Hysan Development Co., Ltd. · HKEX:14
Hysan Development — H1 2019 Earnings Presentation
30 slides from Hysan Development's earnings presentation, Aug 13, 2019
Slide 1: Hysan Development 2019 Interim Results Press Conference
Hysan Development 2019 Interim Results Press Conference 13 August, 2019
Slide 2: Remarks by Ms. Irene Yun Lien Lee, Chairman
13 August, 2019 | Page 2 Remarks by Ms. Irene Yun Lien LEE Chairman
Slide 3: 2019 Interim Results Highlights
2019 Interim Results Highlights 13 August, 2019 | Page 3 • Turnover and Recurring Underlying Profit increased by 9.1% and 8.9% respectively, taking into account full-period operations of Lee Garden Three • Occupancies of Retail and Office portfolios were 96% and 97% respectively • Volatile market co
Slide 4: Mutual Empowerment: Turnover Contribution
Mutual Empowerment 13 August, 2019 | Page 4 • A dual engine business Turnover Contribution 156 Million (7%) 1,001 Million (48%) 929 Million (45%) Retail Office Residential
Slide 5: Mutual Empowerment (Con't)
Mutual Empowerment (Con’t) 13 August, 2019 | Page 5 • Dynamic relations between office and retail creates positive, self-starting cycle Changing demographics of office tenants o Expanded and diverse retail offerings o Attract more local and multinational companies – enjoy facilities for them and the
Slide 6: Mutual Empowerment
Mutual Empowerment 13 August, 2019 | Page 6 • Two office tenant categories stand out: o Banking and Finance o Co-working / Flex space
Slide 7: Mutual Empowerment (Con't)
Mutual Empowerment (Con’t) 13 August, 2019 | Page 7 • Global financial institutions in Lee Garden Three pivoted our office portfolio to a higher concentration of banking and finance tenants → about 25% of office lettable space o Young families from financial industry interested in children’s lifesty
Slide 8: Mutual Empowerment (Con't)
Mutual Empowerment (Con’t) 13 August, 2019 | Page 8 • Flex space: including Spaces, The Desk, WeWork o For corporate tenants who need flexibility o Popular with start-ups o Transient and diverse workers / consumers o Added wide range of food and beverage with drinking elements o More lifestyle retai
Slide 9: Community Creation
Community Creation 13 August, 2019 | Page 9 • Three aspects of community creation: o Special accent in neigbourhood o Events using spaces not used in the past o Use business technology to create “Smart Community”
Slide 10: Community Creation (Con't)
Community Creation (Con’t) 13 August, 2019 | Page 10 • Diverse neighbourhood with unique accents o Full-building-height mural o Mixture of old and new shops
Slide 11: Community Creation (Con't)
Community Creation (Con’t) 13 August, 2019 | Page 11 • Placemaking in office and retail spaces not used in the past o Art and cultural space at Hysan Place o Other areas to showcase concepts or host activities
Slide 12: Community Creation (Con't)
Community Creation (Con’t) 13 August, 2019 | Page 12 • Use business technology and aim to become ‘Smart Community’ with ‘Smart Mobility’, ‘Smart Living’ and ‘Smart Environment’
Slide 13: Thinking Long Term
Thinking Long Term 13 August, 2019 | Page 13 • Connected to life cycle of working, living, shopping and socialising for all generations • Sustainability Committee formalised and Sustainability Policy refreshed • Continue to integrate environmental, social and governance (ESG) initiatives into core b
Slide 14: Outlook
Outlook 13 August, 2019 | Page 14 • Hong Kong economy expected to face uncertainties in 2H 2019 o Global economic slowdown o Sino-U.S. trade disputes o Recent internal social conflicts to impact Hong Kong’s economy, in terms of investment demand and tourism • Pressure in the short term, but Hysan’s
Slide 15: Presentation by Mr. Roger Hao, Chief Financial Officer
13 August, 2019 | Page 15 Presentation by Mr. Roger HAO Chief Financial Officer
Slide 16: 2019 Interim Results Highlights
2019 Interim Results Highlights 13 August, 2019 | Page 16 30/6/2019 30/6/2018 HK$'M HK$'M % Turnover 2,086 1,912 9.1% Recurring Underlying Profit 1,394 1,280 8.9% Underlying Profit 1,394 1,280 8.9% - Fair value gain on investment properties located in ‧ Hong Kong 1,318 1,695 -22.2% ‧ Shanghai* 45 33
Slide 17: 2019 Interim Performance: By Portfolio
2019 Interim Performance: By Portfolio 13 August, 2019 | Page 17 Turnover (HK$’M) 2500 2000 156 (7%) 149 (5%) 130 (4%) 1500 929 820 868 (45%) (46%) (45%) 1000 962 961 1,001 500 (50%) (50%) (48%) Residential 0 Office 2018 1H 2018 2H 2019 1H Retail
Slide 18: Strong Financial Position
Strong Financial Position 13 August, 2019 | Page 18 Gearing Debt Profile • Total Gross Debt: HK$7,576 million • Fixed Rate Debt: 79.5% of the total gross debt (31 December 2018: HK$6,326 million) (31 Dec 2018: 75.5% of the total gross debt) • Net Debt to Equity: 4.9% • Average Debt Maturity: 5.1 yea
Slide 19: Presentation by Mr. Ricky Lui, Chief Operating Officer
13 August, 2019 | Page 19 Presentation by Mr. Ricky LUI Chief Operating Officer
Slide 20: 1H 2019 Performance: Retail Portfolio
1H 2019 Performance: Retail Portfolio 13 August, 2019 | Page 20 • Retail portfolio turnover was HK$1,001 million, up Retail Portfolio Turnover (HK$’M) 4.1% from 1H 2018 1010 1,001 • Contribution from turnover rent of HK$49 million 1000 990 • Occupancy: 96% as at 30 June 2019 980 • Overall, positive
Slide 21: 1H 2019 Performance: Retail Portfolio
1H 2019 Performance: Retail Portfolio 13 August, 2019 | Page 21 • Hysan’s estimated Retail Sales Growth was Hong Kong Retail Sales around 4%, outperformed the overall Hong Kong Retail Sales drop of 2.6% (affected by drop in Jan-Jun 2019 Type of retail outlet discretionary products) (YoY) Jewellery,
Slide 22: 1H 2019 Performance: Retail Portfolio
1H 2019 Performance: Retail Portfolio 13 August, 2019 | Page 22 Trade Mix Enhancement Opened in 1H 2019 Relocated in 1H 2019 Renovated in 1H 2019 Hysan Place b+ab Area 0264 sen-ryo BAI FUNG BENTO DEMK HEYTEA DIDIER DUBOT n.o.t. x ehonia Lee Garden One Wallen Jewellery - Brunello Cucinelli AMOREPACIF
Slide 23: 1H 2019 Performance: Office Portfolio
1H 2019 Performance: Office Portfolio 13 August, 2019 | Page 23 • Office portfolio turnover increased by 13.3% Office Portfolio Turnover (HK$’M) from 1H 2018 to HK$929 million 940 929 • Occupancy: 97% as at 30 June 2019 920 900 • Positive rental reversion in renewals, rent 880 868 review and new let
Slide 24: 1H 2019 Performance: Office Portfolio
1H 2019 Performance: Office Portfolio 13 August, 2019 | Page 24 • Still a balanced portfolio with different industries represented Office Portfolio Marketing Consumer Products 4% 2% High-end Retailers 5% Banking & Finance 24% Information Technology 7% Semi-Retail 8% Co-Work Professional & Consulting
Slide 25: 1H 2019 Performance: Residential Portfolio
1H 2019 Performance: Residential Portfolio 13 August, 2019 | Page 25 • Residential portfolio turnover increased by 20.0% Residential Portfolio Turnover (HK$’M) from 1H 2018 to HK$156 million 160 156 149 150 • Positive rental reversion on renewals, rent review 140 and new lettings 130 130 120 • Occup
Slide 26: Tai Po Luxury Residential Project
Tai Po Luxury Residential Project 13 August, 2019 | Page 26 • Major statutory submission approved • Site formation and foundation construction on track • Detailed design of core disciplines completed and major tenders issued • Interior design and visual mock-ups construction in good progress
Slide 27: New Retail: Perfect Merger of Online Convenience and Offline Experience
New Retail: Perfect Merger of Online Convenience and Offline Experience 13 August, 2019 | Page 27 • Use advanced technology to develop integrated shopping experience that combines product, membership, marketing and transaction services • For example: o Personalised customer relationship management o
Slide 28: New Retail: Perfect Merger of Online Convenience and Offline Experience (Con't)
New Retail: Perfect Merger of Online Convenience and Offline Experience (Con’t) 13 August, 2019 | Page 28 • Our loyalty clubs experience significant growth in number of members in 1H 2019 • Up to 20 successful marketing and branding events, with several ‘first in Hong Kong’ ones
Slide 29: New Retail: Perfect Merger of Online Convenience and Offline Experience (Con't)
New Retail: Perfect Merger of Online Convenience and Offline Experience (Con’t) 13 August, 2019 | Page 29 • Plays major role in Causeway Bay community and creates high profile events o Marvel’s Avengers 4 o CX/HSBC Hong Kong Rugby Sevens Fan Walk o Lee Gardens EGGssentially Art o Go Green 2.0 o Lee
Slide 30: Thank you
13 August, 2019 | Page 30 Thank you
Hysan Development Company — H1 2019 Earnings Presentation on 6ix