Sun Hung Kai Properties Limited · HKEX:16
Sun Hung Kai Properties — FY2007 Earnings Presentation
29 slides from Sun Hung Kai Properties's earnings presentation, Sep 13, 2007
Slide 1: Sun Hung Kai Properties FY2007 Final Results
SUN HUNG KAI PROPERTIES FY2007 FINAL RESULTS 13 September 2007
Slide 2: Agenda
Agenda Final Results Highlights Business Review Mainland Expansion Strategy Prospects Sun Hung Kai Properties – FY2007 Final Results 2
Slide 3: Final Results Highlights
Final Results Highlights The Vineyard, Yuen Long
Slide 4: Final Results Highlights
Final Results Highlights Year ended 30 June 2007 2006 Change Reported net profit (HK$m) 21,226 19,850 6.9% Reported earnings per share (HK$) 8.52 8.23 3.5% Underlying net profit* (HK$m) 11,495 10,468 9.8% Underlying earnings per share* (HK$) 4.61 4.34 6.2% Interim dividend per share (HK$) 0.70 0.70
Slide 5: Profit Breakdown
Profit Breakdown Year ended 30 June (HK$m) 2007 2006 Change Property sales 7,698 7,049 9.2% Net rental income 5,245 4,615 13.7% Hotel operation 349 241 44.8% Telecommunications 183 118 55.1% Other businesses 1,388 1,370 1.3% Other income 516 535 3.6% Unallocated administrative expenses (681) (625) 9
Slide 6: Review of FY2007 Results
Review of FY2007 Results Major projects sold include Park Island Phase 5, Severn 8, Harbour Green, Manhattan Hill and The Vineyard Completed 6 projects with an attributable GFA of about 4.4m sq. ft. Project Group’s interest Usage Attributable GFA (sq. ft.) (%) Harbour Green Joint Venture R 1,110
Slide 7: Review of FY2007 Results (Cont'd)
Review of FY2007 Results (Cont’d) Sold and pre-sold HK$20,930m of properties during FY2007, versus HK$5,102m last year Net rental income rose 14% to HK$5,245m − Increased rents for new leases and renewals across all sectors − Robust rental growth from IFC Hotel contribution grew 45% − First fu
Slide 8: Business Review
Business Review APM, East Kowloon
Slide 9: Residential Sales in Hong Kong
Residential Sales in Hong Kong Premium pricing power demonstrated in sales results at Severn 8, Manhattan Hill, Harbour Green and The Vineyard Take the lead to extend guarantee on new residential developments to 2 years Key projects to be launched for sale in FY08 − Harbour Place in Kowloon −
Slide 10: Property Investment
Property Investment Investment Properties in Hong Kong 14% increase in net rental Gross Rental Income for FY2007* income (HK$7,215m) − Higher rents on renewals and new Residential leases across all sectors 8% − Strong growth at IFC − First full-year contribution from Four Seasons Place Shopping Ce
Slide 11: Update on ICC
Update on ICC Morgan Stanley becomes the first anchor tenant at ICC − First investment bank to move its headquarter to Kowloon − Expect to move into ICC in 2H2008 and will occupy 10 floors Pre-leasing is very encouraging − Virtually all space in Phase 1 of 900,000 sq. ft. is pre-leased or at adv
Slide 12: Land Bank in Hong Kong
Land Land Total BankBank in Hong Kong Attributable GFA (m sq. ft.) Hong Kong Mainland China Properties under development 19.6 42.8 Completed investment properties 23.9 3.0 43.5 45.8 Over 23m sq. ft. (site area) of agricultural land in the New Territories of Hong Kong, the majority of which is in c
Slide 13: Land Acquisitions - Land Bank in Hong Kong
Land Acquisitions Land Bank in HonginKong Hong Kong Acquisitions in FY2007 Group’s Interest Usage Attributable GFA (sq. ft.) (%) Tuen Mun Station Joint venture R/S 1,556,000 Tseung Kwan O Area 56 Joint venture R/O/H 1,541,000 Kowloon Inland Lot 11146 100 R/S 916,000 Yuen Long Lot 2099 in DD109 100 R
Slide 14: Land Acquisitions - Land Bank in the Mainland
Land Acquisitions Land Bank in HonginKong the Mainland Acquisitions in FY2007 City Group’s Usage Attributable GFA (sq. ft.) Interest (%) Shiling Project, Huadu Guangzhou 100 R 7,284,000 Dragon Lake Project, Guangzhou 60 R 7,244,000 Huadu Shuangliu County Project Chengdu 91 R 5,940,000 Sandong Road P
Slide 15: Mainland Expansion Strategy
Mainland Expansion Strategy Shanghai IFC, Lujiazui Shanghai
Slide 16: Mainland Expansion Strategy
Mainland Expansion Strategy Covering 3 areas including Mainland exposure Strategies – Locations and project types Execution plans Sun Hung Kai Properties – FY2007 Final Results 16
Slide 17: Mainland Exposure
Mainland Exposure Target to raise committed investments to 30% of total assets over the next 3 years Current commitments in the Mainland are about 17% of total assets − Attributable committed investments are about RMB$44bn − Covering Beijing, Shanghai, Guangzhou/Pearl River Delta (PRD) cities, H
Slide 18: Strategies - Locations
Strategies - Locations Target to enter 10 major cities over next 3 years Continue to increase investments in 4 prime cities − Beijing, Shanghai, Guangzhou/PRD cities and Shenzhen Enter other selected cities based on GDP per capita, population, city competitiveness and strategic importance Sun
Slide 19: Strategies - Project Types
Strategies – Project Types Extend the current balanced model between properties for rental and for sale to the Mainland Develop landmark commercial complexes in prime locations Target mid-to-high end residential developments for sale Sun Hung Kai Properties – FY2007 Final Results 19
Slide 20: Execution Plans
Execution Plans Strong mainland teams already established − Regional offices established in Beijing, Shanghai and Guangzhou − Local teams being set up for each project Solid financial position to fund expansion − Growing recurrent rental income − Residential sales will help finance development o
Slide 21: Progress - Mainland Residential Sales
Progress – Mainland Residential Sales Pre-sale of first batch of residential units at Phase 1 of Taihu International Community, Wuxi − About 300 units sold within a few hours − Target to sell the remaining units of Phase 1 over next year Pre-sale of Phase 3 of The Woodland in Zhongshan is underw
Slide 22: Progress - Mainland Investment Properties
Progress – Mainland Investment properties HSBC will be the major occupant of Shanghai IFC − HSBC will take up 570,000 sq. ft. over 20 floors in one office tower as its headquarter in the Mainland Renovations at Beijing APM will be completed by the end of 2007 − A major tenant, Nike’s flagship st
Slide 23: Recap of Mainland Expansion Strategy
Recap of Mainland Expansion Strategy Mainland exposure Raise committed investments to 30% of total assets over next 3 years 10 cities with focus on 4 prime cities Strategies Balanced model • Landmark commercial complexes + Mid-to-high end residential for sale Strong mainland teams Execution plans So
Slide 24: Prospects
Kowloon Station Development Packages 5, 6 & 7 Prospects
Slide 25: Hong Kong Property Market
Hong Kong Property Market Residential market likely to fare better − Rising income amid tight labour market − Low mortgage interest rates − Declining inventory level − Limited new supply − Buyers’ confidence continuing to improve Grade A office rents in core areas will remain firm on the back of
Slide 26: Mainland Residential Market
Mainland Residential Market Expect to continue to prosper − Rising general affluence and strong growth − Increasing aspiration towards home ownership − Continuous urbanization − Strong investors’ confidence Macro-control measures towards the property sector should be positive to the healthy deve
Slide 27: Growth Prospects
Growth Prospects Positive outlook for property development business in Hong Kong given our − Strong brand allowing for margin enhancement − Sizeable land bank − Large agricultural land reserves Actively pursue land acquisition opportunities in Hong Kong through various means, including agricultu
Slide 28: Growth Prospects (Cont'd)
Growth Prospects (Cont’d) Continuous positive rent reversion and additional rental income from 6m sq. ft. of new investment properties in Hong Kong over the next 4 years Disposal of non-core investment properties to enhance asset turnover and shareholders’ return Accelerated expansion into the
Slide 29: Thank You
SUN HUNG KAI PROPERTIES Thank You
Sun Hung Kai Properties — FY2007 Earnings Presentation on 6ix