Sun Hung Kai Properties Limited · HKEX:16
Sun Hung Kai Properties — 1H FY2024 Earnings Presentation
49 slides from Sun Hung Kai Properties's earnings presentation, Feb 28, 2024
Slide 1: FY2024 Interim Results
Cover 2 FY2024 Interim Results 28 February 2024 24 February 2022 FY2024 Interim Results
Slide 2: Contents
Contents Page Financial Review – 1HFY2024 4 Property Business – Hong Kong Land Bank 10 Property Development 13 Property Investment 17 Property Business – Mainland Land Bank 26 Property Development 28 Property Investment 31 Hotel Business 37 Sustainability 39 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 FY2024
IFC and ICC, Hong Kong FINANCIAL REVIEW – 1H FY2024 FY2024 Interim Results
Slide 5: Financial Highlights
Financial Highlights 1H 1H Change FY2024 FY2023 Profit attributable to the Company’s shareholders - Underlying(1) (HK$ mn) 8,906 9,465 -5.9% - Reported (HK$ mn) 9,145 8,410 +8.7% Basic earnings per share - Underlying(1) (HK$) 3.07 3.27 -5.9% - Reported (HK$) 3.16 2.90 +8.7% Interim dividend per shar
Slide 6: Profit Breakdown by Segment
Profit Breakdown by Segment Profit Breakdown by Segment(1) 1H 1H Change (in HK$ mn) FY2024 FY2023 (I) Property sales - Hong Kong 1,235 1,200 - Mainland 805 2,166 Sub-total 2,040 3,366 -39.4% (II) Property rental - Hong Kong 6,574 6,393 - Mainland 2,473 2,218 - Singapore 279 276 Sub-total 9,326 8,887
Slide 7: Financial Position
Financial Position 31 Dec 30 Jun 31 Dec As at 2023 2023 2022 Shareholders’ equity (HK$ mn) 602,330 602,055 595,070 - Shareholders’ equity per share (HK$) 207.9 207.8 205.4 Net debt (HK$ mn) 127,786 109,773 114,067 Net gearing ratio(1) 21.2% 18.2% 19.2% Interest cover for the past 12 months(2) 5.4X 8
Slide 8: Prudent Financial Management
Prudent Financial Management Net Gearing Ratio Higher net gearing due to: 25% □ Payment of final dividend for FY2023 21.2% 20% 19.2% □ A substantial portion of the residential 16.0% 17.5% 17.4% 18.2% sale proceeds in Hong Kong have not 15% 14.1% 14.4% been received 10% Expect to see lower net ge
Slide 9: Prudent Financial Management (Cont’d)
Prudent Financial Management (Cont’d) A better alignment of RMB- denominated assets and liabilities Debt Maturity via additional borrowings in RMB Profile Debt (HK$bn) As at 31 Dec-23 As at 30 Jun-23 <1 year, 15% HKD 34.5 (25%) 34.8 (28%) Fixed >5 years, RMB 4.8 (4%) 2.4 (2%) 19% HKD 78.6 (58%) 71.0
Slide 10: Property Business – Hong Kong Land Bank
NOVO LAND, Hong Kong PROPERTY BUSINESS – HONG KONG LAND BANK FY2024 Interim Results
Slide 11: Land Bank in Hong Kong
Land Bank in Hong Kong Total land bank as at 31 December 2023: 58.8mn sq.ft.(1) Completed Properties Properties under Development (3) Industrial (3) Industrial Residential 5% 13% 11% Office 15% Hotel 13% Residential Retail 69% Retail 11% 33% Office 30% (2) Total: 36.6mn sq.ft. Total: 22.2mn sq.ft.
Slide 12: Land Acquisitions in Hong Kong
Land Acquisitions in Hong Kong Added two residential sites through lease modifications □ Both sites are located near to the Group’s existing projects Location Usage Group’s Attributable Interest Gross Floor Area (%) (square feet) (1) Lot No. 1696 in DD 115, Re si dential / 100 795,000 Tung Shing L
Slide 13: Property Business – Hong Kong Property Development
Silicon Hill / University Hill, Hong Kong PROPERTY BUSINESS – HONG KONG PROPERTY DEVELOPMENT FY2024 Interim Results
Slide 14: Recognized Property Sales in Hong Kong
Recognized Property Sales in Hong Kong (1) Property Sales 1H FY2024 1H FY2023 Change Revenue (HK$ mn) 3,612 2,885 25.2% Operating profit (HK$ mn) 1,235 1,200 2.9% Mainly derived from sales of completed residential units All residential projects for sale to be completed in FY2024 are scheduled fo
Slide 15: Contracted Sales in Hong Kong for 1H FY2024
Contracted Sales in Hong Kong for 1H FY2024 In 1H FY2024, Hong Kong residential market continued to be affected by elevated interest rates and uncertain economic outlook Among a contracted sales of HK$9.6bn, HK$2.2bn came from completed stocks Stake Attri. Sales Proceeds Project (%) (HK$ bn) YOH
Slide 16: New Projects to be Launched in the Next 10 Months
New Projects to be launched in the Next 10 Months MTR/ High speed railway Stake Res. GFA Project (%) (sq.ft.) (1) YOHO Hub II, Yuen Long JV 627,000 3 NOVO LAND 1 (2) 100 694,000 4 Phase 3A & 3B Tuen Mun 2 YOHO WEST Phase 2, (3) JV 234,000 Tin Shui Wai Sai Sha Project Phase 1A, (4) 100 423,000 near M
Slide 17: Property Business – Hong Kong Property Investment
TOWNPLACE WEST KOWLOON, Hong Kong PROPERTY BUSINESS – HONG KONG PROPERTY INVESTMENT FY2024 Interim Results
Slide 18: Diversified Property Investment Portfolio Generating Sizable Rental Income
Diversified Property Investment Portfolio Generating Sizable Rental Income Gross rental income registered modest growth in 1H FY2024 Gross Rental Income by Sector in Hong Kong(1) Rental income from retail portfolio HK$ mn registered positive growth 12,000 (+3.5% yoy in 1H FY2024) 9,941 10,000 9,18
Slide 19: Hong Kong Retail Portfolio
Hong Kong Retail Portfolio Registered a moderate increase in rental income with a stable occupancy of 95% Adopt proactive approach to attract customers Proactive Approach Refine Tenant-and-Trade Mix Develop close and long-term relationships with tenants and customers Ongoing asset and service Co
Slide 20: Initiatives to Enhance Shoppers’ Experience
Initiatives to Enhance Shoppers’ Experience Refine the tenant-and-trade mix constantly to in line with prevailing market trends Collaborate with its tenants and business arms to initiate promotional offers and activities APM East Point City V City FY2024 Interim Results 20
Slide 21: Initiatives to Enhance Shoppers’ Experience (Cont’d)
Initiatives to Enhance Shoppers’ Experience (Cont’d) Pet- and family-friendly facilities were introduced through refurbishing outdoor areas □ Dino Park: A 35,000- square-foot outdoor playground at the rooftop area of New Town Plaza in Sha Tin □ Help to boost mall traffic and tenant sales Dino Park
Slide 22: Initiatives to Enhance Shoppers’ Experience (Cont’d)
Initiatives to Enhance Shoppers’ Experience (Cont’d) Revamped mobile app interface Redemption of EV Super Charging service with points Installing more super- fast EV chargers in all Consolidated its social major malls media platforms Hong Kong’s first point redemption programme for super- fast E
Slide 23: Hong Kong Office Portfolio
Hong Kong Office Portfolio Registered a satisfactory occupancy of about 92% Remained resilient under the trend of flight-to-quality Continue to upgrade the green-building standards of its major existing buildings IFC ICC Wan Chai & Causeway Bay Millennium City Cluster Attr. GFA: 1.0mn sq.ft. G
Slide 24: Embracing Innovation to Property Investment Portfolio
Embracing Innovation to Property Investment Portfolio TOWNPLACE WEST KOWLOON A brand-new serviced apartment in West Kowloon, appealing to international and mainland expatriates Soft opening in October 2023 Near to MTR Nam Cheong Station, a pier & a promenade A hybrid short- and long-term l
Slide 25: Expanding Portfolio to Support Recurring Income Base
Expanding Portfolio to Support Recurring Income Base Recurrent income base will be further expanded in the near-to-medium term as new investment properties will come on stream Create strong synergy with the Group’s existing portfolio in the vicinity FY2026/27 & Beyond FY2025/26 FY2024/25 Renderi
Slide 26: Property Business – Mainland Land Bank
Hangzhou IFC, Hangzhou Rendering PROPERTY BUSINESS – MAINLAND LAND BANK FY2024 Interim Results
Slide 27: Land Bank on the Mainland
Land Bank on the Mainland Total land bank as at 31 December 2023: 67.2mn sq.ft.(1) Completed Properties Properties under Development Hotel Residential 9% 9% Office Hotel 34% 3% Office 38% Residential Retail Retail 43% 44% 20% (2) Total: 20.9mn sq.ft. Total: 46.3mn sq.ft. (1) In attributable terms
Slide 28: Property Business – Mainland Property Development
Forest Park, Guangzhou Rendering PROPERTY BUSINESS – MAINLAND PROPERTY DEVELOPMENT FY2024 Interim Results
Slide 29: Recognized Property Sales on the Mainland
Recognized Property Sales on the Mainland (1) Property Sales 1H FY2024 1H FY2023 Change Revenue (HK$ mn) 1,594 4,031 60% Operating profit (HK$ mn) 805 2,166 63% The decline was mainly due to lower sales volume of residential units Around HK$6.1bn(2) contracted sales yet to be recognized Satisf
Slide 30: Contracted Sales on the Mainland
Contracted Sales on the Mainland In 1H FY2024, the Group achieved an attributable contracted sales of over RMB3.0bn(1) on the mainland, mainly attributed to the sale of residential portion at Hangzhou IFC Over the next 10 months, the Group plans to launch: Stake Attri. Res. GFA Project Location
Slide 31: Property Business – Mainland Property Investment
Shanghai IFC Mall, Shanghai PROPERTY BUSINESS – MAINLAND PROPERTY INVESTMENT FY2024 Interim Results
Slide 32: Rental Income from the Mainland
Rental Income from the Mainland Gross Rental Income by Sector on the Mainland(1) HK$ mn 4,000 Retail 66% 3,374 3,139 (+12.2% yoy) 3,000 2,866 (+15.5% yoy in RMB) Rental income growth 992 2,798 mainly due to: 896 (+1.6% yoy) 2,413 Rental growth in (+5.0% yoy in RMB) 927 882 retail portfolio No re
Slide 33: Existing Mainland Property Investment – Retail Portfolio
Existing Mainland Property Investment – Retail Portfolio The Group’s retail portfolio on the mainland continued to perform well with positive rental reversion Shanghai IFC Mall houses a IAPM, Shanghai Parc Central, Guangzhou wide array of internationally acclaimed retailers from across the globe
Slide 34: Existing Mainland Property Investment – Office Portfolio
Existing Mainland Property Investment – Office Portfolio The Group’s grade-A offices at Shanghai IFC, Shanghai ICC and the first two phases of ITC achieved satisfactory occupancies Occupancy of Tower A at Three ITC is ramping up with satisfactory pre-leasing rate Shanghai IFC, Shanghai Shanghai
Slide 35: Expanding Property Investment Portfolio on the Mainland
Expanding Property Investment Portfolio on the Mainland Nanjing IFC Mall, Hexi CBD, Nanjing A one-million-sq.ft. mall with seamless connections to metro lines House top-tier brands which made their debuts in Nanjing Diverse open space and delicately-carved interior design with striking storefr
Slide 36: Expanding Property Investment Portfolio on the Mainland
Expanding Property Investment Portfolio on the Mainland Three ITC, Xujiahui, Shanghai A much-anticipated project to be completed in the near future Tower A office completed in FY23, while Tower B, the 370-metre-tall office skyscraper, is scheduled for completion in early 2025 □ Both Tower B and
Slide 37: Hotel Business
Four Seasons Hotel Suzhou HOTEL BUSINESS FY2024 Interim Results
Slide 38: Hotel Business
Hotel Business Hotel Business(1) 1H FY2024 1H FY2023 Change Revenue (HK$ mn) 2,757 1,860 48% Operating profit/(loss) (HK$ mn) 430 -63 n.m. The Group’s hotel business in Hong Kong continued to recover amid the return of mega events and a revival of inbound tourism Ritz-Carlton Shanghai, Pudong de
Slide 39: Sustainability
Major green projects and green initiatives SUSTAINABILITY FY2024 Interim Results
Slide 40: Sustainability Initiatives
Sustainability Initiatives Committed to achieving LEED Gold or Platinum ratings for its new major commercial projects The Millennity and the shopping mall Rolled out a recycle reward Encouraged the use of EVs through programme with the smart the installation of super-fast EV underneath achieved
Slide 41: Sustainability Initiatives (Cont’d)
Sustainability Initiatives (Cont’d) Made the most of its resources Promote sports for charity and healthy living to enhance social well-being Lent a site in Yuen Long to the Government for Sun Hung Kai Properties Hong Kong Sun Hung Kai Properties Hong Kong the construction of light public housin
Slide 42: Market and Business Prospects
IFC and ICC, Hong Kong MARKET AND BUSINESS PROSPECTS FY2024 Interim Results
Slide 43: Market Prospects
Market Prospects Hong Kong The uncertain external environment and the elevated funding costs will continue to weigh on investment sentiment in the near term Further policy relaxations, rising home rents and potential rate cuts should benefit the residential market Government initiatives will s
Slide 44: Business Prospects
Business Prospects Emphasizing on cash flow management, the Group will continue to adhere to its prudent financial discipline □ Strictly control capital expenditure □ Stick to highly selective approach in land bank replenishment □ Continue to generate cash flow from Sizeable and well-diversified
Slide 45: Business Prospects (Cont’d)
Business Prospects (Cont’d) Several of the Group’s new investment properties are coming on stream, creating new sources of recurring income over the next few years….. □ In the near term, YOHO MIX and the shopping mall beneath The Millennity in Hong Kong, as well as Nanjing IFC Mall and Three ITC i
Slide 46: Resilience to Cope with Difficult Times
Resilience to Cope with Difficult Times For over half a century, the Group has navigated through various economic cycles and crises alongside Hong Kong. Its culture of continuous learning and decades of experience in weathering storms have endowed the Group with resilience to cope with difficult tim
Slide 47: Appendix: Sustainability Performance
Appendix: Sustainability Performance Energy Management Accomplished five-year energy reduction target by FY2020 To reduce the electricity consumption intensity of its EOC-monitored buildings(1) by 13% by FY2030, against FY2020 as baseline Greenhouse Gas Emissions Management To reduce the Scope
Slide 48: Appendix: Sustainability Performance (Cont’d)
Appendix: Sustainability Performance (Cont’d) Task Force on Climate-related Financial Disclosures (TCFD) In 2022, SHKP engaged a third party consultant to conduct the climate risk assessment and a study of its scope 3 emissions Made reference to the recommendations of the TCFD framework under th
Slide 49: Thank you
Thank you FY2024 Interim Results
Sun Hung Kai Properties — 1H FY2024 Earnings Presentation on 6ix