Hysan Development Co., Ltd. · HKEX:14
Hysan Development — H1 2020 Earnings Presentation
26 slides from Hysan Development's earnings presentation, Aug 10, 2020
Slide 1: Hysan Development 2020 Interim Results Analyst Briefing
Hysan Development 2020 Interim Results Analyst Briefing 10 August, 2020
Slide 2: Disclaimer
Disclaimer 10 August, 2020 | Page 2 This document has been prepared for general information purposes only, and is not, and should not be construed as an offer to sell, or a solicitation of an offer to buy any securities. Information and estimates contained and opinions expressed herein have been com
Slide 3: A Difficult Environment
A Difficult Environment 10 August, 2020 | Page 3 • COVID-19 in 1H 2020 brought many aspects of Hong Kong to a halt • The city already suffered many months of social unrest in 2H 2019 • Macro situation exacerbated by the intensifying tension between China and US and its allies • Hong Kong retail sale
Slide 4: 2020 Hysan's Interim Results Highlights
2020 Hysan’s Interim Results Highlights 10 August, 2020 | Page 4 • Hysan’s Turnover and Recurring Underlying Profit decreased by 5.0% and 3.4% respectively • Hysan’s balanced dual-engine portfolio helps the Company remain resilient in the face of both expected and unexpected impacts • Occupancies of
Slide 5: Synergy from a Balanced Portfolio: Turnover Contribution
Synergy from a Balanced Portfolio 10 August, 2020 | Page 5 Turnover Contribution Retail, Office, $900 Million, $927 Million, 45% 47% Residential, $154 Million, Office Residential Retail 8%
Slide 6: Changes to Office Sector
Changes to Office Sector 10 August, 2020 | Page 6 • COVID-19 introduced changes to usage of office space • Hybrid models with flexi-hours and locations, plus more work-from-home • But physical office is here to stay • Physical office to function as gathering place for interaction • New office design
Slide 7: Disruptions to Retail
Disruptions to Retail 10 August, 2020 | Page 7 • Pandemic accelerated retail sector changes globally and in Hong Kong • Online disruption: e-commerce ‘s growth, e.g. F&B “click and deliver” • Supply chain disruption: halted production and delayed shipment • Travelling/Tourism disruption: little trav
Slide 8: How Hysan is Responding to the Challenges
How Hysan is Responding to the Challenges 10 August, 2020 | Page 8 • As COVID-19 emerged, Hysan put in place appropriate protective measures immediately and comprehensively • Maintained clear communications with tenant to provide flexible and multi- faceted solutions ranging from rental assistance t
Slide 9: How Hysan is Responding to the Challenges (con't)
How Hysan is Responding to the Challenges (con’t) 10 August, 2020 | Page 9 • Longer term: • Hysan has curated a dynamic and unique tenant mix, e.g. more banking and finance tenants, growth of flex space, retail’s luxury lifestyle concept • Supplemented by a rich programme of activities and events to
Slide 10: Outlook
Outlook 10 August, 2020 | Page 10 • Plenty of unknowns with pandemic conditions and macro-economic and geopolitical issues affecting Hong Kong’s outlook in 2H 2020 • Many factors are changing our lives at a faster-than- anticipated pace • Our dynamic and balanced portfolio, supported by a strong fin
Slide 11: 1H 2020 Results Highlights
1H 2020 Results Highlights 10 August, 2020 | Page 11 2020 1H 2019 1H HK$'M HK$'M % Turnover 1,981 2,086 -5.0% Recurring Underlying Profit 1,346 1,394 -3.4% Underlying Profit 1,346 1,394 -3.4% - Fair value gain on investment properties located in ‧ Hong Kong (3,871) 1,318 ‧ Shanghai* (19) 45 - Impute
Slide 12: 1H 2020 Performance: By Portfolio
1H 2020 Performance: By Portfolio 10 August, 2020 | Page 12 Turnover (HK$’M) 2,500 2,000 156 154 163 1,500 929 927 904 1,000 500 1,001 835 900 0 2019 1H 2019 2H 2020 1H Retail Office Residential
Slide 13: Strong Financial Position & Ample Liquidity
Strong Financial Position & Ample Liquidity 10 August, 2020 | Page 13 Debt Maturity Profile as at 30 June 2020 Debt Profile Highlight (HKD’m) Gearing Ratio Average Debt Maturity 3,922 Net Cash 7.2 years 3,120 2,326 1,700 1,500 1,200 750 1,751 Fixed : Floating Effective Interest Rate 750 531 404 650
Slide 14: Indicative Cap Rates
Indicative Cap Rates 10 August, 2020 | Page 14 30 Jun 2020 31 Dec 2019 Retail 5.25% - 5.50% 5% - 5.25% Office 4.25% - 5% 4.25% - 5% Residential 3.75% 3.75%
Slide 15: 1H 2020 Performance: Office Portfolio
1H 2020 Performance: Office Portfolio 10 August, 2020 | Page 15 • Office portfolio turnover declined slightly by Office Portfolio Turnover (HK$’M) 0.2% to HK927 million • Occupancy: 96% as at 30 June 2020 940 929 927 920 • Continued to achieve an overall positive rental 904 reversion on renewals, re
Slide 16: 1H 2020 Performance: Office Portfolio (con't)
1H 2020 Performance: Office Portfolio (con’t) 10 August, 2020 | Page 16 • Balanced portfolio with different industries represented Office Portfolio Others 15% Banking & Finance 23% Consumer Products 2% Marketing 3% High-end Retailers 4% Semi-Retail 9% Professional & Consulting 15% IT 9% Co-work Insu
Slide 17: 1H 2020 Performance: Retail Portfolio
1H 2020 Performance: Retail Portfolio 10 August, 2020 | Page 17 • Retail portfolio turnover was HK$900 million, Retail Portfolio Turnover (HK$’M) down by 10% from same period in 2019 1,050 • Contribution from turnover rent of HK$20 million 1,001 1,000 • Occupancy: 94% as at 30 June 2020 950 • Overal
Slide 18: 1H 2020 Performance: Retail Portfolio (con't)
1H 2020 Performance: Retail Portfolio (con’t) 10 August, 2020 | Page 18 • Pandemic effects apparent from February onwards Hong Kong & Hysan Tenant Retail Sales (Jan-Jun 2020, YoY) • Damaging effects compounded by disruptions Type of retail outlet Hong Kong Hysan (estimated) from social events Clothi
Slide 19: 1H 2020 Performance: Residential Portfolio
1H 2020 Performance: Residential Portfolio 10 August, 2020 | Page 19 • Residential portfolio turnover saw a slight decline of Residential Portfolio Turnover (HK$’M) 1% to $154 million 180 • Positive rental reversion on renewals, rent review and new lettings 170 163 160 • Occupancy: 83% as at 30 June
Slide 20: Tai Po Luxury Residential Project
Tai Po Luxury Residential Project 10 August, 2020 | Page 20 • Major interior designs and visual mock-ups completed • Superstructure works in progress • Target completion date of construction is 2H 2021 subject to government approval
Slide 21: Business Technology in Application
Business Technology in Application 10 August, 2020 | Page 21 • Work, learn and dine at home become new normal • Invested strategically into business technology • Online/offline spending stimulus campaign “Power Up” ➢ Fully integrated digital Lee Gardens App with e-recruitment, e-payment, e-redemptio
Slide 22: New Club Avenue Lounge and Garden Area
New Club Avenue Lounge and Garden Area 10 August, 2020 | Page 22 Club Avenue new lounge and Garden at Lee Garden One
Slide 23: Marketing events collaborated closely with tenants
Marketing events collaborated closely with tenants 10 August, 2020 | Page 23
Slide 24: Sustainability Including Community Activities
Sustainability Including Community Activities 10 August, 2020 | Page 24 • Health, wellness and safety all top-of- mind issues • Provided safe environment for stakeholders • Ensured work-from-home arrangements for staff • Supported and sponsored online health and wellness activities • Created uplifti
Slide 25: Thank you
10 August, 2020 | Page 25 Thank you
Slide 26: Hysan Development 2020 Interim Results Analyst briefing
Hysan Development 2020 Interim Results Analyst briefing 10 August, 2020
Hysan Development Company — H1 2020 Earnings Presentation on 6ix