Shui On Land Ltd. · HKEX:272
Shui On Land — FY2014 Earnings Presentation
59 slides from Shui On Land's earnings presentation, Mar 18, 2015
Slide 1: 2014 Annual Results Announcement
Shui On Land Limited (0272.HK) 2014 Annual Results Announcement 18 March 2015
Slide 2: Contents
Contents 1. 2014 Financial Results Highlights - Income Statement - Financial Position as of 31 December 2014 - CAPEX, Locked-in Sales - 2015 Business Targets 2. Relocation in Shanghai & Property development 3. China Xintiandi 4. Q&A 2
Slide 3: Income Statement
Income Statement - Gross profit margin rose marginally by 2ppt to 34% RMB’ mn 2014 2013 Change Turnover of the Group 10,249 9,828 4% Property sales 8,543 8,361 2% Rental & related income and others 1,706 1,467 16% Cost of sales (6,803) (6,673) (2%) Gross profit 3,446 3,155 9% Gross profit margin 34%
Slide 4: Income Statement
Income Statement - Profit attributable to shareholders decreased by 16% to RMB1,778 million RMB’ mn 2014 2013 Change Profit before taxation 4,418 4,777 (8%) Taxation (1,933) (2,072) 7% Profit for the year 2,485 2,705 (8%) Attributable to: Other non-controlling shareholders of 172 266 35% subsidiarie
Slide 5: Recognised Property Sales
Recognised Property Sales - RMB4.9 billion of property sales recognised as disposal of IP, disposal of equity holding commercial properties and turnover of associates Recognised Property Sales Property Sales by City Distribution RMB’ mn Dalian Foshan 13,467 6% 4% 13,267 Turnover of 14,000 477 Wuhan
Slide 6: Growing Rental & Related Income and Investment Properties Portfolio
Growing Rental & Related Income and Investment Properties Portfolio - Driven by new completion, increase in occupancy & rental reversion Strong Rental and Related Income Growth Completed Investment Properties at Valuation RMB’ mn RMB’ bn 40 1,400 1 1,278 34 35 1,200 1,151 1,056 30 29 1,000 835 25 22
Slide 7: Contracted Sales
Contracted Sales - Dropped by 41% mainly due to less properties available for sale in Shanghai in 2014 Reasons of the decrease in 2014: Outlook for 2015: - less properties available for sale in Shanghai in - more properties available for sale in Shanghai 2014 starting from 2H 2015 (RHXC (Lots 2&9) a
Slide 8: Locked-in Sales
Locked-in Sales Locked-in Sales Sales (RMB’ bn) GFA (sq.m.) 8.9 9 0.6 400,000 364,000 54,000 2.4 300,000 6 255,000 4.4 120,000 20,000 Dalian 0.2 200,000 89,000 3 5.9 1.9 En-bloc sales 100,000 190,000 2.3 146,000 General contracted sales 0 0 31 Dec 2013 31 Dec 2014 31 Dec 2013 31 Dec 2014 RMB531 mi
Slide 9: Financial Position
Financial Position - RMB12.4 billion cash and bank balance for bond repayment in 1Q 2015 31 December 31 December RMB’ mn Change 2014 2013 Total assets 108,323 98,602 10% Bank and other borrowings 28,409 24,366 17% Convertible Bonds and Notes 19,556 10,725 82% Total debt 47,965 35,091 37% Total cash
Slide 10: Shui On Land – Strong Asset Base
Shui On Land – Strong Asset Base - Fast growing total assets 120.0 108.3 Total Assets (RMB' bn) 98.6 89.6 CXTD/ 100.0 Brookfield Initial Portfolio 80.0 68.6 RMB27 billion 56.3 60.0 42.6 35.9 40.0 29.9 26 20.0 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 Ne 10
Slide 11: Shui On Land – Strong Asset Base
Shui On Land – Strong Asset Base - 76% of GFA booked at cost Asset value – by nature GFA* – valuation vs. cost Prepayment of Relocation Cost 7% Properties Held for Sale Cash & Bank Balance 4% 11% At Valuation Properties under Others 24% Development for Sale 8% 14% RMB108.3 billion GFA Hotels and oth
Slide 12: Prudent Financial Management
Prudent Financial Management - Repaid three bonds with aggregated principal amount of RMB5,150 million equivalent in 1Q 2015 Debt Maturity Profile – 76% Long-term Debt Debt Profile – Nature and Currency Breakdown 30,000 RMB’ mn RMB’ bn 2015 2016 2017 25,000 24,114 Bonds 5,694* - 5,542 HKD Bank Loans
Slide 13: Planned 2015 Capital Expenditure (CAPEX)
Planned 2015 Capital Expenditure (CAPEX) - Faster relocation in Shanghai TPQ & RHXC RMB’ bn 2013 2014 2015E Construction Cost 6.4 5.8 6.0 % of total CAPEX 64% 39% 57% Land Premium 0.9 1.5 0.5 Relocation Cost 2.7 7.7 4.0 % of total CAPEX 36% 61% 43% Total CAPEX 10.0 15.0 10.5 Total committed undrawn
Slide 14: 2015 Contracted Sales Target – RMB18 billion
2015 Contracted Sales Target – RMB18 billion - Including general and en-bloc commercial properties sales Under construction Completed Residential projects Product type sq.m. sq.m. Shanghai Taipingqiao – Lakevilleluxe (Lot 116) High-rises 45,000 - Shanghai RHXC – The View High-rises - 300 Residential
Slide 15: Contents
Contents 1. 2014 Financial Results Highlights - Income Statement - Financial Position as of 31 December 2014 - CAPEX, Locked-in Sales - 2015 Business Targets 2. Relocation in Shanghai & Property development 3. China Xintiandi 4. Q&A 15
Slide 16: Strong saleable resources in Shanghai from 2H 2015 to 2017
Strong saleable resources in Shanghai from 2H 2015 to 2017 - 280,000 sq.m. residential GFA are available for pre-sale from 2H 2015 to 2017 % of Year of Year of Total relocation Estimated relocation Estimated year GFA relocation relocation cost paid as at 31 outstanding Lot completed for sq.m. starte
Slide 17: Strong saleable resources in Shanghai from 2H 2015 to 2017
Strong saleable resources in Shanghai from 2H 2015 to 2017 - RHXC Residential Phases 6 & 7 (Lots 2 & 9) RHXC Phase 7 (Lot 2) RHXC Phase 6 (Lot 9) Total GFA : 108,000 sq.m. Total GFA: 88,000 sq.m. Lot 3 Residential Residential Residential RHXC Lot 2 rendering RHXC Lot 9 rendering Estimated saleable p
Slide 18: Strong saleable resources in Shanghai from 2H 2015 to 2017
Strong saleable resources in Shanghai from 2H 2015 to 2017 - Taipingqiao Residential Phase 4 (Lot 116) was cleared in August 2014 TPQ Residential Phase 4 (Lot 116) site TPQ Residential Phase 4 rendering Total GFA : 87,000 sq.m. Lot 3 Residential Residential Residential Residential Estimated saleable
Slide 19: Strong pipelines to continue from 2018
Strong pipelines to continue from 2018 - Plan to clear a total GFA of 578,000 sq.m in 2015 % of Year of Estimated Total relocation Estimated relocation Estimated Year GFA relocation year of cost paid as at outstanding Lot completed for sq.m. started relocation 31 Dec 2014 relocation cost as at 31 Pr
Slide 20: Continued saleable resources in Shanghai from 2018
Continued saleable resources in Shanghai from 2018 - GFA of 350,000 sq.m. residential site under relocation TPQ Residential Phase 5 (Lot 118) RHXC Residential Phase 8 (Lot 1) RHXC Residential Phase 9 (Lot 7) Total GFA: 80,000 sq.m. Total GFA: 110,000 sq.m. Total GFA: 160,000 sq.m. % of relocation: 7
Slide 21: Shui On Land - Residential Developments
Shui On Land - Residential Developments - GFA 3.275 million sq.m. residential developments Shanghai Wuhan, Chongqing, Foshan and Dalian Saleable GFA: 280,000 sq.m. Saleable GFA: 2,580,000 sq.m. (PUD) ( PUD or for future development) Taipingqiao (Lot 116) RHXC (Lots 2, 9) Saleable GFA: Saleable G
Slide 22: Contents
Contents 1. 2014 Financial Results Highlights - Income Statement - Financial Position as of 31 December 2014 - CAPEX, Locked-in Sales - 2015 Business Targets 2. Relocation in Shanghai & Property development 3. China Xintiandi 4. Q&A 22
Slide 23: CXTD 2014 Business Highlights
CXTD 2014 Business Highlights - Refining business strategy for IPO In 2014, CXTD Holding has made solid progresses in pursuing the proposed IPO in the following aspects: Achieving construction milestones 1 The Initial Portfolio in co-operation with Brookfield (“Initial Portfolio”) is 80% completed,
Slide 24: 1. Initial Portfolio – Achieving Construction Milestones
1. Initial Portfolio – Achieving Construction Milestones - 157,000 sq.m. newly completed in 2014 Shanghai Taipingqiao | Total Leasable GFA: 308,000 sq.m. Total Leasable GFA*: 537,000 sq.m. Total carrying value as of 31 Dec, 2014: RMB 27,773 million Product mix: 50% office; 50% retail Status:
Slide 25: 1. Initial Portfolio - Operation Metrics
1. Initial Portfolio - Operation Metrics - Rental growth by 9% to RMB784 million Rental growth driven by new completion in THE HUB and AEI completed at Xintiandi Style Leasable Occupancy rate as of Rental & related income Y-o-Y Leases expire in Project Product GFA 31-Dec RMB' million change % % of
Slide 26: 2. Monetization of mature and stabilized or non-core assets
2. Monetization of mature and stabilized or non-core assets Refining business strategy Monetize asset value of the mature and stabilized or non-core assets Provide financial resources for future growth and deleveraging Disposal of the hotel at THE HUB for RMB965 million in 2014. The hotel at T
Slide 27: 3. Asset Enhancement Initiatives (AEI)
3. Asset Enhancement Initiatives (“AEI”) - AEI completed at Xintiandi Style resulting in 19% rental growth AEI Completed - Xintiandi Style (Sep 2013 – May 2014) Xintiandi Style 2013 vs. 2014 Monthly Shopper Traffic Growth % 29 new brands introduced Shopper Traffic (2013) 23% rental reversion Sho
Slide 28: 3. Asset Enhancement Initiatives (AEI)
3. Asset Enhancement Initiatives (“AEI”) - AEI underway at Shanghai Taipingqiao AEI Underway – The House Convert 88 Xintiandi hotel to retail to improve returns. Introduce the concept of “Created in China” that provides a creative platform for innovation for F&B, fashion, lifestyle and entertain
Slide 29: 4. Office Leasing - Taipingqiao
4. Office Leasing - Taipingqiao - 11% rental reversion on completed portfolio - 47% pre-leased in 3 Corporate Avenue Completed Office Properties Office Property Under Development (“PUD”) Shui On Plaza 1&2 Corporate Avenue 3 Corporate Avenue Occupancy: 100% Occupancy: 98% Estimated Completion in 2Q 2
Slide 30: 4. Office Leasing – THE HUB
4. Office Leasing – THE HUB - 50% space committed at rent rate 15% above market average Showroom office tower 2 & 3 handed over to tenants in 1H 2014 and started contribute rental income; Showroom office tower 1 & 5 newly completed in 2H 2014; Tenancy committed for 50% of total leasable GFA;
Slide 31: 4. Office Leasing – THE HUB (cont'd)
4. Office Leasing – THE HUB (cont’d) - Premium quality tenant base Fortune 500 Company and Industry Leaders Headquarters - Downstream business and Shell China Sales & Marketing HSBC Branch Office Roche Diagnostics Headquarters – Greater China Prosnav Branch Office Grundfos Headquarters – China Keyen
Slide 32: 5. Retail Leasing – Taipingqiao
5. Retail Leasing – Taipingqiao - 23% rental reversion on new leases Completed Retail Properties Tenants highlights Total new leases signed: 26,000 sq.m 46 new tenants Average rental reversion: 23% UBS first Private Banking Clubhouse in China Shanghai Xintiandi Xintiandi Style Xintiandi Styl
Slide 33: 5. Retail Leasing – Taipingqiao (cont'd)
5. Retail Leasing – Taipingqiao (cont’d) - 16 New Tenants Introduced to Shanghai Xintiandi YIZIDI Devil’ Share NISISS Coterie Accent Objects Michelle Maurya Wu Hello Nail BEAST CAFE Sproutwork Greyhound BOTTEGA ESTADO PURO ONE+ 33
Slide 34: 5. Retail Leasing – Taipingqiao (cont'd)
5. Retail Leasing – Taipingqiao (cont’d) - Hubindao 60% pre-leased for target opening in 2H 2015 Hubindao is the ancillary retail space at 3 Corporate Avenue and 5 Corporate Avenue (managed by CXTD)* facing the Taipingqiao Man-made Lake Tenancy committed / positive tenant discussion on 60% of le
Slide 35: 5. Retail Leasing - THE HUB
5. Retail Leasing - THE HUB - Scheduled opening in 3Q 2015 with meaningful occupancy Xintiandi– Tenancy committed / positive tenant discussion on 82% of available space Office ancillary retail – Tenancy committed / positive tenant discussion on 66% of available space Shopping Mall – Tenancy co
Slide 36: 6. Asset Management Service
6. Asset Management Service - Portfolio with total GFA of 1mn sq.m. under management Shui On Land Assets Third Party Assets Leasable GFA: 638,000 sq.m. Leasable GFA: 357,000 sq.m. Office: 16% | Retail: 84% Completed IP: 45% | PUD: 55% Office: 91% | Retail: 9% Completed IP PUD China Life Trustee Tota
Slide 37: 6. Asset Management Service (cont'd)
6. Asset Management Service (cont’d) - 335,000 sq.m under pre-leasing for target opening in 2015 - 2016 Leasable Estimated Pre-leased Projects Product GFA opening % Shanghai RHXC Rui Hong Tiandi - Lot 6 Retail 19,000 1Q 2015 67% - Lot 3 Retail 62,000 3Q 2016 N/A Wuhan Tiandi HORIZON (Lots A1/A2/A3)
Slide 38: 7. Enhance Asset Management Capability
7. Enhance Asset Management Capability - Implementation of Business Intelligence Solution Commercial Management Property, Lease & Space information General Mall Systems Receivables, Ledger/AP Exposure POS Analysis, Leasing Property and Traffic Count Activity corporate financial WIFI/LBS activity Loy
Slide 39: Thank You Q & A
Thank You Q&A 39
Slide 40: Appendix
Appendix Appendix - IP Valuation Table & Rental Income Breakdown - Market Outlook - Company Introduction 40
Slide 41: Completed Investment Properties
Completed Investment Properties - Recorded 3% gain on carrying value in 2014 Leasable Fair Value Carrying Value as of Gain to Project GFA Gain in 2014 31 December 2014 Carrying Value sq.m. RMB’ mn RMB’ mn RMB/sq.m. % China Xintiandi Initial Portfolio in co-operation with Brookfield Xintiandi and 73,
Slide 42: Investment Properties Under Development At Valuation
Investment Properties Under Development At Valuation - Recorded 17% gain on carrying value in 2014 due to accelerated construction Fair Value Gain to Leasable Carrying Value as of Gain in Carrying Project GFA 31 December 2014 2014 Value sq.m. RMB’ mn RMB’ mn RMB/sq.m. % China Xintiandi Initial Portf
Slide 43: Completed Commercial Projects Operation Metrics
Appendix - Completed Commercial Projects Operation Metrics Leasable Rental & related income Year on year Leases expire in Project Product GFA RMB' million change % of GFA sq.m. 2014 2013 2012 2014 2013 2015 2016 2017 China Xintiandi Initial Portfolio in co-operation with Brookfield Shanghai Taipingq
Slide 44: Market Outlook
Market Outlook - High growth and strong economic fundamentals in our selected cities Shanghai Wuhan Chongqing Foshan* Dalian* China Population 2014 24.26 10.34 29.91 7.32 6.92 1,368 (million) Per Capita GDP 2014 97,300 97,403 47,694 103,825 115,541 46,531 (RMB) 10-yr Avg. 9.8% 13.2% 14.0% 14.3% 13.3
Slide 45: Large-scale mixed-use city center development
Large-scale mixed-use city center development Xintiandi – Entertainment Area Corporate Avenue – Grade A Office Tower High-end Residential Shopping Centre Man-made Lake 45
Slide 46: Simplified corporate structure overview
Simplified corporate structure overview (as of 31 December 2014) Mr. Vincent H. S. Lo Public Shui On Group (private companies) 48.38% SOCAM Development Limited 56.91% 42.72% (“SOCAM”, 0983.HK) Shui On Land Limited 0.37% (“SOL”, 0272.HK) 100.00% (1) China Xintiandi Holding Company Limited 100.00% Shu
Slide 47: Experienced Management Team
Experienced Management Team - Over 20 years of property development experiences in China Mr. Vincent H. S. Lo Mr. Daniel Y. K. Wan Mr. Philip K. T. Wong Executive Director and Managing Director Chairman and Executive Director Executive Director, Managing Director and CFO CEO of China Xintiandi Mr. L
Slide 48: Experienced Management Team
Experienced Management Team - Expertise across all disciplines Mr. Frankie Y. L. Wong Sir John R. H. Bond Dr. William K. L. Fung Non-executive Director Independent Non-executive Director Independent Non-executive Director Previously the Vice Chairman and CEO of Served as an INED of the Company s
Slide 49: Quality Landbank in High Growth Cities
Quality Landbank in High Growth Cities Dalian Shanghai 2.8mn sq.m. Taipingqiao Total Landbank*: 0.9mn sq.m. GFA 9.9mn sq.m. Wuhan Shanghai 1.2mn sq.m. RHXC 1.2mn sq.m. Dalian Chongqing Wuhan Shanghai Shanghai 1.8mn sq.m. Chongqing KIC Foshan 0.3mn sq.m. Foshan 1.4mn sq.m. THE HUB 0.3mn sq.m. * Total
Slide 50: Superior and Diversified Landbank
Superior and Diversified Landbank Attributable GFA by Property Type Attributable GFA by City Hotel, Serviced Apartment 6% Dalian 17% Shanghai 30% Residential Office 36% 32% Foshan 17% Wuhan 14% Retail Chongqing 26% 22% 50
Slide 51: Shanghai Taipingqiao
Shanghai Taipingqiao Shui On Plaza 1,2 Corporate Residential ASP (RMB/sq.m.) Avenue Langham Xintiandi Hotel 180,000 3 Corporate 5 Corporate Xintiandi 158,100 Avenue Avenue 148,600 The Manor& 150,000 Xintiandi Style Phase 3 Residential 120,000 113,100 Residential Residential Residential Phase5 Phase
Slide 52: Shanghai Rui Hong Xin Cheng (RHXC)
Shanghai Rui Hong Xin Cheng (“RHXC”) Residential ASP (RMB/sq.m.) Lot 7 60,000 54,000 Lot 1 50,000 46,600 Phase 3 40,000 (Lot 8) 38,600 39,600 Lot 2 40,000 Lot 9 30,000 Residential Residential Phase 5 20,000 (Lot 6) Lot 3 10,000 Lot 10 Residential Residential 0 Residential Residential 2010 2011 2012
Slide 53: Shanghai Knowledge & Innovation Community (KIC)
Shanghai Knowledge & Innovation Community (“KIC”) Residential ASP (RMB/sq.m.) 50,000 45,000 37,900 38,600 40,000 30,000 26,000 Residential Residential 5 – 9 KIC Plaza 20,000 Lot 311 1 - 3 & 10 KIC Residential Residential 10,000 11,12 & 15 Plaza KIC Plaza KIC Village 0 2010 2012 2013 2014 (R2) (Lot (
Slide 54: THE HUB
THE HUB Retail Starship Hotel Office Retail Office Office Office Project Information (representing leasable & saleable GFA) Total Project GFA 274,000 sq.m. 215,000 sq.m. D17 & D19, Office, Retail Completed Properties Properties Under Development 59,000 sq.m. D17 Hotel, D19 Performance & Exhibition c
Slide 55: Wuhan Tiandi
Wuhan Tiandi Residential ASP (RMB/sq.m.) Site B 30,000 27,000 22,000 23,100 20,000 10,000 Residential Residential 0 2012 2013 2014 (Ph1&2) (Ph1-3) (Ph3&4) Residential Residential Site A 40,000 31,700 37,300 30,000 20,200 20,000 Project Information (representing leasable & saleable GFA) 10,000 0 Tota
Slide 56: Chongqing Tiandi
Chongqing Tiandi Residential ASP* (RMB/sq.m.) 15,000 13,700 12,700 12,400 12,300 11,900 Chongqing 12,000 Tiandi 9,000 Residential Phase 1 & 2 6,000 Residential Residential Residential Phase 3 - 5 Residential Residential 3,000 Commercial Zone 0 2010 2011 2012 2013 2014 Residential Residential Residen
Slide 57: Foshan Lingnan Tiandi
Foshan Lingnan Tiandi Residential ASP (RMB/sq.m.) Apartment 25,000 19,500 18,000 20,000 15,500 17,100 15,000 11,900 10,000 Residential Residential 5,000 0 2010 2011 2012 2013 2014 (Ph 1) (Ph 1) (Ph (Ph 1- (Ph 2- Residential Residential 1&2) 3) 4) Townhouse 60,000 39,900 40,500 38,600 45,000 23,600 3
Slide 58: Dalian Tiandi
Dalian Tiandi Residential ASP (RMB/sq.m.) Apartment 20,000 15,000 11,500 11,500 10,000 11,000 10,200 10,000 5,000 0 2010 2011 2012 2013 2014 Project Information (representing leasable & saleable GFA) Townhouse Total Project GFA 3,104,000 sq.m. 30,000 23,200 23,800 18,600 19,000 20,000 13,800 189,000
Slide 59: Disclaimer
Disclaimer These materials are prepared by Shui On Land Limited (“SOL” or the “Company”) solely for information use during its presentation that should not be reproduced or redistributed to any other person without the permissions by SOL. By attending this presentation, you have agreed to be bound