SHKP Profile

Sun Hung Kai Properties Limited ("Sun Hung Kai Properties") was founded in 1969 by the elder Kwok, together with Fung King-hei and Lee Shau Kee, and was listed on the Hong Kong Stock Exchange in 1972 and is now one of the largest property companies in Hong Kong. It specializes in premium-quality residential and commercial projects for sale and investment.

SHKP Company Structure

Land Policy

BUSINESS Business Model

Conceptual Model

Revenue Model

Financial Strategy

Sun Hung Kai’s land policy remains a high level in Hong Kong property market which lay the base for long-term development.

Good and accurate market positioning strategy.

Revenue model combining rent revenue with new building sales.

Safe financial strategy, low debt ratios, stable liability structure

Land Reserve

Land Reserve

10.6

3.8

37.9

developing property for sales

developing rental property

developed rental property

The land reserve in HK of 2010 is 42.3 million square feet, enough for at least five years’development. The land Reserve in mainland is Two times that of HK.

Land reserve in Hong Kong remain stable while that in mainland grow rapidly

Land Reserve

These two period laid the strong base for SHKP and helpit accomplishing the accumulation of land capital

Affected by the oil crisis, Hong KongEconomy was in downturn. However,SHKP keep storing land and succeeded In developing Tsuen Wan and Shatin Town Centre

With the agreement of return of Hong Kong was signed, Hong Kongersbecame lack of confidence in the future economy. Property market is poor. SHKP again didn’t give up storingland and developed Sha Tin New Town Plaza

19841973-75

Conceptual Model

APM YOHO

advantage

Concept

advantage

Slogan: Play more, Sleep lessTarget consumers: Young people and middle classDifferential market: prolonged businesshour, evening consumption.

Concept

Fashion Taste Taking a long-term and international view, technology-Oriented, taste.

Concept Promotion for YOHO: YOHO people

Joy of LivingTarget consumers: Young

white collars. Promotion method: co-

operate with MSN and Starbucks.

Revenue Model

Land Reserve

10.6

3.8

37.9

developing property for sales

developing rental property

developed rental property

The land reserve in HK of 2010 is 42.3 million square feet, enough for at least five years’development. The land Reserve in mainland is Two times that of HK.

Revenue Model

Comparing the sales revenue and rental revenue between 2000 and 2005, the previous average figure is 4 .02 billion HKD slightly smaller than the

latter figure which is 4.12 billion HKD

Rental revenue is less volatile then sales revenue

History reason: After the property bubble burst in 1998, the rental revenue only dropped by 5 per cent while the sales revenue plunged by 45 per cent.

Financial Innovation: With the launching of REIT in Hong Kong stock market, reduce the rental business risk and strengthen this sector to develop.

4 Financial Strategy

Comparative low net debt-equity ratio

Help reduce the risk of refinance and enhance the demand elasticity of financing.

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