Wharf (holdings) Ltd. · HKEX:4
Wharf (holdings) — The Wharf (Holdings) — FY2021 Earnings Presentation
43 slides from Wharf (holdings)'s earnings presentation, Mar 9, 2022
Slide 1: Recovery Fragility Exposed With COVID Waves
Recovery Fragility Exposed With COVID Waves The Wharf (Holdings) Limited 2021 Final Results 9 Mar 2022
Slide 2: Agenda: Overview
Agenda Overview The Wharf (Holdings) Limited – 2021 Final Results
Slide 3: Highlights
Highlights HK Prop ▪ Luxury DP Slowed Underlining the Long Project Time Risk Profile ▪ Post-land Acquisition Sales Price Control & Policies, Coupled w/ Noticeable MLDP Over-supply of Non-resi- Prop. Point to Impairment Provisions MLIP ▪ Q4 2021 Slowdown Alerting Logistics ▪ Uplift Due to Well-report
Slide 4: Premium Quality Property Company
Premium Quality Property Company By Business By Location Total Assets (Ex-Cash) 70% 7% 23% 53% 41% 6% $230.1B Properties Logistics Invt. & Others Mainland China HK Others Total Revenue 77% 13% 10% 65% 34% 1% $22.4B Note: Properties incl. Hotels 4 The Wharf (Holdings) Limited – 2021 Final Results
Slide 5: Financial Highlights
Financial Highlights HKD Million 2021 2020 YoY Chg. Group Revenue 22,378 20,997 +7% Operating Profit 8,536 11,104 -23% ▪ Group Revenue +7%; UNP +7% Underlying Net Profit (UNP)* 3,646 3,417 +7% ▪ FY DPS $0.40 Profit Attributable to Equity Shareholders 6,019 3,864 +56% Earnings Per Share (HK$) - Attri
Slide 6: Sound Balance Sheet
Sound Balance Sheet HKD Million 31 Dec 21 31 Dec 20 YoY Chg. ▪ Total Equity $166B (+2%) Total Assets 253,700 254,095 Flat Investment Properties 76,525 78,151 -2% ▪ Net Debt Halved to $13B; Gearing 7.9% Other Long Term Investments 52,902 66,875 -21% ▪ Listed Equities MV $44B* Net Debt 13,186 25,506 -
Slide 7: Agenda: Hong Kong Properties
Agenda Mainland Mainland Development Investment Properties Properties Hong Kong Properties Hotels Logistics The Wharf (Holdings) Limited – 2021 Final Results
Slide 8: Premium Landbank
Premium Landbank ▪ Peak Portfolio: – Mansfield Road Sites Added for $15.6B Mount Nicholson – Contracted Sales $4.9B ▪ Landbank (GFA) 77/79 Peak Road – Total 3.0M s.f. – Peak 0.6M s.f. 11 Plantation Road 8 Note: On Attributable Basis The Wharf (Holdings) Limited – 2021 Final Results
Slide 9: 2021 Contracted Sales
2021 Contracted Sales 50%-owned Mount Nicholson 77/79 Peak Road ▪ Total Sales $1.1B* ▪ Total Sales $3.9B ▪ Project Started in 2010 ▪ Project Started in 2012 9 *On Attributable Basis The Wharf (Holdings) Limited – 2021 Final Results
Slide 10: Agenda: Mainland Development Properties
Agenda Mainland Investment Hotels Properties Mainland Development Properties Hong Kong Logistics Properties The Wharf (Holdings) Limited – 2021 Final Results
Slide 11: Increased Investment Risk
Increased Investment Risk 2021 Contracted Sales* Sales RMB 13.9B -20% GFA 452,000 s.m. -18% ▪ Price Control & Other Policies Increased Investment Risk ASP RMB 29,000 psm -6% ▪ Resi-: ASP Control & Weak Sentiment amid Turbulent Mkt ▪ Non-resi-: Slow Sales Tempo in Oversupplied Mkt 2022 Sales Target*
Slide 12: Investment Upside Depressed
Investment Upside Depressed ▪ Investment Upside Depressed by ASP Controls 2021 Operating Matrix* ▪ Net Order Book RMB 16.7B or 0.5M s.m Revenue $28,875M +64% ▪ 2022 Target Completion 0.5M s.m Operating Profit $2,913M -62% ▪ MLDP Landbank: 2.1M s.m Operating Margin 10% -33 ppts – Marked to Market, Bu
Slide 13: Agenda: Mainland Investment Properties
Agenda Hotels Logistics Mainland Investment Properties Mainland Hong Kong Development Properties Properties The Wharf (Holdings) Limited – 2021 Final Results
Slide 14: Competitive Market
Competitive Market Mainland IP Revenue (HKD Billion) ▪ 20 Long Years From Nascent Base To Bear Fruit ▪ Market Has Become Much More Competitive Meanwhile 2021 2.7 2.7 5.4 ▪ RMB Interest Cost & Tax Substantially Are Significant 2020 1.9 2.3 4.2 ▪ 20-30 Years Remain on Majority of Ground Leases 2019 1.
Slide 15: CSIFS – Mixed Performance
CSIFS – Mixed Performance ▪ Top Mall in Hunan for Luxury & Latest Trends ▪ Office Demand is Weak ▪ Tower 2 to Complete in Phases from 2023 – Park Hyatt Plus One More Hotel – High-rise Apt but Soft ASP ▪ Yr-end Occupancy: Retail 99%; Office 74% 15 The Wharf (Holdings) Limited – 2021 Final Results
Slide 16: CDIFS – Productivity Performance
CDIFS – Productivity Performance ▪ Consistently Among Top 10 for Sales Nationwide ▪ Double-digit Retail Rental Reversion ▪ Office Rental Among City’s Highest But Flat ▪ Yr-end Occupancy: Retail 95%; Office 87% 16 The Wharf (Holdings) Limited – 2021 Final Results
Slide 17: Agenda: Hotels
Agenda Hong Kong Logistics Properties Hotels Mainland Mainland Development Investment Properties Properties The Wharf (Holdings) Limited – 2021 Final Results
Slide 18: Sector Still Devastated
Sector Still Devastated ▪ HK & Philippines Most Severely Affected ▪ Most Reported Deep Losses, Including Full/Partial Closure Since 2015 Since 1970s ▪ Mainland China Recovery Still Fragile Award-winning, Business Travel Brand Contemporary Chic ▪ Niccolo Suzhou Opened in April 11* Owned/Managed ▪ Omi
Slide 19: Niccolo – Market Leading
Niccolo – Market Leading RGI* vs. Competitive Set ▪ Consistent RGI Outperformance vs Comp. Set Chengdu Chongqing Changsha ▪ Occupancy Hit by Travel Restrictions RGI* 199 155 183 ▪ Niccolo Suzhou Ramped Up Quickly but Stalled by Rank 1 2 1 COVID *RGI (Revenue Generating Index) is an Index of Revenue
Slide 20: Agenda: Logistics
Agenda Mainland Hong Kong Development Properties Properties Logistics Mainland Investment Hotels Properties The Wharf (Holdings) Limited – 2021 Final Results
Slide 21: Amid Challenges & Opportunities
Amid Challenges & Opportunities Modern Terminals (2021) Revenue Operating Profit $2,997M (+17%) $766M (+57%) Throughput (million TEUs) 2021 vs 2020 vs 2019 ▪ Supply Chain Disruptions Created Opportunities HK 4.9 Flat Flat ▪ Limited Yard Space Restricted Handling Capacity DCB# 1.7 +26% +34% SCT# 5.7
Slide 22: Agenda: Financial Management
Agenda Financial Management The Wharf (Holdings) Limited – 2021 Final Results
Slide 23: Prudent Financial Management
Prudent Financial Management Debt Maturity (HKD Billion) ▪ Net Debt: $13.2B (YoY $12.3B Lower) Total: $36.7B (As at 31 Dec 21) ▪ Total Equity: $166.4B 2022 3.7 ▪ Gearing: 7.9% (Dec 20: 15.6%) 2023 8.3 ▪ Average Interest Cost: 1.8% 2024 10.3 2025 3.5 ▪ Interest Cover: 9.8x 2026 8.9 ▪ Floating Rate De
Slide 24: Agenda: Coming Attractions
Agenda Coming Attractions The Wharf (Holdings) Limited – 2021 Final Results
Slide 25: Coming Attractions
Coming Attractions ▪ Peak Properties HK Prop ▪ Kowloon Tong Site ▪ Kai Tak Site (30%-JV) ▪ CSIFS Tower 2: Phased Completion from 2023 MLIP – Prestigious High-rise Apt – Park Hyatt Plus Another 5-star Hotel to be Announced 25 The Wharf (Holdings) Limited – 2021 Final Results
Slide 26: Agenda: Outlook
Agenda Outlook The Wharf (Holdings) Limited – 2021 Final Results
Slide 27: Challenging Time Continues
Challenging Time Continues Macro ▪ Macro Policy & Geopolitical Outlook Intensify Business Vulnerability ▪ Outlook for Local Market Based on a Consistent Gov’t Land Policy is HK Prop Reasonably Balanced Minimising Volatility MLDP ▪ Strict Price Control & Other Policies Increased Investment Risk ▪ Dem
Slide 28: Agenda: Sustainability
Agenda Sustainability The Wharf (Holdings) Limited – 2021 Final Results
Slide 29: Supporting HK's COVID-19 Relief
Supporting HK’s COVID-19 Relief Wharf Emergency Relief Fund Donation on 31 Jan 22: Wharf Emergency Relief Fund (Source: Ming Pao) Additional HK$5M to The Community Chest Rainbow Fund Instant Subsidies to Job Loss/ No-pay due to 5th Wave Additional HK$5M to Students in 82 Project WeCan Schools Kowloo
Slide 30: Highlights
Highlights ▪ Apart from the Green Loans Associated with CDIFS & CSIFS in 2019 & 2020 Respectively, the Group Raised its First Sustainability-linked Loan of HK$2,100 Million. ▪ Hang Seng Corporate Sustainability Index Series Member 2021-2022 ▪ HSI ESG Rating of AA (Top 10% ESG Performers Among Indust
Slide 31: Highlights
Highlights ▪ Flagship Business-in-Community Initiative Project WeCan is Supported by 72 Partner Organisations, has Benefitted 80,000 Students of 82 WeCan Partner Schools ▪ Environmental Achievement is Recognised: – LEED Certification – Platinum: Changsha IFS & Chengdu IFS – Gold: Shanghai Wheelock S
Slide 32: Agenda: Appendix
Agenda Appendix The Wharf (Holdings) Limited – 2021 Final Results
Slide 33: 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 Planning No. 9,11 Mansfield Road (50%-JV) 72,500 Sales Mount Nicholson (50%-JV) 28,300 77/79 Peak Road^ 11,000^ Lease Chelsea Court 43,000 Strawb
Slide 34: Mainland Contracted Sales Breakdown by City
Mainland Contracted Sales Breakdown by City Region City Contracted Sales (%) GFA Sold (%) Eastern China Shanghai 5.5% 2.1% Suzhou 23.0% 26.7% Wuxi 0.4% 1.0% Hangzhou 46.6% 33.8% Eastern China Sub-Total 75.5% 63.6% Western China Chengdu 4.4% 6.8% Chongqing 9.8% 15.5% Western China Sub-Total 14.2% 22.
Slide 35: Projects Launched in 2021
3 Projects Launched in 2021 Attributable Proceeds Attributable Average Price Projects City (RMB M) GFA sold (s.m) (RMB psm) Ownership Park Royale – Phase 2 杭州天璽二期 Hangzhou 2,903 49,950 58,100 100% Imperial Park 杭州御尚華庭 Hangzhou 1,043 21,923 47,600 100% The Legend 蘇州久尋花園 Suzhou 460 14,935 30,800 100%
Slide 36: Mainland Key Projects on Sales in 2021
Mainland Key Projects on Sales in 2021 Attributable Proceeds Attributable Average Price Projects City (RMB M) GFA sold (s.m) (RMB psm) Ownership Park Royale – Phase 2 杭州天璽二期 Hangzhou 2,903 49,950 58,100 100% International Community 重慶國際社區 Chongqing 1,200 59,856 19,500 40% Xiangcheng Yuan He Street L
Slide 37: Mainland DP Land Bank Breakdown by City
Mainland DP Land Bank Breakdown by City Region City GFA million (s.m) % Total Eastern China Suzhou 0.46 22% Hangzhou 0.36 17% Eastern China Sub-Total 0.82 39% Western China Chengdu 0.62 29% Chongqing 0.04 2% Western China Sub-Total 0.66 31% Southern China Foshan & Guangzhou 0.16 8% Others Beijing 0.
Slide 38: Mainland Key Projects Completion
Mainland Key Projects Completion Projects Attributable GFA (s.m) Key Completion in 2021 Suzhou Yangcheng Lake Lot 27 蘇州天曦 182,900 Chongqing International Community 重慶國際社區 119,000 Suzhou Xiangcheng Yuan He Street Lot 77 蘇州天逸 101,700 Hangzhou Guiyu Chaoyang 杭州桂語朝陽 98,000 Beijing West Manor 北京西城天鑄 79,9
Slide 39: Mainland IP – Different Series
Mainland IP – Different Series Times Square IFS & Times Outlets Total GFA * Year of Total GFA * Year of Property Project 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 Dalian**
Slide 40: Wharf Hotels Management
Wharf Hotels Management Niccolo (Since 2015) Hong Kong Mainland − The Murray, Hong Kong, a Niccolo − Niccolo Chengdu Hotel^ − Niccolo Changsha − Niccolo Chongqing# − Niccolo Suzhou (Opened on 1 Apr 21)^ Marco Polo (Since 1970s) Hong Kong Mainland+ Philippines − Marco Polo Hongkong Hotel^ − Marco Pol
Slide 41: Overview of Application of Funds
Overview of Application of Funds Major Capital & Development Expenditure 2021 2022 HKD (Actual) (Projected) Hong Kong Properties 16.7B 3.9B Mainland China IP 0.4B 0.3B Mainland China DP 5.9B 5.5B Others 0.1B 1.1B Total 23.1B 10.8B 41 The Wharf (Holdings) Limited – 2021 Final Results
Slide 42: Thank you
Recovery Fragility Exposed With COVID Waves Thank you
Slide 43: 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