Financial Highlights [Overview](index=1&type=section&id=Financial%20Highlights-Overview) For the six months ended June 30, 2023, the Group's revenue grew 7.9% to HK$230.3 million, but profit for the period decreased to HK$146.5 million, mainly due to lower fair value gains on investment properties Financial Summary for the Six Months Ended June 30, 2023 | Metric | 2023 (HK$ million) | 2022 (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 230.3 | 213.4 | +7.9% | | Profit for the Period | 146.5 | 261.4 | -44.0% | | Fair Value Gain on Investment Properties (net of US deferred tax) | 152.0 | 220.0 | -30.9% | | Underlying Profit/(Loss) Excluding Property Revaluation Gains | (5.5) | 41.4 | -113.3% | | Interim Dividend Per Ordinary Share | HK 6 cents | HK 14 cents | -57.1% | Condensed Consolidated Interim Financial Information [Condensed Consolidated Statement of Profit or Loss - Unaudited](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2023, the Group reported revenue of HK$230,280 thousand and gross profit of HK$131,489 thousand, with profit for the period significantly decreasing to HK$146,523 thousand from HK$261,418 thousand in the prior year Key Figures from Condensed Consolidated Statement of Profit or Loss | Metric | 2023 (HK$ thousand) | 2022 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 230,280 | 213,429 | | Cost of Sales | (98,791) | (80,453) | | Gross Profit | 131,489 | 132,976 | | Fair Value Gain on Investment Properties | 130,580 | 187,181 | | Operating Profit | 191,998 | 257,045 | | Net Finance Costs | (62,284) | (21,627) | | Profit for the Period | 146,523 | 261,418 | | Earnings Per Share (Basic and Diluted) | HK$0.43 | HK$0.82 | [Condensed Consolidated Statement of Comprehensive Income - Unaudited](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2023, the Group's total comprehensive income decreased to HK$145,942 thousand from HK$261,839 thousand in the prior year, with HK$123,291 thousand attributable to company shareholders Key Figures from Condensed Consolidated Statement of Comprehensive Income | Metric | 2023 (HK$ thousand) | 2022 (HK$ thousand) | | :--- | :--- | :--- | | Profit for the Period | 146,523 | 261,418 | | Other Comprehensive Income | (581) | 421 | | Total Comprehensive Income for the Period | 145,942 | 261,839 | | Total Comprehensive Income Attributable to Company Shareholders | 123,291 | 236,651 | | Total Comprehensive Income Attributable to Non-controlling Interests | 22,651 | 25,188 | [Condensed Consolidated Statement of Financial Position - Unaudited](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the Group's total assets slightly increased to HK$12,237,676 thousand, with total equity at HK$9,242,666 thousand and net current liabilities at HK$1,002,226 thousand, primarily due to short-term bank loans Key Figures from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2023 (HK$ thousand) | December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Total Assets | 12,237,676 | 12,133,849 | | Non-current Assets | 11,955,125 | 11,839,719 | | Current Assets | 282,551 | 294,130 | | Total Equity | 9,242,666 | 9,115,120 | | Total Liabilities | 2,995,010 | 3,018,729 | | Net Current Liabilities | (1,002,226) | (820,403) | Notes to the Condensed Consolidated Interim Financial Information [Basis of Preparation and Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The condensed consolidated interim financial information is prepared under the historical cost convention, with fair value adjustments for investment properties and financial assets at fair value through other comprehensive income, in compliance with HKAS 34 - The condensed consolidated interim financial information is prepared under the historical cost convention, with fair value adjustments for investment properties and financial assets at fair value through other comprehensive income, in compliance with Hong Kong Accounting Standard 34[9](index=9&type=chunk) - The Group's net current liabilities as of June 30, 2023, were **HK$1,002,226 thousand** (December 31, 2022: HK$820,403 thousand), primarily comprising **short-term bank loans of HK$298,000 thousand** and the **current portion of long-term bank loans of HK$851,908 thousand**[10](index=10&type=chunk) - The directors believe the Group has sufficient financial resources for operations and to meet liabilities, intending to secure new loan facilities to replace those maturing within one year, thus preparing the condensed consolidated interim financial information on a going concern basis[10](index=10&type=chunk) [Revenue and Segment Information](index=7&type=section&id=Revenue%20and%20Segment%20Information) The Group's operating segments are primarily Hong Kong and North America, with total revenue of HK$230,280 thousand for the six months ended June 30, 2023, mainly from property leasing, and performance is assessed based on geographical segment profit/loss, assets, and liabilities - The chief operating decision maker, identified as the Company's executive directors, considers business from a geographical perspective, confirming the Group's operating segments as Hong Kong and North America[13](index=13&type=chunk) - The chief operating decision maker assesses operating segment performance based on profit/(loss) after tax, excluding fair value changes of investment properties (net of US deferred income tax), and their segment assets and liabilities[58](index=58&type=chunk) [Revenue from External Customers](index=7&type=section&id=Revenue%20from%20External%20Customers) For the six months ended June 30, 2023, total revenue from external customers increased by 7.9% to HK$230,280 thousand, driven by stable investment property rental income and significant growth in hotel and catering operations Revenue from External Customers | Revenue Source | 2023 (HK$ thousand) | 2022 (HK$ thousand) | | :--- | :--- | :--- | | Property Leasing - Investment Properties | 157,575 | 157,021 | | Property Leasing - Properties Held for Sale | 12,139 | 14,066 | | Property Related Services | 14,217 | 13,511 | | Hotel Operations | 37,767 | 23,785 | | Catering Operations | 8,582 | 5,046 | | **Total Revenue** | **230,280** | **213,429** | [Segment Results, Assets and Liabilities](index=8&type=section&id=Segment%20Results,%20Assets%20and%20Liabilities) For the six months ended June 30, 2023, the Hong Kong segment reported total revenue of HK$199,325 thousand and profit of HK$199,669 thousand, while the North America segment recorded total revenue of HK$30,955 thousand and a loss of HK$53,146 thousand Segment Revenue (For the Six Months Ended June 30, 2023) | Segment | Property Leasing (HK$ thousand) | Property Related Services (HK$ thousand) | Hotel Operations (HK$ thousand) | Catering Operations (HK$ thousand) | Total Revenue (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 138,759 | 14,217 | 37,767 | 8,582 | 199,325 | | North America | 30,955 | - | - | - | 30,955 | | **Total** | **169,714** | **14,217** | **37,767** | **8,582** | **230,280** | Segment Results (For the Six Months Ended June 30, 2023) | Segment | Profit/(Loss) for the Period (HK$ thousand) | | :--- | :--- | | Hong Kong | 199,669 | | North America | (53,146) | | **Total** | **146,523** | Segment Assets (As of June 30, 2023) | Segment | Segment Assets (HK$ thousand) | | :--- | :--- | | Hong Kong | 11,518,118 | | North America | 719,558 | | **Total** | **12,237,676** | [Net Costs and Expenses](index=10&type=section&id=Net%20Costs%20and%20Expenses) For the six months ended June 30, 2023, the Group's total cost of sales, administrative expenses, and other operating expenses net increased to HK$172,591 thousand, driven by higher depreciation, investment property expenses, hotel and catering operating expenses, and employee benefits Net Costs and Expenses | Item | 2023 (HK$ thousand) | 2022 (HK$ thousand) | | :--- | :--- | :--- | | Depreciation | 24,034 | 27,108 | | Investment Property Related Expenses | 33,025 | 28,974 | | Hotel and Catering Operating Expenses | 31,814 | 22,036 | | Other Employee Benefits Expenses, Net | 40,574 | 36,578 | | Government Subsidies | - | (1,900) | | **Total Cost of Sales, Administrative Expenses and Other Operating Expenses, Net** | **172,591** | **144,129** | - In 2022, Hong Kong government subsidies for the hotel and catering industries amounted to **HK$1.9 million**, while wage subsidies of **HK$1.512 million** under the Employment Support Scheme were offset against other employee benefits expenses[34](index=34&type=chunk) [Other Net Gains](index=10&type=section&id=Other%20Net%20Gains) For the six months ended June 30, 2023, the Group's other net gains significantly increased to HK$3,729 thousand from HK$564 thousand in the prior year, primarily due to gains from the disposal of investment properties and assets classified as held for sale Other Net Gains | Item | 2023 (HK$ thousand) | 2022 (HK$ thousand) | | :--- | :--- | :--- | | Dividend Income from Financial Assets at Fair Value Through Other Comprehensive Income | 688 | 679 | | Gain on Disposal of Investment Properties | 1,080 | - | | Gain on Disposal of Assets Classified as Held for Sale | 2,000 | - | | Net Loss on Disposal of Property, Plant and Equipment | (39) | (115) | | **Total** | **3,729** | **564** | [Finance Income and Finance Costs](index=11&type=section&id=Finance%20Income%20and%20Finance%20Costs) For the six months ended June 30, 2023, the Group's net finance costs significantly increased to HK$(62,284) thousand from HK$(21,627) thousand in the prior year, mainly due to a substantial rise in interest expenses on bank loans Finance Income and Finance Costs | Item | 2023 (HK$ thousand) | 2022 (HK$ thousand) | | :--- | :--- | :--- | | Bank Interest Income | 564 | 131 | | Interest Expense on Bank Loans | (62,848) | (21,758) | | **Net Finance Costs** | **(62,284)** | **(21,627)** | [Income Tax Reversal](index=11&type=section&id=Income%20Tax%20Reversal) For the six months ended June 30, 2023, the Group recorded an income tax reversal of HK$16,809 thousand, a decrease from HK$26,000 thousand in the prior year, primarily due to a reduction in US deferred income tax reversal Income Tax Reversal | Item | 2023 (HK$ thousand) | 2022 (HK$ thousand) | | :--- | :--- | :--- | | Current Income Tax - Hong Kong Profits Tax | (2,786) | (4,479) | | Current Income Tax - US Tax | (13) | (13) | | Deferred Income Tax Reversal/(Expense) - Hong Kong | (1,792) | (2,391) | | Deferred Income Tax Reversal/(Expense) - US | 21,400 | 32,830 | | **Total Income Tax Reversal** | **16,809** | **26,000** | - Hong Kong profits tax provision is calculated at a rate of **16.5%** on estimated assessable profits for the period, with no overseas tax provision required as overseas subsidiaries had no estimated assessable profits (except for US minimum state tax)[63](index=63&type=chunk) [Earnings Per Share](index=12&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2023, profit attributable to company shareholders was HK$123,594 thousand, resulting in basic earnings per share of HK$0.43, a decrease from HK$0.82 in the prior year, with diluted earnings per share equal to basic earnings per share due to no potential dilutive ordinary shares - Basic earnings per share is calculated based on profit attributable to company shareholders of **HK$123,594 thousand** (2022: HK$236,439 thousand) and **287,670 thousand** ordinary shares outstanding during the period[65](index=65&type=chunk) - Diluted earnings per share is equal to basic earnings per share as there were no potentially dilutive ordinary shares for the six months ended June 30, 2023 and 2022[65](index=65&type=chunk) [Dividends](index=12&type=section&id=Dividends) The Board declared an interim dividend of HK 6 cents per ordinary share for the year ending December 31, 2023, totaling HK$17,260 thousand, a reduction from HK 14 cents (totaling HK$40,274 thousand) in the prior year Interim Dividends Declared | Item | 2023 (HK$ thousand) | 2022 (HK$ thousand) | | :--- | :--- | :--- | | Interim dividend declared of HK 6 cents (2022: HK 14 cents) per ordinary share | 17,260 | 40,274 | - The Board declared an interim dividend of **HK 6 cents** per ordinary share for the year ending December 31, 2023, on August 28, 2023, which has not been recognized as a liability in the condensed consolidated interim financial information[65](index=65&type=chunk) [Trade and Other Receivables](index=12&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2023, the Group's net trade receivables were HK$3,342 thousand, slightly lower than HK$3,527 thousand as of December 31, 2022, primarily comprising rental and management fee receivables, with a 30-day credit period for management fees - Net trade receivables amounted to **HK$3,342 thousand** (December 31, 2022: HK$3,527 thousand), primarily comprising rental and management fee receivables[36](index=36&type=chunk)[37](index=37&type=chunk) Ageing Analysis of Trade Receivables | Ageing | June 30, 2023 (HK$ thousand) | December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 30 days | 1,352 | 1,584 | | 31 to 60 days | 189 | 147 | | 61 to 90 days | 164 | 110 | | Over 90 days | 1,637 | 1,686 | | **Total** | **3,342** | **3,527** | [Trade and Other Payables](index=13&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2023, the Group's trade payables decreased to HK$10,572 thousand from HK$13,817 thousand as of December 31, 2022 Ageing Analysis of Trade Payables | Ageing | June 30, 2023 (HK$ thousand) | December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 30 days | 9,095 | 11,540 | | 31 to 60 days | 741 | 1,167 | | 61 to 90 days | 109 | 379 | | Over 90 days | 627 | 731 | | **Total** | **10,572** | **13,817** | Chairman's Statement [Results](index=14&type=section&id=Results) The Group's consolidated profit for the first half of 2023 decreased by 44.0% to HK$146.5 million, primarily due to reduced fair value gains on investment properties and significantly increased interest expenses, resulting in an underlying loss of HK$5.5 million - The Group's consolidated profit for the first half of 2023 was **HK$146.5 million**, a decrease of **HK$114.9 million** or **44.0%** compared to the same period in 2022[69](index=69&type=chunk) - Excluding the impact of fair value changes in investment properties, the Group recorded an underlying loss of approximately **HK$5.5 million**, compared to an underlying profit of HK$41.4 million in the prior year, mainly due to a **188.1% increase** in interest expenses to **HK$62.8 million**[41](index=41&type=chunk) - The Group's total revenue increased by **HK$16.9 million** or **7.9%** to **HK$230.3 million**, with hotel and catering operations contributing a significant increase of **HK$17.5 million** or **60.8%**[70](index=70&type=chunk) - As of June 30, 2023, the Group's investment properties were valued at **HK$9.941 billion**, an increase of **0.9%** compared to December 31, 2022[42](index=42&type=chunk) [Dividends](index=14&type=section&id=Dividends) The directors declared an interim dividend of HK 6 cents per ordinary share, a decrease from HK 14 cents in the prior year - The directors declared an interim dividend of **HK 6 cents** per ordinary share (2022: HK 14 cents)[43](index=43&type=chunk) [Outlook](index=14&type=section&id=Outlook) The global economy remains affected by geopolitical conflicts, high inflation, and interest rates, while the lifting of travel restrictions and recovery of inbound tourism are key drivers for Hong Kong's economy, with the Group maintaining a cautious and prudent policy - The global economy continues to be negatively impacted by the ongoing Russia-Ukraine conflict, high inflation, and high interest rates in major Western economies, with persistent US-China and geopolitical tensions hindering export trade in mainland China and Hong Kong[43](index=43&type=chunk) - The lifting of global travel restrictions and the recovery of inbound tourism are major drivers for Hong Kong's economic growth[43](index=43&type=chunk) - The US federal funds rate is expected to remain high for the rest of 2023, and Hong Kong's interest rates are also anticipated to stay at current high levels[71](index=71&type=chunk) - The Group will continue to monitor current developments cautiously and make appropriate adjustments as circumstances dictate, adhering to a prudent policy[44](index=44&type=chunk) Management Discussion and Analysis [Business Review](index=15&type=section&id=Business%20Review) The Group's business review covers property leasing performance in Hong Kong and the US, alongside significant growth in hotel and catering operations, with Hong Kong property rental income slightly up and US property rental income down due to market downturn [Hong Kong Property Leasing](index=15&type=section&id=Hong%20Kong%20Property%20Leasing) Gross rental income in Hong Kong for the first half of 2023 increased by 3.2% to HK$138.8 million, primarily due to rent increases at Bridgepoint, partially offset by decreases at Early Bird Residence, with a recovery observed in the retail and industrial property leasing markets - Gross rental income in Hong Kong for the first half of 2023 was **HK$138.8 million**, an increase of **HK$4.3 million** or **3.2%** compared to the same period last year[46](index=46&type=chunk) - This increase primarily stemmed from rent hikes at Bridgepoint, though slightly offset by a decrease in rent at Early Bird Residence[46](index=46&type=chunk) - The retail and industrial property leasing markets showed signs of recovery[46](index=46&type=chunk) [US Property Leasing](index=15&type=section&id=US%20Property%20Leasing) Gross rental income from Montgomery Plaza in the US for the first half of 2023 decreased by 15.5% to HK$31.0 million, with office occupancy at 74.0% amid a sluggish San Francisco office leasing market, anticipating further declines in future gross rental income - Gross rental income from Montgomery Plaza in the US for the first half of 2023 was **HK$31.0 million**, a decrease of **HK$5.7 million** or **15.5%** compared to the same period last year[47](index=47&type=chunk) - As of the first half of 2023, Montgomery Plaza's office occupancy rate was **74.0%**[47](index=47&type=chunk) - The San Francisco office leasing market remains sluggish, with negative absorption in the first half of 2023, and gross rental income from Montgomery Plaza is expected to decline further in the foreseeable future[47](index=47&type=chunk) [Hotel and Catering Operations](index=15&type=section&id=Hotel%20and%20Catering%20Operations) Hotel room and catering revenue for the first half of 2023 increased by 60.8% to HK$46.3 million, driven by the return of mainland Chinese tourists, with average occupancy rates at The Arca and The Figo reaching 81.4% and 96.3% respectively, and significant EBITDA growth for both hotels - Hotel room revenue and catering revenue for the first half of 2023 amounted to **HK$46.3 million**, an increase of **HK$17.5 million** or **60.8%** compared to the same period last year, primarily driven by the return of tourists from mainland China[73](index=73&type=chunk) Hotel Average Occupancy Rate and EBITDA | Hotel | H1 2023 Average Occupancy Rate | H1 2022 Average Occupancy Rate | H1 2023 EBITDA (HK$ million) | H1 2022 EBITDA (HK$ million) | | :--- | :--- | :--- | :--- | :--- | | The Arca | 81.4% | 70.0% | 4.6 | 0.1 | | The Figo | 96.3% | 88.4% | 2.5 | 0.9 | [Liquidity and Financial Resources](index=15&type=section&id=Liquidity%20and%20Financial%20Resources) The Group closely monitors cash flow and funding needs, possessing sufficient committed bank facilities and actively seeking refinancing for maturing loans, with proceeds from property disposals used to enhance working capital - The Group has sufficient committed and available bank facilities to meet current and future business needs, and has initiated contact with banks to seek financing and refinancing for loans maturing within one year, receiving positive responses[48](index=48&type=chunk) - In the first half of 2023, the Group disposed of two properties in Sing Win Factory Building, Kwai Chung, for a total consideration of **HK$17.5 million**, realizing a total disposal gain of approximately **HK$3.1 million**, with proceeds used to enhance the Group's working capital during the period[75](index=75&type=chunk) - There is no foreign exchange risk as bank borrowings are denominated in HKD or USD, and principal and interest will be repaid in the respective loan currencies[49](index=49&type=chunk) [Group Capital Structure](index=16&type=section&id=Group%20Capital%20Structure) The Group's capital structure remained largely unchanged, with total bank borrowings slightly increasing to HK$2.5774 billion, primarily secured by properties and their rental income, and interest calculated at floating rates without significant foreign exchange risk - The Group's total bank borrowings increased by **HK$3.4 million** to **HK$2.5774 billion** (December 31, 2022: HK$2.574 billion), including outstanding long-term bank loans of **HK$2.2794 billion**[76](index=76&type=chunk) - Bank borrowings of approximately **HK$2.5594 billion** are secured by certain properties with an aggregate carrying value of **HK$8.4164 billion** and their rental income[52](index=52&type=chunk) - Interest on bank borrowings is calculated at floating rates (spread plus HIBOR or LIBOR), while overdraft interest is at the Hong Kong Prime Rate of **5.875%**[52](index=52&type=chunk) - The Group's borrowings and cash and cash equivalents are primarily denominated in HKD and USD, thus posing no significant foreign exchange fluctuation risk[78](index=78&type=chunk) Long-term Bank Loan Maturity Schedule | Maturity Period | June 30, 2023 (HK$ thousand) | December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Within one year | 851,908 | 692,310 | | In the second year | 1,427,497 | 1,222,876 | | In the third to fifth year | - | 378,851 | | **Total** | **2,279,405** | **2,294,037** | [Capital Expenditure](index=16&type=section&id=Capital%20Expenditure) Capital expenditure for the first half of 2023 was HK$18.3 million, primarily for property, plant, and equipment acquisition, property improvements, and construction works, with capital commitments of HK$12.6 million expected to be funded by future operating income, bank borrowings, and other financing - Capital expenditure for the first half of 2023 amounted to **HK$18.3 million** (2022: HK$13.5 million)[51](index=51&type=chunk) - Capital commitments as of June 30, 2023, were **HK$12.6 million** (December 31, 2022: HK$14.1 million)[51](index=51&type=chunk) - Capital expenditure and commitments are primarily related to the acquisition of property, plant and equipment, property improvements, and construction works, expected to be funded by future operating income, bank borrowings, and other applicable financing channels[51](index=51&type=chunk) [Contingent Liabilities](index=16&type=section&id=Contingent%20Liabilities) As of June 30, 2023, the Group had no significant contingent liabilities or guarantees - As of June 30, 2023, the Group had no significant contingent liabilities or guarantees (December 31, 2022: Nil)[53](index=53&type=chunk) [Employees and Remuneration Policy](index=17&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2023, the Group employed 276 full-time staff, offering competitive remuneration including discretionary bonuses, insurance, medical plans, and MPF, with annual reviews for promotion and compensation, and director remuneration determined by the Board based on the Remuneration Committee's recommendations - As of June 30, 2023, the Group employed a total of **276 full-time employees** (including the Company's directors)[55](index=55&type=chunk) - In addition to salaries, other benefits include discretionary bonuses, insurance, medical plans, and a Mandatory Provident Fund Scheme, with annual reviews for employee promotion and remuneration[55](index=55&type=chunk)[91](index=91&type=chunk) - The remuneration of the Company's directors is recommended by the Remuneration Committee based on the Group's operating results, individual duties and performance, and comparable market data, and decided by the Board[81](index=81&type=chunk) - The Company has not adopted any share option scheme as an incentive for directors and eligible employees[56](index=56&type=chunk) [Significant Investments, Acquisitions or Disposals of Subsidiaries, Associates and Joint Ventures](index=17&type=section&id=Significant%20Investments,%20Acquisitions%20or%20Disposals%20of%20Subsidiaries,%20Associates%20and%20Joint%20Ventures) For the half-year ended June 30, 2023, the Group held no significant investments, nor were there any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - For the half-year ended June 30, 2023, there were no significant investments held, nor any significant acquisitions or disposals of subsidiaries, associates, or joint ventures[82](index=82&type=chunk) [Repurchase, Sale or Redemption of the Company's Shares](index=17&type=section&id=Repurchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Shares) During the period, neither the Company nor its subsidiaries repurchased, sold, or redeemed any of the Company's shares - During the period, the Company did not redeem any of its shares, nor did the Company or its subsidiaries repurchase or sell any of the Company's shares[92](index=92&type=chunk) [Corporate Governance](index=17&type=section&id=Corporate%20Governance) The Company complied with the Corporate Governance Code during the period, except for the combined roles of Chairman and Chief Executive Officer, which the Board believes provides consistent leadership and ensures a balance of power and authority through independent directors - The Company has complied with the code provisions of the Corporate Governance Code set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited during the period, except for the combined roles of Chairman and Chief Executive Officer[93](index=93&type=chunk)[83](index=83&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive Officer provides strong and consistent leadership for the Company, facilitating effective planning and implementation of its strategies, which is in the best interests of the Company and its shareholders[83](index=83&type=chunk) - The Board includes one non-executive director and three independent non-executive directors who provide diverse experience, expertise, independent advice, and perspectives, ensuring a balance of power and authority[83](index=83&type=chunk) - All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules during the period[93](index=93&type=chunk) [Independent Review](index=18&type=section&id=Independent%20Review) The Audit Committee reviewed the Group's key accounting policies and the condensed consolidated interim financial information for the six months ended June 30, 2023, without disagreement, and the interim financial information was reviewed by PricewaterhouseCoopers in accordance with HKSRS 2410 - The Audit Committee has reviewed the Group's principal accounting policies and the condensed consolidated interim financial information for the six months ended June 30, 2023, and has no disagreement[85](index=85&type=chunk) - The condensed consolidated interim financial information for the six months ended June 30, 2023, is unaudited but has been reviewed by PricewaterhouseCoopers in accordance with Hong Kong Standard on Review Engagements 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'[85](index=85&type=chunk) [Interim Dividend and Record Date](index=18&type=section&id=Interim%20Dividend%20and%20Record%20Date) The Board resolved to declare an interim dividend of HK 6 cents per ordinary share, payable on September 29, 2023, to shareholders registered at the close of business on September 13, 2023 - The Board resolved to declare an interim dividend of **HK 6 cents** per ordinary share (2022: HK 14 cents)[85](index=85&type=chunk) - The interim dividend will be paid on **September 29, 2023**, to shareholders registered in the Company's register of members at the close of business on **September 13, 2023**[85](index=85&type=chunk) [Interim Report](index=18&type=section&id=Interim%20Report) The 2023 Interim Report, containing all information required by the Listing Rules, will be dispatched to shareholders in due course and published on the HKEX website and the Company's website - The 2023 Interim Report, containing all information required by the Listing Rules, will be dispatched to the Company's shareholders in due course and published on the HKEX website and the Company's website www.tsld.com[86](index=86&type=chunk)

Risk Management and Internal Control - The audit committee confirmed that the risk management and internal control systems are sufficient and effective as of March 2023[1]. - The group has established a risk management and internal control system aimed at identifying and managing risks associated with achieving business objectives[93]. - The board is responsible for overseeing the risk management and internal control systems to ensure effective communication of core values and operational guidelines throughout the group[95]. - The internal audit function reviewed the adequacy and effectiveness of the group's risk management and internal control systems, focusing on financial, compliance, and operational functions[98]. - The board conducts annual reviews of the effectiveness of the risk management and internal control systems, covering all significant monitoring aspects[113]. - The audit committee assists the board in reviewing the risk management and internal control systems to ensure effective monitoring is in place[114]. - The internal control function evaluates the effectiveness of the risk management and internal control systems annually and provides recommendations based on identified risks[114]. - The group has a structured risk management framework involving the board, audit committee, management, and internal control functions[114]. Environmental, Social, and Governance (ESG) Initiatives - The environmental, social, and governance (ESG) report covers the fiscal year 2022, with comparative figures from fiscal year 2021[5]. - The board of directors is responsible for overseeing the implementation of the ESG strategy and ensuring compliance with relevant laws and regulations[15]. - The group has established an ESG working group to assist in formulating and implementing ESG strategies and policies[15]. - The report emphasizes the importance of integrating ESG principles into the risk management system for sustainable business practices[14]. - The group has engaged an external consultant for limited assurance on the ESG report[12]. - The board will review the progress of ESG-related goals and indicators at least once a year[16]. - The report adheres to the guidelines set forth by the Hong Kong Stock Exchange for ESG reporting[6]. - The company identified 23 key sustainability topics impacting its operations, focusing on environmental, social, and governance (ESG) issues[20]. - Stakeholder feedback was collected through an online survey to prioritize the importance of selected ESG topics, resulting in a matrix that highlights high-importance themes[22]. - The board has reviewed and validated the importance assessment process, ensuring transparency in the company's ESG performance reporting[24]. - The company emphasizes the significance of stakeholder engagement for long-term development and success, maintaining communication channels with various stakeholders[29]. - The company aims to reduce its emissions by 10% by the fiscal year 2032, using the fiscal year 2022 as a baseline[130]. - The company has recognized the importance of environmental, social, and governance (ESG) trends for long-term sustainability and has established an ESG team to develop compliance strategies[121]. Board Composition and Governance - The board consists of at least three independent non-executive directors, ensuring compliance with independence standards[33]. - Independent non-executive directors must confirm their independence annually and notify the company of any changes affecting their independence[35]. - The board meets at least four times a year, with most directors attending in person or via electronic communication[37]. - The company has established mechanisms to ensure the board receives independent viewpoints and opinions on governance matters[36]. - The board has established multiple committees, including the audit committee, remuneration committee, and nomination committee, to oversee various governance aspects[47]. - The board consists of one female director and eight male directors, with a commitment to gender diversity as a key factor in selecting suitable candidates[58]. - The nomination committee reviewed the board's structure and composition, suggesting re-election of retiring directors and assessing the independence of all independent non-executive directors[52]. - The company’s governance practices include regular communication with stakeholders and adherence to legal and regulatory compliance[47]. - The company’s board diversity policy aims to ensure a balanced representation of skills, knowledge, and experience among its members[53]. - The company has implemented a diversity policy for board members, considering various factors such as gender, age, and professional experience[81]. Financial Performance and Risk - The group generated approximately 83% of its revenue from operations in Hong Kong during the reporting period[10]. - The group faces medium-level financial risks, including interest rate risk and liquidity risk, with measures in place to monitor financial market conditions and maintain sufficient cash and available funds[100]. - The group has implemented prudent liquidity risk management and maintains good relationships with banks to ensure adequate financing[100]. - The audit committee is responsible for reviewing the financial statements and assessing the effectiveness of the company's internal control systems[49]. - The board is committed to preparing financial statements that accurately reflect the company's financial position, adhering to applicable accounting standards and regulations[83]. Sustainability and Environmental Impact - The company aims to continuously improve its environmental performance by adhering to strict environmental regulations and enhancing operational sustainability[41]. - The company is committed to providing quality services in a clean and sustainable manner, focusing on reducing emissions and waste while conserving energy and water resources[41]. - The total greenhouse gas emissions for the fiscal year 2022 amounted to 5,298.1 tons of CO2 equivalent, an increase from 4,248.7 tons in 2021, representing a growth of approximately 24.7%[132]. - The company has emitted 36.9 kg of nitrogen oxides, 0.6 kg of sulfur oxides, and 2.1 kg of particulate matter during the reporting year[130]. - The company has implemented measures to mitigate risks associated with regulatory requirements, including mandatory inspections and safety improvements[122]. - The group has implemented measures to reduce energy consumption, including the installation of energy-efficient lighting and regular monitoring of electricity usage[157]. - The group has set a target to reduce total waste by 10% by the fiscal year 2032, using the fiscal year 2022 as a baseline[150]. - The group has begun to incorporate climate change risks and opportunities into its business strategy, conducting annual corporate risk assessments[181]. Employee Engagement and Workplace Culture - The group has a total of 244 employees, with 102 females and 142 males, and 238 full-time employees compared to 6 part-time employees[190]. - The employee turnover rate for the group is 43%, with male turnover at 39% and female turnover at 47%[196]. - The company adheres to a strict non-discrimination policy, ensuring equal opportunities regardless of age, gender, marital status, and other factors[194]. - The company provides competitive compensation and benefits, including medical coverage and various paid leave options[193]. - The group has implemented safety policies and procedures to ensure a safe working environment, including emergency fire equipment and safety guidelines[200]. - The employee handbook is regularly reviewed and updated to comply with labor laws and regulations, ensuring transparency in employee rights and responsibilities[192]. - The company emphasizes a fair and open recruitment and promotion process, recognizing employee contributions and performance[193].

[Financial Highlights](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Financial Highlights](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) For the year ended December 31, 2022, the Group reported an 8.1% revenue increase, but annual profit significantly declined, with underlying profit (excluding property revaluation) down 31.1% due to higher interest expenses Financial Performance Summary | Metric | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 439.9 Million | HKD 407.0 Million | +8.1% | | Annual Profit | HKD 385.5 Million | HKD 654.4 Million | -41.1% | | Underlying Profit (Excluding Property Revaluation) | HKD 36.5 Million | HKD 53.0 Million | -31.1% | | Proposed Final Dividend | HKD 6 Cents per Share | HKD 12 Cents per Share | -50.0% | - Annual profit includes fair value gains on investment properties (net of deferred tax) of **HKD 349 Million**, a significant decrease from **HKD 601.4 Million** in 2021[2](index=2&type=chunk)[47](index=47&type=chunk)[49](index=49&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Consolidated Statement of Profit or Loss](index=2&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) In 2022, Group revenue grew to HKD 440 Million, but profit for the year decreased 41.1% to HKD 386 Million due to reduced fair value gains on investment properties and significantly increased finance costs, with basic earnings per share at HKD 1.25 Consolidated Statement of Profit or Loss Summary | Item | 2022 (HKD Thousand) | 2021 (HKD Thousand) | | :--- | :--- | :--- | | Revenue | 439,858 | 407,024 | | Gross Profit | 291,704 | 270,586 | | Fair Value Gains on Investment Properties | 286,179 | 617,126 | | Operating Profit | 402,439 | 719,645 | | Net Finance Costs | (70,187) | (36,204) | | Profit Before Income Tax | 332,252 | 683,441 | | **Profit for the Year** | **385,510** | **654,426** | | Profit Attributable to Equity Holders of the Company | 360,115 | 633,618 | | Earnings Per Share (Basic and Diluted) | HKD 1.25 | HKD 2.20 | [Consolidated Statement of Comprehensive Income](index=3&type=section&id=%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) Total comprehensive income for 2022 significantly decreased to HKD 384 Million from HKD 741 Million in 2021, primarily due to lower annual profit and a shift from positive to negative other comprehensive income, including fair value losses on financial assets Consolidated Statement of Comprehensive Income Summary | Item | 2022 (HKD Thousand) | 2021 (HKD Thousand) | | :--- | :--- | :--- | | Profit for the Year | 385,510 | 654,426 | | Other Comprehensive Income for the Year | (1,958) | 86,963 | | **Total Comprehensive Income for the Year** | **383,552** | **741,389** | [Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of year-end 2022, total assets increased to HKD 12.134 Billion and total equity to HKD 9.115 Billion, though the Group reported net current liabilities of HKD 820.403 Million mainly from short-term bank loans and current portions of long-term loans, yet management believes sufficient financial resources are available for ongoing operations Consolidated Statement of Financial Position - Assets | Asset | Dec 31, 2022 (HKD Thousand) | Dec 31, 2021 (HKD Thousand) | | :--- | :--- | :--- | | Non-current Assets | 11,839,719 | 11,572,995 | | Current Assets | 294,130 | 259,929 | | **Total Assets** | **12,133,849** | **11,832,924** | Consolidated Statement of Financial Position - Equity and Liabilities | Equity and Liabilities | Dec 31, 2022 (HKD Thousand) | Dec 31, 2021 (HKD Thousand) | | :--- | :--- | :--- | | Total Equity | 9,115,120 | 8,809,572 | | Non-current Liabilities | 1,904,196 | 2,305,337 | | Current Liabilities | 1,114,533 | 718,015 | | **Total Equity and Liabilities** | **12,133,849** | **11,832,924** | - The Group's net current liabilities as of December 31, 2022, amounted to **HKD 820,403 Thousand**, primarily comprising short-term bank loans and current portions of long-term bank loans, though directors believe the Group has sufficient financial resources for its operations[7](index=7&type=chunk) [Notes to the Consolidated Financial Statements](index=6&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [Basis of Preparation and Accounting Policies](index=6&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) These consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance, with the adoption of annual improvements and revised standards effective January 1, 2022, having no significant impact on the Group's results or financial position - Financial statements are prepared on a historical cost basis, except for investment properties and financial assets measured at fair value through other comprehensive income[14](index=14&type=chunk) - The Group adopted annual improvements and revised standards mandatory for fiscal years beginning on or after January 1, 2022, with no significant impact on the Group's results or financial position[15](index=15&type=chunk)[117](index=117&type=chunk) [Revenue and Segment Information](index=7&type=section&id=%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) Group total revenue increased by 8.1% to HKD 440 Million, primarily driven by significant growth in hotel operations, with the Hong Kong segment contributing the majority of revenue and profit, while the North America segment recorded a loss mainly due to fair value losses on investment properties Revenue by Source | Revenue Source | 2022 (HKD Thousand) | 2021 (HKD Thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Property Leasing | 340,537 | 342,549 | -0.6% | | Property Related Services | 27,588 | 27,918 | -1.2% | | Hotel Operations | 57,819 | 29,783 | +94.1% | | Food and Beverage Operations | 13,914 | 6,774 | +105.4% | | **Total** | **439,858** | **407,024** | **+8.1%** | 2022 Segment Results | Item | Hong Kong (HKD Thousand) | North America (HKD Thousand) | Total (HKD Thousand) | | :--- | :--- | :--- | :--- | | Segment Revenue | 366,394 | 73,464 | 439,858 | | Profit/(Loss) for the Year | 546,708 | (161,198) | 385,510 | - The Group's operating segments are geographically divided into Hong Kong and North America, with the chief operating decision maker (Executive Directors) assessing performance based on segment underlying profit (excluding fair value changes of investment properties)[19](index=19&type=chunk)[32](index=32&type=chunk) [Income Tax, Finance Costs and Earnings Per Share](index=11&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E3%80%81%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC%E5%8F%8A%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) In 2022, the Group recorded an income tax credit of HKD 53.258 Million, mainly from deferred income tax credit in the US, while net finance costs significantly increased by 93.9% to HKD 70.187 Million due to rising interest rates, and basic earnings per share decreased from HKD 2.20 to HKD 1.25 Net Finance Costs | Item | 2022 (HKD Thousand) | 2021 (HKD Thousand) | | :--- | :--- | :--- | | Finance Income | 1,038 | 406 | | Finance Costs | (71,225) | (36,610) | | **Net Finance Costs** | **(70,187)** | **(36,204)** | Income Tax (Credit)/Expense | Item | 2022 (HKD Thousand) | 2021 (HKD Thousand) | | :--- | :--- | :--- | | Current Income Tax | 4,750 | 11,149 | | Deferred Income Tax (Credit)/Expense | (58,008) | 17,866 | | **Total Income Tax (Credit)/Expense** | **(53,258)** | **29,015** | - Basic earnings per share were **HKD 1.25**, calculated based on profit attributable to equity holders of the Company of **HKD 360 Million** and 287.7 million ordinary shares in issue (2021: **HKD 2.20 per share**), with no potential dilutive effect[62](index=62&type=chunk)[41](index=41&type=chunk) [Dividends](index=12&type=section&id=%E8%82%A1%E6%81%AF) The Board proposed a final dividend of HKD 6 Cents per ordinary share, a 50% reduction from HKD 12 Cents last year, bringing the total full-year dividend to HKD 20 Cents per share including the interim dividend of HKD 14 Cents Dividends Declared | Dividend | 2022 | 2021 | | :--- | :--- | :--- | | Interim Dividend (per Share) | HKD 14 Cents | HKD 10 Cents | | Proposed Final Dividend (per Share) | HKD 6 Cents | HKD 12 Cents | | **Full Year Dividend (per Share)** | **HKD 20 Cents** | **HKD 22 Cents** | [Trade and Other Receivables and Payables](index=12&type=section&id=%E6%87%89%E6%94%B6%E5%8F%8A%E6%87%89%E4%BB%98%E8%B3%87%E6%AC%BE) As of year-end 2022, net trade receivables increased to HKD 3.527 Million, with a notable rise in receivables over 90 days, and total trade payables also increased to HKD 13.817 Million Trade Receivables Ageing | Trade Receivables Ageing | 2022 (HKD Thousand) | 2021 (HKD Thousand) | | :--- | :--- | :--- | | 0-30 Days | 1,584 | 1,446 | | 31-60 Days | 147 | 137 | | 61-90 Days | 110 | 131 | | Over 90 Days | 1,686 | 91 | | **Total** | **3,527** | **1,805** | Trade Payables Ageing | Trade Payables Ageing | 2022 (HKD Thousand) | 2021 (HKD Thousand) | | :--- | :--- | :--- | | 0-30 Days | 11,540 | 9,159 | | 31-60 Days | 1,167 | 182 | | 61-90 Days | 379 | 7 | | Over 90 Days | 731 | 332 | | **Total** | **13,817** | **9,680** | [Management Discussion and Analysis](index=14&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Chairman's Statement](index=14&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A%E6%9B%B8) The Chairman's Statement highlights a 41.1% decrease in 2022 consolidated profit to HKD 386 Million, mainly due to reduced fair value gains on investment properties, with underlying profit also down 31.1% due to increased interest expenses, anticipating continued pressure from rising interest rates but improved business conditions in 2023 as pandemic effects wane and tourism recovers, while the Group plans to enhance its property portfolio and explore Greater Bay Area investment opportunities - Core property leasing business remained stable, while hotel and food and beverage operations recorded significant revenue growth due to full-year operations of two hotels, driving the Group's total revenue growth of **8.1%**[67](index=67&type=chunk) - Looking ahead, rising interest rates in the US and Europe will significantly increase the Group's interest expenses, negatively impacting profits in the coming years[50](index=50&type=chunk) - The Group's strategy will continue to focus on investing in upgrading and modernizing its existing property portfolio to enhance rental growth potential, and may explore investment opportunities in the Greater Bay Area[71](index=71&type=chunk) [Business Review](index=16&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's hotel operations showed strong performance in 2022 with a 95.9% revenue increase due to full-year operations of two hotels, while Hong Kong property leasing saw slight growth, and the San Francisco office leasing market remained sluggish with decreased occupancy and a 7.2% reduction in rental income - Hotel business revenue significantly increased by **95.9%** to **HKD 71.7 Million**, with The Figo and The Arca hotels achieving average occupancy rates of **92.4%** and **76.5%**, and average daily room rates of **HKD 806** and **HKD 869** respectively[53](index=53&type=chunk) - In Hong Kong, gross rental income increased by **1.4%** to **HKD 267.1 Million**, primarily from the contribution of new commercial spaces[74](index=74&type=chunk) - In the US, gross rental income from Montgomery Plaza decreased by **7.2%** to **HKD 73.5 Million**, with office occupancy at **70%** by year-end, reflecting a persistent sluggish market[75](index=75&type=chunk) [Liquidity and Financial Resources](index=16&type=section&id=%E6%B5%81%E5%8B%95%E6%80%A7%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) The Group maintains a sound financial position with a gearing ratio (total debt to total equity) of 28.2%, consistent with the prior year, and total bank borrowings slightly increased to HKD 2.574 Billion, possessing sufficient bank credit facilities and relying on operating cash flow and bank borrowings for funding needs Key Financial Metrics | Financial Metric | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Bank Borrowings | HKD 2.574 Billion | HKD 2.511 Billion | | Total Equity | HKD 9.115 Billion | HKD 8.810 Billion | | Gearing Ratio | 28.2% | 28.5% | - The Group's borrowings and cash are primarily denominated in HKD and USD, thus posing no significant foreign exchange fluctuation risk[94](index=94&type=chunk) - As of year-end, the Group's long-term bank loans maturing within one year amounted to **HKD 692 Million**, with **HKD 1.223 Billion** maturing in the second year[95](index=95&type=chunk) [Corporate Governance and Other Information](index=19&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Corporate Governance](index=19&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) During the reporting period, the company complied with the Corporate Governance Code under the Listing Rules, with the only deviation being the combined roles of Chairman and Chief Executive Officer held by Mr. Ma Ching Wai, which the Board believes provides strong and consistent leadership beneficial to the company and shareholders - The company complied with the code provisions of the Corporate Governance Code, except for the provision where the roles of Chairman and Chief Executive Officer are held by the same individual[87](index=87&type=chunk)[100](index=100&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive Officer provides strong and consistent leadership for the company, facilitating effective strategic planning and implementation[100](index=100&type=chunk) [Shareholder Information](index=19&type=section&id=%E8%82%A1%E6%9D%B1%E8%B3%87%E6%96%99) The company plans to hold its Annual General Meeting on May 22, 2023, with share transfer registration suspended from May 17 to May 22, 2023, to determine eligibility for attendance - The Annual General Meeting is scheduled for May 22, 2023[88](index=88&type=chunk)[102](index=102&type=chunk) - To ensure shareholders' eligibility to attend the Annual General Meeting, share transfer registration will be suspended from May 17 to May 22, 2023 (both dates inclusive)[104](index=104&type=chunk)

Financial Performance - Total revenue for the six months ended June 30, 2022, was HKD 213,429,000, an increase of 11.2% compared to HKD 191,817,000 for the same period in 2021[13]. - Gross profit for the same period was HKD 132,976,000, slightly up from HKD 131,574,000, indicating a stable gross margin[13]. - Operating profit increased to HKD 257,045,000, up 29% from HKD 199,342,000 in the previous year[13]. - Net profit attributable to shareholders for the period was HKD 236,439,000, compared to HKD 171,740,000 in 2021, reflecting a growth of 37.6%[15]. - Earnings per share (basic and diluted) rose to HKD 0.82, up from HKD 0.60 in the prior year[13]. - The total comprehensive income for the period was HKD 261,839,000, compared to HKD 228,640,000 in 2021, indicating a growth of 14.5%[18]. - The group's consolidated profit for the first half of 2022 was HKD 261.4 million, an increase of HKD 87.1 million or 50% compared to HKD 174.3 million in the same period of 2021[101]. - Basic earnings per share for the first half of 2022 were HKD 0.82, up from HKD 0.60 in 2021[101]. Assets and Liabilities - Total assets as of June 30, 2022, amounted to HKD 12,091,934,000, an increase from HKD 11,832,924,000 at the end of 2021[10]. - Total equity increased to HKD 9,034,976,000 from HKD 8,809,572,000, showing a growth of 2.5%[10]. - The company's total liabilities were HKD 3,056,958,000, with HKD 2,770,468,000 in Hong Kong and HKD 286,490,000 in North America[51]. - The group's current liabilities net value as of June 30, 2022, was HKD 104,219,000, a decrease from HKD 458,086,000 at the end of 2021, indicating improved financial stability[29]. - The group reported a significant reduction in short-term bank loans to HKD 240,000,000 from HKD 480,000,000, reflecting a strategic focus on debt management[29]. - Long-term bank loans secured by properties amounted to HKD 2,352,777,000 as of June 30, 2022, an increase from HKD 2,030,816,000 as of December 31, 2021[74]. - Total bank borrowings increased by HKD 82 million to HKD 2.59 billion as of June 30, 2022, compared to HKD 2.51 billion on December 31, 2021[108]. - The debt-to-equity ratio as of June 30, 2022, was 28.7%, slightly up from 28.5% on December 31, 2021[108]. Cash Flow - The net cash generated from operating activities for the six months ended June 30, 2022, was HKD 95,832,000, an increase of 32% compared to HKD 72,594,000 for the same period in 2021[22]. - The net cash used in investing activities was HKD (35,668,000), a significant improvement from HKD (114,468,000) in the previous year, indicating a reduction in investment outflows[22]. - The net cash generated from financing activities was HKD 24,892,000, down from HKD 53,317,000 in the prior year, reflecting changes in financing strategies[22]. - As of June 30, 2022, cash and cash equivalents increased to HKD 197,180,000, compared to HKD 152,814,000 at the end of the previous year, showing a strong liquidity position[22]. Investment Properties - The company reported a fair value gain on investment properties of HKD 187,181,000, compared to HKD 138,130,000 in the previous year[13]. - The total valuation of investment properties as of June 30, 2022, was HKD 9,748.8 million, an increase of HKD 194.7 million or 2% from HKD 9,554.1 million at the end of 2021[102]. - The fair value of investment properties is determined using a capitalization approach, with no transfers between fair value levels during the period[59]. - The fair value per square foot for residential properties under development is HKD 85,000[65]. - The capitalization rates for completed properties ranged from 1.9% to 4.5% for commercial properties, with a specific rate of 6.0% for North American commercial properties[65]. Operational Highlights - The revenue breakdown includes property leasing (HKD 157,021,000), property-related services (HKD 23,785,000), and hotel operations (HKD 14,066,000) for the first half of 2022[42]. - Basic profit from property leasing and related services in Hong Kong was HKD 39,370,000, while North America reported a loss of HKD 84,834,000, leading to a total profit of HKD 261,418,000[49]. - Gross rental income in Hong Kong for the first half of 2022 was HKD 134.5 million, an increase of HKD 2.9 million or 2.2% compared to the same period last year[107]. - Room and dining revenue from hotels for the first half of 2022 was HKD 28.8 million, significantly up from HKD 7.6 million in 2021 due to full operations of the two hotels[107]. - The average occupancy rates for the two hotels during the first half of 2022 were 88.4% and 70% respectively[107]. Dividends and Shareholder Information - Declared interim dividend of HKD 0.14 per share for the six months ended June 30, 2022, compared to HKD 0.10 per share in 2021, totaling HKD 40,274,000[91]. - The company declared an interim dividend of HKD 0.14 per share, an increase from HKD 0.10 per share in the previous year[114]. - Major shareholder, Jin Can Company, holds 138,998,248 shares, representing 48.32% of total shares[121]. - The company did not repurchase or sell any of its shares during the reporting period[125]. Corporate Governance and Compliance - The company has adhered to the corporate governance code as per the Hong Kong Stock Exchange, with the exception of the separation of roles between the Chairman and CEO, which are held by the same individual since June 15, 2017[127]. - The interim results for the six months ending June 30, 2022, have been reviewed by the audit committee and are unaudited, but have been reviewed by independent auditors according to the relevant standards[128]. - The Chairman, Ma Qingwei, confirmed the compliance of all directors with the trading standards during the reporting period[127].

Hotel Development and Services - The new hotel brand "Yage" opened in May 2021, featuring 187 spacious rooms with modern amenities[6] - The hotel includes "Arca Society," a dining space offering a unique blend of Asian and Western cuisine[9] - "Arca Assembly," a multifunctional event space, can accommodate 288 seats and host up to 600 guests, equipped with the latest smart technology[10] - The company aims to enhance customer experience through modern design and high-quality service in its new hotel[6] - Core property leasing business increased by 4.6% compared to the previous year, while hotel room and dining revenue saw a significant increase of HKD 34.8 million, mainly from the opening of the Yage Hotel in May 2021[31] - The hotel room revenue and food and beverage income for 2021 amounted to HKD 36.6 million, a significant increase of HKD 1.8 million compared to 2020, attributed to the full-year operation of the Feige Hotel and the opening of the Yage Hotel in May 2021[38] - The average occupancy rates for Feige Hotel and Yage Hotel in 2021 were 90% and 41.8%, respectively[38] Financial Performance - The group's consolidated profit for the year ended December 31, 2021, was HKD 654.4 million, an increase of HKD 874 million compared to a consolidated loss of HKD 153 million in 2020[31] - Earnings per share for 2021 were HKD 2.20, compared to a loss per share of HKD 0.54 in 2020[31] - The fair value gain of investment properties (after US deferred tax) was HKD 601.4 million in 2021, compared to a fair value loss of HKD 233.9 million in 2020[31] - Basic profit, excluding the impact of fair value changes, was approximately HKD 53 million, a decrease of HKD 27.9 million or 34.5% from HKD 80.9 million in 2020[31] - Total revenue for 2021 increased by HKD 55.3 million or 15.7% to HKD 407 million, compared to HKD 351.7 million in 2020[31] - As of December 31, 2021, the total valuation of investment properties was HKD 9.554 billion, an increase of HKD 897.8 million or 10.4% from HKD 8.653 billion on December 31, 2020[32] - Total equity amounted to HKD 8.809 billion, up from HKD 8.134 billion on December 31, 2020[32] - In 2021, the gross rental income in Hong Kong was HKD 263.4 million, an increase of HKD 13.7 million or 5.5% compared to 2020, primarily due to increased contributions from the Bridgeway project[38] - The total bank borrowings increased by HKD 77.4 million to HKD 2.51 billion in 2021, compared to HKD 2.43 billion in 2020[39] - The total equity increased by HKD 667.6 million to HKD 8.81 billion in 2021, compared to HKD 8.13 billion in 2020[39] - The debt-to-equity ratio was 28.5% in 2021, down from 29.9% in 2020[39] Corporate Governance and Management - The company is committed to sustainable development and enhancing its corporate governance practices[4] - The company has maintained compliance with the Corporate Governance Code as per the Listing Rules, except for a specific provision noted in the annual report[85] - The company’s board of directors includes five executive directors and three independent non-executive directors[60] - The board consists of five executive directors, one non-executive director, and three independent non-executive directors, ensuring compliance with independence requirements[109] - The company has received annual confirmations of independence from all independent non-executive directors, affirming their status as independent individuals[86] - The company has established and maintained directors' liability insurance to provide appropriate protection for its directors[100] - The board proposed a final dividend of HKD 0.12 per ordinary share, unchanged from 2020[33] - The company has a flexible dividend policy, considering various factors such as operational performance and cash flow when determining dividend amounts[97] - The board reviews corporate governance policies and practices annually, ensuring compliance with legal and regulatory requirements[113] - The company encourages continuous professional development for all directors, providing training sessions and materials[117] Risk Management - The company has outlined major risk factors and mitigation measures in its annual report, emphasizing the impact of financial risks on performance[90] - The group faces significant risks including regulatory changes, market risks due to the COVID-19 pandemic, and operational risks related to contractor performance[170] - Financial risks include interest rate risk and liquidity risk, with measures in place to monitor financial market conditions and maintain sufficient cash reserves[172] - The group has implemented training for employees to understand the latest regulatory requirements and continuously monitors regulatory changes[167] - The internal audit function assessed the adequacy and effectiveness of the group's risk management and internal control systems, confirming they are appropriate and effective[166] - The audit committee assists the board in reviewing the effectiveness of risk management and internal control systems[161] Sustainability and ESG Initiatives - The group has identified 23 key sustainability topics that impact its operations and stakeholders[193] - The board is responsible for overseeing the implementation of environmental, social, and governance (ESG) strategies and policies[189] - The group emphasizes the importance of integrating ESG principles into its risk management system[188] - Stakeholder feedback was collected through an online survey to assess the importance of various ESG topics[196] - The group has established an ESG working group to assist in developing and implementing its ESG strategies[189] - The report does not include environmental and social data from the US division[184] - The company aims to enhance transparency and accountability in its ESG reporting practices[200] - Future ESG initiatives will be aligned with stakeholder expectations and regulatory requirements[200] - The group is exploring opportunities for market expansion through sustainable practices[200]

Financial Performance - Total revenue for the six months ended June 30, 2021, was HKD 191,817,000, an increase of 9.3% from HKD 174,563,000 in the same period of 2020[13] - Gross profit for the same period was HKD 131,574,000, compared to HKD 140,776,000 in 2020, reflecting a decrease of 6.5%[13] - Operating profit for the six months was HKD 199,342,000, a significant recovery from an operating loss of HKD 120,602,000 in the previous year[13] - The net profit attributable to shareholders was HKD 171,740,000, compared to a loss of HKD 135,749,000 in the same period last year[13] - Earnings per share for the period was HKD 0.60, compared to a loss per share of HKD 0.47 in 2020[13] - The company reported a total comprehensive income of HKD 228,640,000 for the six months, a significant increase from HKD 17,900,000 in the same period of 2020[18] - The group reported a basic profit of HKD 174,270,000 for the six months ended June 30, 2021, compared to a loss of HKD 133,542,000 in the same period of 2020[48] - Basic earnings per share for the first half of 2021 were HKD 0.60, compared to a loss per share of HKD 0.47 in the same period of 2020[101] Assets and Liabilities - Total assets as of June 30, 2021, amounted to HKD 11,381,304,000, an increase from HKD 11,107,247,000 at the end of 2020[10] - Total equity increased to HKD 8,326,549,000 from HKD 8,133,395,000 at the end of 2020, representing a growth of 2.4%[10] - The group's total liabilities were HKD 3,054,755,000, with current liabilities amounting to HKD 813,479,000 as of June 30, 2021[50] - Long-term bank loans amounted to HKD 2,063,373,000 as of June 30, 2021, with a portion due within one year being HKD 166,732,000[71] - The group's current liabilities net value as of June 30, 2021, was HKD 506,344,000, primarily consisting of short-term bank loans of HKD 479,912,000[29] Cash Flow - For the six months ended June 30, 2021, the net cash generated from operating activities was HKD 72,594,000, a slight decrease from HKD 73,659,000 in the same period of 2020[22] - The net cash used in investing activities amounted to HKD (114,468,000), compared to HKD (149,308,000) in the previous year, indicating a reduction in investment outflows[22] - The net cash generated from financing activities was HKD 53,317,000, a significant decrease from HKD 210,537,000 in the prior year, reflecting changes in financing strategies[22] - As of June 30, 2021, cash and cash equivalents increased to HKD 152,814,000 from HKD 134,888,000 at the beginning of the period[22] Investment and Capital Expenditure - Capital expenditure for the six months ended June 30, 2021, was HKD 88,966,000, compared to HKD 188,204,000 in the same period of 2020[48] - The company continues to focus on expanding its investment properties, with fair value gains contributing positively to the overall financial performance[13] - Total investment property valuation as of June 30, 2021, was HKD 8.99 billion, an increase of HKD 335.1 million or 3.9% from HKD 8.65 billion as of December 31, 2020[102] Dividends and Shareholder Information - The interim dividend declared was HKD 0.10 per ordinary share, consistent with the previous year, totaling HKD 28,767,000 for both periods[90] - Major shareholder Jin Chan Company holds 138,998,248 shares, representing 48.32% of total shares[122] - The company did not repurchase or sell any of its shares during the reporting period[125] Corporate Governance and Management - The company has adhered to the corporate governance code as per the Hong Kong Stock Exchange, with the exception of the separation of roles between the Chairman and CEO, which are held by the same individual, Mr. Ma Qingwei[127] - The board believes that having the same person serve as both Chairman and CEO provides stable and consistent leadership, beneficial for strategic planning and execution[127] - The company remains confident in its operations and will continue to adopt a prudent approach amid ongoing uncertainties[106] Risk Management and Financial Stability - There were no changes in risk management policies since the end of last year, indicating stability in financial risk management[32] - The company believes it has sufficient financial resources to meet operational needs and settle liabilities as they fall due, supporting its going concern assumption[29] - The group maintains a strong financial position with sufficient committed bank credit facilities to meet current and future funding needs[109] Employee Information - As of June 30, 2021, the total number of full-time employees was 220, including directors[113]

Hotel Renovation and Customer Experience - The hotel at Hollywood Centre has undergone significant optimization, resulting in a new attractive appearance for guests[7]. - The hotel has been renamed "Feige" following the renovation plan[7]. - The company aims to enhance customer experience with modern design and warm color tones in the hotel[9]. - The hotel "Feige" in Sheung Wan was renovated and reopened in mid-October 2020, but hotel room revenue decreased by 86% to approximately HKD 1.8 million due to a six-month closure for renovations[39]. - The hotel "Yage" is expected to open in the second half of 2021 after obtaining a hotel license, contributing to future revenue growth[39]. - The company aims to expand its target customer base for hotel accommodation services to local residents, increasing occupancy rates[177]. Financial Performance and Revenue - The group's core property leasing business declined by 2.1% compared to the previous year, with total revenue decreasing by 5% to HKD 351.7 million (2019: HKD 370.3 million)[33]. - The group recorded a consolidated loss of HKD 153 million for the year, compared to a profit of HKD 446.4 million in 2019, resulting in a loss per share of HKD 0.54 (2019: earnings of HKD 1.52 per share)[33]. - Excluding property revaluation losses, the basic profit for the year was approximately HKD 80.9 million, down HKD 10.1 million or 11.1% from HKD 91.1 million in 2019[33]. - In 2020, the gross rental income in Hong Kong was HKD 249.7 million, a decrease of HKD 11.6 million or 4.4% compared to 2019, primarily due to rental concessions and reduced renewal rents[39]. - The gross rental income from Montgomery Plaza in the US was HKD 77.6 million in 2020, an increase of HKD 4.5 million or 6.2% compared to 2019, with an office occupancy rate of 89% at year-end[39]. - The total distributable reserves as of December 31, 2020, were HKD 559.823 million, down from HKD 580.860 million in 2019[58]. Corporate Governance and Management - The management team includes experienced directors with a long history in the company, such as the Chairman and CEO, Ma Ching Wai, who has been with the company since 1974[14]. - The company has a diversified board with members holding various positions in other organizations, enhancing its governance structure[13]. - The company maintains a high level of corporate governance practices to protect shareholder interests and enhance group performance[111]. - The board consists of five executive directors, one non-executive director, and three independent non-executive directors, ensuring compliance with listing rules[114]. - All independent non-executive directors have confirmed their independence in accordance with the relevant guidelines[115]. - The company has adopted a standard code of conduct for securities trading by directors, ensuring compliance with listing rules[112]. - The company has implemented a training program for new directors to ensure they understand their responsibilities and the company's operations[123]. Risk Management and Internal Controls - The company emphasizes the importance of maintaining effective risk management and internal control systems, which were evaluated for adequacy and effectiveness[135]. - The company has established a risk management framework that includes the board, audit committee, management, and internal control functions[170]. - The internal audit function has reviewed and assessed the adequacy and effectiveness of the company's risk management and internal control systems during the year[174]. - The board is responsible for overseeing the risk management and internal control systems to ensure effective communication of core values and operational guidelines[170]. - The company is committed to continuous improvement in its risk management processes and internal controls to address operational risks effectively[167]. Shareholder Information and Dividends - The board proposed a final dividend of HKD 0.12 per ordinary share, unchanged from 2019[34]. - The company declared an interim dividend of HKD 0.10 per share and a proposed final dividend of HKD 0.12 per share, maintaining the total dividend at HKD 0.22 per share for 2020[52]. - Shareholders holding at least 5% of voting rights can request the convening of a special general meeting[156]. Financial Position and Equity - As of December 31, 2020, the group's investment properties were revalued at HKD 8.656 billion (2019: HKD 8.6275 billion)[33]. - Total equity amounted to HKD 8.134 billion, a slight decrease from HKD 8.2034 billion in 2019[33]. - The equity decreased by HKD 70 million to HKD 81.334 billion in 2020, compared to HKD 82.034 billion in 2019, resulting in a debt-to-equity ratio of 29.9%[40]. - The total bank borrowings increased by HKD 305 million to HKD 2.433 billion in 2020, compared to HKD 2.128 billion in 2019, with long-term bank loans amounting to HKD 2.026 billion as of December 31, 2020[40]. Audit and Compliance - The audit firm has completed the audit of the annual consolidated financial statements and is willing to be reappointed[109]. - The independent auditor's report confirms that the financial statements reflect the group's financial position accurately as of December 31, 2020[189]. - Key audit matters identified include the valuation of investment properties[196]. - All investment property valuations are conducted by third-party valuers to support management's estimates[200].

Financial Performance - Total revenue for the six months ended June 30, 2020, was HKD 174,563,000, a decrease of 5.6% compared to HKD 184,602,000 in 2019[12] - The company reported a gross profit of HKD 140,776,000, slightly down from HKD 140,941,000 in the previous year[12] - Operating loss for the period was HKD 120,602,000, compared to an operating profit of HKD 242,095,000 in 2019, indicating a significant decline[12] - The net loss attributable to shareholders was HKD 135,749,000, compared to a profit of HKD 188,054,000 in the same period last year[12] - The company's total comprehensive income for the period was a loss of HKD (135,749,000) compared to a profit of HKD 188,054,000 in the previous year, indicating a significant decline[25] - The group reported a total loss of HKD 133,542,000 for the period, compared to a profit of HKD 196,877,000 in the same period of the previous year[54] - The group recorded a comprehensive loss of HKD 133.5 million for the first half of 2020, compared to a profit of HKD 196.9 million in the same period of 2019, resulting in a loss per share of HKD 0.47[95] - Basic profit for the first half of 2020, excluding property revaluation losses, was approximately HKD 42.7 million, a decrease of HKD 6.6 million or 13.4% compared to HKD 49.3 million in the same period of 2019[95] Assets and Liabilities - Total assets as of June 30, 2020, amounted to HKD 11,123,922,000, an increase from HKD 10,839,171,000 at the end of 2019[9] - The company's total equity decreased to HKD 8,185,024,000 from HKD 8,203,398,000 at the end of 2019[9] - The company's total capitalized interest for development projects was HKD 13,062,000 for the period[61] - The company's net asset value as of June 30, 2020, was HKD 10,692,498,000, up from HKD 10,550,464,000 as of December 31, 2019[58] - The total liabilities as of June 30, 2020, were HKD 2,635,773,000, an increase from HKD 2,286,463,000 as of December 31, 2019[56] - Long-term bank loans amounted to HKD 1,933,703,000 as of June 30, 2020, compared to HKD 1,840,564,000 as of December 31, 2019[66] - The company's current liabilities net value as of June 30, 2020, was HKD 794,154,000, primarily consisting of short-term bank loans of HKD 478,957,000 and the current portion of long-term bank loans of HKD 513,543,000[31] Cash Flow - The net cash generated from operating activities for the six months ended June 30, 2020, was HKD 73,659,000, a decrease from HKD 85,573,000 in 2019, representing a decline of approximately 14%[22] - The net cash used in investing activities was HKD (149,308,000) for the six months ended June 30, 2020, compared to HKD (150,428,000) in 2019, showing a slight improvement of about 1%[22] - The net cash generated from financing activities increased significantly to HKD 210,537,000 in 2020 from HKD 72,840,000 in 2019, marking an increase of approximately 188%[22] - The total cash and cash equivalents as of June 30, 2020, amounted to HKD 246,532,000, a substantial increase from HKD 62,233,000 in 2019, reflecting a growth of approximately 296%[22] Dividends and Shareholder Information - The company paid dividends amounting to HKD 34,520,000 during the six months ended June 30, 2020, consistent with the previous year's payment[25] - The interim dividend declared for the six months ended June 30, 2020, remained unchanged at HKD 0.10 per share, totaling HKD 28,767,000[85] - The board declared an interim dividend of HKD 0.10 per ordinary share, unchanged from the previous year[97] - The company declared an interim dividend of HKD 0.10 per share, consistent with the previous year[110] - As of June 30, 2020, the chairman and CEO, Ma Qingwei, held 164,744,839 shares, representing 57.27% of the total[111] - Major shareholder Jin Can Company holds a total of 138,998,248 shares, accounting for 48.32% of the company[117] Investment Properties and Fair Value - The company recorded a fair value loss on investment properties of HKD 192,940,000 for the period[12] - The group's non-current assets, including investment properties, amounted to HKD 8,705,126,000 as of June 30, 2020[52] - The fair value of financial assets measured at fair value through other comprehensive income was HKD 10,712,916,000 as of June 30, 2020[52] - As of June 30, 2020, the group's investment properties were revalued at HKD 8.705 billion, an increase of HKD 76 million or 0.9% from HKD 8.6275 billion at the end of 2019[96] Management and Governance - The company has complied with the corporate governance code, except for the role of chairman and CEO being held by the same individual[123] - The company’s board believes that having the chairman also serve as CEO provides consistent leadership beneficial to strategic planning[123] - The company has not entered into any agreements that would allow directors and executives to benefit from acquiring shares of the company[114] - The company has not made any changes to its risk management policies since the end of last year[38] - The interim results for the six months ending June 30, 2020, were reviewed by the audit committee and were not audited[124] - The company’s independent auditor conducted a review of the interim financial information in accordance with the relevant standards[124] Economic Environment and Future Outlook - The group remains cautious about the economic impact of the COVID-19 pandemic and the current geopolitical tensions, while expressing confidence in the long-term stability of the Hong Kong market[98] - The group did not experience significant changes in the business or economic environment that would affect the fair value of its financial assets[40]

Financial Performance - The company reported a significant increase in revenue, achieving a total of HKD 1.2 billion, representing a growth of 15% compared to the previous year[2]. - The group's consolidated profit for the fiscal year 2019 was HKD 446.4 million, a decrease of HKD 65.3 million or 12.8% compared to HKD 517.1 million in 2018[33]. - Earnings per share for 2019 were HKD 1.52, down 11.1% from HKD 1.71 in 2018[33]. - Total revenue for 2019 was HKD 370.3 million, up HKD 17.9 million or 5.1% from HKD 352.4 million in 2018[33]. - The group's basic profit, excluding fair value gains from investment properties, was approximately HKD 91 million, an increase of HKD 8.4 million or 10.2% from HKD 82.6 million in 2018[33]. - The increase in basic profit was primarily driven by higher rental income from properties in Hong Kong and the United States[33]. - The group's gross rental income for the year ended December 31, 2019, was HKD 261.3 million, an increase of HKD 15.4 million or 6.3% compared to the previous year, primarily due to increased rental income from "Bridgeway"[40]. - The hotel room revenue for "Westgate" decreased significantly by HKD 3.2 million or 20% to HKD 12.8 million, with an average occupancy rate of approximately 91%[40]. - The average room rate for "Westgate" declined due to decreased occupancy rates since mid-June 2019, leading to an operating loss of HKD 400,000 compared to an operating profit of HKD 2.4 million the previous year[40]. Future Outlook and Growth Strategies - The company has outlined a future outlook with a projected revenue growth of 10% for the next fiscal year, driven by ongoing market expansion efforts[4]. - Market expansion strategies include targeting emerging neighborhoods, with plans to acquire additional properties in these areas[4]. - The company is exploring potential mergers and acquisitions to enhance its portfolio and market share, focusing on strategic partnerships[4]. - A new technology initiative is underway to implement smart building solutions, aimed at increasing operational efficiency and tenant satisfaction[4]. - The company has invested HKD 200 million in upgrading infrastructure, including elevators and air conditioning systems, to improve tenant experience[8]. Occupancy and Tenant Relations - User data showed a rise in tenant occupancy rates, reaching 85%, up from 75% in the prior year, indicating a strong demand for the company's properties[6]. - The company has set a performance guidance of maintaining a minimum 80% occupancy rate across its properties for the upcoming year[6]. - ASM Pacific Technology has become one of the key tenants in the building, indicating market expansion[30]. Dividends and Shareholder Value - The board has approved a dividend payout of HKD 0.50 per share, reflecting a commitment to returning value to shareholders despite market challenges[4]. - The board proposed a final dividend of HKD 0.12 per ordinary share, unchanged from 2018[34]. - The group declared an interim dividend of HKD 0.10 per share, totaling HKD 28.77 million, and proposed a final dividend of HKD 0.12 per share, totaling HKD 34.52 million for the year[50]. - There is no fixed dividend payout ratio, and the board will consider various factors when determining dividend amounts, including operational performance and cash flow[102]. Corporate Governance - The board consists of five executive directors, one non-executive director, and three independent non-executive directors, ensuring compliance with listing rules[113]. - The company has adopted a corporate governance code and has been compliant with most of its provisions during the fiscal year ending December 31, 2019[110]. - The independent non-executive directors have reviewed the related party transactions and confirmed they were conducted on normal commercial terms and in the best interest of shareholders[84]. - The company emphasizes the importance of independent non-executive directors, with a review process for their independence after nine years of service[127]. - The company maintains a commitment to corporate governance standards, ensuring that all major decisions are made with appropriate oversight from the board[123]. Risk Management - The company acknowledges the potential risks and uncertainties that may affect future performance, as past performance does not guarantee future results[97]. - The company emphasizes the importance of risk management procedures and internal controls, aiming to manage rather than eliminate risks to achieve business objectives[165]. - The company has established a risk management and internal control framework that includes the board, audit committee, management, and internal control functions[166]. - The audit committee assists the board in reviewing the risk management and internal control systems to ensure effective monitoring[168]. - The group faced increased rental payment default risks due to a more challenging leasing market during the year[176]. Compliance and Audit - The independent auditor's report stated that the consolidated financial statements reflect the group's financial position accurately as of December 31, 2019[191]. - The audit focused on the significant estimation uncertainty and the potential for material misstatement due to minor percentage differences in property valuations[198]. - The audit committee confirmed the effectiveness and adequacy of the risk management and internal control systems during a meeting in March 2020[185]. - The company has maintained its internal guidelines and audit processes to ensure compliance with applicable regulations, with no significant changes in relevant rules affecting operations during the year[173]. Employee and Stakeholder Relations - The company emphasizes the importance of employee training and development to enhance operational and management skills[99]. - The company maintains strong relationships with key stakeholders, including tenants, customers, suppliers, and service providers, which are crucial for cost efficiency and long-term business interests[101]. - Employee training has been conducted to strengthen cybersecurity awareness within the organization[183]. Market Conditions - The company faced significant impacts on rental values and market demand due to the US-China trade war and local social unrest, particularly in the second half of the year[173]. - The company has adopted more flexible commercial terms for new leases and renewals in response to market conditions[173]. - The group has taken measures to monitor tenant rent payments more closely to reduce financial risks[176].

Financial Performance - Total revenue for the six months ended June 30, 2019, was HKD 184,602,000, an increase from HKD 166,169,000 in the same period of 2018, representing an increase of approximately 11%[12] - Gross profit for the same period was HKD 140,941,000, compared to HKD 118,564,000 in 2018, reflecting a growth of about 18.9%[12] - Operating profit decreased to HKD 242,095,000 from HKD 493,201,000 year-on-year, indicating a decline of approximately 50.9%[12] - Net profit attributable to shareholders for the six months was HKD 188,054,000, down from HKD 442,450,000 in 2018, a decrease of around 57.5%[12] - Basic and diluted earnings per share were HKD 0.65, compared to HKD 1.54 in the previous year, representing a decline of approximately 57.7%[12] - The company reported a total comprehensive income of HKD 194,530,000 for the period, down from HKD 455,308,000 in 2018, a decrease of about 57.3%[17] - The group's consolidated profit for the first half of 2019 decreased by 57.1% to HKD 196.9 million (2018: HKD 459 million), with earnings per share dropping to HKD 0.65 (2018: HKD 1.54) due to lower property revaluation gains[109] Assets and Liabilities - Total assets as of June 30, 2019, amounted to HKD 10,422,891,000, an increase from HKD 10,098,642,000 at the end of 2018, reflecting a growth of about 3.2%[7] - Total equity increased to HKD 7,985,826,000 from HKD 7,827,821,000, marking an increase of approximately 2%[7] - The company's total liabilities were HKD 2,270,821,000, with current liabilities at HKD 1,479,924,000[63] - Long-term bank loans secured amounted to HKD 1,764,651,000 as of June 30, 2019, an increase from HKD 1,459,355,000 at the end of 2018[77] - The group's current liabilities net value as of June 30, 2019, was HKD 1,206,917,000, primarily consisting of short-term bank loans of HKD 225,000,000 and the current portion of long-term bank loans of HKD 1,081,566,000[30] Cash Flow - For the six months ended June 30, 2019, the net cash generated from operating activities was HKD 85,573,000, an increase of 52.9% compared to HKD 56,038,000 for the same period in 2018[23] - The net cash used in investing activities was HKD (150,428,000), slightly improved from HKD (155,312,000) in the previous year[23] - The net cash generated from financing activities was HKD 72,840,000, down from HKD 100,537,000 in the prior period[23] - As of June 30, 2019, cash and cash equivalents increased to HKD 62,233,000 from HKD 52,773,000 at the end of the previous period[23] Capital Expenditures - The total capital expenditure for the group during the period was HKD 164,701,000, with HKD 156,646,000 allocated to Hong Kong operations and HKD 8,055,000 to North America[53] - The company had capital commitments of HKD 52,598,000 for investment properties as of June 30, 2019, compared to HKD 71,718,000 as of December 31, 2018, a decrease of approximately 26.7%[99] Dividends - The company declared an interim dividend of HKD 0.10 per ordinary share for the six months ended June 30, 2019, consistent with the dividend declared in 2018[98] - The board declared an interim dividend of HKD 0.10 per ordinary share, consistent with the previous year[110] Shareholder Information - Major shareholder Jin Can Company holds 138,998,248 shares, representing 48.3187% of total shares[131] - The issued and fully paid ordinary shares remained at 287,670,000 shares, with a total share capital of HKD 417,321,000[73] Risk Management and Governance - The company has not made any changes to its risk management policies since the end of last year[37] - The company continues to believe it has sufficient financial resources to meet operational needs and settle due liabilities[30] - The company has adhered to the corporate governance code as per the Hong Kong Stock Exchange, with the exception of the separation of roles between the Chairman and CEO, which are held by the same individual since June 15, 2017[136] - The board believes that having the same person serve as both Chairman and CEO provides stable and consistent leadership, beneficial for strategic planning and execution[136] Employment - As of June 30, 2019, the total number of full-time employees is 159, with additional benefits including discretionary bonuses and medical insurance[121]