New World Development

Hello, everyone. Welcome to the meeting of the New World Development and Intermediate Employment Analysts. My name is Patrick. I will be hosting today's meeting. First of all, I would like to introduce the management of today's meeting. First of all, we have Mr. Zheng Zhiguang. He is the Executive Vice President and CEO of the Group, and Mr. Ma Xiucheng is the Executive Director and CEO. Mr. Liu Fuqiang, CFO. If you have any questions, you can ask them on the webcast platform. We will respond to the selection questions. Next, I will hand over to Mr. Zheng Zhiguang. Hello, everyone. First of all, I would like to say a few words about the government's announcement yesterday on the full-scale settlement of the financial and budget case. This is a positive news for the Hong Kong real estate market and for the development of the new world. In addition, the Gold and Gold Administration will expand the relevant regulations of the bill, including the I believe it will attract a lot of real estate investors. For non-residential properties, there is a 60% to 70% increase in the total number of properties. This will be helpful for our private property sales, especially for the sale of properties on LCK Road 888 and Changsha Road. Our contract sales will be 20 to 25 billion Hong Kong dollars. Last year, after some of the government's decisions were made, in the last two months, the amount of payment increased by 20%. Now, the government has announced that it will make a comprehensive decision. We believe that the amount of payment In the next 1-2 weeks or months, it will increase by at least 4-5%. There are a few reasons. First, Hong Kong's local market is in dire need. With the suspension of interest rates, I believe the purchasing power of middle-class families will be released. Secondly, Hong Kong's income tax rate is now over 3%. In addition, the government has now cancelled the purchase of the second set of new housing, which I believe will stimulate investors to invest. Third, about 100,000 high-income people have arrived in Hong Kong. 60% of them are married. These professionals will bring their families to Hong Kong to live in the local real estate market and meet the new demand. We believe that the development of the new world will also control the current market sentiment. In the next six months, we will speed up the launch of 2,500 units, which includes Yellowknife and Kitech. We believe that the launch of these items will bring the company a reasonable cash flow in a short time. What we also want to say is that the HKSAR has made adjustments to the cost of construction. The cost of land has been adjusted from 40% to 50%. This has a positive impact on our project financing. It has provided us with a lot of flexibility. The real estate market in Hong Kong is very optimistic. We believe that the real estate market will gradually stabilize. The price will stabilize and the sales volume will rise. Let's take a look at our mid-term performance in 2024. Although the environment is full of challenges, I have three highlights to share with you. First of all, our overall cognitive ability is very stable. Our core benefits We continue to increase our profits. Our investment business performance continues to improve. Our main engine is K11 products. We are very cautious about our cost. We maintain our cost structure optimization and our profitability. We continue to reduce our debt. We will reduce the debt and maintain the cash flow. At the same time, we will continue to cooperate with long-term cooperating banks. We have $5 billion in debt. can help to increase our cash flow and help us to return our debt this year. At the same time, our non-core asset sales target in 2024 is from 6 billion to 8 billion HKD. We will soon have some positive news to share with you. So we will continue The third point is that we have a very solid foundation for our business and the potential of our business. Looking forward to the future, we will be fully prepared. We will reap the benefits of the fast-growing real estate market. 我们的投资物业组合持续增长,包括凯德的项目,11 Skies和深圳的K11 Ecos。 我们预计到2026年,我们的经常性收入, 將會佔集團核心利潤的50% 增強我們的財務狀況 下面我將時間交給Eric和Edward 跟大家分享我們的業績細節 下面跟大家分享2024財年上半年的業績 大家都知道了 We can see that in the core and tax benefits, we have seen a growth of double digits, although the market is full of challenges. For us this year, it is a very challenging year. The real estate market is very weak. We have seen that we have been affected. The sale and exchange rates have decreased. In the fiscal year of 2024, the revenue dropped by 25% to HK$1.7 billion. The core revenue has risen by 12% to HK$48.6 billion. This is mainly because our investment industry has performed well. The core revenue has reached 29%. The same period of 23 years is 19%. In terms of revenue, our tax revenue has risen by 16% to HK$15.4 billion. 股东应战盈利为5.021, 下跌了13%。 主要是因为我们上半年, 澳龙入账多了, 小数股东是应战盈利上升的, 我们是持有63%的。 我们要注意, These are all non-priced. And the 57-billion deficit has nothing to do with the stock market. We have already disclosed the cash flow. In terms of capital, our operating capital is 20 billion. Compared to the same period last year, it fell by 16%. This is mainly because we have made some internal functions more lucrative. We have improved the structure of the entire company and some business units. We have reduced the cost of ID and operations. Our capital expenditure is HK$750 million. Compared to the same period last year, it fell by 21%. As of 2024, we have used 520 billion HKD. The net debt is 49.9%. If we achieve the latest target of 80 billion HKD, the net debt rate will be reduced by 3.4%. We will share more details with you later. In the mid-term, each share is 0.2 HKD. 我们之前已经说了我们要降低负债率, 我们会跟大家回报。 some of the latest news. First of all, in terms of debt, our government debt rate is relatively stable. In June 2023, the government debt rate was 48.7%. In December 2023, the government debt rate was 49.9%. As I said before, if we can achieve the goal of NCD 80 billion, our net debt rate will drop by 3.4%. In the past six months, the net debt rate has risen for several reasons. First of all, we know that Hong Kong's stock market is relatively weak. Our Hong Kong stock market sales have slowed down. At the same time, 我们都为我们的非核心资产出售谈判争取更好的条款, 所以进度都被推迟。 但是我们的NCD谈判已经进入了最后的阶段, 我们预计未来很快会有消息可以宣布。 还有我们2024财年NCD的全年目标由60亿元, If we can reach the 80 billion NCD sales target, our net debt rate can drop by 3.4%. We have already mentioned that if the debt rate drops by 7%, there will be more long-term news. Our management has confidence that by 2026-2027, the net debt rate can drop by 42%. Next, I would like to share with you the latest situation of our investment industry. As I mentioned before, we have been focusing on real estate development in the past. It is easy to be affected by the current trend in the real estate market. Since 2019, we have been actively expanding our investment industry to increase our regular income. In the past, there have been many unpredictable challenges. The whole journey was not very smooth, but I am very happy to report to you that some of our large-scale investment projects have entered the final stages, including the Eleven Skies in Shenzhen, Keduk Sports Park and K-11 Ecoes. Our capital expenditure has dropped significantly in the first half of this year. These large-scale projects will enter the final stages at the end of this year and will be brought to us We have a lot of income. By 2026, our average income will increase to more than 52% of our total income. Let me share with you the progress of KEDEK athletes. KEDEK athletes will be... The largest gymnasium in Hong Kong can accommodate 50,000 people. It will be completed in 2025. It will also hold some of the 15th National Games in 2025. The gymnasium will have a 70,000 square feet area. It will be completed in the second half of the year. The current rental rate has reached 70%. As Adrian said, the government is now fully established. This will have a very positive impact on Hong Kong's real estate market. We have shared with you a few of the sources we think are needed. Now, for the development of the industry, we have a large number of development projects in China, mainland China and Hong Kong. We will speed up the launch of projects in Hong Kong. In the next six months, we will launch 2,500 units and adjust our pricing and sales policy according to the latest market situation. The North Bay Area is also an important part of the development of Hong Kong's industry. In December last year, China and Hong Kong signed the first North Bay Area Cooperation Agreement. The North Bay Area has an area of 15 million square metres. The signing of this contract can help us to release the value of these agricultural resources. We expect to sign more contracts in the next few months. In this presentation, you can see that our capital expenditure has been falling. In our last conference, we have already mentioned that our strategy is to control capital expenditure. Some of our major companies In Hong Kong, We have a lot of agricultural resources, so that we can use lower prices to replenish our land reserves, and we don't need to pay high prices to bid and buy. In China, we also have a lot of items of reserves, so that we can use lower costs to replenish our land reserves. The entire capital expenditure will be significantly reduced. Next, I will hand over the floor to Edward to talk about the improvement of the budget. In terms of operating expenses, through the control and improvement of the budget, our G&A expenses in the last half of the year were $2 billion. In the last half of the year, it was $2.4 billion. It has dropped by 16%. The sale of non-core assets. As we have mentioned before, this is a very important tool to reduce debt. We have been working hard to negotiate for better conditions. The sale of non-core assets has been delayed. But some discussions and discussions have already entered the final stage. We believe we will soon have news to share with you. At the same time, We will continue to reduce the debt rate and find good non-core assets to sell to recover capital. We will report the latest progress at the right time. Our mid-term stock is 0.2 HKD per share. The market environment is full of challenges. We will be more careful in terms of capital management and will do our best to provide better returns for shareholders. 我们在上次的电话会议 和新创建的出售通行当中 已经提到我们会持续这样减少债务 大家可以看到了 我们有很好的进展 和我们会进一步这样去减少债务 截止到2023年12月底 我们的总债务 is HK$1579 billion. In June 2023, HK$1640 billion was reduced to HK$63 billion. There are 1,579 billion in debt, and 507 billion are short-term debt, and they do not include the future two to five-year cycle bonds. Until December 2023, we have 52 billion in debt. This includes HK$3.9 billion in cash and bank deposits, and HK$1.3 billion in untaxed funds. As I said, our non-core asset sales target is in HK$8 billion. We have repaid $20 billion in bonds and bonds, including $10.2 billion in bonds and $9.9 billion in bonds. We have reimbursed $5.3 billion in bank loans. The average loan cost is HK$100,000 plus 1.1 billion. In terms of capital, we have paid HK$5.1 billion in construction loans. The interest rate is 2.8% to 3.6%. Thank you. Hibor has risen significantly. In the past half of the year, Hibor's net profit was 5.1% higher than that of Hibor in 2024. In the announcement of Hibor's performance in September last year, and in the announcement of Hibor's new stock, we said that we would use Hibor's new stock to repay the bank's loan, and to repay the debt and permanent debt. In December last year, we used the opportunity of the bond market to buy 7 bonds. The gold value of the bonds was US$6.1 billion, which is about 20% of the total value. We made a profit of US$700 million. In late December and early this year, We also did a long-term recovery. In terms of debt recovery, in the first half of the fiscal year of 2024, we raised $6.3 billion in debt, and the total amount of debt and recovery is $110 billion. In the future, we will continue to pay attention to the market. When the opportunity is right, we will return the shares in the form of a long-term acquisition or an appointment to create value for the shareholder. We will continue to travel to the market and share our time with you. Here are the following data. Our IP has been performing well in the last half of the fiscal year in 2024, with a 12% increase in revenue and a 14% increase in distribution. In terms of real estate development, although Hong Kong's revenue and distribution performance in the last six months of 2024 have dropped significantly, the real estate development in mainland China has been very good, leading to a 10% increase in overall real estate development and distribution performance. In terms of Hong Kong's investment and trade, the revenue and distribution revenues are 17% and 19% in comparison. This is mainly due to the reopening of the border and the cancellation of all epidemic prevention measures, the entire retail environment and the rental market of offices have been improved. K11 performance is good. K11 Hong Kong's income and distribution revenues have increased by 21% and 28%. Groups in We have a lot of investment projects coming up next year, including K11 Skies, which is the largest one-stop shopping mall in Hong Kong. Keduck Sports Park will open at the end of this year. It's the largest sports venue in Hong Kong. The rental rate has reached 70%. For mainland China, In terms of investment, in the past six months, the stock market has shown a strong growth of 4.3% in terms of revenue and distribution. With the recovery of the pandemic, K11's distribution in mainland China has seen a 12% increase. The main driving force is the increase in the sales of the business and the increase in the number of customers and the very high rental rates. K11 ECOS in Shenzhen will also start in the second half of this year. In terms of Hong Kong's industrial development, we will launch new projects in the next three years. All of them are in the golden age. We believe that the announcement of a series of measures yesterday will also help the future market. All of our projects are located in the Golden Zone, including the 5-stage yellow bamboo mine and the yellow knife reconstruction project in North Korea. As for China's domestic trade development, E4's contract sales in the first half of last year was 7.6 billion RMB, exceeding the year-round target turnover. The real estate industry in mainland China is recovering. mainly in the Greater Bay Area and the Long Triangle. In these cities, we have a relatively large influence. On January 27, the Guangzhou government has announced a number of policies to ease the restrictions. For us, it is a good thing. The group will also launch a landmark project in Batian Lake, Guangzhou. We are also participating in a series of urban renovation projects. Their advantage is that they don't take up as much money as we do. They can help us to promote the preservation of the land in the core area. There are currently eight urban renovation projects in the New World, all in the core cities of Taiwan, Guangzhou and Shenzhen. I will give the floor to Patrick. Thank you for Eric and Eric's introduction. Next, we will enter the Q&A section. If you have any questions, you can enter them on the webcast platform. We will represent you to ask questions to the management floor. First of all, the first question is about Hong Kong's new project. So yesterday, the government announced that Hong Kong's real estate development is in progress. When will the TPF 3 period be resumed? We welcome the government's decision. For the real estate market in Hong Kong, this is good news. The same goes for the New World. As we all know, the Hong Kong Monetary Authority has also suspended its business interest rates These measures will release buyers and stimulate the market. We also know that the number of non-housing properties increased from 60% to 70%, um um We believe that this will stimulate the share price to rise by four to five percent. We believe that it will release a lot of We also mentioned that in the past, we have mentioned that in the past, we have mentioned that in the past, We believe that the market will be more stable and we believe that the trade volume will rise and the price will be more stable. As I mentioned before, We will continue to discuss this issue with the Hong Kong Railways. We will share any information with you as soon as possible. The next question is about the debt. The debt is now up to 50%. 2022 has reached its peak. In the next 6 to 12 months, what changes will the debt rate make? Will it continue to fall? As I mentioned before, there are several reasons for the debt rate to rise. First, Hong Kong's real estate market is weak. After the announcement of the proposed measures, we believe that it can help us to continue to reduce the debt. And we also want to discuss better conditions with the NCD. Our progress has been delayed, but our discussion with the NCD has entered the final stage. I believe there will soon be good news. 2024年全年的NCD目标是由原本的60亿上调到80亿 我相信也都会帮助我们在负债率方面降低3.4% 之前我都提到了 我们的策略就是持续这样去控制我们的资本支出 现在我们的资本支出 In the past three years, we have already lost $3 billion. In 2024, we have already lost 21% of our capital. In terms of operating expenses, we are also very worried. Our G&A cost was $2.2 billion in the first half of the year. Before that, it was $2.4 billion. So you can see that every year, we have dropped 16% of our operating expenses. Our debt at the end of 2023, is $1,570 billion. This does not include NWS. As I mentioned before, our debt rate will remain stable in the next one to two years. After that, it will fall sharply in 2026. We will continue to lower the debt rate We will share any information with you. Next question. Is the plan to lower the debt rate now consistent? We believe that the plan to lower the debt rate now is competitive. can help us ensure the flexibility of our finance, and can also control the size of our debt. We have optimized capital spending and operating spending. In the past three years, our capital spending has dropped by $300 billion. Our capital expenditure in the first half of 2024 was only $750 million, which was reduced by 21% compared to the same period last year. As for our capital expenditure, we will continue to control it, control the cost, and optimize the cost. We believe that in the first half of this year, our G&A has already dropped by $2 billion, So it has dropped by 16%. We believe that considering the current high-quality environment, our policy policy will be adjusted. As our profits increase, we will also increase our policy. In the last two business meetings, the management said that we have entered the recovery period. But the reality is not like that. When can we get out of the darkest time? In fact, the market in the past is... We see that the demand is declining, the demand is constantly rising, and the RMB is declining. But in general, our profit is very stable, although we have undergone a lot of market pressure. We have maintained the flexibility of our finance. Our business can go from We have mentioned that the government is fully set up. We believe that the real estate market will stay stable. And we expect that the transaction volume will rise and the price will be stable. This will bring stable cash flows to the company. Thank you for your response. Next question. You mentioned that the company won't make any contributions. Is that still the case now? That's right. When we announced our position last year, we said we wouldn't make any contributions. We will maintain this promise. Next question. is about our interest rate. Will our interest rate be adjusted to affect our credit value? For 2024, we actually Our total debt is $1.5 billion. Next question. In Hong Kong, $2.6 billion will be invested in the next half of the year. The entire project includes... Pavilionia, China's $9.8 billion The next question is about our contract sales. New World's contract sales in mainland China will be higher than Hong Kong's. China's domestic market is relatively weak. Will it affect our DP business? How do you see China's domestic market? Um... This is the city's update. The total revenue is relatively small. The total flow area is up to 2 million square metres. The total sales value is estimated to be 800 to 1 billion RMB. These items are all in the core cities of the Bay Area, Guangzhou and Shenzhen. In the past half year, our contract sales So in the past two years, the Chinese government to continue to promote policies to stimulate the demand for economy and housing, including in January, Guangzhou has relaxed some of its shortcomings. This is very good news for us. Within two to three days, our number of visitors has doubled to two to three times. We believe that the Chinese domestic market will have a positive and stable development. This is our point of view. Thank you, Eric. Next question. It's about the projects signed with China. We haven't seen any details yet. Can you share with us the cash flow and other information on this project? This project is still in a very early stage. We will start in 2024. We believe that these joint projects can help us to long-term reduce GFA is 720,000 square feet. The development of the new world in the north will have an area of 15 million square metres. We will sign a memorandum with our partners in the next few months. This is our strategy for the land. We believe we will benefit from it. Next question. Will there be an impact on some of the staff in the projects? Our future projects are actually normal. I can report to you, for example, 我们会在今年年底员工 进度是正常的 我们会在25年开业 15届全文会会在这里举办 在商场区 占地70万呎 will start to open in the second half of this year. Our rental rate has already reached 70%. Another project is K11 Skies, which will start to open in different stages. This includes some Cassandia projects, which will start to open in the middle of 2024. K11 ECOS is a flagship item in mainland China. It will also open in different stages. The first stage is in 2024. This is the same timeline as we expected. The next question is about the bank's balance. Why did it fall from 390 billion to 3,900 billion? Why did it fall from 390 billion to 3,900 billion? Why did it fall from 390 billion to 3,900 billion? We have a credit line of NT$14 billion. For the development of the new world, our interest rate has not decreased. We are still supported by the bank. We have already made $5.3 billion in external assets. Next question. Why did we adjust the target of non-core assets to $80 billion? You can already see some financial data. We have a sales of $800 million. They are not cash. It has no impact on our capital. to use OCI again, so it has no impact on the stock market. IFRS 17 also has an impact on the stock market, so the new rules are only 2.2 billion. We have already disclosed these data in the previous bulletin. This is the content of today's meeting. Thank you for your participation. If you have any questions, please contact our Investor Relations Department. Have a good evening.