Shui On Land Ltd. · HKEX:272
Shui On Land — FY2016 Earnings Presentation
50 slides from Shui On Land's earnings presentation, Mar 22, 2017
Slide 1: 2016 Annual Results Announcement
Shui On Land Limited (0272.HK) 2016 Annual Results Announcement 22 March 2017
Slide 2: Contents
Contents 1. Chairman’s Message 2. 2016 Financial Results Highlights - Income Statement - IP Portfolio and Valuation - Financial Position & Debt Profile 3. Residential Developments - Contracted Sales & Recent Launches - Saleable Resources & Shanghai Pipelines 4. Commercial Property - Investment Prope
Slide 3: Key Achievements in 2016
Key Achievements in 2016 Record property sales: SOL recorded a 7% Y/Y increase to RMB22,975 million in 2016, representing the highest level in the Group’s history. In addition, residential contracted sales ASP increased 79% Y/Y. Significant revenue growth and increased attributable net profit: T
Slide 4: Contracted Sales Increased by 7% in 2016
Contracted Sales Increased by 7% in 2016 2016 Contracted Sales achieved RMB23.0 billion, comprising residential property sales of RMB16.3 billion, commercial property sales of RMB5.0 billion and other assets disposal of RMB1.7 billion. Residential ASP (based on contracted sales) increased 79% Y/
Slide 5: Major Disposal of Non-residential Properties in 2016
Major Disposal of Non-residential Properties in 2016 Unlock the value of our portfolio Foshan Lot 4 GFA Sold (sq.m.) 231,500 Transacted Value RMB1,693 million A1 Office Status as of 31 Disposal completed in June December 2016 2016 Wuhan Tiandi 3 Corporate Avenue A3 Office GFA Sold (sq.m.) 55,100 Tra
Slide 6: Net Gearing Ratio and Net Debt Declined in 2016
Net Gearing Ratio and Net Debt Declined in 2016 Continue to deleverage Net Gearing Net Debt (RMB’mn) 90% 43,000 87% 41,170 41,000 85% 81% 79% 39,000 80% 37,378 75% 37,000 75% 35,535 35,000 34,610 70% 68% 33,000 64% 31,556 65% 31,000 29,182 60% 29,000 55% 27,000 50% 25,000 1H2014 2014 1H2015 2015 1H2
Slide 7: Three New Malls Opened in 2016
Three New Malls Opened in 2016 A total GFA of 253,000 sq.m. Foshan Lingnan Tiandi Wuhan Tiandi Shanghai RHXC NOVA HORIZON Hall of the Moon(Lot 3) Retail Retail Retail Soft Opening: 30 Apr 2016 Soft Opening: 17 Sep 2016 Soft Opening: 16 Dec 2016 Grand Opening: 18 Dec 2016 Leasable GFA
Slide 8: 2017 Key Message: Strengthen Balance Sheet & Accelerate on Asset-Light Model
2017 Key Message: Strengthen Balance Sheet & Accelerate on Asset-Light Model On the macro side, global economic and political uncertainty will impact on the outlook for the World and is expected to affect the Chinese economy. At the same time, Chinese government’s restrictive measures have cause
Slide 9: Wuhan Optics Valley Central City Site
Wuhan Optics Valley Central City Site New acquisition On 24 January 2017, Hua Xia Rising(华夏瑞信), a joint venture company owned indirectly as to 50% by the Group and 50% by CITIC, made a successful bid for a site in East Lake Ring, Wuhan – The Optics Valley. Total land cost was RMB2,298 million for
Slide 10: Wuhan Optics Valley Central City Site (cont’d)
Wuhan Optics Valley Central City Site (cont’d) High potential GFA Price AV Premium # Company Type (sq.m.) (RMB’bn) (RMB/sq.m.) (%) 1 Zhenro Group Residential 287,222 4.6 15,966 446 Wuhan City Construction & Commercial 2 145,836 1.3 8,769 256 Development Residential 3 Wang Jin Commercial 43,799 0.15
Slide 11: Contents
Contents 1. Chairman’s Message 2. 2016 Financial Results Highlights - Income Statement - IP Portfolio and Valuation - Financial Position & Debt Profile 3. Residential Developments - Contracted Sales & Recent Launches - Saleable Resources & Shanghai Pipelines 4. Commercial Property - Investment Prope
Slide 12: Income Statement
Income Statement Gross profit up 250% to RMB5,905 million underpinned by strong sales Change RMB’mn 2016 2015 % Turnover of the Group 17,600 6,472 172% Property sales 15,604 4,380 256% Rental & related income and others 1,774 1,668 6% Construction 222 424 (48%) Cost of sales (11,695) (4,783) 145% Gr
Slide 13: Income Statement (Cont’d)
Income Statement (Cont’d) Profit attributable to shareholders +38% Y/Y Change RMB’mn 2016 2015 % Profit before taxation 4,635 4,088 13% Taxation (2,859) (2,321) 23% Profit for the year 1,776 1,767 1% Attributable to: Non-controlling shareholders of subsidiaries 239 428 (44%) Owners of perpetual capi
Slide 14: Recognised Property Sales
Recognised Property Sales* Total RMB21,960 million for 2016 RMB’mn 2016 2015 Change % Property Sales 15,604 4,380 256% TPQ 3,711 13 28,446% RHXC 3,633 167 2,075% KIC 125 647 (81%) Chongqing 1,530 1,374 11% Wuhan 2,906 988 194% Foshan 2,625 1,191 120% En-bloc Sales 1,074 - - Rental & related income a
Slide 15: Shui On Land – Growing and Strong Asset Base
Shui On Land – Growing and Strong Asset Base -Total assets were RMB122.2 billion at 31 December 2016 -37% of asset value was carried at valuation Growing Asset Base Asset value – by nature (RMB’bn) 140.0 122.2 Others 117.2 10% 120.0 108.3 Cash & Bank Balances 98.6 13% 100.0 IP at Valuation 89.6 Prep
Slide 16: Valuation of Investment Property Portfolio
Valuation of Investment Property Portfolio RMB45.5 billion portfolio on 3% valuation gain Leasable Fair Value Gain / Carrying Value as of Gain / (Loss) to Project Product GFA (Loss) in 2016 31 December 2016 Carrying Value Sq.m. RMB’mn RMB’mn RMB/sq.m. % Completed investment properties at valuation S
Slide 17: Finance Costs Inclusive of Exchange Differences
Finance Costs Inclusive of Exchange Differences 2% reduction in total interest and finance costs RMB’mn 2016 2015 Change % Total interest costs and other finance costs (3,582) (3,648) (2%) Less: Amount capitalized to investment properties under construction or development, properties under developme
Slide 18: Financial Position
Financial Position Net gearing ratio at 68% Net debt decreased by RMB9,614 million in past 18 months 31 31 30 June RMB’mn December December Change % Change % 2015 2016 2015 Total cash and bank balances 15,567 10,614 47% 7,126 118% Total assets 122,213 117,170 4% 112,947 8% Total debt 47,123 47,992 (
Slide 19: Debt Profile
Debt Profile USD/HKD debt reduced by RMB3 billion equivalent or 6% of the total debt Debt Profile – Nature & Maturity Breakdown 2016 vs. 2015 2019- 2022 & RMB’mn 2017 2018 Total 2021 after FX Loans Senior Unhedged FX Loans 6,023 4,393 6,896 - 17,312 26% Unhedged Notes RMB 46% Loans FX Loans RMB HKD
Slide 20: Contents
Contents 1. Chairman’s Message 2. 2016 Financial Results Highlights - Income Statement - IP Portfolio and Valuation - Financial Position & Debt Profile 3. Residential Developments - Contracted Sales & Recent Launches - Saleable Resources & Shanghai Pipelines 4. Commercial Property - Investment Prope
Slide 21: Residential Contracted Property Sales Increased by 96%
Residential Contracted Property Sales Increased by 96% 72% contributed by Shanghai projects Residential Property Sales (RMB’mn) 12,000 +96% 9,000 16,300 6,000 8,335 3,000 0 2015 2016 Residential Property Sales (RMB’ mn) 2016 2015 Change % Shanghai 11,699 2,939 298% TPQ 4,375 380 RHXC 7,324 2,559 Non
Slide 22: RMB13.6 Billion Locked-in Sales for Delivery in 2017 and beyond
RMB13.6 Billion Locked-in Sales for Delivery in 2017 and beyond Locked-in Sales Locked-in Sales GFA (RMB’bn) (sq.m.) 600,000 +2% 502,000 15 13.6 +25% 13.3 403,000 3.7 400,000 193,000 10 6.0 104,000 5 9.9 200,000 7.3 299,000 309,000 0 0 31 Dec 2015 31 Dec 2016 31 Dec 2015 31 Dec 2016 Residential Comm
Slide 23: Shanghai Taipingqiao
Shanghai Taipingqiao Robust sell through rate Shanghai Taipingqiao Lakeville Luxe(Lot 116) Date of Launch Dec 2015 ASP RMB133,000 per sq.m. Average Price per Unit RMB32 million Total Sales Amount RMB4.8 billion Total Units Launched 184 Sell Through Rate 82% 23
Slide 24: Shanghai Rui Hong Xin Cheng
Shanghai Rui Hong Xin Cheng Robust sell through rate and ASP growth The Upper The Upper The Gallery Shanghai Rui Hong Xin Cheng (Lot 9) (Lot 9) (Lot 2) 1st Batch 2nd Batch 1st Batch Date of Launch Oct 2015 Feb 2016 Jun 2016 ASP (per sq.m.) 69,000 79,000 94,000 RMB Average Price per Unit(million) 8 1
Slide 25: 2017 Residential Available for Sale
2017 Residential Available for Sale Abundant saleable resources from Shanghai Residential projects Product type sq.m. Shanghai Taipingqiao – High-rises 51,900 Lakeville Luxe (Lot 116) Shanghai RHXC High-rises 66,300 Chongqing Tiandi High-rises 63,900 Foshan Lingnan Tiandi Townhouses / Low-rises 8,60
Slide 26: Shui On Land - Residential Developments
Shui On Land - Residential Developments GFA 2.1 million* sq.m. saleable resources Shanghai Shanghai** Saleable GFA: 198,200 sq.m. Saleable GFA: 267,000 sq.m. (Completed & PUD) (Under relocation) Taipingqiao (Lot 116) Taipingqiao (Lot 118) RHXC (Lots 2,9) RHXC (Lots 1, 7) Saleable GFA: Saleable G
Slide 27: Relocation Progress Update
Relocation Progress Update Lot 118 was completely relocated in 2016 & 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 31 Dec 2016 as at 31 De
Slide 28: Contents
Contents 1. Chairman’s Message 2. 2016 Financial Results Highlights - Income Statement - IP Portfolio and Valuation - Financial Position & Debt Profile 3. Residential Developments - Contracted Sales & Recent Launches - Saleable Resources & Shanghai Pipelines 4. Commercial Property - Investment Prope
Slide 29: Investment Property Portfolio & Valuation Analysis
Investment Property Portfolio & Valuation Analysis Realizing the value of our commercial properties GFA (sq.m.) Composition in Value by Project Completed Under Development Assets Held for Sale 69% of asset value was located in Shanghai 9% 2,000,000 1,698,000 1,652,000 Taipingqiao 8% 24% 1,500,000 87
Slide 30: Completed Investment Property Portfolio
Completed Investment Property Portfolio Rental and related income grew to RMB1,638 million, increased 6% YOY Rental and Related Income Completed IP Composition by City** (RMB’mn) Foshan 12% 2,000 1,638* 1,539 Chongqing 11% 1,500 1.177 mn Shanghai 63% 1,278 1,151 sq.m. 1,000 Leasable 1,056 835 Wuhan
Slide 31: Completed Investment Property Portfolio
Completed Investment Property Portfolio Total GFA of 1,177,000 sq.m. Total carrying value as of 31 December 2016: RMB42.1 billion Shanghai Portfolio* (Leasable GFA: 744,000 sq.m.) Taipingqiao Office & Retail THE HUB Office & Retail RHXC Retail KIC Office, Retail & Hotel Leasable GFA: Lea
Slide 32: Commercial Property Portfolio
Commercial Property Portfolio GFA 2.3 million sq.m. under development or for future development Shanghai Wuhan Wuhan Office & Retail RHXC Lot 10 Office & Retail Tiandi Leasable GFA: Hall of the Sun Leasable GFA: 338,000 sq.m. 508,000 sq.m. Chongqing Foshan Chongqing Office, Retail & Hotel
Slide 33: Asset Enhancement Initiatives
Asset Enhancement Initiatives AEI underway at Shui On Plaza (Retail) The retail podium of Shui On Plaza to generate better return A total GFA of 28,000 sq.m. for retail Estimated opening in 3Q 2018 SOP Xintiandi 33
Slide 34: Thank You Q & A
Thank You Q&A 34
Slide 35: Appendix
Appendix Company Introduction CAPEX and Core Earnings Rental and Occupancy Rate Analysis Market Information Others 35
Slide 36: 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 36
Slide 37: Simplified Corporate Structure Overview
Simplified Corporate Structure Overview (as of 28 February 2017) Mr. Vincent H. S. Lo Public Shui On Group (private companies) 48.38% 42.85% SOCAM Development Limited 56.78% (“SOCAM”, 0983.HK) Shui On Land Limited 0.37% (“SOL”, 0272.HK) 100.00% China Xintiandi Holding Company Limited 78.11% Shui On
Slide 38: Landbank in High Growth Cities
Landbank in High Growth Cities Dalian Shanghai 2.8 mn sq.m. Taipingqiao Total Landbank*: 0.7 mn sq.m. GFA 8.6 mn sq.m. Wuhan** Shanghai 1.0 mn sq.m. RHXC Dalian 1.1 mn sq.m. Chongqing Wuhan Shanghai Shanghai 1.5 mn sq.m. KIC Chongqing 0.2 mn sq.m. Foshan Foshan Shanghai 1.0 mn sq.m. THE HUB 0.3 mn s
Slide 39: Superior and Diversified Landbank
Superior and Diversified Landbank Attributable GFA by Property Type Attributable GFA by City Hotel, Serviced Apartment Dalian 5% 21% Shanghai 28% Residential 30% Office 36% Foshan 16% Wuhan 13% Retail Chongqing 29% 22% 39
Slide 40: 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. 282,000 sq.m. (Sold & Delivered 624,000
Slide 41: 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 42: Wuhan Tiandi and Chongqing Tiandi
Wuhan Tiandi and Chongqing Tiandi Wuhan Tiandi Chongqing Tiandi Project Information Project Information (representing leasable & saleable GFA) (representing leasable & saleable GFA) Total GFA 1,580,000 sq.m. Total GFA 2,778,000 sq.m. 1,261,000 sq.m. (Sold & delivered) 628,000 sq.m. (Sold & Completed
Slide 43: Foshan Lingnan Tiandi and Dalian Tiandi
Foshan Lingnan Tiandi and Dalian Tiandi Foshan Lingnan Tiandi Dalian Tiandi Project Information Project Information (representing leasable & saleable GFA) (representing leasable & saleable GFA) Total GFA 1,520,000 sq.m. Total GFA 3,105,000 sq.m. 304,000 sq.m. (sold & 270,000 sq.m. (sold & delivered)
Slide 44: Capital Expenditure (CAPEX)
Capital Expenditure (CAPEX) RMB’bn 2016 2015 Construction Cost 5.1 5.4 % of total CAPEX 73% 53% Land Premium - 0.4 Relocation Cost 1.9 4.3 % of total CAPEX 27% 47% Total CAPEX 7.0 10.1 Total committed and available bank loan facilities as of 31 December 2016: RMB6.6 billion - Construction and work
Slide 45: Core Earnings
Core Earnings Change RMB’mn 2016 2015 % Profit attributable to shareholders of the Company 1,088 788 38% Net increase in fair value of the remaining investment properties (1,176) (2,970) Effect of corresponding deferred tax charges 294 743 Realised fair value gains of investment properties disposed*
Slide 46: Rental and Occupancy Rates Analysis
Rental and Occupancy Rates Analysis Excluding rental & related income from 1, 2 & 3 Corporate Avenue, growth by 26% to RMB1,623 million in 2016 compared to RMB1,286 million in 2015 Occupancy rate Rental & related income Change Project Product Leasable as of RMB’mn % GFA 31 Dec 31 Dec 2016 2015 sq.m.
Slide 47: Major Commercial Property Transactions since 2011
Major Commercial Property Transactions since 2011 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 Ti
Slide 48: Market Information
Market Information Indicator Year China Shanghai Wuhan Chongqing Foshan Dalian 2014 63,614 2,356 1,007 1,427 744 766 GDP (RMB billion) 2015 67,671 2,496 1,091 1,572 800 773 2016 74,413 2,747 1,191 1,756 863 815 2014 1,368 24.26 10.34 29.91 7.4 7.0 Population (million) 2015 1,375 24.15 10.61 30.17 7.
Slide 49: 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% Residential 2014 1,052 9.9 17.7 16.0 11.7 2.2 Transaction Area 2
Slide 50: Recent Government Policies
Recent Government Policies City Date Policies 2016 Wuhan 2-Oct 30% of down-payments for first home buyers ; 50% /70% of down-payments are required for upgraders Shanghai 8-Oct Stricter presales management , launch price be same with last batch 50% of down-payments are required for upgraders to purch