Sun Hung Kai Properties Limited · HKEX:16
Sun Hung Kai Properties — H1 FY2017 Earnings Presentation
50 slides from Sun Hung Kai Properties's earnings presentation, Feb 28, 2017
Slide 1: FY2017 Interim Results
FY2017 Interim Results 1 28 February 2017
Slide 2: Contents
Contents Page Key Messages 4 Financial Review – 1H FY2017 6 Property Business – Hong Kong Land Bank 10 Property Development 13 Property Investment 17 Property Business – Mainland China Land Bank 25 Property Development 27 Property Investment 31 Hotel Business 37 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 ICC and IFC IFC in in Hong Hong ICC / Kong IFC Kong Hong Kong KEY MESSAGES
Slide 5: Key Messages
Key Messages Strong contracted sales with abundant saleable resources Sufficient land bank coupled with different sources of land banking High production volume of over 3mn sq.ft. of residential GFA per annum in Hong Kong Steadily-growing rental income driven by well-diversified rental portf
Slide 6: Financial Review - 1H FY2017
IFC and IFC ICC ICC in in Hong Hong ICC / Kong IFC Kong Hong Kong FINANCIAL REVIEW - 1H FY2017
Slide 7: Financial Highlights
Financial Highlights 1H 1H Change FY2017 FY2016 Profit attributable to the Company’s shareholders - Underlying(1) (HK$ mn) 14,608 9,298 57.1 % - Reported (HK$ mn) 20,659 14,724 40.3 % Basic earnings per share for profit attributable to the Company’s shareholders - Underlying(1) (HK$) 5.05 3.23 56.3
Slide 8: Earnings Drivers
Earnings Drivers Operating Profit Breakdown by Segment (1) 1H 1H Change (HK$ mn) FY2017 FY2016 (1) Property sales - Hong Kong 6,691 1,700 - Mainland 1,644 762 - Singapore 10 12 Sub-total 8,345 2,474 237.3 % (2) Property rental - Hong Kong 6,669 6,399 - Mainland 1,369 1,313 - Singapore 235 231 Sub-to
Slide 9: Financial Position
Financial Position 31 Dec 30 Jun 31 Dec 2016 2016 2015 Shareholders’ funds (HK$ mn) 476,834 468,707 455,766 - Shareholders’ fund per share (HK$) 164.7 161.9 157.5 Net debt (HK$ mn) 41,760 50,713 56,551 Net gearing ratio (1) 8.8% 10.8% 12.4% 1H 1H FY2017 FY2016 Interest cover (2) 15.5x 9.7x Remarks:
Slide 10: Property Business - Hong Kong Land Bank
YOHO Developments inHong ICC and IFC in Yuen ICC /Long IFC Kong 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 2016: 49.3mn sq.ft.(1) Office Shopping 34% Centre Shopping Residential 5% Centre 79% 39% Hotel 12% Office 7% Hotel Industrial 4% Residential 12% Industrial 3% 5% Completed investment properties Properties under development Total: 29.4mn sq.ft.
Slide 12: Land Acquisitions
Land Acquisitions Acquired a premium residential site in Sha Tin through government tender during the period 434,000 sq.ft. of GFA To be developed into luxury accommodation with satisfactory development margin Continue to seek opportunities for land acquisitions Adhere to a prudent financi
Slide 13: Property Business - Hong Kong Property Development
Victoria ICC Harbour and IFC in North ICC / Hong Point IFC Kong Hong Kong PROPERTY BUSINESS - HONG KONG PROPERTY DEVELOPMENT
Slide 14: Property Sales in Hong Kong
Property Sales in Hong Kong Property Sales (1) 1H FY2017 1H FY2016 Change (HK$ mn) Revenue 19,243 6,244 208% Operating Profit 6,691 1,700 294% Margin 35% 27% 8ppt Strong property sales growth due to Substantially more completion in 1H FY2017 Overwhelming response to Grand YOHO Phase 1 (virtual
Slide 15: Contracted Sales Exceed HK$22.8bn
Contracted Sales Exceed HK$22.8bn Major contributors Attr. Sales Stake Expected Project Name Location Proceeds (%) Completion (HK$ bn) Grand YOHO Yuen Long 100 9.4 Completed Phase 1 Lime Gala Shau Kei Wan 92 3.6 FY2018 Park YOHO Yuen Long 100 3.1 Completed Phase 1 Ocean Wings Tseung Kwan O 100 1.1 F
Slide 16: Upcoming Launches in Next 10 Months
Upcoming Launches in Next 10 Months Stake Attr. Res. GFA Project Name Location (%) (sq.ft.) 1H 2017 Nam Cheong Cullinan West JV 839,000 Station Sha Tin Town Lot No. 581 Sha Tin 100 431,000 Victoria Harbour North Point 100 320,000 Eight Regency Tuen Mun 100 141,000 St. Moritz Sha Tin 100 130,000 Babi
Slide 17: Property Business - Hong Kong Property Investment
ICC and IFC in IFC Mall ICC / in Hong Hong IFC Kong Kong Hong Kong PROPERTY BUSINESS - HONG KONG PROPERTY INVESTMENT
Slide 18: Property Rental in Hong Kong
Property Rental in Hong Kong Gross Rental Income 1H % of 1H % of by Sector (1) Change FY2017 Total FY2016 (2) Total (HK$ mn) Shopping Centre 4,600 53% 4,441 54% 3.6% Office 2,904 34% 2,718 33% 6.8% Others (3) 1,139 13% 1,117 13% 2.0% Total 8,643 100% 8,276 100% 4.4% Steadily-growing and sizeable r
Slide 19: Diversified Retail Portfolio
Diversified Retail Portfolio Comprises shopping malls located mainly along railway lines totalling ~11mn sq.ft. Proactive management resulted in continued rental income growth amid a soft retail market Continuous Refinement of Trade and Tenant Mixes Attentive Service Enhanced Shopping Experien
Slide 20: Effective Promotions & Attentive Service
Effective Promotions & Attentive Service East Point City, Tseung Kwan O V City, Tuen Mun MOKO, Mong Kok Tai Po Mega Mall, Tai Po 20
Slide 21: Ongoing Asset Enhancement
Ongoing Asset Enhancement APM, Kwun Tong Conversion of office space for retail use is progressing well Outdoor greening project to be completed by 2017 New Town Plaza, Metroplaza, Sha Tin Kwai Fong Renovation at Phase Renovation to be III includes major completed by 2H 2017 layout change, te
Slide 22: Largest Retail Hub in Northwest N.T.
YOHO Mall in Yuen Long, Largest Retail Hub in Northwest N.T. YOHO Mall I Yuen Long Station Development YOHO Mall II (Sun Yuen Long Centre) YOHO Mall I Extension (Grand YOHO) Public Transport Depot Yuen Long Station Development About 450,000 sq.ft. Encouraging pre-leasing To open in 2H 2017 YOH
Slide 23: Other New Shopping Malls
Other New Shopping Malls 2017 2018 2019 PopWalk, Mall at Nam Cheong Harbour North, Tseung Kwan O South Station Development North Point (~240,000 sq.ft.) (~300,000 sq.ft.) (~140,000 sq.ft.) 1st phase fully leased Linked to extensive Mall under Victoria Harbour 2 other phases (95,000 transport
Slide 24: Premium Office Portfolio
Premium Office Portfolio About 10mn sq.ft. of office space continued to perform well with positive rental reversions and high occupancy Millennium City As at 31 December 2016 IFC ICC Cluster Occupancy 100% 99% 97% 98 How Ming Street, Kwun Tong Successfully completed land use conversion in 1H F
Slide 25: Property Business - Mainland China Land Bank
ITC in Xujiahui, Shanghai PROPERTY BUSINESS - MAINLAND CHINA LAND BANK
Slide 26: Land Bank in Mainland China
Land Bank in Mainland China Total land bank as at 31 December 2016: 65.6mn sq.ft. Shopping Centre 16% Shopping Office Centre 33% Residential 56% 61% Office 20% Hotel 9% Hotel Residential 3% 2% Completed investment properties Properties under development Total: 12.4mn sq.ft. Total: 53.2mn sq.ft. 26
Slide 27: Property Business - Mainland China Property Development
ICC / ICC and IFC in Hong IFC Kong Clubhouse at ShanghaiHong Cullinan Kong PROPERTY BUSINESS - MAINLAND CHINA PROPERTY DEVELOPMENT
Slide 28: Property Sales in Mainland China
Property Sales in Mainland China Property Sales (1) 1H FY2017 1H FY2016 Change (HK$ mn) Revenue 6,883 3,226 113% Operating Profit 1,644 762 116% Margin 24% 24% FLAT Property sales mainly from Shanghai Cullinan, The Woodland in Zhongshan, Top Plaza East Tower and GCC, both in Guangzhou Completed
Slide 29: Contracted Sales Exceed RMB5bn
Contracted Sales Exceed RMB5bn(1) Major contributors Attr. Sales Stake Expected Project Name Location Proceeds (%) Completion (RMB bn) Forest Hills Phase 2B Guangzhou 70 0.9 FY2018 Phase 1: Shanghai Arch Completed Shanghai 100 0.8 Phase 1 and 2A Phase 2A: FY2018 GCC Guangzhou 70 0.8 Completed Orient
Slide 30: Upcoming Launches in Next 10 Months
Upcoming Launches in Next 10 Months Attr. Res. Stake Project Name Location GFA (%) (sq.ft.) Shanghai Arch Shanghai 100 25,000 (Townhouses) Shanghai Arch Phase 2B Shanghai 100 383,000 (Apartments) Grand Waterfront Phase 2 Dongguan 100 840,000 The Arch Suites Chengdu 40 395,000 30
Slide 31: Property Business - Mainland China Property Investment
ICC / ICC and IFCShanghai in Hong IFC Kong ICC Hong Kong PROPERTY BUSINESS - MAINLAND CHINA PROPERTY INVESTMENT
Slide 32: Property Rental in Mainland China
Property Rental in Mainland China Gross Rental Income 1H % of 1H % of by Sector (1) Change FY2017 Total FY2016 Total (HK$ mn) Shopping Centre 1,023 56% 970 55% 5.5% Office 664 36% 641 37% 3.6% Others (2) 150 8% 147 8% 2.0% Total 1,837 100% 1,758 100% 4.5% Gross rental income from mainland represen
Slide 33: Shanghai
Shanghai Shanghai IFC in Pudong Shanghai ICC in Puxi Office: 1.6mn sq.ft. (Attr. GFA) Office: 1.3mn sq.ft. (GFA) Virtually fully leased One ICC recorded high occupancy Strong rental reversions and positive rental reversions Two ICC is expected to be nearly fully let by the end of this year S
Slide 34: Shanghai (Cont'd)
Shanghai (Cont’d) ITC: 7.6mn sq.ft. (GFA) Phase 4 Phase 1 Phase 2 ITC One (Phase 1) Phase 2 Completion in 1H 2017 Completion 170,000 sq.ft. office in FY2018 space to be handed over 320,000 to tenants in 1H 2017 sq.ft. offices 340,000-sq-ft upscale 43,000 sq.ft. mall to open in 2018 retai
Slide 35: Nanjing
Nanjing Nanjing IFC: 3.4mn sq.ft. (GFA) Situated atop an interchange station of two metro lines in the Hexi business core Pre-marketing for 2mn sq.ft. of premium offices and 1.1mn-sq-ft mall has started Entire project is due for completion in late 2019 35
Slide 36: Guangzhou
Guangzhou Parc Central and IGC were open in 2016 Over 80% retail space has been leased Tenants gradually moving in Tenant sales and traffic ramping up IGC (Stake: 33.3%) Attr. GFA: 332,000 sq.ft. Parc Central (Stake: 50%) Attr. GFA: 431,000 sq.ft. 36
Slide 37: Hotel Business
The Ritz-Carlton ICC and Shanghai, Pudong ICC IFC in Hong / IFC Kong Hong Kong HOTEL BUSINESS
Slide 38: Hotel Business
Hotel Business Hotel Business (1) 1H FY2017 1H FY2016 Change (HK$ mn) Revenue 2,529 2,445 3.4% Operating Profit 735 697 5.5% Margin 29% 29% FLAT Hong Kong – Sustained high occupancy Tourism sector remained challenging but there were signs of improvement in recent months The Ritz-Carlton Shangh
Slide 39: New Hotel Additions
New Hotel Additions Hotel Vic in North Point Hotel Vic Target to open in 1H 2018 Part of Group’s developments on North Point waterfront Just steps away from MTR North Point Station Offers affordable luxury accommodation A premium hotel in Sha Tin Opening in late 2018 A sister project
Slide 40: Market and Business Prospects
IFC and Cullinan ICC ICC West IFC in inin Hong NamICC Hong / Kong IFC Cheong Kong Hong Kong MARKET AND BUSINESS PROSPECTS
Slide 41: Market Prospects - Hong Kong
Market Prospects – Hong Kong Active primary residential market is expected to continue Homebuyer confidence remains high Positive fundamentals including healthy job market and relatively low interest rates Leasing performance of Grade-A office is likely to be varied by segment Sustained de
Slide 42: Market Prospects - Mainland China
Market Prospects – Mainland China Market activity is likely to remain relatively slow in the short term amid restrictive measures introduced by various local governments Long-term outlook to remain positive, underpinned by end- users’ demand and solid fundamentals Continued demand, though soft
Slide 43: Business Prospects - Property Development
Business Prospects – Property Development Abundant saleable resources Wide range of products in terms of segments and flat mix across Hong Kong Continue to launch projects for sale once ready Expect satisfactory development margin Sufficient land bank Current land bank of 15.8mn sq.ft. o
Slide 44: Business Prospects - Property Investment
Business Prospects – Property Investment Steadily-growing rental income Diversified rental income portfolio Positive rental reversions with high occupancy Ongoing asset enhancement initiatives Expanding investment property portfolio serving a driver for rental income growth ~15mn sq.ft.
Slide 45: Well-Positioned with Strong Fundamentals
Well-Positioned with Strong Fundamentals Seasoned Management Team Steadily High Growing Production Rental Volume Income Creating Values for Shareholders Abundant Strong Saleable Balance Sheet Resources Prudent Sufficient Financial Land Bank Management Discipline 45
Slide 46: Q&A
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Slide 47: Appendix
ICC / ICC and IFC in Hong IFC Kong Hong Kong APPENDIX
Slide 48: Wide Range of Residential Developments for Sale
Wide Range of Residential Developments for Sale 48
Slide 49: Major Malls Along Railway Lines
Major Malls Along Railway Lines 49
Slide 50: Diversified Office Portfolio
Diversified Office Portfolio 50
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