Wharf (Holdings) Ltd. · HKEX:4
Wharf (Holdings) — The Wharf (Holdings) — H1 2020 Earnings Presentation
37 slides from Wharf (Holdings)'s earnings presentation, Aug 3, 2020
Slide 1: Pandemic Left Economies Stranded
Pandemic Left Economies Stranded The Wharf (Holdings) Limited 1H20 Interim Results 3 Aug 2020 The Wharf (Holdings) Limited 1H20 Interim Results 1
Slide 2: Highlights
Highlights • Port Activities Slowed with no Recovery in Sight Yet • 1Q was a Washout; ML Recovery Only Started in 2Q • MLDP Sales & Recognition were Stalled • $2.9B HKDP Provision Put Group UNP into Loss • MLIP Growth Momentum was Disrupted • Hotel Occupancy Plummeted as Travelers Stayed Home The Wh
Slide 3: Financial Highlights
Financial Highlights HKD Million 1H20 1H19 Group Revenue 5,551 8,064 • MLDP Dominated YoY Revenue & OP Decline Operating Profit 2,517 3,701 Underlying Net (Loss) / Profit (UNP)* (1,132) 2,236 • HKDP Provision ($2.9B) Broke the Back of UNP (Loss)/ Profit Attributable to Equity (1,741) 2,450 Sharehold
Slide 4: Asset Mix: Property-Centric
Asset Mix: Property-Centric Total Assets (Ex-Cash & Investments) $176B Properties Mainland China 90% 71% Others Logistics HK 1% 9% 29% The Wharf (Holdings) Limited 1H20 Interim Results 4
Slide 5: Overview, Recurring Income, Asset Turns, Financial Management
Overview Recurring Income Asset Turns Financial Management The Wharf (Holdings) Limited 1H20 Interim Results 5
Slide 6: MLIP - Brisk Post-outbreak Recovery
MLIP - Brisk Post-outbreak Recovery Mainland IP Revenue (HKD billion) 1H 2H • 2Q Tenant Sales Rebound from Effective Sales- 2020 1.9 driving Initiatives 2019 • Sales Growth in May & Jun Driven by Luxury 2.0 1.9 3.9 Segment 2018 1.6 1.8 3.4 • Tenant Support Measures Amidst Pandemic Hit 2017 1.2 1.4 2
Slide 7: CDIFS – Testing First Half
CDIFS – Testing First Half 1H20 CDIFS Mall • Outstanding Mkt Position Soften Pandemic Blow Net Revenue (Net of Tax) -7% • Double-digit Sales Growth in May & Jun • Double-digit Retail Rental Reversion Retail Sales -11% • Office Among the City’s Highest Rental Rates & Occupancy Cost* 14% 83% Occupied
Slide 8: CSIFS – Testing First Half
CSIFS – Testing First Half 1H20 CSIFS Mall • Positive Sales Growth & Close to Full Occupancy Net Revenue (Net of Tax) +3% – Despite Mandatory Mall Closure for 11 days Shortly after CNY Retail Sales +6% • Record-breaking Sales in May Occupancy Cost* 11% • Office Occupancy Grew Noticeably * Incl. Impa
Slide 9: Wharf Hotels – Sector in Stress
Wharf Hotels – Sector in Stress • Travels were Sharply Curtailed, particularly Cross-border • Proactive Plan Against Pandemic Since 2015 Since 1970s – Health & Safety Initiatives Award-winning, Business Travel Brand Contemporary Chic – Cost Containment Measures – Concurrently Preparing for Borders R
Slide 10: Niccolo – New Brand, New Frontiers
Niccolo – New Brand, New Frontiers RGI vs. Competitive Set Chengdu* Chongqing* Changsha* • Revenue Yield Per Room Leads Markets Rank 1st 2nd 1st • Rewarding GOP Promptly Achieved Post-Opening RGI# 225 148 203 • Niccolo Suzhou to Open in 1H21 YoY Chg +20 +29 +93 * Opening Date: Chengdu Apr-15, Chongq
Slide 11: Logistics – More Challenges Than Ever
Logistics – More Challenges Than Ever Modern Terminals (1H20) Revenue $1,196M (-4%) Operating Profit $190M (-13%) • Cargo Flow Still Hurting from COVID-19 Throughput (million TEUs) HK 2.4 -5% • MTL HK Throughput -5% DCB# 0.6* -11% SCT# 2.5* -12% • Macro Challenges & Regional Competition Total 5.5 -8
Slide 12: Overview, Recurring Income, Asset Turns, Financial Management
Overview Recurring Income Asset Turns Financial Management The Wharf (Holdings) Limited 1H20 Interim Results 12
Slide 13: MLDP – Pandemic Disruption
MLDP – Pandemic Disruption 1H20 Contracted Sales Sales RMB 8.1B +24% • Distorted Timing of Schedule from Muted GFA 241,500 s.m +26% Activities in 1Q ASP RMB 32,800 psm +4% • Sales Tempo Starts to Resume in 2Q 2020 Sales Target • Impact from ASP Control Continues 2020 Sales Target RMB 15B Sellable Re
Slide 14: MLDP – Increase in Net Order Book
MLDP – Increase in Net Order Book 1H20 Operating Matrix Revenue $4,275M -18% • Net Order Book RMB31.4B or 1.0M s.m Operating Profit $1,172M -36% • 2020 Target Completion 1.2M s.m Operating Margin 27% -8 ppts Completed GFA 133,800 s.m +28% Recognized GFA 182,600 s.m +74% The Wharf (Holdings) Limited
Slide 15: MLDP – Prudent & Selective Landbanking
MLDP – Prudent & Selective Landbanking • Mainland DP Landbank: 3.3M s.m – No Land Purchase in 1H20 Beijing • Selective Strategy to Sustain Quality & Return Suzhou • Key Cities in Hangzhou, Beijing, Shanghai, Shanghai Hangzhou Suzhou The Wharf (Holdings) Limited 1H20 Interim Results 15
Slide 16: HK Properties – Quality Landbank
HK Properties – Quality Landbank Total Attributable GFA* 3.3M s.f • HK Landbank* 3.3M s.f Kowloon Tong Portfolio 13% • Luxury & Scarcity Kowloon East Portfolio 62% – Peak Portfolio & Kowloon Tong Project # Peak Portfolio 8% • CBD2 Potentials Others 17% – Kowloon East Portfolio * Incl. IPs in HK # Im
Slide 17: Mount Nicholson – Most Valuable in Asia
Mount Nicholson – Most Valuable in Asia 1H20 Contracted Sales $533M 1 Apartment • About 80% Houses & Apartments Sold ($116,000 psf) – Record-breaking Prices in the Region Accumulated Sales* • Attributable Operating Profit $286M 17 Houses $94,000 psf • 1 House & 1 Apt to be Recognised in 2H20 37 Apar
Slide 18: Overview, Recurring Income, Asset Turns, Financial Management
Overview Recurring Income Asset Turns Financial Management The Wharf (Holdings) Limited 1H20 Interim Results 18
Slide 19: Prudent Financial Management
Prudent Financial Management Debt Maturity (HKD billion) (As at 30 Jun 2020) Jul - Jun 2020/21 6.4 • Net Debt: $23.9B; Gearing: 16.7% 2021/22 8.1 • Average Interest Cost: 3.4% 2022/23 5.4 • Interest Cover: 3.8x 2023/24 15.8 • Floating Rate Debt: 79% 2024/25 1.2 Jul 25 & After 5.3 Total: $42.2B The W
Slide 20: Outlook
Outlook The Wharf (Holdings) Limited 1H20 Interim Results 20
Slide 21: Outlook
Outlook • Macro Parameters Ever More Testing – All Eyes on COVID Vaccine & Recovery – Massive QE & Fiscal Relief vs. Economic Contraction Around the World – Paradigm Shift in Sino-US Relations & Unprecedented Tension • Sound Balance Sheet & Prudent Financial Management The Wharf (Holdings) Limited 1
Slide 22: Sustainability
Sustainability The Wharf (Holdings) Limited 1H20 Interim Results 22
Slide 23: Key Sustainability Performance
Key Sustainability Performance • Constituent member of Hang Seng Corporate Sustainability Index • Awarded 10 Years+ Caring Company Logo, CSR Index Plus, Social Capital Builder Logo Award • Published the 6 standalone Sustainability Report in accordance with Core option of the GRI th Standards and HKE
Slide 24: Data at a Glimpse
Data at a Glimpse Obtained green building Decreased water consumption ISO 14001:2015 - Modern Terminals, certification for Modern Terminals Chengdu IFS, Changsha IFS LEED Platinum ISO 45001:2015 - Chengdu IFS, 2019:71,303 m3 - Chengdu IFS, Changsha IFS - Changsha IFS (2018: 74,134) ISO 9001:2015 LEE
Slide 25: Appendix
Appendix The Wharf (Holdings) Limited 1H20 Interim Results 25
Slide 26: 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) 37,700 Lease Chelsea Court 43,000 Strawberry Hill 13,000 Redevelopment 1 Plantation Road 91,000 11 Plantation Road 46,300 77 Peak Road 42,200 Sub-total 273,2
Slide 27: Mainland Contracted Sales Breakdown by City
Mainland Contracted Sales Breakdown by City Region City Contracted Sales (%) GFA Sold (%) Eastern China Shanghai 5.5% 1.8% Suzhou 33.2% 37.7% Wuxi 2.9% 3.8% Ningbo 0.1% - Hangzhou 33.8% 23.7% Eastern China Sub-Total: 75.5% 67.0% Western China Chengdu 0.6% 0.5% Chongqing 7.7% 12.8% Western China Sub-
Slide 28: Projects Launched in 1H20
3 Projects Launched in 1H20 Attributable Proceeds Attributable GFA Average Price Projects City (RMB M) sold (s.m) (RMB psm) Huangpu Street (Site 82) Suzhou 960 23,975 40,000 Yuan He Street (Site 77) Suzhou 534 18,594 28,700 Luxurious Mountain View Hangzhou 515 15,670 29,400 The Wharf (Holdings) Limi
Slide 29: Mainland Key Projects on Sales in 1H20
Mainland Key Projects on Sales in 1H20 Attributable Attributable Average Price Projects City Proceeds Ownership GFA sold (s.m) (RMB psm) (RMB M) Huangpu Street (Site 82) Suzhou 960 23,975 40,000 49% Parc Grande Hangzhou 903 15,957 55,000 50% Parc Royale Hangzhou 735 13,352 55,100 100% International
Slide 30: Mainland DP Land Bank Breakdown by City
Mainland DP Land Bank Breakdown by City Region City GFA million (s.m) % Total Eastern China Shanghai 0.1 2% Suzhou 0.8 24% Wuxi 0.0 1% Hangzhou 0.6 17% Eastern China Sub-Total: 1.5 44% Western China Chengdu 0.8 24% Chongqing 0.2 7% Western China Sub-Total: 1.0 31% Southern China Foshan & Guangzhou 0
Slide 31: Mainland Key Properties Completion
Mainland Key Properties Completion Projects Attributable GFA (s.m) Key Completion in 1H20 Chengdu Times Town (Site A) 70,500 Foshan Sunrise Coast 33,300 Suzhou Huangpu Street (Site 82) 30,100 Projected Key Completion in 2H20 Suzhou Yangcheng Lake (Site 27) 201,400 Chengdu Times City 111,200 Hangzhou
Slide 32: Mainland New Projects for Sales in 2H20
Mainland New Projects for Sales in 2H20 Projects City Ownership Wuzhong Lot #24 Suzhou 100% CSIFS T2 S.A. Changsha 100% The Wharf (Holdings) Limited 1H20 Interim Results 32
Slide 33: Mainland IP – Different Series
Mainland IP – Different Series Times Square IFS & Times Outlets Total GFA * Year of Total GFA * Year of Property Project Nature Property Project Nature (s.m.) Completion (s.m.) Completion Times Square Mixed-use IFS Complexes Chongqing ** O/R 55,000 2004 Chengdu R/O/S.A/ H 603,000 2013-2016 Chongqing
Slide 34: Wharf Hotels Management
Wharf Hotels Management Niccolo (Since 2015) Hong Kong Mainland The Murray, Hong Kong, a Niccolo Niccolo Chengdu Hotel^ Niccolo Changsha Niccolo Chongqing# Niccolo Suzhou (Opening in 2021)^ Marco Polo (Since 1986) Hong Kong Mainland Philippines Marco Polo Hongkong Hotel^ Marco Polo Par
Slide 35: Overview of Application of Funds
Overview of Application of Funds Major Capital & Development Expenditure 1H20 2H20 HKD (Actual) (Projected) Hong Kong Properties 0.3B 1.4B Mainland China IP 0.0B 0.1B Mainland China DP 3.2B 4.8B Others 0.1B 0.5B Total 3.6B 6.8B The Wharf (Holdings) Limited 1H20 Interim Results 35
Slide 36: Thank you
Pandemic Left Economies Stranded Thank you The Wharf (Holdings) Limited 1H20 Interim Results 36
Slide 37: 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