Wharf (Holdings) Ltd. · HKEX:4
Wharf (Holdings) — The Wharf (Holdings) — H1 2021 Earnings Presentation
46 slides from Wharf (Holdings)'s earnings presentation, Aug 10, 2021
Slide 1: Welcomed Cautious Recovery from Pandemic
Welcomed Cautious Recovery from Pandemic The Wharf (Holdings) Limited 1H21 Interim Results 10 Aug 2021 The Wharf (Holdings) Limited – 2021 Interim Results | 1
Slide 2: Highlights
Highlights HK Prop Lux Prop Emerging from Shadow of Pandemic while Long Project Time Profile Increases Development Risk ML DP Strict Price Control Caps Returns & Suggests a Different Risk Profile Impairment Provisions for Non-residential Stock ML IP Luxury Segment Out-performance is Spurring a Tenan
Slide 3: Focus on Premium Property Products
Focus on Premium Property Products Total Business Assets Total Revenue $256.3B $12.3B Invt. & Invt. & Others Others 10% Properties 32% Properties 62% 79% Logistics 11% Logistics 6% Note: Properties incl. Hotels The Wharf (Holdings) Limited – 2021 Interim Results | 3
Slide 4: Financial Highlights
Financial Highlights HKD Million 1H21 1H20 %Chg Group Revenue 12,337 5,551 +122% • Group Revenue +122%; OP +71% Operating Profit 4,301 2,517 +71% • Underlying Net Loss Narrowed by 54% after MLDP Underlying Net (Loss)* (526) (1,132) -54% Provision ($3.7B) Attributable IP Revaluation Surplus / 282 (64
Slide 5: Agenda
Agenda Hong Kong Properties Mainland Development Properties Mainland Investment Properties Hotels Logistics The Wharf (Holdings) Limited – 2021 Interim Results | 5
Slide 6: Hong Kong Properties
Hong Kong Properties The Wharf (Holdings) Limited – 2021 Interim Results | 6
Slide 7: Veteran Developer on The Peak
Veteran Developer on The Peak Peak Portfolio Spanning 577,000 s.f.* • Peak Luxury Segment in Quick Succession ➢ Invested $15.6B in Mansfield Road Sites Acquisition ➢ 5 Hse &1 Apt Sold for Total of $3.4B ➢ 2 Hse Leased for Total Monthly Rent over $2.2M • HK Landbank* Totalled 3.0M s.f. *Attributable
Slide 8: Mount Nicholson
Mount Nicholson 1H21 Residence Car Park Sales $490M $418M • Site Bought in 2010 Units Sold 1 Apartment 43 CP • First Sale in 2016 ASP $115,000 psf $9.7M /CP • 19 Hse & 48 Apts in Total • 1 Apt & 43 CP Sold in 1H21 (to be Booked in 2H21) • 2 Hse & 10 Apts Remain Unsold in 2021 • IRR ??% The Wharf (Ho
Slide 9: 77/79 Peak Road
77/79 Peak Road 1H21 Contracted Sales Sales $3.0B • Redevelopment Started in 2012 Units Sold 5 Houses • First Sale in 2021 ASP Range $80,900-$92,100 psf ➢ 5 Hse Sold ➢ 4 Hse Booked in 1H21 ➢ 5 Hse in 2H21 th The Wharf (Holdings) Limited – 2021 Interim Results | 9
Slide 10: 11 Plantation Road
11 Plantation Road • Breathtaking 270-degree Panorama View • Comprises 7 Hse with 2 Hse Leased in Mar ➢ Hse 1 (10,804 s.f.) Leased for $1.35M / mth ($125 psf) ➢ Hse 3 (7,704 s.f.) Leased for $0.88M /mth ($114 psf) The Wharf (Holdings) Limited – 2021 Interim Results | 10
Slide 11: Agenda
Agenda Hong Kong Properties Mainland Development Properties Mainland Investment Properties Hotels Logistics The Wharf (Holdings) Limited – 2021 Interim Results | 11
Slide 12: Mainland Development Properties
Mainland Development Properties The Wharf (Holdings) Limited – 2021 Interim Results | 12
Slide 13: MLDP – ASP Control Caps Returns
MLDP – ASP Control Caps Returns 1H21 Contracted Sales* • Strict ASP Control on Residential Increases Development Sales RMB 5.7B -29% Risk & Renders Some Projects No Longer Profitable GFA 214,400 s.m. -11% ASP RMB 24,900 psm -25% • Slow-moving Non-residential Stock Piles Up due to Oversupply 2021 Sal
Slide 14: Emphasis on Quality Products
Emphasis on Quality Products 1H21 Operating Matrix* Revenue $6,995M +64% • ASP Controls Suppressed Profitability • Net Order Book RMB 27.3B or 0.9M s.m. Operating Profit $883M -25% • 2021 Target Completion 1.2M s.m. Operating Margin 13% -14 ppts • Landbank: 2.6M s.m. Completed GFA 235,200 s.m. +76%
Slide 15: Agenda
Agenda Hong Kong Properties Mainland Development Properties Mainland Investment Properties Hotels Logistics The Wharf (Holdings) Limited – 2021 Interim Results | 15
Slide 16: Mainland Investment Properties
Mainland Investment Properties The Wharf (Holdings) Limited – 2021 Interim Results | 16
Slide 17: MLIP – Luxury-Driven
MLIP – Luxury-Driven Mainland IP Revenue (HKD billion) 1H 2H • Retail Sales Growth Driven by Luxury Segment 4.2 3.9 ➢ Oversupply in Retail Space Spurs Chase for Top Tenants 3.4 2.6 1.9 2.3 (+45%) • Strong Double-digit Revenue Growth at IFS Malls 1.8 1.4 ➢ Right Cities, Locations & Critical Mass 2.7
Slide 18: CSIFS – Critical Mass
CSIFS – Critical Mass • Trendsetter for Entertainment, Dining, Lifestyle, Retail & Culture in Central China • Retail Revenue +68% (+72% vs 1H19); Turnover Rent Portion 47% • Highly Sought-after by Best-of-class Retailers ➢ Nearly Full Occupancy of 99% • Occupancy of IP Office Climbed to 85% The Whar
Slide 19: CDIFS – Outstanding Market Position
CDIFS – Outstanding Market Position • Ranks Regularly Among Top 10 for Sales • Retail Revenue +57% (+45% vs 1H19); Turnover Rent Portion 47% • Double-digit Retail Rental Reversion • Office Rental Rate Among the Highest in City ➢ Occupancy Grew Notably to 86% The Wharf (Holdings) Limited – 2021 Inter
Slide 20: Agenda
Agenda Hong Kong Properties Mainland Development Properties Mainland Investment Properties Hotels Logistics The Wharf (Holdings) Limited – 2021 Interim Results | 20
Slide 21: Hotels
Hotels The Wharf (Holdings) Limited – 2021 Interim Results | 21
Slide 22: Wharf Hotels – Domestic-Driven
Wharf Hotels – Domestic-Driven • HK Hotel Sector Still Suffering from Closed Borders Since 2015 Since 1970s • Proactive Marketing Initiatives to Drive Business Award-winning, ➢ Promotions & Staycations Targeting Locals Business Travel Brand Contemporary Chic • Preparing for Border Control Easing 12
Slide 23: Niccolo – Award-winning Luxury Hospitality
Niccolo – Award-winning Luxury Hospitality Niccolo Suzhou | Opening: Apr 2021 Niccolo Changsha | Opening: Oct 2018 Niccolo Chengdu | Opening: Apr 2015 Niccolo Chongqing | Opening: Sep 2017 The Murray, Hong Kong | Opening: Jan 2018 The Wharf (Holdings) Limited – 2021 Interim Results | 23
Slide 24: Niccolo – Outperform the Market
Niccolo – Outperform the Market RGI* vs. Competitive Set • RGI Consistently at Top of Market Chengdu Chongqing Changsha • Occupancy Picked Up Quickly After Muted CNY RGI* 198 160 181 • New COVID Scare Clouds 2H21 Outlook Rank 1 2 1 • Newly Opened Niccolo Suzhou (Apr 2021): ➢ Fastest Ramp-Up Among 5
Slide 25: Agenda
Agenda Hong Kong Properties Mainland Development Properties Mainland Investment Properties Hotels Logistics The Wharf (Holdings) Limited – 2021 Interim Results | 25
Slide 26: Logistics
Logistics The Wharf (Holdings) Limited – 2021 Interim Results | 26
Slide 27: Logistics – Coping with Challenges
Logistics – Coping with Challenges Modern Terminals (1H21) Revenue $1,358M (+14%) Operating Profit $278M (+46%) Throughput (million TEUs) • Growth Amid Strengthening ML Economy 1H21 vs 1H20 vs 1H19 ➢ MTL HK Throughput +5% HK 2.5 +5% Flat DCB# 0.8* +37% +21% • Key Challenges Ahead: SCT# 3.0* +18% +4%
Slide 28: Financial Management
Financial Management The Wharf (Holdings) Limited – 2021 Interim Results | 28
Slide 29: Prudent Financial Management
Prudent Financial Management Debt Maturity (HKD billion) (As at 30 Jun 2021) Total: $61.6B • Net Debt: $41.6B 28.3 • Gearing: 24.5% 19.1 • Average Interest Cost: 1.8% • Interest Cover: 9.1x 5.0 4.2 2.9 2.1 • Floating Rate Debt: 91% Jul-Jun 2021/22 2022/23 2023/24 2024/25 2025/26 Jul 2026 & After The
Slide 30: Outlook
Outlook The Wharf (Holdings) Limited – 2021 Interim Results | 30
Slide 31: Outlook
Outlook • HK Prop: Luxury Residential’s Characteristic of Long Project Period Depresses IRR • ML DP: Strict Price Control Renders Some Projects Unprofitable, Oversupply in Non-residential Stock • ML IP: Intensifying Competition to Chase for Out-performing Luxury Tenants • Logistics: HK Port Potentia
Slide 32: Sustainability
Sustainability The Wharf (Holdings) Limited – 2021 Interim Results | 32
Slide 33: Performance Highlights
Performance Highlights • Sustainability Report 2020 following GRI Standards (Core Option) and referencing SASB Standards • Constituent member of Hang Seng Corporate Sustainability Index and Hang Seng ESG 50 Index • 10 Years+ Caring Company Logo, CSR Index Plus Mark and Social Capital Builder Logo Aw
Slide 34: Data at a Glimpse
Data at a Glimpse LEED Platinum Changsha IFS and Chengdu IFS Municipal water consumption* 5,663 talents LEED Gold Reduced by 5% Wuxi IFS and Shanghai Wheelock Square EarthCheck Silver certification General Refuse to Landfill* Training to employees Niccolo Chengdu, Niccolo Chongqing and Reduced by 23
Slide 35: Appendix
Appendix The Wharf (Holdings) Limited – 2021 Interim Results | 35
Slide 36: 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 259,000 No. 9,11 Mansfield Road (50%-JV) 72,500 Sales Mount Nicholson (50%-JV) 30,500 77/79 Peak Road^ 21,200^ Lease Chelsea Court 43,000 Strawberry Hill
Slide 37: Mainland Contracted Sales Breakdown by City
Mainland Contracted Sales Breakdown by City Region City Contracted Sales (%) GFA Sold (%) Eastern China Shanghai 0.9% 0.3% Suzhou 32.8% 34.3% Wuxi 0.5% 0.6% Hangzhou 24.0% 10.0% Eastern China Sub-Total 58.2% 45.2% Western China Chengdu 1.4% 1.5% Chongqing 22.5% 30.6% Western China Sub-Total 23.9% 32
Slide 38: Mainland Key Projects on Sales in 1H21
Mainland Key Projects on Sales in 1H21 Attributable Proceeds Attributable GFA Average Price Projects City (RMB M) sold (s.m) (RMB psm) Ownership International Community 國際社區 Chongqing 1,145 57,612 19,900 40% Parc Grande 天薈 Hangzhou 1,032 18,390 55,900 50% Xiangcheng Yuan He Street Lot 77 天逸 Suzhou 6
Slide 39: Mainland DP Land Bank Breakdown by City
Mainland DP Land Bank Breakdown by City Region City GFA million (s.m) % Total* Eastern China Shanghai 0.02 1% Suzhou 0.54 20% Hangzhou 0.47 18% Eastern China Sub-Total 1.03 39% Western China Chengdu 0.67 25% Chongqing 0.16 6% Western China Sub-Total 0.83 31% Southern China Foshan & Guangzhou 0.22 9%
Slide 40: Mainland Key Projects Completion
Mainland Key Projects Completion Projects Attributable GFA (s.m) Key Completion in 1H21 Suzhou Yangcheng Lake Lot 27 蘇州天曦 107,300 Suzhou Villa One (Huayuan Road Lot 25) 蘇州天灝逅灣花園 48,600 Foshan Glory Garden 佛山樾園 33,200 Projected Key Completion in 2H21 Suzhou Villa One (Huayuan Road Lot 78) 蘇州天灝逅灣雅苑 14
Slide 41: Mainland New Projects for Sales in 2H21
Mainland New Projects for Sales in 2H21 Projects City Ownership The Legend 久尋花園 Suzhou 100% Parc Royale – Phase 2 天璽二期 Hangzhou 100% Imperial Park 天御 Hangzhou 100% The Wharf (Holdings) Limited – 2021 Interim Results | 41
Slide 42: 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 43: 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 Polo
Slide 44: Overview of Application of Funds
Overview of Application of Funds Major Capital & Development Expenditure 1H21 2H21 HKD (Actual) (Projected) Hong Kong Properties 16.1B 2.7B Mainland China IP 0.2B 0.2B Mainland China DP 2.8B 4.5B Others 0.1B 1.1B Total 19.2B 8.5B The Wharf (Holdings) Limited – 2021 Interim Results | 44
Slide 45: Thank you
Welcomed Cautious Recovery from Pandemic Thank you The Wharf (Holdings) Limited – 2021 Interim Results | 45
Slide 46: 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