Sun Hung Kai & Co. Limited · HKEX:86
Sun Hung Kai & — FY2015 Earnings Presentation
22 slides from Sun Hung Kai &'s earnings presentation, Mar 18, 2016
Slide 1: Annual Results Announcement for the year ended 31 December 2015
Stock code: 86.HK Sun Hung Kai & Co Annual Results Announcement for the year ended 31 December 2015 18 March 2016 1
Slide 2: Important - Disclaimer
Important - Disclaimer By attending or viewing this Presentation you are agreeing to be bound by the terms and restrictions set out below. The information contained in this presentation and the accompanying slides and materials (the “Presentation”) is confidential. You must not re-distribute, reprod
Slide 3: 2015 Results Highlights
2015 Results Highlights (HK$ Million) 2015 2014 change Revenue 4,174 4,178 - Profit attributable to owners of the Company 3,897 1,328 193% - On continuing operations 668 940 -29% Per Share Data (HK Cents) EPS 173.8 61.7 Second interim DPS 14.0 nil (Final 14c, special 2c) Total DPS 26.0 26.0 BVPS $8.
Slide 4: Long Term Value Accretion
Long Term Value Accretion “EQUITY “ + “FIXED INCOME” $7.6b Assets Funding solutions for individuals, small SHKF stake businesses and Investments Finance Business corporates Financial Services – traditional and fintech $12b loan book Portfolio Investments $4b interest income Operational insights Real
Slide 5: Pre-tax Contribution by Segment (HK$m)
Pre-tax Contribution by Segment (HK$m) 1,713 973 -43% (8) 2014 (27) 2015 5
Slide 6: Investment Business
Investment Business RH OB RAPS A SUN HUNG KAI & CO. LIMITED
Slide 7: Principal Investments
Principal Investments Pre-tax Return on Pre-tax Period Average contribution average contribution (HK$ Million) end value value (2015) value (2014) Principal Portfolio 4,522.0 2,333.4 333.5 14.3% 126.9 Long Term Investment Portfolio 2,094.2 1,186.8 75.6 6.4% 38.6 Real Estate 977.7 897.9 60.8 6.8% 63.
Slide 8: Principal Investment Highlights 2015
Principal Investment Highlights 2015 Principal Portfolio Long Term Investments 8
Slide 9: Finance Business
Finance Business ARMA PRS SUN HUNG KAI & CO. LIMITED
Slide 10: Finance Business – Loan Book and Interest Income
Finance Business – Loan Book and Interest Income Loan Balances^ (HK$m) Interest Income (HK$m) Total Loans 12,151 (-18% YoY) Interest Income 4,094 16,000 4,200 - 4,100 11 19 3,346 3 12,000 213 4,000 3,329 3,900 353 400 8,000 3,800 11,392 3,700 8,609 4,000 3,600 3,743 3,672 3,500 - 3,400 2014 2015 201
Slide 11: Structured Finance
Structured Finance Segment Results (HK$m) Provides funding solutions to corporates (HK$ Million) 2015 2014 change and high net worth individual customers Revenue 405.4 375.8 8% Provision equivalent to 3% of loan book Operating costs (14.1) (65.3) -78% Loan book: Cost to income (% Revenue) 3.5% 17.4%
Slide 12: Mortgage Loans
Mortgage Loans Overview Sun Hung Kai Credit launched in Oct 2015 Good market opportunity; diversification into another risk segment Property is the largest asset class as HK’s households Diversified demand, not necessarily tied to property market transactions Prudent LTV approach 2015 set up loss $8
Slide 13: UAF Hong Kong
UAF Hong Kong De-emphasizing property loans, but unsecured loans solid with increased market share and profitability Lower loan balance and loan size as property loans declined Hong Kong Gross Loan Balance (HK$m) Total Return on Loans (on avg gross balance) 30% 28.2% 29.4% 20% -6% 10% 0% Share of nu
Slide 14: UAF Hong Kong
UAF Hong Kong New ad campaign “Anyway you want” “No show” loans “One click to loan” 14
Slide 15: UAF China
UAF China 158 Branches across 18 cities in Mainland China 50 branches in HK Small business affected the most in economic Harbin:5 down turn Shenyang: 12 Re-focus on individual salaried workers Result is lower approval amounts and loan Beijing: 7 Dalian:7 Tianjin:6 balance Qingdao: 4 Loan origination
Slide 16: UAF China – Targeting Salaried Workers
UAF China – Targeting Salaried Workers Social Security Tax Pension Fund Insurance Policies Home Owners Annual Income > RMB120k 16
Slide 17: UAF China
UAF China Managing down average loan size and refocus on individual customers China Loan Balance (HK$m) Total Return on Loans (on avg gross balance) 6,000 Gross Loans 30 Guaranteed 40% 40.6% 42.3% 4,000 Loans 139 20% 5,067 2,000 2,932 -42% 0% - 2014 2015 2014 2015 Number of Average Loan Balance (RMB
Slide 18: Total Bad Debts and Delinquencies (HK$M)
Total Bad Debts and Delinquencies (HK$M) Aging of amounts past due but not impaired (HK$M) Bad and doubtful debts (HK$ Million) 2014 2015 17.2%* a. Amounts written off (739) (1,364) 12.8%* b. Recoveries 114 130 15.5%* c. Charge to impairment allowance (163) (229) Total charges for bad and doubtful d
Slide 19: Consumer Finance Segment Results
Consumer Finance Segment Results 2015 Results and Outlook (HK$ Million) 2015 2014 Change Revenue 3,706.4 3,763.6 -2% China Operating Costs (1,373.2) (1,344.9) 2% To continue conservative approach in Cost to income (% 2016 Revenue) 37.0% 35.7% Consolidate branch network Finance cost^ (285.0) (263.8)
Slide 20: December 2015 Balance Sheet Profile (HK$M)
December 2015 Balance Sheet Profile (HK$M) Others Others BVPS $8.1 at year end (+23%) Goodwill and Non controlling interest intangibles (minorities) 24.6m shares repurchased in 2015 ($135m) Continue buybacks subject to Principal Inv liquidity Assets Net Gearing 15.2% Treasury and other Shareholders
Slide 21: Outlook
Outlook Still challenging for 2016 as UAF China is closely tied to Chinese economy Hong Kong expected to be steady and new mortgage business to contribute Reposition to the investment + finance timely 21
Slide 22: Enquiries Contact
Enquiries Contact: Nancy Chen, CFA Head of Investor Relations Tel +852 3920 2823 Nancy.chen@shkco.com 22