“investment properties portfolio ranks among top five in ... 20… · “investment properties...

The Wharf (Holdings) Limited

2013 Final Results

27 March 2014

1

“Investment Properties Portfolio Ranks

Among Top Five in the World”

103B 130B

153B

194B 211B 12B

18B

31B

38B

50B

2009 2010 2011 2012 2013

HK China

IP Book Value – Top in the World

2

Continued value creation and new investment grow IP to

among the most valuable in the world that are publicly held

261B

232B

184B

148B

115B

+34%

+13%

+9%

(HK$)

Top 20 Global Property Companies by Market Cap

3

55.5

38.0 35.2 33.7 31.1 30.4 26.3 23.9 22.8 22.2 21.6 20.9 20.1 18.5 18.4 18.4 18.2 18.0 18.0 17.9

0

10

20

30

40

50

60

Source: Morgan Stanley Real Estate – Global Property Compass (Jan 2014)

Market Cap (US$’B) World’s

Top 20 by

Market Cap

IP book value

4

38,383 34,646 34,033 33,600

30,105 27,988 27,750 27,503 26,246 25,058

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Source: Company data, Wharf research

(US$’M)

Top 5 in

the World

IP Portfolio Ranks Among Top Five in the World

China DP

30%

HKDP 1% Others

11%

IP 58%

IP earnings – 58% of the Group total core profit

5

$6,548M

+11%

$6,052M

+11%

$496M

+20%

HKIP

54%

China IP

4%

49B 65B

80B

114B

138B

2009 2010 2011 2012 2013

Retail valuation

6

Retail valuation

57% of total IP valuation

Retail valuation (HK$)

+182%

Retail revenue

7

4.2B 4.7B

5.7B 6.5B

7.6B

2009 2010 2011 2012 2013

HK & China retail

revenue (HK$)

+17%

+15%

+20%

+12% +16%

Retail revenue

68% of total IP revenue

+81%

Core profit

+13% Excluding HKDP

$5,875M $6,548M

$3,254M $3,428M

IP

Core profit (excl. HKDP) increased by 13%

8

China DP

China DP

Others $1,257M

Others $800M

$11,233M

$9,929M +57%

IP

+5%

+11%

FY12 FY13

(HK$)

IP Net revaluation

surplus

$17.2B

IP revaluation surplus

9

27.8B 23.8B

33.3B

17.2B

FY10 FY11 FY12 FY13

(HK$)

10-year CAGR of

+16% p.a

Book NAV per share

10

21.09 22.46 26.71 30.70

35.28 40.33

46.68

59.22 67.10

82.04 90.94

2003 2004 2005 2006 2007 2008* 2009 2010 2011* 2012 2013

+11%

(HK$/share)

*NAV/share diluted due to rights issue

HKD million FY13 FY12 % Change

Group Revenue 31,887 30,856 +3%

Operating Profit 13,280 14,170 -6%

Core Profit** 11,298 11,040 +2%

Profit Before IP Revaluation Surplus 12,206 13,927 -12%

Net IP Revaluation Surplus 17,174 33,336 -48%

Profit after IP Revaluation Surplus 29,380 47,263 -38%

Earnings Per Share

- Attributable to Shareholders

- Core**

$9.70

$3.73

$15.60

$3.64

-38%

+2%

Dividend Per share $1.70 $1.65 +3%

Financial Highlights

11

**Exclude IP revaluation surplus and exceptional items

Business Review

Hong Kong Investment Properties

12

$46B retail sales

9% HK market share

$6.9B retail revenue

15% growth

Record retail sales and revenue

13

New Record

Harbour City Times Square Plaza Hollywood

Retail Sales $33.8B $9.4B $2.6B

Retail revenue growth +16% +10% +13%

Created

international

media frenzy

Part of retail management to attract foot traffic and retail sales

14

Powerful promotion and marketing campaigns

16.5m

Talk of the

town event

Phenomenal

foot traffic

from locals

and tourists

The Rubber

Duck Project

12 Awards

Obtained in Asia

Enhancing

asset quality

and

rental value

Continued value creation

15

Asset enhancement works:

Completed

(Times Square)

18-month massive renovation

completed in Dec 2013

Under renovation

(Harbour City)

- 4-storey extension bldg at OT

- Shifting of Atrium to add more

retail stores

Retail conversion (Harbour City)

Creation of new retail space to house various celebrated

brands

16

New Times Square relaunch 18-mth massive renovation completed in Dec-13

New F&B

Experience

Brand New

Cinema Complex

Exciting New

Anchor Tenants

$200M

p.a (renovated space)

Estimated payback

period

Target foot traffic

growth Renovation cost Estimated retail rental

increment

$500M

3 Years

10%

17

New Times Square relaunch

opened late

Nov 2013

opened

Sep 2013

opened late

Jun 2013

opened late

Oct 2013

18


CINE TIMES

A Brand New 5-House Cinema complex with the most audience

seats (900) on HK island

opened

Nov 2013


19

New Food Forum

Offering new

F&B

experience

Improve traffic flow

3X more


20

No. of lifts Lift speed Lift capacity

Before

renovation 4 20 sec (G/F - 10/F) Total: 84 pax max.

After

renovation 6 13 sec (G/F or 2/F - 10/F) Total: 200 pax max

21


The New

Times

Square

TV

commercial

$1,258M $1,352M $1,492M


22

+10%

Retail Revenue (HK$)

Remarkable post-renovation results

2011 2012 2013

New Record

Q4 2013 Retail sales

+9% (vs -1% in Q1-Q3 2013)

With opening of anchor

tenants

23

Harbour City – asset enhancement program

Value-

creation

initiatives

continue

4-storey extension building at OT Re-layout at OT Atrium Other retail areas conversion

Foundation works commenced

Building pending govt’s approval

Target completion in 2017

To expand retail space

Zenith committed in Q413

Target completion [mid-2014]

Office areas for Uniqlo flagship

CLP room on Canton Rd.into

3,000 s.f store

Newly recruited brands

Donguri Republic, Zara

Home,

Chanel Watch & Jewellry,

Dior Cosmetics

Store Expansions

Chanel expanded

presence by 10,000 sf

New F&B Outlets

Kaya, C’est la B, Smile

Yogurt, Pierre Herme

Paris, M&C Duck

Harbour City

24

Tenant mix

refinement

continues

Business Review

China Investment Properties

25

Total Development Area (incl. Basement

Carparks)

760,000 Square Meters

26

Chengdu IFS

Phase I completed Q1 2014

Full completion

2015

Retail

28%

Office

38%

CP

20%

Hotel 5%

S.A 9%

Development area breakdown

Phase I Retail Mall 210,000s.m. Office TI 130,000s.m.

Phase II

Under

construction

Office T2, 5-star Hotel,

Serviced Apartment

RMB600M Expected annual rental

income at full operation

Chengdu IFS – 210,000 s.m Shopping Mall

27

As of 27.3.2014

96% Leased

70% Opened

90% Shops opened by

mid-2014

Officially opened on

14 Jan 2014

Encouraging retail

sales since opening

Solid Growth Momentum at China Malls

28

Dalian Times Square

Retail Sales Retail revenue

FY13

+7%

FY13

+10%

Chongqing Times Square

Retail Sales Retail revenue

FY13

+10%

FY13

+7%

Solid Retail

Performance

in China

2,291 2,049

1,650

1,208 1,000 980 936 854

711 640 605 600 562 520 450 369

0

500

1,000

1,500

2,000

2,500

29

Gross Retail Area (‘000 square feet)

Source: company’s annual / interim report, analyst report, Wharf research

Chengdu IFS Mall

Commitment

Chengdu IFS 96%

Harbour City 100%

Times Square 100%

High

commitment

rate at mega-

sized

shopping

malls

30

Chengdu IFS Mall

About 300

coveted brands

&

90 are first time

in Chengdu / western

China

One-stop shopping experience in Western China

8 levels of diversified retail mix

Key entertainment anchors

Lifestyle & entertainment

Tenant mix by area

34%

Mid-high end

with varied

price-points

15%

High-end

Luxury

18%

Affordable

Luxury

33%

F&B

Entertainment

Lifestyle

Target opening in early-

2015

Tower 1 (50 floors – 4 zones)

- 14% committed + 16% under final discussion

Tower 2 (50 floors) - Target completion in end-2014

Target opening in mid-2015

Office Serviced Apartment Hotel

31

Chengdu IFS

Promising

office rental

achieved RMB130-170 psm / mth

(mid-low zones)

China IP – IFSs progressing as planned

*Gross area

Chongqing IFS

Development Area: Usage: Retail area: Landmark: Location: Ownership: Completion:

645,000 s.m.*

Retail, Grade A

offices & hotel

102,000 s.m. 300m tower Jiangbei new CBD

50:50 JV with

COLI

2015

Wuxi IFS


250,000 s.m.

Grade A offices &

hotel Nil 340m tower Taihu Plaza CBD wholly-owned 2014

Changsha IFS

1,025,000 s.m.

Retail, Grade A

offices & hotel 230,000 s.m. 452m tower Prime city centre wholly-owned

Retail size of Times Square City centre landmark

Suzhou IFS


368,000 s.m.

Grade A offices,

apartments &

hotel Nil 450m tower Suzhou new CBD 80:20 JV with Genway 2017

Tallest tower in Suzhou Another Harbour City

**Development area includes basement retail area and carpark


32

2017

Business Review

China Development Properties

33

Exceeded sales target, solid execution in China

34

Average selling price

RMB14,200

Per square meter

+21%

GFA sold

1,495,000

square meters

+15%

FY2013

contracted sales

RMB20.9B +39% yoy

14 Eastern 58%

Western 25%

Southern 11%

Others 6%

cities

Solid execution in China

35

Diverse property portfolio

39

projects on sale

2.7M sm

2014 Sellable resources

Well-received new launches

9 77% New launches Sell-through

84%

Overall sell-through as of 31.12. 2013

4.6B 8.8B

12.7B 15.0B

20.9B 23.0B

Sales momentum continues in 2014

36

(RMB)

China Property Sales

(2009) (2010)

(2011) (2012)

(2013) (2014)

FY2014 sales target

RMB23.0B +10%

(over FY2013 achieved

sales)

Business Review

Marco Polo Hotels, Modern Terminals and

Communications, Media & Entertainment

37

38

Address: 22 Cotton Tree Drive, Central, Hong Kong

Murray Building Acquisition

A

conservation

project for a

unique,

lifestyle hotel

in Central

Nearly

50 years

of history

Land cost $4.4B

Total cost estimate

over $7B

Building design under planning

Target opening

2017

39

Revenue

$3,106M +4.6%

Da Chan Bay Terminal one

1M TEU throughput mark

Revenue

$1,498M +7.7%

Operating profit

$377M -3.6%*

*Hotel renovation

(GW) & pre-opening

exp. (CZ Hotel)

13 owned or managed

Operating profit

$944M -17%*

*One-off costs

(labour unrest)

FY13

Throughput TEU

HK 5.5M

Taicang 1.4M

Modern Terminals Marco Polo Hotel

Other new hotels under development

40

Revenue

$1,857M

+2%

Stable net cash inflow maintained

$1,932M

-9%

i-CABLE Wharf T&T

Operating profit

$300M +20%

Net loss

narrowed to

$93M

New Record

Revenue

Net cash of $182M maintained

Financial Management

41

Comfortable gearing level

42

Net Debt /

(Cash) (HKD billion)

31.12.2013 31.12.2012

Wharf (exclude below

subsidiaries)

46.7 49.2

MTL 11.2 11.2

HCDL 0.4 (4.6)

i-CABLE (0.2) (0.2)

Group Total 58.1 55.6

Net Debt to

Total Equity 20.4% 21.7%

Wharf’s own net debt

-$2.5B

Group net debt

+$2.5B

after HCDL’s purchase of

Murray Building

FY13 Net Gearing

improved to

20.4%

Net gearing

10-year average

22.1% (2003 -2012) 30.8%

24.3% 23.4%

21.1%

25.6%

18.8%

15.8%

19.2%

20.6% 21.7%

20.4%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

10-year average 22.1%

4.5B

15.5B

8.9B

24.9B 26.8B

35.5B 32.8B 32.9B

2007 2008 2009 2010 2011 2012 2013 2014

Rental income from

investment properties (HK & China)

$9.3B Operating profit FY13

Logistics, hotels & CME $1.6B Operating profit FY13

China property sales RMB20.9B FY13

Cash Balance $24.5B as of 31.12.13

Undrawn bank facilities $20.4B as of 31.12.13

Debt financing $8.2B FY13

Available-for-sale

investments (immediately available for

liquidation)

$3.7B market value as of

31.12.13

Major capital and development expenditure Diversified & multiple sources

✴China DP $17.3B self-finance by sales

✴China IP mainly IFS under construction

HKD FY13 (Actual)

FY14 (Projected)

China DP 17.3B 20.7B

China IP 8.7B 8.3B

HKIP 1.1B 0.8B

Others 5.7B 3.1B

Total 32.8B 32.9B

(HK$)

*projects on hand

Diversified income sources and funding

43

Coming attractions

44

Chengdu IFS’s

hotel and

apartments Chongqing IFS

retail mall

Ocean Terminal’s

new image

Murray Building

Fantastic TV

CSR – Flagship Project

Project WeCan

45

Appendix

48

2013 HKIP Performance

Harbour City Times Square Plaza Hollywood

FY13

(HKD million) Revenue % Chg Revenue % Chg Revenue % Chg

Retail 4,909 +16% 1,492 +10% 475 +13%

Office 1,885 +10% 604 +9% - -

Hotels & club 1,372 +8% - - - -

Serviced apt. 305 -2% - - - -

Total 8,471 +13% 2,096 +10% 475 +13%

Total valuation: $200.8B*

* incl. hotels at valuation as of 31.12.2013

Valuation as of

31.12.2013 $146.1B* $46.2B $8.5B

Retail sales

Jan-Dec 2013 $33.8B (+10%) $9.4B (+1.6%) $2.6B (+7.5%)

2013 avg. retail

passing rent (HK$ psf per month)

$368 $228 $87

49

China retail properties pipeline

50

2013 2014 2015 2016 & beyond

3.6 3.6 3.6 3.6

2.0 2.0 2.0 2.0

2.3 2.3 2.3 2.3

1.1 1.1*

2.5

Changsha IFS Chongqing IFS Chengdu IFS Other China retail HK retail

HK Retail

Other China

retail

Chengdu IFS

Chongqing IFS

Changsha IFS

Completion schedule of upcoming China retail properties

Million s.f

11.5M square feet of retail properties upon completion

11.5M s.f

*Gross basis

China contracted sales breakdown by city

51

Region City No. of projects

on sale in 2013

Contracted Sales

(%)

GFA Sold

(%)

Eastern China Shanghai 3 8% 3%

Suzhou 4 19% 18%

Wuxi 5 10% 13%

Changzhou 2 5% 9%

Ningbo 2 2% 1%

Hangzhou 5 14% 13%

Eastern China Sub-Total: 21 58% 57%

Western China Chengdu 6 12% 12%

Chongqing 4 13% 15%

Western China Sub-Total: 10 25% 27%

Southern China Foshan &

Guangzhou 5 11% 11%

Others Tianjin 2 4% 4%

Beijing, Dalian &

Wuhan 3 2% 1%

Southern & Others Sub-Total: 10 17% 16%

9 new projects launched in 2013

52

Projects City New launch

Attributable

Proceeds

(RMB’M)

Attributable

GFA sold (s.m)

Average Price

(RMB’M)

Launched in 1H13:

Shi Ji Hua Fu Hangzhou Jan 2013 667 62,200 10,700

Palazzo Pitti (Lot C) Hangzhou Mar 2013 1,362 57,100 23,900

Feng Huang Hu Changzhou Apr 2013 261 29,100 9,000

Launched in 2H13:

Petrus Bay Ningbo Jul 2013 249 13,400 18,600

Bellagio Suzhou Jul 2013 619 37,100 16,700

[Shanghai Songjiang] Shanghai Aug 2013 737 25,900 28,400

Unique Garden Beijing Aug 2013 329 7,900 41,700

River Pitti Wuxi Nov 2013 192 14,000 13,700

The Berylville Ningbo Dec 2013 232 5,200 44,900

China key projects on sale in 2013

53

Projects City

Attributable

Proceeds

(RMB’M)

Attributable

GFA sold (s.m)

Average Price

(RMB’M) Ownership

Times City Suzhou 1,697 131,500 12,900 80%*

Palazzo Pitti (Lot C) Hangzhou 1,362 57,100 23,900 100%

Tianfu Times Square Chengdu 1,258 60,700 19,200 100%

Ambassador Villa Suzhou 1,248 52,100 24,000 100%

Times City Wuxi 1,074 116,900 9,200 100%

Times Palace Changzhou 848 106,700 7,900 100%*

Int’l Community Chongqing 834 103,200 7,900 40%

The U World Chongqing 865 40,300 20,200 55%*

Peaceland Cove Tianjin 825 60,600 13,000 50%

Shanghai Songjiang Shanghai 737 25,900 28,400 100%

Shi Ji Hua Fu Hangzhou 667 62,150 10,700 100%

Evian Riviera Foshan 633 47,620 13,300 50%

Bellagio Suzhou 619 37,100 16,700 100%

Donghui City Guangzhou 592 37,800 15,700 33%

* HCDL’s sharing

China land bank breakdown by city

54

Region City GFA million (s.m) % Total

Eastern China Shanghai 0.8 7%

Suzhou 1.6 14%

Wuxi 1.5 13%

Changzhou 1.1 9%

Ningbo 0.2 2%

Hangzhou 1.0 8%

Eastern China Sub-Total: 6.2 53%

Western China Chengdu 2.5 21%

Chongqing 1.2 11%

Western China Sub-Total: 3.7 32%

Southern China Foshan & Guangzhou 0.6 5%

Others Tianjin 0.1 1%

Changsha 0.7 6%

Beijing, Dalian & Wuhan 0.4 3%

Southern & Others Sub-Total: 1.8 15%

Total: 11.7 100%

China new land acquisitions in 2013

55

Site Usage Equity

Interest

Attributable

Cost

(RMB’M)

Attributable

GFA

(s.m)

Accommodation

Value

(RMB psm)

Shanghai Pudong

District Residential 100% 1,306 97,900 13,300

Ningbo Jiangbei

District Residential 100% 997 103,600 9,600

Tianjin Haihe Residential 50% 1,325 90,900 14,600

Foshan Chancheng


Hangzhou Xiaoshan

District Residential 50% 1,288 94,800 13,600

Hangzhou Gongshu


Foshan Nanhai


Total attributable land cost & GFA: 6,779 672,900

China property completion

56

Projects Attributable GFA (s.m)

Key completion in 2013

Chongqing Int’l Community 283,000

Suzhou Times City 170,800

Changzhou Times Palace 106,000

Tianjin Peaceland Cove 96,000

Chengdu Tian Fu Times Square 92,000

Key completion in 2014

Changzhou Times Palace 340,400

Suzhou Times City 151,500

Changzhou Feng Huang Hu 146,800

Wuxi Times City 132,000

Suzhou Ambassador Villa 87,300

China new projects for sale in 2014

57

Projects City Ownership

Hangzhou Royal Seal (formerly known as Hangzhou

Wenhui Road Project) Hangzhou 100%

Shanghai South Station Shanghai 27%

Wuhan Lake Moon Site B Wuhan 100%

Chengdu Times City Chengdu 100%

Feng Huang Site 03 Project (Huang He Lu and Feng

Xiang Lu) Changzhou 100%

Dalian Buxiuxiang Dalian 60%

天津市海河地塊項目 Tianjin 50%

寧波江北區天水家園以北地塊項目 Ningbo 100%

Shanghai Pudong Huangpujiang Project Shanghai 100%

Shanghai Tangzhen Shanghai 50%

上海浦東周浦鎭地塊項目 Shanghai 100%

The Wharf (Holdings) Limited

2013 Final Results

27 March 2014

58

THANK

YOU

59

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

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.

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