Logan Property Holdings Company Limited March 2018media.loganproperty.com/201803232208411735501670_sc.pdf · 2. Achieved RMB16.8bn sales in 2017. Rank No. 1 in terms of no. of units

Logan Property Holdings Company Limited March 2018

I Results Highlights

II Strategy & Land Bank

III Outlook

IV Appendix

Content

Results Highlights

8 Key Highlights: Annual Results 2017

HighGross Profit

HighGrowth

HighEarnings

StrongFinancing Capability

HighDividend

Payout

Abundant Land Bank

HighCreditRating

StrongCash Flow

Contract sales RMB43,420mn (up 51.2%)

Revenue RMB27,690mn (up 34.8%) Gross profit RMB9,517mn (up 45.1%) GP margin 34.4% (up 2.5p.p.)

Core profit1 RMB4,620mn (up 48.7%) Core profit margin 16.7% (up 1.6p.p.) EPS RMB117.03 cents (up 44.4%)

Issued a total of USD1,106mn senior notes with coupon @5.125% - 5.75%

Weighted average cost of borrowing reduced from 6.1% to 5.8%

RMB520bn saleable resources (135 projects) with >80% located in the GBA

Average land cost ≈27% of ASP

Credit rating upgraded to the highest AAA level by both China ChengxinInternational & United Credit Rating

Cash collection rate 90%, cash on hand RMB22,408mn, net gearing decreased 3.5p.p. to 67.9%

Proposed final dividend of HK19 cents (include special dividend of HK2 cents)

FY dividend HK41 cents, dividend payout ratio is 40%

4Note 1: Core profit is defined as profit excluding changes in fair value of investment properties and derivative financial instruments and the relevant deferred tax, and share of changes in fair value of Investment properties at an associate

(RMB/sqm)

Contract Sales GFA1 Contract Sales

(RMB mn) (000’ sqm)

Average Selling Price2

45.8%

8,194

11,870

17,096

2015 2016 2017

+44.0%

49.7%43.6%

2015 2016 2017

Other Regions 121 212 60

Nanning Region 435 467 802

Shantou Region 516 636 626

Other GBA 466 384 548

Shenzhen Region 878 599 390

36.4%

26.1%16.1%

19.3%

16.7%22.6%

21.3%

27.7% 25.8%

18.0%

20.3%33.0%

5.0%

9.2%

2.5%2,298

2,426

2015 2016 2017

Other Regions 786 1,543 644

Nanning Region 2,997 3,268 7,179

Shantou Region 4,309 6,590 8,980

Other GBA 3,563 4,651 9,185

Shenzhen Region 8,855 12,664 17,433

43.2%44.1%

40.1%17.4%

16.2%

21.2%

21.0%

22.9%

20.7%

14.6%

11.4%

16.5%

3.8%

5.4%

1.5%2,416

43,421

28,716

20,510

Strong Contract Sales Growth

+51.2%

Leader in Core Markets3

Shenzhen: Top 1 with 4,416 units sold

Shenzhen: Top 2 with 260,000 sqm sold

Shantou: Top 1 with RMB9bn sales

Acesite Mansion Zhuhai: Top 2 with 598 units sold

Nanning, Zhuhai, Foshan: Top 10

5Note 1: Contract sales GFA excludes area for car parking spaces.Note 2: Average selling price excludes car parking spaces.Note 3: Info from Hope Fluent Research (Zhuhai), Shenzhen Home, E-House, CRIC & internal data

45.8%

49.7%43.6%

Shenzhen Region46%

Other Regions1%

Shantou Region11%

Nanning Region20%

Other GBA22%

Total

RMB

35.1bn

Cash Collection Rate Maintained at 90% or Above

85%87%

85%

92%93%

90%

50%

60%

70%

80%

90%

100%

2015 2016 2017

1H FY

Unrecognized Sales as of 28 Feb 2018

Lockup Future Profit

6

30.4%31.9%

34.4%

13.5%15.1%

16.7%

0%

10%

20%

30%

2015 2016 2017

GP Margin Core Profit Margin

14,574

20,539

27,690

0

6,000

12,000

18,000

24,000

30,000

2015 2016 2017

(RMB mn)

1,973.6

3,106.7

4,620.0

0

2,000

4,000

6,000

2015 2016 2017

(RMB mn)

Revenue Core Profit1Profit Margin

+34.8%

Sustainable Profitability

+48.7%

7

Note 1: Core profit is defined as profit excluding changes in fair value of investment properties and derivative financial instruments and the relevant deferred tax, and share of changes in fair value of Investment properties at an associate

Recognized GFA1 Recognized Sales ASP of Recognized Sales2

(000’ sqm) (RMB mn) (RMB/ sqm)

45.8%

49.7%43.6%

7,100

10,81011,093

2015 2016 2017

21,105

15,247

2,294

1,859

2,241

8

Increased Revenue from Property Development

Note 1: Recognized GFA excludes area for car parking spaces.Note 2: Average selling price of recognized sales excludes car parking spaces.

2015 2016 2017

Other Regions 21 101 213

Nanning Region 374 518 447

Shantou Region 185 578 757

Other GBA 481 368 286

Shenzhen Region 1,180 294 591

52.7%

15.8%

25.8%

21.5%

19.8%

12.4%

8.3%

31.1%

33.0%

16.6%

27.9%

19.5%

0.9%

5.4%

9.3%

2015 2016 2017

Other Regions 213 634 1,728

Nanning Region 2,509 3,335 2,848

Shantou Region 1,219 4,726 8,819

Other GBA 3,876 2,895 2,961

Shenzhen Region 7,430 9,515 10,595

48.7%45.1% 39.3%

25.4%

13.7%11.0%8.0%

22.4%

32.7%

16.5%

15.8%

10.6%

1.4%

3.0%

6.4%

26,951

8.8%

6.8%6.1%

5.8%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2014.12.31 2015.12.31 2016.12.31 2017.12.31

Weighted Average Cost of Borrowing

Onshore Bank Borrowings

43%

Onshore Corporate Bonds30%

Offshore Bank

Borrowings5%

Offshore Senior Notes22%

Debt Structure

Weighted Average

Cost of Borrowing5.8%

Total Borrowing: RMB40.84bn

Onshore: 73%

Offshore: 27%

Optimized Debt Structure Lowered Finance Cost

9

19

11 1114

22

17

3

5

0

10

20

30

40

2013 2014 2015 2016 2017

Interim Final Special(HK cents)

Total Dividend Per Share

21.6%25.0%

33.1% 35.0% 35.0%

5.0% 5.0%

0%

10%

20%

30%

40%

50%

2013 2014 2015 2016 2017

Annuual Special

Dividend Payout Ratio1

Dividend

10

Note 1: Dividend payout ratio = Total dividend per share/core profit

Strategy & Land Bank

Greater Bay Area – A World Class Hub

New York BaySan Francisco Bay

Tokyo Bay

Greater Bay Area

12

Greater Bay Area – A World Class HubComparison with Other Global Bay Areas (2016)

Greater Bay Area(9+2)

Tokyo Bay New York BaySan Francisco

Bay

Land Area (sqkm) 56,086 36,500 34,493 18,040

Population (Million) 68.00 35.03 23.69 7.68

2016 GDP (USD, Trillion) 1.39 1.70 1.91 0.77

2017 GDP (USD, Trillion)1.54

(12% of National GDP)

- - -

Average Land Area OwnedPer Person (sqm)

825 1,042 1,456 2,348

Population Density (No. of people/ sqkm)

1,212 960 687 426

GDP Per Capita (USD)20,415（2016）22,647（2017）

48,410 80,426 100,674

Production Value of Region(USD, Million/ sqkm)

24.75 46.46 55.24 42.88

Port Container Throughput (Thousands TEUs)

62,640 7,730 6,250 2,370

Airport Passengers Traffic (Million)

186 117 130 76

Industry

TechnologyInnovation

Financial ServicesManufacturing

Advanced Manufacturing

Financial ServicesPropertyMedical,

Healthcare

TechnologyInnovation

% of Third Industry 62% 82% 89% 83%

Global Financial CentresIndex 2017 Ranking

Hong Kong (3)Shenzhen (20)

Guangzhou (32)Tokyo (5) New York (2)

San Francisco (16)

Conclusion: GBA’s Population & Economic Cluster Possess Bigger Room for Growth

Surpass Tokyo Bay

by 2020

Surpass New York Bay by

2025

13

Source：2016 Government Register. Data are 2016 figures.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

GDP Forecast for Greater Bay Area & Other Bay Areas (USD, Trillion)

Greater Bay Area New York Bay Tokyo Bay San Francisco Bay

Jiangmen

Zhuhai

Macau

Hong Kong1

Shenzhen

HuizhouDongguan

Guangzhou

Foshan

Zhongshan

Zhaoqing

2,663bn1

2,150bn

2,244bn

955bn 758bn

383bn

345bn

330bn

257bn

269bn

220bn

14

2017 GDP in GBA exceeded RMB10 trillion, accounting for ~12% of national GDP Average GDP growth rate surpassed national level at 7.5%

Asset Value benefit from GBA development

2017 GDP Growth Rate

Shenzhen 8.8%

Guangzhou 7.0%

Foshan 8.6%

Dongguan 8.2%

Huizhou 7.4%

Zhongshan 6.6%

Jiangmen 8.1%

Zhuhai 9.2%

Zhaoqing 5.2%

Hong Kong 3.8%

Macao 9.1%

Note 1: Data in HKD

Greater Bay Area (25.06mn sqm)

Shenzhen 33.9% 176.2bn

Huizhou 15.7% 81.6bn

Zhuhai 9.4% 48.9bn

Foshan 6.0% 31.3bn

Zhongshan 5.0% 26.1bn

Heyuan 2.9% 14.9bn

Hong Kong 2.4% 12.5bn

Dongguan 2.4% 12.4bn

Zhaoqing 2.2% 11.5bn

Yangjiang 1.1% 5.6bn

Subtotal 81.0% 421bn

Other Regions (11.13mn sqm)

Nanning Region 9.3% 48.4bn

Shantou Region 5.2% 26.9bn

Other Regions 2.1% 10.7bn

Singapore 2.4% 12.4bn

Subtotal 19.0% 98.4bn

Total(As of 2017.12.31）

519.4bn

Focus on 9+2+6+Eastern & Western GuangdongGreater Bay Area

9 Cities +2 HK/Macau + 6 extensive regions + Eastern & Western Guangdong

15

Yangjiang阳江沿海

Heyuan河源城区

Yunfu云浮

Shanwei汕尾沿海

Jiangmen East江门东

Zhongshan中山

Zhuhai珠海

Huizhou惠州Zhaoqing

肇庆

HK

Qianhai前海

Nansha南沙

Foshan佛山

Guangzhou广州

Dongguan东莞

Shenzhen深圳

Macau

Cuiheng翠亨

Hengqing横琴

Jieyang揭阳

Shantou汕头

Chaozhou潮州

Maoming茂名

Zhanjiang湛江

WesternGuangdong

Eastern Guangdong

QingyuanSouth

清远南部

Shaoguan韶关

HK-ZH-MacauBridge

SZ Bay Bridge

SZ-ZS Channel

Core Area in GBA

Focus in Core City with the Best Value

A total of 11 projects metro properties Ranked no. 1 in terms of no. of units sold (4,416 units)

TangweiStation

(塘尾站)

GuanguangStation

(观光站)

BaolongStation

(宝龙站)

Logan City Station

(龙光城站)

BaohuaStation

(宝华站)

Lixiang Station(荔香站)

Logan City(龙光城)

Mid to Long Term Planning of Railway Transit in Shenzhen

Acesite Park(玖龙臺)

Century Center(世纪大厦)

The Masterpiece(玖云著)

Acesite Mansion(玖龙玺)

Logan Carat Complex (玖钻)

Qiaocheng East Project

(侨城东项目)

Huaqiao East Station

(华侨东站)

Fuyong Project 2(福永项目2 )

Fubao Project(福保项目)

Fuyong Project 1(福永项目1 )

Shekou Free-trade Zone Project

(蛇口自贸区项目)

16

BaishilongStation

(白石龙站)

HongshanStation

(红山站)

Fubao Station(福保站)

Accurately timed the onshore and offshore land market via diverse channels

Secured highly profitable projects with minimum cost through M&A and urban renewal channels

1. Timely invested RMB31bn on 4 projects (Acesite Mansion, Logan Carat Complex, The Masterpiece, Acesite Park) atop of/ along metro stations in Shenzhen before the ASP rally, with total saleable resources of >RMB100bn. Average GP margin above 40%.

2. Achieved RMB16.8bn sales in 2017. Rank No. 1 in terms of no. of units sold (4,416 units) in 2017.

1. Obtained >RMB300bn saleable resources via M&A and urban renewal channels (>90% in the Greater Bay Area) when the public land market was at a relatively high side of the cycle.

2. Focused on HK luxury residential market and seized the bottom of the Singapore’s property market cycle – invested RMB14.4bn on 3 projects in return for RMB24.9bn saleable resources

1. Acquired Logan City project in Huizhou (total GFA: 5mn sqm) in 2007, with average land cost of RMB300/sqm.

2. Logan City continues to generate high return with GP margin of over 60%. >RMB30bn saleable resources remained.

1996-2001

2007-2013

2014-2016上半年

2016下半年-2017

1. Founded in Shantou and remains as the market leader for over 15 consecutive years.

2. Ranked no. 1 with nearly RMB9bn sales achieved in 2017.

Timely & Diverse Land Acquisition

17

1996-2001 2002-20072014-

1H20162007-2013

2H2016-2017

Note 1: As of 31 Dec 2017, saleable resources are classified as attributable saleable resources. Both saleable resources and GFA are based on internal estimation.Note 2: Other regions are Chengdu and Hainan.Note 3: The land cost is the total land cost divided by GFA

Shenzhen 26%

Huizhou/ Dongguan 17%

Guangzhou/ Foshan/ Zhaoqing 10%

Zhuhai/ Zhongshan/

Jiangmen 12%

Heyuan/ Yangjiang 6%

HK/ Macau 4%

Shantou Region7%

Nanning Region11%

Other Region3%

Singapore 4%

Land Bank

RMB

337.1bn

GFA1 (sqm) %

Shenzhen 2,095,165 7.6%

Huizhou/ Dongguan 5,856,874 21.4%

Guangzhou/ Foshan/ Zhaoqing

4,018,862 14.7%

Zhuhai/ Zhongshan/ Jiangmen

2,556,558 9.3%

Heyuan/ Yangjiang 3,015,857 11.0%

Hong Kong & Macau 70,606 0.3%

Greater Bay Area –Subtotal

17,613,922 64.2%

Shantou Region 2,770,223 10.1%

Nanning Region 5,652,065 20.6%

Other Regions2 1,204,328 4.4%

Singapore 189,909 0.7%

Total 27,430,447 -

Land Cost3 (per sqm) RMB 4,086 -

Land Cost3 (excludingHK& Singapore, per sqm)

RMB 3,231 -

M&A & Urban

Renewal

(on the pipeline)

35%Land Bank 65%Total Saleable

Resources1

RMB519.4bn

337.1bn27.43mn sqm

Abundant Land Bank

182.3bn8.76mn sqm

M&A & Urban Renewal Projects in a pipeline and are key generators for future earnings

18

Outlook

Singapore2%

Nanning Region18%

Other Regions2

3%

Shantou Region13%

Shenzhen/ Huizhou37%

Foshan/ Guangzhou/ Zhaoqing

15%

Zhuhai/ Zhongshan

9%

Heyuan/ Yangjiang3%

Accelerating sales: 2018 attributable contract sales target RMB66bn, up >50% y-o-y

Expect to launch over 30 new projects

Saleable Resources1

Over RMB130bn

Note 1: Figures are based on internal estimation.Note 2: Other regions include Chengdu and Hainan

2018: High Quality Growth

Shenzhen: Logan Carat Complex (玖钻), Acesite Park (玖龙臺), Acesite Mansion (玖龙玺)

Huizhou: Logan City (龙光城), Acesite Bay (玖龙湾), Acesite Mount (玖龙山), Acesite Park (玖龙臺) etc.

Shantou: Celestial Palace (御海天宸), Sunshine Palace (阳光御府), Sunshine Garden (阳光禧

园), Sunshine Terrace (阳光悦府)

Foshan: Acesite Park (玖龙府), AcesiteGlory Mansion (玖誉府) etc.

Zhaoqing: Acesite Lake (玖龙湖), Acesite Bay (玖龙湾)

Nanning: Acesite Park (玖珑臺), Acesite Glory Mansion (玖誉府) etc.

Zhuhai: Acesite Mansion (玖龙玺), Acesite Lake (玖龙湖), Acesite Centrium (玖龙汇)

Zhongshan: Acesite Bay (玖龙湾)

20

Attributable contract sales to grow at CAGR >50% during 2018-2020

Become the top property player in the Greater Bay Area

Next 3-5 years: Top Player in the GBA

28.7

43.4

66.0

100.0

2016 2017 2018E 2019E 2020E

2016 2017 2018E 2019E 2020E

CAGR >50%

Actual/ Expected Contract Sales 2016-2020E

21

(RMB bn)

New 3-5 years: Top 10 in terms of Core Profit

3,107

4,620

2016 2017 2018E 2019E 2020E

2016 2017 2018E 2019E 2020E

Actual/ Expected Core Profit Growth Trend 2016-2020E

22

(RMB mn)

Appendix

2017As a % of Revenue

2016As a % of Revenue

Change

(RMB mn)

Revenue 27,690 100.0% 20,539 100.0% 34.8%

Gross Profit 9,517 34.4% 6,560 31.9% 45.1%

Net Profit for the Year 7,008 25.3% 5,200 25.3% 34.8%

Core Profit1 4,620 16.7% 3,107 15.1% 48.7%

Profit Attributable to Equity Shareholders of the Company

6,527 23.6% 4,488 21.9% 45.4%

EPS

- Basic (RMB cents) 117.03 - 81.06 - 44.4%

- Diluted (RMB cents) 115.39 - 80.82 - 42.8%

Interim Dividend per Share (HK cents) 19 - - - -

Special Dividend per Share (HK Cents) 5 - 3 - -

Proposed Final Dividend per Share (HK cents) 17 - 22 - -

Total Dividend per Share (HK cents) 41 - 25 - 64.0%

Income Statement Highlights

24Note 1: Core profit is defined as profit excluding changes in fair value of investment properties and derivative financial instruments and the relevant deferred tax, and share of changes in fair value of Investment properties at an associate

As at 31 Dec 2017 As at 31 Dec 2016 Change

(RMB mn)

Total Asset 111,871 86,502 29.3%

Equity Attributable to the Equity Shareholders 23,306 19,427 20.0%

Total Equity1 27,164 25,751 5.5%

Cash and Bank Balance2 22,408 14,797 51.4%

Receipts in Advance 19,615 16,049 22.2%

Total Borrowing 40,841 33,187 23.1%

Net Gearing Ratio 67.9% 71.4% (3.5%p.p.)

Note 1: Include non-controlling interests and perpetual capital securities

Note 2: Include restricted and pledged deposits

Balance Sheet Highlights

25

# Projects Location StatusSite Area

(sqm)Expected Total

GFA1 (sqm)Average

Land Cost2

1 Sunshine Waterfront, CZ (潮州阳光水岸) Chaoan District (潮安区)Land use rights certificate obtained,pending for the construction permit

71,000 367,446 1,442

2 Acesite Lake, ZQ (肇庆玖龙湖) Dawang High Tech Zone (大旺高新区) Land use rights certificate obtained 58,000 187,000 2,674

3 Acesite Bay, HZ (惠州玖龙湾) Daya Bay (大亚湾) Under construction 101,000 357,700 1,705

4 Acesite Park, HZ (惠州玖龙府) Daya Bay (大亚湾) Under design and planning 57,000 218,600 1,949

5 Acesite Mount, HZ (惠州玖龙山) Huiyang District (惠阳区) Under design and planning 78,000 253,400 1,310

6 Acesite Lake, HZ (惠州玖龙湖) Huiyang District (惠阳区) Under design and planning 104,000 224,128 1,919

7 Qiaocheng East Project, SZ (深圳侨城东) Nanshan District (南山区) Under design and planning 37,000 218,000 39,576

8 Acesite Centrium, ZH (珠海玖龙汇) Baoshui District (保税区) Under construction 49,000 329,200 5,202

9 Acesite Mansion, ZH (珠海玖龙玺) Hengqing Free-Trade Zone (横琴自贸区) Reached presales standard 51,000 162,300 10,313

10 Acesite Lake, ZH (珠海玖龙湖) Doumen District (斗门区) Launched for sales 47,000 108,894 4,268

11 Logan City, HY (河源龙光城) Yuancheng District (源城区) Under design and planning 812,000 2,219,061 1,104

12 Acesite Park, HY (河源玖龙府) Yuancheng District (源城区) Under design and planning 61,000 172,796 2,315

13 Acesite Bay, ZS (中山玖龙湾) Xiaolan County (小榄镇) Launched for sales 67,000 260,022 2,232

14 Acesite Park, ZS (中山玖龙府) Xiaolan County (小榄镇) Under construction 32,000 93,087 1,936

15 Shenwang Project, ZS (中山神湾项目) Shenwan County (神湾镇) Under design and planning 682,000 1,209,981 3,141

16 Huayuan Project, CD (成都花源镇项目) Xinjin District (新津区) Under construction 82,000 234,950 1,898

Total 6,616,565

M&A & Urban Renewal Projects (within Land Bank)

Note 1: As of 31 Dec 2017. Figures are based on internal estimation.Note 2: Average land cost is total land cost divided by total GFA.

26

Note 1: As of 21 March 2018.Note 2: Average land cost is the total land cost divided by GFA on plot ratio basis.

# Project Acquisition TimeSite Area

(sqm)Total GFA

(sqm)

GFA on Plot Ratio Basis

(sqm)

AttributableLand Cost(RMB mn)

AverageLand Cost2

(RMB/ sqm)

1Shantou East Coast A Project

(汕头东海岸A组团项目)2018-01-02 12,992 66,707 51,968 553 10,641

2Nanning Lengtang Project

(南宁楞塘项目)2018-01-05 35,854 201,003 143,415 269 3,750

3Nanning Gaoxing Project

(南宁高新区项目)2018-01-24 49,272 245,915 172,452 345 3,999

4Zhuhai Qianshan Project

(珠海前山项目)2018-02-06 13,633 48,365 35,446 908 25,616

5Zhongshan Guer Village Project

(中山古二村项目)2018-02-07 71,385 264,442 214,156 642 6,000

6Zhongshan Dongfeng Project

(中山东风镇项目)2018-02-07 26,038 85,002 65,095 204 6,270

7Foshan Shunde Project(佛山顺德新城项目)

2018-03-02 20,778 205,932 149,397 470 6,292

8Foshan Nanhai Project

(佛山南海项目)2018-03-20 72,700 185,353 139,600 1,124 8,053

Total 1,302,719 971,529 4,515 6,634

Land Acquisition 2018 (Public Market)1

27

Location Hongshan Station (红山站) of Metro

Lines No. 4 & 6

Type Complex

Site Area Approx. 87,000 sqm

Total GFA Approx. 840,000 sqm

Project Value Atop of dual metro lines at Hongshan

Station (红山站)

Logan Carat Complex (玖钻)

Key Projects 2018 – Shenzhen

Location Guanguang Station (观光站) of Metro

Lines No. 6 & 13

Type Residential & Commercial



Project Value Atop of dual metro lines at Guanguang

Station (观光站)

Acesite Park (玖龙臺)

28

Logan City (龙光城)

Location Huiyang District (惠阳区)




Project Value

Access to various ancillary facilities. Hotel,catering & entertainment facilities, commercial center, schools are under planning

Acesite Mount (玖龙山)

Location Daya Bay (大亚湾) & adjacent to

Shenzhen border


Site Area Approx. 1.7mn sqm

Total GFA Approx. 5.03mn sqm

Project Value

Logan’s biggest and flagship project.

Close to Shenzhen and is near to the metro station in plan. Various choices of transportation that connect to Shenzhen

29

Key Projects 2018 – Huizhou

Location Hengqing Port

Type Residential



Project Value

Adjacent to a commercial complex, 400m away from the Hengqing Station, and is close to the Main Avenue “Hong Kong Macau Avenue”

Acesite Mansion (玖龙玺)

Location Doumen District

Type Residential



Project Value Access to various educational,

vacational & ecological resources and enjoy transport convenience

Acesite Lake (玖龙湖)

30

Key Projects 2018 – Zhuhai

Documents

Logan Property Holdings Company Limited March 2018media.loganproperty.com/201803232208411735501670_sc.pdf · 2. Achieved RMB16.8bn sales in 2017. Rank No. 1 in terms of no. of units