Csi Properties Limited · HKEX:497
Csi Properties — FY2018 Earnings Presentation
53 slides from Csi Properties's earnings presentation, June 2018
Slide 1: FY2018 Final Results Presentation
Strictly confidential FY2018 Final Results Presentation June 2018 Sep 2017
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is provided by CSI Properties Limited (the "Company") based on information available to it and does not constitute a recommendation regarding the securities of the Company and or its subsidiaries The information contained in this presentation
Slide 3: FY2018 - financial highlights
Section 1 FY2018 - financial highlights
Slide 4: FY 2018 sales highlights
FY 2018 sales highlights CSI made over HK$9 billion of sales and presales for FY 2018 to ensure good cashflow for the coming years For the year Unrecognised Contracted Sales ended 31 March committed up to 31 2018 March 2018 % HK$'000 HK$'000 Group level Hong Kong residential properties 2,854,600 1,4
Slide 5: FY 2018 key disposals
FY 2018 key disposals CSI has made a few key disposals for FY2018 to ensure good profitability Disposal price Date completed Projects sold FY2018 Location (HK$m) Apr 2017 12/F Le Diamont, Nos.703 and 705 Nathan Road Mongkok HK$33m May/Jun 2017 Units 1006 and 1007 Bank of America Tower Central HK$106
Slide 6: FY 2018 key acquisitions
FY 2018 key acquisitions CSI has made new site acquisitions for FY2018 to replenish land bank for future growth Purchase price Date acquired Projects acquired YTD Location (HK$m) May 2017 Beijing Legendale Residential units (65% interest) Beijing c. RMB1.76bn A commercial site of c. GFA 52k sq.ft. (
Slide 7: FY 2018 results highlights
FY 2018 results highlights (Period ended 31st March) FY2018 FY2017 % change (HK$m) (A) (B) (A/B-1) Gross revenue from property business 3,969 1,868 112% Property sale 3,662 1,587 Rental income 307 281 Gross profit 859 601 43% Profit from property JV/associates 467 58 Gain on disposal of Property, Pl
Slide 8: FY 2018 results highlights (cont'd)
FY 2018 results highlights (cont'd) Good cash and cash-equivalent investment balances demonstrate financial stability FY 2018 FY 2017 (HK$m) 31st Mar 2018 31st Mar 2017 Properties & related assets 20,110 16,507 Cash & bank balances (including cash held by securities brokers) 2,580 3,603 Investments
Slide 9: Visible disposal and profitability pipeline
Visible disposal and profitability pipeline¹ CSI has a strong visible disposal pipeline in the forthcoming years to ensure good profitability for the Group FY 2019 Asset Type Electric Road site (91% stake) Commercial (SOLD) Capital Centre (formerly AXA Centre) - Ground Floor shop and 51 car parks Co
Slide 10: Pro-forma Balance Sheet adjusted for market valuation as at 31 March 2018
Pro-forma Balance Sheet adjusted for market valuation as at 31 March 2018 Properties valued at historical cost basis on book with no revaluation surplus. Even after revaluation adjustment still represents significant value in terms of a significant discount to pro forma adjusted NAV of HK$1.91 per s
Slide 11: FY 2018 financial highlights
FY 2018 financial highlights FY 2018 FY 2017 FY 2016 (HK$m) (HK$m) (HK$m) Revenue 3,969 1,868 2,201 Gross profit 859 601 1,172 Margin % 21.6% 32.2% 53.2% EBITDA1 1,340 1,531 1,998 Margin % 33.8% 82.0% 90.8% Interest expenses2 316 269 172 Cash and cash equivalent 2,580 3,603 3,529 Short-term realisab
Slide 12: Consistent profitability and growth
Consistent profitability and growth Revenue Gross profit and gross profit margin 3969 2,000 80% 4,000 307 1,666 3,218 64% 3,000 225 1,500 52% 53% 60% 2,578 48% 2,201 1,172 208 22% (HK$ $m) (HK$m) 226 1,868 940 2,000 1,000 32% 859 40% 281 3,662 738 2,993 1,162 36% 601 223 2,370 746 1,000 1,975 1,587
Slide 13: Prudent leverage metrics
Prudent leverage metrics Debt / EBITDA1 EBITDA1 / net interest expense2 and cash3 / short-term debt 40 10 34.0 35 7.7 8 7.2 7.0 30 5.8 25 (HKD m) 6 4.8 4.7 20 (x) 3.8 4.0 4 3.4 14.3 15 11.6 2.2 1.5 1.8 10 8.3 2 6.3 5.7 0.7 3.3 4.0 4.2 0.1 5 4.1 2.2 1.8 1.7 1.9 0 0 FY12 FY13 FY14 FY15 FY16 FY17 FY18`
Slide 14: Conservative capital structure backed by prudent financial policies
Conservative capital structure backed by prudent financial policies • Prudent funding and treasury policy with regard to overall business operations Prudent funding and • Effective interest rate of c. 2.8% for the Group's bank borrowings as at 31 Mar 2018 treasury policy • Prudent dividend policy (c
Slide 15: Portfolio of prime properties in premier locations
Portfolio of prime properties in premier locations (as at 31 Mar 2018) Commercial properties Current / Gross area Market Book committed 1 1, 2 1 1 Date of sq.ft. (000s) value value annual rent Occupancy Purchase (approx) (HK$m) (HK$m) (HK$m) (%) Aug-06/ G/F, 51 carparks of Capital Centre (formerly A
Slide 16: Why invest in CSI properties
Why invest in CSI properties Since 2004, as the pioneer of real estate asset crystallisation, CSI has unlocked Proven value unlocking value by selling prime assets in Hong Kong and Shanghai and generated capabilities approximately HK$9 billion cash profits via over 50 major transactions Unlike devel
Slide 17: Prime property portfolio review
Section 2 Prime property portfolio review
Slide 18: Commercial properties highlights
Commercial properties highlights Key prime commercial assets in Hong Kong and Shanghai helps to anchor c. HK$340 million rental income annually Novotel Hotel – Jordan Everest Building– Jordan Richgate Plaza – Shanghai Nos. 21, 21A, 23-25 & 27 Ashley Road In Point – Shanghai 17 – Tsim Sha Tsui
Slide 19: Central projects highlights
Central projects highlights Prime commercial assets under management in Central at GFA c.500,000 sq.ft., anchoring Group’s future profit pipeline Wellington St. Oriental Crystal Building Gage St./ Graham St. • Commercial redevelopment site • 18 office floors, 2 ground floor • Commercial redevelopmen
Slide 20: Central projects highlights – Gage St./ Graham St.
Central projects highlights – Gage St./ Graham St. Gage St./ Graham St. URA Tender won for Gage Street and Graham Street site marks a new landmark for the Group • The Group won the tender for Site C of the Peel The Center Street/Graham Street project from the Urban Renewal Authority (“URA”), and our
Slide 21: Central projects highlight - Oriental Crystal Commercial Building
Central projects highlight - Oriental Crystal Commercial Building (17 office floors sold) No. 46 Lynhurst Terrace • The Group acquired via 18 office floors, 2 ground floor shops and rooftop of this office building in Central/SOHO for a consideration of c. HK$700 million for GFA of around 43,000 sq.f
Slide 22: Central projects highlights – Soho Central
Central projects highlights – Soho Central 2-4 Shelley Street, Central (Presale in Progress) 46-48 Cochrane Street, Central • Situated in Central’s Soho area, 25-storeys of chic yet contemporary office space with total GFA over 40,000 sq.ft. • Situated in the core of Central district, adjacent to th
Slide 23: Novotel Hotel - Kowloon
Novotel Hotel - Kowloon Novotel Hotel Jordan Our Property : • 4-star international branded hotel with commercial podium in Nathan Rd 348 prime Nathan Road. • 5-min travelling distance from future Express Rail Link terminus • 389 hotel rooms and prime shopping space in prime Jordon • Consolidated 100
Slide 24: 21-27 Ashley Road - Tsimshatsui
21-27 Ashley Road - Tsimshatsui 21-27 Ashley Road Our Property : Ashley Road 21 - 27 • Ginza-style F&B buildings located in the heart of Tsim Sha Tsui • Key landmarks in area including Peninsula Hotel/ Harbour City/ iSquare all with 3-minutes walking distance • GFA of 62,000 sq.ft. with current mark
Slide 25: In-Point Shopping Mall - Shanghai
In-Point Shopping Mall - Shanghai In-point Shopping Mall Our Property : Wujiang Rd no. 169, Jing’an • Popular shopping mall located in the heart of Shanghai just behind the Four Seasons Hotel on Wujiang Road • GFA of 122,000 sq.ft. with current market value at approximately HK$1,400 million versus o
Slide 26: CSI's Major Commercial Property Pipeline – Kowloon East
CSI’s Major Commercial Property Pipeline – Kowloon East Kowloon Bay Office Site (Presale in Progress) Enterprise Square III 41, 43, 45, 47, 49/F (SOLD) • JV with Sino Land and Billion Development, the two big landlords • Headquarter of Esprit Holdings in the heart of Kowloon Bay in Kowloon Bay CBD2
Slide 27: Richgate Plaza Premium Retail Project in XinTianDi, Shanghai
Richgate Plaza Premium Retail Project in XinTianDi, Shanghai • The Group purchased a retail shopping mall named Richgate Plaza in prime Xintiandi area for a total consideration of RMB 1.37 billion with total GFA of 11.3k sqm • Cost amounts to approximately RMB121k psm • Currently annual rental at ap
Slide 28: Everest Building
Everest Building Prime commercial/ retail building at the heart of Jordon • The Group purchased a prime commercial./ retail building at the heart of Jordan at a total cost of c. HK@1.9bn in May 2018 • The property is located at No. 241 and 243 Nathan Road, one of the busiest business spots in Kowloo
Slide 29: Couture Homes – Luxury Residential Development Projects Highlights
Couture Homes – Luxury Residential Development Projects Highlights 47 Perkins Road – Beijing Legendale Jardine’s Lookout (Refurbishment) –Beijing 8-12 Peak Road (Refurbishment) - The Peak Queen’s Gate - Shanghai kau to HIGHLAND – Sha Tin
Slide 30: kau to HIGHLAND - Sale in Progress
kau to HIGHLAND- (SALE IN PROGRESS) The Only Pure House Collection in New Kau To • Acquisition of Kau To Shan land site through government tender in May 2012, G.F.A. of approximately 50,000 sq. ft. for a cost of HK$531 million • Developed into 20 luxury villas of approximately 2,000 to 4,000 sq.ft.
Slide 31: COO Residence Project
COO Residence Project – (ALL 204 RESIDENTIAL UNITS PRESOLD) Luxurious Highrise Residential Project in Tuen Mun • Located at Tuen Mun Yan Ching Street, the street is adjacent to V City and Tuen Mun Town Plaza, being the very heart of the city. Presale started in early Sep 2017 and all of the 204 resi
Slide 32: First MTR Residential Project - Yau Tong
First MTR Residential Project- Mass Residential site at Yau Tong • The Group acquired with its JV partner Sino Land (80% partner) through MTR tender in April 2018 a residential site at Yau Tong at the total consideration of approximately HK$2.62bn. • The property is located near the Yau Tong MTR sta
Slide 33: Queen's Gate – Sale in Progress
Queen’s Gate – (SALE IN PROGRESS) The Finest Expression of British Elegance • A luxurious villa district in Dahongqiao area, Shanghai named as Queen’s Gate and only 15 minutes driving distance from the new Hong Qiao International Airport • Developed into 224 luxurious villas with additional 96 apart
Slide 34: Perkins Road Project
Perkins Road Project – JV with World-class Landmark Development in Jardine’s Lookout Acquisition of old residential tower at Jardine’s Lookout, the premier luxury residential district in Hong Kong in December 2012 G.F.A. of approximately 73,000 sq. ft and old structure demolished for redevelopment T
Slide 35: Peak Road Project
Peak Road Project - Precious Residential Development with Victoria Harbour seaview Peak Road Project Acquired c. 60.3% interest in this old residential building in June 2015 at HK$1.8 billion Interocean Court 17 apartments and one house with total saleable area of 46,512 sf OPUS Hong Kong AV amounts
Slide 36: Barker Road Project
Barker Road Project - Precious Single Lot House Site at the Peak Acquired the heritage site at 47 Barker Road in February 2011 at HK$204 million A rare land lot at Barker Road in the ultra premier residential area at the Peak The house will be redesigned and refurbished and will blend in with its hi
Slide 37: Beijing Legendale Residential Project
Beijing Legendale Residential Project - Luxurious Residential Renovation Project in Beijing Renderings for interiors post renovation • The Group entered into a preliminary purchase agreement in October 2016 in conjunction with a joint venture partner in the acquisition of 114 units totaling around 2
Slide 38: Fan Kam Road Project
Fan Kam Road Project Luxurious Manor Site in Kwu Tung South • The site was acquired by CSI Properties in 2015 and is a very rare manor site next to the Hong Kong Golf Club and Beas River Country Club of The Hong Kong Jockey Club. Other than being adjacent to renowned clubs, it is also extremely conv
Slide 39: Maryknoll Missionary House - Project in Stanley
Maryknoll Missionary House - Project in Stanley • The Group acquired via a 50-50 JV the Maryknoll House in Stanley for a consideration of c. HK$780 million for the site of around 83,000 sq.ft. • The site is located adjacent to Stanley Knoll, a high end residential area in Stanley with stunning seavi
Slide 40: yoo Residence – All Sold
yoo Residence – (ALL SOLD) The First Internationally Branded Residence in Hong Kong A prime residential project in the heart of Causeway Bay within a few walking steps to the Victoria Park 144 high-end lifestyle units ranging from around 400 sq.ft. to over 5,000 sq. ft., All 144 units and car parks
Slide 41: Company Background
Section 3 Company Background
Slide 42: Corporate history and key milestone
Corporate history and key milestone 2017 • Over 20 prime commercial and residential projects in Hong Kong and Shanghai • The group successfully issued Net assets 200 million USD new perpetual securities in Sep 2017 (10 million HKD) 2016 • Total staff of over 220 people • The group has • Net asset ov
Slide 43: Our business model
Our business model Since the inception at 2004, CSI has evolved from an asset trading focused property company to becoming a solid, mid-cap full service real estate investor/ developer with 5 major lines of business Commercial properties Couture Homes Greenfield Commercial Strong rental Super luxury
Slide 44: Proven track record in profit
Proven track record in profit Proven profitability for our properties with all cash profit only and no revaluation gain, with stable profitability of averaging over HK$1 billion in last three years Net profit1 FY18: 1,010 4,000 3,000 FY14: 815 FY17: 1,347 (HK$m) FY13: 903 2,000 1,000 FY11: 858 FY16:
Slide 45: Proven track record in dividend
Proven track record in dividend Steady dividend policy at 12-15% of net profit Dividend payout 350 300 250 HK$115m share 204.0 buyback (HK$m) 200 162.6 198.0 150 140.0 131.0 106.0 HK$100m 100 82.3 share buyback 50 40.8 66.1 15.8 0 31/03/2009 31/03/2010 31/03/2011 31/03/2012 31/03/2013 31/03/2014 31/
Slide 46: Successful new perpetual capital securities issue in September 2017
Successful new perpetual capital securities issue in September 2017 reaffirms debt market as a solid financing avenue • The Group successfully completed the inaugural perpetual capital securities issue arranged by DBS, HSBC, JP Morgan and UBS etc. to raise US$200 million in September 2017 at an attr
Slide 47: Proven investment and capital recycling track record of delivering attractive IRR's
Proven investment and capital recycling track record of delivering attractive IRR’s Selected projects and returns Months of Projects holding Cost (HK$m) Selling price (HK$m) IRR 23% 288 234 B/F Ginza Plaza, Macau 3 171% 47% 496 338 11/F – 23/F Henan Building, Wanchai 13 70% 25% 1,029 821 Nos. 703-70
Slide 48: Highly experienced and disciplined management team
Highly experienced and disciplined management team Group senior management • Acquired control in CSI in 2004 as a platform to expand his property investment business • Currently a non-executive director of HKT Limited, HKT Management Limited and HKC (Holdings) Limited and was previously a non-execut
Slide 49: Highly experienced and disciplined management team
Highly experienced and disciplined management team Commercial property • Joined CSI in 2005, prior to which he worked at various property agency companies with extensive experience in CEO and Director of CSI Barry Ho analyzing market data and trends. Macau • Responsible for sales and leasing of comm
Slide 50: Highly experienced and disciplined management team
Highly experienced and disciplined management team Couture Homes ("CH") Execution Director of CSI • Joined CSI in 2011, prior to which he worked as the Director of Savills Hong Kong Limited and Managing Director of Jimmy Fong • Over 20 years of experience in luxury residential property development a
Slide 51: Strong management team with accolades
Strong management team with accolades • Chairman Chung was nominated as one of the “Asia's Business Leaders ” by CNBC Asia in 2014 • The Group was also awarded the “Best Mid–cap Company in Hong Kong” for 2018 and “Best Small–cap Company in Hong Kong” for 2013 and 2014 in Asia's Best Managed Companie
Slide 52: Long term sponsorship from the Chairman and an institutional investor focused equity register
Long term sponsorship from the Chairman and an institutional investor focused equity register Current shareholding overview1 • Strong commitment of Chairman and controlling shareholder indicating Others confidence in the 26.3% future growth prospect of CSI • Mr. Mico Chung's ownership interest in Co
Slide 53: Q&A
Q&A 20132018 & 2014 Best HK Mid-Cap Company 52