Csi Properties Limited · HKEX:497
Csi Properties — FY2014 Earnings Presentation
43 slides from Csi Properties's earnings presentation, June 2014
Slide 1: FY 2014 Results Presentation
FY 2014 Results Presentation 2013 & 2014 June 2014 (497.HK)
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is provided by CSI Properties Limited (the "Company") for reference purposes only, and should not be relied upon for the purpose of making any investment decision or for any other purpose whatsoever. The information contained in this presenta
Slide 3: Table of Contents
Table of Contents Corporate Presentation Appendix 1: FY2014 Results Highlights Appendix 2: Summary of Major Exited Trades Appendix 3: Details of Key Investment and Residential Property Projects Appendix 4: Case Studies 3
Slide 4: Executive Summary
Executive Summary Mr. Mico Chung, Chairman, acquired control of the Company in 2004 as a platform to expand his property investment business Headquartered in Hong Kong, we are one of the fastest growing property investment/ development companies in Greater China in the past 10 years and was awar
Slide 5: Our Investment Properties Business Model
Our Investment Properties Business Model – Profitable Strategic Repositioning of Properties Identify Acquire Execute Exit Stabilize Execute Value Rental Yield Enhancement Strategy Formulate Repositioning Plan Strength in Acquiring Properties – Result of High Value Added Capital Expertise and Appreci
Slide 6: Proven Track Record and Superior Investment Return
Proven Track Record and Superior Investment Return (*Full details in Appendix 1) Selling Major Projects (up until Mar 2013) Cost Price Increase IRR (HK$’m) (HK$’m) (%) (%) Paul Y. Centre, Kwun Tong (2006-07) 780 1,150 48% 178 - renovation & tenants repositioning No. 88 Gloucester Road, Wanchai (2003
Slide 7: Focused Strategy to Capture High Growth Potential in China
Focused Strategy to Capture High Growth Potential in China CSI started operation in Shanghai in 2006 in view of the tremendous potential for China market and led by experienced management team under Ms. Dong Yan Capturing the long term growth potential in China that’s well supported by macro eco
Slide 8: Our Premium Lifestyle Residential Division
- Our Premium Lifestyle Residential Division As a commitment to our positioning on tailor-made, premium lifestyle residential property development, we have rebranded our residential development division under the brand “COUTURE HOMES” Going forward will focus on premium residential development i
Slide 9: The Origin of Couture Homes
The Origin of Couture Homes Purchased a detached houses complex in Tai Tam from a Singapore fund in 2006 for a total of HK$330m (incl. renovation) Working with the award-winning designer team led by Steve Leung, these houses were completely redesigned and furnished with bespoke furnishings and d
Slide 10: Couture Homes as the Key Growth Driver
Couture Homes as the Key Growth Driver The Hampton epitomizes the superior quality of our residential units by combining world-class design concepts together with use of bespoke furniture, fabrics, rugs, vanished wood panels, wall decoration and leather upholstery to set new standards of quality a
Slide 11: Experienced and Disciplined Management Team
Experienced and Disciplined Management Team Group Senior Management Mr. Mico Chung (Chairman and Executive Director of CSI) Mr. Chung acquired control of the Group in 2004 as a platform to expand his property investment business. Mr. Chung graduated from University College, University of London and
Slide 12: Experienced and Disciplined Management Team
Experienced and Disciplined Management Team Investment Property Division Mr. Wong Chung Kwong (General Manager of Hong Kong Investment Property Division and Executive Director of CSI) Prior to joining the Group in 2004, Mr. Wong has over 30 years’ experience in the local and mainland real estate mar
Slide 13: World-Class Architectural and Interior Design Strength
World-Class Architectural and Interior Design Strength COUTURE HOMES (“CH”) – Premium Lifestyle Residential Development Division Mr. Jimmy Fong (Executive Director of CSI and Head of Sales and Marketing Division of CH) Prior to joining the Group in 2011, Mr. Fong has over 20 years solid experience i
Slide 14: Strong Commitment of Controlling Shareholder
Strong Commitment of Controlling Shareholder Public Shareholders Mico Chung (52.5%) (47.5%) Shareholding interests based on 9,269 million, the total number of outstanding shares post-repurchase in Apr 2014 • Recent share repurchase conducted by Company in Apr 2014 for a total of 249m shares or 2.6%
Slide 15: Recent Key Corporate Activities Highlights
Recent Key Corporate Activities Highlights • Completed a placement exercise through CLSA Capital Markets Limited and JPMorgan Securities to raise approximately US$50 million in October 2012 • The placement proceeds further strengthen the balance sheet of the company and provide the funds for necessa
Slide 16: Awarded Best Small Cap Company in Hong Kong for 2013 and 2014
Awarded “Best Small Cap Company in Hong Kong” for 2013 and 2014 • The Group was awarded the “Best Small Cap Company in Hong Kong” for 2013 and 2014 in Asia's Best Managed Companies annual poll conducted by FinanceAsia, the leading financial journal in the Asia Pacific region • FinanceAsia has organi
Slide 17: Our Future Goal
Our Future Goal Investment Properties Couture Homes • Commitment to detailed design and top quality finishing, tailored made to aim at • Continue to leverage on established pre-targeted class of lifestyle oriented market strengths and network to identify end-users willing to pay a premium and invest
Slide 18: Massive Upside Potential in Valuation through Stock Re-rating
Massive Upside Potential in Valuation through Stock Re-rating Type of Business Share Price vs NAV Major property developers Close to NAV or slight premium Major property investors 20% - 40% discount Mid-cap property companies 30% - 40% discount CSI Approx. 70% discount • Our current capital structur
Slide 19: Why CSI Properties
Why CSI Properties Proven Track Record Value enhancement model generates average annualized IRR of 60% and Performance since inception Combining the repositioning of investment properties for value Profitable Twin Driver enhancement and premium “tailor-made life-style” residential Business Model pro
Slide 20: Prospects - List of Major Properties
Prospects - List of Major Properties Current/ Gross Area Market Book Date of Committed Occupancy Portfolio information * (approx) Value(1) Value Purchase Annual Rent (%) sq ft (‘000) (HK$’m) (HK$’m) (HK$’m) Investment Property G/F, 1506-07,17-22F, Skysign, 75 carparks of Aug ‘06 / Wanchai 109 1,985
Slide 21: Q & As
* ASIA’S CSI Best SH PROPERTIES COMPANIES a s+ & & COUTURE HOMES 2013 & 2014 MR ES Best Small-Cap CSI Properties
Slide 22: Appendix 1: FY2014 Results Highlights
Appendix 1: FY2014 Results Highlights
Slide 23: FY 2014 Final Results Highlights
FY 2014 Final Results Highlights (Year ended 31st March) (HK$’m) FY’2014 FY’2013 % change (A) (B) (A/B-1) Gross Revenue from 2,578 1,162 122% property business - property sale 2,370 939 - rental income 208 223 Gross Profit 940 738 27% Profit from Property JV/ 60 300 80% Associates Profit Attributabl
Slide 24: FY 2014 Key Disposals
FY 2014 Key Disposals Project Selling Price (HK$m) H8, 8 Hau Fook Street TST 668 2 units of the Hampton Happy Valley 167 Le Diamant, Mongkok 1,029 703-705 Nathan Road One floor of Enterprise Square Kowloon Bay 284 Presale of c.120 units at the Causeway Bay c. 1,800 yoo Residence* 23rd Floor of AXA C
Slide 25: FY 2014 Final Results Highlights
FY 2014 Final Results Highlights (HK$’m) FY 2014 FY 2013 31st Mar 2014 31st Mar 2013 Properties & related assets 7.980 7,425 Cash & bank balances 1,795 3,132 Investments 1,924 752 Other assets 148 181 TOTAL ASSETS 11,847 11,490 Bank loans 2,590 2,707 Guaranteed Notes 1,170 1,170 Other liabilities 30
Slide 26: Pro-forma Balance Sheet Adjusted for Market Valuation
Pro-forma Balance Sheet Adjusted for Market Valuation Net Asset Value (HK$’m) Net assets attributable to Shareholders (audited) 7,774 Add: Attributable revaluation surplus relating to the Group’s properties held for sale as per independent valuations 2,457 at 31 March 2014* Attributable revaluation
Slide 27: FY 2014 Financial Highlights
FY 2014 Financial Highlights FY 2014 (HK$m) FY 2013 (HK$m) Book NAV attributable to Shareholders 7,774 7,064 Pro-forma adjusted NAV attributable to 11,379 10,530 Shareholders Net debt 1,966 745 Current ratio 7.09x 6.09x Gearing ratio (consolidated) 31.7% 33.7% Committed Property JV/ Associate 1,472
Slide 28: Appendix 2: Summary of Major Exited Trades
Appendix 2: Summary of Major Exited Trades
Slide 29: Superior Returns and Value Creation
Superior Returns and Value Creation VALUE IRR Date of Date of Months Purchase Price Selling Price CREATION (Annualised) Properties Purchase Disposal of holding HK$ HK$ HK$ 45% of interest in a development Vacant development site in the 2/2/2004 30/3/2004 2 69,975,000 107,775,000 37,800,000 8007% sit
Slide 30: Appendix 3: Details of Key Investment and Residential Property Projects
The Hampton Appendix 3: Details of Key Investment and Residential Property Projects Yoo Residence
Slide 31: Key Current Investment Projects
Key Current Investment Projects AXA Centre, Wanchai Grade-A office located on 151 Gloucester Road with prime harbour view Currently still hold 6 top floors (17th -22rd floors), sky-sign, ground floor and 75 car parking spaces, after sale of the basement and 23rd/24th floors Tenants include AXA
Slide 32: Key Current Investment Projects
Key Current Investment Projects Novotel Hotel Jordan Acquisition of 50% interest of Novotel Hotel Jordan for HK$2.4 billion completed end of July 2012 GFA of approximately 290,000 sq.ft. with 389 hotel rooms and prime shopping space Estimated gross entry yield of 5.5% and targeting yield of 7.
Slide 33: Key Current Investment Projects
Key Current Investment Projects Platinum, Shanghai Grade-A prime office building with 20 storeys located on Taicang Road near XianTianDi in Shanghai Majority of tenants are multi national corporations including the likes of McKinsey (China’s headquarter), Standard Chartered Bank and LG Group etc
Slide 34: Couture Homes – Key Current Projects
Couture Homes – Key Current Projects The Hampton, Happy Valley (All Sold) Successful sale of 11 uniquely-themed and furnished luxury units set the foundation for Couture Homes Combination of design concepts from world renowned designers and use of bespoke furnishing key success factors yoo Resid
Slide 35: Couture Homes – Key Current Projects
Couture Homes – Key Current Projects Barker Road, The Peak Acquired the heritage site at 47 Barker Road in February 2011 at HKD204 million A rare land lot at Barker Road in the ultra premier residential area at the Peak The house will be redesigned and refurbished and will blend in with its hi
Slide 36: Couture Homes – Key Current Projects
Couture Homes – Key Current Projects “Dahongqiao” Project, Shanghai Acquired 50% interest in June 2011 for a prime residential site in the luxurious villa district in Dahongqiao area, Shanghai Project named as Queensgate with GFA of approximately 650,000 sq.ft. Only 15 minutes driving distance
Slide 37: Couture Homes – Key Current Projects
Couture Homes – Key Current Projects Kau To Shan, Shatin Acquisition of Kau To Shan land site through government tender in May 2012 G.F.A. of approximately 50,000 sq. ft. for a cost of HK$531m Plans to develop into around 20 luxury villas of approximately 2,000 to 4,000 sq.ft. each Site form
Slide 38: Appendix 4: Case Studies
Appendix 4: Case Studies
Slide 39: Ongoing Case Example: Novotel Nathan Road Hotel
Ongoing Case Example: Novotel Nathan Road Hotel Novotel Hotel 4-star hotel in prime district in Kowloon Room for improvement in hotel rates Opportunity Underperformance in shopping arcade rental identified Acquired property with Gaw Capital Partners in Aug 2012 Targeting rental yield impro
Slide 40: Ongoing Case Example: Monterey Court, Jardine's Lookout
Ongoing Case Example: Monterey Court, Jardine’s Lookout Prime residential tower at Jardine’s Lookout, renowned Monterey Court (rendering) Opportunity high-end residential district in Hong Kong popular to tycoons identified Acquisition price at HK$19,000 psf for the site with a gross floor area o
Slide 41: Success Case Example: Mohan Building
Success Case Example: Mohan Building Building exterior 12-storey office building situated at the heart of Tsim Sha Tsui shopping district leased to SMEs Before renovation After renovation and trading firms Opportunity identified Poorly managed, mismatched location and positioning Acquired prop
Slide 42: Success Case Example: AXA Centre
Success Case Example: AXA Centre Headquarter of AXA Insurance with sweeping Lift lobby view of Victoria Harbour Opportunity Acquired 51% interest from AXA Insurance in Aug Before renovation After renovation identified 2006 and subsequently increased ownership to c.90% in 2007 Total acquisition
Slide 43: Success Case Example: The Hampton, Happy Valley
Success Case Example: The Hampton, Happy Valley The Hampton Acquired the whole building with 15 units in May 2008 for HK$290mm (HK$7,800 psf) from Nan Fung Development Spent HK$170mm to substantially rebuild and convert existing15 units into 11 larger sized apartment units All-in cost of HK$12