Shui On Land Ltd. · HKEX:272
Shui On Land — FY2011 Earnings Presentation
62 slides from Shui On Land's earnings presentation, Mar 21, 2012
Slide 1: 2011 Annual Results Announcement
Shui On Land Limited (0272.HK) 2011 Annual Results Announcement 21 March 2012
Slide 2: Strategic Planning Paved Way for Balanced and Sustainable Growth
Strategic Planning Paved Way for Balanced and Sustainable Growth Stringent and Difficult Market Environment in 2011 Unique Tiandi Business Model 2
Slide 3: Contents
Contents 1. 2011 Key Financial Highlights - Financial Results 2011 - Stringent Financial Market in 2011 2. 2011 Business Updates & 2012 Business Focus 3. Market Outlook 3
Slide 4: Income Statement
Income Statement RMB’ mn 2011 2010 Change Turnover of the Group 8,484 4,879 74% Cost of sales (4,783) (2,869) 67% Gross profit 3,701 2,010 84% Other income 244 226 8% Operating profit 3,116 1,533 103% Increase in fair value of 2,696 2,711 (1%) investment properties Profit before taxation 6,060 4,367
Slide 5: Income Statement
Income Statement RMB’ mn 2011 2010 Change Profit before taxation 6,060 4,367 39% Taxation (2,062) (1,357) 52% Profit for the year 3,998 3,010 33% Profit attributable to 3,428 2,809 22% shareholders Core Earnings 1,572 756 108% Earnings per share – Basic RMB0.66 RMB0.55 20% Dividend per share – Final
Slide 6: Recognised Property Sales
Recognised Property Sales Recognised Property Sales* Recognised Average Selling Price (“ASP”) * RMB’ mn RMB/sq.m. +83% + 25% 10,000 30,000 7,581 24,600 8,000 25,000 19,700 20,000 6,000 4,133 15,000 4,000 10,000 2,000 5,000 0 0 2010 2011 2010 2011 * Excluding Dalian associates 6
Slide 7: Recognised Property Sales
Recognised Property Sales Total GFA Delivered** Property Sales by Cities Distribution ** GFA sq.m. + 66% 364,800 400,000 18,700 Chongqing 13% Wuhan 300,000 28% 220,000 200,000 Dalian Group Foshan 346,100 12% 100,000 Dalian Shanghai 4% 43% 0 2010 2011 ** Including Dalian associates 7
Slide 8: Financial Position
Financial Position 31 December 31 December RMB’ mn Change 2011 2010 Total assets 68,604 56,253 22% Bank and other borrowings 16,743 13,183 27% Convertible Bonds and Notes 8,745 5,062 73% Total debt 25,488 18,245 40% Total bank balances and cash 6,370 6,790 (6%) Net debt 19,118 11,455 67% Total equit
Slide 9: Debt Structure (As of 31 December 2011)
Debt Structure (As of 31 December 2011) Debt Maturity Profile – 66% Long-Term Debt Weighted Average Cost of Debt RMB’ mn ％ 12,000 10.0% 8,774 8,992 8.0% 8,000 6,584 6.0% 6.2% 6.0% 5.6% 4.1% 4.0% 4,000 1,138 2.0% 0 0.0% <1 year 1-2 years 2-5 years > 5 years 2008 2009 2010 2011 9
Slide 10: Debt Structure: By Nature and Currency
Debt Structure (As of 31 December 2011) Debt Profile - By Nature and Currency HKD Bank Loans - 36% (RMB9,166 mn equivalent) USD Bank Loans - RMB Synthetic Bond - 3% 26% (RMB817mn equivalent) (RMB6,520 mn) RMB Bank Loans - 26% (RMB6,760 mn) RMB Convertible Bond - 9% (RMB2,225 mn) 10
Slide 11: Debt Structure: Property Pledged vs Un-pledged
Debt Structure (As of 31 December 2011) Property (GFA) - Pledged vs. Un-pledged Unpledged 71% Pledged 29% 11
Slide 12: Stringent Financial Market in 2011
Stringent Financial Market in 2011 2011 Bond issued in January 2011: RMB3.5 bn at 7.625% New bank loan facilities in 2011: RMB8 bn equivalent Weighted Average Cost of Debt at 6.2% 12
Slide 13: Stringent Financial Market in 2012
Stringent Financial Market in 2012 2012 Un-drawn bank loan facilities: RMB6.4 bn as of 31 December 2011 Bond issued in January 2012: SGD250 mn at 8% Bond issued in February 2012: US$475 mn at 9.75% Syndication Loan Refinanced for Xintiandi in March 2012 : RMB2.1 bn equivalent 13
Slide 14: 2012 Capital Expenditures (CAPEX)
2012 Capital Expenditures (CAPEX) RMB’ bn 2010 2011 2012E Construction Costs 2.8 4.7 5.5 Land Premium 2.9 4.1 1.5 Relocation Cost 3.3 4.3 4.0 Total CAPEX 9.0 13.1 11.0 2012 Financial Management Focus Positive Operating Cashflow Gearing ratio not higher than 80% 14
Slide 15: 2012 Prospects: Locked-in Sales
2012 Prospects : Locked-in Sales Locked-in Sales RMB’ bn GFA sold (sq.m.) 8 +48% 400,000 +80% 354,000 6 4.9 35,000 300,000 3.3 0.4 197,000 4 200,000 21,000 Dalian 0.4 319,000 Group 2 4.5 100,000 2.9 176,000 0 0 2009A 31 Dec 10 31 2010A Dec 11 312009A Dec 10 31 2010A Dec 11 15
Slide 16: Contents
Contents 1. 2011 Key Financial Highlights 2. 2011 Business Updates & 2012 Business Focus - Contracted Sales, ASP, Margin & Profit Growth - Investment Properties Rental Growth & Asset Appreciation - Land Bank Updates - Three-Year Plan Review & 2012 Business Focus 3. Market Outlook 16
Slide 17: Strong Contracted Sales
Strong Contracted Sales Contracted Sales ASP RMB’ mn RMB/sq.m. 12,000 +114% + 10% 25,000 10,667 20,200 20,000 18,300 8,000 15,000 4,976 10,000 4,000 5,000 0 0 2010 2011 2010 2011 Excluding en-bloc sales, ASP of property sales increased by 64% to RMB28,500 per sq.m. 17
Slide 18: Strong Contracted Sales
Strong Contracted Sales Total GFA sq.m. 600,000 +94% 527,500 400,000 272,300 200,000 0 2010 2011 18
Slide 19: Diversified Contracted Sales in Tier 2 Cities
Diversified Contracted Sales in Tier 2 Cities Contracted Sales (2009) Contracted Sales (2010) Contracted Sales (2011) Total GFA Sold = 266,900sq.m. Total GFA Sold = 272,300sq.m. Total GFA Sold = 527,500sq.m. Total Contracted Sales = RMB6.5 bn Total Contracted Sales = RMB5.0 bn Total Contracted Sales
Slide 20: Residential Property ASP Growth
Residential Property ASP Growth Shanghai Taipingqiao Shanghai RHXC Wuhan RMB/sq.m. RMB/sq.m. RMB/sq.m. 148,600 150,000 44,000 44,000 38,600 39,600 113,100 32,000 33,000 100,000 85,000 33,000 27,700 20,200 55,000 22,000 22,000 16,600 13,400 14,300 50,000 20,000 11,000 11,000 0 0 0 2002 2006 2008 2010
Slide 21: Strong Pricing Power
Strong Pricing Power Prime location in high-growth cities Tiandi brand premium Excellent master-plan communities Maturing communities 2011 ASP Shui On Land City Centre Project (RMB/sq.m.) (RMB/sq.m.) Shanghai Taipingqiao 148,600 50,170 Shanghai Rui Hong Xin Cheng (“RHXC”) 39,600 Wuhan 32,000 7,573 C
Slide 22: En-bloc Sales Reached RMB4.8 billion
En-bloc Sales Reached RMB4.8 billion Wuhan Tiandi Office & Retail Shanghai KIC Office & Retail Corporate Center No. 5 C2 Lot 5-5 Chongqing Tiandi Office & Retail B12-1, B12-3 & B12-4 22
Slide 23: Margin Expansion with Core Earnings Growth
Margin Expansion with Core Earnings Growth Gross Profit Margin Core Earnings 60% 3 ppt RMB’ mn 41% 44% 40% 2,000 20% 1,572 +108% 0% 1,500 2010 2011 Operating Profit Margin 1,000 60% 756 6 ppt 31% 37% 40% 500 20% 0% 0 2010 2011 2010 2011 23
Slide 24: Investment Properties
Investment Properties Income from Investment Properties * Investment Property Portfolio (GFA) * RMB’ mn ’000 sq.m. + 16% + 20% 1,000 600 849 509 800 706 438 400 600 400 200 200 0 0 2010 2011 2010 2011 * Excluding Dalian associates 24
Slide 25: Premium Investment Property Portfolio
Premium Investment Property Portfolio Shanghai Taipingqiao Shui On Plaza Langham Xintiandi Hotel Shanghai Xintiandi Corporate Avenue Phase 1 Shanghai Xintiandi Style 25
Slide 26: Premium Investment Property Portfolio
Premium Investment Property Portfolio Shanghai RHXC – Retail Shanghai KIC – Office (Plaza) Wuhan Tiandi Chongqing Tiandi Foshan Lingnan Tiandi 26
Slide 27: High Rental Income Growth Potential from Investment Properties Under Development
High Rental Income Growth Potential from Investment Properties Under Development Shanghai Corporate Avenue Phase 2 & 3 THE HUB (Lots 126 and 127) Wuhan Shopping Centre Chongqing Office & Retail Foshan Lingnan Tiandi (Lots A1/2/3 Retail Podium) (Lot B11-1/02) (Lot D Mall) 27
Slide 28: Quality Landbank in High Growth Cities
Quality Landbank in High Growth Cities Dalian Shanghai 3.2mn sq.m. Taipingqiao Total Landbank*: 0.9mn sq.m. GFA 11.1 mn sq.m. Wuhan Shanghai 1.1mn sq.m. RHXC 1.3mn sq.m. Dalian Chongqing Wuhan Shanghai Shanghai 2.5mn sq.m. Chongqing KIC Foshan 0.3mn sq.m. Foshan 1.5mn sq.m. THE HUB 0.3mn sq.m. Compl
Slide 29: Superior and Diversified Landbank
Superior and Diversified Landbank Attributable GFA by Property Type Attributable GFA by City Hotel, Serviced Apartment 5% Dalian 19% Shanghai 29% Residential Office 41% 33% Foshan 18% Wuhan 11% Retail Chongqing 21% 23% - 97.5% of the landbank was acquired in or before year 2007 - 88% of the landbank
Slide 30: Three-Year Plan Review & 2012 Business Focus
Three-Year Plan Review & 2012 Business Focus Accelerate Asset Churn Residential properties for sale Commercial properties - Hold for investment - Non-core commercial for sale Organizational & Management Strategies for Higher Profit Margin Decentralisation: project-based organisation for timely decis
Slide 31: Three-Year Plan Updates
Three-Year Plan Updates Accelerate asset churn Delivery plan as per the Three-Year Plan ’000 sq.m. 1,200 1,003 1,000 800 585 600 373 400 200 0 2010A 2011A 2012E 31
Slide 32: Property Available for Sale in 2012
Property Available for Sale in 2012 - RMB15 billion worth of properties for sale Shanghai RHXC Shanghai KIC Dalian Tiandi (Phase 5 Lot 6, Stage 1) (Lot 311 - R3) (Various plots) Wuhan Site B Chongqing Tiandi Foshan Lingnan Tiandi (Regal Riverview Phase 1) (Riviera Phase 2 - 5) (Legendary & Regency P
Slide 33: 2012 Business Focus
2012 Business Focus Residential Sale Non-core Commercial Asset Sale Financial & Cashflow Management 2nd Three-Year Plan 33
Slide 34: Contents
Contents 1. 2011 Key Financial Highlights 2. 2011 Business Updates & 2012 Business Focus 3. Market Outlook 34
Slide 35: Market Outlook
Market Outlook Short term: Austerity measures will continue to cool the property market, but will lead to pent-up demand Long term: Housing demand persists, due to - Urbanisation - End-user demand - Up-grade demand - High saving rate Competitive Edge of Shui On Land’s Business Model Mixed-use develo
Slide 36: High Growth and Strong Economic Fundamentals in the Selected Cities
High Growth and Strong Economic Fundamentals in the Selected Cities Shanghai Wuhan Chongqing Foshan Dalian China Population 2010 23.02 9.8 28.8 7.2 6.7 1,341 (million) Per Capita GDP 2010 76,074 58,961 27,596 80,313 77,097 29,992 (RMB) 10-yr 11.4% 13.9% 13.8% 16.2% 15.4% 10.6% Avg. Real GDP Growth 2
Slide 37: Thank You Q&A
Thank You Q&A
Slide 38: Appendix
Appendix Appendix 1 - Additional Information of the Results Appendix 2 - Company Introduction 38
Slide 39: Recognised Property Sales with ASP
Recognised Property Sales with ASP 2011 2010 ASP Sales GFA ASP Sales GFA ASP Growth rate Project RMB’ mn sq.m. RMB/sq.m RMB’ mn sq.m RMB/sq.m % Shanghai Taipingqiao 827 5,900 148,600 604 6,500 97,800 52% Shanghai RHXC 2,133 57,700 39,200 824 31,300 27,700 42% Shanghai KIC 575 16,700 36,500 918 39,20
Slide 40: Contracted Sales with ASP
Contracted Sales with ASP 2011 2010 ASP Sales GFA ASP Sales GFA ASP Growth Rate Project RMB’ mn sq.m. RMB/sq.m. RMB’ mn sq.m. RMB/sq.m. % Shanghai Taipingqiao 877 5,900 148,600 407 3,600 113,100 31% Shanghai RHXC 1,434 36,200 39,600 1,035 26,800 38,600 3% Shanghai KIC1 50 2,300 21,700 203 8,100 25,1
Slide 41: Carrying Value of Investment Properties
Carrying Value of Investment Properties GFA Fair Value Gain (Loss) in 2011 Carrying Value as of 31 December 2011 Gain (Loss) to Carrying Value Project sq.m. RMB’ mn RMB’ mn RMB/sq.m. % Completed investment properties at valuation Shanghai Taipingqiao 162,000 553 10,220 63,100 5% Shanghai RHXC 35,000
Slide 42: Occupancy Rate of Investment Properties
Occupancy Rate of Investment Properties Project Leasable GFA (sq.m.) Occupancy rate as of 31 Dec 2011 Xintiandi 57,000 100% Shanghai Taipingqiao Xintiandi Style 27,000 96% Corporate Avenue Phase 1 83,000 100% Phase 1 & 2 33,000 100% Shanghai RHXC Phase 3 2,000 39% Phase 4 12,000 N/A Village R1 and R
Slide 43: Residential Properties Available for Sale in 2012
Residential Properties Available for Sale in 2012 Available for sale and presale in 2012 Group’s interest Project sq.m. % Shanghai Taipingqiao 1,000 99.0% Shanghai RHXC 23,400 99.0% Shanghai KIC 49,300 99.0% Wuhan Tiandi 123,700 75.0% Chongqing Tiandi 213,300 79.4% Foshan Lingnan Tiandi 68,800 100.0
Slide 44: Three-Year Plan Updates
Three-Year Plan Updates 2010A 2011A 2012E Project (‘000 sq.m.) Residential Commercial Residential Commercial Residential Commercial Shanghai Taipingqiao 7 27 - - - 34 Shanghai RHXC 32 2 63 12 - - Shanghai KIC 22 58 - 56 - - THE HUB - - - - - - Wuhan Tiandi 85 2 51 59 66 1 Chongqing Tiandi 47 49 112
Slide 45: Historical Financial Performance
Historical Financial Performance Total Turnover and Gross Profit Margin Property Sales and Rental Income RMB’ mn RMB’ mn Total Turnover Gross Profit Margin 44% Property Sales and Others Rental and Related Income 10,000 50% 52% 60% 10,000 8,484 8,484 8,000 41% 8,000 6,758 849 6,758 40% 6,000 643 4,87
Slide 46: Historical Credit Profile
Historical Credit Profile Total Debt / EBITDA Total Debt / Capitalisation x % 14 50% 46% 11.9 41% 12 40% 10 31% 31% 8.0 8 30% 6 20% 3.6 3.0 4 10% 2 0 0% 2008 2009 2010 2011 2008 2009 2010 2011 EBITDA / Total Interest Cost Cash / Total Assets x % 5 4.4 Cash Cash/Total Assets 4 12% 9,000 12% 9% 14% 2.
Slide 47: Appendix 2 - Company Introduction
Appendix Appendix 1 - Additional Information of the Results Appendix 2 - Company Introduction 47
Slide 48: Shanghai Taipingqiao – Large-scale mixed-use city centre development
Shanghai Taipingqiao – Large-scale mixed-use city centre development Xintiandi – Entertainment Area Corporate Avenue – Grade A Office Tower High-end Residential Shopping Centre Man-made Lake 48
Slide 49: The Creation of “Tiandi”
The Creation of “Tiandi” 2. Master Planning 1. Identify Strategic Locations Designing the new community Preserving Heritage in High Growth Cities Strategically develop new communities by keeping local heritage Old town development in good locations, in line with government policies Well planned cons
Slide 50: Tiandi – Unique Business Model
Tiandi – Unique Business Model Large Scale, Mixed-use City Center Community Developments in High Growth Cities A harmonious blend of premium retail areas, offices and luxurious residential with tranquil amenities like parks and lakes Preservation of local heritage and architecture Landmark of the ci
Slide 51: Experienced Management Team – Over 20 Years of Operations in China
Experienced Management Team – Over 20 Years of Operations in China Mr. Vincent H. S. Lo Mr. Freddy C. K. Lee Mr. Daniel Y. K. Wan Chairman and Executive Director Executive Director, Managing Director and CEO Executive Director, Managing Director and CFO Mr. Lo has won various awards: Mr. Lee: Mr. Wa
Slide 52: World Class Corporate Governance
World Class Corporate Governance 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 since Served as an INED of the Compa
Slide 53: Simplified Corporate Structure (As of 31 December 2011)
Simplified Corporate Structure (As of 31 December 2011) Mr. Vincent H. S. Lo & Family Public Shui On Group (private companies) 48.21% 48.28% 49.09% SOCAM Development Limited (“SOCAM”, 0983.HK) 2.63% Shui On Land Limited(1) (“SOL”, 0272.HK) Shui On Development (Singapore) 100% Shui On Development (Ho
Slide 54: Shanghai Taipingqiao
Shanghai Taipingqiao Corporate Residential ASP (RMB/sq.m.) Xintiandi Avenue Ph1 180,000 The Manor Corporate Avenue Ph2 & 3 & Xintiandi Style 148,600 150,000 Phase 3 Don iced A Ser v g ta Residential Residential Residential Residential 120,000 113,100 Phase 3 Phase 2 Phase1 Phase5 ilu artme Ret p ai
Slide 55: Shanghai Rui Hong Xin Cheng (“Rainbow City”)
Shanghai Rui Hong Xin Cheng (“Rainbow City”) Residential ASP (RMB/sq.m.) Lot 7 45,000 Lot 1 Phase 3 39,600 40,000 38,600 B Lot 2 (Lot 8) A& 1 67 t 35,000 Lo Residential Residential Phase 5 (Lot 6) Lot 3 30,000 27,700 Lot 9 &10 25,000 Residential Residential Residential Residential 20,000 Phase 1 Pha
Slide 56: Shanghai Knowledge and Innovation Community (“KIC”)
Shanghai Knowledge and Innovation Community (“KIC”) Properties ASP (RMB/sq.m.) 45,000 41,700 40,000 Residential 35,000 Residential Plaza Phase 2 30,000 25,100 North Parcel 25,000 22,900 Plaza Phase 1 Residential Lot C2 Residential 20,200 20,000 18,700 KIC Village R1 and R2 15,000 Project Information
Slide 57: THE HUB
THE HUB ao ub gqi H Hon tation Retail o r sp T ra n Starship Hotel Office Retail Office Office Office Project Information (representing leasable & saleable GFA) Total Project GFA 277,000 sq.m. Properties Under Development 277,000 sq.m. Office, Retail, Exhibition and Hotel 57
Slide 58: Wuhan Tiandi
Wuhan Tiandi Residential ASP (RMB/sq.m.) e ia l z on merc C om 35,000 Ph4 32,000 ial Zo ne B merc ial Site C om de nt Resi 1 30,000 Ph Ph2 Residential Residential Wu Ph3 25,000 ha nT ia n 20,200 di 20,000 Residential Residential 14,300 15,000 13,400 10,000 Project Information (representing leasable
Slide 59: Chongqing Tiandi
Chongqing Tiandi Residential ASP* (RMB/sq.m.) 16,000 13,700 Chongqing 14,000 Tiandi Residentia 12,400 l Phase 1 12,000 Phase 2 Residential Residential Residential Residential Phase 3 Residential 10,000 Commercial Zone Residential 8,000 Residential Residential 7,100 Residential Residential 6,000 4,00
Slide 60: Foshan Lingnan Tiandi
Foshan Lingnan Tiandi Residential ASP Marco Polo li (RMB/sq.m.) g hua Hotel na n Don rical Ling di o (Hist e) 45,000 Tian sit 39,900 40,000 Residential Zone 35,000 Residential 30,000 e on Residential Z ial 25,000 ial de nt erc Resi 2 19,500 mm ia l Ph 20,000 18,000 de nt Residential Resi 1 Co Reside
Slide 61: Dalian Tiandi
Dalian Tiandi Engineers Apartment Huang Ni Chuan Ambow Training School IT Tiandi Greenville Software Office Clubhouse School Residential ASP Project Information (representing leasable & saleable GFA) (RMB/sq.m.) 25,000 23,200 Total Project GFA 3,190,000 sq.m. 18,600 20,000 19,000 sq.m. Sold & Delive
Slide 62: 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 b