Corporate Presentation 29 November 2018

Transcription

1 Corporate Presentation 29 November 2018

2 Agenda Page Section 1. Company Overview 3 Section 2. Segment Performance Review 7 Section 3. Financial Review 24 Section 4. Appendix 33 Emperor Group Centre Beijing A Grade-A office tower with multistorey retail podium was launched in 2017 Credit Research Contact Equity Research Contact Investor Relations Contacts Keith Chan, HSBC Direct line: keithkfchan@hsbc.com.hk Stanley Chan, Emperor Securities Direct line: esl.research@emperorgroup.com Anna Luk, Group IR Director Direct line: annaluk@emperorgroup.com Winnie Kwong, Group IR Manager Direct line: winniekwong@emperorgroup.com 2

3 1 Company Overview 3

4 Business Overview 74.7% (163.HK) Property Investment - Attain long-term value appreciation through active asset management e.g. transformation, tenant remix programs - Diversify its rental income streams by enhancing the mix between office and retail; Hong Kong, Mainland China and overseas Property Development - Experienced property developer in Hong Kong, targeting residential composite buildings and luxury houses and apartments - Capable on value creation from redevelopment projects Hotel Operations in Hong Kong - The Emperor Hotel - Inn Hotel Hong Kong - MORI MORI Serviced Apartments - The Unit Serviced Apartments Hospitality (Emperor Hotels Group) - Comprising hotels and serviced apartments across Hong Kong and Macau - Precise market positioning with quality services to attract diverse visitors 66.3% (296.HK) Hotel Operations in Macau - Grand Emperor Hotel - Inn Hotel Macau 4

5 Our Property Portfolio Long-term Strategy: To be a Key Property Player in Greater China Segment As of 30 Sep 2018 Book Value (HK$ 000) GFA (ft 2 ) Property Investment Property Development Currently For Lease 45,277,000 A 3,102,700 Under Development 4,657,000 A 1,416,000 Sub-total 49,934,000 4,518,700 Available for Sale 357,000 B 19,500 D Pending To Be Launched 4,884,000 B 201,000 Sub-total 5,241, ,500 GFA Distribution by Segment Property Investment 77.9% Hospitality 18.3% Property Development 3.8% Hospitality Currently Under Operation 4,230,000 C 1,058,000 Total 59,405,000 5,797,200 Notes: A. Carried on balance sheet at fair value B. Carried on balance sheet at costs C. Carried on balance sheet as fixed assets (i.e. net book value) D. In terms of saleable floor area 5

6 Key Highlights Quality and sizeable investment properties portfolio in iconic locations Sep 2018: nearly 90% occupancy rate with solid tenants demand) Proven track record of attaining long-term value appreciation through value creation exercises Positioned as a unique property player for pursuing growth opportunities by selectively sourcing good potential projects (either low-rise houses or luxury residential tower) or asset transformations Experienced management team with sound strategic and execution strengths, a resilient portfolio is built to withstand market volatility A key Hong Kong-based property player with a diversified business portfolio, quality assets, strong recurring income and opportune expansion strategies 6

7 2 Segment Performance Review a) Property Investment for Rental Income b) Property Development for Sale c) Hospitality 7

8 Growing Recurrent Cashflow Total GFA Under for Lease (ft 2 ) ~ 3,017,530 ~ 2,936,000 ~ 4,518, ,155 Future growth drivers Rental Income (HK$ million) Completion of investment property pipeline Expand by new acquisitions Organic rental increments FY2016/17 FY2017/18 1H2018/19 afterwards Ampersand Building Emperor Nam Van Emperor Commercial Centre Emperor Group Centre Beijing Retail Spaces of Fairview Height Nos Oxford Redevelopment Street, London Project at No Lockhart Rd, Wan Chai 8

9 Our Rental Income Portfolio More balanced contribution from various geographical segments Rental Income by Geographical Segments FY2016/17 (Rental Income: HK$857m) Macau 4.7% London 2.0% Mainland China 0.7% FY2017/18 (Rental Income: HK$1,155m) Macau 3.9% London 6.5% Mainland China 19.5% Macau 4.6% 1H2018/19 (Rental Income: HK$591m) London 8.1% Mainland China 18.4% Hong Kong 92.6% Hong Kong 70.1% Hong Kong 68.9% 9

10 Recent Project - Emperor Group Centre Beijing A 28-storey (excluding 3-storey car park basement) Grade-A office tower and premier shopping mall with superb cinema Becoming a landmark building along the prominent street of the capital city Gross floor area: 1,062,000 ft 2 Named as 6-Star Super A- level Building by Beijing Central Business District Administration Committee in Nov 2018 Key tenants from retail & financial sectors 10

11 Recent Project Emperor Nam Van Centre, Macau A 5-storey premium shopping complex at the corner site on Peninsula, which is signified as a prime city-centre shopping spot in the town Gross floor area: 30,000 ft 2 11

12 Project Under Development Lockhart Rd, HK Two adjacent buildings were disassembled, which will be redeveloped into a prime office building with a GFA of 96,000 ft 2 Situated at the junction of Lockhart Road and Luard Road, Wan Chai, a core commercial district on Hong Kong Island Fully capitalize the huge potential of the commencement of Shatin to Central Link in 2021 Redevelopment is expected to be completed in 2020 In 2016 In 2020 No No No GFA: 26,200 ft 2 GFA: 53,400 ft 2 GFA: 96,000 ft 2 (Increasing by 20% in aggregate size) Lockhart Road Luard Road Lockhart Road Luard Road Tentative Building Rendering 12

13 Project Under Development No Oxford Street, London It will be redeveloped into a composite retail/ office building with a GFA of approximately 20,000 ft 2 Located at the prominent shopping hub in London, which is a popular tourist spot for international visitors Redevelopment is expected to be completed in 2019 Tottenham Court Road Station Soho Square Gardens Tentative Building Rendering 13

14 2 Segment Performance Review a) Property Investment for Rental Income b) Property Development for Sale c) Hospitality 14

15 Property Development for Sale Available for Sale/Pre-sale A development project of 14 low-rise detached / semi-detached houses in Siu Lam The completed units were launched to the market in 3Q Sep 2018, sales contracts of 7 houses were committed An urban redevelopment project of 26-storey composite residential/retail tower Pre-sale has been launched since 3Q2017 and the sales contracts of all the units were Sep 2018 Expect to be handed over to owners in late-2018 As of 30 Sep 2018 Address (All in Hong Kong) Peak Castle - Kwun Fat 1 Street, Siu Lam, Tuen Mun, New Territories The Amused - Fuk Wing 2 Street, Sham Shui Po, Kowloon Total SFA (ft 2 ) 43,000 40,300 Land & Construction Cost (HK$ 000) 786,000 ($18,300/ft 2 ) 495,000 ($12,300/ft 2 ) Amount Realised On Sold Units (HK$ 000) 770,000 ($32,800/ft 2 ) 696,000 ($17,300/ft 2 ) Unsold Units Total Saleable Size of Unsold Units (ft 2 ) Book Value* of Unsold Units (HK$ 000) 7/14 19, ,000 0/ Total 83,300 1,281,000 1,466, , ,000 * Carried on balance sheet at costs 15

16 Property Development for Sale Future Project Pipeline As of 30 Sep 2018 Address (All in Hong Kong) GFA (ft 2 ) Costs (HK$ 000) Target Completion Target Market Position 1 2 Tuen Mun Town Lot No. 490, Tai Lam, New Territories Rural Building Lot No. 1198, Junction of Shouson Hill Road West and Wong Chuk Hang Path, Shouson Hill* 29, , Luxury 88,000 3,195,000* 2019 Luxury 3 Nos. 8-10A Mosque Street, Mid-Levels 34, , Luxury 4 Nos Old Bailey Street & No.11 Chancery Lane, Mid-Levels 29, , Luxury 5 Nos A Davis Street, Kennedy Town 20, , Luxury Total 201,000 4,884,000 N/A N/A *Jointly run by Emperor International and 2 other partners, in which Emperor International takes 40% stake 16

17 Future Residential Projects Low-rise Houses in Unique Spots 8 low-rise detached/semi-detached houses at Tuen Mun Town Lot No. 490, Tai Lam, N.T. Well served by a superb transportation network of Hong Kong Shenzhen Western Corridor and Hong Kong Zhuhai Macau Bridge as well as the future Tuen Mun Chek Lap Kok Link Close to Harrow International School Hong Kong, the Hong Kong branch of the prestigious, UK-based Harrow School 15 low-density luxury houses with comprehensive auxiliary facilities at Rural Building Lot No. 1198, Shouson Hill, Hong Kong Acquired in May 2014 by government bid at a consideration of HK$2,708,080,000, in collaboration with 2 partners Located at the junction of Shouson Hill Road West and Wong Chuk Hang Path Tentative Rendering Tentative Rendering 17

18 Future Residential Projects Luxury Residential Tower in Upscale Urban Areas A 28-storey with 99 units luxury residential tower at Nos. 8-10A Mosque St., Mid-levels, Hong Kong Adjacent to Soho area and Lan Kwai Fong, it is in close proximity to Central-Mid-Levels Escalator with convenient access to Central commercial district area Redevelopment project at Nos A Davis Street, Kennedy Town, Hong Kong With the successful extension of MTR to Kennedy Town, it becomes a popular urban area in Hong Kong Island Redevelopment project at Nos Old Bailey Street & No.11 Chancery Lane, Mid- Levels, Hong Kong Adjacent to Soho area and Lan Kwai Fong, it is in close proximity to Central-Mid-Levels Escalator with convenient access to Central commercial district area Tentative Building Rendering 18

19 2 Segment Performance Review a) Property Investment for Rental Income b) Property Development for Sale c) Hospitality 19

20 Hospitality Existing Portfolio As of 30 Sep 2018 Currently Under Operation Name of Hotels GFA (ft 2 ) Site Area (ft 2 ) Net Book Value* (HK$ 000) Storey Height (incl. basement) Guest Rooms (rooms) Hong Kong 1 The Emperor Hotel, Wan Chai 115,000 8,000 1,544, Inn Hotel Hong Kong, Kowloon West 48,000 4, , MORI MORI Serviced Apartments, Wan Chai 14,000 3, , The Unit Serviced Apartments, Happy Valley 17,000 2, , Macau 5 Grand Emperor Hotel, The Peninsula 655,000 48,000 1,133, Inn Hotel Macau, Taipa 209,000 24, , Total 1,058,000 89,000 4,230,000 N/A 1,184 * Carried on balance sheet as fixed assets (i.e. net book value) Hotel Operations in Hong Kong Hotel Operations in Macau The Emperor Hotel Inn Hotel Hong Kong MORI MORI The Unit Grand Emperor Hotel Inn Hotel Macau 20

21 Recent Hotel Project The Emperor Hotel The Emperor Hotel, a 4-stars hotel located at No. 373, Queen s Road. East, Wan Chai, Hong Kong GFA: ~115,000 ft 2 A 29-storey hotel offering 300 guest rooms as well as leisure, dining and parking facilities, which will be a signature hotel under Emperor Hotels Group Commenced in December 2017 Typical guestroom External facade Lobby Floor 21

22 Recent Hotel Project The Emperor Hotel Reception of Golden Valley Golden Valley, a Cantonese & Sichuan cuisine in The Emperor Hotel (previously located in Emperor (Happy Valley) Hotel), was labelled as Michelin 1-star restaurant in the 7th consecutive year, since 2011 Garden terrace Function Room 22

23 Recent Hotel Project The Unit The Unit - A serviced apartments located at No , Yik Yam Street, Happy Valley, Hong Kong GFA: ~17,000 ft 2 A 21-storey serviced apartments with 68 guest rooms, including 2-storey of retail/commercial complex The area is vibrant, conveniently located near Hong Kong s commercial districts and affording easy access to the Hong Kong Jockey Club and Hong Kong Stadium for international sports events, and Hong Kong Sanatorium & Hospital for medical check-ups, helping to ensure solid short-term leasing demand Has been operational since 1Q

24 3 Financial Review a) Emperor International (163.HK) b) Emperor Entertainment Hotel (296.HK) 24

25 Financial Summary (HK$ 000) FY2016/17 FY2017/18 1H2017/18 1H2018/19 Changes Revenue 4,068,467 3,148,894 1,465,986 1,536, % Gross Profit 2,844,405 2,302,452 1,061,583 1,094, % Revaluation Gain / (Loss) on Properties 3,228,003 2,868,417 1,430,148 1,677, % Profit / (Loss) Attributable to the Owners of the Company - Underlying* 914, , , , % - Reported 3,483,150 3,371,517 1,596,732 2,504, % Basic Earnings / (Loss) Per Share - Underlying* HK$0.25 HK$0.17 HK$0.07 HK$ % - Reported HK$0.95 HK$0.92 HK$0.43 HK$ % *Excluding the effect of any fair value changes and write-downs net of deferred taxation Emperor International declared the payment of an interim dividend of HK$0.047 (1H2017/18: HK$0.047) per share. 25

26 Segmental Performance Segmental Revenue (HK$ 000) FY2016/17 FY2017/18 1H2017/18 1H2018/19 Amount Amount Amount Amount % of total Changes Property Investment 857,427 1,154, , , % + 9.5% Property Development 1,515, , , , % % Hospitality 1,695,295 1,599, , , % -0.4% Total 4,068,467 3,148,894 1,465,986 1,536, % + 4.8% Segmental Profit Excluding Fair Value Changes (HK$ 000) FY2016/17 FY2017/18 1H2017/18 1H2018/19 Changes Rental Income 753,139 1,009, , , % Property Sale 928, , , , % Hospitality 402, , , , % Total 2,083,270 1,586, , , % 26

27 Key Financial Indicators (HK$ 000) As at 31 Mar As at 30 Sep Total Assets 55,760,118 64,253,834 65,456,685 - Assets under Investment Properties 40,808,858 49,154,763 49,933,578 - Cash, Bank Balance & Bank Deposits 6,623,140 3,850,400 3,774,849 Net Debt (Total Debt Cash & Bank Balance) 16,809,341 22,928,626 22,674,686 Net Asset Value 25,546,530 29,455,373 30,906,776 Net Asset Value Per Share HK$6.95 HK$8.01 HK$

28 Key Credit Metrics (HK$ 000) As at 31 Mar As at 30 Sep Total Debt 23,432,481 26,779,026 26,449,535 - Short-term Debt 5,777,931 5,875,590 6,193,786 - Long-term Debt 17,654,550 20,903,436 20,255,749 Bank Borrowings 12,555,008 17,191,112 17,511,059 - Due after 1 Year 9,009,674 12,685,429 12,732,273 - Due within 1 Year 3,545,334 4,505,683 4,778,786 Unsecured Notes 8,768,040 6,776,088 6,765,805 Net Gearing Ratio (Net Debt/Total Assets) 30.2% 35.7% 34.6% 28

29 3 Financial Review a) Emperor International (163.HK) b) Emperor Entertainment Hotel (296.HK) 29

30 Financial Summary (HK$ 000) FY2016/17 FY2017/18 1H2017/18 1H2018/19 Changes Total Revenue 1,613,180 1,498, , , % Gaming Revenue 1,362,044 1,253, , , % Hotel Revenue 251, , , , % Gross Profit 1,053, , , , % Gross Profit Margin 65.3% 64.0% 61.2% 60.1% - 1.1pp EBITDA* 452, , , , % EBITDA* Margin 28.0% 27.7% 25.1% 24.5% - 0.6pp Profit Attributable to the Owners of the Company 346, , , , % Basic Earnings Per Share HK$0.27 HK$0.30 HK$0.09 HK$ % * Such EBITDA representing after M.I. and excluding exchange loss, loss on redemption of bond investments and noncash items (such as fair value changes of investment properties) Emperor Entertainment Hotel declared the payment of an interim dividend of HK$0.028 (1H2017/18: HK$0.026) per share. 30

31 Balance Sheet Position (HK$ 000) As at 31 Mar As at 30 Sep Non-current Assets 2,548,214 2,795,715 2,943,438 Current Assets 4,279,117 4,073,845 3,825,139 Current Liabilities (817,602) (881,744) (743,824) Non-current Liabilities (531,154) (111,012) (111,624) Net Asset Value 3,705,339 3,989,968 4,006,128 Gearing Ratio (Total Borrowings/Total Equity) 10.8% 1.8% 1.7% The management intends to maintain a strong cash position for potential M&A opportunities. 31

32 Key Performance Indicators (HK$) FY2016/17 FY2017/18 1H2017/18 1H2018/19 Changes Gaming Concourse GEH GEH GEH GEH GEH Gross Win 1,391,800,000 1,293,100, ,500, ,300, % Average Win Per Table Per Day 57,000 53,000 51,000 45, % VIP Hall GEH GEH GEH GEH GEH Rolling Amount 24,657,000,000 22,361,800,000 10,355,300,000 9,721,800, % Gross Win 962,900, ,100, ,100, ,000, % Average Win Per Table Per Day 263, , , , % Guest Rooms GEH IHM GEH IHM GEH IHM GEH IHM GEH IHM Occupancy Rate 91% 95% 93% 94% 91% 94% 93% 93% + 2pp - 1pp Average Room Rate Per Day Legend: GEH = Grand Emperor Hotel IHM = Inn Hotel Macau % % 32

33 4 Appendix 33

34 Key Investment Properties Currently for Lease Address I. Currently for lease Occupancy Rate: Nearly 90% Hong Kong Street-level Retail Spaces Retail rents in Russell Street was ranked as highest in the world, according to Main Street Across the World 2018 by Cushman & Wakefield As of 30 Sep 2018 GFA(ft 2 ) Fair Value (HK$ 000) Type C: Commercial I: Industrial O: Office R: Residential No. 8 (G/F - 3/F), 20 (G/F & 2/F), (G/F-3/F), (G/F - 3/F), Russell Street, CWB 48,500 4,635,000 C/O No. 76 (G/F) Percival Street, Causeway Bay ( CWB ) ,000 C No (G/F & 1/F), (G/F), 507 (G/F), 523 (G/F & 1/F), Lockhart Road, CWB 7, ,000 C No. 4-8, Canton Road, Tsim Sha Tsui 6,600 1,800,000 C Shop C, No (G/F) Haiphong Road, Tsim Sha Tsui ,000 C Shop B, No (G/F) Hankow Road, Tsim Sha Tsui ,000 C No. 81 (G/F), 83 (G/F & M/F), Nathan Road, Tsim Sha Tsui 4, ,000 C Complexes Emperor Group Centre, No. 288 Hennessy Road, Wan Chai 231,300 3,213,000 C/O China Huarong Tower, No. 60 Gloucester Road, Wan Chai 110,500 2,865,000 O Emperor Commercial Centre, No Des Voeux Road, Central 39,400 1,887,000 C/O New Media Tower, No. 82 Hung To Road, Kwun Tong 89, ,000 C/O No Kwok Shui Road, Kwai Chung 129, ,000 I The Pulse, Repulse Bay 167,200 1,217,000 C Fitfort Shopping Arcade, No. 560 King s Road, North Point 134,400 2,959,000 C Level 3, New Town Mansion Shopping Arcade, Tuen Mun 39, ,000 C Sui Wo Court Commercial & Carpark Complexes, No & No Sui Wo Road, Shatin 95, ,000 C Ulferts Centre, No. 4 Kin Fat Lane, Tuen Mun 178, ,000 I Others Other retail spaces, commercial and residential units 485,000 8,681,000 C/R Macau Leased-out Units of Grand Emperor Hotel and Inn Hotel Macau, Macau Peninsula 74, ,000 C Emperor Nam Van Centre, Macau Peninsula 30,000 1,635,000 C Mainland China Emperor Group Centre, Chang an Avenue East, Beijing 1,062,000 7,968,000 C/O Shops and Carparks, Emperor Lakeside Metropolis, Hubin Bei Rd, Xiamen 63, ,000 C United Kingdom Ampersand Building, No Oxford Street, London, W1F8ZZ 91,000 2,857,000 C/O No Oxford Street, London, W1D 2JT 12, ,000 C/O Sub total Currently for lease 3,102,700 45,277,000 34

35 Key Investment Properties Future Projects As of 30 Sep 2018 Address GFA(ft 2 ) Fair Value (HK$ 000) Type Properties Under Development C: Commercial O: Office Hong Kong No Lockhart Road, Wan Chai, Hong Kong (2020) 96,000 2,462,000 C Mainland China Emperor Star City, Huang Pu District, Shanghai 1,300,000 1,909,000 C/O London No Oxford Street, London, W1D 2DW (2019) 20, ,000 C/O Sub total Under development 1,416,000 4,657,000 35

36 Commercial/Office Complexes in Hong Kong ( ): Year of Acquisition Level 3, New Town Mansion Shopping Arcade (2013) Sui Wo Court Commercial and Carpark (2017) New Media Tower (2015) Fitfort Shopping Arcade (Pre 2013) No Kwok Shui Road (2015) Emperor Commercial Centre (2016) Emperor Group Centre (Pre 2013) China Huarong Tower (2013) Retail Spaces of Fairview Height (2017) The Pulse (Pre 2013) Lockhart Road (2015) Lockhart Road (2014) 36

37 Footprints in United Kingdom No , Ampersand Building, Oxford Street (2017) A freehold 8-storey (including basement) composite building comprising retail spaces, office premises and leasehold apartments of about 91,000 ft 2 No , Oxford Street (2015) It will be redeveloped into a retail and office complex with GFA of about 20,000 ft 2 for longterm investment purpose No , Oxford Street (2014) A 7-storey (including basement) retail and office complex of about 12,700 ft 2 Tottenham Court Road Station Oxford Street Oxford Street Oxford Street Soho Square Gardens Tentative Building Rendering London Palladium ( ): Year of Acquisition 37

38 Hospitality in Macau Commenced in 2006, it is an award-winning gaming hotel of 26 storeys (excluding basement) with a GFA of 655,000 ft 2 and 311 guest rooms Emperor Palace Casino occupies six floors with 77 gaming tables (67 mass tables & 10 VIP tables) and 170 slot machines Comprehensive non-gaming facilities with over 66,000 ft 2 covering sauna, night clubs and restaurants (Grand Emperor Court & Royal Kitchen), which are well received by customers Several retail spaces at G/F with a GFA of 5,500 ft 2 leasing to prominent watch and jewellery retailer It is owned 75% by Emperor Entertainment Hotel, 20% by SJM and 5% by Mr. Jackie Chan at project level Payback period covered 4.5 years only which ended in September 2010 Lobby laden with 78 bars of fine pure gold bars, each weighing 1kg Acquired in March 2014, it is a 17-storey hotel with a GFA of 209,000 ft 2, offering 287 guest rooms, swimming pool, spa and retail spaces. Located at the heart of Taipa Island, it is adjacent to the popular tourist spots with guarantee traffic 38

39 Disclaimers This material is for information purposes only. This presentation may contain forwardlooking statements and estimates based on current assumptions and forecasts made by the management of both Emperor International Holdings Limited and Emperor Entertainment Hotel Limited. Various known and unknown risks, uncertainties and other factors could lead to substantial differences between the actual future results, financial situation, development or performance of the company and the estimates given here. The company accepts no obligation to continue to report or update these forward-looking statements or adjust them to future events or development. This material may not be reproduced, distributed or transmitted to any other person or incorporated in any way into another document or other material without the prior written consent of Emperor International Holdings Limited and Emperor Entertainment Hotel Limited. For more information, please go to & 39