Shui On Land Ltd. · HKEX:272
Shui On Land — 1H 2016 Earnings Presentation
51 slides from Shui On Land's earnings presentation, Aug 24, 2016
Slide 1: 2016 Interim Results Announcement
Shui On Land Limited (0272.HK) 2016 Interim Results Announcement 24 August 2016
Slide 2: Contents
Contents 1. Key Achievements in 1H 2016 & Outlook of 2H 2016 2. 1H 2016 Financial Results Highlights - Income Statement - Financial position & Debt Profile 3. Residential Developments - Contracted Sales & Recent Launches - Shanghai Pipelines & Saleable Resources 4. Commercial Property - Commercial P
Slide 3: Key Achievements in 1H 2016 and Outlook for 2H 2016
Key Achievements in 1H 2016 and Outlook for 2H 2016 Thriving contracted property sales and other assets disposal: A 410% increase to RMB16.6 billion. Robust residential sell through rates: RHXC Lot 2 sold 275 units on the day of launch at RMB94,000 per sq.m. on 18 June 2016, an ASP increase of 1
Slide 4: Contracted Sales Increased by 410% in 1H 2016
Contracted Sales Increased by 410% in 1H 2016 2016 Contracted Sales Target : RMB24 billion RMB20.3 billion or 85% of the sales target achieved taking into account Jan to July Contracted Property Sales, Other Assets Disposal and Subscribed Sales achieved as of 31 July 2016 Sales (RMB’ bn) 25 20.3
Slide 5: RMB21.3 Billion Locked-in Sales for Delivery in 2H 2016 and beyond
RMB21.3 Billion Locked-in Sales for Delivery in 2H 2016 and beyond Sales (RMB’ bn) GFA (sq.m.) 25.0 2.4 1.3 717,000 25 800,000 +60% 21.3 +78% 20 13.3 4.8 600,000 250,000 15 403,000 400,000 10 6.0 104,000 Commercial 16.5 467,000 5 200,000 7.3 299,000 Residential 0 0 31 Dec 2015 30 Jun 2016 31 Dec 201
Slide 6: Shui On Land – Growing Asset Base
Shui On Land – Growing Asset Base 140.0 Total Assets (RMB' bn) 118.9 117.2 120.0 108.3 98.6 100.0 89.6 80.0 68.6 56.3 60.0 42.6 35.9 40.0 29.9 26 20.0 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1H 2016 6
Slide 7: Contents
Contents 1. Key Achievements in 1H 2016 & Outlook of 2H 2016 2. 1H 2016 Financial Results Highlights - Income Statement - Financial position & Debt Profile 3. Residential Developments - Contracted Sales & Recent Launches - Shanghai Pipelines & Saleable Resources 4. Commercial Property - Commercial P
Slide 8: Financial Summary in 1H 2016
Financial Summary in 1H 2016 Surged in property sales : including property sales recognised as turnover, disposal of IP, disposal of equity in subsidiaries holding commercial properties, other assets disposal and turnover of associates amounted to RMB8,519 million, as compared to RMB2,044 million
Slide 9: Income Statement
Income Statement Gross profit up 32% to RMB761 million, lower valuation gain recorded in 1H 2016 Change RMB’ mn 1H 2016 1H 2015 % Turnover of the Group 1,681 2,027 (17%) Property sales 728 951 (23%) Rental & related income and others 831 803 3% Construction 122 273 (55%) Cost of sales (920) (1,449)
Slide 10: Income Statement
Income Statement Backed by the contribution from the disposal of 3 Corporate Avenue in Shanghai, core earnings recorded was RMB1,321 million in 1H 2016 Change RMB’mn 1H 2016 1H 2015 % Profit before taxation 1,382 2,238 (38%) Taxation (254) (703) (64%) Profit for the Period 1,128 1,535 (27%) Attribut
Slide 11: Recognised property sales
Recognised property sales Inclusive disposal of investment properties, disposal of equity in subsidiaries holding commercial properties, other assets disposal and turnover of associates, property sales reached RMB8.5 billion for 1H 2016 RMB’mn 1H 2016 1H 2015 Change % Property Sales 728 951 (23%) TP
Slide 12: Valuation of Investment Property Portfolio
Valuation of Investment Property Portfolio RMB43.9 billion portfolio on 1.2% valuation gain Leasable Fair Value Gain / Carrying Value as of Gain / (Loss) to Project Product GFA (Loss) in 1H 2016 30 June 2016 Carrying Value Sq.m. RMB’mn RMB’mn RMB/sq.m. % Completed investment properties at valuation
Slide 13: Finance Costs Inclusive of Exchange Differences
Finance Costs Inclusive of Exchange Differences 5% reduction in total interest and finance costs RMB’ mn 1H 2016 1H 2015 Change % Total interest costs and other finance costs (1,771) (1,857) (5%) Less: Amount capitalized to investment properties under construction or development, properties under de
Slide 14: Interim DPS Calculation
Interim DPS Calculation RMB’ mn Total 1H 2016 2H 2015 Profit for the period 1,360 1,128 232 20% thereon 272 Less: 2015 Final dividend declared and paid -190 2016 Interim dividend ceiling 82 Interim dividend ceiling in HKD’ mn 96 Proposed Total Dividend in HKD’ mn 89 Note: Dividend Payout Ratio & Sen
Slide 15: Financial Position
Financial Position Net gearing ratio dropped to 75% Net debt decreased by RMB6,560 million in past 12 months 30 June 31 December Change 30 June Change RMB’ mn 2016 2015 % 2015 % Total assets 118,914 117,170 1.5% 112,947 5% Bank and other borrowings 30,965 33,337 (7%) 33,969 (9%) Convertible Bonds an
Slide 16: Debt Profile
Debt Profile USD/HKD debt reduced by RMB4.46 billion equivalent or 8% of the total debt Debt Profile – Nature & Maturity Breakdown Debt Profile – Currency Breakdown 2H 2018- 2021 & As of 31 December RMB’ mn 2017 Total As of 30 June 2016 2016 2020 after Currency 2015 Senior (RMB % of % of - 5,850 7,7
Slide 17: Contents
Contents 1. Key Achievements in 1H 2016 & Outlook of 2H 2016 2. 1H 2016 Financial Results Highlights - Income Statement - Financial position & Debt Profile 3. Residential Developments - Contracted Sales & Recent Launches - Shanghai Pipelines & Saleable Resources 4. Commercial Property - Commercial P
Slide 18: Residential Contracted Property Sales increased by 308%
Residential Contracted Property Sales increased by 308% 72% contributed by Shanghai projects Residential Property Sales RMB’ mn 12,000 +308% 9,000 6,000 10,334 3,000 2,535 0 1H 2015 1H 2016 Residential Property Sales 1H 2016 1H 2015 Change % Shanghai TPQ, RHXC & KIC 7,470 4 1867% Wuhan Tiandi 1,451
Slide 19: Robust Sell Through Rate and ASP Growth in Shanghai
Robust Sell Through Rate and ASP Growth in Shanghai Shanghai Rui Hong Xin Cheng Lot 9 Lot 9 Lot 2 1st Batch 2nd Batch 1st Batch Oct 15 Feb 16 Jun 16 Average Selling Price (RMB per sq.m.) 71,000 80,000 94,000 Total Property Sales Amount (RMB’bn) 2.7 3.6 3.2 Total Units Launch/Sold on the 328/ 352/ 32
Slide 20: 2H 2016 Residential Available for Sale
2H 2016 Residential Available for Sale Abundant saleable resources from Shanghai Residential projects Product type sq.m. Shanghai Taipingqiao – Lakeville Luxe (Lot 116) High-rises 68,700 Shanghai RHXC High-rises 87,400 Wuhan Tiandi High-rises 4,300 Chongqing Tiandi High-rises 89,300 Foshan Lingnan T
Slide 21: Lakeville Luxe – Special layout units
Shanghai Taipingqiao Lakeville Luxe – Special layout units
Slide 22: Slide 22
Slide 23: Shanghai Rui Hong Xin Cheng – The Gallery (Lot 2)
Shanghai Rui Hong Xin Cheng – The Gallery (Lot 2) Club House and Showflats
Slide 24: Slide 24
Slide 25: Shui On Land - Residential Developments
Shui On Land - Residential Developments GFA 2.2 million* sq.m. saleable resources Shanghai Shanghai** Saleable GFA: 156,100 sq.m. Saleable GFA: 347,000 sq.m. (PUD) (Under relocation) Taipingqiao (Lot 116) RHXC (Lots 2) Taipingqiao (Lot 118) RHXC (Lots 1, 7) Saleable GFA: Saleable GFA: Saleable
Slide 26: Strong Shanghai Pipelines - Relocation Progress Update
Strong Shanghai Pipelines - Relocation Progress Update Total % of % of Estimated relocation relocation relocation Year of Estimated GFA year of cost paid as Lot completed completed relocation Year for sq.m. relocation at 30 June as at 31 as at 30 started Pre-sale completion 2016 Dec 2015 June 2016 R
Slide 27: Contents
Contents 1. Key Achievements in 1H 2016 & Outlook of 2H 2016 2. 1H 2016 Financial Results Highlights - Income Statement - Financial position & Debt Profile 3. Residential Developments - Contracted Sales & Recent Launches - Shanghai Pipelines & Saleable Resources 4. Commercial Property - Commercial P
Slide 28: Commercial Properties Sales and Other Assets Disposal
Commercial Properties Sales and Other Assets Disposal RMB6.3 billion of contracted sales achieved in 1H 2016 Commercial Property Sales & Other Assets Disposal RMB’ mn 9,000 +766% 6,308 6,000 Other Assets 1,693 Disposal 3,000 Commercial 4,615 sales 0 728 1H 2015 1H 2016 28
Slide 29: Commercial Properties Sales in Wuhan Tiandi
Commercial Properties Sales in Wuhan Tiandi Two office buildings in Wuhan Tiandi sold for RMB4.5 billion in 1H 2016 A3 Office A3 Office GFA Sold(sq.m.) 55,100 Transacted Value RMB1,134 million Status as of 1H 2016 Under Construction Schedule to be completed and delivered in 2H 2016 A1 Office A1 Offi
Slide 30: Investment Property Portfolio & Valuation
Investment Property Portfolio & Valuation Disposal of commercial properties transfer asset values to cash GFA* (sq.m.) Composition in Value by Project Completed Under Development Assets Held f or Sale 2,000,000 1,698,000 9% 87,000 1,631,000 24% 9% Taipingqiao* 1,500,000 575,000 573,000 THE HUB 1,000
Slide 31: Completed Investment Property Portfolio
Completed Investment Property Portfolio A total GFA of 1,058,000 sq.m. with total carrying value as of 30 June 2016: RMB38.1 billion Shanghai Portfolio* (Leasable GFA: 739,000 sq.m.) Shanghai Taipingqiao THE HUB Shanghai RHXC Shanghai KIC Office & Retail Office & Retail Retail & Hotel Office
Slide 32: Commercial Property Portfolio
Commercial Property Portfolio GFA 2.5 million sq.m. under development or for future development Shanghai Wuhan, Chongqing, Foshan Wuhan Tiandi RHXC Lot 10 Office & Retail Wuhan Tiandi HORIZON Lots A1/2/3 Hall of the Sun Office, Retail & Hotel Leasable GFA: Retail (Under relocation) 328,000 s
Slide 33: Completed Investment Property Portfolio
Completed Investment Property Portfolio Rental and related income grew to RMB759 million, 3% POP increase Rental and Related Income Completed IP Composition by City* Foshan 13% RMB’mn Shanghai 70% 1,539 Chongqing 13% 1.058 mn 1,200 1,278 Leasable Wuhan 4% 1,151 GFA sq.m. 1,056 600 835 684 736 759 Fo
Slide 34: Thank You Q & A
Thank You Q&A 34
Slide 35: Appendix
Appendix (TO BE DISCUSSED) Appendix Market Information Company Introduction Others 35
Slide 36: Market Information
Market Information Indicator Year China Shanghai Wuhan Chongqing Foshan Dalian GDP (RMB billion) 2013 58,802 2,160 905 1,266 701 727 2014 63,614 2,356 1,007 1,427 744 766 2015 67,671 2,496 1,091 1,572 800 773 1H 2016 34,064 1,296 535 800 377 366 Population (million) 2013 1,361 24.2 10.2 29.7 7.3 6.9
Slide 37: Residential Housing Price Growth
Indicator Year China Shanghai Wuhan Chongqing Foshan Dalian Residential Housing 2013 7.7% 9.0% 7.6% 10.3% 9.1% -0.1% Price Growth 2014 1.4% 11.3% 8.4% -2.8% -0.3% 2.7% 2015 9.1% 17.5% 15.6% -5.0% -2.5% 2.1% 1H 2016 12.3% 13.8% 11.9% 1.0% 6.8% 4.3% Residential 2013 1,157 12.4 15.8 15.6 8.9 3.1 Transa
Slide 38: Large-scale Mixed-use City Center Development
Large-scale Mixed-use City Center Development Xintiandi – Entertainment Area Corporate Avenue – Grade A Office Tower High-end Residential Shopping Centre Man-made Lake 38
Slide 39: Simplified Corporate Structure Overview (as of 31 July 2016)
Simplified Corporate Structure Overview (as of 31 July 2016) Mr. Vincent H. S. Lo Public Shui On Group (private companies) 48.38% 42.85% SOCAM Development Limited 56.78% (“SOCAM”, 0983.HK) Shui On Land Limited 0.37% (“SOL”, 0272.HK) 100.00% (1) China Xintiandi Holding Company Limited 78.11% Shui On
Slide 40: Shui On Land – Strong Asset Base
Shui On Land – Strong Asset Base 26% of the GFA or 37% of asset value was carried at valuation Asset value – by nature GFA* – valuation vs. cost Cash & Bank Balances Others At Valuation 10% 7% 26% Prepayment of Relocation Cost 8% IP at Valuation Properties Held 37% 6.6 mn sq.m. for Sale RMB118.9 bn
Slide 41: Shui On Land Property Portfolio in High Growth Cities
Shui On Land Property Portfolio in High Growth Cities Dalian Shanghai 2.8 mn sq.m. Taipingqiao Total Property Portfolio*: 0.7 mn sq.m. GFA 9.0 mn sq.m. Wuhan Shanghai 1.1 mn sq.m. RHXC 1.2 mn sq.m. Dalian Chongqing Wuhan Shanghai 1.7 mn sq.m. Shanghai KIC 0.2 mn sq.m. Chongqing Foshan Foshan THE HUB
Slide 42: Superior and Diversified Landbank
Superior and Diversified Landbank Attributable GFA by Property Type Attributable GFA by City Hotel, Serviced Apartment 6% Dalian Shanghai 19% 30% Residential 32% Office Foshan 34% 14% Wuhan Retail Chongqing 15% 28% 22% 42
Slide 43: Shanghai Taipingqiao & Rui Hong Xin Cheng
Shanghai Taipingqiao & Rui Hong Xin Cheng Shanghai Taipingqiao Shanghai Rui Hong Xin Cheng Project Information Project Information (representing leasable & saleable GFA) (representing leasable & saleable GFA) Total GFA 1,259,000 sq.m. Total GFA 1,734,000 sq.m. 253,000 sq.m. (Sold & Delivered 571,000
Slide 44: Shanghai KIC and THE HUB
Shanghai KIC and THE HUB Shanghai KIC THE HUB Project Information Project Information (representing leasable & saleable GFA) (representing leasable & saleable GFA) Total GFA 499,000 sq.m. Total GFA 308,000 sq.m. 244,000 sq.m. (Sold & Delivered) 45,000 sq.m. (sold & delivered Completed 225,000 sq.m.
Slide 45: Wuhan Tiandi and Chongqing Tiandi
Wuhan Tiandi and Chongqing Tiandi Wuhan Tiandi Chongqing Tiandi Project Information Project Information (representing leasable & saleable GFA) (representing leasable & saleable GFA) Total GFA 1,585,000 sq.m. Total GFA 2,778,000 sq.m. 1,115,000 sq.m. (Sold & delivered) 485,000 sq.m. (Sold & Completed
Slide 46: Foshan Lingnan Tiandi and Dalian Tiandi
Foshan Lingnan Tiandi and Dalian Tiandi Foshan Lingnan Tiandi Dalian Tiandi Project Information Project Information (representing leasable & saleable GFA) (representing leasable & saleable GFA) Total GFA 1,518,000 sq.m. Total GFA 3,103,000 sq.m. 271,000 sq.m. (sold & 257,000 sq.m. (sold & delivered)
Slide 47: Shanghai Rui Hong Xin Cheng
Shanghai Rui Hong Xin Cheng The Gallery (Lot 2) Customer Profile 100% Nationality Payment Source 100% 80% 80% 96.7% 265 89.8% 60% 74.1% 60% 246 203 25.9% 50% 40% 40% 10.2% 71 3.3% 20% 28 20% 9 0% 0% 0% Mainland China Others Mortgage Non-Mortgage* New Clients Existing Clients* *Inclusive of both paym
Slide 48: Shanghai Taipingqiao Project
Shanghai Taipingqiao Project Lakeville Luxe (Lot 116) Customer Profile 100% Nationality Payment Source 60% 100% 80% 95.9% 71 40% 83.8% 60% 58.1% 62 20% 43 50% 40% 41.9% 16.2% 4.1% 20% 0% 31 12 3 0% -20% 0% China Mainland Others Mortgage Non-Mortgage* New Clients Existing Clients* *Inclusive of both
Slide 49: Capital Expenditure (CAPEX)
Capital Expenditure (CAPEX) RMB’ bn 2015 1H 2016 Construction Cost 5.4 2.9 % of total CAPEX 53% 76% Land Premium 0.4 - Relocation Cost 4.3 0.9 % of total CAPEX 47% 24% Total CAPEX 10.1 3.8 Total committed and available bank loan facilities as of 30 June 2016: RMB4.1 billion - Construction and work
Slide 50: Core Earnings
Core Earnings Change RMB’ mn 1H 2016 1H 2015 % Profit attributable to shareholders of the Company 768 1,195 (36%) Net increase in fair value of the remaining investment properties (519) (2,797) (81%) Effect of corresponding deferred tax charges 130 699 (81%) Gain arose from acquisition of subsidiari
Slide 51: Rental and Occupancy Rates Analysis
Rental and Occupancy Rates Analysis Excluding rental & related income from 1, 2 & 3 Corporate Avenue, growth by 25% to RMB744 million in 1H 2016 compared to RMB596 million in 1H 2015 Occupancy rate Rental & related income Change Project Product Leasable as of RMB’mn % GFA 30 Jun 31 Dec 1H 1H sq.m. 2