Sun Hung Kai Properties Limited · HKEX:16
Sun Hung Kai Properties — 1H FY2023 Earnings Presentation
51 slides from Sun Hung Kai Properties's earnings presentation, Feb 23, 2023
Slide 1: FY2023 Interim Results
Cover 2 FY2023 Interim Results 23 February 2023 24 February 2022 FY2023 Interim Results
Slide 2: Contents
Contents Page Financial Review – 1H FY2023 4 Property Business – Hong Kong Land Bank 9 Property Development 13 Property Investment 17 Property Business – Mainland Land Bank 26 Property Development 28 Property Investment 32 Hotel Business 38 Sustainability 40 Market and Business Prospects
Slide 3: Disclaimer
Disclaimer 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, recommendation or suggestion by Sun Hung Kai Properties Lim
Slide 4: Financial Review – 1H FY2023
IFC and ICC, Hong Kong FINANCIAL REVIEW – 1H FY2023 FY2023 Interim Results
Slide 5: Financial Highlights
Financial Highlights 1H 1H Change FY2023 FY2022 Profit attributable to the Company’s shareholders - Underlying(1) (HK$ mn) 9,465 14,818 -36.1% - Reported (HK$ mn) 8,410 15,186 -44.6% Basic earnings per share - Underlying(1) (HK$) 3.27 5.11 -36.1% - Reported (HK$) 2.90 5.24 -44.6% Interim dividend pe
Slide 6: Profit Breakdown by Segment
Profit Breakdown by Segment Profit Breakdown by Segment(1) 1H 1H Change (in HK$ mn) FY2023 FY2022 (I) Property sales - Hong Kong 1,200 7,036 - Mainland 2,166 622 Sub-total 3,366 7,658 -56.0% (II) Property rental - Hong Kong 6,393 6,715 - Mainland 2,218 2,766 - Singapore 276 247 Sub-total 8,887 9,728
Slide 7: Financial Position
Financial Position 31 Dec 30 Jun 31 Dec As at 2022 2022 2021 Shareholders’ equity (HK$ mn) 595,070 601,946 600,773 - Shareholders’ equity per share (HK$) 205.4 207.7 207.3 Net debt (HK$ mn) 114,067 104,608 104,955 Net gearing ratio(1) 19.2% 17.4% 17.5% 1H 1H FY2023 FY2022 Interest cover(2) 6.0x 13.0
Slide 8: Financial Position (Cont’d)
Financial Position (Cont’d) Debt Maturity Profile Non-RMB Floating Rate Debt: 54% Floating - Floating - Other, 1% >5 years, <1 year, 16% RMB, 12% Prudent financial policy 24% Floating - HKD, Between 1 and Fixed, 34% 53% 2 years, 20% Diversified funding sources Between 2 and 5 years, 40% Net Gearing
Slide 9: Property Business - Hong Kong: Land Bank
Wetland Seasons Bay, Hong Kong PROPERTY BUSINESS - HONG KONG LAND BANK FY2023 Interim Results
Slide 10: Land Bank in Hong Kong
Land Bank in Hong Kong Total land bank as at 31 December 2022: 57.9mn sq.ft.(1) (2) Completed Properties Properties under Development (3) (3) Residential Industrial Industrial 10% Hotel 6% 12% 2% Office 11% Hotel 13% Retail 10% Residential Retail 71% 35% Office 30% Total: 34.8mn sq.ft. Total: 23.1
Slide 11: Land Acquisitions in Hong Kong
Land Acquisitions in Hong Kong HKICC In November 2022, the Group was award High Speed Rail the right to develop and operate the Artist West Kowloon Terminus Square Towers Project in the West Kowloon Development Cultural District for about 47 years under a The Artist Square Build-Operate-Transfer a
Slide 12: Land Acquisitions in Hong Kong (Cont’d)
Land Acquisitions in Hong Kong (Cont’d) Successfully acquired commercial sites near Anderson Road in Kwun Tong through government tender Located in a new residential cluster in Kowloon East, the project will be developed into community shopping centres • To offer diverse options for the daily ne
Slide 13: Property Business - Hong Kong: Property Development
PARK YOHO Bologna, Hong Kong PROPERTY BUSINESS - HONG KONG PROPERTY DEVELOPMENT FY2023 Interim Results
Slide 14: Recognized Property Sales in Hong Kong
Recognized Property Sales in Hong Kong (1) Property Sales 1H FY2023 1H FY2022 Change Revenue (HK$ mn) 2,885 16,997 83.0% Operating profit (HK$ mn) 1,200 7,036 82.9% Substantial decrease was mainly due to all residential projects for sale to be completed in FY2023 are scheduled for handover in 2H F
Slide 15: Contracted Sales in Hong Kong for 1H FY2023
Contracted Sales in Hong Kong for 1H FY2023 Stake Attri. Sales Proceeds Project (%) (HK$ bn) NOVO LAND Phase 1A & 1B, Tuen Mun 100 9.5 Wetland Seasons Bay Phase 2 & 3 100 1.4 PARK YOHO Bologna, Yuen Long 100 0.8 Others 1.7 Total 13.4 In 1H FY2023, Hong Kong residential market went through a period
Slide 16: Ample Saleable Resources in Hong Kong
Ample Saleable Resources in Hong Kong - New Projects to be launched in the Rest of 2023 MTR/ High speed railway UNIVERSITY Hill, Pak Shek Kok Stake: 100% NOVO LAND Phase 2A & 2B, Tuen Mun Res. GFA: 287,000 sq.ft. Stake: 100% 233 Prince Edward Road Res. GFA: 883,000 sq.ft. West, Ho Man Tin Stake: 58%
Slide 17: Property Business - Hong Kong: Property Investment
APM, Hong Kong PROPERTY BUSINESS - HONG KONG PROPERTY INVESTMENT FY2023 Interim Results
Slide 18: Rental Income from Diversified Portfolio
Rental Income from Diversified Portfolio Gross Rental Income by Sector in Hong Kong(1) HK$ mn Overall Average 12,000 Occupancy: ~93% 9,941 -7.6% YoY -2.8% YoY -1.7% YoY 10,000 9,181 8,928 8,772 Retail rental income 8,000 registered the lowest 5,403 decline since COVID 4,698 4,519 Retail 4,477 6,000
Slide 19: Hong Kong Retail Portfolio of 12mn sq.ft.
Hong Kong Retail Portfolio of 12mn sq.ft. The Group’s retail portfolio achieved resilient performance with increased footfall and leasing activities • An overall average occupancy of ~96% was recorded in 1H FY2023 Visitor arrivals have been increasing IFC Mall V City recently following the full
Slide 20: Initiatives to Enhance Shoppers’ Experience
Initiatives to Enhance Shoppers’ Experience APM East Point City YOHO Mall Metroplaza Catered for customers’ changing preference with attentive and innovative initiatives Continued to upgrade indoor and outdoor space of major malls with green and trendy elements, bringing refreshing ambience to s
Slide 21: Initiatives to Enhance Shoppers’ Experience (Cont’d)
Initiatives to Enhance Shoppers’ Experience (Cont’d) Regularly rolled out unique promotional campaigns to boost shopper traffic and tenant sales The Point, the Group’s online platform and integrated loyalty programme, has further strengthened its collaboration with business partners and tenants
Slide 22: Hong Kong Office Portfolio of 10mn sq.ft.
Hong Kong Office Portfolio of 10mn sq.ft. Continued to deliver resilient performance against the challenging office leasing market MTR/ High speed railway Millennium City Cluster IFC Attr. GFA: 1.7mn sq.ft Attr. GFA: 1.0mn sq.ft. Occupancy: ~91% Occupancy: ~99% ICC Wan Chai & Causeway Bay GFA: 2.5
Slide 23: Major Projects in the Pipeline
Major Projects in the Pipeline Apart from pursuing Platinum ratings for LEED, BEAM Plus and WELL, the retail-cum-office project at 98 How Ming Street demonstrates the latest in building technologies and smart facility management system The Millennity, two Grade-A office towers • Leasing activiti
Slide 24: Major Projects in the Pipeline (Cont’d)
Major Projects in the Pipeline (Cont’d) Unparalleled connectivity within Hong Kong and to major mainland cities via railways Together with nearby ICC and newly added Artist Square Towers Project, position as a unique commercial hub and wealth management centre in the Greater Bay Area Attracted
Slide 25: Strong Pipeline of Properties for Investment in Hong Kong
Strong Pipeline of Properties for Investment in Hong Kong Completed Properties Office-cum-retail project next to Completed Properties MTR Tin Shui Wai Station for Investment for Investment Office GFA: 366,000 sq.ft. Retail GFA: 490,000 sq.ft. End-FY2026 End-Dec 2022 attr. GFA: Retail project nex
Slide 26: Property Business - Mainland: Land Bank
Guangzhou South Station ICC, Guangzhou Rendering PROPERTY BUSINESS - MAINLAND LAND BANK FY2023 Interim Results
Slide 27: Land Bank on the Mainland
Land Bank on the Mainland Total land bank as at 31 December 2022: 68.3mn sq.ft.(1) (2) Completed Properties Properties under Development Hotel Hotel Residential 5% 7% 9% Office 32% Residential 44% Office 39% Retail 45% Retail 19% Total: 20.0mn sq.ft. Total: 48.3mn sq.ft. (1) In attributable terms
Slide 28: Property Business - Mainland: Property Development
Park Royale, Guangzhou PROPERTY BUSINESS - MAINLAND PROPERTY DEVELOPMENT FY2023 Interim Results
Slide 29: Recognized Property Sales on the Mainland
Recognized Property Sales on the Mainland (1) Property Sales 1H FY2023 1H FY2022 Change Revenue (HK$ mn) 4,031 1,465 175.2% Operating profit (HK$ mn) 2,166 622 248.2% Major contributors: • Oriental Bund Phase 4C in Foshan, Grand Waterfront Phase 3 in Dongguan and Jovo Town Phase 3A in Chengdu Sa
Slide 30: Contracted Sales on the Mainland for 1H FY2023
Contracted Sales on the Mainland for 1H FY2023 Attri. Sales Stake Project Location Proceeds (%) (RMB bn) Hangzhou IFC (Residential Portion) Hangzhou JV(1) 1.3 Jovo Town Chengdu 91 0.8 Oriental Bund Foshan 50 0.3 Others 0.2 (2) Total 2.6 (1) The Group has a 45% and 50% interest in River East and Rive
Slide 31: Upcoming Launches on the Mainland in the Next 10 Months
Upcoming Launches on the Mainland in the Next 10 Months Stake Attri. Res. GFA Project Location (%) (sq.ft.) Guangzhou South Station ICC Guangzhou 100 478,000 (Residential Portion Phase 1) Shanghai Arch Phase 3 (Apartments) Shanghai 100 438,000 Hangzhou IFC (Residential Portion Phase 2) Hangzhou JV(1
Slide 32: Property Business - Mainland: Property Investment
Shanghai IFC Mall, Shanghai PROPERTY BUSINESS - MAINLAND PROPERTY INVESTMENT FY2023 Interim Results
Slide 33: Rental Income from the Mainland
Rental Income from the Mainland Gross Rental Income 1H FY2023 Change Gross Rental Income by Sector on the Mainland(1) in HK$ mn 2,798 17.1% yoy HK$ mn in RMB mn 2,507 9.9% yoy 4,000 17.7% YoY 3,374 18.8% YoY -17.1% YoY Decline mainly due to: 3,000 2,866 2,798 COVID related measures 2,413 Rental
Slide 34: Existing Mainland Property Investment – Retail Portfolio
Existing Mainland Property Investment – Retail Portfolio The Group’s retail portfolio on the mainland has recorded further improvement in footfall and tenant sales of late Shanghai IFC Mall and IAPM mall in Shanghai and the two joint-venture malls in Guangzhou, Parc Central and IGC sustained hig
Slide 35: Existing Mainland Property Investment – Office Portfolio
Existing Mainland Property Investment – Office Portfolio One ITC, Shanghai Shanghai IFC Shanghai ICC Nanjing Two IFC Complemented by a retail portion within an integrated development, Shanghai IFC and Shanghai ICC both sustained high occupancies amid a challenging leasing environment Nanjing One
Slide 36: Major Projects in the Pipeline
Major Projects in the Pipeline Tower A of Three ITC was completed with tenants moving in since August 2022 Construction of the remaining parts of Three ITC is underway Both office towers of Three ITC are targeted Rendering to attain Platinum ratings for LEED and WELL Three ITC Final Phase of I
Slide 37: Strong Pipeline of Properties for Investment on the Mainland
Strong Pipeline of Properties for Investment on the Mainland Residential End-Dec 2022 End-Dec 2025 +45% Retail attr. GFA: attr. GFA: >18mn sq.ft. >26mn sq.ft. Office (Estimated) Hotel Four Seasons Hotel Suzhou Hangzhou IFC(1) Attr. Hotel GFA: 297,000 sq.ft. Guangzhou South Station ICC FY2023 F
Slide 38: Hotel Business
W Hong Kong, Hong Kong HOTEL BUSINESS FY2023 Interim Results
Slide 39: Hotel Business
Hotel Business Hotel Business(1) 1H FY2023 1H FY2022 Change (HK$ mn) Revenue 1,860 1,811 2.7% Operating Profit -63 -162 n.m. Performance of the Group's hotel portfolio in Hong Kong continued to improve There is a marked increase in the occupancy and room rates of the Group’s hotels recently Oc
Slide 40: Sustainability
Core commercial projects in Hong Kong and major mainland cities SUSTAINABILITY FY2023 Interim Results
Slide 41: Sustainability Initiatives
Sustainability Initiatives Upgrade existing core commercial projects to meet the highest green building standards • All these signature developments of the Group have recently achieved LEED Platinum ratings under v4.1 Operations & Maintenance: Existing Buildings rating system One IFC, Two IFC and
Slide 42: Sustainability Initiatives (Cont’d)
Sustainability Initiatives (Cont’d) Promote sports for charity and healthy living • Two large outdoor sports events sponsored by SHKP made a return recently Sun Hung Kai Properties Hong Kong Sun Hung Kai Properties Hong Kong Cyclothon 10K Championships Encourage reading and holistic development,
Slide 43: Market and Business Prospects
IFC and ICC, Hong Kong MARKET AND BUSINESS PROSPECTS FY2023 Interim Results
Slide 44: Market Prospects
Market Prospects Hong Kong The local economy is expected to recover in 2023 with the normalization of economic activities after the full resumption of normal travel with the mainland The full resumption of normal travel with the mainland and broader economic Primary residential revival will supp
Slide 45: Market Prospects (Cont’d)
Market Prospects (Cont’d) Key Cities on the Mainland With economic growth being the top priority, pro-growth policies and other stimuli will be expedited to help restore market confidence and drive a stronger economic recovery Various measures to ensure stable development of property market will
Slide 46: Business Prospects
Business Prospects Short-term Following the full border reopening and normalization of economic activities, the Group’s rental portfolio and hotel operations, both in Hong Kong and on the mainland, have shown further improvement • Well prepares to seek opportunities amid improving operating enviro
Slide 47: Business Prospects (Cont’d)
Business Prospects (Cont’d) Medium- to Long-term The Group is confident about the prospects of the mainland and Hong Kong and will continue to grasp investment opportunities with good potential, contributing to Hong Kong and the Country The Group’s footprint will be further expanded through the
Slide 48: Creating Long-term Value for All Stakeholders
Creating Long-term Value for All Stakeholders Following a three-year fight against the pandemic, Hong Kong is on the path to normalcy with the long-awaited border reopening. With its distinctive advantages under ‘One Country, Two Systems’, Hong Kong enjoys strong support of the motherland and is clo
Slide 49: Thank You!
Cover 2 Thank You! 24 February 2022 FY2023 Interim Results
Slide 50: Environmental Targets
Appendix: Environmental Targets Energy Management • To reduce the electricity consumption intensity of its EOC-monitored buildings(1) by 13% by FY2030, against FY2020 as baseline • Accomplished five-year energy reduction target by FY2020 Greenhouse Gas Emissions Management • To reduce the Scope 1 an
Slide 51: Sustainability Performance
Appendix: Sustainability Performance Constituent of the Hang Seng Corporate Sustainability Index and Hang Seng (Mainland and Hong Kong) Corporate Sustainability Index with an ‘AAA’ rating Top five rankings A constituent since 2018 Sustainability Report 2021/22 For the 21st consecutive year As of 202
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