Slide 1: 1H 2018 Interim Results Investor Presentation
1H 2018 INTERIM RESULTS INVESTOR PRESENTATION 21 AUGUST 2018
Slide 2: Agenda
2 1 1H 2018 RESULTS HIGHLIGHTS 2 DEVELOPMENT PROPERTIES 3 INVESTMENT PROPERTIES 4 FINANCIAL POSITION 5 APPENDIX
Slide 3: 1H 2018 Results Highlights
3 1 1H 2018 RESULTS HIGHLIGHTS
Slide 4: Changes in Accounting Policies: Income Statement
1H 2018 HIGHLIGHTS: CHANGES IN ACCOUNTING POLICIES 4 The Group has adopted HKFRS 9 and HKFRS 15 from 1 Jan 2018, which results in changes in accounting policies and adjustments to the amounts recognised in the 1H18 financial statements: I. Impact on the financial statements – line items of consolida
Slide 5: Changes in Accounting Policies: Financial Position
1H 2018 HIGHLIGHTS: CHANGES IN ACCOUNTING POLICIES 5 II. Impact on the financial statements – line items of consolidated statement of financial position As of 30 June, 2018 Without the Effect of Effect of As HK$’million adoption of adoption of adoption of reported HKFRS 9 and HKFRS 9 HKFRS 15 HKFRS
Slide 6: 1H 2018 Results Highlights
1H 2018 RESULTS HIGHLIGHTS 6 • Total turnover in 1H 2018 decreased 40% YoY to $10.6B. The significant change in turnover was mainly attributable to the adoption of new accounting policies, which has resulted in the deferred recognition of sales. • Gross profit in 1H 2018 grew 4% to $4.3B. Gross prof
Slide 7: Financial Summary
FINANCIAL SUMMARY 7 HK$ million Note 1H 2018 1H 2017 Change Turnover 10,560 17,742 -40% Gross profit 4,262 4,102 +4% Share of results of associates and joint ventures 806 688 +17% Underlying profit N1 1,552 2,833 -45% Net increase in fair value in investment properties N2 2,438 476 +412% Reported pr
Slide 8: Operating Segments
OPERATING SEGMENTS 8 HK$ million Turnover Gross Profit Gross Margin * Recurrent revenue Note 1H 2018 1H 2017 Change 1H 2018 1H 2017 Change 1H 2018 1H 2017 Property sales 7,053 14,606 -52% 2,104 2,156 -2% 30% 15% HK N1 1,668 10,085 -83% 505 1,176 -57% 30% 12% PRC N2 5,385 4,521 +19% 1,599 980 +63% 30
Slide 9: Development Properties
9 2 DEVELOPMENT PROPERTIES
Slide 10: Development Properties Overview
DEVELOPMENT PROPERTIES OVERVIEW 10 Contracted Sales 1H 2018 1H 2017 HK$ HK PRC HK * KPL’s Interest Contracted Sales $5.2B $4.1B 8.4B Saleable Area Sold Approx. 194,000 s.f Approx. 189,000 s.f 7.1B -15% Recognized Sales Subsidiary projects: $1.7B Subsidiary projects: $10.1B Associate projects: $0.3B*
Slide 11: HK Projects on Sale: Mantin Heights
DEVELOPMENT PROPERTIES – HK PROJECTS ON SALE 11 MANTIN HEIGHTS Accumulative sales performance up to end-Jul 2018: • Total units: 1,429 • Sold 1,260 units or 88% of total units • 1st launch in 4/2016 • Contracted sales $19.3B • Construction completed • ASP $23,800 psf
Slide 12: HK Projects on Sale: The Bloomsway
DEVELOPMENT PROPERTIES – HK PROJECTS ON SALE 12 THE BLOOMSWAY Accumulative sales performance up to end-Jul 2018: • Total units: 1,100 • Sold 995 units or 90% of total units • 1st launch in 11/2015 • Contracted sales $8.7B • Construction completed • ASP: Apartments: $13,200 psf ; Villas: $30,700 psf
Slide 13: HK Upcoming Projects: Beacon Hill Projects
DEVELOPMENT PROPERTIES – HK UPCOMING PROJECTS 13 BEACON HILL PROJECTS Planned to be developed into low-density residential projects with a total buildable GFA of 459,000 s.f Project Summary BH Site 1 BH Site 2 Acquisition date Feb-2015 Oct-2016 Total gross buildable GFA 116,000 s.f 343,000 s.f Land
Slide 14: Development Properties – PRC
DEVELOPMENT PROPERTIES – PRC 14 Major projects on sale: PRC Contracted ASP Rmb psm 1H 2018 +22% YoY 32,800 26,800 17,800 Hangzhou Shenyang Hangzhou 15,100 Castalia Court Arcadia Court Lake Grandeur 1H 2015 1H 2016 1H 2017 1H 2018 PRC Saleable Resources Qinhuangdao Nanjing Qianhai Habitat Arcadia Cou
Slide 15: Investment Properties
15 3 INVESTMENT PROPERTIES
Slide 16: Investment Properties – Overview
INVESTMENT PROPERTIES – OVERVIEW 16 Total Property Rental (includes attributable rental income from associates) PRC Six Mixed-Use Properties in the CBDs of Major Cities HK$ million HK PRC 2,652M +10% 2,411M 1998 2008 2011 2013 2015 2016 Beijing Shenzhen Shanghai Shanghai Tianjin Hangzhou Kerry Centr
Slide 17: Investment Properties – PRC Completed Properties
INVESTMENT PROPERTIES – PRC COMPLETED PROPERTIES 17 PRC Property Rental • GFA(100%)* 1.5Ms.f Beijing • Occupancy (@ 30 Jun 2018) * 97% Gross rental revenue: HK$2.0B Kerry Centre • Yield on Cost * 21% (includes attributable rental income from associates) • Completion 1998 • KPL’s interest 71.25% Attr
Slide 18: Investment Properties – Under Development: Shenyang Kerry Centre
INVESTMENT PROPERTIES – UNDER DEVELOPMENT 18 SHENYANG KERRY CENTRE OFFICE (PH 1) Completed in 2014 OFFICE (PH 2) Completion: 2H 2018 Lying at the core of the city’s landmark with a GFA of approx. 13M s.f. This mixed- use project includes a hotel, offices, a shopping mall, and residences. Phase I was
Slide 19: Investment Properties – Under Development: Qianhai Kerry Centre
INVESTMENT PROPERTIES – UNDER DEVELOPMENT 19 QIANHAI KERRY CENTRE T2 Office T1 Office T8 Office T6 Apartment Hotel T5 Apartment T9 T3 Apartment Office (Bank of East Asia) Project T7 Site #1 Site #2 Summary Land acquisition Jan-2015 Dec-2016 No. of Towers 5 (T1 T2 T3 T5 T6) 3 (T7 T8 T9) GFA (s.m) Tot
Slide 20: Investment Properties – HK
INVESTMENT PROPERTIES – HK 20 HK Property Rental Commercial Office Apartment Gross rental revenue: HK$623M Occupancy at 30 Occupancy at 30 Occupancy at 30 (includes attributable rental income from associates) Jun 2018: 98% Jun 2018 : 95% Jun 2018: 94% Attributable GFA 2.9M s.f Continue to
Slide 21: Financial Position
21 4 FINANCIAL POSITION
Slide 22: Financial Position
FINANCIAL POSITION 22 As at 30 As at 31 Debt Maturity Profile HK$ million Jun 2018 Dec 2017 Change Total Debt : $32,449M HK$ million Total Debt 32,449 38,022 -15% Fixed Rate Bonds Bank Loans Cash and bank 14,107 13,748 +3% balance Net Debt 18,342 24,274 -24% Undrawn Bank Loan 12,109 11,665 +4% Facil
Slide 23: Appendix
23 23 5 APPENDIX A. 1H 2018 Contracted Sales - HK B. 1H 2018 Contracted Sales - PRC C. Major Properties Under Development - HK D. Major Properties Under Development - PRC E. PRC Major Completed Mixed-Use Properties F. Land Bank – Overview / HK / PRC
Slide 24: 1H 2018 Contracted Sales – HK
A. 1H 2018 CONTRACTED SALES – HK 24 Projects on sale KPL’s Total Units Accumulative Inventory ASP achieved Sales interest project sold in units sold as at as at 1H 2018 in 1H 2018 proceeds in (%) units 1H 2018 1H 2018 (units) HK$ psf 1H 2018^ HK$ bn MAJOR PROJECTS 1 Mantin Heights 100% 1,429 213 1,2
Slide 25: 1H 2018 Contracted Sales – PRC
B. 1H 2018 CONTRACTED SALES – PRC 25 Major projects on sale Product Contracted GFA Sold ASP KPL’s (100% subsidiaries + KPL’s interest type sales ^ s.m achieved interest for associates) RMB’M in 1H2018 RMB psm 1 Hangzhou Castalia Court 杭州云荷廷 R 567 18,700 28,900 100% 2 Shenyang Arcadia Court Ph 2 瀋陽雅頌
Slide 26: Major Properties Under Development – HK
C. MAJOR PROPERTIES UNDER DEVELOPMENT – HK 26 Name Location Type Stage of Completion Expected KPL’s Buildable Completion Interest GFA* (%) (s.f.) FOR SALE PROPERTIES 1 Beacon Hill Project (NKIL 6532) Beacon Hill R Superstructure work 2H 2018 100 116,376 in progress 2 LaSalle Road / Boundary Street H
Slide 27: Major Properties Under Development – PRC
D. MAJOR PROPERTIES UNDER DEVELOPMENT – PRC 27 Name Location Type Stage of Completion Expected KPL’s KPL’s Completion Interest Attributa (%) ble GFA (s.f.) MAJOR MIXED-USE DEVELOPMENT 1 Shenyang Kerry Centre Shenyang R/O/C Ph II – Residential & office: Facade Ph II – In 60 5,309,788 Phase II & III i
Slide 28: Major Properties Under Development – PRC (Cont'd)
D. MAJOR PROPERTIES UNDER DEVELOPMENT – PRC (CON’T)28 Name Location Type Stage of Completion Expected KPL’s KPL’s Completion Interest Attributable (%) GFA (s.f.) OTHER INVESTMENT PROPERTIES (CON’T) 8 Shenzhen Qianhai Shenzhen H/O/C Piling work in progress 2021 25 322,830 Complex Development SUBTOTAL
Slide 29: PRC Major Completed Mixed-Use Properties
E. PRC MAJOR COMPLETED MIXED-USE PROPERTIES 29 30 Jun 2018 GFA & Occupancy Attri GFA (000s s.f.) Beijing Shanghai Shenzhen Tianjin Hangzhou Others Total Occupancy Office 711 1,430 1,552 - 100 195 3,988 93% Commercial 98 1,096 104 428 812 34 2,572 92% Apartment 277 774 - - - - 1,051 91% ^ Total 1,086
Slide 30: PRC Completed Mixed-Use Properties: Occupancy Rates
E. PRC MAJOR COMPLETED MIXED-USE PROPERTIES (CON’T) 30 Occupancy rates (by segment) As at 30 Jun 2018 As at 31 Dec 2017 Serviced Apartment 94% 96% Office 98% 98% 1 Beijing Kerry Centre Commercial 97% 94% Average 97% 97% Serviced Apartment 89% 87% Office 98% 99% 2 Jing An Kerry Centre Ph 1 Commercial
Slide 31: Jing An Kerry Centre and Kerry Parkside, Shanghai
E. PRC MAJOR COMPLETED MIXED-USE PROPERTIES (CON’T) 31 Jing An Kerry Centre, Shanghai Puxi GFA ( million s.f.) 3.7M s.f Commercial 1.0 • Located in the heart of Shanghai’s Nanjing Road business Office 1.7 district Apartment 0.2 • A pre-eminent shopping venue and exclusive office Hotel 0.8 address in
Slide 32: Beijing Kerry Centre and Shenzhen Kerry Plaza
E. PRC MAJOR COMPLETED MIXED-USE PROPERTIES (CON’T) 32 Beijing Kerry Centre 2.2M s.f GFA ( million s.f.) Commercial 0.1 • Continues to be an iconic presence at the heart of Beijing Office 1.0 • Located in the Chaoyang district, the city's commercial Apartment 0.4 and financial center and within the
Slide 33: Tianjin Kerry Centre and Hangzhou Kerry Centre
E. PRC MAJOR COMPLETED MIXED-USE PROPERTIES (CON’T) 33 Tianjin Kerry Centre Ph 1 1.7M s.f GFA ( million s.f.) Commercial 0.9 • Mixed-use development located on the east bank of the Hotel 0.8 Haihe CBD in Hedong District Total 1.7 • Phase I of the development includes a hotel, upscale residences for
Slide 34: Land Bank – Overview
F. LAND BANK – OVERVIEW 34 Total Property Portfolio Attributable GFA: Approx. 37.1M s.f. (as of 30 Jun 2018) Held for sale 7% PUD 48% Macau Hotel 5% 12% Overall – Overseas Overall – PRC 9% 74% By Type By Location HK 12% Completed IP 33% Hotel 5% Macau 11% Residential Office 55% 26% PUD – PRC PUD – O
Slide 35: Land Bank – HK
F. LAND BANK – HK 35 HK Land bank Attributable GFA (‘000 s.f) Hotel 1% Residential Completed Investment Properties 2,863 Commercial 28% 31% Commercial 1,219 4.3M s.f in Office 841 attributable GFA Apartment 803 Properties under development 818 Office 20% Apartment 20% Completed properties held for s
Slide 36: Land Bank – PRC
F. LAND BANK – PRC 36 PRC Land bank Attributable GFA (‘000 s.f) Hotel 17% Commercial Completed Investment Properties 7,611 18% Commercial 2,572 27.5M s.f Residential 31% Office 3,988 attributable GFA Apartment 1,051 Properties under development 13,866 Office 30% Apartment 4% Completed properties hel
Slide 37: Disclaimer
DISCLAIMER 37 The information in this presentation is for personal, non-commercial reference and general information purposes only and should not be relied upon for investment decision purposes. The information in this presentation, including without limitation any stock price, market data informati