New World Development Co. Ltd. · HKEX:17
New World Development — FY2021 Earnings Presentation
48 slides from New World Development's earnings presentation, Sep 30, 2021
Slide 1: FY2021 Annual Presentation Analyst Briefing
FY2021 ANNUAL PRESENTATION ANALYST BRIEFING 30 September 2021 0
Slide 2: Cruising with the Tailwind from China Macro Policy
CHINA MACRO POLICY CRUISING WITH THE TAILWIND FROM CHINA MACRO POLICY 產城融合 ● 共同富裕 ● 社會創新 HUMANCENTRIC UPGRADE COMMON AS CORE VALUE QUALITY OF LIFE PROSPERITY (以人民為中心 (高質量發展) (共同富裕) 的發展思想) NWD is the BEST positioned developer to capitalize on this macro backdrop 1
Slide 3: The NWD Strategy: City-Industry Integration and Social Innovation
THE NWD STRATEGY NWD: PIONEERING CITY-INDUSTRY INTEGRATION (產城融合) AND SOCIAL INNOVATION FOR COMMON PROSPERITY (共同富裕) Unsustainable industry Model New World’s Unique Model City 城 Industry 產 Developing humanistic Providing humanistic services properties to amplify city’s to upgrade society & aesthetic
Slide 4: Upgrading the Society and People's Living Quality
THE NWD STRATEGY UPGRADING THE SOCIETY AND PEOPLE'S LIVING QUALITY CULTURE TECHNOLOGY Hangzhou Project - Heritage Panyu Project - Innovation Centre Preservation 源泰楼 EDUCATION HEALTHCARE HUMANSA – Endoscopy centres and Panyu Project – Benenden School elderly care centres 3
Slide 5: Ecosystem Offerings Create Massive Inner Circulation
THE NWD STRATEGY ECOSYSTEM OFFERINGS CREATE MASSIVE INNER CIRCULATION MONETIZATION OPPORTUNITIES Effective CRM + cross-selling = high customer stickiness and value | Further enhanced by K$ HUGE SYNERGY LOYALTY Customer Database Creation Currency K$ Group total members Cross-selling amount HKD200M K$
Slide 6: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS 5
Slide 7: FY2021 Financial Summary
SUMMARY FINANCIALS FY2021 FINANCIAL SUMMARY Beat contracted sales & non-core disposal target | Strong balance sheet with abundant capital Revenue Profit Attributable To Shareholders Underlying profit HKD 68,233M HKD 1,172M HKD 6,978M +15.6% YoY +6.9% YoY +5.9% YoY Net gearing ratio Cost of financing
Slide 8: Property Development: Strong Revenue Growth Driven by Hong Kong Bookings
PROPERTY DEVELOPMENT STRONG REVENUE GROWTH DRIVEN BY HONG KONG BOOKINGS GBA margins remain robust Revenue by Region Revenue increase 19,208 22,582 +18% YoY Major booking in FY2021 14,820 14,666 • HK +71% YoY 7,762 Artisan Garden; Atrium House, 4,542 Park Villa FY2020 FY2021 • Mainland China remained
Slide 9: Hong Kong: Highest Contracted Sales Among Peers
PROPERTY DEVELOPMENT HONG KONG: HIGHEST CONTRACTED SALES AMONG PEERS FY2021 contracted sales more than doubled original target of HKD20 bn 1 2 Pavilia Farm I - III FY2021 attributable 888 LAI CHI KOK ROAD contracted sales First farm life-infused Grade-A Office Building residential project HKD42.4 bn
Slide 10: Mainland China: Leadership in GBA Among HK Peers
PROPERTY DEVELOPMENT MAINLAND CHINA: LEADERSHIP IN GBA AMONG HK PEERS Contracted sales met annual target | Maintaining strong presence in GBA Gross Contracted Sales (RMB M) Major GBA projects contracted sales 19,800 20,200 Prince Bay (太子灣), Shenzhen RMB ~31,000 sqm 16,300 18,200 Rest of Apartment Of
Slide 11: Property Investment: Strong HK Rental Income Growth
PROPERTY INVESTMENT STRONG HK RENTAL INCOME GROWTH DESPITE BORDER CLOSURE Even stronger segment result growth due to better operational efficiency Total revenue by Region 4 NEW PROJECTS OPENINGS IN FY2021 Wuhan K11 (Hankou) – Total GFA 134,000 sqm 4,701 4,350 2,591 2,839 +10% 1,759 1,862 +6% 2 K11 M
Slide 12: K11 Significantly Beat Market Performance
PROPERTY INVESTMENT K11 SIGNIFICANTLY BEAT MARKET PERFORMANCE 11 SKIES ATELIER coming soon and SH K11 Middle Huaihai Road Project on the move FY2021 K11 mall sales YoY growth % vs market average FY2021 average occupancy rate of K11 malls in tier 1 cities1 K11 Retail market 63% 99% 94% 57% 11% HK -3%
Slide 13: Continuous Pipeline Growth of K11
PROPERTY INVESTMENT CONTINUOUS PIPELINE GROWTH OF K11 K11 completion schedule on track | 40 K11 projects by FY2026 with 2.9m sqm in portfolio K11 Investment Properties 1 1 Status Site Type GFA (sqm) Status Site Type GFA (sqm) Hong Kong K11 34,000 Hong Kong Kai Tak Sports Center Retail 57,000 Hong Ko
Slide 14: Recurring Income to Contribute >50% Profit by FY2024
RECURRING INCOME RECURRING INCOME TO CONTRIBUTE >50% PROFIT BY FY2024 Earnings stability as a result of strong rental income growth from investment properties pipeline Recurring & Non-recurring Underlying Profit Split FY2021 FY2024E 61% 39% 50%+ Recurring underlying profit Recurring underlying profi
Slide 15: Non-Core Disposals Beat Target Amount
FINANCIAL & CAPITAL MANAGEMENT NON-CORE DISPOSALS BEAT TARGET AMOUNT HKD18.0bn of disposals in FY2021 to recycle capital for deploying to better returning business Major non-core assets disposed in FY2021 Total Consideration (HKD bn) August 2020 Hong Kong Bus business in HK (100% stake in Citybus an
Slide 16: Proactive Capital Management to Maintain Strong Financial Strength
FINANCIAL & CAPITAL MANAGEMENT PROACTIVE CAPITAL MANAGEMENT TO MAINTAIN STRONG FINANCIAL STRENGTH Improving ratios | Repayments taken care of and refinancing perps with lower coupon rate 2.76% 35.6% 6.9x Average financing cost Net gearing ratio Interest coverage ratio -1.29 ppts vs FY2020 -6.0 ppts
Slide 17: Stably & Proactively Returning Capital to Shareholders
FINANCIAL & CAPITAL MANAGEMENT STABLY & PROACTIVELY RETURNING CAPITAL TO SHAREHOLDERS Progressive dividend | Share buyback further enhances return Dividend payout (HKD/share) Proactive share buybacks 2.04 2.04 2.06 HKD1.3 bn 1.92 1.48 1.48 1.50 1.36 963 613 378 321 0.56 0.56 0.56 0.56 130 (1) (1) (2
Slide 18: Strategic Plans
STRATEGIC PLANS 17
Slide 19: Quick-Win: Hong Kong Three-Pronged Approach
#1 QUICK-WIN: HONG KONG THREE-PRONGED APPROACH TO GRAB MARKET OPPORTUNITY OLD BUILDINGS HALF-WAY ENBLOC BUILDING ACQUISITION PROJECTS ACQUISITION & AND REBUILD ACQUISITION STRATA TITLE SALE Pre-selling in 1.5 years Booking in 3 years 18
Slide 20: Quick-Win: Mainland China Market Share and Execution
#1 QUICK-WIN: MAINLAND CHINA TAKE UP MARKET SHARE + SOLID EXECUTION CAPABILITIES HALF-WAY PROJECTS ACQUISITION PROJECT ACCELERATION An Industrial Zone Urban Renewal Project Hangzhou Wangjiang New Town Project in Shenzhen (杭州望江新城) Residential + Commercial Presale in 2022 Q2; Development scale up to B
Slide 21: Partnership & Collaboration: Broaden Land Acquisition Channel
#2 PARTNERSHIP & COLLABORATION BROADEN LAND ACQUISITION CHANNEL AT ATTRACTIVE COST Trusted partner of government and SOE | Ecosystem to support internal circulation (内循環) COLLABORATION WITH SOE Shenzhen Prince Bay Project (深圳太子灣) Guangzhou Hanxi Comprehensive Development Project (廣州漢溪) K11 Hanxi Off
Slide 22: Old City Redevelopment
#3 OLD CITY REDEVELOPMENT UPGRADE LIVING QUALITY & SUPPORT COMMON PROSPERITY Leverage on group ecosystem offerings to enhance living quality of local people Expected land bank Project location Latest status update conversion schedule Guangzhou Zengcheng (廣州增城大旺崗) Signed cooperation framework agreeme
Slide 23: Progress on Ecosystem
PROGRESS ON ECOSYSTEM 22
Slide 24: K Dollar Continue to Contribute to Ecosystem
K DOLLAR K DOLLAR CONTINUE TO CONTRIBUTE TO ECOSYSTEM K Dollar Program induce ecosystem connectivity| Continue collaboration with external parties One platform | One currency FY2021 K Dollar reward program POSITIVE results Collaborations with internet giants and banks Spending High CRM multiplier ut
Slide 25: Humansa: Upgrading Quality of Life with Top-Notch Care
HEALTHCARE HUMANSA: UPGRADING QUALITY OF LIFE WITH TOP-NOTCH CARE Endoscopic Diagnostic Services Healthcare and Nursing Services Elderly Home Operation No.1 in terms of number of centres 4 Endoscopy 5,400+ Centres Qualified Healthcare personnel 340,000+ 1,100+ beds across 10,000+ service provided 9
Slide 26: Expand GBA Healthcare Services to Boost B2C Ecosystem
HEALTHCARE EXPAND GBA HEALTHCARE SERVICES TO BOOST B2C ECOSYSTEM Open 10+ new medical and wellness outlets with diversified offerings in GBA in FY2022 Abundant resources Expansion plan in FY2022 DOCTOR EXPERTISE GUANGZHOU 17M+ Signed MOU with customers Gleneagles Hospital • In affiliation with HKU H
Slide 27: Multifaceted Strategic Alliance with Taiping Group
STRATEGIC COLLABORATION MULTIFACETED STRATEGIC ALLIANCE WITH TAIPING GROUP Co-develop quality projects and co-invest in premium assets Investment • Co-investment in flagship properties, infrastructure, and emerging industries Healthcare Elite client value adding service • Medical tourism with NWD ec
Slide 28: Cultural Enterprise: Serving from the Beginning of Life
CULTURAL ENTERPRISE SERVING FROM THE BEGINNING OF LIFE Baby Kingdom D Mind Donut & Ah Meow Largest parental and family Premium proprietary online community in HK education venture HK homegrown kids IP #1 400+ Search engine for extracurricular 10,000+ Families served No. of schools using edutainment
Slide 29: Incubate Start-Ups to Create Shared Value
INCUBATION INCUBATE START-UPS TO CREATE SHARED VALUE Collaborations to create value and stimulate innovation | Drive customer-centric ecosystem Innovation Incubation Program GBA Accelerator Group Innovation IP Empowers startups to drive business in: 98 NWD IP 80 10 K11 IP NWS IP Artificial Robotics
Slide 30: ESG: Creating Shared Value for All Stakeholders
ESG CREATING SHARED VALUE FOR ALL STAKEHOLDERS 29
Slide 31: Humanistic & Innovative Housing Solutions for Hong Kong
ESG INTEGRATION HUMANISTIC & INNOVATIVE HOUSING SOLUTIONS FOR HONG KONG Sharing the greater good to citizens and resolving Hong Kong housing issues 新世界建好生活 (New World Build for Good) Transitional housing projects Collective efforts from enterprises and community to solve long-term housing issues 1st
Slide 32: Group-Wide SV2030 Performance on Track
ESG INTEGRATION GROUP-WIDE SV2030 PERFORMANCE ON TRACK GREEN 50% 50% Green Building Certs as at FY2021 Carbon Emissions Intensity Energy Intensity • 31 - BEAM Plus • 32 - LEED VS FY2015: VS FY2015: • 3 - China Building Evaluation 33%1 20% Labels • 2 - SITES 25% 15% Water Intensity2 Waste-to-La
Slide 33: NWD Taking Ambitious Climate Action
ESG INTEGRATION NWD TAKING AMBITIOUS CLIMATE ACTION GOVERNANCE A pioneer in Asia with Board oversight of climate actions & risk disclosure as per TCFD recommendations, ahead of mandatory disclosures by HKEX in FY2025 STRATEGY RISK MANAGEMENT Enterprise Risk Management Enhancing ERM No Coal Pledge Cl
Slide 34: Why NWD?
Tae FER AR eA New World Development Company Limited Pa fon omit WHY NWD? —— ewe
Slide 35: Strategically Positioned to Leverage on Macro Backdrop
STRATEGY SUMMARY STRATEGICALLY POSITIONED TO LEVERAGE ON MACRO BACKDROP CORE STRATEGIES PIONEERING CITY-INDUSTRY INTEGRATION AND SOCIAL INNOVATION FOR COMMON PROSPERITY Leverage on innovative ecosystem ranging from living, working, entertainment, insurance, healthcare to education ECOSYSTEM EXPANSIO
Slide 36: Thank You
Tae FER AR eA New World Development Company Limited fo tiost THANK YOU
Slide 37: Appendix
Tae FER AR eA New World Development Company Limited APPENDIX
Slide 38: Landbank Overview
APPENDIX LANDBANK OVERVIEW GBA1 and YRD landbank accounted for 60% of total landbank in Mainland China LANDBANK IN HONG KONG LANDBANK IN MAINLAND CHINA Area Total GFA2 (sqm) GBA 2,607,000 New Territories YRD (Eastern region) 813,000 Central Region 624,000 5.8M sqft Kowloon Northern Region 610,000 2.
Slide 39: FY2021 Segmental Results Achieved Healthy Growth
APPENDIX FY2021 SEGMENTAL RESULTS ACHIEVED HEALTHY GROWTH Property investment and NWS-core business well-performed despite macro challenges FY2021 Segment Results (HKD M) 4,601 (1,529) 2,930 (1,186) 14,167 9,351 Property Property… Property Property… Hotel Hotel… NWS – -… NWS Others Total Others Tota
Slide 40: Major Development Projects in Mainland China
APPENDIX MAJOR DEVELOPMENT PROJECTS IN MAINLAND CHINA Total GFA Group Expected Projects acquired since 2016 Type (exclude carparks Pre-sale status1 & others) interest completion (year) Shenzhen Qianhai Project South Tower pre-sold Office/Retail ~176,000sqm 30% 2023 (深圳前海桂灣商貿項目) in July 2021 Hangzhou
Slide 41: Pipeline Growth in Property Development in Hong Kong
APPENDIX PIPELINE GROWTH IN PROPERTY DEVELOPMENT IN HONG KONG 3.4M sqft to be completed between FY2022 to FY2024 Total Attributable GFA (sq.ft) CC date / Group’s Handover Location Project Name Total Interest (%) date (Calendar year) Residential Retail Office (excluding carpark) Scheduled for complet
Slide 42: Pipeline Growth in Property Development in Mainland China
APPENDIX PIPELINE GROWTH IN PROPERTY DEVELOPMENT IN MAINLAND CHINA More than 1.2M sqm scheduled for completion in FY2022 Total GFA (sqm) Group’s Interest Location Region (%) Total Total Residential Commercial Office Hotel Carkpark Excl. carpark Incl. carpark Development properties 1 Guangzhou Covent
Slide 43: NWD Ecosystem
APPENDIX NWD ECOSYSTEM Synergy across NWD ecosystem, including property, insurance, healthcare, insurance and more 42
Slide 44: Case Study: Integration of Pavilia Farm Residents into NWD Ecosystem
APPENDIX CASE STUDY: INTEGRATION OF PAVILIA FARM RESIDENTS INTO NWD ECOSYSTEM Pavilia Farm has converted 75K new members to NWD Ecosystem Buyers from Eco-system Traffic Converted to Eco-system 833 29% of total buyers 63.3K Retail New World Club Others Retail Insurance, Hospitality 64% 27% 9% TPF Tra
Slide 45: Proptech and ONE-App Amplify Ecosystem
Appendix PROPTECH AND ONE-APP AMPLIFY ECOSYSTEM Utilize technology to absorb customers into NWD ecosystem | empower cross-selling synergies 入 臨 正 按 $ Online Preliminary Formal Apply Settle Handover COMPLETE Registration Agreement Agreement Mortgage Balance Appointment Provide customized offerings in
Slide 46: ESG Integration: ESG Leader in Asia
Appendix ESG INTEGRATION: ESG LEADER IN ASIA Creating Shared Value (CSV) for all stakeholders with Quantified ESG Impacts Enhancing Sustainability Governance • Board Sustainability Committee set up with ESG KPIs set for CEO, departments and employees • Enhancing Group Enterprise Risk Management base
Slide 47: Creating Shared Value for Our Stakeholders Through Innovation
Appendix CREATING SHARED VALUE FOR OUR STAKEHOLDERS THROUGH INNOVATION RAPID RESPONSES TO COVID-19 • 1st HK corporate to manufacture and distribute masks to 300,000 low-income families • Two days of paid vaccination • ~21 million masks donated since May 2020 and a leave for employees HKD10 million p
Slide 48: Disclaimer
DISCLAIMER Important notice 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, inducement, invitation, recommendation or
New World Development Company — FY2021 Earnings Presentation on 6ix