Sun Hung Kai Properties Limited · HKEX:16
Sun Hung Kai Properties — H1 FY2019 Earnings Presentation
43 slides from Sun Hung Kai Properties's earnings presentation, Feb 27, 2019
Slide 1: FY2019 Interim Results
FY2019 Interim Results 1 27 February 2019
Slide 2: Contents
Contents Page Key Messages 4 Financial Review – 1H FY2019 6 Property Business – Hong Kong Land Bank 10 Property Investment 14 Property Development 20 Property Business – Mainland China Land Bank 24 Property Investment 26 Property Development 30 Hotel Business 34 Market and Business Prosp
Slide 3: Disclaimer
Disclaimer The information contained in these materials is intended for reference and general information purposes only. Neither the information nor any opinion contained in these materials constitutes an offer or advice, or a solicitation, recommendation or suggestion by Sun Hung Kai Properties Lim
Slide 4: Key Messages
ICC and and IFC Cullinan West, West Kowloon, ICC IFCHong in Hong in Hong ICC / Kong KongIFC Kong Hong Kong KEY MESSAGES
Slide 5: Key Messages
Key Messages Impressive contracted sales Up to mid-February 2019, accumulated contracted sales already met FY2019 full-year target of HK$47bn Continued healthy growth of sizeable recurring rental income stream during the period Strong pipeline of new investment properties Land banking thro
Slide 6: Financial Review – 1H FY2019
IFC, Central, ICC Hong and IFC in HongKong Kong FINANCIAL REVIEW – 1H FY2019
Slide 7: Financial Highlights
Financial Highlights 1H 1H Change FY2019 FY2018 Profit attributable to the Company’s shareholders - Underlying(1) (HK$ mn) 13,733(2) 19,973 -31% - Reported (HK$ mn) 20,469 33,031 -38% Basic earnings per share for profit attributable to the Company’s shareholders - Underlying(1) (HK$) 4.74 6.90 -31%
Slide 8: Earnings Drivers
Earnings Drivers Profit Breakdown by Segment(1) 1H 1H Change (HK$ mn) FY2019 FY2018 (1) Property rental - Hong Kong 7,472 6,973 - Mainland 1,773 1,651 - Singapore 263 267 Sub-total 9,508 8,891 +6.9% (2) Property sales - Hong Kong 5,507 12,671 - Mainland 1,187 1,224 Sub-total 6,694 13,895 -51.8% (3)
Slide 9: Financial Position
Financial Position 31 Dec 30 Jun 31 Dec 2018 2018 2017 Shareholders’ funds (HK$ mn) 545,856 539,098 526,547 - Shareholders’ fund per share (HK$) 188.4 186.1 181.8 Net debt (HK$ mn) 64,389 65,339 44,659 Net gearing ratio(1) 11.8% 12.1% 8.5% 1H 1H FY2019 FY2018 Interest cover(2) 13.0x 24.6x Remarks: (
Slide 10: Property Business - Hong Kong Land Bank
Victoria Victoria Harbour, Harbour, North North Point, Point, HongKong Hong Kong PROPERTY BUSINESS - HONG KONG LAND BANK
Slide 11: Land Bank in Hong Kong
Land Bank in Hong Kong Total land bank as at 31 December 2018: 57.4mn(1) Office Residential Residential 31% (completion (completion prior Dec after Dec Shopping 2023) 2023) Centre 57% 25% 36% Hotel 12% Shopping Centre 5% Office Industrial 3% 13% Industrial Residential 7% Hotel 8% 3% (2) Completed
Slide 12: Land Acquisitions in Hong Kong
Land Acquisitions in Hong Kong Added 4 sites through different means in 1H FY2019 Stake Method of Attributable Location Usage (%) Acquisition GFA (sq.ft.) Tseung Kwan O Data Government Town Lot No. 131 74 896,000 Centre Tender (Acquired by SUNeVision) Farmland Tuen Mun Town Lot No. 463 59 Resident
Slide 13: Land Acquisitions since January 2019
Land Acquisitions since 1 January 2019 A prime residential site along the Kai Tak Runway Project Kai Tak Runway (GFA: 649,000 sq.ft.) Unrivalled panoramic views of both sides of the Harbour Convenient access to West Kowloon through the planned Central Kowloon Route To be developed into a lux
Slide 14: Property Business - Hong Kong Property Investment
in Hong APM, Kwun Tong, ICCKong Kong Hong / IFC Hong Kong PROPERTY BUSINESS - HONG KONG PROPERTY INVESTMENT
Slide 15: Rental Income Growth Continued Across All Segments
Rental Income Growth Continued Across All Segments HK$ mn Gross Rental Income by Segment in Hong Kong (1) (2) 20,000 18,506 18,000 17,439 16,800 15,675 1H FY2019 16,000 14,673 6,104 HK$9,632mn 5,842 14,000 5,619 +6.9% yoy 5,161 12,000 4,931 9,632 (+6.9% yoy) 10,000 9,011 (+6.0% yoy) 8,000 3,165 9,95
Slide 16: Well Diversified Retail Portfolio
Well Diversified Retail Portfolio A quality portfolio of 12mn sq.ft. IFC Mall, Central IFC Mall with a relatively healthy mix of local and tourist shoppers Better-than-market retail sales growth at the Group’s major malls Positive rental revisions with reasonable occupancy cost YOHO Mall, Yuen
Slide 17: Major Asset Enhancement Works
Major Asset Enhancement Works Rendering New Town Plaza, Sha Tin Park Central, Tseung Kwan O Recently revamped space at New The second phase of the Town Plaza III fully occupied renovation is targeted for completion in the first half of The second phase of 2019 refurbishment has started and is
Slide 18: Hong Kong Office – Solid Performance
Hong Kong Office – Solid Performance Over 10mn sq. ft. of premium office portfolio ICC Millennium City Cluster Attri. GFA: 2.5mn sq.ft. Occupancy: 99% Attri. GFA: 1.7mn sq.ft. Wan Chai & Occupancy: 96% Millennium Causeway Bay IFC City Cluster Attri. GFA: 1.0mn sq.ft. Attri. GFA:1.8mn sq.ft. Occupa
Slide 19: Major New Additions in the Pipeline
Major New Additions in the Pipeline V Walk, Harbour North, 98 How Ming Street, West Kowloon North Point Kwun Tong Rendering Rendering Stake: 100% Stake: 100% Stake: 68.8% Atop MTR Nam Cheong Retail component of the Synergize with APM and Station; provide wide range landmark Victoria Harbour Millenni
Slide 20: Property Business - Hong Kong Property Development
Victoria Harbour, Ultima, Ho Man North Point, Tin, Hong Hong Kong Kong PROPERTY BUSINESS - HONG KONG PROPERTY DEVELOPMENT
Slide 21: Recognized Property Sales in Hong Kong
Recognized Property Sales in Hong Kong (1) Property Sales 1H FY2019 1H FY2018 Change Revenue (HK$ mn) 12,119 31,761 61.8% Operating profit (HK$ mn) 5,507 12,671 56.5% Margin 45% 40% Decline was mainly due to the adoption of HKFRS 15 which leads to later recognition of revenue Under the previous
Slide 22: Impressive Contracted Sales in Hong Kong
Impressive Contracted Sales in Hong Kong Stake Attri. Sales Project (%) Proceeds (HK$ bn) Cullinan West II, West Kowloon JV 9.3 Ultima, Ho Man Tin 100 5.4 PARK YOHO Milano, Yuen Long 100 3.7 St Martin, Pak Shek Kok 100 3.6 Twelve Peaks, The Peak 100 3.3 Grand YOHO, Yuen Long 100 3.1 W LUXE, Shek Mun
Slide 23: Upcoming Launches in Hong Kong in the Next 10 Months
Upcoming Launches in Hong Kong in the Next 10 Months St Martin Phase 1 & 2 (Stake: 100%) Mount Regency Phase 2 Remaining Res. GFA: ~690,000 sq.ft. (Stake: 100%) Res. GFA: 235,000 sq.ft. Hoi Wing Road Project Phase 1 (Stake: 100%) Res. GFA: 110,000 sq.ft. Cullinan West III (Stake: JV) Res. GFA: 670,0
Slide 24: Property Business - Mainland China Land Bank
ITC,Nanjing Nanjing IFC, Shanghai Rendering PROPERTY BUSINESS - MAINLAND CHINA LAND BANK
Slide 25: Land Bank in Mainland China
Land Bank in Mainland China Total land bank as at 31 December 2018: 63.1mn sq.ft.(1) Shopping Shopping Centre Centre Residential 17% 51% Office 58% 31% Office 22% Hotel 9% Hotel Residential 3% 9% (2) Completed properties Properties under development Total: 14.3mn sq.ft. Total: 48.8mn sq.ft. Remark
Slide 26: Property Business - Mainland China Property Investment
Shanghai Shanghai IFC Mall,IFC, Shanghai Shanghai PROPERTY BUSINESS - MAINLAND CHINA PROPERTY INVESTMENT
Slide 27: Healthy Rental Growth in Mainland China
Healthy Rental Growth in Mainland China Gross Rental Income by Segment on the Mainland (1) HK$ mn % 5,000 30 1H FY2019 4,457 HK$2,302mn +7.6% yoy 4,000 3,789 3,566 (RMB2,025mn 3,319 1,648 3,113 19% 19% 20 +11.5% yoy) 3,000 1,388 1,302 19% 1,161 17% (+7.6% yoy) 1,025 2,302 15% 14% 2,140 2,000 (+9.8%
Slide 28: Strong Presence in Shanghai
Strong Presence in Shanghai Shanghai IFC Shanghai ICC One ITC Phase Remaining Two Phases Shanghai IFC, Pudong Shanghai ITC, Xujiahui Shanghai ICC, Puxi (Total GFA: 7.6mn sq.ft.) Offices: High occupancies and Phase 1 & 2 office space (490,000 sq.ft.): healthy rental reversions completed; ~90% pre-lea
Slide 29: New Additions in Other Top-tier Mainland Cities
New additions in Other Top-tier Mainland Cities Nanjing IFC Beijing New Town Plaza Rendering Stake: 100% Stake: 100% (40% prior April 2013) Total GFA: 3.4mn sq.ft. Total GFA: Over 220,000 sq.ft. NJ One IFC: 0.5mn sq.ft. offices; to be completed soon Construction NJ Two IFC: 1.5mn sq.ft. offices; Nea
Slide 30: Property Business - Mainland China Property Development
TODTOWN, Shanghai PROPERTY BUSINESS - MAINLAND CHINA PROPERTY DEVELOPMENT
Slide 31: Recognized Property Sales in Mainland China
Recognized Property Sales in Mainland China (1) Property Sales 1H FY2019 1H FY2018 Change Revenue 2,558 2,822 9.4% Operating profit 1,187 1,224 3.0% Margin 46% 43% Major contributors: Grand Waterfront Phase 2 in Dongguan Oriental Bund Phase 2C in Foshan Office units in Top Plaza East Tower i
Slide 32: Contracted Sales on the Mainland
Contracted Sales on the Mainland Attri. Sales Stake Project Location Proceeds (%) (RMB bn) TODTOWN Phase 1 Shanghai 35 0.9 Park Royale Guangzhou 100 0.8 Oriental Bund Foshan 50 0.6 Others 0.6 (1) Total (for 1H FY2019) 2.9 Remarks: (1) Contracted sales in terms of HKD amounted to HK$3.3bn 32
Slide 33: Upcoming Launches on the Mainland in Next 10 Months
Upcoming Launches on the Mainland in Next 10 Months Stake Attri. Res. GFA Project Location (%) (sq.ft.) New phase of The Woodland Zhongshan JV 714,000 New phase of Shanghai Arch Shanghai 100 381,000 (Residential Towers) Remaining tower of Shanghai 35 71,000 TODTOWN Phase 1 33
Slide 34: Hotel Business
Hotel VIC, North Point, Hong Kong HOTEL BUSINESS
Slide 35: Hotel Business
Hotel Business Hotel Business(1) 1H FY2019 1H FY2018 Change (HK$ mn) Revenue 2,955 2,738 7.9% Operating Profit 792 776 2.1% Margin 27% 28% Hong Kong Hotel VIC Steady performance with higher average RevPAR Grand opening of Hotel VIC in December 2018 ALVA HOTEL BY ROYAL in Sha Tin will open in
Slide 36: Market and Business Prospects
ICC and IFC in Hong Kong MARKET AND BUSINESS PROSPECTS
Slide 37: Market Prospects
Market Prospects Hong Kong Primary Expected to be relatively active with improved market residential sentiment of late market Rising income, still low mortgage rates and abundant liquidity will continue to support end-user demand Grade-A Tight supply in the core areas will underpin office rent
Slide 38: Market Prospects (Cont'd)
Market Prospects (Cont’d) Key Cities in Mainland China Grade-A Positive fiscal and monetary policy initiatives will help office leasing underpin steady economic growth market Quality space at prime locations with good management service will remain highly sought-after by multinationals and corpo
Slide 39: Business Prospects
Business Prospects Property Investment Existing Expect positive rental reversions and high occupancies portfolio Boost shoppers’ experience through continuous active management of tenant / trade mix and the use of digital applications A cross-mall loyalty programme covering 14 shopping malls i
Slide 40: Business Prospects (Cont'd)
Business Prospects (Cont’d) Property Development Aim at high Continue to launch residential units when ready asset turnover Abundant saleable resources Expect good development margin Huge unrecognized property sales Sufficient land Schedule to complete 14mn sq.ft. of attributable GFA bank
Slide 41: Sustainable Business Growth
Sustainable Business Growth “With its strong brand, solid foundation, prudent financial discipline and seasoned management team, the Group is confident of overcoming future challenges and accomplishing sustainable business growth in the years ahead.” Kwok Ping-luen, Raymond Chairman & Managing Direc
Slide 42: Q&A
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Slide 43: SHKP in Sustainability
SHKP in Sustainability Hang Seng Corporate Sustainability Index Series Member 2018-2019 FTSE4Good = Janie Business Sustainability Index RVGRAR BH Top 20 Companies of the Hong Kong _ Business Sustainability Index SED RTs bite 43 Sun Hung Kai Properties
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