Slide 1: Sun Hung Kai & Co
Stock code: 86.HK Sun Hung Kai & Co August 19, 2016 Six-month results to June 2016 1
Slide 2: Important - Disclaimer
Important - Disclaimer By attending or viewing this Presentation you are agreeing to be bound by the terms and restrictions set out below. The information contained in this presentation and the accompanying slides and materials (the “Presentation”) is confidential. You must not re-distribute, reprod
Slide 3: Financial Highlights – First Half 2016
Financial Highlights – First Half 2016 Six-month results ending (HK$M) June 2016 June 2015 Change Revenue 1,742 2,169 -20% Attrib Profit 276 3,631 -92% - From Continuing Operations 276 402 -31% Per Share Data EPS (HK cents) 12.5 161.4 -92% Interim DPS (HK cents) 12 12 BVPS $8.05 $8.08 UAF China busi
Slide 4: Pre-tax Contribution by Segment (HK$M)
Pre-tax Contribution by Segment (HK$M) 670 800 296 600 Group Management and - Support 380 Principal Investments (-43%) 400 471 85 Mortgage Loans 200 187 Consumer Finance 90 120 Structured Finance - 1H2015 (187) 1H2016 (9) (2) (200) 4 Pre-tax profit does not take into account non-controlling interest
Slide 5: Finance Business
Finance Business ARMA PRS SUN HUNG KAI & CO. LIMITED
Slide 6: Finance Business
Finance Business Total Loans HK$ 11,696m (-17%) Finance Businesses Segment Revenue HK$1,721m (-20%) 16,000 14,031 2,144 1,721 12,000 3,650 466 3,721 8,000 10,381 4,000 7,508 - 30 June 2015 30 June 2016 6
Slide 7: Structured Finance
Structured Finance Segment Results (HK$m) Provides funding solutions to corporates Six-month results June 2016 June 2015 Change and high net worth individual customers Revenue 191.8 197.8 -3% Operating costs (8.2) (6.6) 24% Average loan balance lower during 1H2016 Cost to income (% Revenue) 4.3% 3.3
Slide 8: Mortgage Loans
Mortgage Loans Overview Sun Hung Kai Credit launched in Oct 2015 Distinguished brand to focus on secured loans – a responsible, transparent lender with a household brand name Loan book $466m (Dec 15: $213m) Small pre-tax loss $2.4m but operationally profitable in June New Mong Kok branch and web app
Slide 9: Consumer Finance - UAF
Consumer Finance - UAF Six-month results (HK$ M) 1H2015 2H2015 1H2016 YoY HoH Revenue 1,946.5 1,759.9 1,506.5 -23% -14% Operating Costs (698.8) (674.4) (603.7) -14% -10% Cost to income (% Revenue) 35.9% 38.3% 40.1% Finance cost^ (143.3) (141.7) (127.1) -11% -10% Bad and doubtful debts (643.3) (820.0
Slide 10: Total Bad Debts and Delinquencies (HK$M)
Total Bad Debts and Delinquencies (HK$M) Aging of amounts past due but not impaired (HK$M) Bad and doubtful debts 17.2%* (HK$ Million) 1H2015 2H2015 1H2016 Amounts written off (610.6) (753.1) (648.1) Recoveries 59.8 69.7 77.7 15.5%* Charge off (550.8) (683.4) (570.4) As annualized % of 9.4% 13.2% 12
Slide 11: UAF Hong Kong
UAF Hong Kong Continue to phase out of mortgage loans. Higher yield and charge offs because of change in loan mix Hong Kong Gross Loan Balance (HK$m) Total Return on Loans (on avg gross balance) 8,000 6,849 6,626 6,407 6,000 4,000 2,000 - 1H2015 2015 1H2016 Average Balance Per Loan (HK$, at period e
Slide 12: UAF Hong Kong – new ads
UAF Hong Kong – new ads “O2O” Revolving e-loan Credit card debt consolidation “No Show” loans “Refer a Friend” Special offer to home owners 12
Slide 13: UAF China
UAF China LESS branches: 31 closed 127 Branches across 18 cities in Mainland China MORE customers: 18% growth in number 50 branches in HK Harbin:5 of new loans (39k in 1H 2016) Shenyang: 10 LOWER Charge off amounts, both YoY and Beijing: 5 Dalian:6 HoH. Amounts peaked in 2H2015 and Tianjin: 3 trendi
Slide 14: UAF China
UAF China Profitability still impacted by transformation but loan book adjustment is approaching our target China Loan Balance (HK$m) Total Return on Loans (on avg gross balance) Average Loan Balance (RMB, at period end) Charge Off ratio (on avg gross balance) 14
Slide 15: Investment Business
15 Investment Business RH OB RAPS A SUN HUNG KAI & CO. LIMITED
Slide 16: Principal Investments
Principal Investments Gain/ Loss Return on Gain/ Loss Period Six-month (First half average (First Half (HK$ Million) end value average value 2016) value 2015) Principal Portfolio 5,400.1 4,598.4 (119.1) -2.6% 285.4 Long Term Investment Portfolio 2,151.0 2,166.7 114.8 5.3% 23.4 Real Estate 967.0 958.
Slide 17: Principal Investment Highlights 1H2016
Principal Investment Highlights 1H2016 Principal Portfolio Long Term Investments Exits: Shanghai office space, China Xin Yongan, Dianrong 17
Slide 18: June 2016 Balance Sheet Profile (HK$M)
June 2016 Balance Sheet Profile (HK$M) Others Others Non controlling interest BVPS $8.05 Goodwill and (minorities) intangibles 22.5m shares repurchased in 1H2016 ($102m) Principal Inv Net Gearing 16.2% Assets Issued USD 362m 2021 4.75% Shareholders bonds Equity USD115m of the USD350m 2017 6.375% bon
Slide 19: Outlook
Outlook Recent trends indicate UAF recovery in China although our assumptions can be threatened by the economy Well positioned investment portfolio Maintain strong and prudent financial position 19
Slide 20: Enquiries Contact
Enquiries Contact: Nancy Chen, CFA Head of Investor Relations Tel +852 3920 2823 Nancy.chen@shkco.com 20