Kaisa Group Holdings Ltd. · HKEX:1638
Kaisa — H1 2020 Earnings Presentation
46 slides from Kaisa's earnings presentation, August 2020
Slide 1: Interim Results Presentation 2020
Interim Results Presentation 2020 August 2020
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements. Any such forward-looking statements are based on a number of assumptions about the operations of the Kaisa Group Holdings Ltd. (the “Company”) and factors beyond the Company's control and are subject to significant risks and uncert
Slide 3: Contents
Contents 1. Major Achievements in 1H2020 4 2. Development Strategies in 2H2020 16 3. Financial Highlights & Liability Management 21 4. Appendix 30
Slide 4: 1. Major Achievements in 1H2020
1. Major Achievements in 1H2020
Slide 5: Major Achievements in 1H2020
Major Achievements in 1H2020 ✓ Contracted sales achieved RMB36 bn, +4% YoY, 27th in nationwide ranking¹ Steady Growth ✓ Contracted GFA reached 2.12 mn sq. m., +8% YoY in Contracted Sales ✓ 32% contracted sales from URPs (Urban Renewal Projects) ✓ 57% contracted sales from the Greater Bay Area ✓ Land
Slide 6: Contracted Sales
Contracted Sales Contracted Sales Contracted GFA Contracted ASP (RMB mn) ('000 sq. m.) (RMB/sq. m.) 4,642 88,120 18,983 3,837 70,059 18,261 17,686 2,786 17,004 44,714 1,961 2,119 34,690 36,032 16,048 FY2017 FY2018 FY2019 1H2019 1H2020 FY2017 FY2018 FY2019 1H2019 1H2020 FY2017 FY2018 FY2019 1H2019 1H
Slide 7: Contracted Sales (Con’t)
Contracted Sales (Con’t) Contracted Sales in 1H2020: RMB36,032 mn Contracted Sales in 1H2019: RMB34,690 mn Contracted Sales in 1H2020 by Region Contracted Sales in 1H2019 by Region Pan Bohai Pan Bohai Rim, 12% Rim, 15% Western Western China, 5% China, 11% Central Greater Greater Central Bay Area, Ch
Slide 8: Contracted Sales (Con’t)
Contracted Sales (Con’t) Contracted Sales in 1H2020 by Cities (Top 5) Contracted Sales in 1H2020 by Product Serviced 29% Apartment 15% Residential Commercial 10% 70% 9% 5% 4% 4% Office and carpark 6% Shenzhen Huizhou Shanghai Guangzhou Chengdu Contracted Sales in 1H2020 by ASP (Top 5) 1H2020 Sales P
Slide 9: Recognized Sales
Recognized Sales Recognized Sales Recognized GFA Recognized ASP (RMB mn) ('000 sq. m.) (RMB/sq. m.) 18,958 43,849 2,548 17,206 17,209 16,580 36,081 2,241 2,097 13,923 31,206 18,502 20,639 1,116 1,089 FY2017 FY2018 FY2019 1H2019 1H2020 FY2017 FY2018 FY2019 1H2019 1H2020 FY2017 FY2018 FY2019 1H2019 1H
Slide 10: Established Presence in T1 & T2 Cities with High Quality Land Bank
Established Presence in T1 & T2 Cities with High Quality Land Bank ◆ 26.8 mn sq. m. land bank by GFA, with attributable portion of Western China Pan Bohai Rim 72% GFA: 3.38 mn sq. m. GFA: 3.27 mn sq. m. ◆ 78% located in Tier 1 & major Tier 2 cities % of total by GFA: 12.6% % of total by GFA: 12.2% ◆
Slide 11: Land Acquisition through Diversified Channels
Land Acquisition through Diversified Channels ◆ 74% of the newly acquired land located in the Greater Bay Area ◆ 51% of the newly acquired land located in Tier 1 cities ◆ Land acquisition through bidding, M&A and urban renewal, of which 24% from urban renewal conversion ◆ Newly acquired attributable
Slide 12: Urban Renewal Pipeline Supports Future Development
Urban Renewal Pipeline¹Supports Future Development ◆ Acquired 20 new URPs in 1H2020, mainly located in Shenzhen ◆ Total 167 URPs in the pipeline with site area¹over 42 mn sq. m. 旧改项目 ◆ RMB2.6 trn worth expected saleable resources with expected GFA of 100 mn sq. m. upon conversion ◆ 99% of the UPRs i
Slide 13: Strong Commitment in Corporate Social Responsibilities
Strong Commitment in Corporate Social Responsibilities Fight COVID-19 ◆ Donated RMB10 mn to support the front lines of fighting the epidemic in Wuhan and Xiaogan ◆ Donated 5000 protective suits to 11 hospitals in Hubei, and 2.5 tons of disinfectant to Xiaogan ◆ Donated 50 tons of fresh vegetables to
Slide 14: Environmental, Social and Governance
Environmental, Social and Governance Local Community Development through Urban Renewal Social Green ◆ Obtained the first Sustainable Finance Contribution Contribution UN SDGs UN SDGs Framework and Second Party Opinion in China Property Market Infrastructure Green and Essential Buildings Services ◆ M
Slide 15: Rising Brand Influence and Recognition from Capital Markets
Rising Brand Influence and Recognition from Capital Markets Ranked 1157th in Forbes’ Global 2000- Rankd 8th of Hong Kong Listed China- Institutional Investor- The World’s Largest Public Companies based Property Developers 2020 in Honored Company Financial Stability Ranked 213rd in Ranked 22nd in 202
Slide 16: 2. Development Strategies in 2H2020
2. Development Strategies in 2H2020
Slide 17: Celebration of 40-year Anniversary of Establishment of Shenzhen Special Economic Zone
Celebration of 40-year Anniversary of Establishment of Shenzhen Special Economic Zone Speed up construction of Kaisa Golden Bay International Park, builting a world-class tourism destination brand for Shenzhen Increase presence in international and domestic cultural and sports events to make Shenzhe
Slide 18: Greater Bay Area Continues to Be the Core Region of Development
Greater Bay Area Continues to Be the Core Region of Development Expected Saleable Resources in 2H2020: RMB120 bn Expected Saleable Area in 2H2020: 6.6 mn sq. m. by City by City Tier 3 Tier 2 18% 52% Tier 3 Tier 2 7% 63% Tier 1 41% Tier 1 19% by Region by Region Pan Bohai Hainan, 1% Central China Rim
Slide 19: Accelerating Conversion of URPs to Drive Growth
Accelerating Conversion of URPs to Drive Growth URPs to be converted into land bank in 2020 Saleable ASP of Expected Saleable No. Project Location Type Area* Nearby Projects Resources (’000 sq. m.) (RMB/sq. m.) (RMB mn) 1 Hong Kong Sai Wan Project Sai Wan, Hong Kong Residential 2¹ 340,000 820 Shenzh
Slide 20: High Profit Margins from Low Cost URPs
High Profit Margins from Low Cost URPs Land Prices of URPs in Recent Shenzhen Residential Land Auction Land Bank (RMB/sq. m.) Land Cost per Saleable GFA (RMB/sq. m.) GFA: 5.5 mn sq. m. Average selling price of residential property in Shenzhen: over RMB50,000 per sq. m. 87,000 Construction cost of re
Slide 21: 3. Financial Highlights & Liability Management
3. Financial Highlights & Liability Management
Slide 22: Financial Highlights in 1H2020
Financial Highlights in 1H2020 Cashflow Improvement Cash and Bank Deposits(RMB bn) Net Gearing Ratio(1) Quick Ratio(2) 1.3X 1.2X 300% 1.1X 40 1.0X 37 236% 21 23 144% 130% FY2017 FY2018 FY2019 1H2020 FY2017 FY2018 FY2019 1H2020 FY2017 FY2018 FY2019 1H2020 Growing Profitability Core Net Profit Attribu
Slide 23: Financial Highlights in 1H2020
Financial Highlights in 1H2020 P&L and Profitability (RMB mn) Balance Sheet and Credit Metrics (RMB bn) 1H2020 FY2019 % Change 1H2020 1H2019 % Change Total assets 292 271 +8% Revenue 22,297 20,106 +11% Total equity 62 56 +12% Recognized revenue from 20,639 18,502 +12% Contract liabilities 47 39 +20%
Slide 24: Financing and Liability Management
Financing and Liability Management Improving Debt ✓ Net gearing ratio -14 ppts from 2019 year end to 130% Servicing ✓ Quick ratio improved to a healthy level of 1.2× Capability ✓ Cash on hand +9% to RMB40.5 bn from 2019 year end ✓ Total equity +12% to RMB62.3 bn from 2019 year end Expanding ✓ Onshor
Slide 25: Proactive Offshore Liability Management
Proactive Offshore Liability Management Tightening Yield Curve of Kaisa USD Bond 16% 15.34 15.67 June 14.44 2018 13.68 Tightened 300-500 bps 12.00 11.97 12.10 June 12% 2020 10.9410.97 10.40 YTM(%) 9.96 9.05 8.94 7.76 8% 7.357.63 7.23 4% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 Remaining Y
Slide 26: Diversified Investor Base
Diversified Investor Base Geographic Distribution of Kaisa Dollar Bond Investors ◆ Strong response from various types of institutional and private investors including global money managers, private funds, and London family office Boston Frankfurt ◆ Expanded investor base to U.S. Los Angeles New York
Slide 27: Expanding Onshore and Offshore Financing Channels
Expanding Onshore and Offshore Financing Channels ◆ Onshore unutilized bank credit line of RMB120 bn ◆ ABS Issuance ▪ Obtained ABS quota of RMB10.6 bn YTD, being the first domestic AA+ private property developer granted shelf offering quota (mortgage balloon payments) ▪ Issued RMB1.2 bn ABS YTD, wit
Slide 28: Debt Composition and Maturity Profile
Debt Composition and Maturity Profile Debt Composition Debt Maturity Profile Onshore non-bank 1H2020 FY2019 borrowings, 16% 60% 49% 50% 44% Onshore bank ◆ Total Borrowing RMB121.7 bn 40% borrowings, 27% 27% ◆ Onshore: 43% 30% 27% 26% 22% Offshore ◆ Offshore: 57% 20% senior Offshore bank notes, 53% 1
Slide 29: Market Recognition from Equity and Fixed Income Investors
Market Recognition from Equity and Fixed Income Investors Equities and Bonds Coverage Equity Coverage Recommendation Bond Coverage CLSA High-conviction Buy Deutsche Bank Southwest Securities Buy Citigroup Haitong Securities Outperform BAML First Shanghai Buy Barclays Central Wealth Securities Buy BN
Slide 30: 4. Appendix
a AN KAISA GROUP HOLDINGS LTD. edb eR MISA PR >¢ 4. Appendix
Slide 31: 1H2020 Earnings
1H2020 Earnings (RMB bn) 1H2020 1H2019 % Change Revenue 22.30 20.11 +10.9% -Sales of properties 20.6 18.5 +11.6% -Rental income 0.16 0.19 -16.5% -Property management services 0.55 0.38 +47.9% -Hotel and catering operations 0.07 0.10 -28.5% -Cinema, department store and cultural center operations 0.0
Slide 32: Balance Sheet
Balance Sheet (RMB bn) As of 30 Jun 2020 As of 31 Dec 2019 % Change Total assets 292.4 270.9 +7.9% Total liabilities 230.2 215.2 +7.0% Net current asset 77.8 66.8 +16.4% Total equity 62.3 55.7 +11.7% Cash and bank deposits 40.5 37.0 +9.5% Quick ratio(1) 1.2X 1.1X +0.1X Leverage ratio(2) 28% 30% -2 p
Slide 33: Land Acquisition in 1H2020
Land Acquisition in 1H2020 Attributable Attributable Time of Attributable Site Area GFA Way of No Location GFA Consideration Land Use Acquisition Interest (sq. m.) (sq. m.) Acquisition (sq. m.) (RMB mn) 1 Jan-2020 Hangzhou, Zhejiang 51% 49,166 108,165 55,164 458 Residential M&A Residential & 2 Feb-2
Slide 34: URPs to Be Converted into Land Bank in 1-2 years
URPs to Be Converted into Land Bank in 1-2 years Expected Saleable ASP of Nearby Saleable Project Location Type Area* Projects Resources (’000 sq. m.) (RMB/sq. m.) (RMB mn) Hong Kong Kowloon Project Kowloon, Hong Kong Residential 2 270,000 603 Dapeng New District, Shenzhen Dapeng No.2 Industrial Zon
Slide 35: URPs to Be Converted into Land Bank in 3-5 years
URPs to Be Converted into Land Bank in 3-5 years ASP of Nearby Expected Saleable Saleable Area* Project Location Type Projects Resources (’000 sq. m.) (RMB/sq. m.) (RMB mn) Shenzhen Xiangjiaotang Project Longgang, Shenzhen Residential 580 55,000 31,900 Shenzhen Banxuegang 08 Project Longgang, Shenzh
Slide 36: URPs to Be Converted into Land Bank in 3-5 years (Con’t)
URPs to Be Converted into Land Bank in 3-5 years (Con’t) Saleable ASP of Nearby Expected Saleable Project Location Type Area* Projects Resources (’000 sq. m.) (RMB/sq. m.) (RMB mn) Bao’an, Shenzhen Jingbei Fantangmen Project Residential 12 75,000 900 Shenzhen Guangming, Shenzhen Central Guangming Di
Slide 37: URPs to Be Converted into Land Bank Over 5 years
URPs to Be Converted into Land Bank Over 5 years Site Area Project Location (’000 sq. m.) Greater Bay Area Shenzhen All Administrative Districts 5,176 Guangzhou Haizhu, Baiyun, Zengcheng, Panyu, Huadu 10,700 Zhongshan Shaxi, Dayong, Shiqi, Henglan 8,600 Huizhou Huicheng 3,430 Zhuhai Doumen 940 Dongg
Slide 38: URPs Expected to Be Launched in 2H2020
URPs Expected to Be Launched in 2H2020 Shenzhen Kaisa Yuebanshan Shenzhen Kaisa Sky-high Summit Shenzhen Tongda Huixuan • Guangming Street, • Intersection of Jianhui Location • Hangcheng Street, Guangming District, Road and Zhicheng Road, Bao’an District, Shenzhen Shenzhen Longhua District, • Adjace
Slide 39: URPs Expected to Be Launched in 2H2020 (Con’t)
URPs Expected to Be Launched in 2H2020（Con’t） Shanghai Kaisa City Plaza Shenzhen Kaisa Marine Guangzhou Kaisa Baiyun City Plaza (Phase 4-7) Mangrove Bay Location • Xuhang Town, Jiading • Guangzhou Baiyun New Town West • Intersection of Honghua District, Shanghai Extension District, adjacent to Road
Slide 40: Improving Transport Infrastructure in the Greater Bay Area
Improving Transport Infrastructure in the Greater Bay Area ◆ A total track length of 273km is under construction and the total mileage of Shenzhen Metro will reach 580km by 2022 ◆ By 2035, Shenzhen is expected to have 33 metro lines with a total mileage of 1,335km, which is 4.7 times of the current
Slide 41: Benefiting from Positive Housing Policies
Benefiting from Positive Housing Policies Issued Time Documents Core Content Issued by Jul 2020 “Urban Renewal Regulations of the Shenzhen Special The government can initiate individual housing expropriation if more than 95% of the relocation Drafted by the Shenzhen Municipal Economic Zone (Consulta
Slide 42: Abundant Premium Projects in Shenzhen
Abundant Premium Projects in Shenzhen Shenzhen projects in land bank (28) MajorURPs in pipelineLink Transportation (112) in Shenzhen Nam Tai nno Park Major transportation hubs in Shenzhen 南太云创谷 Kaisa E Cube 光明区 佳兆业E立方 Guangming District 龙岗区 Kaisa Sky-high Summit 龙华区 Longgang District 佳兆业云峰汇 Longhua
Slide 43: Metro-accessible Projects in Shenzhen
Metro-accessible Projects in Shenzhen ◆ 15 metro-accessible projects in Shenzhen, occupying prime locations ◆ Strategic locations imply great potential for value appreciation Planning of railway transit in Shenzhen Guangming Street Pinghu & Pinghu Railway Station Kaisa E Cube Niuhu Pinghu Kaisa Plaz
Slide 44: Proven Track Record of URPs Conversion
Proven Track Record of URPs Conversion ◆ Successfully converted 32 URPs with over 13.6 mn sq. m. GFA since established ◆ URPs mainly located in Tier 1 cities including Shenzhen, Guangzhou, Shanghai and Hong Kong ◆ Successfully converted 19 URPs with GFA of nearly 3 mn sq. m. since 2017 GFA No. of Ye
Slide 45: Recently Converted URPs
Recently Converted URPs Guangzhou Kaisa Phoenix Shenzhen Nanshan Shahe Project Shenzhen Luohu Sanshun Project Riverview Residence • North of Shahe Street, • Shuibei Area, • East of Huangge West Nanshan District, Dongxiao Street, Road, Huangge Town, Location Shenzhen Luohu District, Nansha District,
Slide 46: Shareholding Structure (As of 30 June 2020)
Shareholding Structure (As of 30 June 2020) • Founder and chairman • Over 20 years of industry experience • Responsible for overall strategy, investment planning and human resources strategy Funde Sino Life Kwok Family Other public investors Insurance Co., Ltd. 25.17% 39.20% 35.63% Hotel and caterin