Financial Performance - The company's revenue for the year 2023 was HKD 1,738,400,000, an increase of 21.6% compared to HKD 1,429,500,000 in 2022[13] - The operating profit for 2023 was HKD 362,600,000, up from HKD 162,100,000 in the previous year[13] - The profit attributable to equity shareholders for 2023 was HKD 219,656,000, compared to HKD 76,302,000 in 2022, resulting in a basic earnings per share of HKD 0.646[28] - The total assets of the company as of the reporting date were HKD 5,796,137,000, compared to HKD 5,635,896,000 in the previous year[8] - The equity attributable to equity shareholders increased to HKD 3,118,380,000 from HKD 2,936,799,000[8] - The company declared a final dividend of HKD 0.11 per share for 2023, up from HKD 0.05 per share in 2022[8] - The company declared an interim dividend of HKD 0.03 per share on October 26, 2023, compared to no dividend in 2022[141] - The board proposed a final dividend of HKD 0.08 per share for the year ending December 31, 2023, up from HKD 0.05 per share in 2022, indicating a 60% increase[141] Hotel Business Performance - The group's hotel business revenue increased to HKD 1,639,000,000 in 2023, up 23.1% from HKD 1,331,000,000 in 2022[59] - The hotel operating profit for the group was HKD 239,900,000 in 2023, significantly up from HKD 79,000,000 in 2022[59] - The occupancy rate for the Wuhan Holiday Inn increased to 56% in 2023 from 51% in 2022[58] - In Vietnam, the Sheraton Saigon Hotel's occupancy rate rose to 76.3% in 2023, up from 55.4% in 2022, with an average room rate of USD 172 compared to USD 148 in 2022[63] - The average room rate in China reached RMB 403 per night in 2023, compared to RMB 305 in 2022[35] - The occupancy rate for the Osaka Shinsaibashi Hotel improved to 75% in 2023 from 41% in 2022, with an average room rate of JPY 9,444 compared to JPY 6,326 in 2022[58] - The average room rate for the New York Sofitel Hotel was USD 389 per night in 2023, slightly up from USD 387 in 2022, with an occupancy rate of 77.0%[41] - The occupancy rate for the Delta Marriott Hotel at Toronto Airport and Conference Centre increased to 69.7% in 2023, up from 61.6% in 2022, with an average room rate of CAD 177 compared to CAD 158 in 2022[106] - The occupancy rate of the San Francisco W Hotel decreased to 66.5%, down from 68.8% in 2022[67] - The average room rate in 2023 was $336 per night, compared to $305 per night in 2022[67] - New York Sofitel Hotel achieved a 77% occupancy rate in 2023, up from 61% in 2022, with an average room rate of $389 compared to $387 last year[190] - San Francisco W Hotel reported a 67% occupancy rate in 2023, slightly down from 69% in 2022, with an average room rate of $336, an increase from $305[190] - Ho Chi Minh City Sheraton Hotel's occupancy rate improved to 76% in 2023 from 55% in 2022, with an average room rate of $172, up from $148[190] - Wuhan Qinchuan Holiday Inn recorded a 56% occupancy rate in 2023, an increase from 51% in 2022, with an average room rate of 403 RMB compared to 305 RMB last year[190] - Osaka Shinsaibashi Best Western Hotel achieved a 75% occupancy rate in 2023, significantly up from 41% in 2022, with an average room rate of 9,444 JPY compared to 6,326 JPY[190] Economic and Market Conditions - The Macau economy showed significant recovery in 2023, driven by a rebound in tourism and strong growth in gaming revenue[14] - The office property market is expected to face continued decline due to slow local business recovery and government shifts in property usage[30] - The US hotel industry showed resilience in 2023, with strong domestic demand driving recovery, although significant risks remain for 2024[66] - Vietnam welcomed 12.6 million international tourists in 2023, a 3.4 times increase compared to the previous year, although still about 70% of pre-pandemic levels[62] Risk Management and Sustainability - The company is closely monitoring risks and uncertainties related to the ongoing global pandemic and macroeconomic factors[79] - The company has established a risk management committee to oversee its risk management processes[104] - The company recognizes the importance of sustainable development and has implemented ESG strategies to manage environmental and social risks while identifying new business opportunities[115] - The company has established a risk management system to monitor and control the impacts of climate change, including implementing energy-saving measures and disaster recovery plans[116] - The company is committed to reducing emissions and has implemented measures such as upgrading boilers and installing additional solar panels[117] - The company has implemented waste reduction measures, including recycling and energy-saving initiatives, to minimize environmental impact[137] - The company is committed to social sustainability and community investment, reflecting its responsibility towards employees and the community[139] - The company has sufficient measures and monitoring systems in place to comply with local laws and regulations, with no significant non-compliance events reported during the year[123] Corporate Governance and Strategy - The company aims to create long-term value through disciplined investment and potential acquisitions[79] - The company emphasizes talent as a key driver for business growth and sustainable development, promoting workplace diversity to attract top talent[136] - The company operates primarily in property investment and development, with activities in Macau, Vietnam, China, Canada, the United States, and Hong Kong[139] - The company has established a selection process for suppliers based on quality, delivery, cooperation, and price, prioritizing those with economic and environmental awareness[135] - The company’s major suppliers account for less than 30% of total procurement, indicating a diversified supply chain[126] - The company has approximately 1,843 employees as of December 31, 2023, and adopts a localization policy for hiring[187] - The company has established defined contribution retirement plans in Hong Kong, Macau, the People's Republic of China, Vietnam, the United States, Canada, and Japan[187] Asset Management - The fair value of investment properties decreased by HKD 12,500,000 in 2023, compared to an increase of HKD 3,900,000 in 2022[16] - As of December 31, 2023, the Ottawa Sheraton Hotel was classified as an asset held for sale, with expected proceeds (before tax and transaction costs) of approximately CAD 28,014,000 (about HKD 161,622,000) from the sale, which is set to complete on February 29, 2024[106] - The company holds a 70.61% stake in the majority of its assets in Macau, which are managed by Golden Mountain Development Limited[17] - The company has a significant indirect holding of 56,675,000 shares in Jinshan Development Co., Ltd., accounting for 80.96% equity[172] - The company has a 99.70% equity stake in Lam Ho Investments Pte Ltd, with indirect holdings of 32,410,774 shares[170] - The company has a 100% equity stake in KSF Enterprises Sdn Bhd, holding 31,705,000 ordinary shares[174] - The company has a 100% equity stake in Chateau Ottawa Hotel Inc., with holdings of 9,000,000 ordinary shares[175] - The company holds a total of 198,580,800 shares, with a 58.37% equity percentage held by the major shareholders[168] - The indirect investment in Hubei Qingchuan Hotel Co., Ltd. amounts to USD 13,163,880, representing an 80.76% equity stake[171]

Financial Performance - The company's net profit attributable to equity shareholders for the year ended December 31, 2023, was HKD 219,656,000, representing an increase of 187% from HKD 76,302,000 in 2022[1]. - Basic earnings per share for 2023 were HKD 0.646, compared to HKD 0.224 in 2022, reflecting a growth of 189%[1]. - Total revenue for the year was HKD 1,738,354,000, up from HKD 1,429,488,000 in 2022, indicating a year-on-year increase of 21.6%[8]. - Operating profit for the year was HKD 362,570,000, significantly higher than HKD 162,126,000 in the previous year, marking a growth of 123%[8]. - The total comprehensive income for the year was HKD 300,158,000, compared to HKD 86,663,000 in 2022, representing an increase of 246%[12]. - The company's profit before tax for 2023 was HKD 219,656,000, compared to HKD 76,302,000 in 2022, representing a significant increase[75]. - The group's revenue for 2023 was HKD 1,738,400,000, an increase of 21.6% compared to HKD 1,429,500,000 in 2022[112]. - The group's profit attributable to equity shareholders for 2023 was HKD 219.7 million, significantly up from HKD 76.3 million in 2022, mainly due to the recovery of the hotel business[134]. Revenue Breakdown - Total revenue for the hotel and club business reached HKD 1,645,163, a 23% increase from HKD 1,337,997 in 2022[41]. - Revenue from hotel operations for 2023 was HKD 1,639,040,000, with a profit contribution of HKD 239,851,000[68]. - Hotel business total revenue rose to HKD 1,639,000,000 in 2023, up 23.1% from HKD 1,331,000,000 in 2022[93]. - The total revenue from investment properties after direct expenses was HKD 1,030,000,000 in 2023, up from HKD 844,000,000 in 2022[74]. - Revenue from Vietnam increased by 23.4% to HKD 716.1 million in 2023 from HKD 593.5 million in 2022[124]. Asset and Liability Management - The company's total assets decreased to HKD 4,997,402,000 from HKD 3,796,696,000, a decline of 5.5%[14]. - The company's total equity attributable to shareholders increased to HKD 3,118,380 from HKD 2,936,799, reflecting a growth of approximately 6.2%[36]. - Total liabilities amounted to HKD 2,056,339, with bank loans constituting HKD 1,375,474[46]. - The company's total bank loan was HKD 1,375,474,000 in 2023, slightly down from HKD 1,435,804,000 in 2022[79]. - The group's asset-liability ratio was 23.7% as of December 31, 2023, compared to 22.5% in 2022, while total liabilities as a percentage of total assets decreased to 35.5% from 37.0%[135]. Operational Costs and Expenses - The company reported a significant increase in financing costs, which rose to HKD 408,367,000 from HKD 166,026,000, an increase of 145%[8]. - Employee costs for the year amounted to HKD 193,692,000, an increase from HKD 178,587,000 in 2022, reflecting a rise of approximately 8.5%[48]. - Employee costs rose to HKD 612,909,000 in 2023 from HKD 525,791,000 in 2022, reflecting an increase of approximately 16.6%[74]. - The cost of inventory increased to HKD 143,465,000 in 2023 from HKD 132,740,000 in 2022, marking an increase of about 8.0%[74]. Dividends - The company proposed a final dividend of HKD 0.08 per share for the year, an increase from HKD 0.05 in 2022[29]. - The company declared an interim dividend of HKD 0.03 per share for 2023, compared to no interim dividend in 2022[83]. - The company plans to issue a final dividend, which has not been recognized as a liability as of the reporting date[61]. Market and Economic Conditions - The company faced challenges due to high operational costs and geopolitical instability affecting global supply chains[64]. - Macau's visitor arrivals increased by 395% year-on-year in 2023, recovering to 72% of pre-pandemic levels[113]. - The overall unemployment rate in Macau decreased from 3.5% in Q4 2022 to 2.3% in Q4 2023[113]. - The unemployment rate in the U.S. remained low at 3.6% throughout 2023, contributing to strong economic growth of 2.5%[149]. - The outlook for the Macau property market is optimistic, supported by economic stability, tourism growth, and infrastructure improvements, despite potential impacts from inflation and interest rates[139]. Hotel Performance Metrics - The occupancy rate for the Saigon Sheraton Hotel increased to 76.3% in 2023 from 55.4% in 2022, with average room rates rising to USD 172 from USD 148[100]. - The occupancy rate for the Sail Hotel improved to 71.8% in 2023, up from 51.5% in 2022, with average room rates increasing to USD 150 from USD 122[101]. - The occupancy rate for the Ottawa Sheraton Hotel increased to 68.7% in 2023, compared to 57.0% in 2022, with average room rates rising to CAD 216 from CAD 199[106]. - The occupancy rate for the Toronto Airport Marriott Hotel increased to 69.7% in 2023, up from 61.6% in 2022, with average room rates increasing to CAD 177 from CAD 158[107]. - The occupancy rate for hotels improved to 75.3% in 2023 from 40.9% in 2022, with the average room rate increasing to JPY 9,444 per night from JPY 6,326 per night[126]. Other Financial Metrics - The company recognized a hotel property impairment reversal of HKD 58,297,000 during the year, compared to no such reversal in 2022[8]. - The company recorded a net other income of HKD 141,436, compared to HKD 41,331 in the previous year, indicating a substantial increase[47]. - The company recorded a tax loss for the year ended December 31, 2023, and therefore did not make any provisions for Hong Kong profits tax[51]. - The company's tax provision for the year was HKD 61,433,000, compared to HKD 51,533,000 in 2022, indicating an increase of approximately 19.1%[74]. - The net foreign exchange gain for 2023 was HKD 5.6 million, compared to a net loss of HKD 7.5 million in 2022[156]. - The unrealized loss on trading securities for 2023 was HKD 1.6 million, while there was a gain of HKD 0.2 million in 2022[157]. Corporate Governance - The board of directors includes executive directors He Jianyuan, He Jianfu, Xie Sixun, Chen Leiming, and He Chonghui, along with non-executive and independent non-executive directors[170]. - The record date for attending the 2024 Annual General Meeting is June 3, 2024[173]. - The ex-dividend date is set for June 6, 2024, at 4:30 PM Hong Kong time[173]. - The deadline for submitting share transfer documents for registration is June 7, 2024[173]. - The suspension of share transfer registration will occur from June 11, 2024, to June 14, 2024[173].

Financial Performance - The group's total revenue for the six months ended June 30, 2023, was HKD 831,541,000, a 41.5% increase from HKD 587,109,000 in the same period of 2022[4] - Hotel and club business revenue reached HKD 786,141,000, up from HKD 541,265,000, reflecting a growth of 45.3%[4] - For the six months ended June 30, 2023, the company reported a pre-tax profit of HKD 45,250,000, a significant increase from HKD 6,947,000 in the same period of 2022[34] - The company recorded other income of HKD 35,737,000 for the first half of 2023, compared to HKD 11,906,000 in the same period of 2022, reflecting a substantial growth[4] - The company reported a profit of HKD 89,144,000 for the six months ended June 30, 2023, compared to HKD 26,093,000 for the same period in 2022, representing an increase of 241%[95] - Total comprehensive income for the period was HKD 90,065,000, up from HKD 8,121,000 in the previous year, indicating a significant improvement in overall financial performance[97] - The operating profit for the same period was HKD 124,575,000, compared to HKD 32,675,000 in 2022, indicating a significant improvement[116] - The net profit attributable to equity shareholders for the first half of 2023 was HKD 45,250,000, up from HKD 6,947,000 in the prior year, resulting in an earnings per share of HKD 0.133 compared to HKD 0.02[128] Assets and Liabilities - The group's total assets as of June 30, 2023, amounted to HKD 5,642,152,000, compared to HKD 5,635,896,000 at the end of 2022[14] - Total liabilities increased to HKD 2,068,644,000 from HKD 2,083,250,000, indicating a decrease of 0.7%[21] - The company’s total liabilities increased significantly, reflecting the impact of rising financing costs and employee expenses[30] - The company reported a total equity of HKD 3,573,508,000 as of June 30, 2023, compared to HKD 3,516,799,000 as of December 31, 2022, reflecting an increase[53] - The company’s retained earnings stood at HKD 2,465,696,000 as of June 30, 2023, compared to HKD 2,368,101,000 as of June 30, 2022[53] - The company’s non-controlling interests amounted to HKD 610,898,000 as of June 30, 2023, slightly down from HKD 615,847,000 at the end of 2022[103] Cash Flow and Investments - The company’s cash and cash equivalents amounted to HKD 1,350,866,000 as of June 30, 2023, compared to HKD 1,247,915,000 at the end of 2022, showing an increase of approximately 8.25%[42] - The company reported a net cash inflow from investing activities of HKD 90,657,000 for the six months ended June 30, 2023[118] - The company has committed to providing financial support to one of its subsidiaries to ensure its sustainability[89] - The company has guaranteed bank loans for two of its subsidiaries, indicating ongoing support for its affiliates[89] Operational Highlights - The hotel segment in Vietnam generated revenue of HKD 363,131,000, while the US segment contributed HKD 345,091,000[12] - The occupancy rate for the Wuhan Holiday Inn was 54%, up from 50% in 2022, while the average room rate increased to RMB 410 from RMB 285[143] - The occupancy rate for the Saigon Sheraton Hotel in Vietnam rose to 74% from 41%, with the average room rate increasing to USD 173 from USD 125[143] - The occupancy rate for residential properties dropped to 68% in the first half of 2023 from 74% in the same period of 2022 due to decreased demand from expatriates[139] - The company is actively pursuing market expansion and new product development strategies, particularly in the hospitality sector[110] Financing and Costs - The financing costs increased to HKD 45,080,000 in 2023 from HKD 15,800,000 in 2022, indicating a rise of approximately 185%[30] - Employee costs rose to HKD 307,720,000 in the first half of 2023, up from HKD 217,274,000 in 2022, representing an increase of about 42%[30] - The financing costs for the period amounted to HKD 117,575,000, reflecting the company's ongoing investment in growth[116] Governance and Management - The company has not appointed a CEO, as daily operations are managed by regional teams under the supervision of the executive director[182] - The Audit and Compliance Committee consists of four independent non-executive directors and meets regularly with senior management and external auditors to review the effectiveness of internal controls[186] - The Remuneration Committee includes five members, four of whom are independent non-executive directors, and reviews compensation matters related to senior management and directors[187] - The Nomination Committee comprises five members, with four being independent non-executive directors, and submits recommendations for the appointment of directors[188] - The Risk Management Committee consists of four members, three of whom are independent non-executive directors, and assists the board in monitoring the effectiveness of the risk management system[188] Market Outlook - The company remains cautiously optimistic about rental renewals in the second half of 2023, driven by the recovery of tourism and local consumption[140] - The hotel industry is expected to continue its recovery in the second half of 2023, although the outlook remains uncertain due to varying normalization rates across regions[176] - The company is closely monitoring the real estate market and economic conditions, anticipating benefits from significant developments such as the Hong Kong-Zhuhai-Macao Bridge and the expansion of Macau Airport[140]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示不會就本公告全部或任何部份內容而產生或因倚賴該 等內容而引致之任何損失承擔任何責任。 KECK SENG INVESTMENTS (HONG KONG) LIMITED 激成投資（香港）有限公司 （於香港註冊成立之有限公司） 網址: www.keckseng.com.hk （股份代號： 184） 二零二三年中期業績公佈 （未經審核） 激成投資（香港）有限公司（「本公司」）之董事會（「董事會」）欣然公佈本公司與其附屬 公司（「本集團」）截至二零二三年六月三十日止六個月之未經審核簡明綜合中期財務資料。 截至二零二三年六月三十日止六個月之本公司權益股東應佔綜合溢利為45,250,000港元（每股 溢利0.133港元），而二零二二年首六個月則為本公司權益股東應佔綜合溢利6,947,000港元 （每股溢利0.02港元）。 董事會已宣派二零二三年之中期股息每股0.03港元（二零二二年：無），並將於二零二三年十 月二十六日（星期四）派付予於二零二三年十月九日（星期一）名列本公司股東名冊之權益股 東。 ...

Financial Performance - For the year ended December 31, 2022, the total revenue was HKD 1,429,488,000, representing a 196% increase from HKD 482,878,000 in 2021[16]. - The net profit attributable to equity shareholders for 2022 was HKD 76,302,000, compared to a net loss of HKD 194,724,000 in 2021, resulting in a basic earnings per share of HKD 0.224[14]. - The total revenue from the hotel business increased to HKD 1,331,000,000 in 2022, a 250% rise from HKD 380,400,000 in 2021[25]. - The operating profit for 2022 was HKD 162,100,000, a significant recovery from an operating loss of HKD 202,600,000 in 2021[16]. - The profit attributable to equity shareholders for the year ended December 31, 2022, was HKD 76,302,000, compared to a loss of HKD 194,724,000 in 2021[93]. - The company reported a significant increase in revenue, with a year-over-year growth of 15%[137]. - The company reported a net profit margin of 12%, up from 10% in the previous year[137]. Dividends and Shareholder Returns - The company proposed a final dividend of HKD 0.05 per share for the year ended December 31, 2022, up from HKD 0.04 per share in 2021[15]. - Charitable donations made by the company during the year amounted to HKD 529,126, a decrease from HKD 1,060,439 in 2021[95]. Asset and Financial Position - The total assets increased to HKD 5,635,896,000 in 2022 from HKD 5,579,024,000 in 2021[7]. - The company maintains a strong financial position with bank deposits and short-term bank deposits totaling HKD 1,341,300,000 as of December 31, 2022[53]. - The company maintained a liquidity ratio with bank loans accounting for 25% of total assets, down from 27% in the previous year[128]. - The leverage ratio remained stable at 37%, consistent with the previous year[128]. - Interest coverage ratio was 2 times for the year, indicating improved profitability relative to financing costs[128]. - Total value of hotel properties pledged as collateral for bank loans was HKD 1,895,000,000, a decrease from HKD 1,958,400,000 in 2021[129]. Market and Economic Conditions - The overall economic environment in Macau faced challenges, with a GDP contraction of 26.8% in 2022, impacting the business landscape[17]. - The overall economic growth in Vietnam was 8.02% in 2022, marking the fastest growth since 1997, which positively impacted the hotel business[29]. - The company is optimistic about the hotel industry's outlook for 2023, despite facing challenges such as global economic slowdown and labor shortages[53]. Occupancy Rates and Hotel Performance - The occupancy rate for residential properties dropped to 72% in 2022 from 79% in 2021, influenced by lockdowns and travel restrictions[17]. - In Wuhan, the occupancy rate increased to 51.1% in 2022 from 45.6% in 2021, while the average room rate decreased to RMB 305 from RMB 397[27]. - The occupancy rate at the Sheraton Saigon Hotel rose to 55.4% in 2022 from 18.7% in 2021, with an average room rate of USD 148 compared to USD 90[32]. - The occupancy rate at the Sailing Hotel increased to 51.5% in 2022 from 12.1% in 2021, with an average room rate of USD 122 compared to USD 80[33]. - The occupancy rate at the W Hotel in San Francisco was 69% in 2022, up from 43% in 2021, with an average room rate of USD 305 compared to USD 197[25]. - The occupancy rate at the Sofitel New York was 61% in 2022, significantly up from 4% in 2021, with an average room rate of USD 387 compared to USD 338[25]. - The occupancy rate of the San Francisco W Hotel increased to 68.8% in 2022, up from 42.7% in 2021, with an average room rate of $305 per night compared to $197 in 2021[40]. - The occupancy rate of the New York Sofitel Hotel rose from 4.0% in 2021 to 61.2% in 2022, with an average room rate of $387 per night, up from $338 in 2021[41]. ESG and Corporate Governance - The company emphasizes the integration of its ESG strategy with business operations, focusing on reducing environmental impact and promoting community and employee development[66]. - The board monitors ESG risks and opportunities, ensuring compliance with listing rules and reviewing performance against ESG-related goals[67]. - The company has implemented sufficient measures and monitoring systems to comply with ESG strategies, with no reported incidents of non-compliance affecting business operations during the year[90]. - The company is committed to providing a safe working environment, adhering to local safety laws, and has had no work-related fatalities in the past three years[71]. - The company actively participates in community investment and social sustainability initiatives, focusing on areas such as environmental protection and health support[74]. - The company has implemented various energy and water-saving measures, including the use of LED lighting and solar energy[79]. - The company’s properties have received multiple recognitions for their environmental protection efforts[78]. - The company maintains high ethical standards in its operations, aiming to enhance shareholder wealth in the long term[81]. - The company has established a nomination policy to ensure a diverse and qualified board, considering various factors such as gender, age, and professional qualifications[182]. - The company emphasizes a commitment to high corporate governance standards, ensuring shareholder rights and enhancing corporate value[153]. Board Structure and Function - The board consists of 12 members, including 7 executive directors, 1 non-executive director, and 4 independent non-executive directors[158]. - The company has complied with listing rules by appointing at least three independent non-executive directors, with at least one possessing appropriate professional qualifications[159]. - The board's main function is to set the overall strategy and investment direction of the group, while daily management is delegated to the management team[162]. - Independent non-executive directors contribute balanced skills and independent judgment to the decision-making process[162]. - The company secretary has participated in no less than 15 hours of relevant professional training to comply with listing rules[168]. - The board has established four committees: Audit and Compliance Committee, Remuneration Committee, Nomination Committee, and Risk Management Committee[170]. - The Audit and Compliance Committee held three meetings during the year, including three meetings with external auditors and three with the internal audit team to review risk management and internal control frameworks[173]. - The Remuneration Committee held two meetings to review the remuneration policies and structures for executive and non-executive directors, ensuring no conflicts of interest in remuneration decisions[176]. - The Nomination Committee conducted two meetings to assess the board's composition and diversity policies, confirming their effectiveness and appropriateness[181]. - The board currently consists of 11 members, including two female members, reflecting a commitment to diversity in age, gender, and professional background[183]. - The company’s workforce comprises 45% female employees and 55% male employees, demonstrating a commitment to diversity at all levels[184]. Risk Management - The Risk Management Committee was established in 2020 and currently consists of independent non-executive directors, with a primary responsibility to oversee the implementation and operation of the group's risk management system[185]. - The committee held two meetings during the year to review and discuss the group's risk management system and provided recommendations to the board[185]. - The board is responsible for assessing and determining the nature and extent of risks within the group's business and the effectiveness of internal controls[198]. - The internal audit department monitors the risk management and internal control systems, conducting independent audits across all business units[199]. - The group has established a confidential reporting mechanism to ensure timely responses to concerns raised by the internal audit department and the audit and compliance committee[199].

[Performance Highlights](index=1&type=section&id=Performance%20Highlights) The company achieved a significant turnaround in 2022, reporting a consolidated profit attributable to equity holders and an increased final dividend [Consolidated Profit](index=1&type=section&id=Consolidated%20Profit) ITC Properties Group Limited achieved a turnaround in 2022, with consolidated profit attributable to equity holders reaching HKD 76,302,000, a significant improvement from the consolidated loss of HKD 194,724,000 in 2021 Consolidated Profit Attributable to Equity Holders and Basic Earnings Per Share | Metric | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Consolidated profit/(loss) attributable to equity holders | 76,302 | (194,724) | | Basic earnings/(loss) per share (HKD) | 0.224 | (0.572) | [Final Dividend](index=1&type=section&id=Final%20Dividend) The Board recommended a final dividend of HKD 0.05 per share for 2022, an increase from HKD 0.04 per share in 2021 Final Dividend Distribution | Year | Final Dividend Per Share (HKD) | | :--- | :--- | | 2022 | 0.05 | | 2021 | 0.04 | [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated financial performance, position, and cash flows for the reporting period [Consolidated Statement of Profit or Loss](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) In 2022, the company's revenue significantly increased by 196% to HKD 1,429,488 thousand, operating profit turned from a loss in 2021 to a profit of HKD 162,126 thousand, resulting in a profit for the year of HKD 124,199 thousand Key Data from Consolidated Statement of Profit or Loss | Metric | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 1,429,488 | 482,878 | | Operating profit/(loss) | 162,126 | (202,555) | | Profit/(loss) for the year | 124,199 | (184,204) | | Attributable to equity holders of the Company | 76,302 | (194,724) | | Attributable to non-controlling interests | 47,897 | 10,520 | | Basic and diluted earnings/(loss) per share (cents) | 22.4 | (57.2) | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) In 2022, the company's total comprehensive income was HKD 86,663 thousand, a significant improvement from the total comprehensive loss of HKD 181,639 thousand in 2021, primarily due to the profit for the year turning positive despite negative other comprehensive income Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Profit/(loss) for the year | 124,199 | (184,204) | | Other comprehensive income for the year | (37,536) | 2,565 | | Total comprehensive income for the year | 86,663 | (181,639) | | Attributable to equity holders of the Company | 42,767 | (193,833) | | Attributable to non-controlling interests | 43,896 | 12,194 | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of the end of 2022, the company's total assets slightly decreased, but net assets maintained stable growth, with non-current assets decreasing and current assets increasing, while current liabilities significantly rose, resulting in negative net current assets Key Data from Consolidated Statement of Financial Position | Metric | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Non-current assets | 3,898,913 | 4,003,139 | | Current assets | 1,736,983 | 1,575,885 | | Current liabilities | 1,839,200 | 720,277 | | Net current assets/(liabilities) | (102,217) | 855,608 | | Net assets | 3,552,646 | 3,536,687 | | Total equity | 3,552,646 | 3,536,687 | [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed explanations and disclosures regarding the accounting policies and specific line items in the financial statements [Basis of Preparation and Accounting Policies](index=6&type=section&id=1.%20Basis%20of%20Preparation) The company's financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance, complying with HKEX Listing Rules, with no significant impact from new HKFRS amendments this year - The company's financial statements are prepared in accordance with the Hong Kong Companies Ordinance (Cap. 622) and all applicable Hong Kong Financial Reporting Standards, complying with the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[21](index=21&type=chunk)[22](index=22&type=chunk) - Revisions to Hong Kong Financial Reporting Standards effective for the current accounting period have not had a significant impact on the preparation or presentation of the Group's results and financial position for the current or prior periods[24](index=24&type=chunk) - The financial statements are prepared on a historical cost basis, except for derivative financial instruments, trading securities and other non-current financial assets, and investment properties which are measured at fair value[23](index=23&type=chunk)[46](index=46&type=chunk) [Revenue and Segment Reporting](index=7&type=section&id=3.%20Revenue%20and%20Segment%20Reporting) The Group's operations are divided into three reportable segments: hotel, property, investment, and corporate, with total revenue significantly increasing in 2022, primarily driven by hotel and club operations, and detailed disclosures for each segment's performance, assets, and liabilities - The Group's business is managed by segments based on integrated operations (products and services) and geographical areas, identifying three reportable segments: hotel, property, investment, and corporate[25](index=25&type=chunk)[26](index=26&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - Revenue refers to the consideration expected to be received for the transfer of goods and services under HKFRS 15 "Revenue from Contracts with Customers", excluding rental income from leased properties and hotel commercial units[26](index=26&type=chunk) [Revenue Analysis](index=7&type=section&id=Revenue%20Analysis) This section provides a detailed breakdown of revenue by source, highlighting significant growth in hotel and club operations Revenue from Contracts with Customers by Nature | Revenue Source | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Hotel and club operations | 1,337,997 | 387,612 | | Rental income | 84,699 | 87,929 | | Management fee income | 6,792 | 7,337 | | **Total** | **1,429,488** | **482,878** | [Segment Performance Analysis](index=8&type=section&id=Segment%20Performance%20Analysis) This section analyzes the revenue and profit/loss contributions from each operating segment Analysis of the Group's Segment Performance | Segment | Revenue (HKD thousands) | Profit/(loss) contribution (HKD thousands) | | :--- | :--- | :--- | | Hotel (2022) | 1,331,028 | 78,953 | | Hotel (2021) | 380,351 | (204,859) | | Property (2022) | 96,346 | 61,550 | | Property (2021) | 100,620 | 58,946 | | Investment and Corporate (2022) | 2,114 | (16,304) | | Investment and Corporate (2021) | 1,907 | (38,291) | | **Total (2022)** | **1,429,488** | **124,199** | | **Total (2021)** | **482,878** | **(184,204)** | [Segment Assets Analysis](index=9&type=section&id=Segment%20Assets%20Analysis) This section provides a breakdown of total assets by operating segment at year-end Analysis of the Group's Total Assets | Segment | Total Assets as of 2022 (HKD thousands) | Total Assets as of 2021 (HKD thousands) | | :--- | :--- | :--- | | Hotel | 3,693,372 | 3,801,390 | | Property | 1,941,833 | 1,899,667 | | Investment and Corporate | 512,999 | 477,967 | | **Total** | **5,635,896** | **5,579,024** | [Segment Liabilities Analysis](index=10&type=section&id=Segment%20Liabilities%20Analysis) This section provides a breakdown of total liabilities by operating segment at year-end Analysis of the Group's Total Liabilities | Segment | Total Liabilities as of 2022 (HKD thousands) | Total Liabilities as of 2021 (HKD thousands) | | :--- | :--- | :--- | | Hotel | 1,849,000 | 1,806,305 | | Property | 175,412 | 181,048 | | Investment and Corporate | 58,388 | 55,989 | | **Total** | **2,083,250** | **2,042,337** | [Other Income and Net Gains/Losses](index=11&type=section&id=4.%20Other%20Income%20and%20Other%20Gains%2F%28Losses%29%20Net) In 2022, other income significantly increased, mainly from interest income and government grants, while net other gains/losses turned from a loss to a gain, primarily influenced by realized and unrealized gains from derivative financial instruments and non-current financial assets Other Income and Net Gains/Losses | Metric | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Other income | 41,331 | 19,532 | | Interest income | 23,649 | 8,059 | | Government grants | 7,309 | 4,968 | | Net other gains/(losses) | 17,052 | (3,929) | | Net realized and unrealized gains from derivative financial instruments | 10,671 | 5,912 | | Net unrealized gains/(losses) from other non-current financial assets | 9,281 | (6,248) | [Finance Costs and Staff Costs](index=11&type=section&id=5.%20Profit%2F%28Loss%29%20Before%20Taxation%20After%20Deducting%2F%28Crediting%29%3A) In 2022, both finance costs and staff costs significantly increased, reflecting higher interest expenses on bank borrowings and growth in salaries and benefits Finance Costs and Staff Costs | Metric | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Finance costs | 50,274 | 32,293 | | Interest on bank borrowings | 45,010 | 27,092 | | Staff costs | 525,791 | 251,819 | | Salaries, wages and other benefits | 518,664 | 247,713 | [Income Tax](index=12&type=section&id=6.%20Income%20Tax) Income tax expense for 2022 was HKD 5,624 thousand, compared to a tax credit of HKD 57,872 thousand in 2021, primarily due to increased overseas tax provisions and changes in deferred tax Income Tax Analysis | Metric | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Current year tax – overseas | 51,533 | 13,330 | | Deferred tax | (45,909) | (71,202) | | **Income tax** | **5,624** | **(57,872)** | - No Hong Kong profits tax provision was made for Hong Kong-registered entities due to assessable losses or unutilized tax losses[82](index=82&type=chunk) [Earnings/Loss Per Share](index=12&type=section&id=7.%20Earnings%2F%28Loss%29%20Per%20Share) Basic earnings per share for 2022 was 22.4 HK cents, a significant improvement from the basic loss per share of 57.2 HK cents in 2021, primarily due to the profit attributable to equity holders turning positive Earnings/(Loss) Per Share and Issued Ordinary Shares | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Basic earnings/(loss) per share (cents) | 22.4 | (57.2) | | Number of issued ordinary shares (thousands) | 340,200 | 340,200 | - There were no ordinary shares with potential dilutive effects for the years ended December 31, 2022 and 2021[57](index=57&type=chunk) [Trade and Other Receivables and Payables](index=13&type=section&id=Trade%20and%20Other%20Receivables%20and%20Payables) At the end of 2022, trade and other receivables significantly increased, with most being current or overdue by less than one month, while trade and other payables also grew, but the proportion overdue by more than three months decreased [Trade and Other Receivables](index=13&type=section&id=8.%20Trade%20and%20Other%20Receivables) This section analyzes the aging of trade and other receivables, indicating a high proportion of current or short-term overdue amounts Aging Analysis of Trade and Other Receivables | Aging | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Within 1 month | 37,960 | 12,427 | | 1 to 3 months | 3,692 | 2,752 | | After 3 months | 3,235 | 703 | | **Total** | **44,887** | **15,882** | - As of December 31, 2022, **85% of trade receivables were not overdue or overdue by less than one month** (2021: 78%)[85](index=85&type=chunk) - Management assessed that the provision for expected credit losses for the years ended December 31, 2022 and 2021 was not significant[86](index=86&type=chunk) [Trade and Other Payables](index=15&type=section&id=10.%20Trade%20and%20Other%20Payables) This section analyzes the aging of trade and other payables, indicating changes in payment terms Aging Analysis of Trade and Other Payables | Aging | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Within 1 month | 64,866 | 59,478 | | 1 to 3 months | 36,757 | 1,120 | | After 3 months | 3,998 | 26,033 | | **Total** | **105,621** | **86,631** | [Bank Borrowings](index=14&type=section&id=9.%20Bank%20Borrowings) At the end of 2022, total bank borrowings slightly decreased, but short-term bank borrowings repayable within one year or on demand significantly increased, while long-term bank borrowings substantially decreased, with most loans bearing floating interest rates and secured by assets Analysis of Bank Borrowings Repayment Period | Repayment Period | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Within 1 year or on demand | 1,359,323 | 366,887 | | After 1 year but within 2 years | - | 1,045,066 | | After 2 years but within 5 years | 76,481 | 76,351 | | **Total** | **1,435,804** | **1,488,304** | Type of Bank Borrowings Collateral | Loan Type | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Secured bank borrowings | 1,359,323 | 1,357,026 | | Unsecured bank borrowings | 76,481 | 131,278 | | **Total** | **1,435,804** | **1,488,304** | - All other bank borrowings, except for fixed-rate loans obtained by two subsidiaries, bear floating interest rates comparable to market rates[60](index=60&type=chunk) - Bank credit facilities are secured by properties held for sale and the Group's hotel properties (including land), with total carrying amounts of **HKD 64,366 thousand** and **HKD 1,830,666 thousand** respectively[61](index=61&type=chunk)[87](index=87&type=chunk) - The Group has obtained bank waivers for covenant ratio deviations on two bank borrowings, covering the period from December 31, 2021, until the maturity of the bank borrowings in October 2023[63](index=63&type=chunk)[89](index=89&type=chunk) [Share Capital and Reserves](index=15&type=section&id=12.%20Share%20Capital) At the end of 2022, share capital remained unchanged, while reserves increased, leading to a slight growth in total equity attributable to equity holders of the Company Share Capital and Reserves | Metric | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Share capital | 498,305 | 498,305 | | Reserves | 2,438,494 | 2,409,335 | | Total equity attributable to equity holders of the Company | 2,936,799 | 2,907,640 | - Holders of ordinary shares are entitled to receive dividends declared from time to time, exercise one vote per share at general meetings, and have equal rights to the Company's residual assets[91](index=91&type=chunk) [Capital Commitments](index=16&type=section&id=13.%20Capital%20Commitments%20Not%20Provided%20for%20in%20the%20Financial%20Statements) As of the end of 2022, the Group's capital commitments contracted but not provided for significantly increased to HKD 29,056 thousand, with approved but not contracted capital commitments also growing substantially Capital Commitments Not Provided For | Type of Capital Commitment | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Contracted | 29,056 | 2,660 | | Approved but not contracted | 28,185 | 20,081 | | **Total** | **57,241** | **22,741** | [Business Review](index=17&type=section&id=Business%20Review) This section provides an overview of the Group's operational performance across its key business segments, including market conditions and strategic initiatives [Overall Business Environment](index=17&type=section&id=Overall%20Business%20Environment) The 2022 business environment was challenging due to the pandemic, Russia-Ukraine war, geopolitical tensions, and inflationary pressures; despite this, hotel operations showed strong recovery with easing travel restrictions, though the pace is expected to remain slow and uneven - The 2022 business environment remained complex and unstable for the third consecutive year, affected by the COVID-19 pandemic, the Russia-Ukraine war, geopolitical tensions, and inflationary pressures[93](index=93&type=chunk) - Despite significant challenges, hotel operations remained resilient and achieved a strong recovery following the gradual easing of travel and social distancing measures[93](index=93&type=chunk) - Macau's economy continued to face challenges in 2022, with **GDP contracting by 26.8%**, rising unemployment, and a **26% decrease in visitor arrivals**[121](index=121&type=chunk) [Property Leasing and Management Business](index=17&type=section&id=Property%20Leasing%20and%20Management%20Business) Despite pandemic impacts and challenging operating conditions, Macau's property leasing and management business remained stable, with a slight decrease in rental income and residential property occupancy due to lockdowns and travel restrictions, while office properties remained fully leased - Macau property leasing income slightly decreased to **HKD 82,000 thousand** in 2022 (2021: HKD 85,800 thousand), primarily due to lower occupancy rates, renewal discounts, and rental concessions[95](index=95&type=chunk) - Residential property occupancy rate decreased from **79% in 2021 to 72% in 2022**, while office properties were **fully leased in 2022** (2021 average occupancy rate: 93%)[95](index=95&type=chunk) - Net fair value gain on investment properties was **HKD 3,900 thousand** (2021: HKD 4,400 thousand), primarily for long-term investments to generate continuous rental income[72](index=72&type=chunk) [Macau Property Market](index=17&type=section&id=Macau%20Property%20Market) This section provides an outlook for the Macau property market, anticipating recovery post-border reopening but facing headwinds from interest rates and inflation - Following the lifting of border restrictions between mainland China, Hong Kong, and Macau in 2023, economic activity is expected to resume and visitor arrivals to Macau will increase, but the Macau property market is anticipated to remain subdued due to interest rate hike expectations, inflationary pressures, and business recovery uncertainties[96](index=96&type=chunk) - The Group will capitalize on the benefits brought by the opening of the Hong Kong-Zhuhai-Macau Bridge, the Hengqin Port, the expansion of Macau International Airport passenger terminal, and the recovery of Greater Bay Area integration[123](index=123&type=chunk) [Hotel Operations](index=18&type=section&id=Hotel%20Operations) In 2022, total hotel revenue significantly increased by 250% to HKD 1,331,000 thousand, with operating profit turning from a loss to a profit of HKD 79,000 thousand, reflecting uneven global recovery where regions like the US and Canada showed significant improvement, while China was more affected by strict restrictions Key Data for Hotel Operations | Metric | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Total hotel revenue | 1,331,000 | 380,400 | | Hotel operating profit/(loss) | 79,000 | (204,900) | - The hotel industry faces new challenges of labor shortages and increasing costs, with future profitability and stability remaining uncertain[125](index=125&type=chunk) [China](index=18&type=section&id=People%27s%20Republic%20of%20China) China's hotel sector faced severe challenges in 2022 due to strict pandemic controls, impacting revenue and occupancy, but the outlook is optimistic with easing restrictions - China's economy grew by **3% in 2022**, failing to meet official targets, primarily due to pandemic controls and a sluggish real estate market, with the hotel industry severely impacted by lockdowns and travel restrictions[126](index=126&type=chunk)[127](index=127&type=chunk) Holiday Inn Wuhan Riverside Operating Data | Hotel | 2022 Occupancy Rate | 2021 Occupancy Rate | 2022 Average Room Rate (RMB) | 2021 Average Room Rate (RMB) | | :--- | :--- | :--- | :--- | :--- | | Holiday Inn Wuhan Riverside | 51.1% | 45.6% | 305 | 397 | - Holiday Inn Wuhan Riverside's room revenue decreased by **14% to RMB 17,300 thousand**, and food and beverage revenue decreased by **33% to RMB 7,400 thousand**[128](index=128&type=chunk) - Despite the challenging operating environment, the Group remains optimistic about the outlook for China's hotel industry as the government has gradually removed testing, quarantine, and travel restrictions[101](index=101&type=chunk) [Vietnam](index=19&type=section&id=Vietnam) Vietnam's economy and tourism sector experienced a strong recovery in 2022, leading to significant growth in hotel revenue and improved operating metrics - Vietnam's economy experienced a significant recovery in 2022, with **GDP growing by 8.02%**, the fastest since 1997, and strong tourism growth, with international visitors increasing by **23.3 times**[103](index=103&type=chunk)[129](index=129&type=chunk) Vietnam Hotel Operating Data | Hotel | 2022 Occupancy Rate | 2021 Occupancy Rate | 2022 Average Room Rate (USD) | 2021 Average Room Rate (USD) | | :--- | :--- | :--- | :--- | :--- | | Sheraton Saigon Hotel | 55.4% | 18.7% | 148 | 90 | | The Reverie Saigon | 51.5% | 12.1% | 122 | 80 | - The Group's revenue from Vietnam increased by **219% to HKD 593,500 thousand** compared to 2021[104](index=104&type=chunk) - Both Sheraton Saigon Hotel and The Reverie Saigon were awarded the Travelers' Choice by TripAdvisor for the second consecutive year[130](index=130&type=chunk) [Japan](index=20&type=section&id=Japan) Japan's economy improved steadily in 2022, with the hotel sector recovering due to border reopening and increased international visitors, despite ongoing challenges - Japan's economy steadily improved in 2022, with government stimulus contributing a **1.1% gain**, and the hotel industry recovering due to border reopening and visa-free travel, leading to a **15-fold increase in international visitors**[107](index=107&type=chunk)[133](index=133&type=chunk) Best Western Hotel Fino Osaka Shinsaibashi Operating Data | Hotel | 2022 Occupancy Rate | 2021 Occupancy Rate | 2022 Average Room Rate (JPY) | 2021 Average Room Rate (JPY) | | :--- | :--- | :--- | :--- | :--- | | Best Western Hotel Fino Osaka Shinsaibashi | 40.9% | 9.5% | 6,326 | 5,899 | - The industry still faces challenges of labor shortages, increasing operating costs, and potential global economic slowdown[108](index=108&type=chunk) [United States](index=20&type=section&id=United%20States) The US economy grew in 2022, with strong hotel market recovery in New York, though San Francisco lagged, and the outlook remains positive despite economic uncertainties - The US economy grew by **2.1% in 2022**, with unemployment falling to **3.6%**, and the New York hotel market experienced a strong recovery, while San Francisco lagged due to fewer exhibitions and reduced Asian tourist arrivals[109](index=109&type=chunk)[110](index=110&type=chunk) United States Hotel Operating Data | Hotel | 2022 Occupancy Rate | 2021 Occupancy Rate | 2022 Average Room Rate (USD) | 2021 Average Room Rate (USD) | | :--- | :--- | :--- | :--- | :--- | | W San Francisco | 68.8% | 42.7% | 305 | 197 | | Sofitel New York | 61.2% | 4.0% | 387 | 338 | - Hotels are expected to benefit from China's easing travel restrictions in 2023, but recovery remains subject to economic recession, inflation expectations, and geopolitical uncertainties[110](index=110&type=chunk) - W San Francisco was awarded TripAdvisor's Travelers' Choice for the second consecutive year, and Sofitel New York was recognized by Condé Nast Traveler as one of the **top 15 hotels in New York City**[135](index=135&type=chunk) [Canada](index=21&type=section&id=Canada) Canada's economy and hotel sector showed significant recovery in 2022, with positive prospects for continued growth despite anticipated economic slowdown and operational challenges - Canada's economy grew by **3.5% in 2022**, with unemployment falling to **5.3%**, and the hotel industry significantly recovered, despite border controls only being fully lifted in October[113](index=113&type=chunk)[156](index=156&type=chunk) Canada Hotel Operating Data | Hotel | 2022 Occupancy Rate | 2021 Occupancy Rate | 2022 Average Room Rate (CAD) | 2021 Average Room Rate (CAD) | | :--- | :--- | :--- | :--- | :--- | | Sheraton Ottawa Hotel | 57.0% | 20.0% | 199 | 141 | | Delta Hotels by Marriott Toronto Airport & Conference Centre | 61.6% | 28.6% | 158 | 108 | - Canada's economy is expected to slow in early 2023, with the hotel industry facing inflationary pressures and labor shortages, but the outlook remains positive, anticipating continued recovery after border control removals[139](index=139&type=chunk) [Financial Review](index=21&type=section&id=Financial%20Review) This section summarizes the Group's financial performance, including operating results, other financial metrics, and asset pledging [Operating Results](index=22&type=section&id=Operating%20Results) In 2022, the Group's revenue reached HKD 1,429,500 thousand, a 196% year-on-year increase, primarily driven by hotel business recovery, with operating profit turning from a loss in 2021 to a profit of HKD 162,100 thousand, and profit attributable to equity holders at HKD 76,300 thousand, achieving a turnaround Operating Results Overview | Metric | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 1,429,500 | 482,900 | | Operating profit/(loss) | 162,100 | (202,600) | | Profit/(loss) attributable to equity holders | 76,300 | (194,700) | [Other Financial Performance](index=21&type=section&id=Other%20Financial%20Performance) In 2022, the company recorded a net exchange loss of HKD 7,500 thousand, unrealized gains of HKD 200 thousand from trading securities, net realized or unrealized gains of HKD 10,700 thousand from derivative financial instruments, and government grants of HKD 7,300 thousand Other Financial Performance Data | Metric | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Net exchange loss | (7,500) | (2,000) | | Unrealized gains/(losses) from trading securities | 200 | (1,700) | | Net realized or unrealized gains from derivative financial instruments | 10,700 | 5,900 | | Net unrealized gains from other non-current financial assets | 9,300 | (6,200) | | Government grants | 7,300 | 4,800 | [Pledged Assets and Contingent Liabilities](index=22&type=section&id=Pledged%20Assets%20and%20Contingent%20Liabilities) As of the end of 2022, the Group pledged hotel properties and certain properties held for sale, totaling HKD 1,895,000 thousand, to banks as collateral for bank borrowings and credit facilities, while a subsidiary provided a HKD 8,300 thousand guarantee and counter-indemnity to the Macau government for properties held for sale, with the Board deeming claims unlikely - As of December 31, 2022, the Group pledged hotel properties (including land) and certain properties held for sale, with a total value of **HKD 1,895,000 thousand** (2021: HKD 1,958,400 thousand), to banks as collateral for bank borrowings and credit facilities[162](index=162&type=chunk) - A subsidiary provided a guarantee and counter-indemnity of **HKD 8,300 thousand** (2021: HKD 8,300 thousand) to the Government of the Macau Special Administrative Region for properties held for sale[143](index=143&type=chunk) - The Board believes it is unlikely that the Group will face any claims under the guarantees, and no deferred income has been recognized[163](index=163&type=chunk) [Outlook](index=23&type=section&id=Outlook) With eased pandemic measures and quarantine-free travel resuming between mainland China, Hong Kong, and Macau, the Group remains optimistic about the 2023 hotel industry outlook, anticipating increased Macau visitors and a rebound in leasing demand, while continuing to seek long-term value investments and adopting a prudent acquisition strategy, maintaining high liquidity to address global economic slowdown, inflation, and geopolitical tensions - The lifting of pandemic restrictions and the resumption of quarantine-free travel between mainland China, Hong Kong, and Macau contribute to an optimistic market sentiment in Macau, with anticipated growth in visitor arrivals and a rebound in leasing demand[164](index=164&type=chunk) - The Group remains optimistic about the 2023 hotel industry outlook but still faces challenges such as global economic slowdown, rising inflation, interest rate hike expectations, labor shortages, and geopolitical tensions[145](index=145&type=chunk) - The Group will continue to focus on seeking investments that can consistently create long-term value for shareholders, adopting a prudent and pragmatic approach to potential acquisitions, targeting industries and countries or regions where the Group has experience and comparative advantages[165](index=165&type=chunk) - The Group's financial position remains robust, with bank balances and short-term bank deposits totaling **HKD 1,341,300 thousand** as of December 31, 2022, and the Board believes there are sufficient financial resources to meet working capital requirements[146](index=146&type=chunk) [Corporate Governance](index=24&type=section&id=Corporate%20Governance) This section details the company's commitment to high corporate governance standards and adherence to relevant codes and guidelines [Corporate Governance Practices](index=24&type=section&id=Corporate%20Governance%20Practices) The company is committed to achieving high corporate governance standards and has applied the principles of the Corporate Governance Code in Appendix 14 of the Listing Rules; despite the roles of Chairman and Chief Executive not being separated, the Board believes this structure has delivered good results over the years without compromising accountability - The Company has applied the principles set out in the Corporate Governance Code in Appendix 14 of the Listing Rules and is committed to achieving a high level of corporate governance[149](index=149&type=chunk)[150](index=150&type=chunk)[168](index=168&type=chunk) - The Company deviates from Code Provision C.2.1 as the roles of Chairman and Chief Executive are not separated, but the Board believes this structure has delivered good results over the years without compromising the balance of power and accountability[151](index=151&type=chunk)[169](index=169&type=chunk) [Directors' Securities Transactions](index=24&type=section&id=Directors%27%20Securities%20Transactions) The Board has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules, and all Directors have confirmed compliance throughout the review period - The Board has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules, and all Directors have confirmed compliance with the said code throughout the review period[170](index=170&type=chunk) [General Meeting and Dividend Arrangements](index=24&type=section&id=General%20Meeting%20and%20Dividend%20Arrangements) This section outlines the schedule for the Annual General Meeting and the arrangements for dividend distribution, including share transfer registration closure periods [Annual General Meeting](index=24&type=section&id=Annual%20General%20Meeting) The company will hold its Annual General Meeting on May 31, 2023, where shareholders can attend, exercise voting rights, and meet with directors and senior management - The Company will hold its 2023 Annual General Meeting on **Wednesday, May 31, 2023, at 12:00 noon**[171](index=171&type=chunk) - Shareholders may ask questions regarding the meeting's business and meet with the Company's Directors and senior management[152](index=152&type=chunk) [Closure of Register of Members](index=25&type=section&id=Closure%20of%20Register%20of%20Members) To determine eligibility for attending the Annual General Meeting and entitlement to the final dividend, the company will suspend share transfer registration in two periods, requiring shareholders to complete transfers before the specified deadlines Share Transfer Registration Suspension Arrangements | Purpose | Period of Share Transfer Registration Suspension | Record Date | | :--- | :--- | :--- | | To attend and vote at the AGM | Thursday, May 25, 2023 to Wednesday, May 31, 2023 | Wednesday, May 31, 2023 | | For entitlement to the final dividend | Wednesday, June 7, 2023 to Friday, June 9, 2023 | Friday, June 9, 2023 | - All completed transfer forms, together with the relevant share certificates, must be lodged with the Company's Share Registrar, Tricor Tengis Limited, by the aforementioned deadlines[173](index=173&type=chunk) [Other Information](index=23&type=section&id=Other%20Information) This section provides additional relevant information not covered in other sections, such as employee details, securities transactions, and board composition [Employees](index=23&type=section&id=Employees) As of the end of 2022, the Group had approximately 1,682 employees, implementing a localization policy with competitive salaries and remuneration determined based on the operating locations in different countries Number of Employees | Metric | As of 2022 | | :--- | :--- | | Number of employees | 1,682 | - The Group adopts a localization policy, endeavoring to recruit suitable local executives and staff with relevant qualifications and experience wherever possible[166](index=166&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=23&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the review year, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the review year[167](index=167&type=chunk) [Board of Directors](index=25&type=section&id=Board%20of%20Directors) As of the announcement date, the Board of Directors comprises executive, non-executive, and independent non-executive directors, including Mr. Ho Kin Yuen as Executive Chairman - The Board of Directors includes Executive Directors Mr. Ho Kin Yuen (Executive Chairman), Mr. Ho Kin Fook, Mr. Che Sze Shun, Mr. Chan Lui Ming, Ms. Yu Yu Chu, Mr. Ho Chung To, and Mr. Ho Chung Fai (Alternate Director Mr. Ho Chung King)[174](index=174&type=chunk) - Non-Executive Director is Mr. Ho Kin Cheung (Alternate Director Mr. Ho Chung Kit), and Independent Non-Executive Directors are Mr. Kwok Chi Shun, Mr. Wong Pui Fan, Mr. Yu Hon To, and Mr. Chan Chi Man[174](index=174&type=chunk)

Financial Reporting Accuracy - The average room rate for Wuhan Qingchuan Holiday Hotel should be stated in "RMB" instead of "USD" in the interim results announcement and interim report[3] - The company acknowledges the typographical error in the interim results announcement and interim report[3] - No other content in the interim results announcement and interim report has changed apart from the above disclosure[5]

Financial Performance - For the six months ended June 30, 2022, the company's equity shareholders' profit was HKD 6,947,000, compared to a loss of HKD 104,400,000 in the same period of 2021, representing a significant turnaround [7]. - Revenue for the six months ended June 30, 2022, was HKD 587,109 thousand, a significant increase from HKD 235,866 thousand in the same period of 2021, representing a growth of 148% [85]. - Operating profit for the same period was HKD 32,675 thousand, compared to an operating loss of HKD 118,382 thousand in 2021, indicating a turnaround in performance [85]. - Net profit for the six months ended June 30, 2022, was HKD 26,093 thousand, recovering from a net loss of HKD 96,814 thousand in the previous year [87]. - Total comprehensive income for the six months ended June 30, 2022, was HKD 8,121 thousand, a recovery from a total comprehensive loss of HKD 95,004 thousand in 2021 [88]. - The group recorded an operating profit of HKD 32,700,000 in the first half of 2022, compared to an operating loss of HKD 118,400,000 in the same period of 2021 [44]. Revenue Sources - Hotel business revenue increased by 193% to HKD 537.9 million in the first half of 2022, compared to HKD 183.7 million in the same period of 2021 [18]. - Revenue from Vietnam increased by 85% to HKD 238.4 million in the first half of 2022, compared to HKD 129.1 million in the same period of 2021 [26]. - Revenue from hotel and club operations was HKD 541,265,000, and rental income was HKD 42,429,000, totaling HKD 587,109,000 for the first half of 2022, a significant increase from HKD 235,866,000 in the same period of 2021 [109]. Occupancy Rates - The occupancy rate for residential units in Macau dropped to 74% in the first half of 2022, compared to 79% in the same period of 2021, attributed to the impact of lockdowns and travel bans [13]. - The average hotel occupancy rates improved in various regions, with Wuhan Holiday Inn at 50% (up from 45%), and Saigon Sheraton at 41% (up from 16%) in 2022 [17]. - The occupancy rate for Wuhan Qinchuan Holiday Hotel was 50.1% in the first half of 2022, up from 44.9% in the same period of 2021 [21]. - The occupancy rate for the Saigon Sheraton Hotel rose to 41.2% in the first half of 2022, compared to 15.7% in the same period of 2021 [27]. - The occupancy rate of the Ottawa Sheraton Hotel increased to 41.5%, compared to 6.5% in the same period of 2021 [40]. - The occupancy rate for the Toronto Airport and Conference Centre Delta Marriott Hotel rose to 52.7% in the first half of 2022, compared to 14.4% in the same period of 2021 [41]. - The occupancy rate for the San Francisco W Hotel was 67.5% in the first half of 2022, up from 26.6% in the same period of 2021 [34]. Investment Properties - The fair value of investment properties increased moderately by HKD 3,900,000 in the first half of 2022, compared to HKD 4,400,000 in the same period of 2021 [13]. - The fair value gain on investment properties was HKD 3,900 thousand, down from HKD 5,800 thousand in the same period last year [85]. - Non-current assets, including investment properties, increased to HKD 905,400 thousand as of June 30, 2022, from HKD 901,500 thousand at the end of 2021 [90]. Cash Flow and Liquidity - The operating cash flow for the first half of 2022 was HKD 152,329,000, compared to a cash outflow of HKD 22,340,000 in the same period of 2021 [100]. - Cash and cash equivalents increased by HKD 64,663,000 during the first half of 2022, compared to an increase of HKD 467,714,000 in the same period of 2021 [100]. - The total cash and cash equivalents as of June 30, 2022, were HKD 1,221,028,000, up from HKD 1,179,769,000 at the end of the previous year [100]. - The company reported a decrease in investment cash flow, with a net cash outflow of HKD 176,000 in the first half of 2022, compared to a net cash inflow of HKD 529,203,000 in the same period of 2021 [100]. Shareholder Information - The company has a total of 198,580,800 shares held by its directors, representing an average ownership percentage of 58.37% [68]. - As of June 30, 2022, KS Ocean Inc. holds 198,084,320 shares, representing 58.23% of the total issued share capital [75]. - Kansas Holdings Limited has a beneficial ownership of 101,437,360 shares, accounting for 29.82% of the total issued share capital [75]. - The company has not reported any changes in the directors' biographies that require disclosure under the Listing Rules [66]. Corporate Governance - The company’s board of directors has confirmed compliance with the standards set forth in the Listing Rules during the review period [58]. - The Audit and Compliance Committee consists of four independent non-executive directors and regularly meets with senior management and auditors to review the effectiveness of internal controls [59]. - The company has maintained a balanced structure between the board and business management responsibilities [57]. Economic Environment - The average unemployment rate in Macau rose to 3.7% in the second quarter of 2022, compared to 2.9% in the same quarter of 2021 [13]. - The ongoing pandemic continues to adversely affect operations, particularly in the hotel sector, with recovery not yet reaching pre-pandemic levels in North America [9]. - Vietnam's GDP growth was 6.42% in the first half of 2022, compared to 5.74% in the same period of 2021 [25]. - China's GDP growth slowed to 2.5% in the first half of 2022, down from 12.7% in the same period of 2021 [20]. Related Party Transactions - The company has significant related party transactions with major shareholders, including loans and other financial arrangements [174]. - Management fees paid to Da Di totaled HKD 984 million, unchanged from the previous year [179]. - Amounts owed to Da Di decreased from HKD 660,000 in 2021 to HKD 402,000 in 2022, representing a reduction of approximately 39% [180].

Financial Performance - Revenue for the year 2021 was HKD 482,878,000, down 27.5% from HKD 665,709,000 in 2020[5][12] - The loss attributable to equity shareholders for 2021 was HKD 194,724,000, a 65.4% reduction compared to HKD 562,586,000 in 2020[10] - Basic loss per share for 2021 was HKD 0.572, improved from HKD 1.654 in 2020[10] - The group reported a net foreign exchange loss of HKD 2,000,000 in 2021, compared to a net gain of HKD 7,800,000 in 2020[44] - The operating loss for the year was HKD 202.6 million, compared to a loss of HKD 376.9 million in the previous year[132] - The company reported a loss attributable to equity shareholders of HKD 194.72 million for the year ended December 31, 2021, compared to a loss of HKD 562.59 million in 2020[89] Dividend and Shareholder Returns - The board proposed a final dividend of HKD 0.04 per share for 2021, compared to no dividend in 2020[11] - The company made charitable donations totaling HKD 1,060,439 during the year, down from HKD 4,127,111 in 2020[92] Asset and Financial Position - The company's total assets as of December 31, 2021, were HKD 5,579,024,000, a decrease of 3.0% from HKD 5,754,526,000 in 2020[5] - As of December 31, 2021, the group's cash, bank balances, and short-term bank deposits amounted to HKD 1,176,000,000, indicating a stable financial position[48] - The total value of hotel properties mortgaged to banks was HKD 1,958,400,000 as of December 31, 2021, down from HKD 2,108,600,000 in 2020[135] - Bank loans accounted for 27% of total assets as of December 31, 2021, compared to 26% in 2020[135] - The leverage ratio increased to 37% in 2021 from 35% in 2020[135] - Interest coverage ratio based on deposits and cash was 36 times in 2021, up from 29 times in 2020[135] Operational Performance - Rental income from Macau properties decreased slightly to HKD 85,800,000 in 2021 from HKD 93,600,000 in 2020, primarily due to a decline in occupancy rates[13] - The occupancy rate for residential properties fell from 91% in 2020 to 79% in 2021, while office properties saw a slight increase from 91% to 93%[13] - Total revenue for the hotel business in 2021 decreased to HKD 380.4 million, down 31.7% from HKD 557.3 million in 2020[22] - The group's revenue from Vietnam decreased by 46.4% to HKD 186.2 million in 2021, down from HKD 347.3 million in 2020[28] - The ongoing pandemic continues to impact the operational environment, particularly in the hotel sector, with recovery expected to be slow and uneven[12] Hotel Performance Metrics - Wuhan Qinchuan Holiday Hotel's room revenue increased by 23.3% to RMB 20.1 million in 2021, compared to RMB 16.3 million in 2020[24] - Average room rate for Wuhan Qinchuan Holiday Hotel rose to RMB 397 per night in 2021, up from RMB 346 per night in 2020[24] - Saigon Sheraton Hotel's occupancy rate increased to 18.7% in 2021, compared to 14.8% in 2020, with an average room rate of USD 90 per night[30] - New York Sofitel Hotel's occupancy rate was 4% in 2021 after reopening in November, down from 15.2% in 2020, with an average room rate of USD 338 per night[38] - Osaka Shinsaibashi Westin Hotel's occupancy rate dropped to 9.5% in 2021, down from 16.9% in 2020, with an average room rate of JPY 5,899 per night[33] Corporate Governance - The company has committed to high corporate governance standards, believing it essential for protecting shareholder rights and enhancing corporate value[156] - The board has adhered to most principles outlined in the Corporate Governance Code during 2021, with some deviations noted[157] - The company has established four committees: Audit and Compliance Committee, Remuneration Committee, Nomination Committee, and Risk Management Committee[196] - The Audit and Compliance Committee was established in 1999 and consists entirely of independent non-executive directors[198] - The committee reviewed the financial statements for the year ending December 31, 2021, ensuring compliance with accounting principles and practices[199] Environmental, Social, and Governance (ESG) Initiatives - The group has implemented various energy and water-saving measures, including replacing old lighting with LED, adopting solar energy, and installing water-saving facilities[74] - The group actively participates in community investment and social sustainability initiatives, focusing on areas such as support for vulnerable groups and environmental protection[71] - The group has established a robust ESG governance framework to ensure ESG issues are integrated into high-level discussions and adequately resourced for implementation[64] - The company has implemented sufficient measures and monitoring systems to comply with ESG strategies, with no reported incidents of non-compliance with relevant laws and regulations in 2021[85] Employee and Labor Practices - The group employed approximately 1,192 employees as of December 31, 2021, with a localized hiring policy[128] - The group emphasizes the importance of attracting and retaining loyal employees, providing a respectful and safe work environment[68] - The group adheres to local labor laws and ensures that all employees are of legal working age, preventing child labor and forced labor[66] Investments and Acquisitions - The group aims to continue seeking investments that create long-term value for shareholders, with a focus on potential acquisitions in industries and regions where it has expertise[49] - The company has indirect investments amounting to $8,965,000, representing a 55% equity stake in Hubei Qingchuan Hotel Co., Ltd.[102] - The company has a total of 56,675,000 shares in Jinshan Development Co., Ltd., with an equity percentage of 80.96%[103]

Report Title - The company clarified the title of its interim report for the year 2021, which should be revised to "Interim Report for the Year 2021" [3] Governance Structure - The board of directors includes several executive and non-executive members, ensuring a diverse governance structure [5]