SUN HUNG KAI & CO. LTD. 2019 ANNUAL RESULTS SUN HUNG … · Loan Book Metrics Loan Origination 6,080 7,613-20% No. of Loan origination 117,331 129,558-9% Net Loans 9,440 10,068-6%

Endure. Adapt. Excel

IR | Announcement | 1H2020

SUN HUNG KAI & CO. LTD.2019 ANNUAL RESULTS

ENDURE. ADAPT. EXCEL

March 2020SUN HUNG KAI & CO. LTD.

2020 INTERIM RESULTS

ENDURE. ADAPT. EXCEL

August 2020

Important - Disclaimer

2

The material in this Presentation has been prepared by Sun Hung Kai & Co (“the Company”) and its affiliated companies(referred to as the “Group”).

By attending or viewing this Presentation you are agreeing to be bound by the terms and restrictions set out below. Youmust not re-distribute, reproduce, edit or publish this Presentation in whole or in part whether in Hong Kong or otherwisewithout prior consent of the Company.

This Presentation is not an offer or invitation to purchase, subscribe, sell or dispose of any interest or securities in theCompany or the Group.

It is not intended that this Presentation be an exhaustive analysis of the Group’s financial or trading position or prospects.This Presentation may not contain all the information which you may consider material. The information and the opinionscontained in this Presentation are provided as at the date of this Presentation and may change without notice to you.Under no circumstances is any Group member or any of their directors, officers, employees and representatives liable forany direct, indirect or consequential loss or damage, howsoever caused (including in negligence or otherwise), that you orany other party may sustain from any use of the information in this Presentation or otherwise in connection with thisPresentation. The Group’s past performance is not necessarily indicative of its future performance. This Presentationalso contains certain forward-looking statements regarding the Group’s opinions of and expectation of the future. Thesestatements are neither necessarily indicative of the Group’s future performance nor are they guarantees of futureperformance. Forward looking statements, by their nature, are based on assumptions and factors that may be beyond thecontrol of the Group. As such, actual future performance and results may materially and adversely differ from thoseexpressed or implied in this Presentation. The Group assumes no obligation to update or correct any forward-lookingstatement. The Group has not adopted any forward-looking statements made by third parties and as such the Group willnot be responsible for third party statements.


3

Presenters:

Mr. Robert Quinlivan (Group Chief Financial Officer)

Ms. Elsy Li (Group Treasurer and Head of Corporate Development)

Mr. Joseph Fuqua (Director, Investor Relations)


Company Overview

4

Stable, Growing Returns

+

Relationships & Access

Expertise & Innovation

Capital Governance

Our Approach

Asset Growth

Distributions

+

+

Leveragefinancial services heritage

Strategically balanced financing and investing business

Established in 1969 - market leading financial services businesses

>

Listed in 1983 on Stock Exchange of Hong Kong

Strategic transformation into investment management since 2015

Focused on growth through financing and investing


>

>

>

5

50 Years of Excellence in Financial Markets

HK$43B total assetsCommitted to generating long term capital growth for shareholders

01

• Brokerage Business

• Listed in HK in 1983

• Pioneer licensed underwriter of B-shares

• Allied Properties acquired majority stake in 1996

1969 - 2006

02

• Consumer Finance market leader

• Entered China in 2007

• Leading independent Broker and Wealth Manager

2006 – 2015

03

• Core Consumer Financebusiness

• Developed Mortgage business

• Built Investing platform that leveraged our strengths

2015 - 2020

04

• Create sustainable growth through:

• Financing

• Investing

From 2020

For the period ended 30 June 2020.

Values rounded for simplicity of presentation. Numbers may not foot due to rounding.


6

Our Business

CONSUMER FINANCE

40.3%

HK Market Leader, Significant Market Presence in the PRC

MORTAGE LOANS

7.6%SPECIALTY FINANCE

3.1%

INVESTMENT MANAGEMENT

32.8%

• Diversified portfolio of equity,credit and real assets, both public and private

• Extension to Fund Management

GMS

10.1%

Liquidity Reserves, Group Services and Unallocated Finance Costs

6.1%STRATEGIC INVESTMENTSWealth Management & Car Financing


For the period ended 30 June 2020.Values rounded for simplicity of presentation. Numbers may not foot due to rounding.

2020 Interim Results

7

2020 Interim Results Highlights

8

Attributable Profit

HK$695.2m

-32%

Basic EPS

HK 34.9c

-32%

InterimDividend

HK 12c

No change

BVPS

HK$10.4

+6%

All business remain profitable through COVID pandemic

Increased BVPS, solid profits

Strong liquidity, well positioned for opportunities

For the period ended 30 June 2020, YoY comparisonsValues rounded for simplicity of presentation. Numbers may not foot due to rounding.


Track Record of Performance

9

9.0 9.5

10.2

10.4

2017 2018 2019 20201H

9.7% 6.2%10.6%

6.8%

2017 2018 2019 20201H

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

1H

Buybacks

Dividends

673718

553570

84.0 56.2

104.4

69.8

2017 2018 2019 20201H

▲ Focus on sustainable growth

▲ Long track record of consistent dividends

▲ Solid performance in all market conditions

▲ Continue to improve capital efficiency

▲ Disciplined risk management

Financing and investing platform that combines our heritage, network and financial strengths

EPS (HK cents) BVPS (HKD)ROE (%) DISTRIBUTION (HKD Million)

For the period ended 30 June, YoY comparisons Values rounded for simplicity of presentation. Numbers may not foot due to rounding.


annualized annualized

220

461

4,038

467535

738 743 763

1,191

306

Six month

HK$12B returned to

shareholders through distributions and share buybacks since 2007

Earnings Drivers and Segment Assets

10

Assets(% of total)

ConsolidatedPre-tax Profit

YoYChange

17,283.140.3%

520.0 -20%

1,341.73.1%

28.8 -63%

3,267.77.6%

65.5 -4%

14,058.132.8%

365.9 -26%

2,613.86.1%

63.9 -38%

4,318.610.1%

(93.6) N/A

42,883.0 950.5 -32%

Consumer Finance

Specialty Finance

MortgageLoans

Investment Management

StrategicInvestments

Group Managementand Support

• Strong business in HK • Mainland China – consolidated branches and moving online• UAF stake increased to 63%

• Formerly Private Credit• Lower balance on cautious outlook• Increased impairment provisions

• Established market position • Good operating leverage• Focus on loan quality

• Impacted by market volatility but achieved overall six-month return of 4.4%

• Building fund management platform• Strong liquidity profile for PE portfolio

• EBSHK steady performance• LSS Leasing - growing presence as ride hailing service

provider

• Liquidity reserves, Group services and unallocated finance costs

Group Total

(HK$ million)

Values rounded for simplicity of presentation. For the period ended 30 June 2020, YoY comparisons


Balance Sheet

11

HK$10.4 BVPS (+6% )

Cash Reserves: HK$7.5 billion

Interest cover 3.2x

HK$26.4m share buyback completed during the year

>

>

>

>

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For the perird ended 30 June 2020YoY comparisonsNumbers in HK$m unless otherwise specifiedNote: not all Term Loans are held by Specialty Finance


7,518 8,103

9,440 8,618

3,134

20,646

1,383

2,942

15,794

2,574

3,276

2,338

Funded by

Total Loans13,957

Consumer Finance Loans

Term Loans

Mortgage Loans

Cash

Investment Assets

Goodwill, Intangibles

Others

Non controlling interest

Others

Shareholders Equity

Long term debt

Short term debt

Assets HK$42.9B

Strong cash position provides us with comfortable liquidity during the volatile market conditions

(HK$ million)

Capital Structure and Funding

12

Total Asset

Total Liabilities

Net Gearing Ratio

Interest Cover

Funding Structure

HK$16,721m -0.2%

Bank and Other Borrowings

HK$8,506m +4.3%

Notes and Paper

HK$8,215m -4.5%

Conservative Capital Structure and Funding

Strong Cash Position

Well Positioned for Opportunities

+

HK$43B +1%

HK$19B +2%

44.6% from 54.1%

3.2x -29%

For the period ended 30 June 2020, YTD comparisonsValues rounded for simplicity of presentation. Numbers may not foot due to rounding.


Business Review

13

Financing Business

2020 First Half Summary

Consumer Finance - UAF

14

Net Loan Balance

HK$9,440m -6%

Origination

HK$6,080m -20%

Loan Book Breakdown^

China

19%

HK

81%

Revenue

HK$1,624m -4%

Pre-tax Contribution

HK$520m -20%

Net Impairment Losses Ratio^

8.3% from 7.1%

• Resilient Hong Kong Business

• Continued to optimize Mainland China business

• Shifting more loan origination online

• Exploring online business collaborations in Mainland China market

>

For the period ended 30 June 2020, YoY comparisonsValues rounded for simplicity of presentation. Numbers may not foot due to rounding.

^as of gross loan balance as at 30 June 2020.


^annualised

Increase in the weight of HK business: led to lowered return on loans but also lowered net impairment losses

Better cost to income ratio from Mainland China branch consolidation

Increase in finance costs from higher borrowings to support an increase in average loan balances in Hong Kong

Increased net impairment losses ratio due to COVID-19 impact and delayed impact from HK social unrest.

Consumer Finance - UAF

15

1H 2020 Results: -20% Pre-tax Profit

Ageing analysis for loans past due (amount as % net loans)


(HK$m) 1H 2020 1H 2019 Change

Revenue 1,624 1,695 -4%

Operating Costs (499) (539) -7%

Net Impairment Loss (441) (373) +18%

Finance Costs (171) (146) +17%

Pre-tax Profit 520 652 -20%

Operating Metrics

Return on Loans1 30.5% 32.1%

Charge-off Ratio2 8.7% 7.2%

Net Impairment Losses Ratio3 8.3% 7.1%

Impairment Allowance Ratio4 6.7% 6.0%

Cost to Income 30.7% 31.8%

Pre-tax Profit/Net Loans (annualised) 11.0% 13.0%

Loan Book Metrics

Loan Origination 6,080 7,613 -20%

No. of Loan origination 117,331 129,558 -9%

Net Loans 9,440 10,068 -6%

HK/ China Breakdown5 81%/19% 78%/22%

1 Annualised Interest and fee income / average gross loan balance2 Annualised charge-off/average gross loan balance3 Annualised net impairment losses/ average gross loan balance4 Impairment allowance at period end/gross loan balance at period end5 Based on gross loan balance

For the period ended 30 June, YoY comparisonsValues rounded for simplicity of presentation. Numbers may not foot due to rounding.

5.6%

5.7%

0.5%

0.4%

0.2%

0.3%

1.4%

1.6%

0.6%

2.2%

Dec '19

Jun '20

<31 days 31-60 days 61-90 days

91-180 days >180 days

Total: 8.3%

Total: 10.2%

UAF – Hong Kong

16

Maintain operational scale and market leading position

Net impairment losses and other annualised ratios increased as a result of COVID-19 outbreak and delayed impact from HK social unrest

Continue to develop Fintech offerings:

• Revamped “Yes UA” mobile App with more advanced features

• Launch pioneer “One-Click-to-Loan” service for efficient loan application, processing and drawdown

• Drawdown in real time with “Faster Payment System”

>

>

>

20201H 20191H

No. of Branches 48 49

Gross Loans1 (HK$m) 8,191 8,329

Loan Origination (HK$m) 4,704 5,664

Origination (by no.) 89,239 100,434

Average Gross Balance per Loan (HK$) 59,342 60,247





1 Before impairment allowance2 Annualised interest and fee income/ average gross loan balance3 Annualised charge-off / average gross loan balance4 Annualised net impairment losses/ average gross loan balance5 Impairment allowance at period end/gross loan balance at period end

For the year ended 30 June, YoY comparisonsValues rounded for simplicity of presentation. Numbers may not foot due to rounding.


UAF – Mainland China

17

Build leaner, more scalable network:

• Moderate branch consolidation• Moving more business online• Exploring business cooperation with

other online platform to increase exposure to mass-market customers

Business was affected by COVID-19 outbreak:• Annualised net impairment losses ratio

and charge-off ratio increased• Loan book continued to drop to 19% of

UAF’s total loan size• Business is gradually picked up• Adopt cautious credit approach


For the period ended 30 June, YoY comparisonsValues rounded for simplicity of presentation. Numbers may not foot due to rounding.

>

>

1H 2020 1H 2019

No. of Branches 28 31

No. of Cities 15 15

Gross Loans1 (HK$m) 1,932 2,376

Loan Origination (HK$m) 1,377 1,949

Origination (by No.) 28,092 29,124

Avg Gross Balance per Loan (RMB) 32,345 40,076





1 Before impairment losses2 Annualised interest and fee income / average gross loan balance3 Annualised charge-off amount. / average gross loan balance4 Annualised net impairment losses / average gross loan balance5 Impairment allowance at period end/gross loan balance at period end

Specialty Finance

18


Net Impairment Losses

Net Loan Balance^

1H 2020 RecapTailor made funding solutions for corporates, investment funds and high net worth individuals

• Maintained stable return on loans of 14.2%.

• Increased impairment allowance at period end.

>

• 62% of loan book was from Greater China market.

• Almost all loans secured by collateral or with guarantees.

>

Loan balance lower YOY from repayments and cautious outlook.

>

Opportunities rise for non-bank lenders from banks scaling back lending business.

>

HK$29m -63%

HK$64m +43%

HK$1,256m -47%

62%16%

13%

8%Australia

Term Loans by Geography

Global

Greater China

78%

14%

8%

Term Loans by Sector

Propertydevelopment

Logistics

Investments

Portfolio Breakdown

For the year ended at 30 June 2020, YoY comparison



^specialty finance loans only

Asia

UK 1%

Mortgage Loans

19

1H 2020 RecapMortgage loans in Hong Kong with low LTV, predominantly for first mortgages

• Achieving operating leverage and scale

• Higher average loan yield on its portfolio

• Extended fewer lower-margin loans

• Healthy LTV ratio

>

Credit quality remained strong:• No actual credit losses• Increased net

impairment losses due to expected credit loss from decrease of property value

>• Increased revenue

due to increased average loan yield

• Declined finance cost due to less borrowings

• Improved cost efficiency

>

• Investment in infrastructure and people

• Focus on margins and efficiency

• Cautious outlook

>

Net Loan Balance

HK$3,134.1m -13%

Average Loan Size

HK$6.2m

<65% Loan to Valuation

94% First Mortgage Loans

Revenue

HK$169.3m +13%


HK$65.5m -4%

Cost to income

12.3% from 13.5%

Net Impairment Losses

HK$24.1m from HK$0.1m

For the year ended 30 June 2020, YoY comparisonsValues rounded for simplicity of presentation. Numbers may not foot due to rounding.


Business Review

20

Investing Business

Investment Management

21

Pre-tax Profit Analysis 1H 2020 1H 2019 Change

Net gain on financial assets and liabilities and interest income

606.4 734.7 -17%

Dividends received 16.5 8.8 +88%

Rental income 12.5 11.6 +8%

Net Impairment allowance reversal/(losses) on financial instruments

42.7 (42.0) N/A

Net exchange (loss)/gain (0.2) 19.4 N/A

Share of results of associates & joint venture1 3.8 - N/A

Other (loss)/income (92.0) 9.0 N/A

Total gains 589.7 741.5 -20%

Operating costs2 (223.8) (246.8) -9%

Pre-tax profit 365.9 494.7 -26%

1 Exclude Sun Hung Kai Financial Group Limited2 Net of cost of capital and finance cost

4.4% six-month return

Total gains of HK$590m

Private Equity portfolio returned record high distributions and rebalanced Hedge Fund portfolio had strong returns

Real Assets portfolio was marked down

Segment Assets^HK$14,058m

Public Markets

27%

Alternatives

56%

Real Assets

17%(HK$ million)

>

>

>

>

>

For the year ended 30 June 2020, YoY comparisons



^Based on period-end value

COVID pandemic created difficult market conditions, but public markets equity and credit portfolios performed well

Moving forward with transition into Funds Management under leadership of Lindsay Wright

Investment Assets and Return

22

1H 2020 2019 2018

(HK$ Million)Period

End Value

Period Average

Value

Gain/(Loss)

Six-month Return^

Year End Value

Annual Return^

Year End Value

Annual Return^

Public Markets 3,814.4 3,522.3 (245.6) -7.0% 3,106.2 15.0% 3,620.2 -8.6%

Alternatives 7,796.3 7,336.3 862.3 11.8% 7,481.0 17.1% 6,439.9 9.2%

Real Assets 2,447.4 2,483.5 (27.0) -1.1% 2,542.5 -3.9% 2,338.0 9.8%

14,058.1 13,342.1 589.7 4.4% 13,129.7 12.4% 12,398.1 4.1%

^Gain/(Loss) before cost of capital / Average Value

For the period ended 30 June 2020 , and for the year ended 31 December 2019 and 31 December 2018.Values rounded for simplicity of presentation. Numbers may not foot due to rounding.


Public Markets

Confidential | Your footer goes here 23

1 Certain assets have been reclassified to Corporate holdings & Cash to give a more accurate representation of the performance of the portfolio^ Gain/(loss) before cost of capital / average value for the periodFor the year through 30 June 2020Values rounded for simplicity of presentation. Numbers may not foot due to rounding.

• Spin out equity APAC Long/short team to new asset management company

• Transfer existing SHK & Co. investments into seed capital in return for revenue share

• Raise 3rd party capital to expand asset base, manage risk, and generate new income streams

• Continue to leverage Company balance sheet and networks for best opportunities

Going Forward: Transition to Fund Management

PortfolioBreakdown

Corporate Holdings & Cash

45%

-0.1% return

Credit

27%

3.5% return

Equity

28%

Total Value: HK$3,814.4 million

27% of Investment Management

-7.0% return (loss of HK$245.6 million)

• Consists of internal actively managed equity and credit strategies, as well as corporate holdings and cash.

• Difficult start to the year due to COVID but equity and credit rebounded well

• Corporate Holdings includes strategic investments and instruments for hedging of foreign exchange and private equity positions among others, some of which incurred mark-to-market losses in 1H 2020

(HK$ Million)Period End

Value Gain/(Loss)

Six-monthReturn^

Equity1 1,072.6 32.2 3.5%

Credit1 1,011.1 (0.9) -0.1%

Corporate Holdings & Cash 1,730.7 (276.9) N/A

Total 3,814.4 (245.6) -7.0%

24

30% 26% 16% 8% 6%

6% 5%

4%

Consumer Healthcare Financials

Comm. Service Industrials Info. Tech.

Others Real Estate

Markets

Sector

• Actively managed APAC-focused long/short portfolio

• Performance was impacted by the COVID-19 pandemic but rebounded to positive returns

• Long positions recovered better than the broader market while short positions added the Alpha in the downturn

• Outperformed the MSCI Asia Pacific Index

• Significant cash position provides liquidity

Equity Portfolio Breakdown



For the period ended 30 June 2020

Equity Credit

32% 27% 24% 13%

2% 2%

EU Greater China Mid East UK USA Others

61% 17% 16%

7%

Financials Public Admin. Real Estate and Leasing Construction

Credit Portfolio Breakdown

• Actively managed long-biased globally diversified portfolio

• Portfolio performance was impacted by the COVID-19 pandemic but rebounded to recover almost all losses

• Strategy focuses on defensive credit names and showed resilience during the crisis

• Significant investment in high-quality Middle East sovereign bonds became very profitable trades with oil recovery

• Currently risk-off due to expected continuous uncertainty

72% 12% 8%

5% 2%1%

Greater China ANZ Japan USA Others EU

Alternatives


For the year through 30 June 2020


• Seek to enhance portfolio returns through selective equity investment into companies with strong business models operating teams and operational plans

• Periodically review and optimize portfolio• Continue to leverage Company balance sheet

and networks for best opportunities

Going Forward: Continue to Invest in Quality

PortfolioBreakdown



11.8% return (gain of HK$862.3 million)

• Consists of externally managed private equity and hedge funds, as well as private equity investments in direct and co-investments.

• Received total of HK$1,298 million in distributions in the first half

• Continued to deploy to new and existing managers with a total of HK$868m new capital allocated in the first half

• Private equity funds held value (flat year to date), while direct and co-investments performed well (19.1% return year to date)

• Hedge Fund portfolio was rebalanced during the period and has returned 11.2% year to date

2016 2017 2018 2019 Jun-20

Distribution 129.3 59.0 359.1 745.8 1,298.3

Direct Investment (17.0) (405.0) (261.6) (82.7) (5.0)

Contribution - New Fund (27.6) (30.4) (326.1) (384.5) (289.7)

Contribution - Existing Fund (133.1) (142.1) (263.3) (123.8) (578.2)

Net (48.4) (518.5) (491.9) 154.8 425.4

19.1% return

Direct and Co-investments

51%

0.0% return

External PE Funds

31%

11.2% return

External Hedge Funds

18%

Track record of portfolio gain or loss

Alternatives – Returns and Portfolio Construction

26


For the period ended 30 June 2019

Markets

Sectors

External PE Funds and Direct/Co-investment Exposure

40% 32% 15% 6%

3% 2%

2%

China Global Americas Asia SEA Australia UK

35% 34% 14% 14% 3%

Healthcare Technology Financials Diversified Consumer

66% 14% 12%

4%

3%

APAC L/S US L/S Global L/S EU L/S Others

External Hedge Funds

73% 16% 9% 2%

Global China Asia USA

(HK$ million) 30 Jun 2019 Value Gain Six-month Return^

External Hedge Funds 1,422.2 132.5 11.2%

External Private Equity Funds 2,375.0 1.1 0.0%

Direct and Co-investment 3,999.1 728.7 19.1%

Total 7,796.3 862.3 11.8%

^Gain before cost of capital / Average Value


Real Assets

27

For the year ended 30 June 2020


• Commercial and hospitality properties in Hong Kong, the UK and Europe

• Leverage the strength of our business network and group companies

• Equity ownership of real estate and co-investments• Increased impairment allowance for property valuation




-1.1% return (loss of HK$27.0 million)

MarketsHong Kong – 51% Europe – 35%UK – 15%

SectorsCommercialHospitalityDirect Lending

Key investmentsAdmiralty Centre, Hong KongParmaco, FinlandQueensgate, London17 Columbus Courtyard, London

• Whole loan and mezzanine lending to real estate developers secured by real assets

• Geography: Hong Kong, China, Australia, New Zealand, UK, Ireland, Korea, Singapore

• Utilize the company network and expertise in lending• Expect to launch in 2020

Going Forward: Expand in to Fund ManagementMarkets

Sectors59% 30% 8%3%

Office Hotel Education Residential

51% 34% 15%

Hong Kong European Union United Kingdom

Strategic Investments

28

• 40% owned• B2B and B2C auto leasing• Expanded into the ride-hailing

and goods delivery segments

Joint Venture

• Stegthen partnership with Lalamove

• Formed cooperation with other online hailing and logistic platform

• 30% owned• AUM over HK$120 billion• Solid performance in the period

Associate

• Total equity interest + put right HK$2,340m at year end, 5.5% of the Group’s asset

Pre-tax Profit

HK$64m (-38%)

Assets

HK$2,614m (-1%)

Joint Venture

Joint Venture

For the year ended 30 June 2020



Funds Management Initiative

IR | Announcement | 1H2020 29

The Team

ManagementLindsay Wright, (Strategy & Management)CEO, Funds Management

James Dore (Operations)COO, Funds Management

Joseph Fuqua (Marketing & IR)Director, Head of Investor Relations

Target: Launch multiple funds by end of 2020

APAC Alpha Offshore Fund (Equity)

Global Unconstrained Credit Fund (Credit)

Real Estate Direct Lending Fund

Administrators: MorganStanley and AlterDomus

Prime Brokers: MorganStanley, Goldman Sachs, Nomura, Credit Suisse

Systems: Enfusion

Auditor: Ernst & Young

Legal counsel: DLAPiper

Compliance advisor: ComplianceAsia

The Network

Goal: Build on existing investment networks to expand asset base, raise 3rd party capital, manage risk and generate new revenue streams

Initial focus: Transition existing capabilities in public equities (APAC long/short) and real estate direct lending into funds that can take external capital

• Operating internally for 3+ years• Spin out into new asset

management company and transfer existing SHK & Co. investments into seed capital in return for revenue share

• Create vehicle to allow 3rd party investors into deals

• Additional revenue stream• Build larger platform for real

estate lending, equity investment and merchant banking activities

Public Equity (APAC L/S)Transition of Team and Capital

Real Estate Direct LendingTransition to Fund Structure

Subsequent focus: identify and partner with strong teams and/or existing investment firms specializing in actively-managed investment strategies

This multi-boutique approach provides access to the capital and network resources of SHK & Co. while preserving investment and operational independence

In advanced discussions with several teams/managers, including a hedge fund (quantitative) and venture capital (healthcare oriented)

Corporate Risk Management


• Comprehensive risk management framework

• The Board reviews and updates policies and procedures

• Risk Committee oversees risk management

• Internal control and internal audit

• Risk identification

• Principal risks

• Emerging risks

• Risk control

• Risk movement review

• Strong compliance culture

• Consistent training and assessment

• Licensed entities in Hong Kong

• Additional 3rd party compliance consultants

• Strategic and business risks

• Financial risks (market, credit and liquidity risks)

• Operational risks

• COVID-19 coronavirus

• Sino-US trade war

Framework Structure Compliance Principal Risks Emerging Risks

RISK MANAGEMENT

PRINCIPLEOur risk management framework is designed to enable us to achieve strong financial performance and deliver our strategy within the Group’s risk appetite, stringent framework and compliance regime

Business Outlook


• Operations impacted, but business is resilient.

• Risk to credit quality as a result of delayed impact from social unrest, the outbreak of COVID-19 and Sino-US tensions.

• Mortgage lending stable through cautious underwriting and careful credit standards.

• Unprecedented market volatility in Q1 2020.

• Adjusted our investment activities and adapted to the continually changing environment.

• Planning to expand into third party fund management in 2020.

• Continue to assess market and utiliseour extensive networks to seek out opportunities.

• Management closely monitoring situation and adjust strategy and tactics as needed.

• Maintain funding and liquidity

• Strong governance and risk control.

• Further develop our systems work safely and productively through remote working and other backups.

Financing Business

Investing Business

Corporate


The images in the presentation feature team Sun Hung Kai Scallywag, Hong Kong’s professional off-shore sailing team. The team competed on behalf of Hong Kong in the renowned Volvo Ocean Race 17-18, one of the toughest sailing challenges in the world. The team spent more than eight months sailing over 45,000 nautical miles across four oceans.

The origin of the team is Scallywag, a 100-foot super maxi race yacht sponsored by the Company. Just as Sun Hung Kai & Co today has transformed itself into an all-weather investment partner, the yacht has undergone a renewal under the Company’s sponsorship. The spirit of the vessel and its crew echo the Company’s own-Endure. Adapt. Excel.

Mr. Joseph Fuqua

Investor Relations Director

+852 3748 2888

[email protected]

INVESTORRELATIONSCONTACT

Follow the team on

www.scallywaghk.com

ScallywagHK

Weibo WeChat

Scallywag船队

Weibo WeChat

新鸿基有限公司

Follow us on

www.shkco.com

Sun Hung Kai & Co.

http://www.scallywaghk.com/

http://www.shkco.com/

SUN HUNG KAI & CO. LTD. 2019 ANNUAL RESULTS SUN HUNG … · Loan Book Metrics Loan Origination 6,080 7,613-20% No. of Loan origination 117,331 129,558-9% Net Loans 9,440 10,068-6%

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