DP Contributed 62% of Core Profit
The Wharf (Holdings) Limited
2018 Interim Results
9 August 2018
Stock Code: 0004
Financial Highlights
1
Unadjusted
Comparison Group
HKD Million 1H18 1H17#
1H18 1H17
(Ex. WREIC)
% Chg
Group Revenue 7,823 17,063 7,823 7,517 +4%
Operating Profit 2,768 8,553 2,768 1,503 +84%
Core Profit* 2,527 7,438 2,527 2,792 -9%
Profit Attributable to Shareholders 2,860 8,441 2,860 3,541 -19%
Earnings Per Share (HKD)
- Attributable to Shareholders
- Core*
0.94
0.83
2.78
2.45
0.94
0.83
1.17
0.92
-20%
-10%
Dividend Per Share (HKD) 0.25 0.64 0.25 N/A N/A
Wharf REIC (WREIC) was Demerged in Nov 17.
Accordingly, 2017 Comparatives have been
Adjusted to Make Comparison Meaningful
Core Profit -9%:
• DP -24% (62% of Total) Partly due to Timing
Differences
• Logistics -21% (9% of Total)
• All Other Segments Improved
IP Revaluation Surplus $369M
Listed Investments^(Mkt Value $29.0B;
Unrealized Surplus $1.0B)
NAV $142.5B ($46.77/Share)
*Core Profit - Excl. IP Revaluation Surplus & Exceptional Items
^ Excl. the 25% interest in Greentown China Holdings Limited
# Reflects Actual 1H17 Results Without Restatement
2
Property-focused
Total Revenue
82% of
Operating Profit
83% of
Core Profit
72% of
Revenue
$7,823 M
+4%*
China IP
21%
China DP
50%
HK
Properties
1%
Others 28%
Properties 72%
*Excl. WREIC in 1H17
Operating Profit
$2,768 M
+84%*
China IP
32%
China DP
48%
HK
Properties
2%
Others 18%
Properties 82%
Core Profit
$2,527 M
-9%* China IP
20%
China DP
35%
HK
Properties
28%
Others 17%
Properties 83%
Focused Strategy
Selective & Disciplined Approach
Core Profit (Adjusted for Impact of Demerger)
Core Profit - Excl. IP Revaluation Surplus & Exceptional Items
# Reflects Actual 1H17 Results Without Restatement
3
Unadjusted Comparison Group
HKD Million 1H18 1H17#
1H18 1H17
(Ex. WREIC) % Chg % of 1H Total
HK Properties 716 5,202 716 874 -18% 28%
China DP 892 1,450 892 1,194 -25% 35%
China IP 490 431 490 431 +14% 20%
Others 429 355 429 293 +46% 17%
Total 2,527 7,438 2,527 2,792 -9% 100%
Segment Assets
4
Total Business Assets
Properties 90% of Total
Total Business Assets $184.2 B as of End-Jun 18
Total
Business Assets
$184.2 B
China IP
35%
China DP
34%
HK
Properties
21%
Others 10%
Properties 90%
China DP
China IP
Others
Financial Management
Agenda
Hong Kong Properties
Hong Kong Properties
China DP
China IP
Others
Financial Management
Agenda
Mount Nicholson
Mount Nicholson
Launch Date 1Q 2016
Product Type 19 Houses (6,000-10,000 s.f)
48 Apartments (4,200-4,500 s.f)
Accumulated Sales*
13 Houses 32 Apartments
$94,300 psf
(Average)
$87,200 psf
(Average)
Accumulated Total Proceeds $22.7B (Gross Basis)
Accumulated Attributable Profit Booked $4.7B*
*Up to Jun 30, 2018
7
Extreme-
luxury
Unique
Project
Most Valuable
in Asia
Mount Nicholson
1H18 Sales*
2 Houses 2 Apartments
$126,700 psf
(Average)
$128,400 psf
(Average)
Total Proceeds $3.3B#
(Gross Basis)
8
* Accumulated Sales up to Jun 30, 2018
Remarkable Luxury Residential Sales
House 2 Sold for $1.4B ($151,800 psf)
#1 House Sold in 1H18 will be Recognized in 2H18
3.0M s.f
Kowloon Tong Portfolio 15% Peak Portfolio 10%
KEWP* 57%
Others 18%
Total Attributable GFA
Landbank
Exclusive Portfolio
Peak Portfolio
• Mount Nicholson
• 1 & 11 Plantation Road
• 77 Peak Road
• Chelsea Court
• Strawberry Hill
Kowloon Tong Portfolio
• Residential Land Site on
Lung Cheung Road
Growth Potential
Kowloon East Waterfront
Portfolio (“KEWP”)
• Kowloon Godown
• Yau Tong Bay (15% JV)
• Peninsula East
* Kowloon Godown: GFA of Existing Building as of Jun 30, 2018
9
Hong Kong Properties
China DP
China IP
Others
Financial Management
Agenda
10
Administrative Measures are Distorting the Market
ASP is Controlled through Presale Consent
Underlying Demand Remains Robust
1H18 Accumulated Sell-through Rate 96%
Choice between (a) Selling at Sub-market ASP or
(b) Waiting for Consent to Sell at Market ASP
Sellable
1.0M s.m*
Sales Target
RMB22B *
Policy-
Driven Market
11
* Incl. JVs & Associates on an Attributable Basis; 2017 Comparatives Excl. Contribution from HCDL
1H18 Contracted Sales*
Sales RMB7.2B -36%
GFA 0.3M s.m -40%
ASP RMB23,500 psm +5%
Western
China 31%
Contracted
Sales*
RMB7.2B
Southern &
Others10%
Eastern China
59%
Improved Margin
Consecutive Improvement in Margin
Net Order Book RMB21.3B or 0.9M s.m
2018 Target Completion 0.8M s.m
Group Core Profit
35%
Lower
Completion
Operating Margin
+13.4 ppts
12
1H18 Operating Matrix*
* Incl. JVs & Associates on an Attributable Basis; 2017 Comparatives Excl. Contribution from HCDL
Revenue $5,792M -15%
Operating Profit $1,838M +45%
Operating Margin 31.7% +13.4 ppts
Completed GFA 96,600 s.m -66%
Recognized GFA 182,300 s.m -58%
Landbank
13
1H18 Land Acquisition*
677,300 s.m
Guangzhou 4%
Hangzhou 31% Suzhou 49%
Foshan 17%
*Detailed China DP Land Acquisition Breakdown See Appendix
Six
Focus Cities
Landbank
3.8M s.m Sound Financial
Position
High Barrier in Tier-1 Cities
Progress in Hangzhou & Suzhou in 1H18
Tight Credit Environment may Change the
Landscape in 2H18
Hong Kong Properties
China DP
China IP
Others
Financial Management
Agenda
14
China IP
15
530 530 530 602 602 602 602
362
604 687 752 752 752 752
186 186
427 541 541 541
214 214
251
251 251 251
873 1,001
2013 2014 2015 2016 2017 2018 2019+
Commercial Properties Completion Schedule (’000 s.m)
Changsha IFS
Wuxi IFS
Chongqing IFS*
Chengdu IFS
Other China Commercial Prop.
3,146
Total Development Area, Incl. Basement Area & Carpark
*Gross Basis & Net of Recognized Sales
892
3.5x
Momentum
0.8
1.1 1.2 1.2
1.6
1.2
1.2 1.2
1.4
2014 2015 2016 2017 2018
China IP Revenue (HKD billion)
$1.6B (+29%) 1H 2H
Domestic
Consumption
IFS
Series
Growth
Potential
China GDP +6.8% in 1H18 (78% Consumption)
Strong Retail Sales Driving Mall Performance
New Strategic Focus - IFS Series
Broaden Future Recurring Income Base
16
Growth Driver – CSIFS
Leased
97%
Retailtainment
Experience
Opened
May 2018
Changsha IFS Mall
GFA (s.m.) 246,100
Retail Area Leased 97%
Retail Opening Rate 84%
First Day Foot Traffic 150,000+
17
Retail - 370+ Retail Shops (70+ Hunan
Debuts, 30+ Duplex Flagships)
Average Monthly Sales* RMB 200M+(>2x of
CDIFS at full operation)
Office - Most Coveted Address for Leading
Corporates
Hotel (Niccolo Changsha) - Opening in 4Q18
*Average Monthly Sales in Jun & Jul 2018 (First 2 Full Months after Opening)
CSIFS Mall
18
Ground Zero – CDIFS
Retail - Growth Momentum Continued
Office - 73% Committed; Rental Rates among the
City’s Highest
Hotel (Niccolo Chengdu) - Market Leader in Yield
per Available Room
Sales Growth
+23%
Double-digit
Rental Reversion
Outperform
Market
0.7
1.6 1.8 2.4
2.9 1.5
1.7 2.0
2.6
2014 2015 2016 2017 2018
Retail Sales (RMB billion)
RMB2.9B (+23%)
1H 2H
Chengdu IFS Mall
Net Revenue (Net of Tax) RMB431M (+17%)
Foot Traffic Growth +19%
Turnover Rent Portion 28%
Occupancy Cost* 13%
19
*Occupancy Cost = Retail Rental/ Retail Sales
New CBD – CQIFS
Ramping
Up
Luxury
Cluster
New
Landmark
Chongqing IFS Mall
GFA (s.m.) 109,300#
Retail Area Leased 96%
Retail Opening Rate 91%
20
# CQIFS is 50%-owned, 109,300 s.m is Total Retail Area
Retail - Sales RMB355M
Office - 40+% Committed
Hotel (Niccolo Chongqing) - Iconic Sky Hotel
Hong Kong Properties
China DP
China IP
Others
Financial Management
Agenda
21
Hotel Management
B
C
D
E
F
I
G
A
H
J
K
L
M
N
O
P
Q
R
Niccolo
Hong Kong Mainland Philippines
A) The Murray, Hong Kong B) Chengdu*
C) Chongqing*
D) Changsha (4Q18)*
E) Suzhou (2019)
Marco Polo
F) Hong Kong I) Beijing (Parkside) P) Manila (Ortigas)
G) Gateway J) Changzhou, Jiangsu Q) Cebu
H) Prince K) Wuhan* R) Davao
L) Jinjiang, Fujian
M) Xiamen
N) Foshan (LingnanTiandi)
O) Shenzhen
* Owned by The Wharf (Holdings) Limited 22
Logistics – Rebuild Competitiveness
Modern Terminals
Revenue $1,251M (-8%) Operating Profit $242M (-31%)
Throughput (million TEUs)
HK 2.6 -2%
DCB (65%-owned)
0.6* +7%
SCT (20%-owned) 2.8* +4%
Total 6.0 +1.8%
Hong Kong Air Cargo Terminals Ltd (HACTL)
Total Throughput 0.8M Tonnes (-10%)
23
*Total Throughput (Instead of Attributable)
Market Throughput: Kwai Tsing: -4%; Shenzhen: +4%
External
Uncertainties
Trade
Tension
Enhance Efficiency
Improve Margin
Rebuilding Competitiveness
CME2
24
New Economy
Re-Invest Capital
Released from CME1*
in a Small Market
CME2
(Larger Markets with
Greater Potential)
Strategic Initiative &
Infrastructure Play
Opportunity Strategy
Building Long-term
Business for
New Economy
Long-term
*CME1 was Hong Kong-based Business with Market Size Limit
Hong Kong Properties
China IP
China DP
Others
Financial Management
Agenda
25
Prudent Financial Management
Debt Maturity (HKD billion)
19.7
9.2 8.5
1.2 2.8
3.5
Jul18-Jun19 Jul19-Jun20 Jul20-Jun21 Jul21-Jun22 Jul22-Jun23 Jul23 & After
Group Net Debt Floating Rate Debt Gearing
20.1%
$29.3B
70%
26
Coming Attractions
27
Mount Nicholson Niccolo Changsha (4Q18)
Niccolo Suzhou (2019)
CSR
OUR SUSTAINABILITY
• Hang Seng Corporate Sustainability Index Series Member 2017-18
• Hong Kong Quality Assurance Agency’s CSR Index Plus
• 5 Years Plus Caring Company Logo
Recognitions
Project WeCan
Partner
• Wharf Holdings’ 4th standalone Sustainability/CSR Report 2017
published in accordance with the core option of GRI Standards, and in
alignment with HKEX ESG Reporting Guide
• Signature multi-faceted project, currently linking 53 schools and over
50,000 students with 45 corporate and community partners, will be
expanded to cover 76 schools by September 2018.
Report
GRI Standards stand for Global Reporting Initiative Sustainability Reporting Standards
CSR
2017 Sustainability Performance Highlights
Recycled 2,460+ tonnes waste
Hang Seng Corporate Sustainability
Index Series Member 2017-18
8,800 talent*
75,208 training hours*
223+ events and activities supported*
Donations totalling HK$30 million
The Wharf Holdings’ Sustainability Report 2017 is prepared in accordance with the core option of Global Reporting Initiative Sustainability Reporting Standards.
*Reporting scope covers HK and China operations as identified in the report. http://www.wharfholdings.com/download_eng/sr2017/wharf_SR_2017_eng.pdf
31
Appendix
Summary of HK Properties
32
Portfolio Usage Status Locations Attributable GFA (s.f.)
1. Peak Portfolio Residential Sales Mount Nicholson (50%-JV) 52,100
Lease Chelsea Court 43,100
Strawberry Hill 13,300
Redevelopment 1 Plantation Road 90,700
11 Plantation Road 46,300
77 Peak Road 42,200
Sub-total 287,700
2. Kowloon East Waterfront
Portfolio
Commercial Sales Peninsula East 42,600
Industrial Redevelopment Kowloon Godown#
1,032,200
Residential Development Yau Tong Bay (15%-JV) 608,200
Sub-total 1,683,000
3. Non-Core Commercial Lease Cable TV Tower Units 566,300
4. Kowloon Tong Portfolio Residential Development Kowloon Tong 436,400
Total 2,973,400
As of Jun 30, 2018 ; #
GFA of Existing Building
China Contracted Sales Breakdown by City
33
Region City Contracted Sales (%) GFA Sold (%)
Eastern China Shanghai 0% 0%
Suzhou 1% 1%
Wuxi 28% 37%
Ningbo 0% 0%
Hangzhou 37% 21%
Eastern China Sub-Total: 66% 59%
Western China Chengdu 1% 1%
Chongqing 23% 30%
Western China Sub-Total: 24% 31%
Southern China Foshan & Guangzhou 3% 5%
Others Beijing 2% 1%
Tianjin, Dalian & Wuhan 5% 4%
Southern & Others Sub-Total: 10% 10%
China Key Projects on Sales in 1H18
34
Projects City
Attributable
Proceeds
(RMB M)
Attributable GFA
sold (s.m)
Average Price
(RMB psm) Ownership
The Throne Chongqing 1,492 77,300 19,100 50%
Wuxi Glory of Time Wuxi 1,013 50,600 19,900 100%
Exquisite Palace Hangzhou 992 25,400 39,000 100%
River Pitti (Bi Xi) Wuxi 663 35,300 18,000 100%
Willow Breeze Hangzhou 577 7,100 77,500 50%
Wuxi Times City Wuxi 354 20,100 17,000 100%
Dalian Taoyuan Lane Dalian 341 11,700 24,000 60%
Longfor Mansion Hangzhou 327 9,200 31,500 23%
China DP – 1H18 New Land Acquisitions
35
City Date Attributable GFA (s.m) Attributable Consideration
(RMB) Ownership
Foshan Jan-18 112,800 0.81B 50%
Guangzhou
Jan-18 7,700 0.19B 10%
Jan-18 21,500 0.72B 18%
Hangzhou
Jan-18 98,200 1.97B 50%
Jan-18 51,000 2.11B 75%
Jan-18 31,000 1.23B 75%
Feb-18 29,900 0.93B 26%
Suzhou
Feb-18 99,000 1.69B 80%
Feb-18 169,400 2.77B 100%
Feb-18 56,800 1.54B 49%
Total 677,300 14.0B
China DP Land Bank Breakdown by City in 1H18
36
Region City GFA million (s.m) % Total
Eastern China Shanghai 0.1 3%
Suzhou 0.8 21%
Wuxi 0.4 10%
Ningbo 0.0 1%
Hangzhou 0.6 16%
Eastern China Sub-Total: 1.9 51%
Western China Chengdu 0.8 21%
Chongqing 0.4 10%
Western China Sub-Total: 1.2 31%
Southern China Foshan & Guangzhou 0.4 10%
Others Beijing 0.2 5%
Tianjin, Dalian & Wuhan 0.1 3%
Southern & Others Sub-Total: 0.7 18%
Total: 3.8 100%
China Key Properties Completion
37
Projects Attributable GFA (s.m)
Key Completion in 1H18
Foshan Unique Garden 34,300
Beijing The Pearl on the Crown 28,200
Chengdu ICC 26,000
Projected Key Completion in 2H18
Wuxi Times Glory 123,400
Suzhou Bellagio, G09 (碧堤半島) 82,500
Wuxi Times City 79,700
Suzhou Bellagio, G08 (碧堤雅苑) 75,800
Wuxi River Pitti (Bi Xi) 64,400
China New Projects for Sales in 2H18
38
Projects City Ownership
Beijing Xijucun Land Site Beijing 100%
Beijing Liangma K Land Site Beijing 40%
Suzhou Huangqiao 25 Land Site Suzhou 60%
Jingan Garden Shanghai 55%
Overview of Application of Funds
39
HKD 1H18
(Actual)
FY18
(Projected)
Hong Kong Properties 12.6B 13.5B
China IP 2.2B 2.6B
China DP 20.3B 31.1B
Others 0.1B 0.5B
Total 35.2B 47.7B
* China DP Self-financed by Sales; China IP Mainly IFS Under Construction
Major Capital & Development Expenditure
40
Thank You
DP Contributed 62% of Core Profit
41
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.