Wharf (Holdings) Ltd. · HKEX:4
Wharf (Holdings) — The Wharf (Holdings) — H1 2018 Earnings Presentation
42 slides from Wharf (Holdings)'s earnings presentation, Aug 9, 2018
Slide 1: 2018 Interim Results
DP Contributed 62% of Core Profit The Wharf (Holdings) Limited 2018 Interim Results 9 August 2018 Stock Code: 0004
Slide 2: Financial Highlights
Financial Highlights Unadjusted Wharf REIC (WREIC) was Demerged in Nov 17. Group Comparison Accordingly, 2017 Comparatives have been 1H17 HKD Million 1H18 1H17# 1H18 (Ex. WREIC) % Chg Adjusted to Make Comparison Meaningful Group Revenue 7,823 17,063 7,823 7,517 +4% Core Profit -9%: Operating Profit
Slide 3: Property-focused
Property-focused 72% of 82% of 83% of Focused Strategy Revenue Operating Profit Core Profit Selective & Disciplined Approach Total Revenue Operating Profit Core Profit Properties 72% Properties 82% HK Properties 83% HK HK Properties China DP China DP China DP Properties Properties 2% 50% 48% 35% 28%
Slide 4: Core Profit (Adjusted for Impact of Demerger)
Core Profit (Adjusted for Impact of Demerger) Unadjusted Comparison Group 1H17 HKD Million 1H18 1H17# 1H18 % Chg % of 1H Total (Ex. WREIC) HK Properties 716 5,202 716 874 -18% 28% China DP 892 1,450 892 1,194 -25% 35% China IP 490 431 490 431 +14% 20% Others 429 355 429 293 +46% 17% Total 2,527 7,43
Slide 5: Segment Assets
Segment Assets Total Business Assets Properties 90% HK Properties 21% Properties 90% of Total Total Business Assets $184.2 B as of End-Jun 18 Total China DP Business Assets China IP 34% 35% $184.2 B Others 10% 4
Slide 6: Agenda
Agenda Hong Kong Properties China DP China IP Others Financial Management
Slide 7: Agenda: Hong Kong Properties
Agenda Hong Kong Properties China DP China IP Others Financial Management
Slide 8: Mount Nicholson
Mount Nicholson Extreme- Unique Most Valuable Mount Nicholson luxury Project in Asia Launch Date 1Q 2016 19 Houses (6,000-10,000 s.f) Product Type 48 Apartments (4,200-4,500 s.f) Accumulated Sales* 13 Houses 32 Apartments $94,300 psf $87,200 psf (Average) (Average) Accumulated Total Proceeds $22.7B
Slide 9: Mount Nicholson
Mount Nicholson Remarkable Luxury Residential Sales 1H18 Sales* 2 Houses 2 Apartments House 2 Sold for $1.4B ($151,800 psf) $126,700 psf $128,400 psf (Average) (Average) Total Proceeds $3.3B# (Gross Basis) * Accumulated Sales up to Jun 30, 2018 #1 House Sold in 1H18 will be Recognized in 2H18 8
Slide 10: Landbank
Landbank Exclusive Portfolio Growth Potential Total Attributable GFA Peak Portfolio Kowloon East Waterfront • Mount Nicholson Portfolio (“KEWP”) Kowloon Tong Portfolio 15% Peak Portfolio 10% • 1 & 11 Plantation Road • Kowloon Godown • 77 Peak Road • Yau Tong Bay (15% JV) • Chelsea Court • Peninsula
Slide 11: Agenda: China DP
Agenda Hong Kong Properties China DP China IP Others Financial Management 10
Slide 12: Administrative Measures are Distorting the Market
Administrative Measures are Distorting the Market Policy- Sellable Sales Target 1H18 Contracted Sales* Driven Market 1.0M s.m* RMB22B * Sales RMB7.2B -36% GFA 0.3M s.m -40% ASP RMB23,500 psm +5% ASP is Controlled through Presale Consent Underlying Demand Remains Robust Eastern China 59% 1H18 Accumul
Slide 13: Improved Margin
Improved Margin Operating Margin Group Core Profit Lower 1H18 Operating Matrix* +13.4 ppts 35% Completion Revenue $5,792M -15% Operating Profit $1,838M +45% Operating Margin 31.7% +13.4 ppts Completed GFA 96,600 s.m -66% Consecutive Improvement in Margin Recognized GFA 182,300 s.m -58% Net Order Boo
Slide 14: Landbank
Landbank Sound Financial Six Landbank 1H18 Land Acquisition* Position Focus Cities 3.8M s.m High Barrier in Tier-1 Cities Progress in Hangzhou & Suzhou in 1H18 Suzhou 49% Hangzhou 31% 677,300 s.m Tight Credit Environment may Change the Landscape in 2H18 Foshan 17% Guangzhou 4% *Detailed China DP Lan
Slide 15: Agenda: China IP
Agenda Hong Kong Properties China DP China IP Others Financial Management 14
Slide 16: China IP
China IP Commercial Properties Completion Schedule (’000 s.m) 3.5x 3,146 Changsha IFS 873 1,001 Wuxi IFS 251 251 251 251 Chongqing IFS* 427 541 541 541 214 214 186 186 Chengdu IFS 892 752 752 752 752 604 687 362 Other China Commercial Prop. 530 530 530 602 602 602 602 Total Development Area, Incl. B
Slide 17: Momentum
Momentum Domestic IFS Growth China IP Revenue (HKD billion) Consumption Series Potential $1.6B (+29%) 1H 2H China GDP +6.8% in 1H18 (78% Consumption) 1.4 1.2 1.2 Strong Retail Sales Driving Mall Performance 1.2 New Strategic Focus - IFS Series 1.6 Broaden Future Recurring Income Base 1.2 1.2 1.1 0.8
Slide 18: Growth Driver – CSIFS
Growth Driver – CSIFS Opened Leased Retailtainment Changsha IFS Mall May 2018 97% Experience GFA (s.m.) 246,100 Retail Area Leased 97% Retail - 370+ Retail Shops (70+ Hunan Retail Opening Rate 84% Debuts, 30+ Duplex Flagships) First Day Foot Traffic 150,000+ Average Monthly Sales* RMB 200M+(>2x of C
Slide 19: CSIFS Mall
>< WHARF CSIFS Mall
Slide 20: Ground Zero – CDIFS
Ground Zero – CDIFS Outperform Sales Growth Double-digit Chengdu IFS Mall Market +23% Rental Reversion Net Revenue (Net of Tax) RMB431M (+17%) Foot Traffic Growth +19% Turnover Rent Portion 28% Occupancy Cost* 13% Retail - Growth Momentum Continued Retail Sales (RMB billion) Office - 73% Committed;
Slide 21: New CBD – CQIFS
New CBD – CQIFS New Ramping Luxury Chongqing IFS Mall Landmark Up Cluster GFA (s.m.) 109,300# Retail Area Leased 96% Retail Opening Rate 91% Retail - Sales RMB355M Office - 40+% Committed Hotel (Niccolo Chongqing) - Iconic Sky Hotel # CQIFS is 50%-owned, 109,300 s.m is Total Retail Area 20
Slide 22: Agenda: Others
Agenda Hong Kong Properties China DP China IP Others Financial Management 21
Slide 23: Hotel Management
Hotel Management Niccolo Hong Kong Mainland Philippines A) The Murray, Hong Kong B) Chengdu* C) Chongqing* D) Changsha (4Q18)* I E) Suzhou (2019) Marco Polo J F) Hong Kong I) Beijing (Parkside) P) Manila (Ortigas) K E B G) Gateway J) Changzhou, Jiangsu Q) Cebu C D H) Prince K) Wuhan* R) Davao M L O
Slide 24: Logistics – Rebuild Competitiveness
Logistics – Rebuild Competitiveness External Trade Modern Terminals Uncertainties Tension Revenue $1,251M (-8%) Operating Profit $242M (-31%) Throughput (million TEUs) HK 2.6 -2% DCB (65%-owned) 0.6* +7% Enhance Efficiency SCT (20%-owned) 2.8* +4% Total 6.0 +1.8% Improve Margin *Total Throughput (In
Slide 25: CME2
CME2 Opportunity Strategy Long-term Re-Invest Capital Released from CME1* in a Small Market New Economy CME2 Strategic Initiative & (Larger Markets with Infrastructure Play Greater Potential) Building Long-term Business for New Economy *CME1 was Hong Kong-based Business with Market Size Limit 24
Slide 26: Agenda: Financial Management
Agenda Hong Kong Properties China IP China DP Others Financial Management 25
Slide 27: Prudent Financial Management
Prudent Financial Management 20.1% $29.3B 70% Gearing Group Net Debt Floating Rate Debt 19.7 9.2 8.5 3.5 2.8 1.2 Jul18-Jun19 Jul19-Jun20 Jul20-Jun21 Jul21-Jun22 Jul22-Jun23 Jul23 & After Debt Maturity (HKD billion) 26
Slide 28: Coming Attractions
Coming Attractions Mount Nicholson Niccolo Changsha (4Q18) Niccolo Suzhou (2019) 27
Slide 29: Our Sustainability
>< WHARF CSR UR SUSTAINABILITY
Slide 30: CSR
CSR • Wharf Holdings’ 4th standalone Sustainability/CSR Report 2017 Report published in accordance with the core option of GRI Standards, and in alignment with HKEX ESG Reporting Guide • Hang Seng Corporate Sustainability Index Series Member 2017-18 Recognitions • Hong Kong Quality Assurance Agency’
Slide 31: 2017 Sustainability Performance Highlights
2017 Sustainability Performance Highlights Hang Seng Corporate Sustainability Index Series Member 2017-18 Recycled 2,460+ tonnes waste 8,800 talent* 75,208 training hours* 223+ events and activities supported* Donations totalling HK$30 million The Wharf Holdings’ Sustainability Report 2017 is prepar
Slide 32: Appendix
Appendix >< WHARF
Slide 33: 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) 52,100 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 287,7
Slide 34: China Contracted Sales Breakdown by City
China Contracted Sales Breakdown by City Region City Contracted Sales (%) GFA Sold (%) Eastern China Shanghai 0% 0% Suzhou 1% 1% Wuxi 28% 37% Ningbo 0% 0% Hangzhou 37% 21% Eastern China Sub-Total: 66% 59% Western China Chengdu 1% 1% Chongqing 23% 30% Western China Sub-Total: 24% 31% Southern China F
Slide 35: China Key Projects on Sales in 1H18
China Key Projects on Sales in 1H18 Attributable Attributable GFA Average Price Projects City Proceeds sold (s.m) (RMB psm) Ownership (RMB M) The Throne Chongqing 1,492 77,300 19,100 50% Wuxi Glory of Time Wuxi 1,013 50,600 19,900 100% Exquisite Palace Hangzhou 992 25,400 39,000 100% River Pitti (Bi
Slide 36: China DP – 1H18 New Land Acquisitions
China DP – 1H18 New Land Acquisitions Attributable Consideration City Date Attributable GFA (s.m) Ownership (RMB) Foshan Jan-18 112,800 0.81B 50% Jan-18 7,700 0.19B 10% Guangzhou Jan-18 21,500 0.72B 18% Jan-18 98,200 1.97B 50% Jan-18 51,000 2.11B 75% Hangzhou Jan-18 31,000 1.23B 75% Feb-18 29,900 0.
Slide 37: China DP Land Bank Breakdown by City in 1H18
China DP Land Bank Breakdown by City in 1H18 Region City GFA million (s.m) % Total Eastern China Shanghai 0.1 3% Suzhou 0.8 21% Wuxi 0.4 10% Ningbo 0.0 1% Hangzhou 0.6 16% Eastern China Sub-Total: 1.9 51% Western China Chengdu 0.8 21% Chongqing 0.4 10% Western China Sub-Total: 1.2 31% Southern China
Slide 38: China Key Properties Completion
China Key Properties Completion Projects Attributable GFA (s.m) Key Completion in 1H18 Foshan Unique Garden 34,300 Beijing The Pearl on the Crown 28,200 Chengdu ICC 26,000 Projected Key Completion in 2H18 Wuxi Times Glory 123,400 Suzhou Bellagio, G09 (碧堤半島) 82,500 Wuxi Times City 79,700 Suzhou Bella
Slide 39: China New Projects for Sales in 2H18
China New Projects for Sales in 2H18 Projects City Ownership Beijing Xijucun Land Site Beijing 100% Beijing Liangma K Land Site Beijing 40% Suzhou Huangqiao 25 Land Site Suzhou 60% Jingan Garden Shanghai 55% 38
Slide 40: Overview of Application of Funds
Overview of Application of Funds Major Capital & Development Expenditure 1H18 FY18 HKD (Actual) (Projected) Hong Kong Properties 12.6B 13.5B China IP 2.2B 2.6B China DP 20.3B 31.1B Others 0.1B 0.5B Total 35.2B 47.7B * China DP Self-financed by Sales; China IP Mainly IFS Under Construction 39
Slide 41: Thank You
DP Contributed 62% of Core Profit Thank You 40
Slide 42: End of Presentation / Disclaimer
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