Wharf (Holdings) Ltd. · HKEX:4
Wharf (Holdings) — The Wharf (Holdings) — FY2023 Earnings Presentation
38 slides from Wharf (Holdings)'s earnings presentation, Mar 12, 2024
Slide 1: Profit Attained with Smaller Property Provisions
Profit Attained with Smaller Property Provisions The Wharf (Holdings) Limited 2023 Final Results 12 Mar 2024
Slide 2: Results Highlights
Overview Results Highlights ▪ Total Property Sales -44% from 2022 ▪ Net Order Book at Year End -75% ▪ Impairment Provisions Totaled $1.9B ($3.8B Lower than 2022) ▪ UNP Before Provisions Fell by $0.5B (or 9%) ▪ UNP After Provisions Improved by $3.3B ▪ Attributable Profit Improved by $2.7B The Wharf (
Slide 3: Property-focused
Overview Property-focused Total Assets Group Revenue Operating Profit 2023: $204.9B 2023: $19.0B 2023: $6.9B ML Prop 38% Invt. & Others ML Prop 66% Logistics ML Prop 62% Invt. & Others 26% 13% 28% Hotels 1% Invt. & HK Prop 26% Others 13% Logistics 9% Logistics HK Prop 5% Hotels 3% Hotels 2% 5% HK Pr
Slide 4: Financial Highlights
Overview Financial Highlights HKD Million 2023 2022 %Chg. Group Revenue 18,950 18,064 +5% ▪ Tepid Macro Environment Drove Uneven Recovery Operating Profit 6,896 6,603 +4% ▪ Translation from Weak RMB Understated ML Underlying Net Profit* 3,566 303 +1,077% Performance in HKD Attributable IP Revaluatio
Slide 5: Disciplined Financial Management
Overview Disciplined Financial Management ▪ Total Gross Debt Lowest in 10+ Years ▪ HK Debt Cut by $9.2B FY, $11.2B in 2H ▪ 74% of Total Debt in RMB ▪ Avg. Interest Cost 4.7% p.a. (4.9% 1H, 4.5% 2H) Total Debt (HKD Billion) Debt Maturity (HKD Billion) 24.5% Total: $19.4B (As at 31 Dec 23) 7.9% 3.4% 1
Slide 6: Sound Financial Health
Overview Sound Financial Health HKD Billion 31 Dec 23 31 Dec 22 % Chg. Total Assets 204.9 221.7 -8% ▪ Total Equity $148.2B; Net Debt $7.8B Investment Properties 71.2 69.2 +3% Development Properties* 60.5 69.4 -13% ▪ Gearing 5.3% Other Long Term Investments 42.4 48.9 -13% ▪ Long Term Investments - Li
Slide 7: Hong Kong Properties
Hong Kong Properties
Slide 8: Ultra-luxury & Scarcity
Hong Kong Ultra-luxury & Scarcity Properties Mount Nicholson ▪ Revenue $1.1B; OP $300M ▪ Long Selling Cycle Insulated Unique Properties from Lacklustre General Market ▪ Contracted Sales $289M 11 Plantation Road ▪ Landbank 2.8M s.f ▪ All Projects Proceeding on Track ▪ Removal of Stamp Duty “Penalties
Slide 9: Mainland Development Properties
Mainland Development Properties
Slide 10: Extended Market Woes
Mainland Extended Market Woes Development Properties Operating Matrix & Contracted Sales Revenue $9,258M (-35%) ▪ Demand is Taking Longer to Rebuild Operating Profit $1,020M (-37%) ▪ Office Oversupply is More Serious Contracted Sales RMB 2.6B (-38%) ASP RMB 16,300 psm (-34%) ▪ $1.9B Provisions Made
Slide 11: Mainland Investment Properties
Mainland Investment Properties
Slide 12: Growing but Slowly
Mainland Growing but Slowly Investment Properties Mainland IP Revenue (RMB Billion) 1H 2H ▪ Revenue +4% in RMB in Cautious Market 2023 2.2 2.1 4.3 2022 2.1 2.0 4.1 – Offset by Currency Translation to HKD Terms 2021 2.2 2.3 4.5 ▪ Retail Affected by Feeble Consumption Sentiment 2020 1.7 2.0 3.7 ▪ Offi
Slide 13: IFS Malls – Distinguished Positioning
Mainland IFS Malls – Distinguished Positioning Investment Properties Chengdu IFS ▪ One-stop Shopping, Lifestyle Landmarks at Heart of Cities ▪ Resilient Leasing Demand amid Competitive Market Changsha IFS – Double-digit +ve Retail Rental Reversion – Occupancy*: CDIFS 93%; CSIFS 98% * As at 31 Dec 20
Slide 14: Hotels
Hotels
Slide 15: Wharf Hotels Management
Hotels Wharf Hotels Management Since 2015 Since 1970s Since Nov 2023 5 Award-winning, Contemporary Hotels 11 Deluxe Hotels in Key Asian Destinations 286-room Hotel at Changsha IFS Locations: HK, Chengdu, Changsha, Locations: HK, ML & Philippines Location: Changsha (Owned) Chongqing, Suzhou (3 Owned)
Slide 16: Post-pandemic Recovery
Hotels Post-pandemic Recovery Maqo Changsha ▪ Record Year for Owned Hotels Despite Momentum Loss in 4Q ▪ Niccolo Consistently a ML Market Leader ▪ Marco Polo under Renovation to Rejuvenate ▪ Maqo Debuted in Premium Lifestyle Segment in Nov The Wharf (Holdings) Limited | 2023 Final Results 16
Slide 17: Logistics Infrastructure
Logistics Infrastructure
Slide 18: Continuing Weakness
Logistics Continuing Weakness Infrastructure Modern Terminals (2023) Revenue $2,347M Operating Profit $355M (-21%) (-53%) Throughput* (million TEUs) 2023 vs 2022 vs 2019 ▪ Ocean Throughput Hit Harder by Macro Factors HK 3.7 -15% -25% ▪ Additional Uncertainties from Wars in Ukraine & DaChan Bay (DCB)
Slide 19: Project Pipeline
Project Pipeline
Slide 20: Project Pipeline
Project Project Pipeline Pipeline ▪ 1 Plantation Road ▪ Kowloon Tong Site HK ▪ Kai Tak Site (30%-JV) ▪ Kowloon Godown Redevelopment ▪ CSIFS Tower 2 Mainland – Prestigious High-rise Apt (Total 398 Units) – 231-room Park Hyatt Hotel (Mid-2024) The Wharf (Holdings) Limited | 2023 Final Results 20
Slide 21: Outlook
Outlook
Slide 22: Pressures to Persist
Outlook Pressures to Persist ▪ Escalating Geopolitical Uncertainties & Global Fragmentation to Add Pressure to Growth ▪ Restoring Confidence & Boosting Domestic Demand Key to ML Recovery ▪ More Gov’t Stimulus Measures Expected but Promoting Sustainable Growth Takes Time The Wharf (Holdings) Limited
Slide 23: Sustainability
Sustainability
Slide 24: Recognised Sustainability Achievements
Sustainability Recognised Sustainability Achievements Recognitions Certifications ▪ Member of Hang Seng Corporate LEED Platinum: LEED Gold: Sustainability Index Series ▪ Chengdu IFS ▪ Wuxi IFS ▪ Changsha IFS ▪ “AA+” Sustainability Rating ▪ Shanghai Wheelock ▪ “A” at MSCI ESG Rating Square ▪ Manageme
Slide 25: Environment: Building a Sustainable Future
Sustainability Environment: Building a Sustainable Future GHG Emission (Scope 1 & 2) Intensity Waste Management ↓25%* Divert Waste away from Landfills* 2030 Targets MLIP Electricity Intensity Water Management ↓20%* Reduce Consumption* *Baseline: 2017 Green or Sustainability-linked Loans Sustainable
Slide 26: Social: Business-in-Community & Wellbeing
Sustainability Social: Business-in-Community & Wellbeing ▪ The Wharf Group* Named 3rd Top Donor 2022/23 by The Community Chest Donations *The Wharf Group incl. Wharf REIC & Wharf Holdings Events Social Welfare Education Environmental Protection Arts & Healthy Others Sponsorship Supported 25% 6% 50%
Slide 27: Corporate Governance
Sustainability Corporate Governance ▪ Total No. of Hours of Anti-corruption Training in 2023: 2,600+ Hours Anti-Corruption ▪ For Board Members, Directors & Employees ▪ The Group’s Sustainability Risks and Opportunities are Discussed and Evaluated by the Board on a Regular Basis Attendance 96% For 4
Slide 28: Appendix
Appendix The Wharf (Holdings) Limited | 2023 Final Results 28
Slide 29: Summary of HK Properties
Summary of HK Properties Portfolio Usage Status Locations Attributable GFA (s.f.) 1. Peak Portfolio Residential Development No. 2-8 Mansfield Road 259,300 No. 9,11 Mansfield Road (50%-JV) 72,500 Sales Mount Nicholson (50%-JV) 19,000 77/79 Peak Road 4,700 Lease Chelsea Court 43,000 Strawberry Hill 13
Slide 30: Mainland Contracted Sales Breakdown by City
Mainland Contracted Sales Breakdown by City Region City Contracted Sales (%) GFA Sold (%) Eastern China Suzhou 40.9% 40.1% Hangzhou 9.3% 9.0% Shanghai 4.5% 0.0% Eastern China Sub-Total 54.7% 49.1% Southern China Foshan 25.3% 42.4% Guangzhou 10.3% 4.4% Southern China Sub-Total 35.6% 46.8% Northern &
Slide 31: Mainland Key Projects on Sales in 2023
Mainland Key Projects on Sales in 2023 Attributable Attributable Average Proceeds GFA Sold Price Projects City (RMB M) (s.m) (RMB psm) Ownership Poetic Palace 蘇州荷岸曉風 Suzhou 298 15,389 19,400 33% Glory Garden 佛山樾園 Foshan 278 25,558 10,500 50% Rosy Mansion 佛山悅府 Foshan 219 20,370 10,300 50% Yangcheng L
Slide 32: Mainland DP Land Bank Breakdown by City
Mainland DP Land Bank Breakdown by City Region City GFA million (s.m) % Total Western China Chengdu 0.57 40% Chongqing 0.09 7% Western China Sub-Total 0.66 47% Eastern China Suzhou 0.22 15% Hangzhou 0.09 7% Eastern China Sub-Total 0.31 22% Northern & Central China Changsha 0.39 27% Beijing 0.04 3% S
Slide 33: Mainland Key Projects Completion
Mainland Key Projects Completion Projects Attributable GFA (s.m) Key Completion in 2023 Hangzhou Parc Regal 杭州天璽二期 69,500 Chengdu ICC 成都環貿廣場 39,500 Suzhou Poetic Palace 蘇州荷岸曉風 33,100 Suzhou The Legend 蘇州久尋花園 31,400 Hangzhou Imperial Park 杭州天御 30,100 Suzhou Villa One (Huayuan Road Lot 78) 蘇州天灝逅灣雅苑 22
Slide 34: Mainland IP – Different Series
Mainland IP – Different Series Times Square IFS & Times Outlets Project Total GFA * Year of Project Total GFA * Year of Property Nature (s.m.) Completion Property Nature (s.m.) Completion Times Square Mixed-use IFS Complexes Chongqing ** O/R 55,000 2004 Chengdu R/O/S.A/ H 603,000 2013-2016 Dalian**
Slide 35: Wharf Hotels Management
Wharf Hotels Management Niccolo (Since 2015) Maqo (Since 2023) Hong Kong Mainland Mainland ▪ The Murray, Hong Kong, a Niccolo ▪ Niccolo Chengdu ▪ Maqo Changsha (Opened in Nov-23) Hotel* ▪ Niccolo Changsha ▪ Niccolo Chongqing# ▪ Niccolo Suzhou* Marco Polo (Since 1970s) Hong Kong Mainland Philippines
Slide 36: Overview of Application of Funds
Overview Overview of Application of Funds Major Capital & Development Expenditure To be Incurred in Coming Years HKD Incurred in 2023 Committed Uncommitted Total Hong Kong Properties 2,013M 2,172M 7,958M 10,130M Mainland China IP 75M 3M 114M 117M Mainland China DP 2,629M 1,207M 293M 1,500M Others 41
Slide 37: Thank You
Thank You Profit Attained with Smaller Property Provisions
Slide 38: End of Presentation
End of Presentation The Wharf (Holdings) Limited [HKEx Stock Code: 0004.HK] Disclaimer All information and data are provided for information purposes only. All opinions included herein constitute our judgment as of the date hereof and are subject to change without notice. The Group, its subsidiaries