九龙仓集团(00004) - 2019 - 中期财报

Executive Summary The Group's profit attributable to shareholders and underlying net profit declined in H1 2019 due to trade tensions, economic slowdown, and currency fluctuations Group Performance Overview Wharf Holdings Limited's profit attributable to shareholders decreased by 14% to HKD 2.45 billion, with underlying net profit down 12% to HKD 2.236 billion, primarily due to adverse factors such as US-China trade friction, Hong Kong's economic slowdown, and RMB exchange rate fluctuations, leading to an uncertain full-year outlook - Mainland China assets exceeded RMB 100 billion, accounting for over 70% of the Group's total assets and contributing approximately 80% to the Group's profit[5] - Unpredictable US-China trade friction has a profound impact on both economies and Hong Kong's economy[5] - In Hong Kong, travel warnings, economic slowdown, shrinking exports and re-exports, declining retail sales, stock market volatility, and employment concerns further dampened already weak demand[5] Group Profit Performance H1 2019 | Metric | H1 2019 (HKD million) | H1 2018 (HKD million) | Change (%) | | :--- | :--- | :--- | :--- | | Underlying Net Profit | 2,236 | 2,527 | -12% | | Profit Attributable to Shareholders | 2,450 | 2,860 | -14% | - The first interim dividend was HKD 0.25 per share, consistent with the prior year, totaling HKD 762 million[7] Business Review Overall Business Composition The Group's business primarily focuses on property-related sectors, including investment properties, hotels, and development properties in Hong Kong and Mainland China, with property businesses contributing 67% of revenue and 84% of underlying net profit during the period, alongside logistics operations - Property businesses contributed 67% of the Group's revenue and 84% of the Group's underlying net profit[8] - The investment property portfolio forms a recurring income base, while the development property portfolio drives asset turnover[8] - Other businesses include Modern Terminals and Hong Kong Air Cargo Terminals, which operate logistics businesses[8] Hong Kong Properties Hong Kong development properties primarily rely on the Mount Nicholson project, which contributed HKD 3.6 billion in contracted sales in H1 2019, with other redevelopment and development projects in Kowloon Tong and Kowloon East addressing luxury residential and core business district expansion needs - The Mount Nicholson project is the primary source of contracted sales for Hong Kong development properties[9] - Demand for luxury homes remains stable, differing from mass-market sales cycles[9] Peak Property Portfolio Mount Nicholson, a joint venture development, recorded contracted sales of four houses and two apartment units totaling HKD 3.6 billion in H1, with an average selling price of HKD 94,000 per sq ft, while other Peak projects are under redevelopment Mount Nicholson H1 2019 Sales Data | Metric | Data | | :--- | :--- | | Contracted Sales Units | 4 houses and 2 apartment units | | Total Sales Value | HKD 3.6 billion | | Average Selling Price | HKD 94,000 per sq ft | - Superstructure works for 11 Plantation Road and 77 Peak Road redevelopment projects are complete, providing a total of 15 houses[10] Kowloon Tong Residential Project Located at a prime junction of Lion Rock Tunnel Road and Lung Cheung Road, adjacent to the Beacon Hill luxury residential area, this project has a total developable gross floor area of 436,000 sq ft and has been approved for four 13-story residential towers, with foundation work currently underway - The project is located at the junction of Lion Rock Tunnel Road and Lung Cheung Road, adjacent to the traditional luxury residential area of Beacon Hill[11] - It has a total developable gross floor area of 436,000 sq ft, approved for four 13-story residential towers, with foundation work currently in progress[11] Kowloon East Projects Driven by the government's "Energizing Kowloon East" initiative, the Group's Kowloon East projects, including Kowloon Godown and the Yau Tong Bay waterfront joint venture, will benefit from the area's transformation into a core business district, with Kowloon Godown having multiple redevelopment options and Yau Tong Bay providing over 6,300 residential units - Kowloon East projects will benefit from the government's "Energizing Kowloon East" initiative, aiming to create another core business district in Hong Kong[12] - Kowloon Godown has multiple redevelopment options, currently under study[13] - The Yau Tong Bay residential project has a total gross floor area of 4 million sq ft, will provide over 6,300 residential units, and its overall building plans have been approved[13] Mainland China Development Properties Mainland China development property revenue recognized decreased by 10% to HKD 5.232 billion in H1, with operating profit down 1% to HKD 1.828 billion, but operating profit margin improved by 3 percentage points to 35%; contracted sales decreased by 10% to RMB 6.5 billion, mainly from Hangzhou, Beijing, Shanghai, and Suzhou, and the Group remains cautious about future project profitability, having acquired no new land parcels in the past year - Basic demand for quality properties in Mainland China's tier-one cities remains solid, but government controls on new residential sales prices impact future project profitability[14] - The Group remains cautious, having acquired no new land parcels in the past year[14] Mainland China Development Properties H1 2019 Performance | Metric | H1 2019 | H1 2018 | Change (%) | | :--- | :--- | :--- | :--- | | Recognized Revenue | HKD 5.232 billion | HKD 5.792 billion | -10% | | Operating Profit | HKD 1.828 billion | HKD 1.838 billion | -1% | | Operating Profit Margin | 35% | 32% | +3 percentage points | | Contracted Sales | RMB 6.5 billion | RMB 7.24 billion | -10% | | Unrecognized Sales | RMB 23.5 billion | RMB 21.766 billion | +8% | | Land Bank | 3.6 million sq m | - | - | Mainland China Investment Properties Mainland China investment property revenue grew 22% to HKD 1.958 billion, and operating profit increased 30% to HKD 1.162 billion, primarily driven by the opening of Changsha IFS; however, most cities may face an oversupply of office space in the coming years Mainland China Investment Properties H1 2019 Performance | Metric | H1 2019 (HKD) | Change (%) | | :--- | :--- | :--- | | Revenue | 1.958 billion | +22% | | Operating Profit | 1.162 billion | +30% | - An oversupply of office space in most cities may intensify in the coming years[15] Changsha IFS Changsha IFS has rapidly become a new landmark in Central China, with overall revenue of HKD 378 million and operating profit of HKD 130 million in H1; the mall achieved 98% occupancy and 97% opening rate, with tenant sales reaching RMB 2.138 billion, and has received multiple international awards - Changsha IFS has rapidly emerged as a new landmark in Central China, integrating entertainment, fashion, shopping, culture, and dining[16] Changsha IFS H1 2019 Performance | Metric | Amount (HKD) | | :--- | :--- | | Overall Revenue | 378 million | | Operating Profit | 130 million | Mall Changsha IFS Mall, covering 246,000 sq m, achieved 98% occupancy and 97% opening rate, with H1 tenant sales reaching RMB 2.138 billion, and has received multiple international awards including "RLI International Shopping Centre 2019" - The mall received multiple international awards, including "RLI International Shopping Centre 2019", solidifying its status as a retail hotspot[17] - The tenant mix includes over 70 brands making their debut in Hunan Province, with an occupancy rate of 98% and an opening rate of 97%[18] - Tenant sales maintained strong momentum in H1 2019, reaching RMB 2.138 billion[18] Offices & Hotel Changsha IFS features premium offices and a hotel in its two towers, with Tower 1 being the tallest building in Hunan Province