New World Development Co. Ltd. · HKEX:17
New World Development — FY2022 Earnings Presentation
32 slides from New World Development's earnings presentation, Sep 30, 2022
Slide 1: FY2022 Annual Presentation Analyst Briefing
FY2022 ANNUAL PRESENTATION ANALYST BRIEFING 30 September 2022 0
Slide 2: FY2022 Financial Summary
SUMMARY FINANCIALS FY2022 FINANCIAL SUMMARY NWD delivered consistent net profit and underlying profit growth amidst challenging environment Revenue Net profit attributable to shareholders Underlying profit On par 1,249 68,233 68,213 7,085 6,958 59,008 1,152 1,096 6,589 FY2020 FY2021 FY2022 FY2020 FY
Slide 3: Solid DP and IP Segments Amidst Challenging Environment
KEY HIGHLIGHTS SOLID DP AND IP SEGMENTS AMIDST CHALLENGING ENVIRONMENT Clear strategy for DP and IP segments enabling satisfactory FY22 segment results FY22 FINANCIAL HIGHLIGHTS Strong overall DP results margin Resilient contracted sales with driven by GBA exposure strong presence in 1st tier citi
Slide 4: Stable & Proactive Capital Return to Shareholders
DIVIDEND POLICY STABLE & PROACTIVE CAPITAL RETURN TO SHAREHOLDERS Progressive and sustainable dividend since FY2015 Dividend payout (HKD/share) 2.04 2.04 2.06 2.06 1.92 1.84 1.76 1.68 Dividend yield2 9.4% 1.48 1.48 1.50 1.50 1.36 1.24 1.32 1.20 0.48 0.52 0.52 0.56 0.56 0.56 0.56 0.56 FY2015 (1) FY20
Slide 5: NWD Well Positioned to Ride on Key Catalysts
FUTURE CATALYSTS NWD WELL POSITIONED TO RIDE ON 4 KEY CATALYSTS Travel restriction: further relaxations Northern Metropolis: key government development IP portfolio set to benefit Abundant farmland at low cost Dec 2021 Sep 2022 4Q 2022? Quarantine / ~12M medical surveillance 21 days 0 + 3 days sqft
Slide 6: Development Properties
DEVELOPMENT PROPERTIES 5
Slide 7: Resilient Results Benefiting from Balanced Portfolio of HK & Mainland China
DEVELOPMENT PROPERTIES RESILIENT RESULTS BENEFITING FROM BALANCED PORTFOLIO OF HK & MAINLAND CHINA Mainland China result up 11% contributed by more GBA bookings of higher margin Revenue by Region Segment Results by Region 22,582 9,351 8,984 17,370 Mainland China 14,820 5,951 +11% YoY 11,527 6,600 7,
Slide 8: Stable Combined Contracted Sales in FY23 and FY24
DEVELOPMENT PROPERTIES STABLE COMBINED CONTRACTED SALES IN FY23 AND FY24 Total contracted sales (HKD BN) ~35-40 ~30 28.7 Balanced portfolio between HK and Mainland China Conservative outlook given market uncertainty and volatility FY2022 FY2023E FY2024E Note: Assume exchange rate RMB/HKD 1.2 in FY22
Slide 9: Mainland China: Rapid Cash Collection from Resilient Contracted Sales
DEVELOPMENT PROPERTIES – MAINLAND CHINA MAINLAND CHINA: RAPID CASH COLLECTION FROM RESILIENT CONTRACTED SALES IN FY22 Robust performance driven by higher presence in 1st tier cities of GBA and YRD FY22 gross contracted sales FY22 case study: Hangzhou project RMB 17.1 bn GBA & 85% YRD Total saleable
Slide 10: Profitable Landbank Replenishment through SOE Partnership and Quick-Win Projects
DEVELOPMENT PROPERTIES – MAINLAND CHINA PROFITABLE LANDBANK REPLENISHMENT THROUGH SOE PARTNERSHIP AND QUICK-WIN PROJECTS Region Landbank Landbank replenishment approach (in thousand sqm GFA) GBA 2,316 Shanghai residential projects ~60% of YRD total landbank 680 1st round 2nd round concentration tend
Slide 11: Northern Metropolis: Key Government Development from Favorable Policies
DEVELOPMENT PROPERTIES – HK NORTHERN METROPOLIS: KEY GOVERNMENT DEVELOPMENT FROM FAVORABLE POLICIES Mar 22 Aug 22 Ongoing More… Proposal for R&D transfers Standard rate land Acceleration of 20% upzoning from Mainland premium for farmland upzoning and land in private housing China? exchange exchange
Slide 12: 12M Sqft GFA of Landbank at Lower Cost from Farmland Conversion (1/2)
DEVELOPMENT PROPERTIES – HK 12M SQFT GFA OF LANDBANK AT LOWER COST FROM FARMLAND CONVERSION (1/2) Tai Pang Wan 大鵬灣 深圳灣 Shenzhen Bay Qianhai 前海 Tin Shui Wai 天水圍 Yuen Long 元朗 ~15M Northern Metropolis (NM) NM – Yuenlong District ~12M NM – North District sqft site area within sqft GFA Proposed rail line
Slide 13: 12M Sqft GFA of Landbank at Lower Cost from Farmland Conversion (2/2)
DEVELOPMENT PROPERTIES – HK 12M SQFT GFA OF LANDBANK AT LOWER COST FROM FARMLAND CONVERSION (2/2) Key land exchange: Short term farmland conversion Conversion Attr. GFA Total attr. Farmland schedule (sqft) GFA (sqft) Wu Nga Lok Yeung Fanling 粉嶺烏鴉落陽 1 466,000 Ma Shi Po Fanling 粉嶺馬屎埔 2 100,000 Fanling
Slide 14: Pavilia Farm Updates
PAVILIA FARM UPDATES PHASE I & II COMPLETION ON TRACK; PHASE III DEMOLTION AND RECONSTRUCTION PLAN IN PROGRESS THE PAVILIA FARM: Phase I and II THE PAVILIA FARM: Phase III • Completion on track • Authorized Person certified that the latest estimated material date is • Booking in FY23 31st March 2025
Slide 15: Investment Properties
ie : fiji ti ' = | P fay TH | in INVESTMENT PROPERTIES
Slide 16: Resilient and Stable Growth in Revenue and Segment Results
INVESTMENT PROPERTIES RESILIENT AND STABLE GROWTH IN REVENUE AND SEGMENT RESULTS DESPITE CHALLENGING RETAIL ENVIRONMENT Continuous operational efficiency enhancement resulting in higher segment results and improved margins Segment revenue FY2022 YoY Overall IP +3% 4,824 K11 +4% 4,701 4,350 3,669 2,0
Slide 17: NWD a Key Beneficiary of Travel Restriction Relaxations
MACRO KEY NOTE NWD A KEY BENEFICIARY OF TRAVEL RESTRICTION RELAXTIONS Gradual relaxation of quarantine arrangements for inbound travel Dec 2021 Feb 2022 Apr 2022 Aug 2022 Sep 2022 Compulsory 21 days 14 days 7 days 3 days 0 days More travel quarantine + + relaxation policies in hotel 4 days of 3 days
Slide 18: K11 Continues to Significantly Outpace the Market and Maintain High Occupancy
INVESTMENT PROPERTIES K11 CONTINUES TO SIGNIFICANTLY OUTPACE THE MARKET AND MAINTAIN HIGH OCCUPANCY K11’s unique edge enables it to outperform the retail markets Operational Brand value Ecosystem traffic Strong CRM excellence FY2022 K11 mall sales YoY growth % vs FY2022 average occupancy rate of mar
Slide 19: K11 Continues to Deliver Excellent Performance Through Strong Brand Value
INVESTMENT PROPERTIES K11 CONTINUES TO DELIVER EXCELLENT PERFORMANCE THROUGH STRONG BRAND VALUE & MANAGEMENT EXPERTISE Strong segment results growth due to higher operational efficiency FY22 YoY growth HK Mainland China Wuhan Victoria K11 ATELIER Wuhan Overall Overall Guanggu K11 Dockside1 King’s Ro
Slide 20: 11 SKIES: New Tourism Destination Benefiting from Border Relaxation
INVESTMENT PROPERTIES 11 SKIES: NEW TOURISM DESTINATION BENEFITING FROM BORDER RESTRICTION RELAXATION Newest tourism landmark with largest RDE in HK (Total GFA 3.8M sqft) Opening in phases from July 2022 3 Grade-A Office Towers • Wealth Management • Wellness and Medical GBA Forum on 26th May • GBA B
Slide 21: Continuous Pipeline Growth of K11
INVESTMENT PROPERTIES CONTINUOUS PIPELINE GROWTH OF K11 K11 completion schedule on track | 38 K11 projects by FY2026 with ~2.8M sqm in portfolio K11 projects 1 1 Status Site Type GFA (sqm) Status Site Type GFA (sqm) Hong Kong K11 34,000 Hong Kong Kai Tak Sports Center Retail 57,000 Hong Kong D · PAR
Slide 22: Financial & Capital Management
FINANCIAL & CAPITAL MANAGEMENT 21
Slide 23: Proactively Manage Interest Rate Risk by Optimizing Fixed-Rate Debt Ratio
INTEREST RISK MANAGEMENT PROACTIVELY MANAGE INTEREST RATE RISK BY OPTIMIZING FIXED- RATE DEBT RATIO Gross Debts – Jun 22 (Incl. Perpetual Bond) Market consensus +5 times by Mar 23 Fixed Floating reach 4.75-5% Rate Rate Avg. financing cost 111,279 122,895 (47.5%) (52.5%) FY22 FY23 2.5% ~4.5% Incl. $4
Slide 24: Continued Monitoring and Disciplined Hedging of Exchange Rate Risk
CURRENCY RISK MANAGEMENT CONTINUED MONITORING AND DISCIPLINED HEDGING OF EXCHANGE RATE RISK High: 1.2385 (6.33) RMB/HKD 1.23 1.21 1.19 1.17 1.15 1.13 29 Sep: 1.0963 (7.15) 1.11 1.09 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22
Slide 25: Proactive Gearing Management: Continuous Non-Core Disposal
GEARING MANAGEMENT – NON CORE DISPOSALS PROACTIVE GEARING MANAGEMENT: CONTINUOUS NON-CORE DISPOSAL FOR CAPITAL RECYCLING Non-core disposals Budget 18.0 Actual 13.9 ~15 14.0 9.0 ~10 FY21A FY22A FY23E FY24E Non-core disposals criteria Low IRR businesses and assets Minority stake Simplify Little syne
Slide 26: Proactive Capital Management: Capex Optimization
GEARING MANAGEMENT – CAPEX OPTIMIZATION PROACTIVE CAPITAL MANAGEMENT: CAPEX OPTIMIZATION TO IMPROVE FINANCIAL EFFICIENCY Capex optimization initiatives More selective with Adopt newly developed land acquisitions building materials JV partner Centralized procurement Earlier designs Less variation ord
Slide 27: ESG: Creating Shared Value for All Stakeholders
ESG CREATING SHARED VALUE FOR ALL STAKEHOLDERS 26
Slide 28: Creating Shared Value for Our Stakeholders
ESG INTEGRATION CREATING SHARED VALUE FOR OUR STAKEHOLDERS Build for Good COVID-19 rapid response Share for Good Pioneering & Business sector Hong Kong’s innovative housing first mover in pioneering solutions responding to large-scale Hong Kong’s fifth crowd donation wave platform 27
Slide 29: Recent Achievements
ESG INTEGRATION RECENT ACHIEVEMENTS Ambitious climate action and engagement Leader in sustainable finance HK$39B 3rd Asia real estate company to have near-term 1.5℃-aligned Science Based Targets approved by SBTi and commit to SBTi Net-Zero Standard sustainable financing since 2018 Launched market-fi
Slide 30: Focusing on Our People
ESG INTEGRATION FOCUSING ON OUR PEOPLE Commitment to diversity & inclusion 35.3% highest female Board ratio among Hong Kong real estate developers (effective 1 December 2022) NWD is committed to achieving and maintaining a diverse Board and workforce Building a people-oriented culture 4.5-day 100% 1
Slide 31: Thank You
Mae rea sa New World Development Company Limited Aft THANK YOU
Slide 32: Disclaimer
DISCLAIMER Important notice 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, inducement, invitation, recommendation or
New World Development Company — FY2022 Earnings Presentation on 6ix