Hysan Development Co., Ltd. · HKEX:14
Hysan Development — H1 2018 Earnings Presentation
36 slides from Hysan Development's earnings presentation, Aug 7, 2018
Slide 1: Hysan Development 2018 Interim Results Press Conference
Hysan Development 2018 Interim Results Press Conference 7 August, 2018
Slide 2: Remarks by Ms. Irene Yun Lien LEE, Chairman
7 August, 2018 | Page 2 Remarks by Ms. Irene Yun Lien LEE Chairman
Slide 3: 2018 Interim Results Highlights
2018 Interim Results Highlights 7 August, 2018 | Page 3 • Turnover and Recurring Underlying Profit increased by 6.8% and 4.3% respectively year- on-year • Increased Reported Profit reflected changes in fair value of investment properties • Occupancies of Retail and Office portfolios were 96% and 95%
Slide 4: Overview
Overview 7 August, 2018 | Page 4 HK Economy & Retail Sales in 2018 1H • Strong consumer spending • Growth in visitors numbers • Some macroeconomy uncertainties may affect growth Hysan • Curating unique content for the Lee Gardens community which is inclusive, full of contrast and diversity • We beli
Slide 5: Vision. Courage. Persistence
Where You Hear the Heartbeat of Hong Kong 7 August, 2018 | Page 5 Lee family purchased Lee Mindset based on a long Stakeholders can enjoy the As Hong Kong’s heartbeat, Gardens Hill 95 years ago history of sustainable area not just for now, but for Hysan and Lee Gardens development generations to com
Slide 6: Vision
Vision 7 August, 2018 | Page 6 Unique neighborhood Proven credible Quality buildings location Curating Reimaging Redefining Community Retail Office Content Generational Shift Technological Demographic Change Mature ones Advancement Tourists Baby boomers E-Commerce New Hong Kong Millennials Mobile te
Slide 7: Courage
Courage 7 August, 2018 | Page 7 Lee Garden Three as example • We challenge ourselves to attract quality tenants who demand the highest standards in a commercial setting • First Hysan commercial building with a focus on attracting financial industry tenants • As an innovative fast mover, we diligentl
Slide 8: Persistence
Persistence 7 August, 2018 | Page 8 • Lee Garden Three only one part of entire portfolio • We are leveraging the opening of Lee Garden Hardware Content Stakeholders Three to further energise the rest of the portfolio Quality buildings Unmatched Popular loyalty • We are determined to give Lee Gardens
Slide 9: Persistence – Curating Experience
Persistence – Curating Experience 7 August, 2018 | Page 9 CX/HSBC Rugby Sevens Carnival Lee Gardens EGGssentially Art! Rugby Edition Absolutely Fabulous Children’s Theatre Cha Long Pop-up Store and Valentine’s Day Art Fun in Causeway Bay Night Parade
Slide 10: Persistence – Encouraging Partnerships: Tenant and Third Party Partnerships
Persistence – Encouraging Partnerships: Tenant and Third Party Partnerships 7 August, 2018 | Page 10 Go Green Causeway Bay Louis Vuitton Launch Event I.T Undefeated Opening Nike Yoga Day
Slide 11: Persistence – Cultivating Loyalty
Persistence – Cultivating Loyalty 7 August, 2018 | Page 11 Club Avenue • Expanded our lounge service to the first floor of Lee Garden One • Provide more unique and exclusive events Lee Garden Plus • More attractive limited time offers from tenants • Major platform to drive traffic and spending
Slide 12: Persistence – Driving Digital Transformation
Persistence – Driving Digital Transformation 7 August, 2018 | Page 12 • For 2018 2H and beyond • Area high-speed Wi-Fi system • E-coupon for paperless shopping experience • Interactive signage • Better Big Data analytics • IoT (Internet of Things) • Artificial Intelligence
Slide 13: Persistence – Driving Digital Transformation
Persistence – Driving Digital Transformation 7 August, 2018 | Page 13 Collect Retain Analyse Predict Individual customer behaviour
Slide 14: Persistence – Hysan95
Persistence – Hysan95 7 August, 2018 | Page 14 Hysan95 is a multimedia project with a strong social media presence that cements Hysan’s connection with Causeway Bay through the stories of the people who live and work there.
Slide 15: Persistence – Lee Gardens Association
Persistence – Lee Gardens Association 7 August, 2018 | Page 15 As a founding member, we contribute in many ways, including social media and videos
Slide 16: Vision. Courage. Persistence.
Vision. Courage. Persistence.
Slide 17: Presentation by Mr. Roger Hao, Chief Financial Officer
7 August, 2018 | Page 17 Presentation by Mr. Roger HAO Chief Financial Officer
Slide 18: 2018 Interim Results Highlights
2018 Interim Results Highlights 7 August, 2018 | Page 18 30-06-18 30-06-17 HK$'M HK$'M % Turnover 1,912 1,791 6.8% Recurring Underlying Profit 1,280 1,227 4.3% Underlying Profit 1,280 1,227 4.3% - Fair value gain or (loss) on investment properties located in ‧ Hong Kong (net of effect of non-control
Slide 19: 2018 1H Performance: By Portfolio Turnover
2018 1H Performance: By Portfolio 7 August, 2018 | Page 19 Turnover (HK$’M) 1,912 1,791 1,757 130 (6.8%) 134 (7.5%) 130 (7.4%) 672 (37.5%) 820 (42.9%) 687 (39.1%) 985 (55.0%) 940 (53.5%) 962 (50.3%) Residential Office 2017 1H 2017 2H 2018 1H Retail
Slide 20: Strong Financial Position
Strong Financial Position 7 August, 2018 | Page 20 Low Gearing Stable Debt Profile Strong Credit Rating • Total Gross Debt: HK$6,026 million • Fixed Rate Debt: 74.3% of the • Net Interest Coverage: 17.9 times (31 Dec 2017: HK$6,176 million) total gross debt (2017: 19.3 times) • Net Debt to Equity: 5
Slide 21: Presentation by Mr. Ricky Lui, Chief Operating Officer
7 August, 2018 | Page 21 Presentation by Mr. Ricky LUI Chief Operating Officer
Slide 22: 2018 1H Performance: Retail Portfolio
2018 1H Performance: Retail Portfolio 7 August, 2018 | Page 22 Market overview: Hong Kong Retail Sales Jan-Jun 2018 Type of retail outlet (YoY) • 2018 first six months: overall increase of 13.4% when compared to the same period of 2017 Jewellery, watches and clocks, +23.5% and valuable gifts • Encou
Slide 23: 2018 1H Performance: Retail Portfolio
2018 1H Performance: Retail Portfolio 7 August, 2018 | Page 23 • Retail portfolio turnover was trimmed by 2% to Retail Portfolio Turnover (HK$’M) HK$962 million 985 962 • Occupancy: 96% as at 30 Jun 2018 940 • Turnover rent improved over 100% to HK$54 million • Overall, neutral rental reversion in r
Slide 24: 2018 1H Performance: Retail Portfolio
2018 1H Performance: Retail Portfolio 7 August, 2018 | Page 24 • Hysan’s estimated Retail Sales YoY Growth Retail Sales YoY Growth (Jan-Jun 18) was over 25%, outperformed the overall Hong Kong Retail Sales +25% • Total foot traffic increased by around 10% +13% • Strong increase in mainland visitors
Slide 25: 2018 1H Performance: Retail Portfolio – Trade Mix Enhancement
2018 1H Performance: Retail Portfolio 7 August, 2018 | Page 25 Trade Mix Enhancement Our commitment to meet and exceed our ever-changing customer need and expectation Lee Garden Three - Soft opening in April 2018 Modern lifestyle, an extension of our retail offerings • Home furnishing and appliances
Slide 26: 2018 1H Performance: Retail Portfolio – New Tenants
2018 1H Performance: Retail Portfolio 7 August, 2018 | Page 26 Other exciting new tenants in our portfolio • Luxury: Chaumet, The Spa by Valmont • Food and beverage: 10 Shanghai, Ta-ke, Sake Diamond, n.o.t. Specialty Coffee, Hai-di-lao • Lifestyle Offer: Converse, Vans, Cote&ciel, Champion • Kids: M
Slide 27: 2018 1H Performance: Retail Portfolio – Loyalty Programmes
2018 1H Performance: Retail Portfolio 7 August, 2018 | Page 27 Marketing No. of Member Customer Relationship Management (CRM) VIP Club Avenue Lee Garden Plus Loyalty programmes successes • VIP Club Avenue membership up around 40% +39% +195% • Sales attributed to Club Avenue members up by around 30%
Slide 28: 2018 1H Performance: Retail Portfolio – Shoppers Promotion
2018 1H Performance: Retail Portfolio 7 August, 2018 | Page 28 Shoppers promotion • Leeisure and Shopaholic shoppers’ promotion attracted good footfall and spending • Other promotions during Chinese New Year, Valentine’s Day and Mother’s Day
Slide 29: 2018 1H Performance: Retail Portfolio – Events and Community Curation
2018 1H Performance: Retail Portfolio 7 August, 2018 | Page 29 Marketing Events and Community Curation Tenant collaborations: • Louis Vuitton launch event • Rue Madame • Cartier • Brunello Cucinelli • Bvlgari • St. John • Piaget • Starbucks flagship opening Third party collaborations: • Rugby Sevens
Slide 30: 2018 1H Performance: Retail Portfolio – Unique Events
2018 1H Performance: Retail Portfolio 7 August, 2018 | Page 30 Unique events • Lee Gardens EGGssentially Art! Rugby Edition • Absolutely Fabulous Children’s Theatre monthly performance at Lee Garden Two • HK Ballet’s “ALICE (in wonderland)” street ballet performance in association with Lee Gardens A
Slide 31: 2018 1H Performance: Office Portfolio
2018 1H Performance: Office Portfolio 7 August, 2018 | Page 31 • Office portfolio turnover increased by 22% to Office Portfolio Turnover (HK$’M) HK$ 820 million • Occupancy: 95% as at 30 Jun 2018 820 • Positive rental reversion in renewals, rent 672 687 review and new lettings across the portfolio 2
Slide 32: 2018 1H Performance: Office Portfolio
2018 1H Performance: Office Portfolio 7 August, 2018 | Page 32 • Causeway Bay being highly convenient with Lee Garden Three excellent facilities and services, perfectly matches decentralisation trend Co-working Professional Space & Consulting 20% 11% • New tenants moved in or are in the process of m
Slide 33: 2018 1H Performance: Office Portfolio – Tenant Mix
2018 1H Performance: Office Portfolio 7 August, 2018 | Page 33 • Still a very balanced tenant mix showing the Overall Marketing portfolio’s diversity: 15% Professional - Banking and Finance & Consulting 15% - Professional and Consulting Business Centre & Co- working - Insurance Space 6% - Semi-Retai
Slide 34: 2018 1H Performance: Residential Portfolio
2018 1H Performance: Residential Portfolio 7 August, 2018 | Page 34 • Residential portfolio turnover decreased by 3% to Residential Portfolio Turnover (HK$’M) HK$ 130 million • Positive rental reversion on renewals, rent review 134 130 130 and new lettings • Occupancy: 79% as at 30 Jun 2018 • Still
Slide 35: Tai Po Luxury Residential Project
Tai Po Luxury Residential Project 7 August, 2018 | Page 35 • GBP Approval obtained in end July 2018 • Site formation work and foundation are now scheduled to begin in 2018 2H
Slide 36: Thank you
7 August, 2018 | Page 36 Thank you
Hysan Development Company — H1 2018 Earnings Presentation on 6ix