Wharf (holdings) Ltd. · HKEX:4
Wharf (holdings) — The Wharf (Holdings) — H1 2023 Earnings Presentation
39 slides from Wharf (holdings)'s earnings presentation, Aug 9, 2023
Slide 1: Feeble Recovery from COVID
Feeble Recovery from COVID The Wharf (Holdings) Limited 2023 Interim Results 9 Aug 2023
Slide 2: Results Highlights
Results Highlights ▪ Mainland Property Market Still a Big Challenge ▪ Contracted Sales Dwindled with Average Selling Price in Decline ▪ Interest in Office Stock & En Bloc Sales is Particularly Soft ▪ Further Provision was Made for Slow-moving Stock ▪ Recovery Momentum for Retail Rent was also Below
Slide 3: Core Strength – Premium Property
Core Strength – Premium Property Total Assets Group Revenue Operating Profit 1H23: $215.5B 1H23: $8.1B 1H23: $3.1B HK Prop 24% HK Prop 1% ML Prop 39% ML Prop 63% ML Prop 56% Hotels 1% Hotels 4% Hotels 1% Logistics 7% Logistics 15% Logistics 7% Inv. & Others 29% Inv. & Others 17% Inv. & Others 36% Pr
Slide 4: Financial Highlights
Financial Highlights HKD Million 1H23 1H22 %Chg. ▪ Slow ML & HK Recovery Dragged by Macro Concerns Group Revenue 8,130 8,209 -1% ▪ Currency Translation Understates YoY Comparison of Operating Profit 3,139 3,479 -10% ML Businesses in HKD Underlying Net Profit* 1,811 428 +323% ▪ Group Revenue -1% to $
Slide 5: Strong Financial Position & Liquidity
Strong Financial Position & Liquidity HKD Billion 30 Jun 23 31 Dec 22 % Chg. ▪ Total Equity $149.7B; Net Debt $15.0B Total Assets 215.5 221.7 -3% ▪ Gearing 10.1% Investment Properties 67.4 69.2 -3% ▪ Liquid Long Term Investments Development Properties* 66.6 69.4 -4% – $45.1B Liquid Listed Equities M
Slide 6: Prudent Financial Management
Prudent Financial Management Total Debt (HKD Billion) 24.5% 7.9% 6.7% 10.1% Gearing 3.4% ▪ Total Remains at Low Level 61.6 36.7 29.3 19.9 23.9 Total Debt ▪ Onshore RMB Debt 40% of Total ▪ Average Interest Cost: 4.9% p.a. Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 ▪ Primarily Floating Rate Debt Maturity (HKD
Slide 7: Hong Kong Properties
Hong Kong Properties 7
Slide 8: Ultra-luxury Properties Segment
Ultra-luxury Properties Segment Mount Nicholson 11 Plantation Road ▪ Quiet Market has Low Direct Impact to Group ▪ Properties on the Market All in Ultra-luxury Class – Rare & Highly Unique Properties – Sales Tempo Differs from Mass Market – Border Reopening Expands Market Catchment Hong Kong Propert
Slide 9: Premium Landbank – Full Pipeline
Premium Landbank – Full Pipeline Landbank ▪ All Projects under Development Proceeding to Plan ▪ Land Bank GFA: 2.8M s.f. ▪ Contracted Sales: $289M from Mount Nicholson – Equivalent to $82,000 psf • Exclusive Peak Portfolio ▪ Recognition: $311M; Net Order Book: $787M (GFA: 0.6M s.f*) • Kowloon Tong P
Slide 10: Mainland Development Properties
Mainland Development Properties 10
Slide 11: Uneven Recovery amid State-directed Restructuring
Uneven Recovery amid State-directed Restructuring 1H23 Contracted Sales ▪ Weak Economy & Illiquidity Continue to Restrain Sales RMB 1.4B -41% Investment Activities & Market Recovery ASP RMB 16,100 psm -44% ▪ Market Held out for Policy Incentives ▪ Contracted Sales Dwindled with ASP Stumbled 2023 Sel
Slide 12: Immense Challenges Faced by Market
Immense Challenges Faced by Market 1H23 Operating Matrix ▪ Recognitions Mainly from Hangzhou & Suzhou Revenue $3,328M -33% ▪ MLDP Landbank: 1.6M s.m; No Addition in 1H23 Operating Profit $76M -88% ▪ 2023 Target Completion: 248,300 s.m Completed GFA 61,500 s.m. -75% ▪ Net Order Book: RMB 6.6B or 0.2M
Slide 13: Mainland Investment Properties
Mainland Investment Properties 13
Slide 14: Recovery Lagging amid Cautious Sentiment
Recovery Lagging amid Cautious Sentiment Mainland IP Revenue (HKD Billion) 1H 2H 1H23 2.4 ▪ Revenue Stabilised (+2% in RMB) in a Weak Market 2022 2.6 2.2 4.8 ▪ Retail Sentiment Not Bullish: 2021 2.7 2.7 5.4 – Sales & Rent Momentum Below Strength 2020 1.9 2.3 4.2 ▪ Office Demand Sluggish in Oversuppl
Slide 15: IFS – Consistent Productivity
IFS – Consistent Productivity Chengdu IFS Changsha IFS ▪ Right Cities, Locations & Critical Mass ▪ Top Choice for Top-tier Brands & Shoppers – Double-digit Positive Retail Rental Reversion – Retail Occupancy*: CDIFS 97%; CSIFS 97% ▪ CDIFS Office Rental Among City’s Highest * As at 30 Jun 2023 Mainla
Slide 16: Hotels
>< WHARF Established 1886 C2UA La
Slide 17: Reaping Reopening Benefits
Reaping Reopening Benefits Niccolo Marco Polo New Brand (to be Unveiled) ▪ Long-awaited Travel Rebound Boosts Revenue & Occ. ▪ Decent Growth in Mainland – Room Rates Reached New Peak – Niccolo Hotels Consistently Outperform Comp. Set & Reported Record Revenue & GOP ▪ Modest Recovery in Hong Kong Sin
Slide 18: Logistics Infrastructure
Logistics Infrastructure 18
Slide 19: Persistent Weak Global Demand
Persistent Weak Global Demand Modern Terminals (1H23) Revenue $1,209M (-21%) Operating Profit $191M (-52%) Throughput* (million TEUs) 1H23 vs 1H22 vs 1H19 HK 1.9 -18% -25% ▪ Soft Demand from Weak Global Economy & Trade DaChan Bay (DCB)# 0.9 -7% +45% Tension Shekou Container Terminals (SCT)# 2.7 -7%
Slide 20: Project Pipeline
>< WHARF Project Pipeline
Slide 21: Project Pipeline
Project Pipeline HK ML ▪ 1 Plantation Road ▪ CSIFS Tower 2 ▪ Kowloon Tong Site – Prestigious High-rise Apt (Total 398 Units) ▪ Kai Tak Site (30%-JV) – 230-room Park Hyatt Hotel (Mid-2024) ▪ Kowloon Godown Redevelopment – 286-room Vibrant, Lifestyle Hotel to Open in 4Q23 The Wharf (Holdings) Limited
Slide 22: Outlook
Established 1886 Outlook
Slide 23: Positive but …
Positive but … ▪ Post-COVID Readjustment in Progress, but Macro Uncertainties Pressuring Recovery ▪ Global Recession Risks Remain amid Inflation, Interest Rate Hikes, Currency Instability & Geopolitical Tension ▪ Govt’s Promise of Policy Support to Boost ML Economy, Consumer Confidence & Spending bu
Slide 24: Sustainability
>< WHARF Sustainability
Slide 25: Recognised Sustainability Achievements
Recognised Sustainability Achievements Recognitions Certifications LEED Platinum: LEED Gold: ▪ Member of Hang Seng Corporate ▪ Chengdu IFS ▪ Wuxi IFS Sustainability Index Series ▪ Changsha IFS ▪ Shanghai Wheelock ▪ “AA+” Sustainability Rating Square Gold: Silver: ▪ CSR Index Plus Mark ▪ Niccolo Chen
Slide 26: Environment: Building a Sustainable Future
Environment: Building a Sustainable Future 2030 Targets Sustainable Finance Renewable Energy Sustainability-linked loan Chengdu IFS Modern Terminals GHG Emission (Scope 1 & 2) Intensity ↓25%* HK$ 2.1B (2021) 50-80% of 291 Solar Panels KPI: HSI ESG Rating, Electricity from 140,000 kWh/yr MLIP Electri
Slide 27: Social: Business-in-Community & Wellbeing
Social: Business-in-Community & Wellbeing Donations ▪ The Wharf Group* Named 2nd Top Donor by The Community Chest for Two Consecutive Years Project WeCan ▪ Empowering Students for Pursuing Future Studies or Careers ▪ Benefiting 87,000+ Students of 82 Schools ▪ With Support from 72 Partner Organisati
Slide 28: Corporate Governance
Corporate Governance Anti-corruption Total No. of Hours of Anti-corruption Training in 2022: 2,100+ Hours For Board Members, Directors & Employees Board Engagement & Diversity The Group’s Sustainability Risks and Opportunities are Strive for Full Compliance on Board Diversity as a Listed Issuer Disc
Slide 29: Appendix
>< WHARF Appendix
Slide 30: 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) 19,100 77/79 Peak Road 11,000 Lease Chelsea Court 43,000 Strawberry Hill 1
Slide 31: Mainland Contracted Sales Breakdown by City
Mainland Contracted Sales Breakdown by City Region City Contracted Sales (%) GFA Sold (%) Eastern China Suzhou 34.8% 29.8% Hangzhou 13.7% 14.5% Eastern China Sub-Total 48.5% 44.3% Southern China Foshan 30.6% 48.0% Guangzhou 11.6% 4.8% Southern China Sub-Total 42.2% 52.8% Northern & Central China Cha
Slide 32: Mainland Key Projects on Sales in 1H23
Mainland Key Projects on Sales in 1H23 Attributable Proceeds Attributable GFA Average Price Projects City (RMB M) Sold (s.m) (RMB psm) Ownership Glory Garden 佛山樾園 Foshan 171 15,799 10,800 50% Rosy Mansion 佛山悅府 Foshan 122 11,343 10,600 50% Poetic Palace 蘇州荷岸曉風 Suzhou 109 5,284 20,700 33% Guangzhou Ce
Slide 33: Mainland DP Land Bank Breakdown by City
Mainland DP Land Bank Breakdown by City Region City GFA million (s.m) % Total Western China Chengdu 0.60 38% Chongqing 0.03 2% Western China Sub-Total 0.63 40% Eastern China Suzhou 0.25 16% Hangzhou 0.16 10% Eastern China Sub-Total 0.41 26% Northern & Central China Changsha 0.42 27% Beijing 0.04 2%
Slide 34: Mainland Key Projects Completion
Mainland Key Projects Completion Projects Attributable GFA (s.m) Projected Key Completion in 1H23 Suzhou The Legend 蘇州久尋花園 31,385 Hangzhou Imperial Park 杭州天御 30,083 Projected Key Completion in 2H23 Hangzhou Parc Regal 杭州天璽二期 69,516 Suzhou Villa One (Huayuan Road Lot 78) 蘇州天灝逅灣雅苑 44,645 Chengdu ICC 成
Slide 35: Mainland IP – Different Series
Mainland IP – Different Series Times Square IFS & Times Outlets Project Total GFA * Year of Total GFA * Year of Property Nature (s.m.) Completion Property Project 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 36: Wharf Hotels Management
Wharf Hotels Management Niccolo (Since 2015) Hong Kong Mainland − The Murray, Hong Kong, a Niccolo Hotel* − Niccolo Chengdu − Niccolo Changsha − Niccolo Chongqing# − Niccolo Suzhou* Marco Polo (Since 1970s) Hong Kong Mainland+ Philippines − Marco Polo Hongkong Hotel* − Marco Polo Parkside, Beijing^
Slide 37: Overview of Application of Funds
Overview of Application of Funds Major Capital & Development Expenditure To be Incurred in Coming Years HKD Incurred in 1H23 Committed Uncommitted Total Hong Kong Properties 858M 3,105M 8,049M 11,154M Mainland China IP 27M 73M 133M 206M Mainland China DP 1,430M 1,539M 1,741M 3,280M Others 170M 2,839
Slide 38: Thank You
Thank You Feeble Recovery from COVID
Slide 39: 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