Shui On Land Ltd. · HKEX:272
Shui On Land — FY2015 Earnings Presentation
52 slides from Shui On Land's earnings presentation, Mar 16, 2016
Slide 1: 2015 Full Year Results Announcement
Shui On Land Limited (0272.HK) 2015 Full Year Results Announcement 16 March 2016
Slide 2: Contents
Contents 1. Chairman’s Message 2. 2015 Financial Results Highlights - Income Statement - IP Portfolio and Valuation - Financial position & Debt Profile - Locked-in Sales & YTD sales 3. Residential Developments - Contracted Sales & Recent Launches - Shanghai Pipelines & Saleable Resources 4. Commerci
Slide 3: Key Achievements in 2015 and outlook for 2016
Key Achievements in 2015 and outlook for 2016 Increased asset turnover: Increased to 18% in 2015, compared to 9% in 2014 Solid performance in 2015: Core earnings increased 438% to RMB2.4 billion Recognised Property Sales: RMB12,287 million, comprised RMB4,684 million and RMB7,603 million of re
Slide 4: Contracted Sales increased by 121%
Contracted Sales increased by 121% RMB21.5 billion of contracted sales achieved in 2015. Residential Property Sales Commercial Property Sales RMB’ mn RMB’ mn 12,000 12,000 +213% 9,000 +50% 9,000 13,178 6,000 6,000 8,335 3,000 5,544 3,000 4,206 0 0 2014 2015 2014 2015 Residential Property Sales 2015
Slide 5: Robust sell through rate in the key markets
Robust sell through rate in the key markets Shanghai RHXC Shanghai Taipingqiao Wuhan Tiandi – The Upper (Lot 9) – Lakeville Luxe (Lot 116) – Park View (Lot B5) First batch of launch Launched in Dec 2015 Launched in Dec 2015 Launched in Oct 2015 RMB900 million subscribed RMB1,012 million fo
Slide 6: Sold 1 & 2 and 3 Corporate Avenue for RMB12.3 billion
Sold 1 & 2 and 3 Corporate Avenue for RMB12.3 billion - Best way to realise the full valuation and maximise return to shareholders 1 & 2 Corporate Avenue Property value RMB6.6 billion Delivered to the buyer in August 2015 3 Corporate Avenue Property value RMB5.7 billion Delivered to the buyer in Feb
Slide 7: 2016 Outlook – Messages from the Chairman
2016 Outlook – Messages from the Chairman Increase asset turnover & reduce debt More focus on Tier 1 city’s residential development & delivery Unlock the value of investment property portfolio “Asset Light Model” for new commercial projects Recycling of assets and capital Management – Op
Slide 8: Contents
Contents 1. Chairman’s Message 2. 2015 Financial Results Highlights - Income Statement - IP Portfolio and Valuation - Financial position & Debt Profile - Locked-in Sales & YTD sales 3. Residential Developments - Contracted Sales & Recent Launches - Shanghai Pipelines & Saleable Resources 4. Commerci
Slide 9: Income Statement
Income Statement Inclusive of investment property disposals, recognized sales reached RMB12 billion Change RMB’ mn 2015 2014 % Turnover of the Group 6,472 10,249 (37%) Property sales 4,380 8,543 (49%) Rental & related income and others 1,668 1,622 3% Construction 424 84 405% Cost of sales (4,783) (6
Slide 10: Income Statement
Income Statement Backed the contribution from the disposal of 1 & 2 Corporate Avenue in Shanghai, core earnings increased significantly by 438% to RMB2,423 million in 2015 Change RMB’ mn 2015 2014 % Profit before taxation 4,088 4,418 (7%) Taxation (2,321) (1,933) 20% Profit for the year 1,767 2,485
Slide 11: Turnover by projects (Recognised property sales)
Turnover by projects (Recognised property sales) Less property sales contribution from Shanghai RHXC in 2015 Change RMB’ mn 2015 2014 % Property Sales 4,380 8,543 (49%) TPQ 13 16 (19%) RHXC 167 5,416 (97%) KIC 647 152 326% Chongqing 1,374 1,061 30% Wuhan 988 1,337 (26%) Foshan 1,191 561 112% Rental
Slide 12: Investment Property Portfolio & Valuation
Investment Property Portfolio & Valuation Recorded 6% valuation gain for the RMB48.9 billion portfolio GFA* (sq.m.) Composition in value by project 8% 1,648,000 1,698,000 8% 2,000,000 33%* Taipingqiao 1,500,000 761,000 575,000 THE HUB Under Development 11% 1,000,000 RHXC 500,000 1,123,000 Completed
Slide 13: Shui On Land – Growing Asset Base
Shui On Land – Growing Asset Base 140.0 Total Assets (RMB' bn) 117.2 120.0 108.3 98.6 100.0 89.6 80.0 68.6 56.3 60.0 42.6 35.9 40.0 29.9 26 20.0 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 13
Slide 14: Shui On Land – Strong Asset Base
Shui On Land – Strong Asset Base 26% of the GFA or 42% of asset value was carried at valuation Asset value – by nature GFA* – valuation vs. cost Assets Classified as Others, 10% Held for Sale, IP at Valuation At Valuation, 5% - CXTD Cash & Bank 26% Property Balances, Portfolio, 18% 9% Prepayment of
Slide 15: Financial Position
Financial Position RMB10,614 million cash and bank balances Change RMB’ mn 31 December 2015 31 December 2014 % Total assets 117,170 108,323 8% Bank and other borrowings 33,337 28,409 17% Convertible Bonds and Senior Notes 14,655 19,556 (25%) Total debt 47,992 47,965 - Total cash and bank balances 10
Slide 16: Debt Profile
Debt Profile Debt Profile – Nature and Currency Breakdown Currency Breakdown as of 31 December 2015 2020 Currency RMB’ mn (equivalent) % of total debt 2018- RMB’ mn 2016 2017 & Total 2020 RMB 25,956 54% after USD 16,496 34% Senior - 5,764 8,891 - 14,655 Notes HKD 5,540 12% HKD Bank Total 47,992 100%
Slide 17: 2016 Outlook - Locked-in Sales
2016 Outlook - Locked-in Sales RMB13.3 billion of locked-in sales for delivery in 2016 and beyond Locked-in Sales as of 31 December 2015 Sales (RMB’ bn) GFA (sq.m.) 403,000 15 13.3 400,000 104,000 255,000 10 6.0 300,000 200,000 100,000 Commercial 5 4.4 299,000 2.2 7.3 100,000 155,000 Residential 2.2
Slide 18: Contents
Contents 1. Chairman’s Message 2. 2015 Financial Results Highlights - Income Statement - IP Portfolio and Valuation - Financial position & Debt Profile - Locked-in Sales & YTD sales 3. Residential Developments - Contracted Sales & Recent Launches - Shanghai Pipelines & Saleable Resources 4. Commerci
Slide 19: 2016 Residential Contracted Sales Target – RMB14billion
2016 Residential Contracted Sales Target – RMB14billion Strong Saleable Resources from Shanghai Residential projects Product type sq.m. Shanghai Taipingqiao – Lakeville Luxe (Lot 116) High-rises 84,600 Shanghai RHXC – The Upper (Lot 9) High-rises 48,400 The Gallery (Lot 2) High-rises 103,700 Wuhan T
Slide 20: Shanghai Rui Hong Xin Cheng Phases 6 & 7
Shanghai Rui Hong Xin Cheng Phases 6 & 7 - Estimated saleable resources: RMB12-14 billion The Upper (Lot 9) – 2nd batch The Gallery (Lot 2) Launched in Feb 2016 Plan for launch from 2Q 2016 to 2017 Achieved RMB3.6 billion Available for sale GFA: 103,700 sq.m. subscribed sales Latest ASP: R
Slide 21: Shanghai Rui Hong Xin Cheng
Shanghai Rui Hong Xin Cheng - Inner Ring Road, Prime Location, High Quality Product Design & Finishing Lot 3 Residential Residential Residential 21
Slide 22: Strong End-users Demand – Customer profile
Strong End-users Demand – Customer profile RHXC Customer Profile Nationality: 98% Mainland Chinese, 2% Foreigner & HK/Taiwan/Macau Original living district : 60% Hongkou, 12% Yangpu, 6% Pudong, 11% Inner Ring Road, 10% Outer Ring Road Age group: 65%,18-40, 17% from 41-50 Payment method: 13%
Slide 23: Shanghai Xintiandi Area - Lakeville Luxe
Shanghai Xintiandi Area - Lakeville Luxe -Estimated saleable resources: RMB10-12 billion Lakeville Luxe (Lot 116) Available for sale : 84,600 sq.m. Latest ASP: RMB126,700 per sq.m. Lakeville Luxe Customer Profile Nationality: 99% Mainland Chinese Age group: 15% 21-30, 35% 31-40, 29% 41-50, 2
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Slide 25: Strong Shanghai Pipelines - Three residential sites
Strong Shanghai Pipelines - Three residential sites for a total GFA of 350,000 sq.m. RHXC Lot 1 RHXC Lot 7 Taipingqiao Lot 118 GFA 110,000 sq.m. GFA 160,000 sq.m. GFA 80,000 sq.m. 96% Relocated 94% Relocated 97% Relocated Design of RHXC Lot 1 Design of RHXC Lot 7 25
Slide 26: Strong Shanghai Pipelines - Relocation progress
Strong Shanghai Pipelines - Relocation progress Total % of % of Estimated relocation relocation relocation Year of Estimated GFA year of cost paid as Lot completed completed relocation Year for sq.m. relocation at 31 Dec as at 30 as at 31 started Pre-sale completion 2015 June 2015 Dec 2015 RMB’ mn R
Slide 27: Shui On Land - Residential Developments
Shui On Land - Residential Developments - GFA 2.8 million* sq.m. saleable resources Shanghai Shanghai** Saleable GFA: 236,700 sq.m. Saleable GFA: 348,000 sq.m. (PUD) (Under relocation) Taipingqiao (Lot 116) RHXC (Lots 2, 9) Taipingqiao (Lot 118) RHXC (Lots 1, 7) Saleable GFA: Saleable GFA: Sal
Slide 28: Contents
Contents 1. Chairman’s Message 2. 2015 Financial Results Highlights - Income Statement - IP Portfolio and Valuation - Financial position & Debt Profile - Locked-in Sales & YTD sales 3. Residential Developments - Contracted Sales & Recent Launches - Shanghai Pipelines & Saleable Resources 4. Commerci
Slide 29: Completed Investment Property Portfolio
Completed Investment Property Portfolio - A total GFA of 1,036,000 sq.m. with total carrying value as of 31 December 2015: RMB37.6 billion Shanghai Portfolio* (Leasable GFA: 719,000 sq.m.) Shanghai Taipingqiao THE HUB Shanghai RHXC Shanghai KIC Office & Retail Office & Retail Retail & Hotel
Slide 30: Completed Investment Property Portfolio
Completed Investment Property Portfolio - Rental and related income grew to RMB 1.5 billion, 20% YOY increase Rental and Related Income Completed IP Composition by City* Foshan RMB’ mn 13% Chongqing Newly completed in 13% 2015: Leasable GFA 1.04 mn of 165,000 sq.m. 1,539 Leasable Wuhan New openi
Slide 31: Rental & related income
Rental & related income - Growth by 20% to RMB1,539 million Occupancy rate Rental & related Leasable Change as of income Project Product GFA 31 December RMB' mn % sq.m. 2015 2014 2015 2014 2015 Shanghai Taipingqiao Shanghai Xintiandi Office / Retail 54,000 99% 98% 302 297 2% Xintiandi Style Retail 2
Slide 32: Commercial Property Portfolio
Commercial Property Portfolio - GFA 2.5 million sq.m. under development or for future development Shanghai Wuhan, Chongqing, Foshan Wuhan Tiandi RHXC Lot 10 Office & Retail Wuhan Tiandi HORIZON Lots A1/2/3 Hall of the Sun Office, Retail & Hotel Leasable GFA: Retail (Under relocation) 329,000
Slide 33: Thank You Q & A
Thank You Q&A 33
Slide 34: Appendix
Appendix (TO BE DISCUSSED) Appendix Market Information Company Introduction Others 34
Slide 35: Market Information
Market Information Indicator Year China Shanghai Wuhan Chongqing Foshan Dalian GDP (RMB billion) 2013 58,802 2,160 905 1,266 701 727 2014 63,591 2,356 1,007 1,427 744 766 2015 67,671 2,496 1,091 1,572 800 773 Population (million) 2013 1,361 24.2 10.2 29.7 7.3 6.9 2014 1,368 24.3 10.3 29.9 7.4 7.0 20
Slide 36: Market Information
Market Information Indicator Year China Shanghai Wuhan Chongqing Foshan Dalian Residential Housing 2013 7.7% 9.0% 7.6% 10.3% 9.1% -0.1% Price Growth 2014 1.4% 11.3% 8.4% -2.8% -0.3% 2.7% 2015 9.1% 17.5% 15.6% -5.0% -2.5% 2.1% Residential 2013 1,157 12.4 15.8 19.1 8.9 3.1 Transaction Area 2014 1,052
Slide 37: 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 37
Slide 38: Simplified Corporate Structure Overview
Simplified Corporate Structure Overview (as of 29 February 2016) Mr. Vincent H. S. Lo Public Shui On Group (private companies) 48.38% 42.90% SOCAM Development Limited 56.73% (“SOCAM”, 0983.HK) Shui On Land Limited 0.37% (“SOL”, 0272.HK) 100.00% (1) China Xintiandi Holding Company Limited 78.11% Shui
Slide 39: Quality Landbank in High Growth Cities
Quality Landbank in High Growth Cities Dalian Shanghai 2.9 mn sq.m. Taipingqiao Total Landbank*: 0.8 mn sq.m. GFA 9.4 mn sq.m. Wuhan Shanghai 1.1 mn sq.m. RHXC 1.2 mn sq.m. Dalian Chongqing Wuhan Shanghai Shanghai 1.7 mn sq.m. Chongqing KIC Foshan 0.2 mn sq.m. Foshan 1.3 mn sq.m. THE HUB 0.2 mn sq.m
Slide 40: Superior and Diversified Landbank
Superior and Diversified Landbank Attributable GFA by Property Type Attributable GFA by City Hotel, Serviced Apartment Dalian 5% 18% Shanghai 29% Residential Office 35% 33% Foshan 17% Wuhan Retail 14% 27% Chongqing 22% 40
Slide 41: Shanghai Taipingqiao
Shanghai Taipingqiao Shui On Plaza 1,2 Corporate Avenue Residential ASP Langham (RMB/sq.m.) Xintiandi High-rises Hotel 3 Corporate 5 Corporate 138,400 Xintiandi 150,000 126,700 Avenue Avenue The Manor& 120,000 104,600 Xintiandi Style 85,000 90,000 Phase 3 60,000 Residential Residential Residential R
Slide 42: Shanghai Rui Hong Xin Cheng (RHXC)
Shanghai Rui Hong Xin Cheng (“RHXC”) Residential ASP (RMB/sq.m.) Lot 7 80,000 Lot 1 68,800 Phase 3 70,000 Lot 2 (Lot 8) Lot 9 60,000 54,000 Residential Residential 50,000 46,600 Phase 5 40,000 (Lot 6) Lot 3 38,600 39,600 40,000 Lot 10 Residential 30,000 Residential Residential Residential 20,000 Pha
Slide 43: Shanghai Knowledge & Innovation Community (KIC)
Shanghai Knowledge & Innovation Community (“KIC”) Residential ASP (RMB/sq.m.) 50,000 45,000 37,900 38,600 40,000 Residential 30,000 26,000 Residential 5 – 9 KIC Plaza Lot 311 Hotel 20,000 Lot 311 1 - 3 & 10 KIC Residential 11,12 & 15 Residential 10,000 Residential Plaza KIC Plaza KIC Village 0 2010
Slide 44: THE HUB
THE HUB Retail Starship Hotel Office Retail Office Office Office Project Information (representing leasable & saleable GFA) Total Project GFA 282,000 sq.m. 45,000 sq.m. Hotel sold & delivered Completed Properties 237,000 sq.m. Office, Retail, Performance & Exhibition Centre 44
Slide 45: Wuhan Tiandi
Wuhan Tiandi Residential ASP (RMB/sq.m.) Site B 40,000 34,400 27,000 30,000 22,000 23,100 20,000 10,000 0 Residential Residential 2012 2013 2014 2015 (Ph1&2)(Ph1-3) (Ph3&4) (Ph3-5) Residential Residential Site A 40,000 31,700 37,300 30,000 20,200 20,000 Project Information (representing leasable & s
Slide 46: Chongqing Tiandi
Chongqing Tiandi Residential ASP* (RMB/sq.m.) 15,000 12,400 13,700 12,700 12,300 11,900 12,000 10,500 Chongqing Tiandi 9,000 Residential Phase 1 & 2 6,000 3,000 Residential Residential Residential Phase 3 - 5 Phase 7 - 10 0 Phase 6 Commercial 2010 2011 2012 2013 2014 2015 Zone (Ph (Ph (Ph 1- (Ph 1-
Slide 47: Foshan Lingnan Tiandi
Foshan Lingnan Tiandi Residential ASP (RMB/sq.m.) Low/High-rises 25,000 18,000 19,500 20,000 15,500 17,100 11,900 12,100 15,000 10,000 5,000 Residential 0 Residential 2010 2011 2012 2013 2014 2015 (Ph 1) (Ph 1) (Ph (Ph 1-3) (Ph 2-4) (Ph 2-4) 1&2) Residential Residential Townhouse 60,000 45,000 39,90
Slide 48: Dalian Tiandi
Dalian Tiandi Residential ASP (RMB/sq.m.) Apartment 20,000 15,000 11,500 11,500 10,000 11,000 10,200 10,000 8,700 5,000 0 2010 2011 2012 2013 2014 2015 Project Information (representing leasable & saleable GFA) Townhouse Total Project GFA 3,103,000 sq.m. 30,000 23,200 23,800 18,600 19,000 20,000 13,
Slide 49: Core Earnings
Core Earnings Change RMB’ mn 2015 2014 % Profit attributable to shareholders of the Company 788 1,778 (56%) Increase in fair value of the remaining investment properties (2,970) (2,978) Effect of corresponding deferred tax charges 743 745 Realised fair value gains of investment properties disposed*
Slide 50: Finance costs, inclusive of exchange differences
Finance costs, inclusive of exchange differences Change RMB’ mn 2015 2014 % Total interest costs and other finance costs (3,648) (3,563) 2% Less: Amount capitalized to investment properties under construction or development, properties under development for sale and hotels under 2,185 2,676 (18%) de
Slide 51: 2015 Capital Expenditure (CAPEX)
2015 Capital Expenditure (CAPEX) RMB’ bn 2015 Construction Cost 5.4 % of total CAPEX 53% Land Premium 0.4 Relocation Cost 4.3 % of total CAPEX 47% Total CAPEX 10.1 Total committed and available bank loan facilities as of 31 December 2015: RMB6.3 bn - Construction and working capital loan facilities
Slide 52: Valuation of Investment Property Portfolio
Valuation of Investment Property Portfolio Recorded 6% valuation gain for the RMB48.9 billion portfolio Leasable Fair Value Gain / Carrying Value as of Gain / (Loss) to Project Product GFA (Loss) in 2015 31 December 2015 Carrying Value sq.m. RMB’ mn RMB’ mn RMB/sq.m. % Completed investment propertie