Soundwill Holdings Limited · HKEX:878
Soundwill — H1 2011 Earnings Presentation
36 slides from Soundwill's earnings presentation, September 2011
Slide 1: Profitable unique play in property development with premier sites in Hong Kong
Profitable unique play in property development with premier sites in Hong Kong 878.HK September 2011
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Soundwill Holdings Limited (the “Company”) solely for information purposes and does not constitute an offer, recommendation or invitation to subscribe for or purchase any securities and nothing contained herein shall form the basis of any contract or
Slide 3: Agenda
Agenda Company Overview Business Review & Prospect Financial Review Appendix Open Forum 3
Slide 4: Company Overview
Company Overview 4
Slide 5: Corporate Development Milestone
Corporate Development Milestone Became a Founded by Completion of Explored business constituent stock of Madam Grace Foo in 1978, flagship property, opportunities in the PRC MSCI Hong Kong involving in old building Soundwill Plaza, in 1996. in 2005. Small Cap Index on assembly business. 31 May 2011.
Slide 6: Shareholder/Corporate Structure
Shareholder/Corporate Structure Chairman Other Public Madam Grace Foo Shareholders (incl. Argyle Street and family Management’s Funds) 67.88% 32.12% Property Property Property Assembly & Leasing Development Resale 6
Slide 7: Sustainable & Unique Business Model
Sustainable & Unique Business Model New Compulsory Acquisition Rule in April 2010 Sales of property Relaxed the threshold from 90% to 80% ownership projects for old buildings aged 50 years or above Negotiation Identify sites Projects held for with landlords by our Completion in urban areas with long
Slide 8: Sustainable & Unique Business Model (Cont’d)
Sustainable & Unique Business Model (Cont’d) Exit Strategies for Assembled Properties - A Balance of Investment Return, Investment Resources & Investment Period Investment Return (sale proceed + rental income + capital gain) Site re-zoning & Sale of un-developed building planning land sites 5-10yr
Slide 9: Business Review & Prospect
Business Review & Prospect 9
Slide 10: Property Leasing Segment
Property Leasing Segment Segment Review for 1H2011 % of Revenue Total GFA Occupancy (HK$m) Building Location segment (sq. ft.) rate sales 1H2011 1H2010 Soundwill Causeway 246,400 98% 82% 95 90 Plaza Bay Other Hong Kong leasing 145,280 92% 10% 12 12 Island properties Advertising Causeway 1,253 100%
Slide 11: Property Leasing Segment (Cont’d)
Property Leasing Segment (Cont’d) SWP Performance and Outlook Unit rental* (per sq. ft.) Street Level (G/F) : HK$650 – 1,200 Street Level (1/F) HK$220 - 260 Upper levels : HK$25 - 35 Leasing Revenue Lease renewal Occupancy schedule portfolio per month* rate (sq. ft.) (HK$m) 2011 2012 8,800 (G/F) 8
Slide 12: Property Leasing Segment (Cont’d)
Property Leasing Segment (Cont’d) New Development for Leasing Tang Lung Street Project 1-29 Tang Lung Street, Causeway Bay Aggregate site area: approx. 12,500 sq. ft. Nos. 1-23, approx. 9,900 sq. ft. Nos. 25-29, approx. 2,510 sq. ft. Planned for a Ginza-styled commercial development (similar t
Slide 13: Property Assembly Segment
Property Assembly Segment Segment Review for 2010 & 1H2011 Month Site area Sale price Project Location Year booked disposed (sq. ft.) (HK$m) Lin Fa Kung St. West Jan 10 Tai Hang 1,900 98.3 1H2010 蓮花宮西街 Electric Rd. May 10 Tin Hau 2,100 168 FY2010 電氣道 San Wai St. Sept 10 Hung Hom 7,300 325 FY2010 新
Slide 14: Property Assembly Segment (Cont’d)
Property Assembly Segment (Cont’d) Other PA Projects Working / Marketing On Progress Site Area Planned GFA Project Location Zoning (sq. ft.) (sq. ft) 1. Hing Wan St. Wanchai 1,300 16,000 R/C 2. School St. Causeway Bay 2,300 22,500 R Mercury St. 3. (completed with Tin Hau 2,600 38,600 R/C 87.5% own
Slide 15: Property Development Segment
Property Development Segment Current Residential Development Project in HK WarrenWoods 尚巒 13-27 Warren Street, Causeway Bay Planned construction period : OP issued before Jun 2012 Land and construction cost : HK$580m Site area : 8,800 sq. ft. Total GFA : approx. 92,600 sq. ft. Sales Revenue : HK$1
Slide 16: Property Development Segment (Cont’d)
Property Development Segment (Cont’d) Current Residential Development Project in HK (Cont’d) Park Haven (曦巒) 32 – 50 Haven Street , Causeway Bay Planned : 2011 – late 2013 construction period Land cost : HK$517m Total GFA : approx. 103,200 sq. ft. Est. time of sale : 4Q2011 An iconic luxury reside
Slide 17: Property Development Segment (Cont’d)
Property Development Segment (Cont’d) Work In Progress: Residential Projects Est. Approx. Project Location Est. Year of Saleable GFA Completion (sq. ft.) 1. WarrenWoods Hong Kong, PRC 2012 93,000 2. Haven St. Project Hong Kong, PRC 2013 103,000 3. Zhuhai Project A Guangdong Province, 2012 589,000
Slide 18: Growth Drivers in Coming Years
Growth Drivers in Coming Years Completion of Major Residential Projects - WarrenWoods Project in 2012 - Haven Street Project in 2013 Property Assembly with Steady Growth Renewal of Completion of Lease Contracts New Rental Income Project Street Level Shops of Tang Lung Street Project in 2013 Soundwil
Slide 19: Financial Review
Financial Review 19
Slide 20: Group Financial Highlights
Group Financial Highlights For the six months ended 30 June 2010 2011 Change (HK$m) (HK$m) Revenue 245 145 41% Cost of sales (109) (18) 83% Gross profit 136 127 7% Net profit 630 1,004 59% Adjusted net profit* 65 29 55% Gross profit margin 55.5% 87.6% 32.1% Adjusted net profit margin 26.5% 20.0% 6.5
Slide 21: Revenue & Net Profit Summary
Revenue & Net Profit Summary Revenue Adjusted Net Profit* HK$m HK$m % % 47 24 G R AGR C CA 1H FY 1H FY *Net profit exclude fair value adjustments on investment properties 21
Slide 22: Revenue Breakdown by Segments
Revenue Breakdown by Segments HK$m CAGR 13% Property 1H Leasing FY HK$m 37% Sale of CAGR Assembled 1H Properties FY HK$m CAGR 13% 1H Urban Infrastructure FY 22
Slide 23: Revenue Breakdown by Segments (Cont’d)
Revenue Breakdown by Segments (Cont’d) 1H2010 Urban Infrastructure 11% Others 1H2011 4% Urban Infrastructure 15% Others 5% Property Leasing Sale of 45% Assembled Properties 40% Property Leasing 80% 23
Slide 24: Outlook of Revenue Breakdown in 2012
Outlook of Revenue Breakdown in 2012 24
Slide 25: Net Asset Value
Net Asset Value A proven track record showing substantial growth in our investment portfolio HK$m 25
Slide 26: Net Asset Value (Cont’d)
Net Asset Value (Cont’d) Deferred Tax Adjustment HK$m HK$ NAV per book as at 31 Dec 2010(1) 6,717 NAV per share (HK$) 27.8 Add: Deferred tax on investment properties 1,156 Adjusted NAV as at 31 Dec 2010 7,873 Adjusted NAV per share (1) (HK$) 32.6 (1) Based on 241m shares in issue (as at 31 Decembe
Slide 27: Net Asset Value (Cont’d)
Net Asset Value (Cont’d) HK$bn 27
Slide 28: Working Capital Management
Working Capital Management As at As at 31 Dec 2010 30 Jun 2011 Change (restated) (HK$m) (HK$m) Net assets 7,873 9,158 16% Net assets per share (HK$) 32.6 33.3 2% Cash and bank balance 218 223 2% Bank deposit at escrow account 238 227 5% Total debt 3,092 3,286 6% Gearing ratio* 39% 36% 3pp *Gearing r
Slide 29: Appendix
Appendix 29
Slide 30: Senior Management Team
Senior Management Team Founder and Chairman of the Group Responsible for the Group’s overall development director and strategies Madam Grace Foo Over 40 years experience in the Hong Kong property business, with specialization in the acquisition of old buildings for redevelopment projects Exe
Slide 31: Summary of Share Placements in the Past 12 Months
Summary of Share Placements in the Past 12 Months Premium/ No. of Transaction Price Date Buyers Nature / Sellers (Discount) on Shares (HK$ per share) Market Price Ajia Partners Asset Management Old shares sold by 250,000 7.70 0.65% Nov-10 Controlling Shareholder Family Insight China Focus Fund 250,0
Slide 32: SWP Current Tenants
SWP Current Tenants Renowned brands Beauty centres Other services Ginza-style arcade coupled with Grade-A office location attracts a cluster of high-end service sectors 32
Slide 33: Comparable Matrix – PB Ratio
Comparable Matrix – PB Ratio As at 31 August 2011 Soundwill PB Ratio = 0.29 Source: Bloomberg & Company 33
Slide 34: Comparable Matrix – Gearing Ratio
Comparable Matrix – Gearing Ratio As at 31 August 2011 Soundwill Gearing Ratio = 36% Source: Bloomberg & Company 34
Slide 35: Comparable Matrix – Return on Equity
Comparable Matrix – Return on Equity As at 31 August 2011 Soundwill ROE = 30.1% Source: Bloomberg & Company 35
Slide 36: Open Forum
Open Forum 36