COVID, power outage) Core Business Aviation 271.7 274.4 1 No longer share Wai Kee’
Slide 14: Core Business
a an el3z2 NWS Core Business
Slide 15: Roads - toll roads in the Mainland
Roads - 15 toll roads in the Mainland (c.742km) Stable performance despite negative external impacts Core Business Segment AOP 1 ► Efforts in enriching portfolio bearing fruits - AOP of 3 expressways in Central region +3% yoy & accounted for >11% of Roads AOP HK$MM YoY 9% 1,061 ► Major expressways2
Slide 16: Aviation
Aviation Improving performance amid stabilizing industry ► Gradual recovery in domestic flights & continued border reopening around the world contributed to industry Segment AOP Core Business stabilization HK$MM ► Strong improvement in collection of deferred rental payment & reduction of trade recei
Slide 17: Construction
Construction Leading contractor with optimistic mid to long-term outlook Segment AOP ► Hip Hing Group AOP remained solid at HK$401.1MM despite keen competition and rising material costs Core Business HK$MM Hip Hing ► No. of new tender offerings in market is picking up. Hip Hing Group’s FY2022-1H New
Slide 18: Insurance
Insurance Industry outperformer with steady growth trend ► Outperformance driven by appealing insurance products1 & efforts in strengthening tied-agency force with Segment AOP Core Business enhanced productivity, with no. of agent qualifying for Million Dollar Round Table (“MDRT”) +21% in 2021 HK$MM
Slide 19: Strategic Portfolio
SY #0 all 32 NWS Pm aot = Strategic Portfolio
Slide 20: Logistics
Logistics Premium assets defied challenges ► ATL Logistics Centre (ATL) (Contributed over 85% of Logistics AOP in FY2022-1H) Segment AOP Strategic Portfolio • Reclassified as an investment property, the Group’s share of the net asset value of ATL increased to c.HK$7.3Bn, representing c.11% of the Gr
Slide 21: Facilities Management
Facilities Management Improvement in all businesses’ performance ► GHK Hospital – AOL further narrowed & continued to generate positive EBITDA since May 2021 Segment AOP Strategic Portfolio • Outpatient & inpatient admission +49% & +20% yoy • Regularly utilized beds increased to 238 (FY2021-1H: 204)
Slide 22: Environment, Social & Governance (ESG)
Environment, Social & Governance (ESG)
Slide 23: Climate Actions Update
Climate Actions Update NWS pledged support towards HKSAR Government’s Climate Action 2050 in October 2021 Sustainable finance: over HK$4 billion financing came from sustainable finance transactions as at 31 December 2021 Sustainability Policy and Climate Change Policy updated to incorporate ou
Slide 24: Climate Actions Update (Cont'd)
Climate Actions Update (Cont’d) Road entered into a 3-way MOU in Sept 2021 with PowerChina (廣東國電龍源風力發電) and CHN Energy (中國電建集團城市規劃設計研究院), a strategic alliance with an aim to identify new alternative energy applications in highway operations and to promote intelligent highways in support of the natio
Slide 25: Corporate Governance Update
Corporate Governance Update HKEX’s revision on CG Code and related Listing Rules came into effect on 1 Jan 2022. New requirements focus on enhancing listed issuers’ corporate governance and diversity practices and will apply to CG reports for financial year commencing on or after 1 Jan 2022 NWS is
Slide 26: Corporate Governance Update (Cont'd)
Corporate Governance Update (Cont’d) Reviewed and updated a number of policies including: Sustainability Policy and Climate Change Policy to formalise our commitment in - reducing our energy consumption; - refraining from making new debt or equity investments in companies engaged in the constructi
Slide 27: Achievements in ESG
Achievements in ESG ESG ratings and recognitions ESG Rating Description 2021 2020 2019 Agency Last Agency Update Hang Seng • Rating improved from AA since 2019 AA+ AA+ AA Sep 2021 Sustainability Index • Listed on Hang Seng Corporate Sustainability (HSSUSB) Benchmark Index since 2013 Sustainalytics •
Slide 28: Achievements in ESG (Cont'd)
Achievements in ESG (Cont’d) ESG ratings and recognitions Organizer Awards NWS Hong Kong Management Association (HKMA) Certificate of Excellence in 2020/21 Hong Kong Sustainability Award CAPITAL Environmental Social and Governance Awards 2021 Hip Hing Green Council 7 Green Management Awards – Projec
Slide 29: Appendices
Appendices =~ an eli NWS
Slide 30: Corporate Structure
Appendix Chow Tai Fook (Holding) Limited Corporate Structure 17.HK 1929.HK Market Cap: HK$80Bn Market Cap: HK$156Bn 100% 61% 75% 825.HK Market Cap: HK$2Bn 659.HK Market Cap: HK$30Bn Note: Market cap as at 24 Feb 2022 30
Slide 31: Financial Position as at 31 Dec 2021
Appendix Financial Position as at 31 Dec 2021 Total cash & bank balance (HK$MM) Total debt (HK$MM) 25,348 20,347 11,674 10,805 30 Jun 2021 31 Dec 2021 30 Jun 2021 31 Dec 2021 Net debt position (HK$MM) Net gearing ratio 14,543 25% 8,672 13% 30 Jun 2021 31 Dec 2021 30 Jun 2021 31 Dec 2021 31
Slide 32: AOP by segment and geography
Appendix AOP by segment and geography Core Business Others 10% represents 92% of AOP The Mainland FY2021 42% 1H Hong Kong 48% 42% 21% 17% 12% 12% 5% -7% -2% Others 17% Roads Aviation Construction Insurance Strategic Discontinued The Portfolio Operations FY2022 Mainland 41% 1H Logistics Environment H
Slide 33: Portfolio of toll roads in the Mainland c.742 km
Appendix Portfolio of 15 toll roads in the Mainland c.742 km Roads Guangdong Zhejiang Hubei Tianjin Shanxi Hunan # of Roads 7 1 1 1 3 2 Length 313.9 km 103.4 km 98.06 km 60.67 km 76.52 km 89.08 km Concession Expiry 2023–2035 2029 2040 2039 2023–2025 2038-2043 1H-FY2022 Cumulative Average Daily 1,291
Slide 34: Goshawk – Leading global aircraft leasing platform
Appendix Goshawk – Leading global aircraft leasing platform Aviation As at 31 Dec 2021, 162 aircraft on book1 Aircraft Type Geographical Spread Asia Europe 50% 16% A320 B737 America family family 48% Middle- 16% 30% East Other Africa 11% 22% 4% Others 3% Aircraft leasing portfolio Fleet size1 219 ai
Slide 35: Investments in logistics in Greater China
Appendix Investments in logistics in Greater China Logistics CUIRC Urumqi Jilin Inner • JV with China State Railway Group, Mongolia Liaoning PSA, CIMC & Deutsche Bahn Xinjiang • 13 large-scale rail container terminals in Beijing Investments in: Dalian Tianjin • ANE (Cayman) Inc. the Mainland Hebei •
Slide 36: Insurance Investment Portfolio (As of 31 Dec 2021)
Appendix Investment Portfolio (As of 31 Dec 2021) Insurance Investment Portfolio AUM* (HK$'M) Asset Types 58,713 56,280 46,450 Fixed Income 77% Equities & Public Other Investment Assets Funds & Cash 2019 2020 2021 12% 8% Private Funds * Exclude Investment-Linked Assurance Scheme business 3% Geograph
Slide 37: Optimization of business portfolio
Optimization of business portfolio Acquisitions B A Suiyuenan Expy Sui-yue Expy Changliu Expy Fortified balance Sky Aviation Leasing FTLife Insurance Co Ltd Int’l Ltd sheet Healthy gearing Capital FY2018-2H FY2019 FY2020 FY2021 recycling level 13% Shares of Beijing Capital Hip Seng Group Healthcar
Slide 38: Thank you
——a AT 32 NWS Thank you
Slide 39: Disclaimer
Disclaimer NWS Holdings Limited (“NWS”) makes no representation or warranty of any kind, express, implied or statutory regarding the accuracy or completeness of the information contained. It is not the intention to provide, and you may not rely on this presentation as providing, all material informa