Wharf (holdings) Ltd. · HKEX:4
Wharf (holdings) — The Wharf (Holdings) — H1 2024 Earnings Presentation
36 slides from Wharf (holdings)'s earnings presentation, Aug 8, 2024
Slide 1: Capital Values Fall in Lethargic Market
Capital Values Fall in Lethargic Market The Wharf (Holdings) Limited 2024 Interim Results | 8 Aug 2024
Slide 2: Results Highlights
Results Highlights Overview • Consumption & Investment in Property Sector Stalled as Markets Lost Vibrancy • UNP Stable at $2.0B with Most Segments Weaker • $2.6B Group Loss Resulted After Non-cash IP Revaluation Deficit • Net Debt Management In Line with Plan & Gearing Remains Low The Wharf (Holdin
Slide 3: Financial Highlights
Financial Highlights Overview HKD Million 1H24 1H23 %Chg. • Recovery Pace Impeded by Macro Challenges Group Revenue 7,032 8,130 -14% Operating Profit 3,085 3,139 -2% • Group Revenue -14% to $7.0B Underlying Net Profit* 1,979 1,811 +9% • Weaker Market Led to Softer Capital Values & Group Loss Attribu
Slide 4: Strategic Capital Allocation
Strategic Capital Allocation Overview HK & ML Prop Book Value HK Properties – Majority under Development HKIP HKDP MLIP MLDP • Full Project Pipeline in HK Jun-24 15% 32% 37% 16% $123.4B - Kowloon Tong Site, Kai Tak JV Site - Two Mansfield Road Sites - Kowloon Godown Redevelopment Dec-23 14% 28% 41%
Slide 5: Prudent Financial Management
Prudent Financial Management Overview • Reduced Total Debt to Lowest in the Decade • Avg Interest Cost: 3.9% p.a. (1H23: 4.9% p.a.) • Debt Exposure: Majority in RMB as Natural Hedge • Interest Cover: 8.6x Total Debt (HKD Billion) Debt Maturity (HKD Billion) Total: $19.3B (As at 30 Jun 24) 36.7 29.3
Slide 6: Healthy Gearing & Balance Sheet
Healthy Gearing & Balance Sheet Overview HKD Billion 30 Jun 24 31 Dec 23 % Chg. Total Assets 190.0 204.9 -7% Investment Properties 63.3 71.2 -11% Development Properties* 58.9 60.5 -3% • Debt Management In Line with Plan Other Long Term Investments 37.7 42.4 -11% - Liquid Listed Equities MV 30.0 34.6
Slide 7: Hong Kong Properties
Hong Kong Properties The Wharf (Holdings) Limited – 2024 Interim Results 7
Slide 8: Ultra-luxury Peak Portfolio
Ultra-luxury Peak Portfolio Hong Kong Properties Mount Nicholson (50%-owned) • Removal of “Cooling Measures” in Feb Released Latent Demand - Impact Rather Short-lived & Market Turned Quiet • 1 Apt at Mount Nicholson Sold & Booked under Quiet Market 11 Plantation Road 77/79 Peak Road - Total Price $6
Slide 9: Mainland Investment Properties
Mainland Investment Properties The Wharf (Holdings) Limited – 2024 Interim Results 9
Slide 10: Slowdown in Domestic Consumption
Slowdown in Domestic Consumption Mainland Investment Properties Mainland IP Revenue (RMB Billion) • Lacklustre Trading Performance for Mall Tenants 1H 2H FY - Cautious Consumer Sentiment & Leakage to Overseas 4.5 4.3 • 1H24 MLIP Revenue -2%, OP -4% YoY in RMB Terms 4.1 3.7 - Retail Occupancy & Rent
Slide 11: Mainland Development Properties
Mainland Development Properties The Wharf (Holdings) Limited – 2024 Interim Results 11
Slide 12: Lower Sales on Reducing Inventory
Lower Sales on Reducing Inventory Mainland Development Properties Operating Matrix & Contracted Sales Revenue $2,504M (-25%) • Market Floor Is Forming Given Supportive Policies Operating Profit $485M (+538%) • Sentiment & Market Confidence Now Need to Rebuild Contracted Sales RMB 0.7B (-48%) ASP RMB
Slide 13: Hotels
Hotels The Wharf (Holdings) Limited – 2024 Interim Results 13
Slide 14: Shifting Travel Dynamics
Shifting Travel Dynamics Hotels Wharf Hotels Since 2015 5 Award-winning Hotels (3 Owned) in HK, Chengdu, Changsha, • Decline in Room Rate & Performance, In line with Market Trend Chongqing & Suzhou • Segment Revenue -2%, OP -73% YoY Since 1970s • Recent Hotel Openings at Changsha IFS: 10 Deluxe Hote
Slide 15: Logistics Infrastructure
Logistics Infrastructure The Wharf (Holdings) Limited – 2024 Interim Results 15
Slide 16: Heightened Regional Competition
Heightened Regional Competition Logistics Infrastructure Modern Terminals (1H24) Revenue Operating Profit $1,062M (-12%) $112M (-41%) Throughput* (million TEUs) 1H24 vs 1H23 vs 1H19 HK 1.7 -7% -30% • HK Port Business Lost Usual Vibrancy Under DaChan Bay (DCB)# 1.0 +12% +62% Restructuring of Supply C
Slide 17: Project Pipeline
Project Pipeline The Wharf (Holdings) Limited – 2024 Interim Results 17
Slide 18: Project Pipeline
Project Pipeline Project Pipeline Region Project Expected Completion • 1 Plantation Road Completed • Kai Tak Site (30%-JV) 2024 HK Prop • Kowloon Tong Site 2025 • Mansfield Road Sites 2026 • Kowloon Godown Redevelopment 2028 Mainland DP • CSIFS Tower 2 Prestigious High-rise Apt 2025 Logistics • MTL
Slide 19: Outlook
Outlook The Wharf (Holdings) Limited – 2024 Interim Results 19
Slide 20: Continuing Volatility
Continuing Volatility Outlook • Global Economy Highly Sensitive to US Interest Rate Pivot, Trade Tensions & Geopolitical Risks • Mainland Tackling High Leverage & Inventory in Property Sector, Subdued Sentiment & Elevated Saving Rate • HK Economy Hindered by Strong Local Currency & Tight Financial C
Slide 21: Sustainability
Sustainability The Wharf (Holdings) Limited – 2024 Interim Results 21
Slide 22: Recognised Sustainability Achievements
Recognised Sustainability Achievements Sustainability Recognitions Certifications • Member of Hang Seng Corporate Sustainability LEED Platinum LEED Gold Index Series; “AA+” Sustainability Rating • Chengdu IFS • Wuxi IFS • Changsha IFS • “A” at MSCI ESG Rating • Shanghai Wheelock Square • Management
Slide 23: Environment: Building a Sustainable Future
Environment: Building a Sustainable Future Sustainability 2030 Targets* Sustainable Finance Renewable Energy 2023 Progress: On Track GHG Emission (Scope 1 & 2) Intensity Sustainable Finance % Contribution Chengdu IFS ↓25% 40% 50-80% of Electricity from Hydroelectric Power (As at 30 Jun 2024) MLIP El
Slide 24: Social: Business-in-Community
Social: Business-in-Community Sustainability Project WeCan Wharf Group Rendered Full Support for Xue Long 2 Visit • Empowering Students for Pursuing Future Studies or Careers • Wharf is Honoured to be a Diamond Sponsor for Xue Long 2’s (China’s • Benefitting ~93,000 Students of 82 Schools First Dome
Slide 25: Social: Community Care & Wellbeing
Social: Community Care & Wellbeing Sustainability Donations Sponsorships Events Supported in 2023 • The Wharf Group* Named 3rd Top Donor 2022/23 Environmental Arts & Healthy Others by The Community Chest (“The Chest”) Social Welfare Education Protection Culture Life 25% 6% 3% 50% 10% 6% *The Wharf G
Slide 26: Corporate Governance
Corporate Governance Sustainability Anti-Corruption Total No. of Hours of Anti-corruption Training in 2023 3,200+ Hours For Board Members, Directors & Employees Board Engagement & Diversity The Group’s Sustainability Risks and Opportunities are Strive for Full Compliance on Board Diversity as a List
Slide 27: Appendix
Appendix The Wharf (Holdings) Limited – 2024 Interim Results 27
Slide 28: Summary of HK Properties
Summary of HK Properties Appendix Portfolio Usage Status Locations Attributable GFA (s.f.) 1. Peak Portfolio Residential Development No. 2-8 Mansfield Road 259,300 No. 9,11 Mansfield Road (50%-JV) 72,500 Sales Mount Nicholson (50%-JV) 17,000 77/79 Peak Road 4,700 Lease Chelsea Court 43,000 Strawberr
Slide 29: Mainland Contracted Sales Breakdown by City
Mainland Contracted Sales Breakdown by City Appendix Region City Contracted Sales (%) GFA Sold (%) Eastern China Suzhou 65.6% 56.2% Hangzhou 2.7% 0.8% Eastern China Sub-Total 68.3% 57.0% Southern China Foshan 20.7% 32.2% Guangzhou 8.6% 3.1% Southern China Sub-Total 29.3% 35.3% Western China Chongqin
Slide 30: Mainland Key Projects on Sales in 1H24
Mainland Key Projects on Sales in 1H24 Appendix Attributable Attributable Average Proceeds GFA Sold Price Projects City (RMB M) (s.m) (RMB psm) Ownership Villa One (Huayuan Road Lot 78) 蘇州天灝逅灣雅苑 Suzhou 160 8,677 18,400 100% Poetic Palace 蘇州荷岸曉風 Suzhou 118 6,788 17,400 33% Rosy Mansion 佛山悅府 Foshan 91
Slide 31: Mainland DP Stock Breakdown by City
Mainland DP Stock Breakdown by City Appendix Region City GFA million (s.m) % Total Western China Chengdu 0.57 44% Chongqing 0.09 7% Western China Sub-Total 0.66 51% Eastern China Suzhou 0.19 15% Hangzhou 0.01 1% Eastern China Sub-Total 0.20 16% Central China Changsha 0.38 30% Northern China Beijing
Slide 32: Mainland Key Projects Completion
Mainland Key Projects Completion Appendix Projects Attributable GFA (s.m) Key Completion in 1H24 Hangzhou Luxurious Mountain View 杭州雍景山 76,800 Projected Key Completion in 2H24 Suzhou Villa One (Huayuan Road Lot 78) 蘇州天灝逅灣雅苑 22,400 The Wharf (Holdings) Limited – 2024 Interim Results 32
Slide 33: Mainland IP – Different Series
Mainland IP – Different Series Appendix Times Square IFS & Times Outlets Project Total GFA * Year of Project Total GFA * Year of Property Nature (s.m.) Completion Property Nature (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
Slide 34: Overview of Application of Funds
Overview of Application of Funds Appendix Major Capital & Development Expenditure To be Incurred in Coming Years HKD Incurred in 1H24 Committed Uncommitted Total Hong Kong Properties 1,099M 4,110M 13,621M 17,731M Mainland China IP 27M 3M 113M 116M Mainland China DP 1,108M 921M 203M 1,124M Others 153
Slide 35: Thank You
Thank You Capital Values Fall in Lethargic Market
Slide 36: End of Presentation
End of Presentation The Wharf (Holdings) Limited [HKEx Stock Code: 0004.HK] Disclaimer All information and data are provided for information purposes only. All opinions included herein constitute our judgment as of the date hereof and are subject to change without notice. The Group, its subsidiaries