Wheelock and Company Limited The Wharf (Holdings) Limited
2010 Annual Results 23 March 2011
Established 1886
1 Financial Highlights of 2010 Final Results
FY2010 % FY2010 % (HK$M) Change (HK$M) Change Turnover 24,186 +28% 19,380 +10% Operating Profit 11,384 +20% 9,372 +10% Finance costs (1,089) -176% (996) -195% Taxation* (1,472) +9% (1,200) +21% Profit before net IP surplus 4,974 +13% 7,905 +1%
IP revaluation surplus (net of Tax & NCI) 15,220 +152% 27,845 +143% Profit attributable to shareholders 20,194 +93% 35,750 +86% EPS HK$9.94 +93% HK$12.98 +86% DPS HK$0.125 +0% HK$1.00 +0%
*deferred tax on IP revaluation surplus excluded 2 2010 Annual Results Wheelock Properties privatization sharpens the focus on Hong Kong Property Developments
2010 Annual Results 3 Wheelock – Results Highlights
Wheelock Properties Ltd (“WPL”), privatized in 7/2010 for HK$6.9B, will spearhead the Group’s HK property development, building from its current attributable land bank of 1.7M s.f.
Wheelock Properties (Singapore) Ltd (“WPSL”) contributed HK$1.3B in operating profit on completion of Ardmore II and Orchard View in 2010. In early 2011, WPSL acquired a residential site in Hangzhou, China, for RMB1.4B, or an AV of RMB4,000 psm
Wharf’s attributable property portfolio was 15.1M s.f. in HK and 12M s.m. (129M s.f.) in China. Its investment properties were stated at HK$148 billion at year end
Excluding non wholly-owned subsidiaries, Group’s own debts were HK$10B at year end
Wharf raised HK$10B through a rights issue in March 2011. The Company supported it with a HK$5B contribution 4 2010 Annual Results Wheelock Assets and Profit Split
Attributable Business Assets (net of NCI) Attributable Profit before net IP surplus as at 31 December 2010 as at 31 December 31 2010
17% 22%
83% 78%
Wheelock (Ex Wharf) HK$132.0B HK$5.0B Wharf
5 2010 Annual Results Wheelock Assets and Profit Split (Ex Wharf)
Attributable Business Assets (net of NCI) Attributable Profit before net IP surplus as at 31 December 2010 as at 31 December 2010
24%
41% 51% 2% 74%
8% Hong Kong
China HK$21.9B HK$1.1B Singapore
6 2010 Annual Results WPL - HK Developments
1. MTR Austin Station
50/50 residential development with New World Development
Total site area: 295,000 s.f.; attributable GFA: 641,000 s.f.; AV@ HK$9,130 psf
Master layout plan and general building plan submitted for approval, piling work underway
2. One Island South, Aberdeen (Redevelopment at 2 Heung Yip Road)
Commercial development of 812,800 s.f. GFA
417,600 s.f. sold in early 2011, ASP: over HK$6,300 psf; another 275,200 s.f. pre-sold in prior years
Retail podium (91,000 s.f.) will be held for investment
7 2010 Annual Results WPL - HK Developments
3. Other residential developments
- Residential development of 89,000 s.f. GFA 46 Belcher’s Street, Western District - AV @ HK$3,800 psf - Foundation work underway
211-215C - Residential development of 91,700 s.f. GFA Prince Edward Rd West, - Lease modification premium agreed; AV@ HK$8,800 psf Ho Man Tin - Superstructure work on schedule
4. Sales Update
The Babington, 90% of 47 luxury apartments sold for Mid-Levels HK$616M; ASP @HK$13,000 psf
8 2010 Annual Results WPL - China Developments
All projects are in Foshan, Guangdong, and through 50:50 JV with China Merchants
Project Project Attributable AV Completion Nature GFA (s.m.) (RMB psm)
Evian Town Residential 229,000 ~2,000 2013
Evian Uptown Residential 133,000 ~5,600 2014
New Acquisition
Shishan Town Residential 155,000 ~2,200 2015 (1/2010) First Ring Rd, Nanhai Residential 112,000 ~4,900 2015 (7/2010) Total: 629,000 9 2010 Annual Results WPL - China Developments
Sales Updates
Average Project Launched Sold Sales proceeds in 2010 up to 31.12.2010 (RMB’M) Price (RMB psm) 6 high-rise Evian Town 93% 585 13,000 towers (541 units)
5 high-rise Evian Uptown 99% 225 9,200 towers (556 units)
Launched in early 2011
Townhouse (37 Evian Town 57% 164 59,000 units)
Note: All units launched prior to 2010 were fully sold 10 2010 Annual Results WPSL - Singapore Developments
Sales Update Project No. of Units Sold / Pre- ASP Completion sold (SGD psf) Ardmore II (Residential) 118 100% ~2,300+ 6/2010
Orchard View (Residential) 30 30% ~3,200+ 5/2010
Scotts Square (Residential & Retail) 338 70% ~4,000 2011 (residential only)
Property Development
Ardmore Three An international-standard luxury residential development in the prestigious Ardmore Park, next to Ardmore II Design has been finalised, construction to commence in 2011 A show-flat will be built on site for completion in late 2011
11 2010 Annual Results WPSL - PRC Development
In early 2011, WPSL acquired a prime project comprising 5 sites in Fuyang District (富陽市), Hangzhou, PRC for RMB1.4B, AV @ RMB4,000 psm
The project is 22 km from the Hangzhou city centre, with a nice mountain view
GFA: 358,000 s.m. for high-end residential development
This diversifies and broadens the asset and earning base of WPSL
12 2010 Annual Results Property Investment
Hong Kong
GFA: 191,400 s.f.; valuation: HK$3.5B Crawford 99% (office) & 95% (retail) leased at satisfactory rental rates House H&M, the anchor retail tenant, performed solidly
Wheelock GFA: 198,300 s.f.; valuation: HK$3.3B House 99% leased at satisfactory rental rates
Singapore
GFA:464,900 s.f.; valuation: SGD850M Wheelock A commercial development at Orchard Road Place 100% leased
13 2010 Annual Results “Building for Tomorrow” accelerates in the Mainland as Wharf celebrates its 125th anniversary with a record financial performance.
14 2010 Annual Results Wharf - Result Highlights
Group Performance
Record net profit at HK$ 35.8 B, +86% vs. 2009; EPS: HK$12.98
Book NAV + 27% to HK$59.22 per share, with primarily only the revaluation on IPs and listed investments
Gearing at 19.2% as at 31.12.2010. Excluding non-wholly owned subsidiaries, own debts were HK$23.4B
Wharf raised HK$10 billion through a rights issue in March 2011, which was 671% over-subscribed
15 2010 Annual Results Wharf - Result Highlights
Hong Kong Properties
Property investment (18.1 million square feet GFA) accounted for 70% of Group operating profit. HC (excluding hotels) valued at HK$80B and TS at HK$30B, represented 51% of the Group’s business assets and 58% of operating profit HC and TS accounted for 8.5% share of HK retails sales for FY2010, with sales growth beating the market by over 12% points and 2% points respectively:
40% Outperformed market by 12% Outperformed 30% points market by 2% 30% 20% points 20% 18% 10%
0% Harbour City Times Square HK Retail Market 16 2010 Annual Results Wharf - Result Highlights China Properties
34% of the Group’s business assets was in the Mainland as at 31.12.10, on course for the medium term target of 50%
Mainland land bank increased to 12.0M s.m. in early 2011 at a cost of RMB61B, including RMB15B not yet due for payment
Shanghai Wheelock Square was completed in 2010 with a value of HK$6.2B. Property investment portfolio will multiply when the 5 IFCs in Chengdu, Chongqing, Wuxi, Suzhou and Changsha (total attributable GFA: 2.0M s.m. and investment cost of RMB39B) roll out between 2013-2016
Mainland property sales in 2010 totalled RMB8.8B (0.54M s.m.), 91% over 2009. Opening net order book for 2011: RMB8.2B
Budgeted sales for 2011: RMB14B (0.9M s.m.). Attributable turnover in 2010: RMB3.3B (0.27M s.m.) 17 2010 Annual Results Wharf Asset and Profit Split
% of Group Total Business Assets % of Group Operating Profit
4% 1% 9% 19%
28% 59% 16% 64%
HK Properties (excl. Hotels) China Properties HK$220.2B HK$9.4B Logistics CME & Others
* China assets (Properties + Logistics): 34% as at 31.12.2010 18 2010 Annual Results Wharf
Analysis of Operating Profit
FY2010 FY2009 YoY (HK$’M) (HK$’M) Growth Property Investment 6,545 6,191 +6% Property Development 1,235 1,012 +22% Logistics 1,792 1,418 +26% CME (62) 163 N/A Investment & Others 188 90 +109% Corporate Expenses (326) (320) -2% Total Operating Profit 9,372 8,554 +10%
19 2010 Annual Results Wharf – Hong Kong Properties
20 2010 Annual Results Harbour City
Segment Performance Revenue Property Value (excl. Hotels) at Attributable GFA FY2010 FY2009 % 31.12.2010: HK$80B (s.f.) (HK$M) (HK$M) Change Retail 1,948,000 2,928 2,550 +15% Office 4,435,000 1,553 1,662 -7% Serviced Apartments 670,000 275 255 +8% Hotel and Club 1,364,000 1,056 889 +19% Total: 8,417,000 5,812 5,356 +9%
21 2010 Annual Results Harbour City Retail
Largest retail complex in town, representing 75% of retail area of Canton Road
Retail Sales +30% to $20.3B, growth rate outperformed market by 12% points. Average sales psf in 12/2010: ~$3,000, a record high Accounts for close to 6.3% of total HK retail sales – unmatched by any other mall
Turnover: +15%; Operating profit: +17%
Success factors – premier location, diversified trade-mix, captivating ‘shoppertainment’ ambiance & powerful marketing campaigns
22 2010 Annual Results Harbour City
Office
Turnover dropped by 7% reflecting the softness in the market since 2H08, which has started to firm again
Occupancy at 94%
Demand for office space driven by business expansion, corporation upgrades and decentralization
Lease renewal retention rate: 68%
Serviced Apartments
Occupancy at 92%
23 2010 Annual Results Times Square
Segment Performance Revenue Property Value at Attributable GFA FY2010 FY2009 % 31.12.2010: HK$30B (s.f.) (HK$M) (HK$M) Change Retail 936,000 1,076 956 +13% Office 1,033,000 457 470 -3% Total: 1,969,000 1,533 1,426 +8%
24 2010 Annual Results Times Square
Retail The most successful vertical mall in town with over HK$1B of retail turnover p.a. Retail sales +20% in 2010, outperforming the market by over 2% points Turnover: +13%; Operating profit: +15%
Success factors: Unique 16-level design, comprehensive and diverse trade-mix and direct link to CWB MTR New sky escalators in the atrium have significantly improved vertical circulation Office Turnover dropped by 3% to reflect the earlier softness in the market Occupancy at 96%; lease renewal retention rate: 74%
25 2010 Annual Results Hong Kong Property Developments
Mount Nicholson (Attributable GFA: 162,000 s.f.) Mount Nicholson is itself a ‘location brand name’, with the ultimate top social status and recognition Private half-mile access road offers ultimate privacy Each ultra-deluxe villa will boast its own private swimming pool or lift access 50:50 JV with Nan Fung, construction will commence in 2011
Cable TV Tower South (GFA: 585,000 s.f.) Being redeveloped into a high-rise industrial / loft building Superstructure work underway
Kowloon Godown (GFA: 829,000 s.f.) Approval obtained for a residential and commercial development Lease modification application underway 26 2010 Annual Results Wharf – China Properties Building for Tomorrow
27 2010 Annual Results China Properties Building for Tomorrow
Strategy to increase China assets to 50% of Group is progressing smoothly
Acquired 10 projects in 2010 with attributable GFA of 1.5M s.m. for RMB14.6B
Further acquired 4 projects in early 2011 with attributable GFA of 1.4M s.m. for RMB10B
Landbank increased to 12.0M s.m. at a cost of RMB61B, on course to reach next milestone of 15M s.m.
PRC assets represented 34% of Group business assets at 31.12.10
28 2010 Annual Results China Landbank
Area - 12M s.m. Cost - RMB61B
Suzhou Suzhou Wuxi Chengdu 16% 13% 7% Chengdu 23% 21% Wuxi Chongqing 15% 11% Others* Others* 5% 7% Chongqing Shanghai Shanghai 14% Hangzhou 5% 14% 13% Changzhou Changzhou Changsha 4% 9% 10% Changsha 6% Hangzhou 7% Retail Office 8% 16% GFA By Usage
Hotel 3%
* Others include Tianjin, Wuhan, Ningbo and Dalian Residential 73% 29 2010 Annual Results China Landbank
Region Attributable GFA (s.m.) Eastern China 6.4M Western China 4.4M Others 1.2M
Others: Total: 12.0M Dalian Tianjin Wuhan Changsha Eastern China: Changzhou Wuxi Suzhou Shanghai Hangzhou Ningbo Western China:
Chengdu Chongqing Next Milestone 15M s.m. 30 2010 Annual Results China Property Investment
Future Recurrent Income Base
Property investment portfolio will multiply when the 5 IFCs in Chengdu, Chongqing, Wuxi, Suzhou and Changsha (total attributable GFA: 2.0M s.m.) roll out between 2013-2016 at an investment cost of RMB39B
Shanghai Wheelock Square was completed in 2010, with value of HK$6.2B, compared with original cost of HK$2.9B
The investment properties were valued at HK$18.1B as at 31.12.2010
Revenue for China property investment dropped by 21% in 2010, as a result of sale of BCTS in 2009 and renovation work at CTS during the year
31 2010 Annual Results China Investment Property Portfolio
000's.m. 2500 2,300
2000
1500 1,100 1000 665
500 379 379 379
0 2010 2011 2012 2013 2014 ~ 2016 Future Recurrent Income Base
2010 Annual Results 32 China Property Investment
Shanghai Wheelock Square
Brand new landmark office tower with GFA of 114,000 s.m.
The tallest building in Puxi (270-metre) overlooking Jing’an Park
Over 60% committed; latest monthly rental rates at over RMB340psm
High floors to be released will command ever higher rates
Tenants include multinationals and major corporations
33 2010 Annual Results China Property Investment
Chengdu IFC
The next Group’s flagship with GFA of 439,000 s.m. in the busiest pedestrian shopping area of Chengdu Comprises mega retail complex, Grade A offices, 5-star hotel and luxury residences Phase 1 (retail & one office tower) will be completed in 2013
Chongqing IFC
The new landmark of Chongqing with its iconic 300- metre tower and up-market retail mall
Comprises up-market retail, Grade A office, 5-star hotel and serviced apartments
50:50 JV with COLI, attributable GFA of 223,00 s.m. Full completion in 2015 34 2010 Annual Results China Property Investment
Wuxi IFC
Located in Taihu Plaza in Nanchang, Wuxi’s new CBD Comprises Grade A office, 5-star hotel and luxury residences; GFA: 280,000 s.m. The 340-metre tower will be tallest in Wuxi
Target completion in 2015
Suzhou IFC
A 450-metre skyscraper development overlooking Jinji Lake; tallest in Suzhou Attributable GFA: 351,000 s.m.
Comprises Grade A offices, 5-star hotel and luxury apartments
Target completion in 2016 35 2010 Annual Results
China Property Investment
Changsha IFC
Acquired in early 2011, located in the heart of Changsha city centre
Two 300-metre+ towers and another tower atop a 250k s.m. retail podium
Comprises upscale retail, Grade A offices, 5-star hotel and luxury apartments; GFA: 700,000 s.m.
The retail complex will be one of the largest in Changsha
Target completion in 2016 36 2010 Annual Results China Property Developments New Growth Engine
Turnover +18% to HK$3.6B, OP +22% to HK$1.2B
Contract sales +91% to RMB8.8B in 2010
2011 opening net order book: RMB8.2B
Sales target for 2011: RMB14B
Keys to Success: management commitment, local execution know-how and adjustability
37 2010 Annual Results Contracted Sales in 2010
RMB8.8B Sales 540,000 s.m. Sales
Wuxi Wuxi 21% Shanghai 14% 27%
Shanghai 9% Chengdu 33% Chengdu Others 23% Others 9% 12% Changzhou 10% Suzhou Changzhou Suzhou 7% 17% 18%
Contract Sales +91% over 2009
38 2010 Annual Results China Property Development
Key Property Sales in 2010
Sold / Pre- sold GFA Sold Sales Average Launched in FY2010 (as at (s.m.) Proceeds Price 31.12.2010) (RMB’M) (RMB psm)
Medium-rise(264 Shanghai Xiyuan units) 97% 50,400 2,300 45,500 Ambassador Villa (Suzhou) Villa (111 units) 91% 36,000 1,500 41,300 Times Palace 96 villas (Changzhou) High-rise (808 units) 98% 99,000 889 9,000
Crystal Park High-rise (1,046 (Chengdu) units) 87% 119,000 1,049 8,800
Times Residences High-rise (158 units) (Chengdu) Office (200 units) 71% 57,000 967 16,600 Times City (Wuxi) High-rise (930 units) 75% 85,000 920 10,900
39 2010 Annual Results China Property Development
Completion Schedule ^ 000's.m. 2500
2,000* 2000
1,500* 1500
1000
475 500 281
0 2010 2011 2012 2013 ^ exclude property investments, include assoc / JCE projects *provisional data Sales to be recognized in 2011, +50% over 2010 New Growth Engine 40 2010 Annual Results Wharf – Non Property Businesses
41 2010 Annual Results Non Property Businesses
MTL
Revenue +15% to HK$3.3B; OP +31% to HK$1.7B
HK throughput +6% to 5.4M TEUs
China throughput: Taicang +44% to 1.3M TEUs; DCB +189% to 671K TEUs
Marco Polo Hotels
Revenue +20% to HK$1.1B
Occupancy at 85% for the 3 HK hotels; average room rate: +26% over. 2009
Recently awarded "Best International Hotel Management Group of China" by China Hotel Starlight Awards A pipeline of nine new hotels will nearly double Marco Polo's scale by 2015
42 2010 Annual Results Non Property Businesses i-CABLE
Revenue +14% to HK$2.0B; Net loss at HK$267M due to significant non- recurrent costs, Net cash: HK$447M
Subscriber base increased to over 1.1M
Exclusive premier programming & the sharpest high definition (HD) service in the market
Wharf T&T
Revenue at HK$1.7B, OP at HK$201M
A record-high net gain in business broadband installed base, with respectable progress made in network rollout, corporate branding, and product competitiveness
43 2010 Annual Results Wharf Financial Position
FY2010 FY2009 Net Debt /(cash) (HK$M) (HK$M) Wharf (excluding below subsidiaries) 23,376 9,392 MTL 9,932 10,742 HCDL (172) 1,829 i-Cable (447) (531) Total: 32,689 21,432
Gearing (net debt to total equity) 19.2% 15.8%
Wharf raised HK$10B equity through a rights issue in 3/2011
Healthy Financial Base
44 2010 Annual Results End of Presentation
Wheelock and Company Limited [HKEx Stock Code: 0020.HK] 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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