Investor Presentation

May 2019

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Company Overview

3

Balanced asset platform of

portfolio businesses and

investments

Leverage on Financial services

expertise

Experience

Network

Capital

Cash flows

Capital Growth

Established in 1969

Long history as owner and operator of market leading financial services businesses

Major shareholder of market leading consumer finance firm UA Finance and substantial shareholder of Everbright Sun Hung Kai

Unique finance + investment model

Seek enhanced returns through our expertise and network

Create new revenue opportunities for the Group

HK$41B total assets

Committed to generate long term capital growth for shareholders

01

02

03

1969 - 2006

2006 – 2015

From 2015

› Stock Broker

› Consumer Finance › Leading independent

WM platform

› Asset platform that combines our heritage, network and financial strength

› Financials as core + global investments

50 Years in Financial Services

53.3

173.8

50.3

84.0

56.2

'12-'14avg

2015 2016 2017 2018

(SHKF Sale)

Focus on Multi-Year Value Accretion

5

6.6

8.1 8.2 9.0

9.5

2014 2015 2016 2017 2018

Avg 63.5

EPS (HK cents) BVPS ($) Annual DPS (HK cents)

HK 26c HK 26c

▼ Investment mark-to-market

▼ Impairment writeback in 2017

▼ Asset quality

▲ Solid HK consumer finance business

▲ HK Mortgage business strong momentum

▲ UA China repositioning positive for long term

Consistent dividend policy

Share repurchase

2018 vs 2017

6

Latest Financial Results

2018 Final Results Highlights (For the year ended 31 Dec, YoY comparisons)

7

HK1,184

Attributable Profit

-35%

HK 56.2c

Basic EPS

-33%

HK 26c

Full Year

No change

HK$9.48

BVPS

+5%

Investment mark-to-market

Increase in BVPS

Focus on multi-year value accretion

Earnings Drivers and Segment Assets (HK$m) (For the year ended 31 Dec 2018, YoY comparisons)

8

› UA Finance (58%) - unsecured lending in HK, China, individual consumers

› Market leader in HK

Consumer Finance 17,277 1,208 -16%

Assets Pre-tax Profit

YoY Change

› Leverage on our know-how and network › Equity, debt and real estate portfolio › Strategic and liquidity management portfolio

Principal Investments 15,216 361 -67%

› EBSHK(30%) – Wealth Mgmt, HK › LSS Leasing (40%) – Car leasing in China

Financial Services 2,568 203 +71%

› SHK Credit - mortgage and home equity loans in HK, home owners and buyers

Mortgage Loans

3,951 114 +226%

› Overhead costs and unallocated finance costs Group Management and Support

1,722 (54)

40,684 1,831 -30% Group Total

-25%

Funded by

$9.48 BVPS (+5%)

Net gearing 52.4%

Healthy cash position

$1b buyback plan completed by 145m shares repurchase

Balance Sheet (HK$m) (For the year ended 31 Dec 2018)

9

4,996 5,974

9,769 9,009

3,854

19,039

2,485

11,155

2,741

3,274 3,806

2,410 2,856

Total Loans 16,108

Consumer Finance Loans

Term Loans (in Principal Inv.)

Mortgage Loans

Cash

Other Investment Assets

Goodwill, Intangibles

Assoc, JV*

Others

Non controlling interest

Others

Shareholders Equity

Long term debt

Short term debt

Assets $40.7B

*Include EBSHK put

Capital Structure and Funding (HK$m)

10

Total Assets and Leverage

2,911

4,996

2017 2018

63% 56%

37% 44%

2017 2018

Total Equity Total Liabilities

37,422 40,684

46.4% 52.4%

2017 2018

3,797 7,183

8,131

7,800

2017 2018Banks and other borrowings Notes

14,983

11,928

Total Cash

Net Gearing

Funding Structure

► Improved balance sheet efficiency

11

Business Segments

Consumer Finance

12

Loan Book

HK$9,770m +7%

Origination

HK$15,297m +14%

Revenue

HK$3,422m +10%

Pre-tax Contribution

HK$1,208m -16%

Cost-to-income

33.5% from 37.0%

Loan Book Breakdown

HK 75%

China 25%

► Solid growth pre-bad debts

► Leaner, scalable China business

5.9%

5.4%

1.1%

0.5%

Dec 17

Dec 18<31 days

31-60

61-90

91-180

>180

7.7%

9.2%

Impairment, Bad Debts and Delinquency

13

Impairment and Bad Debts1 charged to P/L (HK$m)

Ageing analysis for loans past, as % net loans 2

HKFRS 9: • Personal loans 90 days

write off (from 180) • $78m adjustment to

loan book

2018 charge off increased but eased from 1H2018 (8.3%)

2017 $312m write back when charge off dropped from 10% to 6.6%

906

610

793

23

(312)

41

ImpairmentCharge (writeback)Net Charge off

834

929

297

Net charge off__ Avg gross loans % 10.0% 6.6% 7.8%

2016 2017 2018

1Refers to “Net impairment losses on financial instruments in 2018 and “bad and doubtful debts in 2017 2 2017 data exclude impaired amounts; 2018 data include impaired amounts

Consumer Finance – Hong Kong

14

Loan book reached new high

Household brand helping HK for 25 years

Good profitability

Improving O2O platform

2017 2018 18/17

No branches 49 49 -

Gross loans (HK$m) 6,544 7,803 +19%

Loan origination (HK$m) 8,516 10,136 +19%

Origination (by no) 154,048 165,459 +7%

Avg loan balance (HK$) 53,126 59,132 +11%

Return on loans1 32.9% 31.5%

Charge off ratio2 4.8% 4.4%

1Revenue/ avg gross loan balance 2Charge off amount/ avg gross loans

UAF – Mainland China

15

Build leaner, scalable network: • Automated credit scoring system • Online reach continues with own

apps and partnerships • Consolidation of branches

Revised credit approach

• Challenging credit conditions • Tightened approvals

2017 2018 18/17

No branches 85 46 -46%

No. cities 15 15

Gross loans (HK$m) 3,283 2,612 -20%

Loan origination (HK$m) 4,907 5,161 +5%

Origination (by no) 128,744 95,635 -26%

Avg loan balance (HK$) 28,628 34,147 +19%

Return on loans1 36.5% 39.5%

Charge off ratio2 11.0% 16.2% 1Revenue/ avg gross loan balance 2Charge off amount/ avg gross loans

Mortgage Loans

16

Impairment and Bad Debts $3.8m from loan growth. No write off

Focus on margins and efficiency

Loan Book

HK$3,854 +82%

1st amongst non-bank

mortgage providers for new first mortgages

Revenue

HK$250m +101%

Pre-tax Contribution

HK$114m +226%

Cost to income

18.4% from 35.3%

Achieving operating leverage and scale

Prudently increase second mortgages

Financial Services

17

Segment PBT HK$203m (+71%) › 30% owned

› AUM over HK$130b › Debut USD200m 3yr bond

(Baa3) › Domestic and foreign-

integrated platform under Everbright

› Accounting gain HK$134m (2017 $109m)

› 40% owned › Strong shareholders as our

partners › JV formed with Shanghai

Qiang Sheng Taxi

› To focus on opportunities in ride-hailing and goods delivery platforms

Principal Investments

18

5.7% Investment Return*

Public Equity ---------------- (5.7%)

Public Credit----------------- (0.8%)

Private Equity --------------- 10.1%

Private Credit---------------- 13.5%

Real Estate-------------------- 9.8%

*Return on average value

Pre-tax contribution $361m after operation and capital cost allocation 2017: 11.6% return, PBT $1,082m

Public Equity 22%

Public Credit 11%

Private Equity 35%

Private Credit 16%

Real Estate 15%

Segment Assets

HK$15,216m

Public Portfolio

19

Equities Credit

› Market: 2018 first time negative returns in local currency since 2011

› Year end downturn › Net long positions › YTD market reversal

› Defensive strategy and moved up credit curve

› Outperformed market indices › More positive on 2019

22% of PI ($3,406m),

-5.7% return 11% of PI ($1,698m),

-0.8% return

Private Portfolio

20

Credit Equity

› Early positioning in healthcare

and tech › 4Q public market conditions

affected valuation assumptions for some positions

› Started to see liquidity and this will be future focus

› Selectively seek strategic opportunities

35% of PI ($5,286m), 10.1% return

› Structured Finance business › $410m interest income › Average balance similar to 2017 › Impairment and Bad Debts

2.2% vs 2.8% of average assets › Opportunities in specialty credit

in real estate sector

16% of PI ($2,489m), 13.5% return

› HK office performing well › New investment in Finnish

“Build-to-rent” company Parmaco with strong partners

› Opportunities in niche asset classes

15% of PI ($2,338m) 9.8% return

Real Estate

Outlook

21

Steady growth expected for HK Consumer Finance and

Mortgage business

Scale up in China under right conditions

Continue to build out current model

Liquidity and income

stream from PI

YTD investment performance promising

Full year subject to MTM

volatility

Long term on track

22

Appendix

Group Structure

Lee and Lee Trust

HH Mohammed Bin Rashid AI

Maktoum

Allied Group Limited (HK)

(373 HK)

Dubai Ventures LLC CVC Capital Partners SICAV-

FIS S.A.

Allied Properties Limited (HK)

(56 HK)

Sun Hung Kai & Co. Limited (HK)

(86 HK)

ITOCHU Corporation ORIX Aisa Capital

Limited Akihiro Nagahara

United Asia Finance Limited (HK) Sun Hung Kai Credit

Limited

25.09% 7.27%

Consumer Finance Financial Services Principal Investments Mortgage Loans

9.46%

EBSHK LSS Financial Leasing

74.95%

74.99%

58.18%

30% 40%

61.43% 9.79% 8.27%

97.40%

7.77% 92.23%

100% 100%

Contact: Nancy Chen, CFA Head of Investor Relations +852 3748 2823 nancy.chen@shkco.com

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