Wharf (Holdings) Ltd. · HKEX:4
Wharf (Holdings) — The Wharf (Holdings) — FY2017 Earnings Presentation
62 slides from Wharf (Holdings)'s earnings presentation, Mar 8, 2018
Slide 1: Property Sales Drive the Continuing Business
Property Sales Drive the Continuing Business The Wharf (Holdings) Limited 2017 Final Results 8 March 2018 1
Slide 2: Financial Highlights
Financial Highlights HKD Million 2017 2016 Group Revenue 43,273 46,627 Operating Profit 20,622 17,065 Core Profit* 15,718 13,754 Profit Before IP Revaluation Surplus 20,143 20,534 Net IP Revaluation Surplus 1,733 906 Profit After IP Revaluation Surplus 21,876 21,440 Earnings Per Share (HK$) - Attrib
Slide 3: Core Profit (Adjusted for Impact of Demerger)
Core Profit (Adjusted for Impact of Demerger) Group (Excl. Wharf REIC) Combined Wharf & Wharf REIC* % of 2017 HKD Million 2017 2016 % Chg 2017 2016 % Chg Total IP 747 807 -7% 10% 9,418 8,839 +7% DP 6,239 3,538 +76% 88% 6,922 3,822 +81% - Hong Kong 2,399 1,970 +22% 34% 2,399 1,970 +22% - Mainland 3,8
Slide 4: Backdrop
Backdrop • Total Net Profit of HK$11B Realized from Sale of Property Interests in 2017, Incl. $4.5B from 8 Bay East Transaction & Revaluation Surplus of $1.3B (Recorded in Prior Years) • As at 31 Dec 2017, as a Result of the Demerger & Re-investment Consolidated Assets Excl. Cash Totaled $177.0B
Slide 5: Re-investment
Re-investment Re-investment Breakdown • Consolidated Assets Excl. Cash Totaled $210B* Listed Equities 36% 75% in Properties 15% in Liquid Listed Equities Total Re-investment HK Properties • Equity Capital Designated for China Since 2H17 $70.5B 18% Properties <50% of Total • Remaining Equity for
Slide 6: Agenda
Agenda HK Properties Logistics China IP China DP Hotel Management Mount Nicholson – House 1 Financial Management 6
Slide 7: HK Properties
HK Properties HK Properties Breakdown by GFA Non-Core Kowloon Tong Portfolio 19% 15% • Immensely Valuable Peak Portfolio Total Peak Portfolio • KEWP Presents Growth Potential 10% Attributable GFA 3.0M s.f • New Land Site in Lung Cheung Road, Kowloon Tong (GFA 436,400 s.f; Total Consideration $12.5B)
Slide 8: Mount Nicholson – Raise the Bar for Luxury Living
Mount Nicholson – Raise the Bar for Luxury Living 50%-Owned Mount Nicholson Launch Date 1Q 2016 19 Houses (6,000-10,000 s.f) Product Type 48 Apartments (4,200-4,500 s.f) • Features Exclusive & Ultra-luxury Residences • Enchanting Uninterrupted View over Victoria Harbour • 50:50 JV Development with N
Slide 9: Mount Nicholson – Unique Appeal Driving Asia's New Records
Mount Nicholson – Unique Appeal Driving Asia’s New Records • Record Luxury Residences in Asia (House 3: 126,800 psf; Apartment 12C,D: $132,000 psf) • Exclusivity & Scarcity Accumulated Sales* 11 Houses 32 Apartments • 2017: 5 Houses & 14 Apartments $88,300 psf $87,200 psf Sold for $9.4B (Gross Basis
Slide 10: 8 Bay East – Largest En-bloc Office Transaction in Kowloon
8 Bay East – Largest En-bloc Office Transaction in Kowloon • Wholly-owned Subsidiary that Owns the 8 Bay East Project was Disposed in 2017 • $4.5B Disposal Gain & $1.3B Revaluation Surplus (Recorded in Prior Years) Recognized in 2017 8 Bay East Transaction Details Total GFA 596,000 s.f Total Conside
Slide 11: Re-investment – HK Properties
Re-investment – HK Properties • Peak Portfolio Led by Successful Mount Nicholson Project • Lung Cheung Road Site Bought in Early 2018 • Redevelopment Projects in Kowloon East • HK Property Interests Also Incl. a Portfolio of Listed Blue Chip HK Property Stocks as Interim Proxy to Land Bank (at an At
Slide 12: Agenda
Agenda HK Properties Logistics China IP China DP Hotel Management Modern Terminals Hong Kong Financial Management 12
Slide 13: Modern Terminals – Riding on a Gradual Global Trade Recovery
Modern Terminals – Riding on a Gradual Global Trade Recovery 2017 Total Throughput (Million TEUs) HK 5.2 +12% DCB (65%-owned) 1.3* Flat SCT (20%-owned) 5.3* +4% Total 11.8 +7% Market Throughput South China +6% Kwai Tsing +7% *Total Throughput (Instead of Attributable) 13
Slide 14: Modern Terminals – Steady Cashflow
Modern Terminals – Steady Cashflow Consolidated Revenue & Operating Profit • 2017 Consolidated Revenue $2,703M (+3%) 3,206 2,739 2,635 2,703 • Consolidated Operating Profit $649M (-9%) 1,034 676 710 649 2014 2015 2016 2017 Revenue (HKD M) Operating Profit (HKD M) Note: Consolidated Revenue & OP Excl
Slide 15: Hong Kong Air Cargo Terminals Ltd (HACTL)
Hong Kong Air Cargo Terminals Ltd (HACTL) • 2017 Total Throughput 1.8M Tonnes (+9%) • HACTL is a 20.8% Associate of the Group 15
Slide 16: Agenda
Agenda HK Properties Logistics China IP China DP Hotel Management Chengdu IFS Chongqing IFS Financial Management 16
Slide 17: China IP – New IPs Poised for Growth
China IP – New IPs Poised for Growth China IP Revenue (HKD billion) $2.6B (+12%) 1H 2H • Solid Retail Sales Driving Mall 1.4 Performance 1.2 1.2 1.2 • IP Rental Performance on Track • Newly-opened CQIFS & Upcoming 0.8 CSIFS to Add New Momentum 1.1 1.2 1.2 0.8 0.5 2013 2014 2015 2016 2017 17
Slide 18: CDIFS Mall – Unrivalled Market Position
CDIFS Mall – Unrivalled Market Position Retail Sales (RMB billion) RMB5.0B (+30%) • Sales Leads the Pack, Driven by Location, Critical Mass & Management • Double-digit Rental Reversion 5.0 2017 CDIFS Mall 3.8 3.3 Net Revenue (Net of Tax) RMB761M (+20%) 2.1 Foot Traffic Growth +18% Turnover Rent Port
Slide 19: CDIFS Office & Hotel
CDIFS Office & Hotel Office - Leasing Progress on Track • First Class Workplace with Top-notch Management • 60% Committed in 4 Years – Encouraging • Rental Rates Achieved among the Highest in CD Hotel - Market Leader in Room Yield in CD • Niccolo Chengdu was Named One of China’s Best Business Hotels
Slide 20: CQIFS – New Lifestyle Landmark in Chongqing
CQIFS – New Lifestyle Landmark in Chongqing 50%-Owned CQIFS Retail Hotel 109,300 s.m 36,800 s.m 30% 10% Total • One-of-a-kind Cluster Setting Quality 361,600 s.m* (100% Level) Standard for the Entire Area Office* 215,500 s.m 60% • Iconic 300m Tower & 4 Other Towers Total Development Area, Excl. Carp
Slide 21: CQIFS Mall – Unprecedented Experiences
CQIFS Mall – Unprecedented Experiences (Debuted on 15 Sep 2017) Mid to High-end 21% Entertainment & Lifestyle 8% • Offering an Exceptional One-stop Lifestyle Experience in China West F&B 109,300 s.m • The Largest Cluster of First-tier 24% (100% Level) Top-end Luxury Brands in Chongqing Under One-Roo
Slide 22: Contemporary Urban Chic CQ Niccolo
Contemporary Urban Chic CQ Niccolo (Opened on 8 Sep 2017) • Set a New Standard for Hotels • The City’s Highest Sky Hotel (252 Luxurious Guestrooms) • Enjoy CQ’s Spectacular Landscape & Skyline & the Confluence of the Yangtze & Jialing Rivers 22
Slide 23: CSIFS - New Unique Icon for Changsha
CSIFS - New Unique Icon for Changsha • Boasts the Most Coveted Location in the Prime City Centre 23
Slide 24: CSIFS – "Retailtainment"
CSIFS – “Retailtainment” CSIFS Apartments 69,900 s.m 10% Hotel Retail 79,800 s.m 246,100 s.m 12% • Most Sought-after Retailtainment 35% Total Destination in Hunan Province 700,000 s.m Office • 94% of Area Leased/ Under Offer – 304,200 s.m Underscores Retailers’ Trust & 43% Confidence Total Developme
Slide 25: Re-investment – CME2
Re-investment – CME2 • A Strategic Initiative & An Infrastructure Play in the New Economy • Re-investment of Former CME Capital in a Progressive CME Arena that Covers Much Larger Markets with Greater Growth Potential 25
Slide 26: Agenda
Agenda HK Properties Logistics China IP China DP Hotel Management Huangpujiang Project, Pudong, Shanghai Financial Management 26
Slide 27: Contracted Sales Beat Expectation
Contracted Sales Beat Expectation 2017 Contracted Sales* • 60 Projects in 14 Cities on Sale in Contracted Sales RMB25.3B -19% 2017 Contracted GFA 0.9M s.m -42% Contracted ASP RMB26,100/s.m +31% • 2018 Sales Target RMB22B ^ *Not Included Sales from HCDL Post-demerger (from 23 Nov 2017- 31 Dec 2017) •
Slide 28: Improving Operating Margin
Improving Operating Margin • Lower Completion & Recognition 2017 Operating Matrix* Revenue $33,959M +11% • Operating Margin +13.3 ppts Operating Profit $10,207M +99% • Net Order Book RMB19B or 0.8M ^ Operating Margin 30.1% +13.3 ppts s.m Completed GFA 1M s.m -39% Recognized GFA 1.2M s.m -27% • 2018
Slide 29: Selective Land Purchase
Selective Land Purchase Suzhou 55% • Selective Land Purchase to Enhance the Quality of Landbank & Return 2017 New Acquisition Beijing 15% • Key Target Cities: Beijing, Shanghai, 701,300 s.m Suzhou, Hangzhou, Guangzhou & Shenzhen Hangzhou 4% Foshan • China DP Landbank 3.9M s.m 26% 29
Slide 30: Re-investment – China Properties
Re-investment – China Properties • China DP Sharpening of our Focus to Half a Dozen Key Cities (from 16 Cities Previously) Benefitted the Business Unit across the Board Investment in Listed Greentown China Appreciated in Value to $6.4B (Original Cost $2.9B) • Prime China IP Opportunities are Sca
Slide 31: Agenda
Agenda HK Properties Logistics China IP China DP Hotel Management Niccolo - Chongqing Financial Management 31
Slide 32: Hotel Management
Hotel Management Marco Polo Hong Kong Mainland Philippines Niccolo P) Manila F) Hong Kong I) Beijing (Parkside) I (Ortigas) A) Chengdu* J) Changzhou, B) Chongqing* G) Gateway Q) Cebu (50%-owned) Jiangsu C) The Murray J H) Prince K) Wuhan* R) Davao E A K D) Changsha (2018)* B D L) Jinjiang, Fujian E)
Slide 33: Agenda
Agenda HK Properties Logistics China IP China DP Hotel Management Financial Management 33
Slide 34: Prudent Financial Management
Prudent Financial Management Debt Maturity (HKD billion) • Gearing: Net Cash of $9.3B 10.1 10.1 9.2 • Average Interest Cost: 3.5% 4.0 • Floating Rate Debt: 61.3% 2.3 0.7 Jan18-Dec18 Jan19-Dec19 Jan20-Dec20 Jan21-Dec21 Jan22-Dec22 Jan23 & After 34
Slide 35: Coming Attractions
| WHARF Coming Attractions
Slide 36: Coming Attractions
Coming Attractions Mount CSIFS Mall & Nicholson Niccolo Hotel 36
Slide 37: Corporate Social Responsibility
CORPORATE SOCIAL RESPONSIBILITY 37
Slide 38: CSR Key Achievements
CSR Key Achievements • Published the 3 CSR Report in Accordance with GRI G4 rd Sustainability Reporting Guidelines, and in Alignment with HKEx Environmental, Social and Governance Reporting Guide http://www.wharfholdings.com/eng/Ebook2016/mobile/index.html • Hang Seng Corporate Sustainability Index
Slide 39: Business-in-Community – Project WeCan
Business-in-Community – Project WeCan Launched in 2011 by Wharf, Project WeCan is a Business-in-Community initiative providing students who are disadvantaged in learning with opportunities and care. Using an “adopt a school” model, it is now an open platform encompassing: 34 Companies: 11 Wharf Busi
Slide 40: Business-in-Community
Business-in-Community Young Innovators Bazaar • Held at Plaza Hollywood • Over 1,000 Students from 46 Project WeCan Schools Participated in 2017 • Provided Students with an Opportunity to Experience the Full Cycle of Operating a Retail Business 40
Slide 41: Appendix
| WHARF Appendix 41
Slide 42: Summary of HK Properties
Summary of HK Properties Portfolio Usage Status Locations Attributable GFA (s.f.) 1. Peak Portfolio Residential Sales Mount Nicholson (50%-JV) 62,300 Lease Chelsea Court 43,100 Strawberry Hill 13,300 Redevelopment 1 Plantation Road 90,700 11 Plantation Road 46,300 77 Peak Road 42,200 Sub-total 297,9
Slide 43: CDIFS – The City's Busiest Pedestrian Shopping Area
CDIFS – The City’s Busiest Pedestrian Shopping Area Chunxi Pedestrian Street • The Prime Location in City Centre • At the Intersection of Hongxing Road, Dacisi Road and Beishamao Metro Station Street • Directly Connected to 1st Ring Road Metro Station (Lines 2 CDIFS & 3 Intersect) 2nd Ring Road 3rd
Slide 44: CDIFS – Award-winning Mixed-use Icon in Western China
CDIFS – Award-winning Mixed-use Icon in Western China 9-Level Retail/ Lifestyle Podium Premium Offices Attracted a Large Concentration of Movers & Shakers Among the Top in Retail Sales & Footfall in Western China Luxurious IFS Residences Niccolo Chengdu Among the Most Exclusive Serviced Residences i
Slide 45: CDIFS Mall – Redefining Lifestyle Experiences
CDIFS Mall – Redefining Lifestyle Experiences Wide Selection of Brands Under One Roof (Over 100 Debuts in Chengdu) • Unique Showcase in China West for World’s Coveted Brands • A Strong Model for CQIFS & CSIFS Malls Entertainment & Lifestyle F&B 19% 17% 204,000 s.m Top-end Luxury 25% Mid to High-end
Slide 46: CDIFS Mall – Key Awards
CDIFS Mall – Key Awards • 2017 ICSC* Asia-Pacific Shopping Center Gold Award (Marketing Positioning & Brand Awareness) • Succeeded ‘2016 VIVA Best-of-the- Ms Christina Hau, General Manager (Operations) of Wharf China Estates Best Design & Development Awards’ Limited (3rd left); Ms Winnie Wong, Deput
Slide 47: CQIFS Mall – Diversified Tenant Mix
CQIFS Mall – Diversified Tenant Mix Diversified Tenant Mix (Selected Brands) >150 Brands Incl. 80 Int’l Brands & 20 CQ Debuts 47
Slide 48: CQIFS – Prominent Location in Chongqing's New CBD
CQIFS – Prominent Location in Chongqing’s New CBD • Strategically Located in Jiangbeizui District (New CBD) • Directly Connected to Light Railway Station (Lines 6 & 9) • Panoramic River View (Jialing River & Yangtze River) CQIFS • Clusters of Renowned Chinese Financial Institutions Nearby • Adjacent
Slide 49: Chongqing City Profile
Chongqing City Profile • China’s Western Development Strategy Chongqing 2017 Tertiary Industry +9.9% 49% of CQ GDP • Strong Presence of Population 30.5 million Tertiary Primary International Brands 2017 GDP +9.3% (National Avg.: 49% 7% +6.9%) • The World’s Largest 2017 Retail Sales +11.0% Municipali
Slide 50: Changsha City Profile
Changsha City Profile Changsha 2017 Tertiary Industry +10.9% • Hub City in Central China 49% of CS GDP Population 7.6 million Tertiary • Beneficiary of China’s “Rise of +9.0% 4% Primary 49% Central China” Campaign 2017 GDP (National Avg.: +6.9%) • Important Entertainment Center 2017 Retail Sales +10
Slide 51: China Commercial Properties Pipeline
China Commercial Properties Pipeline Commercial Properties Completion Schedule (’000 s.m) 3,146 Changsha Outlets 873 1,001 Wuxi IFS 72 72 72 72 251 251 251 251 Chongqing IFS* 214 427 541 541 541 214 186 186 Chengdu IFS 604 687 752 752 752 752 362 Other China Commercial Prop. 530 530 530 530 530 530
Slide 52: China Contracted Sales Breakdown by City
China Contracted Sales Breakdown by City Region City No. of Projects Contracted GFA Sold on Sale Sales (%)* (%)* Eastern China Shanghai 4 10% 3% Suzhou 5 8% 9% Wuxi 4 12% 19% Changzhou 3 1% 1% Ningbo 3 4% 4% Hangzhou 13 33% 29% Eastern China Sub-Total: 32 68% 65% Western China Chengdu 7 2% 3% Chongq
Slide 53: Projects Launched in 2017
3 Projects Launched in 2017 Attributable Attributable Average Price Projects City New Launch Proceeds GFA Sold (RMB psm) (RMB M) (s.m) The Osmanthus Grace (Site 18) Hangzhou May 579 16,800 33,900 Longfor Mansion (Site 16) Hangzhou Jun 753 22,300 32,600 Hangzhou Site 12 (臻璽) Hangzhou Sep 1,736 39,900
Slide 54: China Key Projects on Sales in 2017
China Key Projects on Sales in 2017 Attributable Attributable Average Price Projects City Proceeds GFA sold Ownership (RMB M) (s.m) (RMB psm) Hangzhou Site 12 (臻璽) Hangzhou 1,736 39,900 43,500 100% Shanghai Pudong Shanghai 1,706 13,800 123,900 100% Huangpujiang The Pearl on the Crown Beijing 1,463 1
Slide 55: China DP – 2017 New Land Acquisitions
China DP – 2017 New Land Acquisitions Attributable GFA Attributable Consideration City Date Ownership (s.m) (RMB) Beijing Sep17 102,800 6.64B 100% Foshan May17 65,900 0.73B 40% Foshan Sep17 116,200 1.01B 50% Hangzhou Sep17 30,100 1.13B 100% Hangzhou Sep17 3,300 0.09B 7% Suzhou Jul17 90,700 1.84B 33%
Slide 56: China DP – Jan & Feb 2018 New Land Acquisitions
China DP – Jan & Feb 2018 New Land Acquisitions Attributable GFA Attributable Consideration City Date Ownership (s.m) (RMB) Foshan Jan18 112,800 0.81B 50% Guangzhou Jan18 7,700 0.19B 10% Guangzhou Jan18 21,400 0.72B 18% Hangzhou Jan18 98,200 1.97B 50% Hangzhou Jan18 34,000 1.41B 50% Hangzhou Jan18 2
Slide 57: China Land Bank Breakdown by City in 2017
China Land Bank Breakdown by City in 2017 Region City GFA million (s.m) % Total Eastern China Shanghai 0.3 5% Suzhou 0.9 15% Wuxi 0.6 10% Ningbo 0.0 0% Hangzhou 0.5 8% Eastern China Sub-Total: 2.3 38% Western China Chengdu 1.5 25% Chongqing 0.6 10% Western China Sub-Total: 2.1 35% Southern China Fos
Slide 58: China Key Properties Completion
China Key Properties Completion Projects Attributable GFA (s.m) Key Completion in 2017 Shanghai Pudong Huangpujiang 136,000 Wuxi River Pitti (Bi Xi) 87,700 Chongqing IFS 86,300 Wuxi Times City 62,600 Chengdu Times City 56,600 Hangzhou Longxi (Site 13) 55,700 Projected Key Completion in 2018 Wuxi Tim
Slide 59: China New Projects for Sales in 2018
China New Projects for Sales in 2018 Projects City Ownership Beijing Xijucun Land Site Beijing 100% Hangzhou Santang Land Site Hangzhou 100% Jingan Garden Shanghai 55% Suzhou Yangchenghu 27 Land Site Suzhou 100% Beijing Liangma K Land Site Beijing 40% Suzhou Yuanhelu Land Site Suzhou 33% Suzhou Huan
Slide 60: Overview of Application of Funds
Overview of Application of Funds Major Capital & Development Expenditure 2017 2018 HKD (Actual) (Projected) HKIP (Before WREIC Demerger) 1.7B 0B HKDP 0.2B 12.9B China IP 2.5B 6.5B China DP 26.0B 24.7B Others 1.5B 0.5B Total 31.9B 44.6B * China DP Self-financed by Sales; China IP Mainly IFSs Under Co
Slide 61: Thank You
Property Sales Drive the Continuing Business Thank You 61
Slide 62: End of Presentation
End of Presentation The Wharf (Holdings) Limited [HKEx Stock Code: 0004.HK] Disclaimer 1) All information and data are provided for information purposes only. All opinions included herein constitute Wharf’s judgment as of the date hereof and are subject to change without notice. The Group, its subsi