Swire Pacific Evaluation
Swire Pacific (SEHK: 0019)
29 August 2012, Keiann Yeung
Business Description
Swire Pacific is a Hong Kong-based conglomerate with key operations in property and aviation. Other divisions include marine services, beverages, trading and industrials. Property accounts for more than 60% of its Enterprise Value and operating profit. Other key holdings include 44% of Cathay Pacific. The UK-based founding family John Swire & Sons owns 42% economic interest and 58% voting rights in the company.
Key Competitors
• • The Wharf Holdings Cheug Kong (Holdings) Limited
Properties (listed in SEHK as Swire Properties, SEHK.01972)
Hong Kong Portfolio Key Holdings: Island East, Pacific Place, Citygate Outlets PRC Portfolio Key Holdings: Taikoo Hui (Guangzhou), Sanlitun Village (Beijing) and INDIGO (Beijing) Overseas/Hotels Portfolio Swire Properties is very active in United Kingdom and United States, and has a total 16 overseas investments. Underlying profit from Property Division was HK$12,673 million, a 164% increase over 2010. Excluding non-recurring items, e.g. the disposal of Festival Walk, the underlying profit of Property Division was HK$4,113 million, a disappointing increase of 6% over 2010 (The Wharf Holdings has an 18% increase over 2010). • Disposal of Festival Walk – Festival was jointly developed by Swire Pacific and CITIC in 1998, then fully owned by Swire Pacific in 2006. In July 2011, Singapore co-operation Mapletree Investments acquired Festival Walk at a price HK $18.8 billion, incurring a profit of HK $8,615 million to Swire Pacific. • Buoyant Office Rental Market – Hong Kong office rental market demonstrates a strong growth, and it can be reflected in the high rental price. Pacific Place is virtually fully let in 2011. The overall gross rental income increased 9% from 2010. Analysts projected the
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average price psf of grade A office will be up over 20% from August 2010, office rental outlook remains positive for 2012. Decline in
29 August 2012, Keiann Yeung
Business Description
Swire Pacific is a Hong Kong-based conglomerate with key operations in property and aviation. Other divisions include marine services, beverages, trading and industrials. Property accounts for more than 60% of its Enterprise Value and operating profit. Other key holdings include 44% of Cathay Pacific. The UK-based founding family John Swire & Sons owns 42% economic interest and 58% voting rights in the company.
Key Competitors
• • The Wharf Holdings Cheug Kong (Holdings) Limited
Properties (listed in SEHK as Swire Properties, SEHK.01972)
Hong Kong Portfolio Key Holdings: Island East, Pacific Place, Citygate Outlets PRC Portfolio Key Holdings: Taikoo Hui (Guangzhou), Sanlitun Village (Beijing) and INDIGO (Beijing) Overseas/Hotels Portfolio Swire Properties is very active in United Kingdom and United States, and has a total 16 overseas investments. Underlying profit from Property Division was HK$12,673 million, a 164% increase over 2010. Excluding non-recurring items, e.g. the disposal of Festival Walk, the underlying profit of Property Division was HK$4,113 million, a disappointing increase of 6% over 2010 (The Wharf Holdings has an 18% increase over 2010). • Disposal of Festival Walk – Festival was jointly developed by Swire Pacific and CITIC in 1998, then fully owned by Swire Pacific in 2006. In July 2011, Singapore co-operation Mapletree Investments acquired Festival Walk at a price HK $18.8 billion, incurring a profit of HK $8,615 million to Swire Pacific. • Buoyant Office Rental Market – Hong Kong office rental market demonstrates a strong growth, and it can be reflected in the high rental price. Pacific Place is virtually fully let in 2011. The overall gross rental income increased 9% from 2010. Analysts projected the
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average price psf of grade A office will be up over 20% from August 2010, office rental outlook remains positive for 2012. Decline in