Properties Growth Continues. The Wharf (Holdings) Limited 2016 Final Results 9 March 2017

Transcription

1 Properties Growth Continues The Wharf (Holdings) Limited 2016 Final Results 9 March

2 Overview Backdrop Group Core Profit +25% to $13.8B Properties Share 92% (2015: 88%) due to 31% Growth IP 6% Growth on Large Base to $8.8B DP Nearly Tripled on Record Revenue (& Sales) Wharf T&T Disposal Realized Proceeds of $9.5B Net Cash Inflow On/Off Balance Sheet $31B (After Dividends but Before Financing Activities & Acquisition of Wheelock House for $6.2B) 2

3 Overview Surging Core Profit from Properties Total Core Profit Core Profit from Properties: +31% to $12.7B China Properties HK Properties: +35% to $10.1B China Properties: +16% to $2.6B, HK Properties 73% $13.8 billion (+25%) 19% 8% Others Despite a Weaker RMB Properties: 92% of Group Total 3

4 Overview Solid IP Growth Despite Headwinds IP Core Profit (HKD billion) $8.8B (+6%) High Occupancy Favourable Rental Reversion High Productivity Secures Pricing Power Keen Demand from the Trendiest & Aspirational Brands

5 Overview Record-High DP Sales & Revenue; Core Profit Tripled Total DP Revenue* (HKD billion) $37.1B (+35%) China HK 6.4 HK & China DP 0.0 Core Profit: Nearly 3x to $4B 0.1 Record Revenue: $37B Record Sales: $40B * Incl. JVs & Associates on an Attributable Basis 5

6 Overview Financial Highlights HKD Million % Chg Group Revenue 46,627 40, % Core Profit +25% IP Revaluation Surplus: $906M* Fair Value of IP: $303B (2015: $293B) Operating Profit 17,065 14, % Core Profit** 13,754 10, % Profit Before IP Revaluation Surplus 20,534 9, % Net IP Revaluation Surplus 906 6,231-85% Profit After IP Revaluation Surplus 21,440 16, % Earnings Per Share (HK$) - Attributable to Shareholders % - Core** % * Mainly Driven by HK Office Rental Reversion; Cap Rates Remained Unchanged Dividend Per share (HK$) % **Exclude IP Revaluation Surplus and Exceptional Items 6

7 Agenda Hong Kong Properties China Properties Other Businesses Strategic Reviews Financial Management Next 7

8 Agenda Hong Kong Properties China Properties Other Businesses Strategic Reviews Financial Management Next 8

9 HK IP Challenging Outlook amid Macro Uncertainties HK Retail Sales (HKD billion) Title Sales & Tourist Arrivals Q 2Q 3Q 4Q Growth -12.5% -8.2% -7.5% -3.7% (-8.1%) Sequentially Stabilizing Strong HKD; Cloudy Macro Environment Obscure Outlook H 2H 9

10 HK IP Retail Sales Stabilizing HC Retail Sales (HKD billion) Title Q 2Q 3Q 4Q Growth -18.9% -9.6% -6.4% -3.8% TS Retail Sales (HKD billion) Q 2Q 3Q 4Q Growth -20.0% -10.3% -6.3% -7.0% % % H 2H H 2H 10

11 HK IP Mixed Retail Outlook Strong HKD; Currency / Interest Rate Movements Global Economic & Political Uncertainties Europe Terrorist Threats to Affect Tourist Flow 11

12 HK IP Proactive Management Cushions Downside Risks Retail Revenue by Segment Stabilizing Retail Sales Enhances Rental Visibility 68% $9.1 billion 3% 6% Others PH Active AEI Creates Value HC (+5%) 23% TS Widening Customer Base (Through Promotions in SE Asia*) HK the 1 st Travel Destination for PRC Tourists HC $6,207M +4% TS $2,137M +6% PH $546M +3% *South Korea, India and Philippines, etc. 12

13 HK IP HC Relentless Value Creation HC Retail Revenue (HKD billion) $6.2B (+4%) 1H 2H Diversification & Balanced Mix Mitigating Market Risk Solid Rental Reversion 2.1 OT Extension Building by 2H

14 HK IP TS Unfolding AEI Value TS Retail Revenue (HKD billion) $2.1B (+6%) 1H 2H Solid Retailers Demand (99% Occupancy) F&B, Cosmetics & Luxury Clusters Further Strengthened

15 HK IP HC & TS Global Showcase for the Best Brands HC (Selected Brands) TS (Selected Brands) Expansion HK Debut Kowloon Debut NA Other Commitments 15

16 HK IP HC & TS Effective Marketing Initiatives HC TS 16

17 HK IP Office - Steady HK Office Revenue (HKD billion) $3.4B (+9%) 1H 2H Occupancy Remained High (97%) Positive Rental Reversion

18 HK DP Mount Nicholson Ultra-Luxury Residences on the Peak 6 Villas & 16 Apartments Sold for 50%-Owned Mount Nicholson Launch Date 1Q 2016 $9.9B in 2016 Relevant Profits* Recognized in 2016 (3 Apartments & 1 Villa Sold for $1.7B in 2M17) Product Type* OP *Villas: 7,000 10,000 s.f Apartments: 4,200 4,500 s.f 19 Villas 48 Apartments Issued * 5 Villas & 16 Apartments. The Remaining 1 Villa Sold will be Recognized in

19 Agenda Hong Kong Properties China Properties Other Businesses Strategic Reviews Financial Management Next 19

20 China IP China IP Underpins Long-term Growth RMB Devaluation China IP Revenue (HKD billion) $2.4B (+2%) 1H 2H Encourages PRC Domestic Consumption & Retail Sales Location & Critical Mass Create a Snowball Effect 0.8 Revenue +9% YoY in RMB (+2% in HKD) CAGR % (in HKD)

21 China IP CDIFS Mall Outshines Competition 2016 CDIFS Mall Net Revenue (Net of Tax) RMB633M (+11%) Beat Expectation Consistently Remarkable Performance Foot Traffic Growth +19% Turnover Rent Portion 17% Occupancy Cost* 14% * Occupancy Cost = Retail Rent/Retail Sales Among the Top in Western China in Both Retail Sales & Foot Traffic Continued to Gain Popularity CDIFS Retail Sales Growth 2016 RMB3.85B +17% 2017 Expect Double-digit Growth 21

22 China IP CDIFS Office Finest Premium 39.5% Committed or ~110,000 s.m Leased (in 3 Years) Leasing Progress Comparable to SWS Rental Rates Achieved among the Highest in CD Selective Tenants 22

23 China IP New IFS Malls Progressing at Full Speed New IPs to Further Strengthen Recurrent Income Base Mall CQIFS CSIFS CSIFS & CQIFS Pre-leasing Status on Track Replicating the Success of CDIFS & Harbour City (HK) Best-positioned to Tap the GFA (s.f) 1.2M* 2.7M Scheduled for Opening Sep Q17 % of Area Under Offer/Discussion >90% >85% * CQIFS is 50%-owned, 1.2M s,f. is Total Retail Area Experience-oriented Consumption Markets 23

24 China DP Record-breaking Sales Contracted Sales (RMB billion) RMB31.4B (+21%) 1H 2H 2016 Sales Exceeded Target by 31% GFA Sold 1.5M s.m (+6%); ASP RMB19,900/s.m (+11%) Sales Target RMB24B (2016: 7.5 RMB24B) 2017 Sellable Resources 1.6M s.m (2016: 2.4M s.m) Projects in 14 Cities on Sale in Accumulated Sell-through Rate 93% 24

25 China DP Stronger-than-expected Operating Results Share of Group Core Profit Increased to 14% Improving Operating Margin 2016 Operating Matrix* Revenue $30,676M +12% Operating Profit $5,133M +22% Operating Margin 16.7% +1.4 ppts Net Order Book RMB27B or 1.2M s.m 2017 Target Completion 1M s.m Completed GFA 1.7M s.m +3% Recognized GFA 1.7M s.m +7% * Incl. JVs & Associates on an Attributable Basis 25

26 China DP Disciplined Landbanking Selective & Prudent Approach Focus on 4 Tier 1 Cities, Selective Top Tier 2 Cities DP Land Bank 4.2M s.m Date City Attributable Attributable Consideration GFA (s.m) (RMB) Ownership Feb16 Beijing 47, B 40% Jun16 Hangzhou 17, B 25% Dec16 Shenzhen 51, B 100% Total 116, B 26

27 Agenda Hong Kong Properties China Properties Other Businesses Strategic Reviews Financial Management Next 27

28 Other Businesses MTL Revenue $2,635M (-4%) Throughput (million TEUs) Operating Profit $710M (+5%) Market Throughput South China: -1% HK % DCB % TC 2.2 Flat Total % Kwai Tsing: -2% 28

29 Other Businesses Hotels Revenue $1,587M (+2%); Operating Profit $289M (+4%) Operating Environment Remains Challenging CDIFS Niccolo Hotel Emerged as the City s Market Leader in Room Yield (in Just a Year) 336-Room The Murray Iconic Luxury Hotel Befitting the Most Prestigious Visitors, to Open in 4Q17 29

30 Others 2016 Key Awards Niccolo Chengdu Best Business Hotel in Chengdu 25 th Annual Business Traveller Awards Niccolo Hotels Best Luxury Hotel Brand of the Year 2016 Asia Hotel Awards CDIFS The 2016 VIVA Best-of-the- Best Design and Development Award (by ICSC) Marco Polo Ortigas Manila Five-Star Rating 2017 Global Star Ratings (by Forbes Travel Guide) Harbour City 2 Gold Awards - Public Relations & Events - Sales Promotions/ Traffic Activation ICSC Asia Pacific Center Awards CDIFS Grand Award Quality Building Award

31 Agenda Hong Kong Properties China Properties Other Businesses Strategic Reviews Financial Management Next 31

32 Strategic Reviews Strategic Reviews CME Year-long Review Led the Group to Exit the Segment Wharf T&T was Disposed for $9.5B & a Gain of $7.3B IP Commenced Study for a Separate Listing by Way of Distribution in Specie to Wharf Shareholders All Discussions to Dispose i-cable have Ended; Funding Commitments Will Not be Extended on Expiry 32

33 Agenda Hong Kong Properties China Properties Other Businesses Strategic Reviews Financial Management Next 33

34 Financial Management Prudent Financial Management 25.6% Net Debt to Total Equity 18.8% 19.2% 20.6% 21.7% 20.4% 18.9% Net Gearing Further Dropped to 7.3% 15.8% 14.9% Group Net Debt -$23.4B to $23.8B, Net Cash Inflow: $31B* % Floating Rate Debt: 73% of Total * On/Off Balance Sheet; After Dividends but Before Financing Activities & Acquisition of Wheelock House ($6.2B) Net Debt / (Cash) (HKD B) 31 Dec Dec 2015 Wharf (Excl. Subs.) MTL HCDL i-cable Group Total Net Debt to Total Equity (1.9) % (1.7) % 34

35 Financial Management Prudent Financial Management Average Interest Cost Debt Maturity (HKD billion) % 3.2% 3.2% % 2.8% Jan17-Dec17 Jan18-Dec18 Jan19-Dec19 Jan20-Dec20 Jan21-Dec21 Jan22 & After 35

36 Financial Management Overview of Application of Funds Major Capital and Development Expenditure (HKD billion) Major Capital and Development Expenditure FY16 FY HKD (Actual) (Projected) China DP $12.4B $12.8B China IP $4.5B $6.0B HKIP $7.9B $1.5B Others $2.1B $2.5B Total $26.9B $22.8B * China DP $12.8B Self-financed by Sales; China IP Mainly IFSs Under Construction 36

37 Financial Management New Achievements on Panda Bond Issuance 1 st Tranche Issued on 12 Oct 2016 RMB4B (Over-subscribed 3x)/RMB20B Coupon Rate: 3.1% 37

38 Agenda Hong Kong Properties China Properties Other Businesses Strategic Reviews Financial Management Next 38

39 Next Coming Attractions CSIFS Mall & Niccolo CQIFS Mall & Niccolo 1Q 2Q 3Q 4Q OT 4-Storey Extension OT 4-Storey Extension The Murray 39

40 Corporate Social Responsibility 40

41 CSR 2016 Key Achievements Published the 2 nd CSR Report Based on GRI G4 Guidelines, with the Coming CSR Report (Issued in July) Also Complying with the HKEX s ESG Disclosure Requirements Hang Seng Corporate Sustainability Index (top 30) Accredited the HKQAA s CSR Index Plus mark 41

42 CSR Business-in-Community (Highlights) Flagship Business-in-Community Programme Project WeCan Key Youth Development Programme Architectural Design Internship Project Partners Project Partners 2 Universities 31 Companies 5 Universities 3 Consulates 3 Organizations Awardees 20 Postgraduates (Architecture) Beneficiary 51 Schools 43,000 Students Countries Denmark, France, Germany, India. Italy, Japan, The Netherlands, Spain, Switzerland and The United Kingdom 42

43 Appendix 43

44 IP Portfolio 2016 IP Revenue: $15,289M By Business 2016 IP Valuation: $302.6B By Business Office 27% 4% S.A. & Others Office 34% 10% S.A. & Others 69% Retail 56% Retail China 15% China 14% 85% HK 86% HK 44

45 HKIP Performance Harbour City Times Square Plaza Hollywood 2016 (HKD million) Revenue % Chg Revenue % Chg Revenue % Chg Retail 6,207 +4% 2,137 +6% % Office 2,437 +5% % - - Hotels & Club 1,286-2% Serviced Apt % Total 10,246 +4% 2,838 +6% % Valuation* as of 31 Dec 2016 Retail Sales Jan-Dec 2016 $172.1B $54.5B $9.5B $27.7B (-9.9%) $8.1B (-11.3%) $2.4B (-8.5%) 2016 Avg. Retail Passing Rent (HK$ psf per Month) * Incl. Hotels at Valuation as of 31 Dec 2016 $436 $297 $106 45

46 Commercial Properties Pipeline Commercial Properties Completion Schedule (Million s.f) 53.9M s.f Changsha IFS Suzhou IFS Changsha Outlets Wuxi IFS Chongqing IFS* Chengdu IFS Other China Commercial Prop. HK Commercial Prop. Total Development Area, Incl. Basement Area & Carpark *Gross Basis & Net of Recognized Sales 46

47 China Commercial Properties Pipeline Wuxi IFS Suzhou IFS Chongqing IFS Changsha IFS 250,000 s.m 383,000 s.m 604,000 s.m.* 1,043,000 s.m Grade A Offices No Retail 339m Tower Taihu Plaza CBD Wholly-owned 2016 Total Development Area, Incl. Basement Area & Carpark * Gross area & Net of Recognized Sales Grade A Offices, Apartments & Hotel No Retail 450m Tower Suzhou New CBD 80:20 JV with Genway 2018 Retail, Grade A Offices & Hotel Retail 114,000 s.m 300m Tower Jiangbei New CBD 50:50 JV with COLI 2017 Retail, Grade A Offices & Hotel Retail 254,000 s.m 452m Tower Prime City Center Wholly-owned

48 Chongqing City Profile China s Western Development Strategy Chongqing 2016 Tertiary Industry +11.0% 48.4% of CQ GDP Strong Presence of International Brands Population 2016 GDP 29.9 million +10.7% (National Avg.: +6.7%) Tertiary 48% 7% Primary The World s Largest 2016Retail Sales +13.2% Municipality by Population & Area 2016 Disposable Income per Capita RMB29, % 44% Secondary Transportation Hub Biggest Inland River Port 48

49 Changsha City Profile Hub City in Central China Changsha 2016 Tertiary Industry +12.4% 47.6% of CS GDP Beneficiary of China s Rise of Central China Campaign Population 2016 GDP 7.3 million +9.4% (National Avg.: +6.7%) Tertiary 48% 4% Primary Important Entertainment 2016 Retail Sales +11.6% Center in China Presence of Hunan Satellite TV 2016 Disposable Income per Capita RMB43, % 48% Secondary 49

50 China Contracted Sales Breakdown by City Region City No. of Projects on Sale in 2016 Contracted Sales (%) GFA Sold (%) Eastern China Shanghai 6 20% 5% Suzhou 5 16% 12% Wuxi 4 9% 14% Changzhou 3 3% 9% Ningbo 3 5% 5% Hangzhou 10 23% 18% Eastern China Sub-Total: 31 76% 63% Western China Chengdu 7 6% 12% Chongqing 3 5% 9% Western China Sub-Total: 10 11% 21% Southern China Foshan & Guangzhou 7 4% 7% Others Beijing 3 2% 2% Tianjin, Dalian & Wuhan 5 7% 7% Southern & Others Sub-Total: 15 13% 16% 50

51 4 New Projects Launched in 2016 Projects City New Launch Attributable Proceeds (RMB M) Attributable GFA Sold (s.m) Average Price (RMB psm) Crown Land Beijing Feb 201 9,500 21,100 The Exquisite Palace (Longxi) Hangzhou Apr ,200 28,100 The Pearl on the Crown Beijing May ,000 21,000 Hangzhou Binjiang District (The Willow Shores) Hangzhou Aug ,700 42,700 51

52 China Key Projects on Sales in 2016 Projects Shanghai Pudong Huangpujiang City Attributable Proceeds (RMB M) Attributable GFA sold (s.m) Average Price (RMB psm) Ownership Shanghai 5,635 59,100 95, % Suzhou Times City Suzhou 2,093 65,400 28,700 80% Qiantang Bright Moon Hangzhou 1,345 46,200 27,300 50% River Pitti (Bi Xi) Wuxi 1, ,600 11, % Scenery Bay Tianjin 1,215 42,900 27,600 50% Bellagio ( 碧堤雅苑 ) Suzhou 1,151 55,100 20, % Greentown Zhijiang No.1 Hangzhou 1,094 51,400 20,200 50% Palazzo Pitti (Lot C & D) Hangzhou 1,059 28,300 37, % Bellagio ( 碧堤半島 ) Suzhou ,400 20, % Ambassador Villa Suzhou ,900 54, % Wuxi Times City Wuxi ,700 11, % Park Mansion Ningbo ,800 15, % 52

53 China Land Bank Breakdown by City Region City GFA million (s.m) % Total Eastern China Shanghai 0.5 8% Suzhou % Wuxi % Changzhou 0.4 5% Ningbo 0.1 1% Hangzhou 0.6 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: % 53

54 China key Properties Completion Projects Attributable GFA (s.m) Key Completion in 2016 Suzhou Times City 193,900 Changzhou Ambassador Villa 121,800 Ningbo Park Mansion 103,800 Changzhou Feng Huang Hu 102,000 Greentown Wharf Qiantang Bright Moon 94,800 Shanghai Zhoupu 91,300 Projected Key Completion in 2017 Shanghai Pudong Huangpujiang 136,000 Suzhou Times City 123,500 Wuxi River Pitti (Bi Xi) 87,700 Chongqing IFS 86,300 54

55 China New Projects for Sale in 2017 Projects City Ownership Hangzhou Site 18 Hangzhou 25% Jingan Garden Shanghai 55% Beijing Chaoyang LiangMa Site Beijing 40% Longxi (Site 12) Hangzhou 100% 55

56 Properties Growth Continues Thank You 56

57 End of Presentation The Wharf (Holdings) Limited [HKEx Stock Code: 0004.HK] Disclaimer 1) All information and data are provided for information purposes only. All 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. 57