Shui On Land Ltd. · HKEX:272
Shui On Land — H1 2017 Earnings Presentation
47 slides from Shui On Land's earnings presentation, Aug 23, 2017
Slide 1: Shui On Land Limited 2017 Interim Results Announcement
Shui On Land Limited (0272.HK) 2017 Interim Results Announcement
Slide 2: Contents
Contents 1. Chairman’s Message 2. 1H 2017 Financial Results Highlights - Income Statement - Investment Portfolio and Valuation - Financial Position & Debt Profile 3. Residential Developments - Contracted Sales & Recent Launches - Saleable Resources & Shanghai Pipelines 4. Commercial Property - Compl
Slide 3: Business Review
Business Review Our key initiatives include: Pursual of Asset Light Strategy: The Group is implementing and refining our Asset Light Strategy, including setting up of new partnerships to leverage on our brand name and management expertise in order to capture land acquisitions and investment opport
Slide 4: Key Achievements in 1H 2017
Key Achievements in 1H 2017 Turnover increased by 185% to RMB10,166 million; Gross profit increased by 449% to RMB4,418 million with gross profit margin increased 20 percentage points to 43% in 1H 2017 compared to 1H 2016. Attributable profit increased 17% Y/Y. Expanded our landbank in the key m
Slide 5: Focus on Profitability and Shareholders Return
Focus on Profitability and Shareholders Return Increased dividend payout The Board recommends 1H2017 DPS dividend at HK$0.03 per share, an increase of 173% compared to last (HKD cents) year. The increase was driven by: 4.5 4 4 4 3.9 2016 interim dividend per share as 3.5 reduced from preceding yea
Slide 6: New Investment: Wuhan Optics Valley
New Investment: Wuhan Optics Valley Total GFA of Wuhan Optics Valley is 1,279,000 sq.m. (AV: RMB1,790 per sq.m.), 35% of which is for residential usage and 65% is for commercial usage. The first phase which is a mixed-use development, includes a total GFA of 300,000 sq.m.. The first batch of res
Slide 7: New Investment: RHXC Lot 167
New Investment: RHXC Lot 167 Total GFA of Lot 167 is 213,200 sq.m., 40% of which is for residential usage and the remaining is for commercial usage. Total investment is estimated to be RMB15 bn. Relocation of Lot 167 has started in August 2017. Lot 167b Lot 167a (Residential) (Retail & Office) L
Slide 8: Major Divestment
Major Divestment Disposal of the majority equity interests in 11 parcels at the Chongqing project Target Assets Sq.m. Total GFA 1,259,200 Residential Land Parcels 703,500 - Lots B5, B10, B15, B24-6 & B14-3/4 Commercial Land Parcels 167,300 - Lots B13, B24-8, B24-9, B14-1 & B4-2 Super High-rise (Lot
Slide 9: Deleveraging Exercise Bearing Fruit
Deleveraging Exercise Bearing Fruit Net Gearing Net Debt (RMB’mn) 100% 45,000 41,170 90% 87% 81% 40,000 37,378 79% 35,535 80% 75% 34,610 35,000 68% 31,556 70% 64% 29,182 30,000 28,875 60% 57% 25,000 50% 20,000 40% 15,000 30% 20% 10,000 10% 5,000 0% 0 1H2014 2014 1H2015 2015 1H2016 2016 1H2017 1H2014
Slide 10: 2H 2017 Outlook: Three-Pronged Strategy of Strength, Balance and Performance
2H 2017 Outlook: Continue Our Three-Pronged Strategy of Strength, Balance and Performance The global economy has continued to expand during 2017, albeit at a moderate pace while the Chinese Economy is performing considerably better than other major economies and above Government targets. The Gro
Slide 11: Contents
Contents 1. Chairman’s Message 2. 1H 2017 Financial Results Highlights - Income Statement - Investment Portfolio and Valuation - Financial Position & Debt Profile 3. Residential Developments - Contracted Sales & Recent Launches - Saleable Resources & Shanghai Pipelines 4. Commercial Property - Compl
Slide 12: Income Statement
Income Statement Gross profit up 449% to RMB4,418 million underpinned by strong sales 1H 2016 Change RMB’mn 1H 2017 (Restated) % Turnover of the Group 10,166 3,571 185% Property sales 9,086 2,618 247% Rental & related income and others 973 831 17% Construction 107 122 (12%) Cost of sales (5,748) (2,
Slide 13: Income Statement (Cont'd)
Income Statement (Cont’d) Profit attributable to shareholders increased 17% 1H 2016 Change RMB’mn 1H 2017 (Restated)1 % Profit before taxation 3,024 1,382 119% Taxation (1,856) (254) 631% Profit for the period 1,168 1,128 4% Attributable to: Non-controlling shareholders of subsidiaries 30 140 (79%)
Slide 14: Recognised Property Sales
Recognised Property Sales1 Total RMB12,558 million for 1H 2017 1H 2016 RMB’mn 1H 2017 Change % (Restated) Property Sales 9,086 2,618 247% TPQ 793 6 13,117% RHXC 4,795 9 53,178% KIC 1 12 (92%) Chongqing 121 207 (42%) Foshan 147 542 (73%) En-bloc Sales 3,229 1,842 75% 1H 2016 Property Sales Recognised
Slide 15: RMB10.2 Billion Locked-in Sales for Delivery in 2H 2017 and Beyond
RMB10.2 Billion Locked-in Sales for Delivery in 2H 2017 and Beyond Locked-in Sales Locked-in Sales GFA (RMB’bn) (sq.m.) 15 13.6 -25% 600,000 502,000 -10% 3.7 10.2 450,000 10 400,000 193,000 4.0 205,000 5 9.9 200,000 6.2 309,000 245,000 0 0 31 Dec 2016 30 Jun 2017 31 Dec 2016 30 Jun 2017 Residential
Slide 16: Valuation of Investment Property Portfolio
Valuation of Investment Property Portfolio RMB43.8 billion portfolio on 0.5% valuation gain Leasable Fair Value Gain / Carrying Value as at Gain / (Loss) to Project Product GFA (Loss) in 1H 2017 30 June 2017 Carrying Value Sq.m. RMB’mn RMB’mn RMB/sq.m. % Completed investment properties at valuation
Slide 17: A Strong Asset Base
A Strong Asset Base Total assets were RMB121.7 billion as at 30 June 2017 IP consists of 45% of total Growing Asset Base Asset Value – by Nature (RMB’bn) 140.0 122.2 117.2 121.7 Others 120.0 108.3 12% 98.6 Cash & Bank 100.0 Balances IP at Valuation 89.6 15% 36% 80.0 68.6 Prepayment of Relocation Cos
Slide 18: Financial Position
Financial Position Net gearing ratio at 57% Net debt decreased by RMB12,295 million in the past 2 years RMB’mn 30 Jun 2017 31 Dec 2016 Change % 30 Jun 2015 Change % Total cash and bank deposits 17,704 15,567 14% 7,126 148% Total assets 121,662 122,213 0% 112,947 8% Total debt 46,579 47,123 (1%) 48,2
Slide 19: Debt Profile
Debt Profile Debt Profile – Nature & Maturity Breakdown 1H 2017 vs. 2016 2H 2019- 2022 & RMB’mn 2018 Total 2017 2021 after FX Debt FX Debt Unhedged USD Senior 27% RMB Unhedged 3,4021 4,310 8,794 - 16,506 Loans 26% Notes 48% RMB Hedging Expired FX Debt HKD Bank on Jun 30 Loans - 1,148 3,210 - 4,358 H
Slide 20: Contents
Contents 1. Chairman’s Message 2. 1H 2017 Financial Results Highlights - Income Statement - Investment Portfolio and Valuation - Financial Position & Debt Profile 3. Residential Developments - Contracted Sales & Recent Launches - Saleable Resources & Shanghai Pipelines 4. Commercial Property - Compl
Slide 21: Contracted Property Sales
Contracted Property Sales 76% of residential sales contributed by Shanghai projects Contracted Sales (RMB’mn) Contracted Sales Subscribed Sales 30,000 19,580 20,000 2,938 12,565 10,000 3,756 4,035 3,555 16,642 736 493 8,530 0 2,819 3,263 1H 2014 1H 2015 1H 2016 1H 2017 Residential Contracted Sales A
Slide 22: Shanghai Rui Hong Xin Cheng
Shanghai Rui Hong Xin Cheng Robust sell through rate and ASP growth Shanghai Rui Hong Xin Cheng The Upper (Lot 9) The Gallery (Lot 2) 1st Batch 2nd Batch 1st Batch 2nd Batch Date of Launch Oct 2015 Feb 2016 Jun 2016 Apr 2017 ASP (per sq.m.) 69,000 79,000 94,000 103,000 RMB Average Price per Unit(mil
Slide 23: Residential Available for Sale in 2H 2017 & Beyond
Residential Available for Sale in 2H 2017 & Beyond Abundant saleable resources from Shanghai Group’s Attributable Residential projects Product type GFA sq.m. interest % GFA sq.m. Shanghai Taipingqiao – High-rises 44,900 98.00% 44,000 Lakeville Luxe (Lot 116) Shanghai RHXC High-rises 21,2001 99.00% 2
Slide 24: Residential Developments
Residential Developments GFA 2.7 million1,2 sq.m. saleable resources Shanghai Shanghai3 Saleable GFA: 179,800 sq.m. Saleable GFA: 267,000 sq.m. (Completed & PUD) (Under relocation) Taipingqiao (Lot 116) Taipingqiao (Lot 118) RHXC (Lot 2) RHXC (Lots 1, 7) Saleable GFA: 44,900 sq.m. 80,000 sq.m.
Slide 25: Relocation Progress Update
Relocation Progress Update Three lots at RHXC are scheduled to be cleared in 2017/2018 % of % of Estimated Total relocation relocation relocation Year of GFA year of cost paid as at Lot completed completed relocation sq.m. relocation 30 June 2017 as at 31 Dec as at 30 Jun started completion RMB’ mn
Slide 26: Contents
Contents 1. Chairman’s Message 2. 1H 2017 Financial Results Highlights - Income Statement - Investment Portfolio and Valuation - Financial Position & Debt Profile 3. Residential Developments - Contracted Sales & Recent Launches - Saleable Resources & Shanghai Pipelines 4. Commercial Property - Compl
Slide 27: Completed Investment Property Portfolio
Completed Investment Property Portfolio 63% of the total GFA or 72% of the total IP valuation is from Shanghai projects Completed IP GFA1 by City Completed IP Valuation by City Foshan 12% Foshan 10% Chongqing 4% Chongqing 11% 1.155 mn Shanghai 63% Wuhan 14% Shanghai 72% sq.m. RMB40.8 bn Leasable Wuh
Slide 28: Rental and Related Income
Rental and Related Income Rental and related income increased by 19% Rental and Related Income1 Rental and Related Income by Cities (RMB’mn) 2,000 1,638 Other Cities 1,539 1,500 1,278 22% 1,056 1,151 906 1,000 835 684 759 500 0 Shanghai 78% 2010 2011 2012 2014 2015 2016 2013 1H 2016 1H 2017 1. Exclu
Slide 29: Rental and Occupancy Rates Analysis
Rental and Occupancy Rates Analysis Shanghai projects Rental & related Occupancy rate Change Project Product Leasable income as at % RMB’mn GFA 30 Jun 31 Dec 1H 2017 1H 2016 sq.m. 2017 2016 Shanghai Taipingqiao Shanghai Xintiandi Office / Retail 54,000 100% 99.6% 198 164 21% Xintiandi Style Retail 2
Slide 30: Rental and Occupancy Rates Analysis (Cont'd)
Rental and Occupancy Rates Analysis(Cont'd) Non Shanghai increased 46% Y/Y Rental & related Occupancy rate Change Project Product Leasable income as at % RMB’mn GFA 30 Jun 31 Dec 1H 2017 1H 2016 sq.m. 2017 2016 Wuhan Tiandi Wuhan Xintiandi Retail 46,000 95% 95% 50 55 85% HORIZON Retail 114,000 85% 7
Slide 31: Commercial Property Portfolio
Commercial Property Portfolio GFA 4.6 million1 sq.m. under development or for future development Shanghai – RHXC Lot 10 Wuhan Tiandi Wuhan Optics Valley Office & Retail Office & Retail Office & Retail Total Leasable GFA: 338,000 sq.m. Leasable GFA: 508,000 sq.m. Leasable GFA: 833,000 sq.
Slide 32: Thank You Q & A
Thank You Q&A 32
Slide 33: Appendix
Appendix Company Introduction CAPEX and Core Earnings Major Non-residential Property Transactions Market Information 33
Slide 34: Large-scale Mixed-use City Center Development
Large-scale Mixed-use City Center Development Xintiandi – Entertainment Area Corporate Avenue – Grade A Office Tower High-end Residential Shopping Centre Man-made Lake 34
Slide 35: Landbank in High Growth Cities
Landbank in High Growth Cities Dalian3 Shanghai 2.7 mn sq.m. Taipingqiao Total Landbank1: 0.7 mn sq.m. GFA 9.8 mn sq.m. Wuhan Tiandi Shanghai 1.0 mn sq.m. RHXC Dalian 1.0 mn sq.m. Wuhan Optics Valley 1.3 mn sq.m. Wuhan Shanghai Shanghai KIC Chongqing 0.3 mn sq.m. Foshan Chongqing Shanghai 1.5 mn sq.
Slide 36: Superior and Diversified Landbank
Superior and Diversified Landbank Attributable GFA by Property Type Attributable GFA by City Hotel, Serviced Apartment 4% Dalian 20% Residential Shanghai 30% 32% Of f ice 37% Foshan 16% Chongqing Wuhan Retail 8% 24% 29% 36
Slide 37: Completed Investment Property Portfolio
Completed Investment Property Portfolio Total GFA of 1,155,000 sq.m. Total carrying value as at 30 June 2017: RMB40.8 billion Shanghai Portfolio1 (Leasable GFA: 722,000 sq.m.) Taipingqiao Office & Retail THE HUB Office & Retail RHXC Retail KIC Office, Retail & Hotel Leasable GFA: Leasabl
Slide 38: Shanghai Taipingqiao & Rui Hong Xin Cheng
Shanghai Taipingqiao & Rui Hong Xin Cheng Shanghai Taipingqiao Shanghai Rui Hong Xin Cheng Project Information Project Information (representing leasable & saleable GFA) (representing leasable & saleable GFA) Total GFA 1,265,000 sq.m. Total GFA 1,744,000 sq.m. 290,000 sq.m. (Sold & Delivered 710,000
Slide 39: Shanghai KIC and THE HUB
Shanghai KIC and THE HUB Shanghai KIC THE HUB Project Information Project Information (representing leasable & saleable GFA) (representing leasable & saleable GFA) Total GFA 498,000 sq.m. Total GFA 308,000 sq.m. 249,000 sq.m. (Sold &Delivered) 45,000 sq.m. (sold & delivered Completed 247,000 sq.m. (
Slide 40: Wuhan Tiandi and Wuhan Optics Valley
Wuhan Tiandi and Wuhan Optics Valley Wuhan Tiandi Wuhan Optics Valley Project Information Project Information (representing leasable & saleable GFA) (representing leasable & saleable GFA) Total GFA 1,580,000 sq.m. Total GFA 1,277,000 sq.m. Properties for 628,000 sq.m. (Sold & Completed future 1,277,
Slide 41: Chongqing Tiandi and Foshan Lingnan Tiandi
Chongqing Tiandi and Foshan Lingnan Tiandi Chongqing Tiandi Foshan Lingnan Tiandi Project Information Project Information (representing leasable & saleable GFA) (representing leasable & saleable GFA) Total GFA 2,811,000 sq.m. Total GFA 1,524,000 sq.m. 274,000 sq.m. (sold & 1,269,000 sq.m. (Sold & de
Slide 42: Dalian Tiandi
Dalian Tiandi Dalian Tiandi Project Information (representing leasable & saleable GFA) Total GFA 3,105,000 sq.m.1 360,000 sq.m. (sold & delivered ) Completed 52,000 sq.m.2 ( sold yet to be Properties delivered；available for sale ) 248,000 sq.m. (IP) Properties under 880,000 sq.m. development 1.The G
Slide 43: Capital Expenditure (CAPEX)
Capital Expenditure (CAPEX) RMB’bn 1H 2017 2016 Construction Cost 2.2 5.1 % of total CAPEX 51% 73% Land Premium 1.3 - Relocation Cost 0.8 1.9 % of total CAPEX 49% 27% Total CAPEX 4.3 7.0 Total committed and available bank loan facilities as at 30 June 2017: RMB3.8 billion - Construction and working
Slide 44: Core Earnings
Core Earnings Change RMB’mn 1H 2017 1H 2016 % Profit attributable to shareholders of the Company 898 768 17% Net increase in fair value of the remaining investment properties (207) (519) Effect of corresponding deferred tax charges 52 130 Bargain purchase gain from acquisition of subsidiaries - (867
Slide 45: Major Non-residential Property Transactions
Major Non-residential Property Transactions Realising value of commercial properties at appropriate timing for recycling of capital Contracted Amount GFA Sold Year Project (RMB’mn) (sq.m.) 2011 Wuhan Tiandi Corporate Centre 5 963 58,800 2011 Shanghai KIC C2 Lot 5-5 600 14,400 2011 Chongqing Tiandi B
Slide 46: Market Information
Market Information Indicator Year China Shanghai Wuhan Chongqing Foshan Dalian 2014 63,614 2,356 1,007 1,427 744 766 2015 67,671 2,496 1,091 1,572 800 773 GDP (RMB billion) 2016 74,413 2,747 1,191 1,756 863 815 1H 2017 38,149 1,391 602 914 420 329 2014 1,368 24.26 10.34 29.91 7.4 7.0 Population (mil
Slide 47: Market Information (Cont'd)
Market Information (Cont’d) Indicator Year China Shanghai Wuhan Chongqing Foshan Dalian 2014 1.4% 11.3% 8.4% -2.8% -0.3% 2.7% Residential Housing 2015 9.1% 17.5% 15.6% -5.0% -2.5% 2.1% Price Growth 2016 11.3% 24.1% 6.8% 5.2% 11.6% 4.0% 1H 2017 3.9% 34.4% 3.7% 29.1% 14.6% 12.4% 2014 1,052 9.9 17.7 16