New World Development Co. Ltd. · HKEX:17
New World Development — FY2018 Earnings Presentation
45 slides from New World Development's earnings presentation, Sep 20, 2018
Slide 1: Analyst Briefing - 20 Sep 2018
Analyst Briefing - 20 Sep 2018
Slide 2: Disclaimer - Important Notice
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 o
Slide 3: FY2018 results review
FY2018 results review 3
Slide 4: Financial highlights
Financial highlights (HK$ million) FY2018 FY2017 YoY change (%) Revenue 60,688.7 56,628.8 7.2% Segment results 15,844.6 14,090.4 12.4% Changes in fair value of investment properties 15,367.1 1,363.8 1,026.8% Profit for the year 27,081.2 10,474.7 158.5% Profit attributable to shareholders of the Comp
Slide 5: Segment performance
Segment performance (HK$ million) FY2018 FY2017 (1) Property development Revenue Segment results Revenue Segment results Hong Kong 7,141.0 2,864.5 8,538.1 2,277.1 Mainland China 16,239.8 6,611.0 17,429.9 5,229.7 23,380.8 9,475.5 25,968.0 7,506.8 (2) Property investment Hong Kong 1,835.9 1,160.9 1,57
Slide 6: Breakdown of underlying profit
Breakdown of underlying profit 30,000 27,081.2 (3,206.5) (15,517.9) 25,000 20,000 15,000 296.3 (781.5) 111.3 (7.7) 2.4 7,977.6 10,000 5,000 - Profit after tax NCI Reversal of fair Release of fair NWSH related NWDS related NWCL related Others Underlying profit value surplus on value gain on IP IP upo
Slide 7: Liquidity and capital resources
Liquidity and capital resources Source of borrowings Floating rate Fixed rate* 63% 37% Maturity profile of borrowings within 1 year in 2nd year in 3rd-5th year after 5 years 13% 21% 54% 12% Currency profile of borrowings HKD USD & others RMB 71% 20% 9% (*Including results of IRS) (As at 30 Jun 2018)
Slide 8: FY2018 annual results catalyst recap
Prospects FY2018 annual results catalyst recap Hong Kong property development . Total HK$24.7 bn contracted sales achieved vs HK$10 bn full year target . Ample saleable resources with approximately 1,700 residential units + commercial projects . Contracted sales for FY2019 booking have been majorly
Slide 9: What have we achieved?
What have we achieved ? 9
Slide 10: Management focus
Management focus VALUE CREATION FOR SHAREHOLDERS AND THE COMPANY Strategy and operations . Comprehensive ecosystem for customer anchoring under New World Brand . Robust management execution with pioneered vision and be first in the market . Enhancement in recurrent income with greater IP portfolio .
Slide 11: Enhances living experience to achieve higher market price
Enhances living experience to achieve higher market price . Unique concepts with original personalities = price premium . One of its kind bespoke concept, not easy to prototype . Customer can feel the sprit inspired through direct contact with our products 11
Slide 12: Top quality product with high score rated by market
New World Living Community Score rated by independent clerks of work PARK SIGNATURE 93 points THE WOODSVILLE 95 points THE WOODSIDE 94 points EIGHT SOUTH LANE 97 points THE PAVILIA HILL 97 points THE PARKHILL 94 points SKYPARK 96 points BOHEMIAN HOUSE 98 points MOUNT PAVILIA 98 points PARK VILLA 93
Slide 13: First mover in sales and acquisitions
First mover in sales and acquisitions . Get the best window to capture customer demand, gross sales proceeds recorded over HK$20bn in May and June 2018, more than 40% of the market share by value . 3 successful bids won in West Kowloon; land value has appreciated over 35% since our acquisition 13
Slide 14: First mover in technology - 27 IPs granted
Web Server Email Property Sales System Admin Functions SMS 100% registration online Payment Online ROI System Gateway ipad/ Computer First mover in technology- 27 IPs granted . First system in Hong Kong: Web-base + online payment . More accurate, save manpower, paperless and more efficient . Value c
Slide 15: Project technology enhance efficiency
SnagR CONTECH Unit Modern building handover solutions digitization Project technology enhance efficiency . BIM and CIA, two new construction tech initiatives enhanced the development quality, efficiency, time and cost saving . SnagR, a digital platform link up all related parties in unit handover an
Slide 16: Sustainability engagement & energy savings
27 buildings obtained LEED Gold/Platinum certifications. The world’s First WELL Platinum (Pre-certification) for the King’s Road Commercial Project (K11 Atelier) In FY2018,20 buildings earned BEAM Plus certification. Sustainability engagement & energy savings . Over 40 professional certificates were
Slide 17: Upcoming catalyst – Victoria Dockside
Upcoming catalyst – Victoria Dockside . The development of this 3mn sq ft complex is in good progress . 70% of K11 ATELIER leased, latest monthly rental hits HK$110 psf . Soft marketing on K11 MUSEA, ROSEWOOD, K11 ARTUS have already started . 50% of K11 MUSEA are pre-leased, target 3Q 2019 open 17
Slide 18: Upside of Greater Bay concept – HK Skycity
Upside of Greater Bay concept – HK Skycity . An iconic world-class commercial development with total GFA 3.77 mn sq ft . Strategically located project into the core hub in HK + the Bay Area . Target population over 100 million when complete . To be completed in phases from 2023 to 2027 18
Slide 19: Ecosystem for customer anchoring
SERVICE PRODUCTS INTELLECTUAL PROPERTY 1 Living community EXPERIENCE IDEAS ENGAGEMENT VOC TECHNOLOGIES 3 👪 2 CONTEXT NEIBOURGHOOD Working Retail CONCEPTS community community BESPOKE VALUES Ecosystem for customer anchoring . We connect our customers through different communities under New World…
Slide 20: Incremental VIP base, targeting millennials
NWClub VIP members: 75,000 Active ratio: 60% Millennials: 62% (age 26-45) NWClub Income generation: HK$2.3 bn of property sales (8.4% of transaction amount) HK$14 mn of cross sales with others related business units K11Klub VIP members: over 900,000 Active ratio: 28% (with purchase in past 3 months)
Slide 21: Decent profit margin
Gross profit margin trend Items FY2016 FY2017 FY2018 HK DP segment results 23% 27% 40% China DP segment results 28% 30% 41% Decent profit margin . With all the new initiatives in place, profit margin in sales were maintained at a decent level . The ASP of selected projects has became the regional be
Slide 22: NWD share price performance in FY2018
Share price performance Company 30 Jun 2017 30 Jun 2018 % change 18 Sep 2018 vs 30 Jun 2017 NEW WORLD 9.91 11.04 +11.4% +3.9% SHKP 114.70 118.40 +3.2% +2.0% HENDERSON 39.59 41.50 +4.8% +1.2% SINO 12.80 12.76 -0.3% +4.7% NWD share price performance in FY2018 . Share price of HK developer were deeply
Slide 23: Create shareholders value
Share buyback in open market Number of share involved Average per share price Total proceeds 21.91 mn HK$11.14 HK$243.8 mn Full year DPS trend Company FY2015 FY2016 FY2017 FY2018 CAGR New World 0.42 0.44 0.46 0.48 4.6% Development Create shareholders value . The company actively share buyback since
Slide 24: Appendix – FY2018 operation review
Appendix – FY2018 operation review 24
Slide 25: Hong Kong DP and Landbank
Hong Kong DP and Landbank 17.HK - New World Development 25
Slide 26: Hong Kong property sales
Hong Kong property sales Key contributors in FY2018 property development bookings MOUNT PAVILIA PARK VILLA THE MASTERPIECE THE PAVILIA HILL DOUBLE COVE (PH 1-5) HK attributable contracted sales HK$bn 2017.07.01-2018.06.30 24.7 2018.07.01-2018.09.02 1.6 Key contributors in contracted sales in FY2018
Slide 27: Hong Kong property sales
Hong Kong property sales Key projects to be launched No of units Waterloo Road project 240 Sheung Heung Road project 294 Reach Summit 504 Lung Tin Tsuen PH 3 313 Subtotal A 1,351 NWD inventory 246 JV inventory 158 Subtotal B 404* Total (A+B) 1,755 (*as at 2 Sep 2018) 17.HK - New World Development 27
Slide 28: Hong Kong property sales
Hong Kong property sales Key project to be booked in FY2019 • THE PAVILIA BAY • FLEUR PAVILIA • ARTISAN HOUSE • THE PARKVILLE • PARK HILLCREST • MOUNT PAVILIA Total No of units sold Total no of contracted Project as at 2 Sep units sales proceeds 2018 HK$bn THE PAVILIA BAY 983 978 10.0 FLEUR PAVILA 6
Slide 29: Hong Kong landbank
Hong Kong landbank Non- Residential residential Ready landbank (DP + CIP) attributable Total % attributable GFA GFA Hong Kong Island 484,166 495,479 979,645 8.2% Kowloon 578,464 3,638,634 4,217,098 35.2% New Territories 2,900,028 3,876,737 6,776,765 56.6% Total 3,962,658 8,010,850 11,973,508 • New p
Slide 30: China DP and Landbank
China DP and Landbank 17.HK - New World Development 30
Slide 31: Mainland China property sales
Mainland China property sales Key projects booked in FY2018 Guangzhou Covent Garden Shenyang New World Garden Wuhan New World Times Guangzhou Foshan Canton First Estate Langfang New World Garden Contracted sales FY2018 FY2017 Sales proceeds/ RMB bn 16.3 16.2 Overall ASP/ RMB 20,356 18,070 Residentia
Slide 32: Mainland China property sales
Mainland China property sales Development property saleable resources (excl carpark) GFA sq m Residential 686,000 Non residential 834,859 Total 1,520,859 Development property saleable resources (excl carpark) % of total Southern (Guangzhou, Shenzhen, Foshan) 30% Central (Wuhan) 21% Eastern (Ningbo)
Slide 33: Mainland China completion
Mainland China completion Fiscal year/ sq m FY2018 FY2017 % change DP excl. carpark 1,074,164 819,033 31.2% DP incl. carpark 1,105,441 920,053 20.1% IP excl. carpark 103,854 231,805 -55.2% IP incl. carpark 353,364 361,046 -2.1% DP + IP excl. carpark 1,178,018 1,050,838 12.1% DP + IP incl. carpark 1,
Slide 34: Mainland China completion
Mainland China completion FY2019 DP completion Non- Residential Total Carpark forecast sq m residential Guangzhou 159,686 - 159,686 14,211 Foshan 42,023 - 42,023 - Ningbo - 108,391 108,391 153,209 Langfang 55,064 7,249 62,313 57,029 Shenyang 554,529 76,671 631,200 - Others 98,512 58,470 156,982 37,8
Slide 35: Mainland China landbank
Mainland China landbank Total GFA Total GFA Region/ sq m ‘000 (incl (excl % carpark) carpark) Southern region 3,294 2,609 37% Central region 1,689 1,209 17% Eastern region 824 557 8% Northern region 1,171 708 10% Northeastern region 2,316 1,963 28% Total 9,294 7,046 Of which, core projects 7,546 5,6
Slide 36: Mainland China new acquisition and partnership
Mainland China new acquisition and partnership Strategic cooperation with Lo Wu Government . NWCL signed the “Strategic Cooperation Agreement for Economic Belt at Man Kam To Crossing” with the Lo Wu Government in Jan 2018 . Land parcel available for the project modification covers an area of approxi
Slide 37: Hong Kong IP
Hong Kong IP 17.HK - New World Development 37
Slide 38: Hong Kong investment properties
Hong Kong investment properties Key projects in HK FY2018 occupancy Office New World Tower 99% Manning House 98% K11 Atelier 70% Mall HK K11 TST 100% D‧PARK 94% THE FOREST 96% Pearl City 100% Key operations performance in FY2018 Gross rental income HK$1.8 billion HK rental segment margin 63% Footfal
Slide 39: Hong Kong Victoria Dockside
Hong Kong Victoria Dockside GFA breakdown ,000 sq ft Usage Opening K11 ATELIER 435 Office 2017 Q4 Rosewood Hong Kong Hotel 1,106 2019 Q1 Rosewood Residence Serviced apartment K11 MUSEA* 1,156 Retail 2019 Q3 K11 ARTUS 380 Serviced apartment 2019 Q3 Total 3,077 *The portion of 12 Salisbury Road are in
Slide 40: Hong Kong Victoria Dockside
Hong Kong Victoria Dockside K11 ATELIER • Commenced operations in 2017 4Q • Occupancy rate is over 70% • Rental rate achieved regional high K11 MUSEA • Offer world-class experience in retail, art, culture, entertainment and dining • extensive selection of international brands, many of which are pop-
Slide 41: Hong Kong Victoria Dockside
Hong Kong Victoria Dockside Rosewood Hong Kong & residence • Rosewood Hong Kong: 413 rooms • Rosewood Residence: 186 rooms • Schedule to open: 2019 1Q K11 ARTUS • It is the first hospitality extension of K11 • Comprises 287 suites spanning across 14-storey • scheduled to open in summer 2019 17.HK -
Slide 42: Hong Kong Skycity
Hong Kong Skycity Usage ,000 sq ft Dining and retail outlets 2,100 Experience-based entertainment facilities 570 Office space 570 Public facilities and carpark 530 Total 3,770 Development timeline Period To be completed in phases From 2023 to 2027 17.HK - New World Development 42
Slide 43: China IP
China IP 17.HK - New World Development 43
Slide 44: Mainland China investment properties
Mainland China investment properties Key projects FY2018 occupancy Office Wuhan New World International Trade Towers 80% Shanghai K11 – Office 92% Retails Beijing New World Centre 100% Shanghai K11 – Art Mall 96% Guangzhou Central Park-view 89% Serviced Apartment Guangzhou Central Park-view 90% 17.H
Slide 45: The End
The End
New World Development Company — FY2018 Earnings Presentation on 6ix