Sun Hung Kai Properties Limited · HKEX:16
Sun Hung Kai Properties — FY2019 Earnings Presentation
43 slides from Sun Hung Kai Properties's earnings presentation, Sep 12, 2019
Slide 1: FY2019 Annual Results
FY2019 Annual Results 12 September 12019
Slide 2: Contents
Contents Page Financial Review – FY2019 4 Property Business – Hong Kong Land Bank 9 Property Investment 12 Property Development 18 Property Business – Mainland China Land Bank 22 Property Investment 26 Property Development 30 Hotel Business 34 Market and Business Prospects 36 2
Slide 3: Disclaimer
Disclaimer The information contained in these materials is intended for reference and general information purposes only. Neither the information nor any opinion contained in these materials constitutes an offer or advice, or a solicitation, recommendation or suggestion by Sun Hung Kai Properties Lim
Slide 4: Financial Review – FY2019
ICC and Cullinan West, West ICC and IFC in in Hong Kowloon, IFC Hong ICC / Kong IFC Kong Hong Kong FINANCIAL REVIEW – FY2019
Slide 5: Results Snapshot
Results Snapshot Balance Profit Dividend Sheet Underlying Full-year Net EPS DPS Gearing HK$11.18 HK$4.95 Ratio 6.6% yoy 6.5% yoy 12.9% 5
Slide 6: Financial Highlights
Financial Highlights FY2019(1) FY2018 Change Profit attributable to the Company’s shareholders - Underlying(2) (HK$ mn) 32,398 30,398 +6.6% - Reported (HK$ mn) 44,912 49,951 -10.1% Basic earnings per share - Underlying(2) (HK$) 11.18 10.49 +6.6% - Reported (HK$) 15.50 17.24 -10.1% Final dividend per
Slide 7: Earnings Drivers
Earnings Drivers Profit Breakdown by Segment(1) FY2019 FY2018 Change (in HK$ mn) (1) Property rental - Hong Kong 15,373 14,549 - Mainland 3,746 3,534 - Singapore 559 564 Sub-total 19,678 18,647 +5.5% (2) Property sales - Hong Kong 16,395 13,936 - Mainland 2,302 2,314 - Singapore 0 11 Sub-total 18,69
Slide 8: Financial Position
Financial Position 30 Jun 31 Dec 30 Jun As at 2019 2018 2018 Shareholders’ equity (HK$ mn) 566,405 545,856 539,098 - Shareholders’ equity per share (HK$) 195.5 188.4 186.1 Net debt (HK$ mn) 72,968 64,389 65,339 Net gearing ratio(1) 12.9% 11.8% 12.1% FY2019 FY2018 Interest cover(2) 14.6x 17.6x (1) Ca
Slide 9: Property Business - Hong Kong Land Bank
Victoria Harbour, North Point, Hong Kong PROPERTY BUSINESS - HONG KONG LAND BANK
Slide 10: Land Bank in Hong Kong
Land Bank in Hong Kong Total land bank as at 30 June 2019: 58.0mn(1) Residential (completion after June Office 2024) 31% 30% Residential Shopping (completion Centre prior June 36% 2024) Hotel 53% Shopping 12% Centre 5% Office Industrial 3% Residential 12% 9% Industrial Hotel 6% 3% Completed proper
Slide 11: Land Acquisitions in Hong Kong
Land Acquisitions in Hong Kong Added 7 sites through different means in FY2019 Stake Method of Attributable Location Usage (%) Acquisition GFA (sq.ft.) Residential/ Tai Po Town Lot No. 244 100 Government Tender 917,000 Shops Tseung Kwan O Town Lot No. 131 74 Data Centre Government Tender 896,000 (
Slide 12: Property Business - Hong Kong Property Investment
Metroplaza, Kwai Fong,Kong in Hong Hong ICC /Kong IFC Hong Kong PROPERTY BUSINESS - HONG KONG PROPERTY INVESTMENT
Slide 13: Healthy Rental Income from Diversified Portfolio
Healthy Rental Income from Diversified Portfolio Gross Rental Income by Sector in Hong Kong (1) HK$ mn FY2019 19,698 (+6.4% yoy) HK$19,698mn 20,000 18,506 6.4% yoy 18,000 6,434 (+5.4% yoy) 16,000 6,104 14,000 12,000 Shopping Office Centres 33% 10,000 54% 8,000 10,699 (+7.5% yoy) 9,954 6,000 Others 4
Slide 14: Diversified Quality Retail Portfolio of 12mn sq.ft.
Diversified Quality Retail Portfolio of 12mn sq.ft. During the year, the Group’s retail YOHO Mall, Yuen Long portfolio performed satisfactorily IFC Mall Weakening consumer sentiment and declining tourist spending have posed challenges in the retail market for recent months Adopt a proactive ap
Slide 15: Latest Retail Addition – V Walk
Latest Retail Addition – V Walk atop MTR Nam Cheong Station V Walk, West Kowloon Stake: 100% Total GFA: 298,000 sq.ft. Underneath Cullinan West residential development Opened in July 2019 Almost fully leased with an array of local favourites 15
Slide 16: Balanced and Diversified Office Portfolio of Over 10mn sq.ft.
Balanced and Diversified Office Portfolio of Over 10mn sq.ft. Millennium City Cluster ICC Wan Chai & IFC Causeway Bay Attri. GFA: 1.7mn sq.ft Attri. GFA: 2.5mn sq.ft Occupancy:94%(2) Occupancy:99% Attri. GFA: 1.0mn sq.ft Attri. GFA: 1.8mn sq.ft Occupancy:99% Occupancy:98% (1) Occupancies as at 30 Ju
Slide 17: Major New Additions in the Pipeline
Major New Additions in the Pipeline Harbour North, North Point Stake: 100% Total GFA: 145,000 sq.ft. Retail component of the landmark Victoria Harbour development Feature a diverse collection of lifestyle retail and popular eateries Some of the street shops already opened and expect full openi
Slide 18: Property Business - Hong Kong Property Development
Central Peak, Victoria Mid-Levels Harbour, East, Hong North Point, Hong Kong Kong PROPERTY BUSINESS - HONG KONG PROPERTY DEVELOPMENT
Slide 19: Recognized Property Sales in Hong Kong
Recognized Property Sales in Hong Kong Property Sales(1) FY2019 FY2018 Change Revenue (HK$ mn) 36,541 35,725 2.3% Operating profit (HK$ mn) 16,395 13,936 17.6% Adopted the new accounting standard HKFRS 15 for recognition of property sales in FY2019 Major contributors: Cullinan West II, Victori
Slide 20: Contracted Sales in Hong Kong
Contracted Sales in Hong Kong Stake Attri. Sales Project (%) Proceeds (HK$ bn) Cullinan West, West Kowloon JV 11.2 St Martin, Pak Shek Kok 100 10.8 Ultima, Ho Man Tin 100 7.8 PARK YOHO Milano, Yuen Long 100 3.6 Grand YOHO, Yuen Long 100 3.5 W LUXE, Shek Mun (Office) 100 2.7 Others(1) 20.1 Total 59.7
Slide 21: Upcoming Launches in Hong Kong in the Next 9 Months
Upcoming Launches in Hong Kong in the Next 9 Months Tin Shui Wai Project Phase 1 (Stake: 100%) 252 Texaco Road & Res. GFA: 423,000 sq.ft. 28 Wang Lung Street (Stake: 65.2%) Attri. GFA: 248,000 sq.ft. Hoi Wing Road Project Phase 1 Sha Tin Town Lot No.609 (Stake: 100%) (Stake: 100%) Res. GFA: 110,000
Slide 22: Property Business - Mainland China Land Bank
ITC, Shanghai PROPERTY BUSINESS - MAINLAND CHINA LAND BANK
Slide 23: Land Bank in Mainland China
Land Bank in Mainland China Total land bank as at 30 June 2019: 65.4mn sq.ft.(1)(2) Shopping Centre Shopping 17% Office Centre 33% Residential 50% 56% Office 24% Hotel 9% Hotel Residential 3% 8% Completed properties(3) Properties under development Total: 14.8mn sq.ft. Total: 50.6mn sq.ft. (1) In a
Slide 24: Land Acquisitions in Mainland China
Land Acquisitions in Mainland China Jianghehui Project, Hangzhou(1) Rendering Eastern site stake: 45%; Western site stake: 50% Usage Total GFA Breakdown (sq.ft.) Residential 1,609,000 Office 5,464,000 Retail 1,342,000 Hotel 431,000 Total 8,846,000 (Above-ground GFA) Acquired two riverside sites at
Slide 25: Land Acquisitions in Mainland China (Cont’d)
Land Acquisitions in Mainland China (Cont’d) Qingshing Project, Nansha Rendering Stake: 100% Usage GFA Breakdown (sq.ft.) Office 2,401,000 Retail 861,000 Total 3,262,000 Acquired the two sites in Nansha Free Trade Zone in May 2018 and February 2019 respectively To be developed in phases into a 3
Slide 26: Property Business - Mainland China Property Investment
IAPM, Shanghai Shanghai IFC, ICC, Shanghai Shanghai PROPERTY BUSINESS - MAINLAND CHINA PROPERTY INVESTMENT
Slide 27: Healthy Rental Growth in Mainland China
Healthy Rental Growth in Mainland China Represented ~19% of the Group’s total gross rental income Gross rental income of RMB4,069mn, up 9.9% in RMB terms HK$ mn Gross Rental Income by Sector on the Mainland (1) 5,000 4,666 (+4.7% yoy) FY2019 4,457 HK$4,666mn 4,000 4.7% yoy 1,709 (+3.7% yoy) 1,64
Slide 28: Strong Presence in Shanghai
Strong Presence in Shanghai Shanghai IFC, Pudong Shanghai IFC Mall Shanghai ICC Shanghai ICC, Puxi Stake: 100% Continued to achieve positive rental reversions at both complexes Tenant sales at Shanghai IFC Mall have been further boosted following the renovation on the ground level Two ITC Two IT
Slide 29: New Additions in Major Mainland Cities
New Additions in Major Mainland Cities Nanjing IFC Stake: 100% Total GFA: 3.4mn sq.ft. Nanjing One IFC offices recently completed with some tenants already moved in Nanjing Two IFC offices to be completed in 2020 Pre-leasing discussions on luxury shopping mall currentlyTwo ITC underway New Tow
Slide 30: Property Business - Mainland China Property Development
Shanghai Arch, Shanghai PROPERTY BUSINESS - MAINLAND CHINA PROPERTY DEVELOPMENT
Slide 31: Recognized Property Sales in Mainland China
Recognized Property Sales in Mainland China Property Sales(1) FY2019 FY2018 Change Revenue 4,772 6,195 23.0% Operating profit 2,302 2,314 0.5% Major contributors: Grand Waterfront Phase 2 in Dongguan, Shanghai Arch and Oriental Bund in Foshan Satisfactory development margin Completed ~2.1mn
Slide 32: Contracted Sales in Mainland China
Contracted Sales in Mainland China Attri. Sales Stake Project Location Proceeds (%) (RMB bn) Oriental Bund Foshan 50 1.2 Park Royale Guangzhou 100 0.9 1st batch of TODTOWN Phase 1 Shanghai 35 0.9 Forest Hills Guangzhou 70 0.3 Others 1.3 Total 4.6(1) (1) Contracted sales in terms of HKD amounted to H
Slide 33: Upcoming Launches in Mainland China in Next 9 Months
Upcoming Launches in Mainland China in Next 9 Months Stake Attri. Res. GFA Project Location (%) (sq.ft.) New batches of Oriental Bund Foshan 50 880,000 Residence at Suzhou ICC Suzhou 90 530,000 Park Royale Phase 2B Guangzhou 100 406,000 (Remaining Towers) Shanghai Arch Phase 2 Shanghai 100 381,000 (
Slide 34: Hotel Business
The Ritz Carlton, Hong Kong HOTEL BUSINESS
Slide 35: Hotel Business
Hotel Business Hotel Business(1) FY2019 FY2018 Change (HK$ mn) Revenue 5,682 5,333 6.5% Operating Profit 1,433 1,470 2.5% ALVA Hotel by Royal The Group’s hotel portfolio performed relatively steady during the year Operating environment has been significantly deteriorated since the middle of 2019
Slide 36: Market and Business Prospects
IFC and ICC in Hong Kong MARKET AND BUSINESS PROSPECTS
Slide 37: Market Prospects
Market Prospects Hong Kong Economy is likely to remain weak in the short term, confronting a slow global economy and unprecedented internal challenges Primary Softening market sentiment with limited investors’ residential demand market Relatively low mortgage rates and end-user demand continuing
Slide 38: Market Prospects (Cont’d)
Market Prospects (Cont’d) Key Cities in Mainland China Reasonable economic growth is likely backed by the monetary and fiscal stimuli despite lingering Sino-US trade conflicts Primary Performance will vary city by city due mainly to city- residential specific housing policies market End-user dem
Slide 39: Business Prospects – Property Investment
Business Prospects – Property Investment Uncertainties of late have weighed on the overall leasing activities in Hong Kong Further boost shoppers’ experience through The Point by SHKP Devote more resources into marketing campaigns to drive traffic and tenant sales Additional contribution fro
Slide 40: Business Prospects – Property Development
Business Prospects – Property Development Aim at high asset turnover Continue to launch residential units for sale when ready Presold ~70% of the 3.1mn sq.ft. GFA planned for sale in Hong Kong which is scheduled for completion in FY2020 Around HK$52 bn contracted sales yet to be recognized
Slide 41: Sustainable Business Growth
Sustainable Business Growth “With an unwavering faith in Hong Kong, the Group is confident of being able to weather the current tough and challenging environment and move forward, as it has come through the storms and grown with this city over the decades.” Kwok Ping-luen, Raymond Chairman & Managin
Slide 42: Q&A
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Slide 43: SHKP in Sustainability
SHKP in Sustainability Hang Seng Corporate Sustainability Index Series Member 2018-2019 H K Hong Kong Business Sustainability Index 2018 SEHK:0016 FTSE4Good Sun Hung Kai Properties 43
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