Sun Hung Kai Properties Limited · HKEX:16
Sun Hung Kai Properties — 1H FY2022 Earnings Presentation
52 slides from Sun Hung Kai Properties's earnings presentation, Feb 24, 2022
Slide 1: FY2022 Interim Results
Cover 2 FY2022 Interim Results 24 February 2022 24 February 2022 FY2022 Interim Results
Slide 2: Contents
Contents Page Financial Review – 1H FY2022 4 Property Business – Hong Kong Land Bank 10 Property Development 13 Property Investment 17 Property Business – Mainland Land Bank 26 Property Development 28 Property Investment 32 Hotel Business 38 Sustainability 40 Market and Business Prospect
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: Financial Review – 1H FY2022
IFC and ICC, Hong Kong FINANCIAL REVIEW – 1H FY2022 FY2022 Interim Results
Slide 5: Financial Highlights
Financial Highlights 1H 1H Change FY2022 FY2021 Profit attributable to the Company’s shareholders - Underlying(1) (HK$ mn) 14,818 17,482 -15.2% - Reported (HK$ mn) 15,186 13,578 +11.8% Basic earnings per share - Underlying(1) (HK$) 5.11 6.03 -15.3% - Reported (HK$) 5.24 4.69 +11.7% Interim dividend
Slide 6: Sustainable Dividends
Sustainable Dividends HK$ Interim Dividend (LHS) Final Dividend (LHS) Payout Ratio % (RHS) 48.9% 48.0% 6 47.4% 50% 46.0% 45.7% 44.3% 44.3% 42.1% 5 40% 4 30% 3 3.70 3.70 3.70 3.45 3.00 2.80 20% 2.40 2.40 2 1.25 10% 1 1.05 1.10 1.20 1.25 1.25 1.25 0.95 0.95 0 0% FY2014 FY2015 FY2016 FY2017 FY2018 FY20
Slide 7: Earnings Drivers
Earnings Drivers Profit Breakdown by Segment(1) 1H 1H Change (in HK$ mn) FY2022 FY2021 (1) Property sales - Hong Kong 7,036 10,484 - Mainland 622 1,882 Sub-total 7,658 12,366 -38.1% (2) Property rental - Hong Kong 6,715 6,923 - Mainland 2,766 2,313 - Singapore 247 260 Sub-total 9,728 9,496 +2.4% (3)
Slide 8: Financial Position
Financial Position 31 Dec 30 Jun 31 Dec As at 2021 2021 2020 Shareholders’ equity (HK$ mn) 600,773 593,820 583,286 - Shareholders’ equity per share (HK$) 207.3 204.9 201.3 Net debt (HK$ mn) 104,955 95,042 83,955 Net gearing ratio(1) 17.5% 16.0% 14.4% 1H 1H FY2022 FY2021 Interest cover(2) 13.0x 15.3x
Slide 9: Financial Position (Cont’d)
Financial Position (Cont’d) Prudent financial policy Balanced debt maturity profile Diversified funding sources Ample liquidity Debt Maturity Profile Net Gearing Ratio 30% <1 year, 19.7% 25% >5 years, 26.6% 20% 17.5% 16.0% 14.1% 14.4% 15% 12.1% 12.9% 10.8% 10% 7.2% Between 1 and 2 5% years,
Slide 10: Property Business - Hong Kong Land Bank
High Speed Rail West Kowloon Terminus Development, YOHO Hub, Hong Hong Kong Kong Rendering Rendering PROPERTY BUSINESS - HONG KONG LAND BANK FY2022 Interim Results
Slide 11: Land Bank in Hong Kong
Land Bank in Hong Kong Total land bank as at 31 December 2021: 57.8mn sq.ft.(1) Residential Shopping 74% Centre 35% Office 30% Properties Completed under (2) properties development Shopping Centre 9% Office Residential 9% 10% Hotel Hotel 13% (3) 2% (3) Industrial Industrial 6% 12% Total: 34.2mn sq
Slide 12: Land Acquisitions in Hong Kong
Land Acquisitions in Hong Kong Completed the lease modification procedures for Shap Sz Heung Development the large-scale residential project at Shap Sz Heung, increasing its total GFA by ~1mn sq.ft. to ~5.8mn sq.ft. in October 2021 The Shap Sz Heung project initially was converted from farmland
Slide 13: Property Business - Hong Kong Property Development
Wetland Seasons Bay, Hong Kong Rendering PROPERTY BUSINESS - HONG KONG PROPERTY DEVELOPMENT FY2022 Interim Results
Slide 14: Recognized Property Sales in Hong Kong
Recognized Property Sales in Hong Kong (1) Property Sales 1H FY2022 1H FY2021 Change Revenue (HK$ mn) 16,997 23,433 27.5% Operating profit (HK$ mn) 7,036 10,484 32.9% Major contributors: Wetland Seasons Park Phase 2 and 3, Regency Bay, Regency Bay II, Cullinan West III and Grand YOHO Phase 2 S
Slide 15: Contracted Sales in Hong Kong for 1H FY2022
Contracted Sales in Hong Kong for 1H FY2022 Stake Attri. Sales Proceeds Project (%) (HK$ bn) Wetland Seasons Bay Phase 1 & 2, Tin Shui Wai 100 10.3 The YOHO Hub, Yuen Long JV 3.0 Cullinan West III, West Kowloon JV 0.9 Kennedy 38, Kennedy Town 53.3 0.8 Others 5.6 Total 20.6 Contracted sales reached
Slide 16: Ample Saleable Resources to be Launched in Hong Kong for the Next 10 Months
Ample Saleable Resources to be Launched in Hong Kong for the Next 10 Months MTR Residential projects 1 3 2 1. Wetland Seasons Bay Phase 3 4 8 Stake: 100% Res. GFA: 214,000 sq.ft. 5 5. Prince Central 6 Stake: 100% Res. GFA: 45,000 sq.ft. 2. Tuen Mun Town Lot No.483 Phase 1, Siu Hong Stake: 100% Res.
Slide 17: Property Business - Hong Kong Property Investment
IFC Mall, Hong Kong PROPERTY BUSINESS - HONG KONG PROPERTY INVESTMENT FY2022 Interim Results
Slide 18: Rental Income from Diversified Portfolio
Rental Income from Diversified Portfolio Gross Rental Income by Sector in Hong Kong(1) (HK$ mn) 1H FY2022 Change HK$ mn Gross Rental Income 8,928 2.8% yoy 10,500 9,181 Net Rental Income 6,715 3.0% yoy 8,928 (-2.8% yoy) 9,000 Shopping Centres 7,500 3,348 51% 3,222 (-3.8% yoy) 6,000 4,500 4,698 4,519
Slide 19: Hong Kong Retail Portfolio of 12mn sq.ft.
Hong Kong Retail Portfolio of 12mn sq.ft. Performance of the Group’s retail portfolio continued to improve with increased leasing activities while social distancing measures were further relaxed during the period Overall occupancy of the portfolio has remained steady Malls with a local focus s
Slide 20: Initiatives to Enhance Shoppers’ Experience
Initiatives to Enhance Shoppers’ Experience Elevated the hygienic standards of the Group’s properties to ensure a safe and healthy environment for its stakeholders Such as 5G Smart Restrooms solution to help visitors shorten queueing time and maintain the cleanness of restrooms Optimized tenan
Slide 21: Initiatives to Enhance Shoppers’ Experience (Cont’d)
Initiatives to Enhance Shoppers’ Experience (Cont’d) Continued to work closely with tenants and business partners, as well as strengthen the collaborations between the Group’s business arms The Point by SHKP, loyalty programme for the Group’s shopping malls with 1.8 million members, has constant
Slide 22: Hong Kong Office Portfolio of 10mn sq.ft.
Hong Kong Office Portfolio of 10mn sq.ft. Recorded satisfactory overall occupancy despite a challenging office market in Hong Kong 1 2 4 1 3 (4) Millennium City Cluster (1) IFC Attri. GFA: 1.7mn sq.ft Attri. GFA: 1.0mn sq.ft. Occupancy: ~91% Occupancy: ~99% (2) ICC (3) Wan Chai & Causeway Bay Attr
Slide 23: Major New Additions in the Pipeline
Major New Additions in the Pipeline 98 How Ming Street, Kowloon East Construction of the entire project is expected to be completed in 2023 Two Grade-A office towers: 650,000 sq.ft. Topped out Pre-leasing activities are progressing well One-stop modern lifestyle mall: 500,000 sq.ft. Sche
Slide 24: Major New Additions in the Pipeline (Cont’d)
Major New Additions in the Pipeline (Cont’d) High Speed Rail Terminus, West Kowloon Under the latest approved plan Offer green space of ~100,000 sq.ft. and part of the 1.5-kilometre-long West Kowloon Parkway to link old and new communities Further benefit the general public through the provisi
Slide 25: Major New Additions in the Pipeline (Cont’d)
Major New Additions in the Pipeline (Cont’d) New Projects in Northern Metropolis (1) Kwu Tung Retail space of 132,000 sq.ft. Adjacent to the committed MTR Kwu Tung Station (2) Yuen Long 1 Yuen Long Station Development will provide additional retail space of 107,000 sq.ft. upon scheduled opening in 2
Slide 26: Property Business - Mainland Land Bank
ITC Remaining Phase, Shanghai Rendering PROPERTY BUSINESS - MAINLAND LAND BANK FY2022 Interim Results
Slide 27: Land Bank on the Mainland
Land Bank on the Mainland Total land bank as at 31 December 2021: 71.1mn sq.ft.(1) Shopping Centre 20% Residential 43% Shopping Centre 42% Properties Completed under (2) properties development Office Office 37% 33% Residential 14% Hotel Hotel 7% 4% Total: 17.5mn sq.ft. Total: 53.6mn sq.ft. (1) In
Slide 28: Property Business - Mainland Property Development
Grand Hangzhou Waterfront, IFC, Hangzhou Dongguan Rendering Rendering PROPERTY BUSINESS - MAINLAND PROPERTY DEVELOPMENT FY2022 Interim Results
Slide 29: Recognized Property Sales on the Mainland
Recognized Property Sales on the Mainland (1) Property Sales 1H FY2022 1H FY2021 Change Revenue (HK$ mn) 1,465 3,475 57.8% Operating profit (HK$ mn) 622 1,882 67.0% Major contributors: Forest Hills in Guangzhou and Oriental Bund Phase 3B in Foshan Satisfactory development margins Around HK$5
Slide 30: Contracted Sales on the Mainland for 1H FY2022
Contracted Sales on the Mainland for 1H FY2022 Attri. Sales Stake Project Location Proceeds (%) (RMB bn) Chengdu ICC (Residential portion) Chengdu 40 0.7 Oriental Bund Foshan 50 0.6 Wuxi TIC Wuxi 40 0.4 Grand Waterfront Dongguan 100 0.1 Others 0.2 (1) Total 2.0 (1) Contracted sales in terms of HKD a
Slide 31: Upcoming Launches on the Mainland in the Next 10 Months
Upcoming Launches on the Mainland in the Next 10 Months Stake Attri. Res. GFA Project Location (%) (sq.ft.) Jovo Town Phase 3A Chengdu 91 1,228,000 Park Royale Phase 3A Guangzhou 100 477,000 Shanghai Arch Phase 3 (Apartments) Shanghai 100 438,000 (1) Hangzhou IFC Phase 1 (First Batch) Hangzhou JV 19
Slide 32: Property Business - Mainland Property Investment
Shanghai IAPM, Shanghai PROPERTY BUSINESS - MAINLAND PROPERTY INVESTMENT FY2022 Interim Results
Slide 33: Rental Income from the Mainland
Rental Income from the Mainland Gross rental income of RMB2,781mn, up 12% yoy in RMB terms Represented ~27% of the Group’s total gross rental income Gross Rental Income by Sector on the Mainland(1) (HK$ mn) 1H FY2022 Change HK$ mn 3,500 3,374 (+17.7% yoy) Gross Rental Income 3,374 17.7% yoy Net
Slide 34: Existing Mainland Property Investment – Retail Portfolio
Existing Mainland Property Investment – Retail Portfolio The Group’s premium malls in Shanghai, totalling ~3mn sq.ft., delivered solid performance with high occupancy during the period Shanghai IFC Mall continued to record healthy growth in tenant sales from a high base Its catchment area has
Slide 35: Existing Mainland Property Investment – Office Portfolio
Existing Mainland Property Investment – Office Portfolio Shanghai IFC Shanghai ICC The Group’s grade-A office portfolio in Shanghai recorded high occupancy notwithstanding keen competitions Both Shanghai IFC and Shanghai ICC have attained LEED Platinum certifications Shanghai IFC continued to
Slide 36: Major New Additions in the Pipeline
Major New Additions in the Pipeline Shanghai ITC Nanjing IFC Rendering Project Details Project Details Rendering Stake • 100% Stake • 100% Total GFA: • 7.6mn sq.ft. Total GFA: • 3.4mn sq.ft. 220-metre office tower: • Scheduled for completion in 2022 Nanjing IFC • Continue to attract reputable foreig
Slide 37: Expansion of Mainland Property Investment Portfolio
Expansion of Mainland Property Investment Portfolio Mainland property investment portfolio will increase to over ~26mn sq.ft. attributable GFA by the end of FY2024, from the existing portfolio of ~15.2mn sq.ft. Major completions by End-FY2024 include Nanjing IFC Mall, Shanghai ITC remaining phas
Slide 38: Hotel Business
The Ritz-Carlton Shanghai, Pudong HOTEL BUSINESS FY2022 Interim Results
Slide 39: Hotel Business
Hotel Business Hotel Business(1) 1H FY2022 1H FY2021 Change (HK$ mn) Revenue 1,811 1,213 49.3% Operating Profit -162 -228 N.A. Performance of the Group’s hotels in Hong Kong improved amid a well- contained local pandemic situation during the period Near-term operating environment is likely to be
Slide 40: Sustainability
Noah’s Ark Hong Kong SUSTAINABILITY FY2022 Interim Results
Slide 41: Sustainability Initiatives
Sustainability Initiatives Promote Vaccination United Court – Show Flat Noah’s Ark Hong Kong Proactive efforts to combat pandemic, Intake of United Court, transitional housing Initiatives to promote environmental a number of key initiatives are in place project sponsored by SHKP, will commence prote
Slide 42: Sustainability Initiatives (Cont’d)
Sustainability Initiatives (Cont’d) The Group goes all out to support the HKSAR Government to fight against this latest wave of pandemic, hoping that different sectors can join hands to combat the virus Supply of land for community isolation and treatment facilities The Group lends for free two
Slide 43: Sustainability Initiatives (Cont’d)
Sustainability Initiatives (Cont’d) The Group has operated Ma Wan Park, since 2007 to proactively promote environmental protection and care for the underprivileged and elderly Ma Wan Park includes Noah’s Ark Hong Kong and Ma Wan Park Nature Garden Attracted 7.16 million visitors in the past 14
Slide 44: Market and Business Prospects
High Speed Rail West Kowloon Terminus Development, Hong Kong Rendering MARKET AND BUSINESS PROSPECTS FY2022 Interim Results
Slide 45: Market Prospects
Market Prospects Hong Kong Near-term operating environment will be inevitably affected by the latest rapid wave of Omicron and more stringent social distancing measures A full economic recovery will hinge on a well-contained pandemic situation and a gradual resumption of quarantine-free travel w
Slide 46: Market Prospects (Cont’d)
Market Prospects (Cont’d) Key Cities on the Mainland The dual circulation strategy and various supportive macro initiatives will continue to support a reasonable economic growth Primary residential Latest loosening in mortgage financing will support reasonable housing demand market Home prices
Slide 47: Business Prospects
Business Prospects Short-term Hong Kong The recent outbreak of Omicron brings additional challenges to the Group’s operations o Extra preventive measures to raise the hygiene standards of its residential and commercial properties The near-term operating environment for shopping mall business h
Slide 48: Business Prospects (Cont’d)
Business Prospects (Cont’d) Medium- to Long-term The Group is confident about the prospects of the mainland and Hong Kong and will continue to invest in the Country Continue to acquire land selectively in both Hong Kong and major cities on the mainland when opportunities arise, while strictly ob
Slide 49: Creating Long-term Value for All Stakeholders
Creating Long-term Value for All Stakeholders During the past half-century, the Group has weathered good and bad times alongside the people of Hong Kong. The Group firmly believes that Hong Kong will continue with its success as the Pearl of the Orient under ‘One Country, Two Systems’, given its wel
Slide 50: Q&A
Cover 2 Q&A 24 February 2022 FY2022 Interim Results
Slide 51: Environmental Targets
Appendix: Environmental Targets Energy Management Waste Management To reduce the electricity consumption intensity To avoid sending construction waste directly to of its EOC-monitored buildings(1) by 13% by landfills FY2030, against FY2020 as baseline To achieve an annual diversion rate of at
Slide 52: Sustainability Performance
Appendix: Sustainability Performance A constituent since 2018 Constituent of the Hang Seng Corporate Sustainability Index and Hang Seng Sustainability Report (Mainland and Hong Kong) Corporate 2020/21 As of 2021, SHKP received an Available Online Sustainability Index with an ‘AAA’ rating MSCI ESG Ra
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