IP Earnings Anchored 14% Growth in Group Core Profit · Leading Landlord with a Valuable & Resilient IP Profile ... Overview Hong Kong IP China IP & DP Others Next Uniquely Positioned

IP Earnings Anchored 14% Growth

in Group Core Profit

The Wharf (Holdings) Limited

2016 Interim Results

10 Aug 2016

1

Overview Hong Kong IP China IP & DP Others Next

Leading Landlord with a Valuable & Resilient IP Profile

Superior Assets & Proven Management Driving IP Performance

Strong China/HK DP Recognition Lifted 1H16 Core Profit

Improving Sequential Performance (2Q16 vs 1Q16)

Backdrop

2


IP Portfolio with Proven Track Record

Total Assets $440B as of End-Jun 2016

IP Portfolio Increased by 3% to $319B,

72% of Total

Consistent Core IP Operations

72%

13%

15%

Total Assets

$440 billion

Others

IP

DP

Incl. JV & Associates

3


Uniquely Positioned to Withstand Market

Weakness

IP Core Profit +11% to $4.6B

78% of Group Core Profit

IP – Navigating Through Tough Times

2.9 3.2 3.8

4.2 4.6

1H12 1H13 1H14 1H15 1H16

IP Core Profit (HKD billion)

$4.6B (+11%)

70%

8%

15%

7%

Core Profit

Others

HKIP

$6.0 billion

China IP

DP

4


1H16 Total IP (Excl. Hotel) Revenue

+7% to $7.6B

Proven Management Capabilities Driving

Growth

Well Prepared To Balance Risks &

Opportunities

IP Stability Driven by Strong Execution

4.4

4.8

5.6

6.1

6.4 0.5

0.5

0.8

1.1

1.2

1H12 1H13 1H14 1H15 1H16

Total IP Revenue (HKD billion)

$7.6B (+7%) HK China

5


Core Profit +14% to $6.0B

Financial Highlights

HKD Million 1H16 1H15 % Chg

Group Revenue 20,021 17,906 +12%

Operating Profit 8,075 7,475 +8%

Core Profit** 5,972 5,258 +14%

Profit Before IP Revaluation Surplus 6,200 3,793 +63%

Net IP Revaluation Surplus 525 3,165 -83%

Profit after IP Revaluation Surplus 6,725 6,958 -3%

Earnings Per Share (HK$)

- Attributable to Shareholders

- Core**

2.22

1.97

$2.30

$1.73

-3%

+14%

Dividend Per share (HK$) $0.58 $0.55 +5.5%

**Exclude IP revaluation surplus and exceptional items

6


Hong Kong IP

Agenda

China IP & DP

Others

Next

7


HK Retail – Challenging

2Q Sales & Tourist Arrivals Decline

Stabilizing

Strong HKD; Weak Macro Environment to

Impact Outlook

Still Too Early to See Light At the End of

the Tunnel

252.9 249.6 245.6 219.7

241.6 243.6 229.6

2013 2014 2015 2016

HK Retail Sales (HKD billion) Title

1H 2H

494.5 493.2 475.2

219.7 (-10.5%)

2Q: -8.3%

1Q: -12.5%

8


Stabilizing Retail Sales Decline

16.0 16.8 15.6

13.3

17.8 18.2

15.2

2013 2014 2015 2016

HC Retail Sales (HKD billion) Title

-14.7%

2Q: -9.6%

1Q: -18.9%

4.4 5.2

4.7 3.9

5.1

5.3

4.5

2013 2014 2015 2016

TS Retail Sales (HKD billion)

1H 2H

-15.7%

2Q: -10.3%

1Q: -20.0%

2Q16 Decline Significantly Narrowed

9


Mixed Retail Outlook

Marco Environment; Foreign Currency Movements

Brexit Impact: Europe Currency & Political Uncertainty

Europe Terrorist Threats to Affect Tourism Trend

Lower Base Effect Started to Kick in; Diverse Tourist Trend

Mixed Impacts from Global Price Harmonization (Pricing vs Patronage)

Tenants’ Flexible Strategy Responding to Market Changes

10


Confirmed Resilience Against Headwinds

HC $3,108M +4%

TS $1,087M +10%

PH $270M +3%

Ongoing AEIs & Refining Tenant Mix

Powerful Promotions & Proactive

Expansion of Customers Base

Stable Occupancy Cost & Solid Rental

Reversion

Sustained Foot Traffic with Mild Growth

6%

24%

68%

2%

Retail Revenue By Segment

$4.6 billion

(+5%)

HC TS

PH

Others

11


HC – Value Creation Mitigates Retail Pressure

Continued Tenant Mix Enhancement &

OT Initiatives Freshening the Mall

Intact Pricing Power

Diversification & Balanced Mix

Countering Market Risk

OT Extension Building by 2H17, with

Diverse Dining Options 0.7 0.8

1.1 1.2 1.4

1.7 2.1

2.4 2.8

3.0 3.1

0.8 0.9

1.1

1.4

1.5

1.9

2.1

2.5

2.9 2.9

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

HC Retail Revenue (HKD billion)

$3.1B (+4%)

1H 2H

12


TS – AEI Driving Growth

Renovation Completed by End-2015

Trade & Tenant Mix, F&B Choices Further

Enriched

Post-AEI Value Creation Gradually

Unlocked

0.3 0.4 0.4 0.5 0.5 0.6

0.7 0.7

0.9 1.0

1.1 0.4 0.4

0.5 0.5

0.6

0.7

0.7 0.8

1.0

1.0

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

TS Retail Revenue (HKD billion)

$1.1B (+10%)

1H 2H

13


HC

(Selected Brands)

TS

(Selected Brands)

Expansion

HK Debut

Kowloon Debut NA

Other

Commitments

HC & TS – Tenant Mix Enhancement Continues

14


HC & TS – Creative & Culture-Oriented Promotions

HC TS

15


Office – Stable Performance

High Occupancy (97%-98%)

Positive Rental Reversion

Positive Spot Rental Growth

1.1 1.2 1.2 1.4

1.5 1.6

1.1 1.2

1.3

1.5

1.6

2011 2012 2013 2014 2015 2016

HK Office Revenue (HKD billion)

$1.6B (+8%)

1H 2H

16


Agenda

Hong Kong IP

China IP & DP

Others

Next

17


China IP – Solid Performance

Solid Growth Momentum (HKD) Despite

Currency Translation Impacts

IFS Pipeline to Add Future Growth

Impetus

0.2 0.2 0.3 0.3 0.2 0.3

0.5 0.5

0.8

1.1 1.2

0.1

0.2 0.2

0.3 0.3

0.5

0.5

0.8

1.2

1.2

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

China IP Revenue (HKD billion)

$1.2B (+7%) 1H 2H

• In Jul 2010, Chongqing TS mall was closed for renovation and hence impacted the rental revenue during the period

18


CDIFS Mall – Stand Above Competition

Strong Execution Driving Performance

Solid Retail Revenue & Sales Growth

On Track to Meet Full-Year Target

* Occupancy Cost = Retail Rent/Retail Sales

1H16 CDIFS Mall

Net Revenue (Net of Tax) RMB312M (+9%)

Foot Traffic Growth +14%

Turnover Rent Portion 16%

Occupancy Cost* 15%

CDIFS Retail Sales Growth

1H16 RMB1.8B +13%

2016 Expect Double Digit Growth

19


CDIFS – Large-Scale & Powerful Marketing Events

20


CDIFS Office – Leasing Progressing on Track

Finest Premium Office Raises the Bar for Future Offices

36% Committed or ~100,000 s.m Leased

Commanding the Highest Rental Rates in CD

21


Award - Winning CDIFS

Other Key Awards in 1H16 (Total 16 Awards)

• The Most Valuable Commercial Real Estate Developers of

China (China Commercial Real Estate Association)

• Best Operated Commercial Real Estate Project (China Commercial

Real Estate Golden Coordinate Awards)

• The Most Distinctive Experiential Mall (Chengdu Retailers Business

Association)

• 2015-2016 Real Estate Design China Award – Top 10 Golden

Commercial Projects (China Real Estate Architects)

• Top 10 Retail Enterprises of the Year (Chengdu Retailers Business

Association)

The 2016 VIVA Best-of-the-

Best Design and

Development Award

(by ICSC)

Niccolo Chengdu - Best Business

Hotel in Southwest China (9th TTG

China Travel Award)

Quality Building Award 2016

22


5 IFSs – Long-term Growth Engine

Progressing at Full-Speed

Significant Earnings & Value Drivers

Retail-Led IFSs to Tap the Experience-

Driven Consumption Markets

Exclude Carpark

*Net of Recognized Sales

10%

36%

30%

15%

9%

Attributable Area of 5 IFSs

Attributable

Area

2.0M s.m

SZIFS

CSIFS

CDIFS

WXIFS

CQIFS (50%)*

23


China IP Pipeline – Embracing the Future

Pre-Leasing On Track

Solid Demand from Retailers

Underlined Tenants’ Confidence in

Wharf’s Expertise

Jan14

CS Times Outlets

88% Under

Offer/Discussion

(186 Brands)

CSIFS

Over 80% Under

Offer/ Discussion

CQIFS

Over 85% Under

Offer/ Discussion

China IP Pipeline

Sep16 Apr17 2H17

CDIFS

Fully Let

24


6.3 7.5 10.9 8.9 10.3

16.3 6.4

7.5

10.0 12.6

15.7

2011 2012 2013 2014 2015 2016

Contracted Sales (RMB billion)

RMB16.3B (+58%) 1H 2H

DP – Gaining Pace; Record Sales

1H 2016 Contracted Sales

Sales RMB16.3B +58%

GFA 836,000 s.m +34%

ASP RMB18,600 s.m +15%

Sales Exceeded Budget

68% of FY16 Target Met

Benefiting from Favorable Operating

Environment

54 Projects in 14 Cities on Sale

DP Landbank 5.0M s.m

2016 Sellable Resources 2.4M s.m

1H16 Accumulated Sell-through Rate 91%

25


DP – Strong Profit Recognition

1H16 Operating Matrix*

Revenue $13,049M +33%

Operating Profit $2,328M +54%

Operating Margin 18% +2.5 ppts

Completed GFA 1.1M s.m +134%

Recognized GFA 872,000 s.m +44%

Robust Results due to Increased GFA &

Better-Margin Projects Recognition

Improving Recognized Margin

Net Order Book RMB29B or 1.4M s.m * Incl. JVs & Associates on an Attributable Basis

26


DP – Disciplined Landbanking

Date City Attributable

GFA (s.m)

Attributable

Consideration (RMB) Ownership

Feb16 Beijing 47,800 2.05B 40%

Jun16 Hangzhou 18,200 0.28B 25%

Total 66,000 2.33B

Selective & Prudent Approach

Focus on Tier 1 Cities, Selective Top Tier

2 Cities

27


Hong Kong IP

China IP & DP

Others

Next

Agenda

28


HKDP – Mount Nicholson

Prestigious Peak Properties

Sets a New Benchmark for Luxury Living

3 Villas Sold for $2.2B (Attributable:

$1.1B) YTD; $82,400 psf on Average

Of which 2 Villas Sold in 1H16 were

Recognized

50%-Owned Mount Nicholson

Launch Date 1Q 2016

Product Type 19 Villas (6,000-10,000 s.f)

48 Apartments (4,200-4,500 s.f)

OP Issued

29


MTL

Revenue $1,234M (-11%)

Operating Profit $290M (-11%)

Market Throughput Decline (South China

-4%; Kwai Tsing -9%)

Throughput (million TEUs)

HK 2.3 +4%

DCB 0.7 +10%

TC 1.0 +11%

Total 4.0 +7%

30


Hotels

Revenue $740M (+3%); Operating Profit $104M (-10%)

Challenging Operating Environment in HK & Mainland China

The New Niccolo Brand is Getting Off to a Great Start

Niccolo Chengdu - Market Leader for Room Yield, Only One Year from Opening

31


CME – Strategic Review Underway

Wharf T&T

Best Half-Year Results Ever

EBITDA $415M (+10%), Margin 41%

Operating Profit $214M (+24%)

Free Cash Flow $237M (+7%)

i-CABLE

Revenue $710M (-7%)

Operating Loss $133M

Fantastic TV Chinese Channel Latest by

May 2017

32


Prudent Financial Management

Net Gearing Ratio at a Low Level

Group Net Debt $48B

Floating Rate Debt: 82% of Total

21.1%

25.6%

18.8%

15.8%

19.2%

20.6%

21.7%

20.4%

18.9%

14.9% 15.2%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1H16

Net Debt to Total Equity

Net Debt /

(Cash)

(HKD B)

Wharf

(Excl.

Subs.)

MTL HCDL i-CABLE Group

Total

Net Debt

to Total

Equity

30 Jun 2016 40.4 8.9 (1.5) 0.4 48.2 15.2%

30 Jun 2015 51.9 10.9 (0.7) 0.2 62.3 19.6%

33


Prudent Financial Management

2.3%

2.8%

3.2% 3.2%

2.8%

2.9%

2011 2012 2013 2014 2015 1H16

Average Interest Cost

14.0

11.0

20.1

7.4

6.3

8.0

Jul16-Jun17 Jul17-Jun18 Jul18-Jun19 Jul19-Jun20 Jul20-Jun21 Jul21 & After

Debt Maturity (HKD billion)

34


Overview of Application of Funds

35.5

32.8 31.5

23.4

33.8

2012 2013 2014 2015 2016

Major Capital and Development Expenditure

(HKD billion)

* China DP $15.8B self-financed by sales; China IP mainly IFSs under construction

HKD

1H16

(Actual)

FY16

(Projected)

China DP $7.9B $15.8B

China IP $2.0B $6.2B

HKIP $7.0B $8.2B

Others $1.1B $3.6B

Total $18.0B $33.8B

35


Agenda

Hong Kong IP

China IP & DP

Others

Next

36


Next Highlights

CQIFS Mall & Niccolo (Apr 2017)

OT 4-Storey Extension (2H17)

CSIFS Mall (2H17)

CS Times Outlets (Sep 2016)

Hotel at Murray Building (4Q17)

37

Corporate

Social Responsibility

(CSR)

38

The 2nd

CSR Report – based on the international

sustainability reporting guidelines (GRI G4)

Will soon be available on www.wharfholdings.com

Hang Seng Corporate Sustainability Index – top 30

Key CSR Achievements

HKQAA’s CSR Index Plus mark

Project WeCan, the flagship Business-in-Community initiative,

now in its 5th year

35 corporate partners (incl. universities & consulates)

Supporting 50 secondary schools and 42,000 students

39

Appendix

40

70%

27%

3%

Office S.A. &

Others

Retail

56%

35% 9%

Office S.A. &

Others

Retail

84%

16%

China

HK

85%

15%

China

HK

1H16 IP Revenue: $7,644M

By Business

1H16 IP Valuation: $302.9B

By Business

IP Portfolio

41

HKIP Performance

Harbour City Times Square Plaza Hollywood

1H16

(HKD million) Revenue % Chg Revenue % Chg Revenue % Chg

Retail 3,108 +4% 1,087 +10% 270 +3%

Office 1,208 +6% 348 +6% - -

Hotels & Club 594 -5% - - - -

Serviced Apt. 156 +7% - - - -

Total 5,066 +3% 1,435 +9% 270 +3%

Valuation* as of

30 Jun 2016 $170.7B $54.5B $9.4B

Retail Sales

Jan-Jun 2016 $13.3B (-14.7%) $3.9B (-15.7%) $1.2B (-8.4%)

1H16 Avg. Retail

Passing Rent

(HK$ psf per

Month)

$435 $300 $105

* Incl. hotels at valuation as of 30 Jun 2016

42

Commercial Properties Pipeline

14.0 14.2 14.2 14.4 14.7 14.7 14.7

5.7 5.7 5.7 5.7 5.7 5.7 5.7

3.9

6.6 7.4 8.1 8.1 8.1 8.1

2.0 2.0

6.5 6.5 6.5 6.5

2.2 2.2

2.2 2.2 2.2 2.7 0.8 0.8 0.8 0.8

4.1 4.1 6.1

8.9

9.4

11.2

2013 2014 2015 2016 2017 2018 2019+

Commercial Properties Completion Schedule (Million s.f)

Changsha IFS

Suzhou IFS

Changsha Outlets

Wuxi IFS

Chongqing IFS*

Chengdu IFS

Other China Commercial Prop.

HK Commercial Prop.

53.8M s.f

Total development area, incl. basement area & carpark

*Gross basis & net of recognized sales

43

China Commercial Properties Pipeline

606,000 s.m.*

Retail, Grade A offices &

hotel

Retail 114,000 s.m

300m tower

Jiangbei new CBD

50:50 JV with COLI

2016

383,000 s.m

Grade A offices, apartments & hotel

No Retail

450m tower

Suzhou new CBD

80:20 JV with Genway

2018

250,000 s.m

Grade A offices & hotel

No Retail

339m tower

Taihu Plaza CBD

Wholly-owned

2019+

1,043,000 s.m

Retail, Grade A offices &

hotel

Retail 254,000 s.m

452m tower

Prime city center

Wholly-owned

2019

Wuxi IFS Chongqing IFS Suzhou IFS

Total development area, incl. basement area & carpark

* Gross area & net of recognized sales

Changsha IFS

44

Chongqing City Profile

5%

45%

51%

Tertiary Primary

Secondary

1H16 Tertiary Industry +10.7%

50.6% of CQ GDP

China’s Western

Development Strategy

Strong Presence of

International Brands

The World’s Largest

Municipality by Population &

Area

Chongqing

Population 29.9 million

1H16 GDP +10.6%

(National Avg.: +6.7%)

1H16Retail Sales +12.9%

1H16 Disposable

Income per Capita

RMB15,569

+8.8%

45

Changsha City Profile

4%

50%

46%

Tertiary

Primary

Secondary

1H16 Tertiary Industry +11.6%

46.5% of CS GDP

Hub City in Central China

Beneficiary of China’s “Rise

of Central China” Campaign

Important Entertainment

Center in China – Presence

of Hunan Satellite TV

Changsha

Population 7.3 million

1H16 GDP +9.2%

(National Avg.: +6.7%)

1H16 Retail Sales +11.2%

1H16 Disposable

Income per Capita

RMB22,423

+8.6%

46

China Contracted Sales Breakdown by City

Region City No. of Projects

on Sale in 1H16

Contracted

Sales (%)

GFA Sold

(%)

Eastern China Shanghai 5 21% 6%

Suzhou 5 14% 9%

Wuxi 4 9% 16%

Changzhou 3 4% 10%

Ningbo 3 3% 3%

Hangzhou 8 21% 15%

Eastern China Sub-Total: 28 72% 59%

Western China Chengdu 7 6% 12%

Chongqing 4 6% 10%

Western China Sub-Total: 11 12% 22%

Southern China Foshan & Guangzhou 7 4% 8%

Others Beijing 3 4% 3%

Tianjin, Dalian & Wuhan 5 8% 8%

Southern & Others Sub-Total: 15 16% 19% 47

3 New Project Launched in 1H16

Projects City New Launch

Attributable

Proceeds

(RMB’M)

Attributable

GFA Sold

(s.m)

Average Price

(RMB psm)

Yalin Landscape (Public Housing) Beijing Feb 193 9,200 21,100

Longxi Hangzhou Apr 429 16,000 26,800

YalinDong (Public Housing) Beijing May 189 9,000 21,000

48

China Key Projects on Sales in 1H16

Projects City

Attributable

Proceeds

(RMB’M)

Attributable

GFA sold

(s.m)

Average Price

(RMB psm) Ownership

Shanghai Pudong

Huangpujiang Shanghai 2,723 29,800 91,300 100%

Suzhou Times City Suzhou 1,325 43,200 27,800 80%

Qiantang Bright Moon Hangzhou 873 31,300 26,100 50%

Scenery Bay Tianjin 868 33,000 25,500 50%

Bi Xi Wuxi 783 75,700 10,100 100%

Ambassador Villa Suzhou 613 11,200 54,100 100%

The U World Chongqing 519 36,200 13,700 55%

Palazzo Pitti (Lot C) Hangzhou 483 16,100 26,500 100%

Wuxi Times City Wuxi 481 47,200 9,700 100%

Zhoupu Shanghai 479 11,500 41,800 100%

Greentown Zhijiang No.1 Hangzhou 435 22,200 19,400 50%

Longxi Hangzhou 429 16,000 26,800 100%

49

China Land Bank Breakdown by City

Region City GFA million (s.m) % Total

Eastern China Shanghai 0.6 8%

Suzhou 0.9 12%

Wuxi 0.8 11%

Changzhou 0.5 6%

Ningbo 0.1 1%

Hangzhou 0.7 10%

Eastern China Sub-Total: 3.6 48%

Western China Chengdu 1.7 22%

Chongqing 0.7 10%

Western China Sub-Total: 2.4 32%

Southern China Foshan & Guangzhou 0.2 3%

Others Tianjin 0.1 1%

Changsha 0.8 11%

Beijing, Dalian & Wuhan 0.4 5%

Southern & Others Sub-Total: 1.5 20%

Total: 7.5 100% 50

China Key Properties Completion

Projects Attributable GFA (s.m)

Key Completion in 1H16

Suzhou Times City 193,900

Ningbo Park Mansion 103,700

Changzhou Feng Huang Hu 102,000

Wuxi Bi Xi 87,600

Chongqing The Thorne 85,000

Hangzhou Royal Seal 82,000

Projected Key Completion in 2H16

Shanghai Zhoupu 91,300

Chongqing IFS 86,400

Hangzhou Greentown Zhijiang No.1 85,100

Chengdu Le Palais 77,200

Suzhou Bellagio 75,800 51

China New Projects for Sale in 2H16

Projects City Ownership

Hangzhou Binjiang District Site Hangzhou 50%

Jingan Garden Shanghai 55%

The Pearl on the Crown Beijing 25%

Crown Land Beijing 25%

52

Thank You

IP Earnings Anchored 14% Growth in Group Core Profit

53

End of Presentation

The Wharf (Holdings) Limited [HKEx Stock Code: 0004.HK]

Disclaimer

1) 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.

2) The full-year statutory financial information of preceding financial years quoted in this presentation

are derived from statutory annual financial statements for that relevant financial years, each of which

had been delivered to Registrar of Companies in accordance with the prevailing Companies

Ordinance and were reported on by the auditors with relevant auditors’ reports without qualification or

modification.

54

Documents

IP Earnings Anchored 14% Growth in Group Core Profit · Leading Landlord with a Valuable & Resilient IP Profile ... Overview Hong Kong IP China IP & DP Others Next Uniquely Positioned