IP Demerger in Progress. The Wharf (Holdings) Limited 2017 Interim Results 9 Aug 2017

Transcription

1 IP Demerger in Progress The Wharf (Holdings) Limited 2017 Interim Results 9 ug

2 1. Interim Results 2. Strategic Review 2

3 Backdrop Overview Underlying Profit Increased by 22% to $7,271M Stable IP Performance (66% of Underlying Profit) DP Core Profit More than Doubled (32% of Underlying Profit) CME Exit to Complete in Oct 2017 DPS Increased by 10% to $0.64 3

4 Quality IP Demonstrated Resilience Overview IP Core Profit (HKD billion) $4.8B (+3%) H13 1H14 1H15 1H16 1H17 Total Core Profit IP Core Profit +3% to $4.8B 66% of Group Core Profit HK Properties 72% $7.3 billion (+22%) 26% 2% China Properties Others DP Core Profit +161% to $2.3B 4

5 Differentiating IP Driving Growth Overview Total IP Revenue (HKD billion) $7.9B (+4%) HK China Productive Retail Portfolio 0.8 Stable Office Sector Positive Rental Reversion 1H13 1H14 1H15 1H16 1H17 5

6 Financial Highlights Overview HKD Million 1H17 1H16 % Chg Group Revenue 17,063 20,021-15% Operating Profit 8,553 8,075 +6% Core Profit** 7,271 5, % Core profit +25% Profit Before IP Revaluation Surplus 7,270 6, % Net IP Revaluation Surplus 1, % IP Revaluation Surplus: $906M Core Profit +22% to $7.3B Profit fter IP Revaluation Surplus 8,441 6, % Fair Value of IP: $303B (2015: $293B) Earnings Per Share (HK$) - ttributable to Shareholders % - Core** % Dividend Per Share (HK$) $0.64 $ % **Exclude IP Revaluation Surplus and Exceptional Items 6

7 genda Hong Kong Properties B China Properties C Other Businesses D Financial Management E Next 7

8 genda Hong Kong Properties B China Properties C Other Businesses D Financial Management E Next 8

9 Improving Retail Market B C D E HK Retail Sales (HKD billion) Title HK IP 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 YoY -12.5% -8.2% -7.5% -3.7% -1.3% +0.2% 1H 2H Sales & Tourist rrivals On the Mend H17 Total Tourist rrivals +2.4% (-0.6%) (Mainlander +2.3%)

10 Retail Sales Revival On Track B C D E HK IP HC Retail Sales (HKD billion) Title TS Retail Sales (HKD billion) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 YOY -18.9% -9.6% -6.4% -3.8% +1.4% +4.4% 1H 2H 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 YoY -20.0% -10.3% -6.3% -7.0% -4.8% -3.7% 1H 2H % -4.3%

11 Outlook Stabilizing but Mixed B C D E HK IP Global Economic & Political Uncertainties Foreign Currency Movements & Monetary Policy Divergence Europe Terrorist ttacks Divert Global Tourism Trend 11

12 Best-positioned to Build IP Performance B C D E HK IP Retail Revenue by Segment 69% $4.7 billion (+3%) 2% 6% Others PH Stabilizing Retail Sales Strengthens Rental Outlook HC 23% TS Continuous EIs & Tenant Mix Refinement HC $3,258M +5% Positive Rental Reversion TS $1,065M -2% PH $287M +6% 12

13 HC EIs Driving Value Creation B C D E HK IP HC Retail Revenue (HKD billion) $3.3B (+5%) 1H 2H Sales Productivity Underpins Positive Rental Growth 2.5 Constant Re-tenanting Further Enhances Retail Experience ttracting New Differentiating Retailers

14 TS Redefining Retail Experience B C D E HK IP TS Retail Revenue (HKD billion) $1.1B (-2%) 1H 2H Passing Rent p.s.f +1%, Revenue Drop Due to 4% Lettable rea Reduction* Tenant Refinement Brings Excitement & 0.8 Freshness Opening of LEGO Certified Store & Facesss Captivate Crowds * For Shop malgamation Housing 2 nchors (LEGO & Facesss) and Ongoing Tenant Mix Reshuffling 14

15 TS New Excitements B C D E HK IP LEGO Certified Store 9/F Lettable rea: 3,385 s.f Opened on 8 Jul 2017 Facesss 4/F Lettable rea: 6,459 s.f Opened on 21 Jul

16 HC & TS ttracting the Most spiring Brands B C D E HK IP HC (Selected Brands) TS (Selected Brands) Expansion HK/ Kowloon Debut Other Commitments 16

17 Creative Promotion & Cultural Enrichment Initiatives B C D HK IP E HC TS 17

18 Office - Stable B C D E HK IP HK Office Revenue (HKD billion) $1.7B (+4%) 1H 2H High Occupancy (96%-98%) Positive Rental Reversion

19 50%-Owned Mount Nicholson B C D E HK DP Symbol of Luxury & Scarcity 1H 2017: 2 Houses & 6 partments House 7 Sold for >$3.1B (Gross basis) ccumulated Sales: House 1 9 Houses & 22 partments House 1 & 7 Ranked among Top 3 of 2017 Top Luxury Residential Sales * * Global Luxury Real Estate Market Report: Luxury Defined 2017, Christie s International Real Estate $13.7B (Gross basis) 1 House Sold in FY16 Recognized in 1H17 1 House Sold in Jul 2017 for $645M 19

20 genda Hong Kong Properties B China Properties C Other Businesses D Financial Management E Next 20

21 China IP Long-term Value Creation B C D E China IP China IP Revenue (HKD billion) $1.2B (+4%) 1H 2H Solid Sales & Rental Performance 1.2 New Leading IPs Poised for Growth 0.8 Solid Foundation to Build Future Success

22 Mixed-use CDIFS City Within City B C D E China IP ward-winning Trendsetting Landmark in China West 8-Level Retail/ Lifestyle Podium Premium Offices Luxurious IFS Residences Niccolo Chengdu mong the Top in Retail Sales & Footfall in Western China ttracted a Large Concentration of Movers & Shakers mong the Most Exclusive Serviced Residences in CD Retail Sales RMB2.4B (+30%) Foot Traffic +22% Preferred Residence with Superb Service City s Market Leader in Room Yield in <2 Years Figures are for 1H17 22

23 CDIFS Mall Stands Out from the Crowd B C D E China IP 1H17 CDIFS Mall Net Revenue (Net of Tax) RMB367M (+18%) Foot Traffic Growth +22% Turnover Rent Portion 24% Promising Performance Continued Occupancy Cost* 14% * Occupancy Cost = Retail Rent/Retail Sales CDIFS Retail Sales Growth Unmatched Sales Productivity Double-digit Rental Reversion 1H17 RMB2.4B +30% 2017 Expect Double-digit Growth 23

24 CDIFS Office Selective Tenant Profile B C D E China IP Top-notch Workplace 46% Committed Over 125,000 s.m Leased in 3.5 Years Encouraging Rental Rates chieved among the Highest in CD 24

25 DP Sales On Track B C D E China DP Contracted Sales (RMB billion) RMB11.9B (-27%) 1H 2H Sales chieved: 15.1 GF Sold 0.5M s.m (-40%) SP RMB22,500 p.s.m (+21%) Restrictive Policies Depict a Challenging Outlook 2017 Sellable Resources 1.6M s.m Projects in 14 Cities on Sale in 1H17 1H17 ccumulated Sell-through Rate 95% 2017 Sales Target: RMB24B 25

26 Improving Profitability B C D E China DP 1H17 Operating Matrix* Revenue $9,095M -30% Operating Profit $2,355M +1% Operating Margin 25.9% +8.1 ppts Completed GF 409,000 s.m -63% Recognized GF 564,000 s.m -35% Lower Completion & Recognition Enhancing Operating Margin Net Order Book RMB30B or 1.1M s.m FY Target Completion 1M s.m * Incl. JVs & ssociates on an ttributable Basis 26

27 Disciplined Landbanking B C D E China DP Remains Selective and Opportunistic Date City ttributable ttributable Consideration GF (s.m) (RMB) Ownership Feb17 Hangzhou 32, B 23% Total 32, B Focus on Tier 1 Cities & Top Tier 2 Cities DP Land Bank 3.4M s.m (verage Cost: RMB5,600 p.s.m) 27

28 genda Hong Kong Properties B China Properties C Other Businesses D Financial Management E Next 28

29 B D MTL C E Other Businesses Throughput (million TEUs) HK % DCB % TC % Total % Market Throughput South China +7% Revenue $1,361M (+10%) Operating Profit $349M (+20%) Sold Remaining 50% Stake in Taicang in Jun 2017; The Remaining Disposal Gain Booked in 1H17 Kwai Tsing +11% 29

30 B D Wharf Hotels C E Other Businesses Revenue $774M (+5%); Operating Profit $155M (+49%) Improving Operating Environment Niccolo Chengdu at CDIFS was Named One of China s Best Business Hotels by Condé Nast Traveler in Jun 2017 Niccolo Chongqing, a 252-Room Hotel at CQIFS to Open in 3Q17 The Murray, Hong Kong, a Niccolo Hotel to Open in 4Q17 30

31 genda Hong Kong Properties B China Properties C Other Businesses D Financial Management E Next 31

32 Prudent Financial Management B C D E Financial Management Net Debt to Total Equity 18.8% 19.2% 20.6% 21.7% 20.4% 18.9% 15.8% 14.9% Net Gearing Ratio Remained Low at 7.3% 6.4% H17 6.4% Group Net Debt $21.4B Net Debt / (Cash) (HKD B) Wharf (Excl. Subs.) MTL HCDL i-cble Group Total Net Debt to Total Equity 30 Jun (0.4) % Floating Rate Debt: 66% of Total 30 Jun (1.5) % 32

33 Prudent Financial Management B C D E Financial Management verage Interest Cost Debt Maturity (HKD billion) 1H17 Increase on Debt Mix Change % 3.2% 3.2% 3.3% % H17 Jul17-Jun18 Jul18-Jun19 Jul19-Jun20 Jul20-Jun21 Jul21-Jun22 Jul22 & fter 33

34 Overview of pplication of Funds B C D E Financial Management Major Capital and Development Expenditure (HKD billion) Major Capital and Development Expenditure 1H17 FY17 HKD (ctual) (Projected) China DP $5.7B $13.4B China IP $2.1B $5.4B HKIP $0.6B $1.9B Others $1.0B $2.8B Total $9.4B $23.5B * China DP $13.4B Self-financed by Sales; China IP Mainly IFSs Under Construction 34

35 genda Hong Kong Properties B China Properties C Other Businesses D Financial Management E Next 35

36 Coming ttractions B C D E Next Mount Nicholson 3Q17 OTE 4Q17 The Murray 4Q17 CQIFS 3Q17 CSIFS

37 Coming ttractions B C D E Next Mount Nicholson 3Q17 OTE 4Q17 The Murray 4Q17 CQIFS 3Q17 CSIFS

38 50%-Owned Mount Nicholson B C D E Next 3 rd Phase (Tower C&D) Expected End-3Q17 38

39 Coming ttractions B C D E Next Mount Nicholson 3Q17 OTE 4Q17 The Murray 4Q17 CQIFS 3Q17 CSIFS

40 Iconic Ocean Terminal Extension ( OTE ) B C D E Next GF ~100,000 s.f No. of Floors 5 No. of Tenants Expected Opening Date 11 F&Bs 2 Retails 4Q Degree Panorama of Victoria Harbour 40

41 Coming ttractions B C D E Next Mount Nicholson 3Q17 OTE 4Q17 The Murray 4Q17 CQIFS 3Q17 CSIFS

42 The Murray The Remaking of an Icon B C D E Next ccommodation 298 Rooms & 38 Suites (25 Floors) Murray on The Rooftop (Bar & Restaurant) Restaurants & Bars The Tai Pan (Modern European) Murray Lane (Lobby Bar) The Garden Lounge Guo Fu Lou ( 國福樓 )* Meeting & Event Spaces Leisure Facilities >20,000 s.f Spa, Gymnasium & Swimming Pool Contemporary Urban Chic Part of Government s Conserving Central Initiative * The Wan Chai Branch One-starred Rating by Michelin Guide Since

43 Coming ttractions B C D E Next Mount Nicholson 3Q17 OTE 4Q17 The Murray 4Q17 CQIFS 3Q17 CSIFS

44 CQIFS & CSIFS Mixed-use Developments B C D E Next 50%-Owned CQIFS CSIFS Retail 1.2M s.f 30% 10% Hotel 0.4M s.f Retail 2.7M s.f 35% 12% Hotel 1.0M s.f Total 4.1M s.f (100% Level) Total 7.9M s.f 60% Office* 2.5M s.f 53% Office 4.2M s.f Total Development rea, Excl. Carpark (Total 2,211 Carparks) * Net of Recognized Sales Total Development rea, Excl. Carpark (Total Over 2,700 Carparks) 44

45 CQ & CSIFS Mall Encouraging Pre-leasing Status B C D E Next Mall CQIFS CSIFS GF (s.f) 1.2M* 2.7M To Mirror the Success of Harbour City (HK) & CDIFS Scheduled for Opening Sep Q18 Proven Management & Execution Capabilities % of rea Leased/ Under Offer >90% >90% Promising Pre-leasing Underlines * CQIFS is 50%-owned, 1.2M s.f is Total Retail rea Retailers Trust 45

46 CQIFS Mall New Lifestyle Destination B C D E Diversified Tenant Mix (Selected Brands) CQ Debut Renowned Brands Next To Offer an Exceptional One-Stop Lifestyle Experience Over 150 Brands Incl. 80 Int l Brands & 20 CQ Debuts Sportswear & nchor Entertainment/ Lifestyle Mid to High-end 21% Entertainment & Lifestyle 9% 24% 1.2M s.f (100% Level) 25% Food & Beverage F&B 22% Top-end Luxury ffordable Luxury 46

47 CSR CORPORTE SOCIL RESPONSIBILITY 47

48 Key CSR chievements CSR Published CSR Report 2016 in ccordance with GRI G4 Sustainability Reporting Guidelines, and in lignment with HKEx Environmental, Social and Governance Reporting Guide Hong Kong Quality ssurance gency s CSR Index Plus Hang Seng Corporate Sustainability Index Constituent Stock 5 Years Plus Caring Company Logo rchitectural Design Internship has Supported Over 20 Students Since

49 2016 CSR Performance Highlights CSR Total ssets HK$443.8 billion Hang Seng Corporate Sustainability Index Series Member Reduced >17% GHG Emissions Since 2014* 6,600+ Talent* 102,000+ Training Hours* Supporting 43,000 Students* 1,100+ Volunteers* Donations of HK$36 million The Wharf s CSR Report 2016 is prepared in accordance with the GRI G4 Sustainability Reporting Guidelines. *Reporting scope covers selected HK operations only. 49

50 1. Interim Results 2. Strategic Review 50

51 CME i-cble ll Major Regulatory Hurdles Cleared Open Offer (Expected Completion: 14 Sep 2017) Loan Capitalization (Expected Completion: Sep/ Oct 2017) Distribution in Specie of ll i-cble Shares to Wharf Shareholders (2 Stages) Scheduled for Completion in Sep/ Oct 2017 These will Complete CME Exit Note: New Investor: Forever Top (sia) Limited 51

52 IP Demerger (Dividend Neutral) Wharf REIC (Incl. 72% HCDL) GF 11M+s.f; Value $230B+ nnual Turnover $13B+ Unique Commercial HKIPs: Harbour City Times Square Plaza Hollywood Wharf China IP China DP Other HK Properties Logistics (MTL, HCTL) Hotel Management Crawford House Wheelock House The Murray (Under Conversion) PN15 PPROVED; 1 UNDER PREPRTION 52

53 ppendix 53

54 IP Portfolio 1H17 IP Revenue: $7,927M By Business 1H17 IP Valuation: $305.9B By Business Office 26% 4% S.. & Others Office 34% 11% S.. & Others 70% Retail 55% Retail China 16% China 14% 84% HK 86% HK 54

55 HKIP Performance Harbour City Times Square Plaza Hollywood 1H17 (HKD million) Revenue % Chg Revenue % Chg Revenue % Chg Retail 3,258 +5% 1,065-2% % Office 1,235 +2% % - - Hotels & Club % Serviced pt % Total 5,272 +4% 1,415-1% % Valuation* as of 30 Jun 2017 Retail Sales Jan-Jun 2017 $172.7B $54.5B $9.6B $13.7B (+2.8%) $3.8B (-4.3%) $1.2B (-1.4%) 1H17 vg. Retail Passing Rent (HK$ psf per Month) * Incl. Hotels at Valuation as of 30 Jun2017 $462 $302 $109 55

56 Commercial Properties Pipeline Commercial Properties Completion Schedule (Million s.f) 53.5M s.f Changsha IFS Suzhou IFS Changsha Outlets Wuxi IFS Chongqing IFS* Chengdu IFS Other China Commercial Prop. HK Commercial Prop. Total Development rea, Incl. Basement rea & Carpark *Gross Basis & Net of Recognized Sales 56

57 China Commercial Properties Pipeline Wuxi IFS Suzhou IFS Chongqing IFS Changsha IFS 250,000 s.m 383,000 s.m 570,000 s.m* 1,043,000 s.m Grade Offices Grade Offices, partments & Hotel Retail, Grade Offices & Hotel Retail, Grade Offices & Hotel No Retail No Retail Retail 114,000 s.m Retail 254,000 s.m 339m Tower 450m Tower 300m Tower 452m Tower Taihu Plaza CBD Suzhou New CBD Jiangbei New CBD Prime City Center Wholly-owned 80:20 JV with Genway 50:50 JV with COLI Wholly-owned Total Development rea, Incl. Basement rea & Carpark * Gross area & Net of Recognized Sales 57

58 Chongqing City Profile China s Western Development Strategy Chongqing 1H17 Tertiary Industry +10.8% 50.4% of CQ GDP Strong Presence of International Brands Population 1H17 GDP 30.5 million +10.5% (National vg.: +6.9%) Tertiary 50% 4% Primary The World s Largest 1H17Retail Sales +11.7% Municipality by Population & rea 1H17 Disposable Income per Capita RMB16, % 45% Secondary Transportation Hub Biggest Inland River Port 58

59 Changsha City Profile Hub City in Central China Changsha 1H17 Tertiary Industry +10.2% 47.1% of CS GDP Beneficiary of China s Rise of Central China Campaign Population 1H17 GDP 7.6 million +8.5% (National vg.: +6.9%) Tertiary 47% 3% Primary Important Entertainment 1H17 Retail Sales +10.6% Center in China Presence of Hunan Satellite TV 1H17 Disposable Income per Capita RMB24, % 50% Secondary 59

60 China Contracted Sales Breakdown by City Region City No. of Projects on Sale in 2016 Contracted Sales (%) GF Sold (%) Eastern China Shanghai 2 12% 2% Suzhou 5 11% 10% Wuxi 4 15% 22% Changzhou 3 1% 1% Ningbo 3 7% 7% Hangzhou 12 21% 21% Eastern China Sub-Total: 29 67% 63% Western China Chengdu 7 3% 4% Chongqing 4 12% 16% Western China Sub-Total: 11 15% 20% Southern China Foshan & Guangzhou 6 6% 9% Others Beijing 2 5% 2% Tianjin, Dalian & Wuhan 5 7% 6% Southern & Others Sub-Total: 13 18% 17% 60

61 2 Projects Launched in 1H17 Projects City New Launch ttributable Proceeds (RMB M) ttributable GF Sold (s.m) verage Price (RMB psm) The Osmanthus Grace (Site 18) Hangzhou May 208 6,200 33,800 Longfor Mansion (Site 16) Hangzhou Jun 195 6,100 32,100 61

62 China Key Projects on Sales in 1H17 Projects Shanghai Pudong Huangpujiang City ttributable Proceeds (RMB M) ttributable GF sold (s.m) verage Price (RMB psm) Ownership Shanghai 1,372 11, , % Wuxi Glory of Time Wuxi ,300 17, % Greentown Zhijiang No.1 Hangzhou ,500 22,600 50% Bellagio Suzhou ,900 20, % The Pearl on the Crown Beijing 579 7,300 79,200 25% Wuxi Times City Wuxi ,200 14, % The Berylville Ningbo ,200 33,300 50% Scenery Bay Tianjin ,100 36,600 50% International Community Chongqing ,800 12,800 40% The Throne Chongqing ,100 17,800 50% Evian Capital Foshan ,000 14,900 50% Suzhou Times City Suzhou ,300 28,900 80% 62

63 China Land Bank Breakdown by City Region City GF million (s.m) % Total Eastern China Shanghai 0.5 9% Suzhou % Wuxi % Changzhou 0.1 1% Ningbo 0.0 1% Hangzhou 0.5 9% Eastern China Sub-Total: % Western China Chengdu % Chongqing % Western China Sub-Total: % Southern China Foshan, Shenzhen & Guangzhou 0.2 3% Others Tianjin 0.1 1% Changsha % Beijing, Dalian & Wuhan 0.3 5% Southern & Others Sub-Total: % Total: % 63

64 China Key Properties Completion Projects ttributable GF (s.m) Key Completion in 1H17 Suzhou Times City 122,300 Wuxi River Pitti (Bi Xi) 87,700 Chongqing IFS 68,000 Chengdu Times City 56,600 Chengdu Times Town 42,100 Projected Key Completion in 2H17 Shanghai Pudong Huangpujiang 136,000 Suzhou Times City 124,400 Wuxi Times City 62,600 Hangzhou The Exquisite Palace (Longxi) 55,700 Dalian Garden Valley 54,000 Foshan Evian Kingbay 45,300 64

65 China New Projects for Sales in 2H17 Projects City Ownership Foshan Site ( 依雲曦岸 ) Foshan 40% Longxi (Site 12) Hangzhou 100% 65

66 IP Demerger in Progress Thank You 66

67 End of Presentation The Wharf (Holdings) Limited [HKEx Stock Code: 0004.HK] Disclaimer 1) ll information and data are provided for information purposes only. ll opinions included herein constitute Wharf s judgment as of the date hereof and are subject to change without notice. The Group, its subsidiaries and affiliates hereby disclaim (i) all express, implied, and statutory warranties of any kind to user and/or any third party including warranties as to accuracy, timeliness, completeness, or fitness for any particular purpose; and (ii) any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the information and data contained herein. 2) The full-year statutory financial information of preceding financial years quoted in this presentation are derived from statutory annual financial statements for that relevant financial years, each of which had been delivered to Registrar of Companies in accordance with the prevailing Companies Ordinance and were reported on by the auditors with relevant auditors reports without qualification or modification. 67