Financial Performance - For the six months ended June 30, 2023, the company's revenue decreased by 9.3% year-on-year to HKD 1,611 million[4]. - The company's recurring basic profit fell by 12.2% year-on-year to HKD 1,026 million[4]. - The basic profit attributable to shareholders was HKD 1,026 million, down 16.9% from the previous year[4]. - The group reported a profit attributable to shareholders of HKD 190 million for the six months ended June 30, 2023, compared to HKD 71 million in the same period of 2022[65]. - The company reported a profit for the period of HKD 333 million, slightly down from HKD 335 million in the previous year, representing a decrease of 0.6%[43]. - Gross profit for the same period was HKD 1,347 million, down 11.9% from HKD 1,529 million year-over-year[43]. - The consolidated profit before tax for the six months ended June 30, 2023, was HKD 486 million, compared to HKD 517 million for the same period in 2022[57]. - The total comprehensive income for the period was not specified, but the company recognized share-based payments of HKD 2 million in the first half of 2023[47]. - The company reported a total comprehensive income of HKD 1,202 million for the period, reflecting a significant change in financial performance[50]. Revenue Breakdown - For the six months ended June 30, 2023, the total revenue from rental investment properties was HKD 1,419 million, with contributions from office (HKD 645 million), retail (HKD 682 million), and residential (HKD 92 million) segments[56]. - The office segment revenue fell by 7.5% to HKD 745 million, while the retail segment revenue decreased by 9.9% to HKD 762 million[11]. - The group's retail revenue decreased by 9.9% to HKD 762 million (2022: HKD 846 million), while rental income based on revenue increased by 67% year-on-year to HKD 87 million (2022: HKD 52 million) due to a recovery in consumer spending[14]. - The segment profit for the office division was HKD 630 million, while the retail and residential divisions reported profits of HKD 641 million and HKD 76 million respectively[56]. Dividend and Equity - The company maintained an interim dividend of HKD 0.27 per share, unchanged from the previous year[4]. - The group declared an interim dividend of HKD 0.27 per share, amounting to HKD 277 million, for the six months ended June 30, 2023[68]. - The company's total equity attributable to owners was HKD 70,200 million as of June 30, 2023, compared to HKD 68,729 million at the end of 2022[48]. - The company's equity attributable to owners was HKD 7,723 million, an increase from HKD 7,723 million as of January 1, 2023[47]. - The total equity attributable to owners, including revaluation and other reserves, was HKD 83,411 million as of June 30, 2023[47]. Market Conditions - The unemployment rate in Hong Kong decreased to 2.9%, indicating an improvement in the local labor market[6]. - The global economic outlook remains uncertain, with the IMF lowering its growth forecast for 2023 to 2.8%[6]. - Retail sales recovery outperformed the overall Hong Kong retail market, driven by promotional activities and government consumption voucher schemes[16]. Operational Highlights - The overall occupancy rates for the office and retail segments were 89% and 98%, respectively[3]. - Approximately 11% of retail space was temporarily closed due to significant optimization works in the Lee Garden area, impacting retail revenue[11]. - The occupancy rate of the retail business remained stable at 98% as of June 30, 2023 (December 31, 2022: 99%) despite a challenging market[14]. - The high-end residential project, Linhai Mountain City, received satisfactory approval in Q1 2023, achieving record transaction prices and unit prices despite market uncertainties[10]. - The company has established a joint venture with IWG plc to operate shared workspace brands in Hong Kong and the Greater Bay Area, currently managing 36 locations with plans for further expansion[21]. Financial Position - The company's total equity decreased by 2.1% to HKD 68,729 million as of June 30, 2023[4]. - Total debt decreased to HKD 25,730 million as of June 30, 2023, from HKD 27,487 million on December 31, 2022, with less than 5% of total debt maturing in the next 18 months[30]. - The debt-to-equity ratio as of June 30, 2023, was 25.9%, up from 23.4% on December 31, 2022, while the net interest coverage ratio fell to 10.3 times from 13.1 times[34]. - Cash and bank deposits totaled approximately HKD 4,361 million as of June 30, 2023, down from HKD 7,771 million on December 31, 2022[35]. - The company's cash and cash equivalents decreased to HKD 666 million from HKD 2,560 million at the end of 2022, a decline of 74%[45]. Investment and Development - The group plans to open the Caroline Hill Road project by the end of 2026, which is a key part of the overall planning for the Lee Garden area[10]. - The commercial property development project at Caroline Hill Road is on schedule, with foundation work ongoing and superstructure work expected to commence in Q3 2023, aiming for completion by the end of 2026[18]. - The company reported an investment income of HKD 138 million and other losses of HKD 32 million during the reporting period[56]. - The company invested in New Wind Tianyu Group, a leading private healthcare service provider in mainland China, allowing the company to tap into the growing demand for quality healthcare services[22]. Corporate Governance and Compliance - The company continues to comply with the corporate governance code as per the Hong Kong Stock Exchange regulations[94]. - The company held a hybrid annual general meeting on May 16, 2023, allowing shareholders to attend either in person or via an online streaming system, enhancing participation opportunities[96]. - The proportion of independent non-executive directors increased from 46% to 54.5% following the appointment of new directors, improving board independence[97]. - The percentage of female directors on the board rose from 27% to 36.4%, surpassing the target of 33% for gender diversity[97]. Employee and Remuneration - The total number of employees as of June 30, 2023, was 468, aligning with the company's human resources policy aimed at sustainable growth[123]. - The total remuneration for directors and senior management for the six months ended June 30, 2023, was HKD 30 million, an increase from HKD 28 million in the same period of 2022, representing a 7.14% growth[82]. - The company’s remuneration policy emphasizes fair and performance-based compensation aligned with long-term strategies and shareholder interests[103].

Hysan Development Company (00014) H1 2023 Earnings Call August 10, 2023 05:00 AM ET Speaker0 Thank you for coming to Hysem Development twenty twenty three Interim Results Announcement Session. Let me introduce our panel for this afternoon. Our Executive Directors and Chief Operating Officer, Mr. Ricky Loy and our Chief Financial Officer and Company Secretary, Mr. Roger Howe. We will start today's session with a presentation from Ricky and Roger, and we will follow that with time to take questions from the f ...

Financial Performance - For the six months ended June 30, 2023, the company's revenue was HKD 1,611 million, a decrease of 9.3% compared to HKD 1,777 million in 2022[4] - The company's recurring core profit for the same period was HKD 1,026 million, down 12.2% from HKD 1,169 million in the previous year[4] - The group's revenue for the first half of 2023 decreased by 9.3% to HKD 1,611 million compared to HKD 1,777 million in 2022[13] - The recurring basic profit fell by 12.2% to HKD 1,026 million from HKD 1,169 million year-on-year[13] - The group's profit for the period was HKD 333 million, slightly down from HKD 335 million in the previous year, representing a decrease of 0.6%[42] - Basic earnings per share increased to HKD 0.19 from HKD 0.07, reflecting a significant growth of 171.4%[42] - Investment income rose to HKD 138 million, up from HKD 135 million, indicating a growth of 2.2%[42] - The group reported a pre-tax profit of HKD 486 million for the six months ended June 30, 2023, compared to HKD 517 million in the same period of 2022[62] Dividend and Shareholder Returns - The company maintained an interim dividend of HKD 0.27 per share, unchanged from the previous year[4] - The group announced an interim dividend of HKD 0.27 per share, consistent with the previous year[14] - The company declared an interim dividend of HKD 0.27 per share for the first half of 2023, totaling HKD 277 million, consistent with the previous year's interim dividend of HKD 0.27 per share[64] - The first interim dividend will be distributed on September 5, 2023, to shareholders registered as of August 25, 2023[69] Market and Economic Conditions - The unemployment rate in Hong Kong decreased to 2.9%, indicating an improvement in the local labor market[7] - The number of visitors to Hong Kong reached 13 million in the first half of 2023, recovering to 37% of pre-pandemic levels[7] - The company anticipates that the economic recovery in Hong Kong will continue to be influenced by the global economic environment, but visitor numbers and economic activities are expected to improve[12] Property and Rental Performance - The overall occupancy rates for the office and retail segments were 89% and 98%, respectively, as of June 30, 2023[4] - The retail segment's revenue declined by 9.9% to HKD 762 million, while the residential segment saw a 17.5% drop to HKD 104 million[13] - Approximately 11% of retail space was closed due to significant optimization works in the Lee Garden area, impacting retail revenue[13] - The occupancy rate for the office portfolio remained stable at 89% as of June 30, 2023, compared to 90% at the end of 2022[15] - The occupancy rate of the retail portfolio remained stable at 98% as of June 30, 2023 (December 31, 2022: 99%) [16] - The high-end residential leasing revenue fell by 17.5% to HKD 104 million (2022: HKD 126 million) due to global economic uncertainty and decreased demand from expatriates [18] - The occupancy rate for the residential portfolio was maintained at 61% as of June 30, 2023 (December 31, 2022: 61%) [18] Strategic Developments - The company is undertaking strategic upgrades to its retail property portfolio to accommodate the expansion of international high-end brands[9] - The group plans to open the Galleria project in the Lee Garden area by the end of 2026, which is a key part of its long-term development strategy[12] - The commercial property development project at Caroline Hill Road is progressing on schedule, with foundation work ongoing and superstructure work expected to commence in Q3 2023, aiming for completion by the end of 2026 [19] - The luxury residential project Linhai Shancheng in Tai Po has achieved record transaction prices and unit prices, reflecting strong buyer interest despite market uncertainties [20] Financial Position and Assets - The company's total equity as of June 30, 2023, was HKD 68,729 million, a decrease of 2.1% from HKD 70,200 million at the end of 2022[5] - Total cash capital expenditure decreased significantly to HKD 624 million from HKD 2,621 million in 2022, mainly due to construction projects at the Kadoorie Hill and Lee Garden[31] - Total debt decreased to HKD 25,730 million as of June 30, 2023, from HKD 27,487 million at the end of 2022, with less than 5% of total debt maturing in the next 18 months[32] - The debt-to-equity ratio increased to 25.9% from 23.4% at the end of 2022, while the net interest coverage ratio fell to 10.3 times from 13.1 times[37] - Cash and bank deposits totaled approximately HKD 4,361 million, down from HKD 7,771 million at the end of 2022, with investments in investment-grade debt securities amounting to HKD 997 million[38] - The valuation of the investment property portfolio as of June 30, 2023, was HKD 96,732 million, a slight decrease of 0.1% from HKD 96,787 million at the end of 2022, with a fair value loss of HKD 754 million recognized during the period[27] - The net asset value decreased to HKD 81,807 million from HKD 83,411 million, reflecting a decline of 1.9%[47] Operational Efficiency - Operating expenses as a percentage of revenue increased to 25.4% from 22.1% in 2022, primarily due to rising electricity costs and the impact of the Lee Garden optimization project[25] - Financial expenses rose to HKD 231 million, up from HKD 172 million in the first half of 2022, attributed to the rising interest rate environment with an effective interest rate of 3.9% compared to 2.4% in the same period last year[26] - The group’s administrative expenses for the period were HKD 145 million, compared to HKD 145 million in the previous year, indicating no change[55] Investments and Joint Ventures - The company holds a 26% stake in the resilient investment property Hong Kong Plaza, which has shown strong performance despite pandemic-related challenges in Shanghai [22] - The joint venture with IWG plc operates 36 shared workspace locations in the Greater Bay Area, with plans for further expansion in the growing market [23] - The investment in New Wind Tianyu Group, a leading private healthcare provider in mainland China, continues to grow rapidly, capitalizing on the demand for quality healthcare services [24] Other Financial Metrics - The fair value change of investment properties resulted in a loss of HKD 754 million, compared to a loss of HKD 985 million in the previous year, showing an improvement of 23.4%[42] - Share of profits from associates was HKD 146 million, slightly down from HKD 147 million in 2022, while losses from joint ventures increased to HKD 17 million from HKD 8 million due to the launch of the Tai Po residential project[28] - The total segment revenue for the group was HKD 745 million, down from HKD 762 million, reflecting a decrease of 2.2%[55] - The total segment profit attributable to the group was HKD 630 million, compared to HKD 641 million in the prior year, indicating a decline of 1.7%[55]

Business Performance and Market Conditions - Hysan's core business performance was impacted by strict quarantine regulations during the fifth wave of the COVID-19 pandemic, leading to a nearly 3% decline in local GDP compared to Q4 2021[7][8] - Despite challenges, Hysan maintained tenant support during the pandemic, preserving occupancy rates in both retail and office segments[10] - The overall economic outlook remains uncertain due to post-pandemic effects, geopolitical tensions, and rising inflation and interest rates[15] - The company anticipates a positive outlook for 2023 with the resumption of cross-border travel, which is expected to boost tourism and business activities in Hong Kong[8] - Future market recovery is anticipated with the easing of travel restrictions and resumption of cross-border activities with mainland China[72] Financial Performance - The company reported a steady total return with a strong asset base, emphasizing the importance of diversified tenants in maintaining stability during adverse conditions[34] - The company achieved a 6% increase in financial performance, with total revenue reaching 110,402 million[62] - The total revenue for 2022 was HKD 3,460 million, a decrease of 4.1% compared to HKD 3,608 million in 2021[72] - Basic profit for 2022 was HKD 2,129 million, down from HKD 2,330 million in 2021, reflecting a decline of 8.6%[142] - The company reported a net cash outflow of HKD 4,049 million during the year[75] Occupancy and Leasing - The office occupancy rate dropped to 90% in 2022 from 94% in 2021[73] - The retail shop occupancy rate remained stable at 99% for both 2022 and 2021[73] - The residential occupancy rate decreased to 61% in 2022 from 71% in 2021[73] - The company plans to enhance leasing incentives to attract more clients in the residential sector[72] Strategic Initiatives and Growth Plans - Hysan plans to continue expanding its core business and investing in growth pillars to adapt to the evolving market landscape[9] - The company is positioned in a prime location in Causeway Bay, which remains attractive for businesses and consumers alike, benefiting from its vibrant office and retail environment[9][10] - The company has a long-term strategy focused on the continuous curation and expansion of its core business in the Lee Garden area[28] - The company plans to continue expanding its investment portfolio in the core business district of Causeway Bay, Hong Kong[84] Sustainability and Corporate Responsibility - Hysan's commitment to sustainable growth and smart community-based business models enhances its appeal to potential investors and partners[9] - The company is committed to sustainable development, with ongoing projects adhering to high sustainability standards and a focus on reducing carbon emissions[14] - The company has established a vaccination center during the pandemic to support the local community, demonstrating its commitment to social responsibility[14] - Carbon intensity reduced by 38% and electricity purchase intensity decreased by 21% compared to the 2005 baseline[143] Governance and Management - The company emphasizes the importance of good corporate governance, which is crucial for both the board and the overall group[179] - The board is responsible for setting business objectives and strategies that align with the group's best interests, as well as monitoring their implementation[184] - The company has established a risk appetite and evaluates the risks it is willing to take to achieve its strategic goals[184] - The board's commitment to maintaining high levels of corporate governance is reflected in the updated Corporate Governance Guidelines as of January 2023[179] Community Engagement and Awards - The company is actively involved in community engagement and environmental protection initiatives, aiming to minimize its business impact on the environment[37] - The company has received multiple awards for its ESG performance, including the "2022 Best Annual Report Award" and "Outstanding Environmental, Social, and Governance Data Report Award" from various organizations[61] - The company has been recognized with an "A" rating for public disclosure for four consecutive years, highlighting its commitment to transparency[58] Investment and Financial Strategy - The total investment properties value increased to HKD 96,787 million, a 1.8% rise from the previous year[79] - Total debt increased to HKD 27,487 million as of December 31, 2022, from HKD 18,807 million in 2021, primarily due to financing for the Kadoorie Hill project[116] - The group maintained an investment-grade credit rating with Moody's and Fitch rating it A3 and A- respectively as of December 31, 2022[121] - The company aims to optimize sustainable financial returns for shareholders through a robust governance framework and effective risk management[177] Future Outlook and Market Expansion - Future outlook indicates a projected revenue growth of 20% for the next fiscal year, supported by new product launches and market penetration strategies[159] - Market expansion plans include entering three new international markets by the end of the next fiscal year[157] - The company is investing $50 million in research and development for innovative technologies aimed at enhancing user experience[160] - A new product line is set to launch in Q2 2024, expected to contribute an additional $30 million in revenue[159]

Hysan Development Company (00014) H2 2022 Earnings Call February 16, 2023 07:00 PM ET Speaker0 Thank you all for coming to Hyphen Development's twenty twenty two Annual Results Announcement Webcast Session. And let me introduce our panel for this afternoon. Our Chairman, Ms. Irene Lee our Executive Director and Chief Operating Officer, Mr. Ricky Louie and our Chief Financial Officer and Company Secretary, Mr. Roger Howe. And we'll start today's session with a presentation from Irene, Ricky and Roger, and we ...

Financial Performance - Revenue for the six months ended June 30, 2022, was HKD 1,777 million, a decrease of 3.1% compared to HKD 1,834 million in the same period of 2021[6]. - Core operating profit for the same period was HKD 1,169 million, down 0.7% from HKD 1,177 million year-on-year[6]. - The announced profit decreased to HKD 71 million, primarily due to a 1.0% non-cash fair value change of investment properties reflecting market conditions[6]. - Basic profit increased by 4.9% to HKD 1,235 million, primarily due to a one-time foreign exchange gain of HKD 66 million from the acquisition of a subsidiary[14]. - The company reported a net profit of HKD 335 million for the period, a decline of 57.0% from HKD 781 million in the prior year[50]. - Basic earnings per share decreased to HKD 0.07 from HKD 0.50, reflecting an 86.0% drop[49]. - The total comprehensive income for the period was HKD 70 million, a substantial decrease from HKD 945 million in the same period last year[50]. - The fair value change of investment properties resulted in a loss of HKD 985 million, compared to a loss of HKD 545 million in the previous year[49]. - The group reported a pre-tax profit of HKD 517 million for the six months ended June 30, 2022, compared to HKD 943 million in the same period of 2021, reflecting a decline of 45%[64]. Revenue Segmentation - The office segment revenue decreased by 8.5% to HKD 805 million, while the retail segment revenue increased by 3.2% to HKD 846 million[14]. - Revenue from rental investment properties was HKD 702 million, while property management service income was HKD 103 million, totaling HKD 805 million for the office segment[66]. - The total segment profit for the office division was HKD 696 million, a decrease from HKD 795 million in the same period last year[66]. Occupancy and Demand - The occupancy rates for office and retail properties were 91% and 98%, respectively, indicating strong demand despite market challenges[9]. - The occupancy rate for the office segment remained stable at 91% as of June 30, 2022, compared to 94% at the end of 2021[16]. - The retail segment's occupancy rate was 98% as of June 30, 2022, down from 99% at the end of 2021[17]. - Tenant sales in the second quarter increased by over 25% compared to the first quarter, aligning with last year's performance[9]. Strategic Initiatives - The company plans to launch a new thematic initiative in the third quarter to enhance the shopping experience at its flagship mall, celebrating its tenth anniversary[10]. - The company is reviewing and revising retail space designs as part of its asset enhancement strategy[10]. - The company has introduced new tenants in the retail segment, including dining and beauty brands, to enhance its business portfolio[18]. - The company engaged in strategic marketing activities, achieving significant sales performance through promotional campaigns and partnerships[19]. Economic Context - The unemployment rate in Hong Kong improved to 4.7% from the previous year, reflecting a gradual economic recovery[8]. - The company is optimistic about its business outlook, citing ongoing development and expansion plans as key growth drivers[13]. Investment and Capital Expenditures - Capital expenditures decreased to HKD 2,621 million (2021: HKD 20,077 million), focusing on selective asset enhancement and redevelopment[34]. - The group’s investments outside its core areas totaled HKD 2,109 million as of June 30, 2022, up from HKD 1,780 million as of December 31, 2021, aimed at expanding into mainland China and other Asian regions[33]. Debt and Financing - As of June 30, 2022, the total debt of the group increased to HKD 27,287 million, up from HKD 18,807 million as of December 31, 2021, primarily due to bank loans for the project financing of the Kadoorie Hill project[35]. - The net debt-to-equity ratio as of June 30, 2022, was 23.8%, up from 11.7% as of December 31, 2021[40]. - The group executed sustainable financing transactions, including one of Hong Kong's largest green loans amounting to HKD 12,951 million for the Kadoorie Hill land development[45]. Shareholder Returns - The company announced an interim dividend of HKD 0.27 per share, consistent with the previous year[15]. - The total dividends declared during the period were HKD 1,276 million, including HKD 60 million to non-controlling interests[56]. - The company declared an interim dividend of HKD 1,209 million for the second interim dividend of 2021, compared to HKD 1,216 million for the same period in 2021[78]. Corporate Governance and Compliance - The company continues to comply with the Corporate Governance Code and has adopted the standard code for securities trading by directors[105][106]. - The Audit and Risk Management Committee held two meetings during the review period, focusing on annual financial reports and risk management issues[107]. - Deloitte Touche Tohmatsu is the auditor for the company, ensuring compliance and financial integrity[148]. Employee and Management Compensation - The total remuneration for directors and key management personnel for the six months ended June 30, 2022, was HKD 28 million, slightly up from HKD 27 million in the same period of 2021, reflecting a 3.70% increase[92]. - The fixed annual salaries for the executives Li Yunlian and Lu Ganwei were set at HKD 8,240,000 and HKD 5,600,000 respectively for 2022[114]. - The performance-based bonuses for 2021 were established at HKD 15,200,000 for Li Yunlian and HKD 4,400,000 for Lu Ganwei[114]. Stock Options and Share Repurchase - The company granted a total of 2,084,000 stock options under the new plan during the review period[125]. - During the review period, the company repurchased a total of 5,400,000 ordinary shares at a total cost of approximately HKD 125 million[140]. - The highest repurchase price per share was HKD 23.95, while the lowest was HKD 20.15, with a total cost of HKD 36 million for April alone[141].

Investment Strategy and Expansion - Hysan achieved significant investments under its mid-to-long-term strategy in 2021, focusing on core business expansion and growth pillars to create a more balanced and diversified business portfolio [8]. - The acquisition of the Carrian Road project is expected to increase Hysan's core property area by approximately 30% and will include a 60,000 square feet green space [20]. - Hysan's investment in the new medical group in mainland China aims to tap into the rapidly growing quality healthcare sector, expanding its investment footprint beyond the Greater Bay Area and Shanghai [24]. - Hysan established a 50/50 joint venture with IWG to expand its shared workspace business in the Greater Bay Area, capitalizing on the growing demand for flexible office solutions [23]. - The company successfully acquired a 24-story commercial building in Shanghai's Jing'an District, enhancing its property portfolio in a key metropolitan area [22]. - Hysan's investment strategy includes light-asset businesses that complement its core operations and leverage partnerships with established operators [18]. - The company plans to develop the Carrian Hill site into a high-quality commercial building with community facilities, which will increase the property portfolio size by 30% and is expected to be completed by 2026 [27]. - The company has partnered with IWG to manage 33 existing office locations in the Greater Bay Area, capitalizing on the rapidly growing office space market [32]. - A new residential project in Tai Po, offering 262 independent houses and units, is set to launch in the first half of 2022, leveraging the area's geographical advantages [35]. - The company has invested in New Wind Group, which operates in the rapidly growing healthcare sector in mainland China, expanding its investment footprint beyond the Greater Bay Area and Shanghai [41]. Financial Performance - The financial performance for 2021 showed a revenue of 74,993 million, with a steady increase from previous years [74]. - Revenue decreased by 2.7% year-on-year, primarily due to the impact of COVID-19 on office leasing business, with total revenue at HKD 3,608 million [76]. - Office business revenue fell by 4.7% to HKD 1,728 million, while retail business revenue increased by 1.3% to HKD 1,620 million [76]. - The company reported a profit before tax of HKD 2,261 million, with a net profit of HKD 1,903 million for the year [78]. - Basic earnings attributable to shareholders amounted to HKD 2,330 million, including non-operating items of HKD 947 million [78]. - The company's operating profit for the year was HKD 2,835 million, with a net cash outflow of HKD 7,851 million [79]. - The total valuation of investment properties increased by 26.8% to HKD 95,107 million compared to HKD 74,993 million at the end of the previous year [83]. - The company's share of profits from joint ventures rose to HKD 458 million in 2021, up from HKD 225 million in 2020, primarily due to fair value gains from investment properties [113]. - Cash flow from operating activities was HKD 2,845 million in 2021, an increase of HKD 87 million from HKD 2,758 million in 2020 [117]. - The company paid dividends totaling HKD 1,497 million in 2021, slightly down from HKD 1,502 million in 2020 [117]. Sustainability and Corporate Governance - The company is leading the industry in green financing, securing the largest green loan in the Hong Kong market to date [19]. - The company emphasizes sustainable practices by minimizing environmental impact and actively contributing to the communities where it operates [52]. - The company achieved a GRESB rating of "Four Stars" and received the "Green Star" designation, reflecting its commitment to sustainability [73]. - The group issued HKD 1,550 million in green bonds in 2019 and expanded its sustainable financing framework in 2021, achieving a total of approximately HKD 3,890 million in sustainable financing transactions, representing about 21% of total debt [130]. - The company established a sustainable development committee on January 1, 2020, and updated the scope of various committees in 2021 and 2022 [136]. - The company has a formal corporate governance guideline in 2004, which was updated in 2021 and 2022 [136]. - The company has a comprehensive board appointment guideline and conducts effective evaluations of board performance [138]. - The company has a whistleblowing policy in place since 2016, with independent third-party reporting channels [136]. - The company has a formal fraud prevention policy and procedures adopted in 2021 [136]. - The company has a sustainable procurement policy adopted in 2021 [136]. Board Composition and Effectiveness - The board consists of 10 directors, with 4 independent non-executive directors, exceeding the minimum requirement of the Listing Rules [145]. - The board has established four committees under the board: Audit and Risk Management Committee, Remuneration Committee, Nomination Committee, and Sustainability Committee [163]. - The board's composition and diversity are regularly assessed to ensure effective governance and decision-making [170]. - The board consists of 10 directors, with 2 being female, and there is a commitment to improve gender diversity when suitable candidates are identified [172]. - The board held a total of 5 meetings in 2021, reflecting active participation in company affairs and decision-making [179]. - The board's self-assessment achieved a 100% response rate, indicating strong engagement among directors [190]. - The board discussed the importance of diversity and high-performance talent in its leadership structure [198]. - The board's evaluation covered five aspects: responsibilities, composition, meetings and processes, board operations, and training [192]. - The board has identified specific matters that require board approval to maintain control over key decisions and ensure clear responsibilities between the board and management [165]. - The board is committed to maintaining high levels of corporate governance and fulfilling its supervisory responsibilities [157]. Market Challenges and Strategic Responses - The company's office leasing market faced pressure due to reduced demand and rental rates, particularly in Central and Wan Chai/Causeway Bay [76]. - The residential business revenue decreased by 12.2% to HKD 260 million, impacted by low demand from expatriates [76]. - The company introduced flexible leasing options to attract new tenants amid challenging market conditions [76]. - The average rental level for renewals, rent reviews, and new leases in the office segment fell to negative levels, while the occupancy rate remained stable at 94% (2020: 95%) [92]. - The occupancy rate for office properties was 94%, down from 95% in the previous year, while retail properties maintained a high occupancy rate of 99% [91]. - The company is focusing on strategic investments in mainland China and new economic sectors to enhance core business development [87].

Financial Performance - The group's revenue and recurring basic profit decreased by 7.4% and 12.6% year-on-year, respectively, with revenue at HKD 1,834 million and recurring profit at HKD 1,177 million[4]. - The group's revenue for the first half of 2021 was HKD 1,834 million, a decrease of 7.4% compared to HKD 1,981 million in the same period of 2020[12]. - The recurring basic profit decreased by 12.6% to HKD 1,177 million, down from HKD 1,346 million in 2020[13]. - The office business revenue decreased by 5.1% to HKD 880 million, while the retail business revenue fell by 8.9% to HKD 820 million[15][16]. - The residential business revenue decreased by 13.0% to HKD 134 million, with an occupancy rate of 73%[18]. - The company reported a profit before tax of HKD 943 million, a significant recovery from a loss of HKD 2,422 million in the previous year[38]. - Net profit for the period was HKD 781 million, compared to a loss of HKD 2,658 million in the same period last year[39]. - Earnings per share for the period was HKD 0.50, a turnaround from a loss per share of HKD 2.52 in the previous year[38]. - The company reported a total comprehensive income of HKD 945 million for the period, compared to a loss of HKD 2,694 million in the previous year[39]. Occupancy and Demand - The office and retail business occupancy rates were 95% and 97%, respectively, indicating strong demand despite ongoing challenges[4]. - The occupancy rates for the office and retail segments were 93% and 97% respectively as of June 30, 2021[12]. - The retail sector in Hong Kong continued to be impacted by COVID-19, but the Lee Gardens area saw better sales growth compared to the overall market, supported by a loyal customer base[8]. Investments and Acquisitions - The company successfully acquired a commercial site on Gough Hill Road, which will enhance its property portfolio and community vision in the Lee Gardens area[8]. - The company plans to develop a commercial building in Causeway Bay, which is expected to enhance its asset portfolio and strengthen its market position[19]. - Total capital expenditure cash outflow increased significantly to HKD 20,077 million from HKD 619 million in 2020, mainly due to successful land acquisition[27]. - The company successfully acquired commercial land in Causeway Bay for HKD 19,778 million, classified as investment property[64]. Financial Position - Shareholders' equity stood at HKD 73,146 million, with a slight decrease in net asset value per share to HKD 70.3[5]. - Total assets decreased to HKD 104,658 million from HKD 84,353 million, indicating an increase of 24%[40]. - The company’s total liabilities increased to HKD 27,592 million from HKD 20,754 million, reflecting a rise of 33.4%[41]. - The debt-to-equity ratio at the end of the first half of 2021 was 8.2%, compared to net cash at the end of 2020[31]. - Total debt decreased to HKD 18,404 million from HKD 19,204 million at the end of 2020, following early repayment of HKD 800 million in bank loans[28]. Cash Flow and Dividends - The net cash inflow from operating activities for the six months ended June 30, 2021, was HKD 1,283 million, compared to HKD 958 million for the same period in 2020, representing a 33.8% increase[45]. - The company declared an interim dividend of HKD 1,216 million for the second interim dividend of 2020, compared to HKD 1,221 million for the same period in 2019[62]. - The company announced an interim dividend of HKD 0.27 per share, unchanged from the previous year[14]. Strategic Initiatives - A joint venture with IWG plc was established to expand the shared workspace business in the Greater Bay Area, reflecting the evolving office space needs post-pandemic[10]. - The company is preparing to launch an online interactive community and smart office renovations to improve efficiency and connectivity[20]. - The company aims to explore opportunities in the Greater Bay Area and leverage new economic trends for future growth[11]. - The company is committed to community recovery efforts, including vaccination promotion and support for vulnerable groups[9]. Financial Management - The net interest coverage ratio was 6.5 times, down from 17.0 times in 2020, indicating a decline in financial stability[13]. - Financial expenses increased to HKD 275 million from HKD 234 million in the first half of 2020, primarily due to preparations for potential investment opportunities[23]. - Operating expenses as a percentage of revenue remained relatively stable at 18.5%, compared to 17.2% in 2020[22]. Shareholder Information - The company issued 1 million shares under the share option plan during the first half of 2021, compared to 2 million shares issued in the same period of 2020[42]. - The company has a total of 467 employees as of June 30, 2021, with no significant changes in human resources, training, and development programs compared to the 2020 sustainability report[124]. - The company has been authorized to repurchase up to 10% of its issued shares as of the date of the resolution[122]. Compliance and Governance - The company adopted a tax governance policy in January 2021, outlining its tax strategy and policies[91]. - A risk appetite statement was adopted in June 2021, defining the risk levels the company aims to avoid[91]. - The Audit and Risk Management Committee held two meetings during the period, focusing on financial reporting and risk management issues[91]. - The company confirmed compliance with the standard code of conduct for securities trading by all directors during the six-month period[90].

Financial Performance - The group's revenue for 2020 was HKD 3,710 million, a decrease of 7.0% from HKD 3,988 million in 2019, primarily due to the impact of COVID-19 on its three main business segments [64]. - The recurring basic profit and basic profit both fell by 7.3% to HKD 2,398 million in 2020, down from HKD 2,587 million in 2019 [64]. - The group reported a loss of HKD 2,547 million in 2020, compared to a profit of HKD 4,845 million in 2019, mainly due to changes in the fair value of investment properties [64]. - Shareholders' equity as of December 31, 2020, was HKD 73,680 million, down from HKD 77,650 million in 2019 [64]. - Total revenue for the company decreased by 7.0% to HKD 3,710 million in 2020, down from HKD 3,988 million in 2019 [68]. - The office segment revenue fell by 1.0% to HKD 1,814 million, while the retail segment saw a decline of 12.9% to HKD 1,600 million [68]. - The residential segment revenue decreased by 7.2% to HKD 296 million, primarily due to limited demand from expatriates [68]. - The group reported a loss of HKD 2,547 million for 2020, compared to a profit of HKD 4,845 million in 2019 [65]. - The fair value change of investment properties was HKD 4,903 million in 2020, a significant increase from a loss of HKD 792 million in 2019 [65]. Financial Ratios and Debt Management - The net interest coverage ratio was 5.2 times, down from 17.0 times in 2019, indicating a tighter financial position [49]. - The net debt to equity ratio was 3.9% as of December 31, 2019, showing a strong balance sheet [49]. - The average debt maturity was 6.8 years, indicating a stable long-term financing strategy [49]. - The effective interest rate for the company was 3.0%, slightly down from 3.4% in 2019 [49]. - Financial expenses increased to HKD 546 million in 2020 from HKD 313 million in 2019, attributed to new funding for investment opportunities [83]. - The debt-to-equity ratio improved to a net cash position by the end of 2020, with a net interest coverage ratio dropping to 9.8 times from 17.0 times in 2019 [98]. - The average repayment period of the debt portfolio was approximately 6.8 years as of December 31, 2020, compared to 6.6 years in 2019 [96]. - The fixed-rate debt ratio increased from 84% at the end of 2019 to 88% at the end of 2020, indicating a stronger position against interest rate fluctuations [104]. Property Management and Operations - The company owns approximately 4.5 million square feet of retail, office, and residential space, enhancing its competitive advantage in the market [11]. - The company has a diversified tenant base, which has proven crucial during challenging market conditions [12]. - The occupancy rates as of December 31, 2020, were 95% for office properties and 96% for retail properties, while the residential segment had an occupancy rate of 74% [64]. - The property expenditure ratio was 13.2% in 2020, slightly down from 13.4% in 2019, indicating stable cost efficiency [69]. - The company provided various support measures to tenants, including rent reductions and marketing initiatives, in response to the challenges posed by the COVID-19 pandemic [74]. - The company expanded its partnership with IWG to increase the supply of flexible workspaces, responding to the rising demand for hybrid work models [73]. - The company maintained a stable rental level for lease renewals and new leases despite market challenges [78]. Strategic Initiatives and Future Outlook - The company aims to continue investing and developing its core business in Causeway Bay while seeking opportunities outside its primary area [61]. - The company plans to integrate environmental, social, and governance (ESG) principles into its property portfolio over the next decade [61]. - The outlook for 2021 remains uncertain, heavily dependent on the control of the COVID-19 pandemic globally [62]. - The company plans to launch an advanced e-commerce platform within the year to enhance online shopping experiences [80]. - The company is committed to sustainability, with a focus on minimizing environmental impact while achieving higher efficiency [17]. Governance and Board Structure - The group has maintained a strong governance framework, exceeding compliance requirements set by the Hong Kong Stock Exchange [111]. - The board consists of 9 members, with 4 being independent non-executive directors, surpassing the requirements of the listing rules [112]. - The group emphasizes a strong corporate governance system to enhance business performance and achieve expected results [141]. - The board has established four committees: Audit and Risk Management Committee, Remuneration Committee, Nomination Committee, and Sustainability Committee [146]. - The board's main responsibilities include overseeing the internal control and risk management systems to ensure their adequacy and effectiveness [149]. - The governance policies and guidelines are updated regularly, with the latest update in January 2021 [142]. - The board includes a New Generation Innovation Committee to advise on overall capabilities and strategic direction since 2019 [148]. - The board's composition and diversity are reviewed annually to ensure effective governance and decision-making [155]. Shareholder Engagement and Communication - The company has a dividend policy that allows all shareholders to receive dividends based on the group's financial performance and future funding needs [197]. - The company successfully held the 2020 Annual General Meeting despite the COVID-19 pandemic, implementing strict health measures including temperature checks and social distancing [198]. - The company provided shareholders with over 30 days to review the annual report and financial statements, exceeding the legal requirement of 21 days [198]. - The company has committed to regular updates on operational and financial performance during the COVID-19 pandemic, including virtual meetings with institutional investors [199]. - The company has maintained open and constructive dialogue with stakeholders, including investors and credit rating agencies [200].

Financial Performance - Revenue decreased by 5.0% to HKD 1,981 million, and recurring basic profit fell by 3.4% to HKD 1,346 million for the six months ended June 30, 2020[5]. - The group recorded a reported loss of HKD 2,626 million for the first half of 2020, compared to a profit of HKD 2,783 million in the same period last year[14]. - The fair value loss of investment properties was HKD 4,065 million, compared to a fair value gain of HKD 1,453 million in 2019[14]. - The group experienced a loss before tax of HKD 2,422 million for the six months ended June 30, 2020, compared to a profit of HKD 3,257 million in the same period of 2019[39]. - The company reported a total comprehensive loss of HKD 2,694 million for the six months ended June 30, 2020, compared to a profit of HKD 3,019 million for the same period in 2019[45]. - The company reported a loss attributable to shareholders of HKD 2,626 million for the six months ended June 30, 2020, compared to a profit of HKD 2,783 million in 2019[69]. Revenue Breakdown - For the six months ended June 30, 2020, the total revenue from the retail segment was HKD 900 million, while the office segment generated HKD 927 million, and the residential segment brought in HKD 154 million, leading to a combined revenue of HKD 1,981 million[59]. - The total segment profit for the retail segment was HKD 794 million, for the office segment was HKD 840 million, and for the residential segment was HKD 128 million, resulting in a total segment profit of HKD 1,762 million[59]. Economic Outlook - The economic outlook for Hong Kong in the second half of 2020 remains uncertain due to COVID-19 and other global and local political and economic factors[5]. - Retail sales in Hong Kong dropped over 33% year-on-year in the first half of 2020, with jewelry and luxury goods sales declining by more than 65%[8]. Occupancy and Property Management - The occupancy rates for office and retail properties were 96% and 94% respectively[5]. - The company continues to focus on improving health and safety standards in its properties, becoming one of the first owners in Hong Kong to enhance hygiene and safety specifications[11]. - The company plans to continue expanding its property management services in Hong Kong, aligning with its core business strategy[57]. Financial Position - Shareholders' equity decreased by 5.1% to HKD 73,696 million, and the net asset value per share fell by 5.0% to HKD 70.7[6]. - The value of the investment property portfolio was HKD 75,630 million as of June 30, 2020, a decrease of 4.4% from HKD 79,116 million on December 31, 2019[25]. - The company’s net assets amounted to HKD 83,529 million as of June 30, 2020, up from HKD 80,972 million at the end of 2019, indicating a growth of 3.2%[42]. - The company’s net current assets increased to HKD 19,417 million as of June 30, 2020, compared to HKD 7,195 million as of December 31, 2019, indicating improved liquidity[41]. Debt and Financial Management - Total outstanding debt rose to HKD 19,458 million as of June 30, 2020, from HKD 12,615 million at the end of 2019[30]. - The debt-to-equity ratio improved to a cash net position by mid-2020, with a net interest coverage ratio maintained at 17.0 times[32]. - The proportion of fixed-rate debt increased to 89% of total debt as of June 30, 2020, up from 84% at the end of 2019, indicating a stronger position in managing borrowing costs[34]. - The company has access to committed credit facilities totaling HKD 4,700 million as of June 30, 2020, up from HKD 3,250 million as of December 31, 2019, enhancing its liquidity position[33]. Dividends and Shareholder Returns - The group announced an interim dividend of HKD 0.27 per share, consistent with the previous year[15]. - The company declared dividends of HKD 1,221 million during the period, which is a decrease from HKD 1,286 million in the previous period[45]. - The company declared an interim dividend of HKD 0.27 per share for 2020, totaling HKD 281 million, compared to HKD 283 million for the same period in 2019[72]. Strategic Initiatives - The company has implemented various flexible relief measures for tenants, including rent reductions and marketing support, to help them navigate short-term financial and operational challenges[11]. - The "Power Up" campaign was launched in May 2020, integrating technology and marketing expertise to create a comprehensive digital platform for customer engagement[11]. - The company plans to enhance its business resilience through the expansion of flexible workspaces and the introduction of high-end retail concepts[11]. - The company plans to continue exploring market expansion opportunities and new product development strategies in the upcoming quarters[42]. Risk Management and Governance - The board established a Sustainability Committee on January 1, 2020, to oversee environmental, social, and governance issues, supported by a management execution committee and working groups[97]. - The Audit and Risk Management Committee held two meetings during the period, focusing on the annual financial report and risk management related to the COVID-19 pandemic[97]. - The company actively engaged in discussions regarding the impacts of the global pandemic on its operations and risk management strategies[97]. Employee and Shareholder Information - As of June 30, 2020, the total number of employees in the group was 506[127]. - Major shareholders included Lee Hysan Company Limited with 433,130,735 shares (41.57% of total issued shares), Silchester International Investors LLP with 83,647,000 shares (8.03%), and First Eagle Investment Management, LLC with 52,460,214 shares (5.04%) as of June 30, 2020[124].