Csi Properties Limited · HKEX:497
Csi Properties — H1 2018 Earnings Presentation
50 slides from Csi Properties's earnings presentation, November 2017
Slide 1: 1H FY2018 Interim Results Presentation
Strictly confidential 1H FY2018 Interim Results Presentation Nov 2017 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: Interim Period FY2018 - financial highlights
Section 1 Interim Period FY2018 - financial highlights
Slide 4: FY 2018 YTD key sales
FY 2018 YTD key sales CSI has made substantial sales/ contracted sales of over HK$4billion within FY2018 YTD to ensure good profitability in the forthcoming fiscal years Project For the Six Months Unrecognised Contracted Sales Attributable Ended 30 September 2017 committed up to 30 Interest Septembe
Slide 5: FY 2018 YTD key acquisitions
FY 2018 YTD key acquisitions CSI has made new site acquisitions for FY2018YTD to replenish land bank for future growth Purchase price Date acquired Projects acquired YTD Location (HK$m) May 2017 Beijing Legendale Residential units (65% interest) Beijing c. RMB1.76bn A commercial site of c. GFA 52k s
Slide 6: FY 2018 interim results highlights
FY 2018 interim results highlights (Interim Period ended 30th September) 1HFY2018 1HFY2017 % change (HK$m) (A) (B) (A/B-1) Gross revenue from property business 1,171 301 289% Property sale 1,030 185 Rental income 141 116 Gross profit 209 223 6% Profit from property JV/associates 81 (19) Profit attri
Slide 7: FY 2018 interim results highlights (cont'd)
FY 2018 interim results highlights (cont'd) Strong cash and cash-equivalent investment balances demonstrate financial stability 1H FY 2018 FY 2017 (HK$m) 30th Sep 2017 31st Mar 2017 Properties & related assets 17,092 16,507 Cash & bank balances (including cash held by securities brokers) 2,541 3,603
Slide 8: Pro-forma Balance Sheet adjusted for market valuation as at 30 Sep 2017
Pro-forma Balance Sheet adjusted for market valuation as at 30 Sep 2017 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$1.55 per sha
Slide 9: Visible disposal and profitability pipeline
Visible disposal and profitability pipeline¹ CSI has completed a majority of the fiscal year sales target within the interim to ensure good profitability for the Group FY 2018 Book value² Asset Type (HK$m) No.232 Wan Chai Road Site (50% stake) Commercial (Completed in Oct 2017) 807 No.2-4 Shelley St
Slide 10: 1H FY 2018 financial highlights
1H FY 2018 financial highlights 1H FY 2018 FY 2017 FY 2016 (HK$m) (HK$m) (HK$m) Revenue 1,171 1,868 2,201 Gross profit 209 601 1,172 Margin % 17.8% 32.2% 53.2% EBITDA1 333 1,531 1,998 Margin % 28.4% 82.0% 90.8% Interest expenses2 158 269 172 Cash and cash equivalent 2,541 3,603 3,529 Short-term real
Slide 11: Consistent profitability and growth
Consistent profitability and growth Revenue Gross profit and gross profit margin 2,000 80% 4,000 1,666 64% 3,218 3,000 225 1,500 52% 53% 60% 2,578 48% 208 2,201 1,172 (HK$m) (HK$ $m) 226 1,868 2,000 940 281 1,000 32% 40% 2,993 1,162 1,171 738 223 2,370 746 141 36% 601 1,000 1,975 1,587 18% 203 1,030
Slide 12: Prudent leverage metrics
Prudent leverage metrics Debt / EBITDA1 EBITDA1 / net interest expense2 and cash3 / short-term debt 8 7.2 7.1 40 34.0 35 6 30 4.8 4.7 25 3.8 4.0 (x) (x) 4 3.4 20 14.3 2.2 15 11.6 1.8 8.3 2 1.5 10 6.3 5.7 0.7 3.3 4.1 4.0 5 2.2 1.8 1.7 2.1 1 0.1 0 0 FY12 FY13 FY14 FY15 FY16 FY17 FY12 FY13 FY14 FY15 FY
Slide 13: 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 treasury policy • Effective interest rate of c. 2.5% for the Group's bank borrowings as at 31 Mar 2017 • Prudent dividend policy (c
Slide 14: Portfolio of prime properties in premier locations
Portfolio of prime properties in premier locations (as at 30 Sep 2017) Commercial properties Gross area 1 Date of sq.ft. (000s) Purchase (approx) Aug-06/ G/F, 51 carparks of Capital Centre (formerly AXA Centre) Wan Chai 17 Aug-07/Jun-08 Novotel Nathan Road Hotel Jordon Jul-12 – Nov-15 220 Nos. 2–4 S
Slide 15: 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 16: Prime property portfolio review
Section 2 Prime property portfolio review
Slide 17: Well located portfolio of premium properties
Well located portfolio of premium properties Strictly confidential Portfolio overview (as at 30 Sep 2017) China 22 18 24 high quality assets in prime HONG KONG locations across Hong Kong, Shanghai and Macau with total 21 16 Shatin attributable value of c.HK$22 Sham Shui Po billion 13 3 11 Jordan 14
Slide 18: Commercial properties highlights
Commercial properties highlights Key prime commercial assets in Hong Kong and Shanghai helps to anchor c. HK$300 million rental income annually Richgate Plaza – Shanghai Novotel Hotel – Jordan 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 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.ft. • Renovation of the l
Slide 22: Central projects highlights – Soho Central
Central projects highlights – Soho Central 2-4 Shelley Street, Central 46-48 Cochrane Street, Central • Situated in Central’s Soho area, 25-storeys of chic yet • Situated in the core of Central district, adjacent to the Central-Mid contemporary office space with total GFA over 40,000 sq.ft. Levels E
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 • Consolidated 100% interest of ho
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 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 (CSI - 30%) CBD2 with
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: Couture Homes – Luxury Residential Development Projects
Couture Homes – Luxury Residential Development Projects 47 Perkins Road – 513 Yan Ching Street Glenealy- Central Jardine’s Lookout Tuen Mun Queen’s Gate - Shanghai kau to HIGHLAND – Sha Tin
Slide 29: 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. each
Slide 30: COO Residence Project – All Residential Units Presold
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 reside
Slide 31: 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 apartment
Slide 32: Perkins Road Project – JV in Jardine’s Lookout
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 33: 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 34: 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 35: 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 36: 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 conven
Slide 37: 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 38: 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 39: Company Background
Section 3 Company Background
Slide 40: Corporate history and key milestone
Corporate history and key milestone 2017 • Over 20 prime commercial and residential projects in Hong Kong and Shanghai • Total staff of over 220 people Net assets 2016 • Net asset over HK$10.7 billion • The group has • Net profit at HK$1.35 billion (100 million HKD) successfully issued 2.5 2015 mill
Slide 41: 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 well over HK$1 billion in last two years Net profit1 4,000 1H FY18: 214 3,000 FY14: 815 FY17: 1,347 (HK$m) FY13: 903 2,000 1,000 FY11: 858 FY16: 1,645
Slide 42: Proven track record in dividend
Proven track record in dividend Proven growth in dividend payout throughout the years with significant upside with additional residential sales in the forthcoming years Dividend payout 350 300 HK$115m 250 share buyback 204.0 200 (HK$m) 198.0 150 131.0 162.6 HK$100m 106.0 share 100 buyback 82.3 50 40
Slide 43: 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$200 million in September 2017 at an attr
Slide 44: Proven investment and capital recycling track record of delivering attractive IRR’s
Proven investment and capital recycling track record of delivering attractive IRR’s Selected projects and returns Months of Projects holding Cost (HK$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 45: 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 46: 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 47: 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 48: 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 Small–cap Company in Hong Kong” for 2013 and 2014 in Asia's Best Managed Companies annual poll conducted by FinanceAsia, the leadi
Slide 49: 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 28.3% future growth prospect of CSI • Mr. Mico Chung's ownership interest in Co
Slide 50: Q&A
Q&A Ea * ASIA’S * Cc S [ ae COUTURE PROPERTIES COMPANIES ea 2013 & 2014 Best Small-Cap CSI Properties * CSI °