Wharf (holdings) Ltd. · HKEX:4
Wharf (holdings) — The Wharf (Holdings) — FY2022 Earnings Presentation
40 slides from Wharf (holdings)'s earnings presentation, Mar 9, 2023
Slide 1: 2022 Final Results
The Wharf (Holdings) Limited 2022 Final Results 9 Mar 2023 Pandemic Woes Caused $10 Billion NAV Erosion
Slide 2: Overview
Overview The Wharf (Holdings) Limited – 2022 Final Results 2
Slide 3: Results Highlights
Results Highlights • All Segments in Hong Kong & the Mainland Slowed Down • Total Property Sales Decreased by 74% to $6B • Impairment Provisions Made Against Unsold Stock Totaled Nearly $6B • Rental Income Fell by 11% • Net Asset Value Declined by $10B or 6% to $152B ($49.6/shr) The Wharf (Holdings)
Slide 4: Assets Focus – Premium Property
Assets Focus – Premium Property Total Assets Group Revenue Operating Profit 2022: $221.7B 2022: $18.1B 2022: $6.6B HK Prop 24% HK Prop - HK Prop - ML Prop 40% ML Prop 68% ML Prop 63% Hotels 1% Hotels 2% Hotels - Logistics 6% Logistics 17% Logistics 12% Inv. & Others 29% Inv. & Others 13% Inv. & Othe
Slide 5: Financial Highlights
Financial Highlights HKD Million 2022 2021 %Chg. • Mainland & HK Slowdown Dented FY22 Results Group Revenue 18,064 22,378 -19% • Group Revenue: -$4.3B/19% to $18.1B Operating Profit 6,603 8,536 -23% - HKDP: -$3.9B (After a Bumper 2021) Underlying Net Profit* 303 3,646 -92% Attributable IP Revaluatio
Slide 6: Strong Balance Sheet in Volatile Market
Strong Balance Sheet in Volatile Market HKD Million 31 Dec 22 31 Dec 21 %Chg. Total Assets 221,745 253,700 -13% • Net Debt $5.3B (YOY ↓$7.9B) Investment Properties 69,222 76,525 -10% - Gearing Reduced to 3.4% Other Long Term Investments 48,924 52,902 -8% - Net Debt excluding MTL $2.2B, 1.5% of NAV N
Slide 7: Prudent Financial Management
Prudent Financial Management Total Debt (HKD Billion) • Prepaid Debt to Reduce Exposure 24.5% 7.9% 6.7% 3.4% Gearing 61.6 • In 18 Months Since June 2021: 36.7 29.3 19.9 Total Debt - Gross Debt Reduced by $42B or 68% Jun-21 Dec-21 Jun-22 Dec-22 - Net Debt Reduced by $36B or 87% Debt Maturity (HKD Bil
Slide 8: Agenda
Agenda Hong Kong Properties Mainland Development Properties Mainland Investment Properties Hotels Logistics Infrastructure The Wharf (Holdings) Limited – 2022 Final Results 8
Slide 9: Premium Landbank
Premium Landbank Landbank • 2.8M s.f. Landbank (GFA) Kowloon Tong Project (GFA: 0.4M sf) - Peak 0.6M s.f. Rare & Unique Collection Kowloon East Portfolio (GFA: 1.8M sf) • Contracted Sales: $1,025M (-79%) • Recognition: $905M; Net Order Book: $733M Luxury & Exclusive Peak Portfolio (GFA: 0.6M sf*) No
Slide 10: Agenda
Agenda Mainland Development Properties Hong Kong Properties Mainland Investment Properties Hotels Logistics Infrastructure The Wharf (Holdings) Limited – 2022 Final Results 10
Slide 11: Undergoing State-directed Restructuring
Undergoing State-directed Restructuring 2022 Contracted Sales • Ongoing Interruption by COVID on Sales & Construction Sales RMB 4.2B -70% GFA 172,500 s.m. -62% • Weak Sentiment Under Market Illiquidity & High Profile Defaults for Debt-ridden Developers ASP RMB 24,600 psm -15% • Subdued Sales Activit
Slide 12: Risk Management under Weak Market
Risk Management under Weak Market 2022 Operating Matrix • MLDP Revenue -50% YoY Revenue $14,308M -50% - Recognitions mainly from Hangzhou & Suzhou Operating Profit $1,688M -56% • MLDP Landbank: 1.7M s.m; No Addition in 2022 Operating Margin 12% -1 ppt • Net Order Book: RMB 8.5B or 278,200 s.m Comple
Slide 13: Agenda
Agenda Mainland Investment Properties Hong Kong Properties Mainland Development Properties Hotels Logistics Infrastructure The Wharf (Holdings) Limited – 2022 Final Results 13
Slide 14: First Reversal in Recent Years
First Reversal in Recent Years Mainland IP Revenue (HKD Billion) 1H 2H 2022 2.6 2.2 4.8 • Business Hurt by COVID Lockdown & Weak Economy 2021 2.7 2.7 5.4 • Reversal of MLIP Revenue Amplified in 2H 2020 1.9 2.3 4.2 • Retail: More Cautious & Savvier Shoppers 2019 1.9 2.0 3.9 • Office: Weak Demand & Ov
Slide 15: IFS – Proven Track Record in Productivity
IFS – Proven Track Record in Productivity Luxury Brands Debut/ Expansion: CDIFS • Top Productivity Attracts Top-tier Debut Brands • Double-digit Positive Retail Rental Reversion • Sales & Turnover Rent Dragged by Lockdown Van Cleef & Arpels Graff • Heightened Pressure in Office Occupancy & Rent CSIF
Slide 16: Agenda
Agenda Hotels Hong Kong Properties Mainland Development Properties Mainland Investment Properties Logistics Infrastructure The Wharf (Holdings) Limited – 2022 Final Results 16
Slide 17: Travel Restrictions Phasing Out
Travel Restrictions Phasing Out • 2022: Lockdowns & Restricted Mobility Resulted in a Loss • 2023: ML Domestic Travel Gaining Pace Since 1Q23; Flight Since 2015 Since 1970s Capacity & Manpower Shortage as Challenges Award-winning, Business Travel Brand • Niccolo: Continued to Outperform Comp. Set in
Slide 18: Agenda
Agenda Logistics Infrastructure Hong Kong Properties Mainland Development Properties Mainland Investment Properties Hotels The Wharf (Holdings) Limited – 2022 Final Results 18
Slide 19: Global Demand Softened
Global Demand Softened Modern Terminals (2022) Revenue Operating Profit $2,955M (-1%) $754M (-2%) • Demand Weakened Starting in Mid-year Due to Inflation Throughput* (million TEUs) 2022 vs 2021 vs 2019 & Economic Slowdown HK 4.4 -11% -12% DCB# 2.0 +19% +54% • HK: Cross-border Gate Volume Hurt by Bor
Slide 20: Project Pipeline
Project Pipeline The Wharf (Holdings) Limited – 2022 Final Results 20
Slide 21: Project Pipeline
Project Pipeline HK ML • 1 Plantation Road • CSIFS Tower 2 • Kowloon Tong Site - Prestigious High-rise Apt • Kai Tai Site (30%-JV) - Park Hyatt Hotel • Kowloon Godown Redevelopment - Another Hotel to be Announced The Wharf (Holdings) Limited – 2022 Final Results 21
Slide 22: Outlook
Outlook The Wharf (Holdings) Limited – 2022 Final Results 22
Slide 23: Outlook
Outlook • Negative: Inflation, Interest Rate Hikes & Geopolitical Tension - Tipping 2023 to Potential Global Recession • Positive: ML Exit from “Zero-COVID” Policy & Gov’t Strengthened Policy Support - Gradual Recovery in Economy, Consumer Confidence & Spending • Progressive Return to a Post-COVID N
Slide 24: Sustainability
Sustainability The Wharf (Holdings) Limited – 2022 Final Results 24
Slide 25: Recognised Sustainability Achievements
Recognised Sustainability Achievements Recognitions Certifications LEED Platinum: Member of Hang Seng Corporate Chengdu IFS Sustainability Index Series Changsha IFS Shanghai Wheelock Square Upgraded to “AA+” Sustainability Rating LEED Gold: Wuxi IFS Gold: CSR Index Plus Mark Niccolo Chengdu Marco Po
Slide 26: Environment: Building a Sustainable Future
Environment: Building a Sustainable Future 2030 Targets Sustainable Finance GHG Emission (Scope 1 & 2) Intensity MLIP Electricity Intensity Sustainability-linked loan Green Loan Green Loan ↓25%* ↓20%* HK$ 2B (2018) HK$ 2.1B (2021) RMB 1B (2020) RMB 580M (2021) Waste Management Water Management KPI:
Slide 27: Social: Business-in-Community & Wellbeing
Social: Business-in-Community & Wellbeing Supporting HK’s COVID-19 Relief Project WeCan Employee Wellbeing Wharf Emergency Relief Fund • Empowering Students for Pursuing Future Studies or • Training & Development: Careers Total 140,000+ Hours of Training Provided in • The Wharf Group* Named 2nd Top
Slide 28: Corporate Governance
Corporate Governance Anti-corruption Total No. of Hours of Anti-corruption Training in 2022: 2,100+ Hours For Board Members, Directors & Employees Board Engagement & Diversity The Group’s Sustainability Risks and Opportunities are Discussed Strive for Full Compliance on Board Diversity as a Listed I
Slide 29: Appendix
Appendix The Wharf (Holdings) Limited – 2022 Final Results 29
Slide 30: Summary of HK Properties
Summary of HK Properties 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) 21,300 77/79 Peak Road 11,000 Lease Chelsea Court 43,000 Strawberry Hill 1
Slide 31: Mainland Contracted Sales Breakdown by City
Mainland Contracted Sales Breakdown by City Region City Contracted Sales (%) GFA Sold (%) Eastern China Hangzhou 39.8% 24.0% Suzhou 33.4% 39.3% Shanghai 4.0% 1.4% Wuxi 0.3% 2.7% Eastern China Sub-Total 77.5% 67.4% Southern China Foshan & Guangzhou 11.9% 20.8% Northern & Central China Changsha 5.7% 4
Slide 32: 1 Project Launched in 2022
1 Project Launched in 2022 Attributable Proceeds Attributable Average Price Projects City (RMB M) GFA sold (s.m) (RMB psm) Ownership CSIFS Apartments 長沙國金中心公寓 Changsha 256 7,900 32,300 100% The Wharf (Holdings) Limited – 2022 Final Results 32
Slide 33: Mainland Key Projects on Sales in 2022
Mainland Key Projects on Sales in 2022 Attributable Proceeds Attributable Average Price Projects City (RMB M) GFA sold (s.m) (RMB psm) Ownership Parc Regal 杭州天璽二期 Hangzhou 1,076 20,100 50,600 100% Xiangcheng Yuan He Street Lot 77 蘇州天逸翠樾庭 Suzhou 560 24,000 23,400 100% Luxurious Mountain View 杭州雍景山 Ha
Slide 34: Mainland DP Land Bank Breakdown by City
Mainland DP Land Bank Breakdown by City Region City GFA million (s.m) % Total Western China Chengdu 0.60 36% Chongqing 0.03 2% Western China Sub-Total 0.63 38% Eastern China Suzhou 0.30 18% Hangzhou 0.19 11% Eastern China Sub-Total 0.49 29% Northern & Central China Changsha 0.42 25% Beijing 0.04 2%
Slide 35: Mainland Key Projects Completion
Mainland Key Projects Completion Projects Attributable GFA (s.m) Key Completion in 2022 Suzhou Villa One (Huayuan Road Lot 78) 蘇州天灝逅灣雅苑 101,400 Hangzhou Luxurious Mountain View 杭州雍景山 77,700 Suzhou Yangcheng Lake Lot 27 蘇州天曦 75,600 Hangzhou Parc Grande 杭州天薈 61,900 Foshan Rosy Mansion 佛山悅府 50,100 Fosh
Slide 36: Mainland IP – Different Series
Mainland IP – Different Series Times Square IFS & Times Outlets Project Total GFA * Year of Total GFA * Year of Property Nature (s.m.) Completion Property Project 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 Chongqing
Slide 37: Wharf Hotels Management
Wharf Hotels Management Niccolo (Since 2015) Hong Kong Mainland − The Murray, Hong Kong, a Niccolo Hotel* − Niccolo Chengdu − Niccolo Changsha − Niccolo Chongqing# − Niccolo Suzhou* Marco Polo (Since 1970s) Hong Kong Mainland+ Philippines − Marco Polo Hongkong Hotel* − Marco Polo Parkside, Beijing^
Slide 38: Overview of Application of Funds
Overview of Application of Funds Major Capital & Development Expenditure 2022 2023 HKD (Actual) (Projected) Hong Kong Properties 4.2B 4.5B Mainland China IP 0.1B 0.2B Mainland China DP 3.4B 2.9B Others 0.2B 2.9B Total 7.9B 10.5B The Wharf (Holdings) Limited – 2022 Final Results 38
Slide 39: Thank You
Thank You Pandemic Woes Caused $10 Billion NAV Erosion The Wharf (Holdings) Limited – 2022 Final Results 39
Slide 40: 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