Shui On Land Ltd. · HKEX:272
Shui On Land — H1 2015 Earnings Presentation
47 slides from Shui On Land's earnings presentation, Aug 26, 2015
Slide 1: 2015 Interim Results Announcement
Shui On Land Limited (0272.HK) 2015 Interim Results Announcement 26 August 2015
Slide 2: Message from the Chairman
Message from the Chairman Management Change Development Strategy & Game Plan - Residential & Commercial properties - Increase asset turnover to reach 25-30% - Strengthen balance sheet & Earnings base Market Outlook - Residential Market - Office Market - Retail Market 2
Slide 3: Contents
Contents 1. 1H2015 Financial Results Highlights - Income statement - Financial position as at 30 June 2015 - CAPEX plan for 2H 2015 2. Residential Development Outlook - Shanghai saleable resources & Relocation - Other cities’ saleable resources 3. Commercial Property Outlook & CXTD - Rental performa
Slide 4: Income Statement
Income Statement - Turnover dropped by 61% due to fewer properties delivered in 1H 2015 For the six months ended 30 June RMB’ mn Change 2015 2014 Turnover of the Group 2,027 5,236 (61%) Property sales 951 4,447 (79%) Rental & related income and others 803 789 2% Construction 273 - - Cost of sales (1
Slide 5: Income Statement
Income Statement - Profit attributable to shareholders increased by 50% to RMB1.2 billion For the six months ended 30 June RMB’ mn Change 2015 2014 Profit before taxation 2,238 1,939 15% Taxation (703) (834) 16% Profit for the period 1,535 1,105 39% Attributable to: Non-controlling shareholders of s
Slide 6: Contracted Sales
Contracted Sales - RMB10.3 billion of contracted sales achieved from Jan to Jul 2015 Contracted Property Sales Total GFA RMB’ mn sq.m. 12,000 10,270 400,000 311,400 300,000 9,000 7,007 110,700 3,263 131,400 200,700 July contracted sales 6,000 2,819 200,000 31,300 Commercial sales 3,100 3,000 101 728
Slide 7: Monetization of Mature and Stabilized Assets
Monetization of Mature and Stabilized Assets - Disposal of 1 & 2 Corporate Avenue for RMB6.6 billion 1 & 2 Corporate Avenue Property Value RMB6,601 million Rental & related FY2014 RMB253 million income 1H2015 RMB136 million Total Leasable GFA 83,200 sq.m. Average Selling Price 79,400 per sq.m. No. o
Slide 8: RMB12.5 billion of locked-in sales for delivery in 2H 2015 and beyond
RMB12.5 billion of locked-in sales for delivery in 2H 2015 and beyond Locked-in Sales Sales (RMB’ bn) GFA (sq.m.) 5.5 400,000 6 340,000 0.3 4.4 33,000 300,000 255,000 0.2 1.6 67,000 20,000 1.9 Dalian 3 200,000 89,000 En-bloc sales 3.6 240,000 100,000 2.3 146,000 General contracted sales 0 0 31 Dec 2
Slide 9: Financial Position
Financial Position - RMB7,126 million cash and bank balances RMB’ mn 30 June 2015 31 December 2014 Change Total assets 112,947 108,323 4% Bank and other borrowings 33,969 28,409 20% Convertible Bonds and Senior Notes 14,327 19,556 (27%) Total debt 48,296 47,965 1% Total cash and bank balances 7,126
Slide 10: Prudent Financial Management
Prudent Financial Management - Lengthened maturity Debt Maturity Profile – 81% Long-term Debt Debt Profile – Nature and Currency Breakdown 25,000 RMB’ mn RMB’ mn 2H 2015 2016 2017 22,414 20,000 Convertible Bonds and 432 - 5,556 15,969 Senior Notes 15,000 HKD Bank Borrowings 578 5,651 1,328 10,000 8,
Slide 11: Shui On Land – Strong Asset Base
Shui On Land – Strong Asset Base - Fast growing of total assets Cleared various residential & commercial sites in Shanghai Completed construction of various investment properties in Shanghai CXTD/ 120.0 108.3 112.9 Brookfield Total Assets (RMB' bn) Portfolio 98.6 RMB30 100.0 89.6 billion 80.0 68
Slide 12: Shui On Land – Strong Asset Base
Shui On Land – Strong Asset Base - 75% of the GFA was carried at original cost Asset value – by nature GFA* – valuation vs. cost Others, 11% Cash & Bank IP at Valuation Balance , 6% At - CXTD Valuation Prepayment of Property 25% Relocation Portfolio , 27% Cost, 7% Properties RMB112.9 billion 6.9 m s
Slide 13: 2H 2015 Capital Expenditure (CAPEX) Plan
2H 2015 Capital Expenditure (CAPEX) Plan - Supported by committed bank loan facilities of RMB7.8 billion RMB’ bn 2014 1H 2015 2H 2015E Construction Cost 5.8 2.9 4.4 % of total CAPEX 39% 58% 52% Land Premium 1.5 0.1 0.2 Relocation Cost 7.7 2.0 3.8 % of total CAPEX 61% 42% 48% Total CAPEX 15.0 5.0 8.4
Slide 14: Contents
Contents 1. 1H2015 Financial Results Highlights - Income statement - Financial position as at 30 June 2015 - CAPEX Plan for 2H 2015 2. Residential Development Outlook - Shanghai saleable resources & Relocation - Other cities’ saleable resources 3. Commercial Property Outlook & CXTD - Rental performa
Slide 15: Shui On Land - Residential Developments
Shui On Land - Residential Developments - GFA 3.1 million sq.m. for over RMB100 billion saleable resources Shanghai Shanghai* Saleable GFA: 282,000 sq.m. Saleable GFA: 348,000 sq.m. (PUD) (Under relocation) Taipingqiao (Lot 116) RHXC (Lots 2, 9) Taipingqiao (Lot 118) RHXC (Lots 1, 7) Saleable GFA:
Slide 16: Shui On Land - Residential Developments
Shui On Land - Residential Developments - Plan for a sustainable growth of contracted sales to improve operating cashflow Contracted Sales (RMB’ mn) Project 2009 2010 2011 2012 2013 2014 1H 2015 Residential Property Sales 6,078 4,737 5,787 5,373 9,430 5,544 2,535 Shanghai Projects 4,640 1,488 2,311
Slide 17: 2015 Residential Contracted Sales Target – RMB8 billion
2015 Residential Contracted Sales Target – RMB8 billion Under construction Completed Residential projects Product type sq.m. sq.m. Shanghai Taipingqiao – Lakevilleluxe (Lot 116) High-rises 46,700 - Shanghai RHXC – The View High-rises - 200 Residential Phase 6 High-rises 86,000 - Wuhan Tiandi – Wuhan
Slide 18: 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 9 & 2) 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 9 rendering RHXC Lot 9 Sales Centre Estimated saleabl
Slide 19: 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 Sales Centre Total GFA : 89,000 sq.m. Estimated saleable properties in this site: RMB12-15 billion Launch P
Slide 20: 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 Total Estimated Year of Estimated relocation relocation outstanding Estimated GFA relocation year of Lot complete cost paid as relocation Year for sq.m. started relocation d as at 31 at 30 Jun 2015 cost P
Slide 21: Contents
Contents 1. 1H2015 Financial Results Highlights - Income statement - Financial position as at 30 June 2015 - CAPEX plan for 2H 2015 2. Residential Development Outlook - Shanghai saleable resources & Relocation - Other cities’ saleable resources 3. Commercial Property Outlook & CXTD - Investment prop
Slide 22: Investment Property Portfolio - Completed
Investment Property Portfolio - Completed - A total GFA of 1,037,000 sq.m. valued at RMB43 billion CXTD Property Portfolio (RMB29.4 bn) in co-operation with Brookfield Rental and related income Leasable GFA: 510,000 sq.m. 1,000 RMB’ mn 736 750 614 Rental and 500 related income Shanghai Taipingqiao T
Slide 23: CXTD Property Portfolio - Operation Metrics
CXTD Property Portfolio - Operation Metrics - Rental growth 26% to RMB475 million due to new completion, rental reversion and AEI Leasable Occupancy rate as of Rental & related income P-o-P Leases expire in Project Product GFA 30 June RMB' million change % % of GFA sq.m. 2015 2014 1H 2015 1H 2014 1H
Slide 24: Office Leasing - Taipingqiao
Office Leasing - Taipingqiao - 6% Rental reversion on completed portfolio - 75% Pre-leased in 3 Corporate Avenue Completed Office Properties Office Property Completed in 1H 2015 Shui On Plaza 1&2 Corporate Avenue 3 Corporate Avenue Occupancy: 97% Occupancy: 98% Pre-leased: 75% Total new lease sign
Slide 25: Retail Leasing – Taipingqiao
Retail Leasing – Taipingqiao - 15% rental reversion on new leases Completed Retail Properties Retail Properties Completed in 1H 2015 Shanghai Xintiandi Xintiandi Style Hubindao Occupancy: 98% Occupancy: 99% Soft Opening : 4Q 2015 Ancillary retail space at 3 Total new leases signed in 1H 2015: 17
Slide 26: Office Leasing – THE HUB
Office Leasing – THE HUB - Growing premium quality tenant base with 21 new tenants introduced Tower 2 and 3 88% leased Tower 1 74% leased Tower 5 38% leased Fortune 500 Company and Industry Leaders Headquarters – Downstream business and Shell China Sales & Marketing HSBC Branch Office Roche Di
Slide 27: Retail Leasing - THE HUB
Retail Leasing - THE HUB - Total of 98 tenants committed for the scheduled opening in 2H 2015 Xintiandi Tenants commenced operation in July 2015; 64% when included committed tenants Mall Soft Opening in September 2015; 60% when included committed tenants Office Ancillary Retail 47% when includ
Slide 28: Asset Enhancement Initiatives (AEI)
Asset Enhancement Initiatives (“AEI”) - AEI completed and underway at Shanghai Taipingqiao AEI Completed – Xintiandi Style (Sep 2013 – May 2014) 12% increase in rental revenue vs. 1H 2014 30% increase in shopper traffic vs. 1H 2014 27% increase in tenant reported sales revenue vs. 1H 2014 AEI
Slide 29: Shui On Land Commercial Property Portfolio - Completed
Shui On Land Commercial Property Portfolio - Completed - Rental growth by 10% to RMB261 million due to increase of occupancy and rental reversion Occupancy rate Rental & related P-o-P Leasable Leases expire in as of income Change Project Product GFA 30 June RMB' million % % of GFA sq.m. 2015 2014 1H
Slide 30: Shui On Land Commercial Property Portfolio
Shui On Land Commercial Property Portfolio - GFA 2.6 million sq.m. under development or for future development Shanghai RHXC Lot 10 RHXC Lot 3 Shanghai KIC Hall of the Sun (Under relocation) Hall of the Moon Office & Retail Retail & Hotel Office & Hotel Leasable GFA: Leasable GFA: Leasab
Slide 31: Thank You Q&A
Thank You Q&A 31
Slide 32: Appendix
Appendix Appendixes - Market Outlook - IP Valuation Table - Company Introduction 32
Slide 33: 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 7.35 6.96 1,368 (million) Per Capita GDP 2014 97,300 97,403 47,694 103,825 109,939 46,531 (RMB) 10-yr Avg. 9.8% 13.2% 14.0% 14.3% 13.3%
Slide 34: Valuation of Completed Investment Properties
Valuation of Completed Investment Properties - RMB2,277 million of valuation gain generated by Shanghai Taipingqiao project Fair Value Gain / Gain / Leasable Carrying Value as of 30 (Loss) to (Loss) Project Product Type GFA June 2015 Carrying in Value 1H 2015 sq.m. RMB’ mn RMB’ mn RMB/sq.m. % China
Slide 35: Valuation of Investment Properties Under Development
Valuation of Investment Properties Under Development Fair Value Gain / Leasable Gain / Carrying Value as of 30 (Loss) to Product GFA (Loss) in June 2015 Carrying Project Type 1H 2015 Value sq.m. RMB’ mn RMB’ mn RMB/sq.m. % China Xintiandi Property Portfolio in co-operation with Brookfield Shanghai T
Slide 36: 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 36
Slide 37: Simplified Corporate Structure Overview
Simplified Corporate Structure Overview (as of 30 June 2015) Mr. Vincent H. S. Lo Public Shui On Group (private companies) 48.38% SOCAM Development Limited 56.73% 42.90% (“SOCAM”, 0983.HK) Shui On Land Limited 0.37% (“SOL”, 0272.HK) 100.00% (1) China Xintiandi Holding Company Limited 100.00% Shui On
Slide 38: Quality Landbank in High Growth Cities
Quality Landbank in High Growth Cities Dalian Shanghai 2.9mn sq.m. Taipingqiao Total Landbank*: 0.9mn sq.m. GFA 9.8mn sq.m. Wuhan Shanghai 1.1mn 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 0.2mn sq.m. * Total
Slide 39: Superior and Diversified Landbank
Superior and Diversified Landbank Attributable GFA by Property Type Attributable GFA by City Hotel, Serviced Apartment 5% Dalian 17% Shanghai 30% Residential 35% Office 35% Foshan 17% Wuhan 14% Chongqing Retail 22% 25% 39
Slide 40: Shanghai Taipingqiao
Shanghai Taipingqiao Shui On Plaza 1,2 Corporate Avenue Residential ASP Langham (RMB/sq.m.) Xintiandi Hotel 3 Corporate 5 Corporate 180,000 Xintiandi Avenue Avenue 158,100 The Manor& 148,600 Xintiandi Style 150,000 Phase 3 Residential Residential Residential Residential Phase5 120,000 113,100 Phase
Slide 41: Shanghai Rui Hong Xin Cheng (RHXC)
Shanghai Rui Hong Xin Cheng (“RHXC”) Residential ASP (RMB/sq.m.) Lot 7 60,000 57,100 Lot 1 54,000 Phase 3 (Lot 8) 50,000 46,600 Lot 2 Lot 9 40,000 38,600 39,600 Residential 40,000 Residential Phase 5 (Lot 6) Lot 3 30,000 Lot 10 Residential Residential 20,000 Residential Residential Phase 1 Phase 4 R
Slide 42: 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 Residential 1 - 3 & 10 KIC Residential 10,000 11,12 & 15 Plaza KIC Plaza KIC Village 0 2010 2012 2013 2014 (R2) (Lot (
Slide 43: THE HUB
THE HUB Retail Starship Hotel Office Retail Office Office Office Project Information (representing leasable & saleable GFA) Total Project GFA 229,000 sq.m. 215,000 sq.m. D17 & D19, Office, Retail Completed Properties Properties Under Development 14,000 sq.m. D19 Performance & Exhibition Centre 43
Slide 44: Wuhan Tiandi
Wuhan Tiandi Residential ASP (RMB/sq.m.) Site B 40,000 32,600 30,000 27,000 23,100 22,000 20,000 Residential Residential 10,000 0 2012 2013 2014 1H 2015 Residential (Ph1&2) (Ph1-3) (Ph3&4) (Ph3&4) Residential Site A 40,000 31,700 37,300 30,000 20,200 20,000 Project Information (representing leasable
Slide 45: Chongqing Tiandi
Chongqing Tiandi Residential ASP* (RMB/sq.m.) 15,000 13,700 12,400 12,700 12,300 11,900 12,000 11,100 Chongqing Tiandi 9,000 Residential Phase 1 & 2 6,000 Residential Residential Residential Phase 3 - 5 Phase 7 - 10 Phase 6 3,000 Commercial Zone 0 2010 2011 2012 2013 2014 1H2015 Residential Resident
Slide 46: 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 12,000 10,000 5,000 Residential 0 Residential 2010 2011 2012 2013 2014 1H 2015 (Ph 1) (Ph 1) (Ph 1&2)(Ph 1-3)(Ph 2-4)(Ph 2-4) Residential Residential Townhouse 60,000 45,000 39,900 40,
Slide 47: 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 8,800 5,000 0 2010 2011 2012 2013 2014 1H 2015 Project Information (representing leasable & saleable GFA) Townhouse Total Project GFA 3,103,000 sq.m. 30,000 23,800 23,200 18,600 19,000 205,000