SUN HUNG KAI PROPERTIES LIMITED ANNUAL REPORT 2018/19 1 Worldreginfo - 57E0b932-Baee-4Fe1-A53f-84Ccbeef77fe Board of Directors and Committees

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SUN HUNG KAI PROPERTIES LIMITED ANNUAL REPORT 2018/19 1 Worldreginfo - 57E0b932-Baee-4Fe1-A53f-84Ccbeef77fe Board of Directors and Committees WorldReginfo - 57e0b932-baee-4fe1-a53f-84ccbeef77fe - WorldReginfo Solid Foundations Premium Brand ANNUAL REPORT 2018/19 16 Customer Focus Stock Code: 2018/19 Annual Report C127090 Customer Focus Premium Brand Solid Foundations ANNUAL REPORT 2018/19 4 1. ITC in Xuhui, Shanghai 3 2. Sun Hung Kai Centre in Wan Chai, Hong Kong 1 2 1 5 3. IFC in Central, Hong Kong 2 4. ICC in West Kowloon, Hong Kong 3 5. Victoria Harbour Development in North Point, Hong Kong 4 5 Stock Code: 16 WorldReginfo - 57e0b932-baee-4fe1-a53f-84ccbeef77fe 排雙Column相同闊度81mm + 81mm (與舊年不同) ↓ ↓ Contents 2 Board of Directors and Committees 3 Corporate Information and Information for Shareholders 4 Financial Highlights and Land Bank 6 Group Financial Summary 7 Business Structure 8 Chairman’s Statement 20 Business Model and Strategic Direction 22 Review of Operations 24 Hong Kong Property Business 52 Mainland Property Business 74 Property Related Businesses 83 Telecommunications and Information Technology 84 Infrastructure and Other Businesses 87 Corporate Finance 88 Financial Review 92 Investor Relations 94 Sustainable Development 102 Corporate Governance Report 120 Directors’ Report 143 Directors’ Biographical Information 154 Executive Committee 156 Independent Auditor's Report and Consolidated Financial Statements SUN HUNG KAI PROPERTIES LIMITED ANNUAL REPORT 2018/19 1 WorldReginfo - 57e0b932-baee-4fe1-a53f-84ccbeef77fe Board of Directors and Committees Board of Directors Executive Directors Kwok Ping-luen, Raymond (Chairman & Managing Director) Wong Chik-wing, Mike (Deputy Managing Director) Lui Ting, Victor (Deputy Managing Director) Kwok Kai-fai, Adam Kwok Kai-wang, Christopher Kwong Chun Tung Chi-ho, Eric Fung Yuk-lun, Allen Kwok Ho-lai, Edward (Alternate Director to Kwok Ping-luen, Raymond) Non-Executive Directors Lee Shau-kee (Vice Chairman) Kwan Cheuk-yin, William Kwok Kai-chun, Geoffrey Independent Non-Executive Directors Yip Dicky Peter Wong Yue-chim, Richard Li Ka-cheung, Eric Fung Kwok-lun, William Leung Nai-pang, Norman Leung Kui-king, Donald Leung Ko May-yee, Margaret Fan Hung-ling, Henry Wu Xiang-dong Committees Executive Committee Kwok Ping-luen, Raymond Wong Chik-wing, Mike Lui Ting, Victor Kwok Kai-fai, Adam Kwok Kai-wang, Christopher Kwong Chun Tung Chi-ho, Eric Fung Yuk-lun, Allen Chow Kwok-yin, Eric Yung Sheung-tat, Sandy Li Ching-kam, Frederick Fung Sau-yim, Maureen Chan Hong-ki, Robert Lam Ka-keung, Henry Audit and Risk Management Committee Li Ka-cheung, Eric* Yip Dicky Peter Leung Kui-king, Donald Leung Nai-pang, Norman Remuneration Committee Wong Yue-chim, Richard* Li Ka-cheung, Eric Kwan Cheuk-yin, William Leung Nai-pang, Norman Nomination Committee Wong Yue-chim, Richard* Kwan Cheuk-yin, William Yip Dicky Peter Leung Nai-pang, Norman * Committee Chairman SUN HUNG KAI PROPERTIES LIMITED 2 ANNUAL REPORT 2017/182018/19 WorldReginfo - 57e0b932-baee-4fe1-a53f-84ccbeef77fe Corporate Information and Information for Shareholders Corporate Information Company Secretary Share Registrar Principal Bankers Yung Sheung-tat, Sandy Computershare Hong Kong Bank of China (Hong Kong) Limited Investor Services Limited The Hongkong and Shanghai Banking Auditor Shops 1712-1716 Corporation Limited Deloitte Touche Tohmatsu 17th Floor, Hopewell Centre Mizuho Bank, Ltd. 183 Queen’s Road East MUFG Bank, Ltd. Registered Office Wanchai Industrial and Commercial Bank of China Hong Kong (Asia) Limited 45th Floor, Sun Hung Kai Centre Sumitomo Mitsui Banking Corporation 30 Harbour Road Solicitors Agricultural Bank of China Limited Hong Kong Hang Seng Bank Limited Telephone : (852) 2827 8111 Woo Kwan Lee & Lo Mayer Brown DBS Bank Ltd. Facsimile : (852) 2827 2862 Bank of Communications Co., Ltd. Website : www.shkp.com Clifford Chance E-mail : [email protected] Information for Shareholders Share Listing Financial Calendar for 2018/19 The Company’s shares are listed on The Stock Exchange of Interim results announcement : 27 February 2019 Hong Kong Limited (“Stock Exchange”) and are traded over Interim dividend paid : 21 March 2019 the counter in the United States in the form of American Annual results announcement : 12 September 2019 Depositary Receipts (“ADR”). Closure of register of members1 : 4 to 7 November 2019 (both days inclusive) Stock Code Annual general meeting : 7 November 2019 Stock Exchange : 16 Ex-dividend date for final dividend : 11 November 2019 Bloomberg : 16 HK Equity Closure of register of members2 : 13 November 2019 Reuters : 0016.HK Final dividend payable : 21 November 2019 Trading Symbol for ADR : SUHJY CUSIP : 86676H302 Notes: 1. For the purpose of ascertaining shareholders’ entitlement to attend and vote at the Investor Relations Contact annual general meeting Telephone : (852) 3766 5787 2. For the purpose of ascertaining shareholders’ entitlement to the proposed final dividend Facsimile : (852) 2116 0597 E-mail : [email protected] Choice of Language or Means of Receipt of Corporate Communications This annual report is now available in printed form in English and in Chinese, and on the website of the Company. If (i) shareholders, who have received or chosen to receive printed copies of this annual report in English or in Chinese, wish to receive the same in the other language; or (ii) shareholders, who have received or chosen to receive or are deemed to have consented to receive this annual report by electronic means, wish to receive printed copies; or (iii) shareholders for any reason have difficulty in receiving or gaining access to this annual report on the Company’s website, they may obtain printed copies free of charge by sending a request to the Company c/o the Share Registrar, Computershare Hong Kong Investor Services Limited, by post to 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong or by email at [email protected]. For shareholders who wish to change their choice of language or means of receipt of the Company’s future corporate communications free of charge, they may at any time notify the Company by giving reasonable notice (of not less than 7 days) to the Company c/o the Share Registrar by post or by email or by completing and returning the accompanying Change Request Form. SUN HUNG KAI PROPERTIES LIMITED ANNUAL REPORT 2018/19 3 WorldReginfo - 57e0b932-baee-4fe1-a53f-84ccbeef77fe Financial Highlights and Land Bank For the year ended 30 June 20191 2018 Change (%) Financial Highlights (HK$ million) Revenue 85,302 85,644 –0.4 Profit attributable to the Company’s shareholders – Reported 44,912 49,951 –10.1 – Underlying2 32,398 30,398 +6.6 Gross rental income3 25,077 23,682 +5.9 Net rental income3 19,678 18,647 +5.5 Financial Ratios (%) Net debt to shareholders’ equity 12.9 12.1 +0.85 Dividend payout4 44.3 44.3 – Financial Information per Share (HK$) Basic earnings per share for profit attributable to the Company’s shareholders – Reported 15.50 17.24 –10.1 – Underlying 11.18 10.49 +6.6 Dividends – Interim dividend 1.25 1.20 +4.2 – Final dividend 3.70 3.45 +7.2 – Full-year dividend 4.95 4.65 +6.5 Shareholders’ equity 195.50 186.09 +5.1 Land Bank in Hong Kong (gross floor area in million square feet) Properties under development 25.17 22.7 N/A Completed properties6 32.97 33.8 N/A Total 58.07 56.5 N/A Land Bank on the Mainland (gross floor area in million square feet) Properties under development 50.6 50.7 –0.2 Completed properties6 14.8 13.8 +7.2 Total 65.4 64.5 +1.4 Notes: 1. The results for the year ended 30 June 2019 have been impacted by the adoption of new accounting standard HKFRS 15 for revenue recognition, which affected the timing of property sales recognition in Hong Kong, details of which are described in Note 3(b) and 3(c)(ii) to the annual financial statements. The Group has taken transitional provisions and methods not to restate comparative information for prior years. The comparative information continues to be reported under the accounting policies prevailing prior to 1 July 2018 2. Underlying profit attributable to the Company’s shareholders excluded the net effect of changes in the valuation of investment properties 3. Including contributions from associates and joint ventures 4. Dividend payout based upon underlying profit 5. Change in percentage points 6. The Group has a 50% stake in a premium 950,000-square-foot shopping mall in Singapore in addition to property holdings in Hong Kong and on the mainland 7. Completion refers to the stage in which the project is ready for handover starting from the financial year of 2018/2019. Hence, the figures of the financial year 2018/19 cannot be used for direct comparison with historical figures SUN HUNG KAI PROPERTIES LIMITED 4 ANNUAL REPORT 2017/182018/19 WorldReginfo - 57e0b932-baee-4fe1-a53f-84ccbeef77fe Underlying Earnings and Dividends per Share HK$ 12 11.18 10.49 10 8.97 8.37 8 7.07 6 4.95 4.65 3.85 4.10 Underlying Earnings (Basic) 4 3.35 Dividends 2 0 2015 2016 2017 2018 2019 Shareholders’ Equity per Share Net Debt to Shareholders’ Equity Ratio HK$ % 220 30 210 195.50 25 200 186.09 190 20 12.9 180 172.04 15 12.1 11.2 10.8 170 161.90 156.82 10 7.2 160 150 5 140 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Land Bank in Hong Kong Land Bank on the Mainland 80 100 81.6 58.0 80 60 56.5 71.2 52.1 51.4 51.8 66.5 64.5 65.4 60 40 40 20 20 0 0 2015 2016 2017 2018 20191 2015 2016 2017 2018 2019 Properties Under Development Completed Properties 1. Completion refers to the stage in which the project is ready for handover since the financial year of 2018/19.
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