Sun Hung Kai Properties Limited · HKEX:16
Sun Hung Kai Properties — H1 FY2016 Earnings Presentation
44 slides from Sun Hung Kai Properties's earnings presentation, Feb 26, 2016
Slide 1: FY2016 Interim Results
FY2016 Interim Results 26 February 2016 1
Slide 2: Contents
Contents Page – Interim Results Highlights 4 – Business Overview A) Property Business – Hong Kong Land Bank 8 Property Development 11 Property Investment 16 B) Property Business – Mainland Land Bank 24 Property Development 26 Property Investment 30 C) Hotel Business 36 – Strategy and Pro
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: Interim Results Highlights
ICC / IFC Hong Kong Interim Results Highlights
Slide 5: Interim Results Highlights
Interim Results Highlights 1H 1H Change FY2016 FY2015 Profit attributable to the Company’s shareholders - Underlying* (HK$ mn) 9,298 8,463 9.9 % - Reported (HK$ mn) 14,724 15,696 -6.2 % Basic earnings per share for profit attributable to the Company’s shareholders - Underlying* (HK$) 3.23 3.08 4.9 %
Slide 6: Interim Results Highlights (Cont'd)
Interim Results Highlights (Cont’d) Profit Breakdown by Segment 1H 1H Change (in HK$ mn) FY2016 FY2015 (1) Property rental - Hong Kong 6,399 5,955 - Mainland 1,313 1,218 - Singapore 231 265 Sub-total 7,943 7,438 6.8 % (2) Property sales - Hong Kong 1,700 1,694 - Mainland 762 594 - Singapore 12 (3) S
Slide 7: Interim Results Highlights (Cont'd)
Interim Results Highlights (Cont’d) 31 Dec 30 Jun 31 Dec 2015 2015 2014 Shareholders’ funds (HK$ mn) 455,766 451,026 433,141 - Shareholders’ fund per share (HK$) 157.5 156.8 153.4 Net debt (HK$ mn) 56,551(1) 50,571 59,658 Net gearing ratio (2) 12.4% 11.2% 13.8% 1H 1H FY2016 FY2015 Interest cover (3)
Slide 8: Land Bank Hong Kong
Yuen Long Station and YOHO Development Land Bank Hong Kong 8
Slide 9: Land Bank as at December 2015
Land Bank as at 31 December 2015 – Total land bank: 52.2mn sq.ft.(1) Office 35% Residential Shopping Shopping 81% Centre Centre 7% 37% Hotel 12% Office 2% Hotel 3% Industrial 13% Industrial Residential 7% 3% Completed investment properties Properties under development Total: 28.8mn sq.ft. Total: 23.
Slide 10: Land Acquisitions
Land Acquisitions – 3 new sites were added during the period Large-scale Yuen Long Station Development with significant synergy with the neighbouring YOHO residential enclave and YOHO Mall Location Stake Usage Attributable GFA (%) (sq.ft.) Yuen Long Station JV R/S 1,468,000 Development Sha Tin T
Slide 11: Property Development Hong Kong
Ultima Ho Man Tin Property Development Hong Kong
Slide 12: Property Development
Property Development – Over HK$6.2bn property sales(1) were booked with satisfactory profit margins Ultima Phase 1 in Ho Man Tin Park Vista 1A in Yuen Long – Ultima Phase 1 with over 400,000 sq.ft. of residential GFA was completed during the period – Expect a meaningful increase in residential c
Slide 13: Contracted Sales
Contracted Sales – Contracted sales of about HK$11.3bn during the period, mainly from Project Name Location Stake Attr. Sales Expected Proceeds Completion (%) (HK$ bn) Century Link II Tung Chung 100 5.5 2H FY2016 Ultima Phase 1 Ho Man Tin 100 2.8 Completed Park Vista 1A Yuen Long 100 1.0 Completed K
Slide 14: Upcoming Major Launches
Upcoming Major Launches Project Name Location Stake Attr. Approx. Expected Res. Attr. Completion GFA No. of (%) (sq.ft.) Units Grand YOHO Phase 1 Yuen Long 100 740,000 1,100 FY2017 Tseung Kwan O Town Lot Tseung Kwan O 100 483,000 630 FY2018 No. 118 Ultima Phase 2 Ho Man Tin 100 467,000 270 FY2016 In
Slide 15: Location Map of Upcoming Major Launches
Location Map of Upcoming Major Launches Grand YOHO Sha Tin Town Phase 1 Lot No. 566 Twin Regency Tseung Kwan O Town Lot No. 118 Inland Lot No. 9027 1-3 Church Lane Ultima Phase 2 Phase 1 15
Slide 16: Property Investment Hong Kong
MOKO Mong Kok Property Investment Hong Kong
Slide 17: Property Investment
Property Investment – Steadily-growing rental income from diversified portfolio Gross Rental Income by Sector in Hong Kong (1) HK$mn 16,000 15,674 14,673 14,000 13,289 5,204 1H FY2016 12,000 4,972 HK$8,275 mn 4,650 8% 10,000 8,276 (+8% yoy) 8,000 7,655 2,742 (+8% yoy) 6,000 8,332 2,540 7,691 Shoppin
Slide 18: Retail Portfolio
Retail Portfolio – Quality and diversified retail portfolio of over 10.7mn sq.ft. of GFA High occupancies Positive rental reversions Reasonable occupancy cost Rental income mainly driven by base rent – Extensive network of regional malls serving mainly the locals – Continuous asset enhanceme
Slide 19: Continuous Asset Enhancement Initiatives
Continuous Asset Enhancement Initiatives MOKO, Mong Kok Reconfiguration completed in August 2015 Improved traffic with new layouts and additional escalators Strong growth in rents APM, Kwun Tong Conversion of over 150,000 sq.ft. of office space for retail use is under way Greening project
Slide 20: Strong Pipeline for Future Expansion
Strong Pipeline for Future Expansion YOHO Mall, Yuen Long: 1.1mn sq.ft. (GFA) YOHO Mall I opened in September 2015 with high traffic Renovation at YOHO Mall II will be completed in 1Q 2016 Comparable to the positioning and scale of New Town Plaza in eastern New Territories Expected to be a p
Slide 21: Strong Pipeline for Future Expansion (Cont'd)
Strong Pipeline for Future Expansion (Cont’d) YOHO Mall Extension, Yuen Long Over 450,000 sq.ft. of retail space at Grand YOHO is slated for completion by the end of 2016 Another of nearly 110,000 sq.ft. at Yuen Long Station Development will also form part of the YOHO Mall PopWalk, Tseung Kwan O
Slide 22: Office Portfolio
Office Portfolio – About 10mn sq.ft. of well-diversified office space continued to generate promising results Spot rents at IFC saw an uptrend ICC recorded strong rental reversions and improved occupancy Millennium City cluster continued to attract tenants from various sectors, leading to high
Slide 23: Diversified Office Portfolio
Diversified Office Portfolio Grand Central Plaza Metroplaza Tower Occupancy: 96% Occupancy: 99% Grand Century Place Millennium City ICC 26 Nathan Road 1,2,5 & 6 One IFC World Trade Centre Two IFC Sun Hung Kai Centre Central Plaza MTR MTR (under construction) Guangzhou-Shenzhen- Occupancy: 99% Hong K
Slide 24: Land Bank Mainland
Xujiahui Centre Project Shanghai Land Bank Mainland
Slide 25: Land Bank as at December 2015
Land Bank as at 31 December 2015 – Total land bank: 70.4mn sq.ft. Shopping Centre 15% Shopping Centre Office Residential 55% 34% 62% Office 20% Hotel Residential 8% Hotel 3% 3% Completed investment properties Properties under development Total: 11.7mn sq.ft. Total: 58.7mn sq.ft. 25
Slide 26: Property Development Mainland
Shanghai Arch Shanghai Property Development Mainland
Slide 27: Property Development
Property Development – Booked over HK$3.2bn property sales(1), mainly from Shanghai Arch Shanghai Cullinan Forest Hills Phase 1A & 1B – Completed an attributable GFA of about 700,000 sq.ft. of residential units of Oriental Bund Phase 1A during the period Over 900,000 sq.ft. of attributable G
Slide 28: Contracted Sales
Contracted Sales – Achieved contracted sales of about RMB 2.5bn(1) for the period under review, mainly from Project Name Location Stake Attr. Expected Sales Completion Proceeds (%) (RMB bn) Shanghai Arch Phase 1 Shanghai 100 0.5 Completed Shanghai Cullinan Shanghai 100 0.4 Completed Park Royale Phas
Slide 29: Major Upcoming Launches
Major Upcoming Launches Project Name Location Stake Attr. Expected Res. GFA Completion (%) (sq.ft.) Shanghai Arch Phase 2A Shanghai 100 206,000 FY2018 (Serviced apartment) Grand Waterfront Phase 1A&1B Dongguan 100 307,000 FY2017 (Remaining batches) Forest Hills Phase 2B Guangzhou 70 467,000 FY2018 O
Slide 30: Property Investment Mainland
Parc Central Guangzhou Property Investment Mainland
Slide 31: Growing Rental Income
Growing Rental Income – Accounted for around 17% of the Group’s total gross rental income HK$mn Gross Rental Income by Sector on the Mainland (1) 4,000 1H FY2016 3,113 3,319 HK$1,758 mn(3) 3,000 8% 1,161 1,025 2,067 2,000 1,758 (+8% yoy) 1,631 832 Shopping 569 641 (+13% yoy) Centres 1,821 1,858 55%
Slide 32: Shanghai IFC in Pudong
Shanghai IFC in Pudong Office: 1.6mn sq.ft. (Attr. GFA) IFC Mall: 1.2mn sq.ft. (GFA) Both towers were virtually fully Occupancy stayed high occupied Recorded continued growth in Advantageous location in the tenant sales and positive rental Lujiazui Finance and Trade reversions Zone Constru
Slide 33: Shanghai ICC in Puxi
Shanghai ICC in Puxi Office: 1.3mn sq.ft. (GFA) IAPM Mall: 1.3mn sq.ft. (GFA) One ICC has been fully Nearly full occupancy leased Tenant sales continued to ramp Leasing of Two ICC is up strongly since opening encouraging Opening of line 12 extension gives IAPM direct connections to 3 metro
Slide 34: New Malls in Guangzhou
New Malls in Guangzhou Parc Central (Stake: 50%) Attr. GFA: 431,000 sq.ft. Encouraging pre-leasing response Soft opening in 1Q 2016 IGC (Stake: 33.3%) Attr. GFA: 332,000 sq.ft. Pre-leasing has been progressing well Open in 2H 2016 34
Slide 35: Xujiahui Centre Project in Shanghai
Xujiahui Centre Project in Shanghai – 7.6mn sq.ft. integrated project with high-end retail space, grade-A office and a luxury hotel – Directly linked to Xujiahui metro station – Construction of Lot 1 is progressing on schedule 180,000 sq.ft. of office space will be handed over in 1H 2017 330,000
Slide 36: Hotel Business
The Ritz-Carlton Shanghai, Pudong Hotel Business Hotel Business
Slide 37: Hotel Business
Hotel Business – Both revenue and operating profit declined slightly amid a challenging operating environment in Hong Kong (1) Revenue and Operating Profit from Hotel Portfolio HK$ mn 5,000 4,838 4,610 4,037 4,000 3,000 2,547 2,445 (-4% yoy) 2,000 1,252 1,293 937 1,000 720 697(-3% yoy) - FY2013 FY20
Slide 38: Hotel Business (Cont'd)
Hotel Business (Cont’d) – Sustained high occupancy at hotels in Hong Kong while room rates were under pressure due to the decline in the number of inbound visitors – Food and beverage business continued to register satisfactory profit growth, partially offsetting the decline in RevPAR – The Ritz-Car
Slide 39: Strategy and Prospects
ICC / IFC Hong Kong Strategy and Prospects
Slide 40: Market Prospects
Market Prospects – Hong Kong The residential market consolidation is expected to continue in the short term, while end-user demand is supported by positive factors such as positive demographics and still low interest rates Grade-A office leasing market is expected to do well amid low vacancies w
Slide 41: Business Strategy
Business Strategy Prudent financial High quality management products and excellent services Long-term strategies Selective and Balanced sources of focused approach to income mainland investments 41
Slide 42: Business Prospects – Property Development
Business Prospects – Property Development – Substantial majority of over 3mn sq.ft. of residential completion in Hong Kong in this financial year has been pre-sold – Stick to prudent financial discipline on land replenishment when good opportunities arise – Continue to launch projects for sale once
Slide 43: Business Prospects – Property Investment
Business Prospects – Property Investment – Expect steadily growing rental income Positive rental reversions with high occupancy Diversified rental income portfolio The quality office portfolio to benefit from its strong brand and leading position Extensive network of regional malls in Hong K
Slide 44: Sun Hung Kai Properties Q&A
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