[I. Company Information and Performance Overview](index=1&type=section&id=I.%20Company%20Information%20and%20Performance%20Overview) This section provides an overview of Grand Hotel Investments Limited's interim performance and key financial statements [1.1 Company Profile and Interim Performance Highlights](index=1&type=section&id=1.1%20Company%20Profile%20and%20Interim%20Performance%20Highlights) Grand Hotel Investments Limited announced its H1 FY2024 results, with profit attributable to owners, before revaluation and depreciation, significantly increasing by 132% to HKD 42 million year-on-year - Company name: **Grand Hotel Investments Limited** (Stock Code: 201)[3](index=3&type=chunk) - Reporting period: Six months ended June 30, 2024[3](index=3&type=chunk) Net Profit Attributable to Owners of the Company Before Tax, Revaluation, and Depreciation of Land, Property & Equipment | Indicator | H1 2024 (HKD Thousand) | H1 2023 (HKD Thousand) | Change (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Profit | 42,000 | 18,000 | 24,000 | +132% | [1.2 Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=1.2%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2024, revenue increased by 37.1% to HKD 244 million, but loss for the period widened by 82.2% to HKD 32.55 million, mainly due to impairment of investment properties and increased finance costs Key Data from Condensed Consolidated Statement of Profit or Loss | Indicator | H1 2024 (HKD Thousand) | H1 2023 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 243,969 | 177,953 | +37.1% | | Gross Profit | 19,722 | 48,591 | -59.4% | | Impairment of Investment Properties | (5,000) | - | Not Applicable | | Administrative Expenses | (23,159) | (51,110) | -54.7% | | Finance Costs | (23,228) | (19,446) | +19.4% | | Loss Before Tax | (29,483) | (18,347) | +60.7% | | Loss for the Period | (32,546) | (17,861) | +82.2% | | Loss Attributable to Owners of the Company | (32,360) | (17,920) | +80.6% | | Basic Loss Per Share (HK cents) | (0.36) | (0.20) | +80.0% | [1.3 Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=1.3%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) In H1 2024, total comprehensive expense turned to HKD 47.23 million from total comprehensive income in the prior year, primarily due to exchange differences on foreign operations and fair value losses on equity investments Key Data from Condensed Consolidated Statement of Comprehensive Income | Indicator | H1 2024 (HKD Thousand) | H1 2023 (HKD Thousand) | | :--- | :--- | :--- | | Loss for the Period | (32,546) | (17,861) | | Fair Value (Loss) Gain on Equity Investments | (908) | 9,313 | | Exchange Differences on Translation of Foreign Operations | (13,773) | 53,257 | | Other Comprehensive (Expense) Income for the Period | (14,681) | 62,570 | | Total Comprehensive (Expense) Income for the Period | (47,227) | 44,709 | | Total Comprehensive (Expense) Income Attributable to Owners of the Company | (47,041) | 44,650 | [1.4 Condensed Consolidated Statement of Financial Position](index=4&type=section&id=1.4%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, total assets slightly decreased, current assets significantly reduced, leading to an increase in net current liabilities and a slight decrease in total equity Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2024 (HKD Thousand) | December 31, 2023 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-Current Assets | 4,870,298 | 4,949,467 | -1.6% | | Current Assets | 168,113 | 336,905 | -50.1% | | Current Liabilities | 532,608 | 729,704 | -27.0% | | Net Current Liabilities | (364,495) | (392,799) | -7.2% | | Equity Attributable to Owners of the Company | 4,165,708 | 4,212,749 | -1.1% | | Total Equity | 4,172,785 | 4,220,012 | -1.1% | | Non-Current Liabilities | 333,018 | 336,656 | -1.1% | [II. Notes to the Financial Statements](index=5&type=section&id=II.%20Notes%20to%20the%20Financial%20Statements) This section details the basis of preparation, accounting policies, and specific components of the financial statements [2.1 Basis of Preparation](index=5&type=section&id=2.1%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, using 2023 annual financial information for comparison - Prepared in accordance with Hong Kong Accounting Standard 34 (Interim Financial Reporting) issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix D2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[7](index=7&type=chunk) - The financial information for the year ended December 31, 2023, is extracted from the statutory annual consolidated financial statements, and the auditor's report was unqualified[7](index=7&type=chunk) [2.2 Principal Accounting Policies](index=5&type=section&id=2.2%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, except for investment properties and certain financial instruments, with accounting policies consistent with the 2023 annual financial statements, and the first-time application of HKFRS amendments had no significant impact - Prepared on a historical cost basis, except for investment properties and certain financial instruments measured at fair value[8](index=8&type=chunk) - Accounting policies and methods of computation are consistent with those used in the annual financial statements for the year ended December 31, 2023[8](index=8&type=chunk) - First-time application of amendments to Hong Kong Financial Reporting Standard 16, Hong Kong Accounting Standard 1, Hong Kong Accounting Standard 7, and Hong Kong Financial Reporting Standard 7 had no significant impact on the financial position and performance[9](index=9&type=chunk) [2.3 Revenue Composition](index=6&type=section&id=2.3%20Revenue%20Composition) Total revenue for H1 2024 was HKD 244 million, primarily from hotel operations (HKD 225 million, up 41% YoY) and property rental income (HKD 19.01 million, up 3% YoY) Revenue Source Analysis | Revenue Category | H1 2024 (HKD Thousand) | H1 2023 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Hotel Operating Revenue | 224,959 | 159,513 | +41.0% | | Property Rental Income | 19,010 | 18,395 | +3.3% | | Dividend Income | - | 45 | -100.0% | | **Total Revenue** | **243,969** | **177,953** | **+37.1%** | [2.4 Segment Information](index=7&type=section&id=2.4%20Segment%20Information) The company primarily operates in hotel services, property investment, and securities investment, with hotel services contributing the most to revenue and performance, though some hotels still recorded losses - Operating and reportable segments: Hotel services (including 8 hotels), property investment (commercial, hotel, and residential properties), and securities investment[11](index=11&type=chunk) Segment Revenue and Performance | Segment | H1 2024 Revenue (HKD Thousand) | H1 2023 Revenue (HKD Thousand) | H1 2024 Performance (HKD Thousand) | H1 2023 Performance (HKD Thousand) | | :--- | :--- | :--- | :--- | :--- | | Hotel Services | 224,959 | 159,513 | 712 | 30,151 | | - Best Western Plus Hotel Tsim Sha Tsui | 24,396 | 25,521 | (1,758) | 4,377 | | - Grand Hotel | 40,851 | 35,300 | 11,990 | 13,181 | | - Shanghai Grand Hotel | 10,523 | - | 1,555 | (7,427) | | - Grand View Hotel Causeway Bay | 24,514 | 21,995 | (850) | 1,877 | | - Ramada Hong Kong Harbour View | 40,936 | 40,268 | 11,373 | 16,421 | | - Ramada Hong Kong Grand | 41,658 | 36,429 | 2,637 | 1,722 | | - Grand Bay Hotel | 42,081 | - | (24,235) | - | | Property Investment | 19,010 | 18,395 | 14,010 | 18,395 | | Securities Investment | - | 45 | - | 45 | | **Total** | **243,969** | **177,953** | **14,722** | **48,591** | - Finance costs: Bank loan interest of **HKD 10.764 million**, interest on amounts due to immediate holding company of **HKD 12.464 million**, totaling **HKD 23.228 million**[12](index=12&type=chunk) [2.5 Income Tax Expense](index=9&type=section&id=2.5%20Income%20Tax%20Expense) Income tax expense for H1 2024 was HKD 3.063 million, compared to a reversal of HKD 0.486 million in the prior year, primarily comprising current tax in Hong Kong and the UK Income Tax Expense (Reversal) Composition | Tax Category | H1 2024 (HKD Thousand) | H1 2023 (HKD Thousand) | | :--- | :--- | :--- | | Hong Kong Current Tax | 2,260 | 4,669 | | China Current Tax | - | 13 | | UK Current Tax | 2,459 | 2,722 | | Deferred Tax | (1,656) | (7,890) | | **Total Income Tax Expense (Reversal)** | **3,063** | **(486)** | - Hong Kong profits tax rate: **16.5%** (H1 2023: 16.5%)[13](index=13&type=chunk) [2.6 Composition of Loss for the Period](index=9&type=section&id=2.6%20Composition%20of%20Loss%20for%20the%20Period) Loss for the period was primarily impacted by a significant increase in depreciation of property, plant and equipment, rising from HKD 35.426 million to HKD 68.541 million Items Deducted (Credited) in Arriving at Loss for the Period | Item | H1 2024 (HKD Thousand) | H1 2023 (HKD Thousand) | | :--- | :--- | :--- | | Depreciation of Right-of-Use Assets | 381 | 394 | | Depreciation of Property, Plant and Equipment | 68,541 | 35,426 | | Interest Income from Bank Deposits | (2,718) | (3,152) | | Loss (Gain) on Disposal of Property, Plant and Equipment | 741 | (7) | [2.7 Dividend Policy](index=10&type=section&id=2.7%20Dividend%20Policy) The Board decided not to declare an interim dividend for H1 2024, primarily due to challenging economic conditions, an unstable hotel market, and high operating and interest costs - No dividends were declared or paid for H1 2024 and H1 2023[16](index=16&type=chunk) - The Board does not recommend an interim dividend to conserve cash flow, address challenging economic conditions, an unstable hotel market, and high operating and interest costs[21](index=21&type=chunk) [2.8 Loss Per Share](index=2&type=section&id=2.8%20Loss%20Per%20Share) Basic loss per share for H1 2024 was 0.36 HK cents, widening from 0.20 HK cents in the prior year, mainly due to an increased loss attributable to owners of the company - Basic loss per share: **0.36 HK cents** (H1 2023: 0.20 HK cents)[4](index=4&type=chunk)[17](index=17&type=chunk) - Calculated based on loss attributable to owners of the company of **HKD 32.36 million** (H1 2023: HKD 17.92 million) and **8,947,051,000** ordinary shares in issue[17](index=17&type=chunk) - No diluted loss per share as there are no potential ordinary shares[17](index=17&type=chunk) [2.9 Trade and Other Receivables](index=10&type=section&id=2.9%20Trade%20and%20Other%20Receivables) As of June 30, 2024, total trade and other receivables were HKD 7.509 million, a significant decrease from HKD 18.46 million on December 31, 2023, with trade receivables decreasing by 66% Trade and Other Receivables | Category | June 30, 2024 (HKD Thousand) | December 31, 2023 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Receivables | 5,254 | 15,569 | -66.2% | | Other Receivables | 2,255 | 2,891 | -22.1% | | **Total** | **7,509** | **18,460** | **-59.3%** | - Trade receivables aging analysis shows that most (**HKD 5 million**) are not yet due[19](index=19&type=chunk) - Credit period: 30 to 60 days for hotel travel agents and certain customers[18](index=18&type=chunk) [2.10 Trade and Other Payables and Accruals](index=11&type=section&id=2.10%20Trade%20and%20Other%20Payables%20and%20Accruals) As of June 30, 2024, total trade and other payables and accruals were HKD 32.783 million, a decrease from HKD 41.111 million on December 31, 2023 Trade and Other Payables and Accruals | Category | June 30, 2024 (HKD Thousand) | December 31, 2023 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Payables | 4,030 | 3,875 | +4.0% | | Other Payables and Accruals | 28,753 | 37,236 | -22.8% | | **Total** | **32,783** | **41,111** | **-20.3%** | - Trade payables aging analysis shows that the vast majority (**HKD 4.017 million**) are due within 30 days[20](index=20&type=chunk) [III. Management Discussion and Analysis](index=12&type=section&id=III.%20Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the Group's business operations, financial performance, and future outlook [3.1 Business Review and Overall Performance](index=12&type=section&id=3.1%20Business%20Review%20and%20Overall%20Performance) The Group continues to engage in hotel investment, hotel management, property leasing, and property development, with H1 2024 net profit attributable to owners, before revaluation and depreciation, significantly increasing by 132% to HKD 42 million, driven by increased hotel revenue and reduced opening expenses for Grand Bay Hotel - Principal businesses: Hotel investment, hotel management, property leasing, and property development[22](index=22&type=chunk) - Net profit attributable to owners of the company before tax, revaluation, and depreciation of land, property, and equipment: **HKD 42 million** (H1 2023: HKD 18 million), a **132% increase**[22](index=22&type=chunk) - Overall profit increase primarily due to a **41% increase in hotel revenue** and the absence of opening, maintenance, and renovation costs for Grand Bay Hotel[23](index=23&type=chunk) [3.2 Revenue Performance](index=13&type=section&id=3.2%20Revenue%20Performance) Total revenue for H1 2024 increased by 36% year-on-year to HKD 246 million, with hotel operating revenue growing 41% to HKD 225 million and investment property revenue increasing 3% to HKD 19.01 million Revenue Analysis | Revenue Category | H1 2024 (HKD Thousand) | H1 2023 (HKD Thousand) | Change (%) | Reason | | :--- | :--- | :--- | :--- | :--- | | Hotel Operating Revenue | 224,959 | 159,513 | +41% | Increased room rates and operating costs for Grand Bay Hotel | | Investment Property Revenue | 19,010 | 18,395 | +3% | Appreciation of GBP rental income against HKD | | Other Income | 2,182 | 3,618 | -40% | Not Applicable | | **Total** | **246,151** | **181,526** | **+36%** | | [3.3 Hotel Operations Performance](index=13&type=section&id=3.3%20Hotel%20Operations%20Performance) The Group owns eight hotels, with seven operating and one leased, maintaining an average hotel occupancy rate of over 90% in H1 2024, and successfully increasing the annual rent for Royal Scot Hotel in London by 34% - Number of hotels: Eight hotels owned, seven operating, one leased (Royal Scot Hotel in London)[25](index=25&type=chunk) - Average room occupancy rate: Consistently **over 90%+**[25](index=25&type=chunk)[32](index=32&type=chunk) Average Room Occupancy Rate (%) for January-June 2024 | Hotel Name | Occupancy Rate (%) | | :--- | :--- | | Ramada Hong Kong Harbour View | 97 | | Ramada Hong Kong Grand | 98 | | Grand Hotel | 97 | | Grand View Hotel Causeway Bay | 95 | | Best Western Plus Hotel Tsim Sha Tsui | 87 | | Grand Bay Hotel | 93 | | Shanghai Grand Hotel | 80 | - Annual rent for Royal Scot Hotel in London: Successfully increased annual rent by **34%** from **GBP 3.546 million** to **GBP 4.737 million**, with new rental income to be reflected in H2 2024[25](index=25&type=chunk)[32](index=32&type=chunk) [3.4 Cost Analysis](index=14&type=section&id=3.4%20Cost%20Analysis) Hotel service costs increased by 64% to HKD 154.6 million in H1 2024, mainly due to the resumption of normal operations for quarantine hotels and increased staff for Grand Bay Hotel's opening, while administrative expenses decreased by 55% due to reduced opening and renovation costs - Hotel service costs: **HKD 154.6 million** (H1 2023: HKD 94 million), a **64% increase**[26](index=26&type=chunk)[27](index=27&type=chunk) - Cost increase reasons: Resumption of normal operations for quarantine hotels and the opening of Grand Bay Hotel, leading to an increase in employees from **455 to 550**[26](index=26&type=chunk)[31](index=31&type=chunk) - Cost of sales: **HKD 1.6 million** (H1 2023: HKD 0.4 million), increase primarily due to Grand Bay Hotel's operating costs[27](index=27&type=chunk) - Administrative expenses (excluding depreciation): **HKD 22.3 million** (H1 2023: HKD 50.2 million), a **55% decrease**, mainly due to the absence of opening, maintenance, and renovation costs for Grand Bay Hotel and Shanghai Grand Hotel[28](index=28&type=chunk) - Depreciation of hotel properties: **HKD 68 million** (H1 2023: HKD 34.9 million), a **95% increase**[28](index=28&type=chunk)[29](index=29&type=chunk) Depreciation of Hotel Properties (HKD Million) | Hotel Name | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Ramada Hong Kong Harbour View | 3.0 | 3.1 | -0.1 | | Ramada Hong Kong Grand | 14.8 | 14.8 | - | | Best Western Plus Hotel Tsim Sha Tsui | 8.1 | 7.8 | +0.3 | | Grand Hotel | 2.0 | 2.1 | -0.1 | | Grand View Hotel Causeway Bay | 5.8 | 5.9 | -0.1 | | Grand Bay Hotel | 33.0 | - | +33.0 | | Shanghai Grand Hotel | 1.3 | 1.2 | +0.1 | | **Total for the Period** | **68.0** | **34.9** | **+33.1** | [3.5 Financing Situation](index=15&type=section&id=3.5%20Financing%20Situation) As of June 30, 2024, the Group's total debt decreased by 21.8% to HKD 684 million, with both the gearing ratio and external debt ratio declining, but finance costs increased due to rising interest rates - Total debt: **HKD 684 million** (December 31, 2023: HKD 875 million), a decrease of **HKD 191 million** (**-21.8%**)[30](index=30&type=chunk) Total Debt Analysis (HKD Million) | Category | December 31, 2023 | June 30, 2024 | Change | H1 2024 Interest Paid | | :--- | :--- | :--- | :--- | :--- | | Bank Loans | 330 | 348 | +18 | 10.8 | | Shareholder Loans | 545 | 336 | -209 | 12.4 | | **Total Debt** | **875** | **684** | **-191** | **23.2** | - Gearing ratio: **7%** (December 31, 2023: 9%), calculated as total debt relative to total revalued net assets[30](index=30&type=chunk) - External debt ratio: **3.5%**, calculated as bank loans relative to total revalued net assets[30](index=30&type=chunk) - Debt-to-asset ratio: **16%** (December 31, 2023: 21%), calculated as total debt relative to capital employed before revaluation of all hotel properties[30](index=30&type=chunk) - Finance costs: Total interest expense of **HKD 23.2 million** (H1 2023: HKD 19.4 million), increase primarily due to rising interest rates[30](index=30&type=chunk) - Bank loans are primarily denominated in HKD and GBP, with interest calculated at floating rates, exposing the Group to foreign exchange risk[31](index=31&type=chunk) [3.6 Key Business Achievements](index=16&type=section&id=3.6%20Key%20Business%20Achievements) Despite challenges in Hong Kong visitor recovery, the Group's average hotel occupancy rate exceeded 90%, with Grand Bay Hotel and Shanghai Grand Hotel reopened, Royal Scot Hotel in London's annual rent successfully increased, and plans to renovate Wood Street Hotel in London - Overnight visitors to Hong Kong: Approximately **11 million** in H1 2024, with about **7 million** from mainland China, still below pre-pandemic levels (15 million in H1 2019)[32](index=32&type=chunk) - Tourism recovery challenges: Air capacity, global/China economy, foreign exchange rates, local labor shortages, and rising operating costs[32](index=32&type=chunk) - Hotel openings: Grand Bay Hotel commenced operations on August 1, 2023, and Shanghai Grand Hotel reopened on August 1, 2023, after renovation[32](index=32&type=chunk) - Average hotel occupancy rate: Consistently **over 90%+**[32](index=32&type=chunk) - Total revenue growth: Hotel revenue increased by **41%** to **HKD 225 million**, and total revenue increased by **36%** to **HKD 246 million**[32](index=32&type=chunk) - Annual rent for Royal Scot Hotel in London: Successfully increased annual rent by **34%** to **GBP 4.737 million**[32](index=32&type=chunk) - Wood Street Hotel project in London: Acquired in 2020, planned for renovation into a luxury hotel with approximately **216 rooms**[32](index=32&type=chunk) [3.7 Future Outlook](index=16&type=section&id=3.7%20Future%20Outlook) The Group owns eight hotels and a London renovation project, facing future challenges from a weak Chinese economy and a high HKD-RMB exchange rate hindering Chinese visitor recovery, with management continuing efforts to increase revenue and control costs - Asset portfolio: Eight revenue-generating hotels (six in Hong Kong, one in Shanghai, one in London) and the Wood Street Hotel renovation project in London[33](index=33&type=chunk) - Future challenges: Weak Chinese economy, expensive HKD against RMB, and potentially difficult recovery of Chinese visitor numbers[33](index=33&type=chunk) - Response strategy: Management will continue efforts to increase revenue and control costs[33](index=33&type=chunk) [IV. Other Information](index=16&type=section&id=IV.%20Other%20Information) This section covers dealings in listed securities, corporate governance practices, and audit committee review [4.1 Dealings in Listed Securities](index=16&type=section&id=4.1%20Dealings%20in%20Listed%20Securities) In H1 2024, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - No activities involving the purchase, sale, or redemption of the company's listed securities[34](index=34&type=chunk) [4.2 Corporate Governance](index=17&type=section&id=4.2%20Corporate%20Governance) The company has complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, except for the combined roles of Chairman and Chief Executive Officer, which the Board believes facilitates effective strategy implementation and cost savings - Compliance with Corporate Governance Code: Except for the combined roles of Chairman and Chief Executive Officer, the company has complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules[35](index=35&type=chunk) - Deviation from Code Provision C.2.1: Mr. Cheng Kai Man holds both Chairman and Chief Executive Officer roles; the Board believes this provides strong and consistent leadership, facilitates strategy implementation, and significantly saves costs[35](index=35&type=chunk) - Compliance with Model Code: All Directors confirm compliance with the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules throughout the period[36](index=36&type=chunk) [4.3 Audit Committee Review](index=17&type=section&id=4.3%20Audit%20Committee%20Review) The Audit Committee has reviewed the Group's unaudited financial results for the six months ended June 30, 2024 - The Audit Committee has reviewed the Group's unaudited financial results for the six months ended June 30, 2024[37](index=37&type=chunk)

Financial Performance - Total revenue for the year ended December 31, 2023, was HKD 451,811,000, an increase from HKD 439,482,000 in 2022, representing a growth of approximately 3%[12] - Gross profit for the year was HKD 112,082,000, down from HKD 172,868,000 in the previous year, indicating a decline of about 35%[12] - The company reported a loss of HKD 33,051,000 for the year, compared to a profit of HKD 592,163,000 in 2022, marking a significant decrease in profitability[12] - The basic loss per share for the year was HKD (0.37), compared to earnings per share of HKD 6.63 in the previous year[12] - Total revenue increased by 3% from approximately HKD 439 million to approximately HKD 452 million[28] - Operating hotel net profit decreased by 45% to HKD 74.7 million from HKD 136.5 million[30] - Net profit attributable to owners decreased by HKD 138 million to HKD 41 million from HKD 179 million[30] - Revenue from hotel operations increased by 3% to HKD 414.4 million, driven by higher room rates and occupancy[32] - Investment property income rose by 3% to HKD 37.3 million, attributed to currency appreciation of GBP rental income[32] - The pre-tax profit for 2023 was HKD 28,954,000, a significant decrease of 95.3% compared to HKD 616,309,000 in 2022[146] - The income tax expense for the year was HKD 62,005,000, which is an increase from HKD 24,146,000 in the previous year[146] Expenses and Costs - Administrative expenses increased to HKD 70,945,000 from HKD 37,977,000, reflecting an increase of approximately 87%[12] - Financial costs rose to HKD 43,780,000, up from HKD 23,098,000, which is an increase of about 90%[12] - Hotel service costs for the year amounted to HKD 242.8 million, up from HKD 167 million in 2022, primarily due to an increase in employee numbers from 334 to 536[37] - Administrative expenses (excluding depreciation) rose to HKD 69 million, up from HKD 36 million in 2022, due to opening costs and renovations[37] Corporate Governance - The company is committed to maintaining its accounting policies and internal controls to ensure the integrity of its financial reporting[15] - The board consists of nine members, including five executive directors, one non-executive director, and three independent non-executive directors, ensuring compliance with the listing rules[48] - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange listing rules, ensuring adherence to governance standards[47] - The company aims to enhance shareholder value through effective strategic planning and execution under the leadership of the chairman and CEO[48] - The company has confirmed compliance with the standard code for securities trading by directors throughout the year[47] - The board's responsibilities include setting strategic direction, establishing goals, and overseeing senior management performance[50] - The company maintains a high standard of corporate governance with a focus on a quality board, robust internal controls, and transparency to shareholders[52] Risk Management - The board is responsible for evaluating and determining the nature and extent of risks, maintaining effective risk management and internal control systems[67] - The audit committee completed a review of the effectiveness and adequacy of the group's risk management and internal control systems for the year ending December 31, 2022[74] - The risk management committee was established in 2019, focusing on business, financial, and property asset management risks, with daily, weekly, and monthly reviews conducted by its members[74] - The internal audit team, formed in 2019, conducts independent assessments of the internal audit and control systems, reporting to the audit committee[74] Dividend Policy - The company did not recommend a final dividend for the year due to various operational challenges[30] - The company has adopted a dividend policy aimed at providing stable and sustainable returns to shareholders[93] - The dividend distribution will consider factors such as the group's operating conditions, financial status, and future capital needs[94] - The board retains the right to review and amend the dividend policy at any time, without guaranteeing any specific amount of dividends in any given period[94] Acquisitions and Investments - The group acquired the Grand Bay Hotel in December 2022, which has 435 rooms and a total area of 216,314 square feet, and it began operations on August 1, 2023[42] - The total cash consideration for the acquisition of Haili Investment Limited was HKD 1,430,864,000[166] - The group acquired a subsidiary, contributing HKD 1,420,695,000 to the total assets during the year[147] Environmental, Social, and Governance (ESG) - The environmental, social, and governance (ESG) committee was established to manage and report on the group's ESG performance and risks, with regular updates provided to the board[75] - The group has implemented various environmental measures to minimize carbon emissions and enhance energy and water efficiency, with regular reviews of these measures[114] Operational Insights - The group operates eight hotels, with six located in Hong Kong, one in London, and one in China, facing significant operational expenses and market margins of only 35% to 40% of total revenue[119] - Average room occupancy rates for hotels ranged from 72% to 95% across different properties[34] - The Royal Scot Hotel in London maintained a valuation of GBP 88.5 million, with rental income remaining stable at GBP 3.546 million[34] - The group expects continued challenges in the hotel business and rental income, but anticipates a rise in overnight visitors to Hong Kong due to the 2024 budget promoting tourism[42]

Financial Performance - The net profit attributable to the company's owners for the year ended December 31, 2023, was HKD 41 million, a decrease of HKD 138 million compared to HKD 179 million in 2022[4]. - The company reported a loss of HKD 33,051 thousand for the year, compared to a profit of HKD 592,163 thousand in the previous year[5]. - Basic loss per share was HKD (0.37) in 2023, down from earnings of HKD 6.63 per share in 2022[5]. - The group reported a pre-tax profit of HKD 28,954,000, a significant decrease from HKD 616,309,000 in the previous year[19]. - The group did not declare or propose any dividends for the years 2023 and 2022[25]. - The group did not recommend the payment of a final dividend for the year ended December 31, 2023, due to a significant decline in operating profits and increased costs[38]. Revenue and Growth - Total revenue for the year was HKD 414,420 thousand, an increase of 2.8% from HKD 403,159 thousand in 2022[4]. - Total revenue for the year 2023 was HKD 451,811,000, an increase of 2.9% from HKD 439,482,000 in 2022[15]. - Hotel operating revenue reached HKD 414,420,000, up from HKD 403,159,000 in the previous year, reflecting a growth of 2.9%[15]. - Total revenue for the group increased by 3% year-on-year, from approximately HKD 439 million in 2022 to approximately HKD 452 million in 2023[44]. - Operating hotel revenue rose by 3% to HKD 414 million in 2023, compared to HKD 403 million in 2022, driven by increased room rates and occupancy[45]. Costs and Expenses - The gross profit margin decreased to 27.0% in 2023 from 42.9% in 2022, reflecting higher costs[4]. - Administrative expenses increased to HKD 70,945 thousand from HKD 37,977 thousand in 2022, indicating rising operational costs[4]. - The group's hotel service costs for the year were HKD 242.8 million, up from HKD 167 million in 2022, primarily due to an increase in employee numbers from 334 to 536[47]. - Administrative expenses (excluding depreciation) increased to HKD 69 million in 2023 from HKD 36 million in 2022, mainly due to opening costs and maintenance expenses for new hotels[52]. - The group's total financial costs rose to HKD 43,780,000 in 2023 from HKD 23,098,000 in 2022, reflecting an increase of 89%[23]. - The company's financial costs rose by 90% to HKD 43.8 million in 2023, compared to HKD 23.1 million in 2022[41]. - The group reported a significant increase in tax expenses, which rose by 157% to HKD 62 million in 2023 from HKD 24 million in 2022[41]. Assets and Liabilities - The company's total assets as of December 31, 2023, were HKD 4,556,668 thousand, slightly up from HKD 4,536,518 thousand in 2022[11]. - The net current liabilities improved to HKD (392,799) thousand from HKD (435,267) thousand in the previous year[11]. - Total debt as of December 31, 2023, was HKD 875 million, an increase of HKD 18 million from HKD 857 million in 2022[56]. - The debt-to-asset ratio was 21% as of December 31, 2023, compared to 20% in 2022[54]. - Interest expenses for the year amounted to HKD 43.7 million, up from HKD 23.1 million in 2022, attributed to rising interest rates[56]. Operational Insights - The group’s operating segments include hotel services, property investment, and securities investment, with a focus on resource allocation and performance evaluation[16]. - The average occupancy rates for the hotels ranged from 72% to 95% across different properties in 2023[49]. - The group employed 536 staff members as of December 31, 2023, an increase from 334 in 2022[57]. - The number of overnight visitors to Hong Kong was approximately 17 million in 2023, with 12 million from mainland China[58]. - The group's net profit was impacted by renovation costs and increased operational expenses due to labor shortages[58]. Future Outlook - The company plans to continue focusing on operational efficiency and cost management to improve profitability in the upcoming year[12]. - Future prospects for hotel operations and rental income remain challenging, with management focused on increasing revenue and controlling costs[62]. - The Royal Scot Hotel in London is expected to see rental increases linked to the UK retail price index, which has been at a 40-year high[59]. - The group acquired the Glamorous Bay Hotel, which has 435 rooms and began operations on August 1, 2023[58].

Financial Performance - For the six months ended June 30, 2023, hotel service revenue was HKD 159,513,000, a decrease of 37.9% compared to HKD 256,622,000 for the same period in 2022[13]. - The group reported a loss before tax of HKD 18,347,000 for the six months ended June 30, 2023, compared to a profit of HKD 128,551,000 for the same period in 2022[13]. - The company's net profit attributable to owners for the six months ended June 30, 2023, was HKD 18 million, a decrease of HKD 127 million compared to HKD 145 million for the same period in 2022[49]. - Total revenue for the period decreased by 35%, from HKD 279 million to HKD 182 million[52]. - Hotel operating revenue decreased by 38% to HKD 160 million, down from HKD 257 million for the same period in 2022[54]. - The group’s total classified income for the six months ended June 30, 2023, was HKD 177,953,000, down from HKD 275,401,000 in the previous year[13]. - The group’s net profit attributable to shareholders, excluding depreciation, was HKD 17.9 million, an 88% decrease from HKD 144.6 million in the previous year[63]. - The company reported a loss of 17,861,000 HKD for the six months ended June 30, 2023, compared to a profit of 106,005,000 HKD in the same period last year[125]. - Total comprehensive income attributable to the company’s owners for the period was 44,650,000 HKD, compared to a loss of 32,317,000 HKD in the previous year[128]. Assets and Liabilities - Total assets as of June 30, 2023, amounted to HKD 5,287,735,000, compared to HKD 5,265,508,000 as of December 31, 2022[16]. - Total liabilities as of June 30, 2023, were HKD 1,010,262,000, a slight decrease from HKD 1,032,744,000 as of December 31, 2022[18]. - The group’s total classified assets in hotel services were HKD 3,731,880,000 as of June 30, 2023, compared to HKD 3,760,420,000 as of December 31, 2022[16]. - The group’s total assets were revalued at HKD 9.877 billion as of June 30, 2023, up from HKD 9.6 billion at the end of 2022[98]. - The carrying value of the group's investment properties and hotel properties as of June 30, 2023, is approximately HKD 977,000,000 and HKD 1,570,000,000, respectively[191]. - The carrying value of bank loans due within one year decreased to HKD 10,000,000 from HKD 22,000,000 as of December 31, 2022[186]. Revenue and Income Sources - The group’s property rental income for the six months ended June 30, 2023, was HKD 18,395,000, slightly down from HKD 18,737,000 in the previous year[6]. - The group’s securities investment income remained stable at HKD 18,395,000 for the six months ended June 30, 2023, compared to HKD 18,737,000 in the same period of 2022[13]. - The rental income for the Royal Scot Hotel in London for the period was GBP 1.768 million, consistent with the previous year[95]. - Future rental income from the Royal Scot Hotel in London is promising, with annual rent increases linked to the UK Retail Price Index, which reached a 40-year high of 10.7% in June 2023[77]. Expenses and Costs - The cost of hotel services for the period was HKD 94 million, an increase from HKD 76.3 million in the previous year[55]. - The group incurred administrative expenses of HKD 51.1 million, an increase of 183% compared to HKD 18.1 million for the same period in 2022[63]. - Total interest expenses increased to HKD 19.4 million, up from HKD 4.3 million in the same period last year, primarily due to the acquisition of the Grand Bay Hotel[74]. - The company incurred interest expenses of HKD 19.446 million for the six months ended June 30, 2023, compared to HKD 4.349 million in the same period of 2022[1]. Employee and Operational Insights - The group has a total of 455 employees as of June 30, 2023, up from 334 employees as of December 31, 2022[75]. - The group continues to face challenges in hotel operations and rental income, with management focused on increasing revenue and controlling costs[80]. - The group’s operating costs have significantly increased due to local labor shortages and a rise in hotel staff numbers[102]. Shareholder and Equity Information - Major shareholder Shobokshi Hussam Ali H. holds 71.09% of the shares due to the interests of his spouse, Zheng Qiwen[138]. - Alef United Holdings Limited holds 2,396,000 shares (0.03%) and Saray Value Fund SPC holds 882,698,524 shares (9.87%) as of April 6, 2022[115]. - Fidelity Management & Research (Japan) Limited holds 220,316,000 shares (2.46%), while Fidelity Management & Research (Hong Kong) Limited holds 90,048,000 shares (1.01%)[116]. Cash Flow and Financial Resources - Operating cash flow before changes in working capital was 33,760,000 HKD, down from 171,683,000 HKD in the previous year[135]. - The group has sufficient financial resources, including internal resources and unused bank financing, to meet its operational funding needs[180]. - The company has prepared cash flow forecasts and contract calculations for the ongoing period until September 30, 2024, simulating a basic case scenario[164].

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) [Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The company reported a loss attributable to owners of HK$17,920 thousand for the six months ended June 30, 2023, a reversal from profit in the prior year due to decreased revenue and higher costs | Metric | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | (Loss) Profit Attributable to Owners of the Company | (17,920) | 105,958 | | (Loss) Earnings Per Share (HK cents) | (0.20) | 1.18 | | Total Revenue | 177,953 | 275,401 | | (Loss) Profit Before Tax | (18,347) | 128,551 | | (Loss) Profit for the Period | (17,861) | 106,005 | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the six months ended June 30, 2023, turned positive from a prior-year loss, driven by favorable exchange differences from foreign operations | Metric | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | (Loss) Profit for the Period | (17,861) | 106,005 | | Fair Value (Loss) Gain on Equity Investments at Fair Value Presented in Other Comprehensive Income | 9,313 | (7,198) | | Exchange Differences on Translation of Foreign Operations | 53,257 | (131,077) | | Other Comprehensive Income (Expense) for the Period | 62,570 | (138,275) | | Total Comprehensive Income (Expense) for the Period | 44,709 | (32,270) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, total assets less current liabilities and total equity slightly increased, while net current liabilities decreased compared to December 31, 2022 | Metric | As of June 30, 2023 (HK$ thousand) | As of December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Non-current Assets | 5,003,416 | 4,971,785 | | Current Assets | 284,319 | 293,723 | | Current Liabilities | 702,804 | 728,990 | | Net Current Liabilities | (418,485) | (435,267) | | Total Assets Less Current Liabilities | 4,584,931 | 4,536,518 | | Equity Attributable to Owners of the Company | 4,270,011 | 4,225,361 | | Total Equity | 4,277,473 | 4,232,764 | | Non-current Liabilities | 307,458 | 303,754 | [Notes to the Financial Statements](index=5&type=section&id=Notes%20to%20the%20Financial%20Statements) [Basis of Preparation](index=5&type=section&id=Basis%20of%20Preparation) These condensed consolidated financial statements adhere to HKAS 34 and Listing Rules Appendix 16, with an unqualified auditor's report - These condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix 16 to the Listing Rules of The Stock Exchange of Hong Kong Limited[15](index=15&type=chunk) - The company's auditor has issued an unqualified auditor's report on the consolidated financial statements[37](index=37&type=chunk) [Significant Accounting Policies](index=5&type=section&id=Significant%20Accounting%20Policies) Accounting policies and calculation methods remain consistent with the prior year, and new HKFRSs had no significant impact on financial performance or position - The accounting policies and methods of computation adopted in the unaudited condensed consolidated financial statements for the six months ended June 30, 2023, are consistent with those presented in the Group's annual financial statements for the year ended December 31, 2022[38](index=38&type=chunk) - The application of new and revised Hong Kong Financial Reporting Standards during the period had no significant impact on the financial position and performance and/or disclosures in the condensed consolidated financial statements of the Group for the current and prior periods[8](index=8&type=chunk) [Revenue Analysis](index=6&type=section&id=Revenue%20Analysis) Total revenue decreased by **35%** year-on-year, mainly due to a **38%** drop in hotel operations revenue as room rates fell below quarantine service levels | Revenue Source | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Hotel Operations Revenue | 159,513 | 256,622 | -38% | | Property Rental Income | 18,395 | 18,737 | -2% | | Dividend Income | 45 | 42 | +7% | | Total Revenue | 177,953 | 275,401 | -35% | - The decrease in hotel revenue was due to lower hotel room rates compared to the period when quarantine hotel services were provided for the six months ended June 30, 2022[49](index=49&type=chunk) [Segment Information](index=7&type=section&id=Segment%20Information) The Group's operating segments are hotel services, property investment, and securities investment, with hotel services experiencing significant declines in revenue and results - The Group's operating and reportable segments include hotel services, property investment, and securities investment[20](index=20&type=chunk)[79](index=79&type=chunk) | Segment | Segment Revenue for the Six Months Ended June 30, 2023 (HK$ thousand) | Segment Revenue for the Six Months Ended June 30, 2022 (HK$ thousand) | Segment Results for the Six Months Ended June 30, 2023 (HK$ thousand) | Segment Results for the Six Months Ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Hotel Services | 159,513 | 256,622 | 26,262 | 127,506 | | Property Investment | 18,395 | 18,737 | 18,395 | 18,737 | | Securities Investment | 45 | 42 | 45 | 42 | | Total | 177,953 | 275,401 | 44,702 | 146,285 | [Income Tax](index=9&type=section&id=Income%20Tax) Income tax for the period transitioned from an expense to a credit, driven by Hong Kong deferred tax reversal and reduced current taxes in Hong Kong and China | Income Tax Item | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Hong Kong Current Tax | 4,669 | 15,975 | | China Current Tax | 13 | 209 | | UK Current Tax | 2,722 | 3,108 | | Over-provision in Prior Years | - | (40) | | Hong Kong Deferred Tax | (7,890) | 3,294 | | Total Income Tax (Credit) Expense | (486) | 22,546 | - Hong Kong profits tax is recognized based on management's estimated weighted average annual income tax rate of **16.5%** for the entire financial year[96](index=96&type=chunk) [ (Loss) Profit for the Period](index=9&type=section&id=(Loss)%20Profit%20for%20the%20Period) The company reported a loss for the period, influenced by property, plant and equipment depreciation, increased bank interest income, and disposal gains | Item | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Depreciation of Right-of-use Assets | 394 | 419 | | Depreciation of Property, Plant and Equipment | 35,426 | 38,247 | | Interest on Bank Deposits | (3,152) | (204) | | (Gain) Loss on Disposal of Property, Plant and Equipment | (7) | 449 | [Dividend Policy](index=10&type=section&id=Dividend%20Policy) The Board decided against an interim dividend for the six months ended June 30, 2023, citing slow tourism recovery, lower room rates, rising operating costs, and hotel maintenance expenses - The Board resolved not to declare or recommend an interim dividend for the six months ended June 30, 2023, and June 30, 2022[24](index=24&type=chunk)[97](index=97&type=chunk) - Slow recovery of the tourism industry, reduced room rates, and increased operating costs led to a significant decrease in hotel operating profit[103](index=103&type=chunk) - Higher interest expenses[103](index=103&type=chunk) - Repair and maintenance of Grand Bay View Hotel[103](index=103&type=chunk) - Costs for repair and maintenance of each quarantine hotel to achieve ideal hotel standards[103](index=103&type=chunk) [ (Loss) Earnings Per Share](index=10&type=section&id=(Loss)%20Earnings%20Per%20Share) Basic loss per share was **0.20 HK cents** for the six months ended June 30, 2023, a reversal from prior-year earnings, with no diluted EPS presented due to a lack of potential ordinary shares | Metric | For the Six Months Ended June 30, 2023 (HK cents) | For the Six Months Ended June 30, 2022 (HK cents) | | :--- | :--- | :--- | | Basic (Loss) Earnings Per Share | (0.20) | 1.18 | - Basic (loss) earnings per share is calculated based on the loss attributable to owners of the Company of **HK$17,920,000** for the period (profit for the six months ended June 30, 2022: HK$105,958,000) and **8,947,051,000** shares in issue during the period[98](index=98&type=chunk) - Diluted earnings per share for the current and prior periods are not presented as there were no potential ordinary shares in existence during these periods[25](index=25&type=chunk) [Trade and Other Receivables](index=10&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2023, total trade and other receivables significantly decreased, with notable declines in trade receivables and overdue accounts | Item | As of June 30, 2023 (HK$ thousand) | As of December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Trade Receivables (from contracts with customers) | 3,210 | 10,730 | | Other Receivables | 3,542 | 5,329 | | Total | 6,752 | 16,059 | | Aging of Trade Receivables | As of June 30, 2023 (HK$ thousand) | As of December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Not yet due | 2,904 | 8,122 | | Overdue: 0 – 30 Days | 113 | 1,194 | | Overdue: 31 – 60 Days | 62 | 1,057 | | Overdue: 61 – 90 Days | 131 | 357 | | Total | 3,210 | 10,730 | [Trade and Other Payables](index=11&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2023, total trade and other payables and accruals decreased, mainly due to a decline in other payables and accruals | Item | As of June 30, 2023 (HK$ thousand) | As of December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Trade Payables | 5,351 | 2,487 | | Other Payables and Accruals | 28,180 | 49,428 | | Total | 33,531 | 51,915 | | Aging of Trade Payables | As of June 30, 2023 (HK$ thousand) | As of December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | 0 – 30 Days | 4,901 | 2,414 | | 31 – 60 Days | 433 | 72 | | 61 – 90 Days | 17 | 1 | | Total | 5,351 | 2,487 | [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) [Overall Performance](index=12&type=section&id=Overall%20Performance) Net profit attributable to owners, before revaluation and depreciation, significantly decreased by **88%** to **HK$18,000 thousand**, driven by lower hotel revenue and higher operating, maintenance, and finance costs | Metric | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Net Profit Attributable to Owners of the Company After Tax and Before Depreciation of Land, Property and Equipment | 17,900 | 144,624 | -88% | | Profit (Loss) After Tax and Non-controlling Interests | (17,920) | 105,958 | Not Applicable | - The overall decrease in profit was mainly due to reduced hotel revenue and increased hotel operating costs, repair and maintenance costs, and finance costs[105](index=105&type=chunk) [Revenue Analysis](index=13&type=section&id=Revenue%20Analysis_Management) Total revenue decreased by **35%** year-on-year, primarily due to a **38%** drop in hotel operations revenue, while London's Royal Scot Hotel rental income remained stable with positive growth prospects | Revenue Source | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Hotel Operations Revenue | 159,513 | 256,622 | -38% | | Investment Property Income | 18,395 | 18,737 | -2% | | Dividend Income | 45 | 42 | +7% | | Other Income | 3,618 | 3,554 | +2% | | Total | 181,571 | 278,955 | -35% | | Hotel Name | Average Room Occupancy Rate (%) from January to June 2023 | | :--- | :--- | | Ramada Hong Kong Harbour View | 89 | | Ramada Hong Kong Grand | 84 | | Best Western Plus Hotel Hong Kong | 92 | | Grand View Hotel Causeway Bay | 83 | | Best Western Plus Hotel Tsim Sha Tsui | 89 | - The future prospects for rental increases at the Royal Scot Hotel in London are encouraging, as annual rent increases (every 5 years) are linked to the UK Retail Price Index, which remained at **10.7%** in June 2023, its highest point in 40 years[36](index=36&type=chunk)[88](index=88&type=chunk) [Cost Analysis](index=14&type=section&id=Cost%20Analysis) Administrative expenses (excluding depreciation) surged by **194%** to **HK$50,200 thousand**, driven by Grand Bay View Hotel's opening, maintenance, and Wood Street Hotel's operating costs, alongside increased hotel service staff and payroll | Cost Item | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Administrative Expenses (excluding depreciation) | 50,200 | 17,100 | +194% | | Cost of Hotel Services | 94,000 | 76,300 | +23% | | Total Depreciation of Hotel Properties | 34,900 | 37,700 | -7% | - The increase in administrative expenses was mainly due to opening expenses, repair and maintenance costs of **HK$29,000 thousand** for Grand Bay View Hotel, and operating expenses of **HK$4,000 thousand** for Wood Street Hotel Limited[50](index=50&type=chunk)[107](index=107&type=chunk) - The increase in hotel operating costs was mainly due to an increase in the number of employees from **334** to **455** and payroll growth (including staff from the newly acquired Grand Bay View Hotel)[57](index=57&type=chunk)[107](index=107&type=chunk) [Financing](index=14&type=section&id=Financing) Total debt slightly increased to **HK$871,000 thousand**, with finance costs surging **351%** to **HK$19,400 thousand** due to increased shareholder loans from the Grand Bay View Hotel acquisition, while gearing and debt-to-asset ratios remained stable | Debt Type | As of June 30, 2023 (HK$ million) | As of December 31, 2022 (HK$ million) | Change (HK$ million) | | :--- | :--- | :--- | :--- | | Bank Loans | 240 | 242 | -2 | | Shareholder Loans | 631 | 615 | +16 | | Total Debt | 871 | 857 | +14 | | Finance Cost Item | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Interest Expense | 19,400 | 4,300 | +351% | | Interest Expense on Bank Loans | 6,200 | 2,700 | +130% | | Interest Expense on Shareholder Loans | 13,200 | 1,600 | +725% | - As of June 30, 2023, the gearing ratio and debt-to-asset ratio were **9%** and **20%** respectively, remaining stable compared to December 31, 2022[34](index=34&type=chunk)[35](index=35&type=chunk) [Key Business Developments](index=15&type=section&id=Key%20Business%20Developments) Grand Bay View Hotel and Shanghai Grand America Hotel reopened on August 1, 2023, after extensive maintenance, while London's Wood Street Hotel renovation into a luxury hotel is ongoing - Grand Bay View Hotel and Shanghai Grand America Hotel commenced operations on August 1, 2023, following extensive repair and maintenance[58](index=58&type=chunk) - The Group acquired the Wood Street Police Headquarters in central London for **£40,000,000** on January 29, 2020, which has been approved for renovation into a luxury hotel with approximately **216** rooms, restaurants, and bars[52](index=52&type=chunk) - The Group holds eight revenue-generating hotels (six in Hong Kong, one in Shanghai, and one in London) and the renovation project for Wood Street Hotel in London[59](index=59&type=chunk) [Outlook](index=16&type=section&id=Outlook) Hong Kong's tourism recovery is slow due to airline capacity, global economy, and exchange rate challenges, alongside rising operating costs from labor shortages; management focuses on revenue growth and cost control, anticipating high occupancy for other hotels - In the first half of 2023, Hong Kong received approximately **13 million** visitors, compared to **35 million** in the same period of 2019, with tourism recovery impacted by challenges such as airline capacity, global economy, and exchange rates[110](index=110&type=chunk) - Operating costs significantly increased due to local labor shortages and an increase in hotel staff numbers[110](index=110&type=chunk) - The newly acquired Grand Bay View Hotel commenced operations on August 1, 2023, and has maintained high occupancy rates; the Group's other hotels in Hong Kong are also expected to continue achieving high occupancy rates[94](index=94&type=chunk) - The future prospects for hotel business and rental income remain challenging, and management will continue efforts to increase revenue and control costs[117](index=117&type=chunk) [Corporate Governance](index=16&type=section&id=Corporate%20Governance) The company complied with all Corporate Governance Code provisions, except for the combined Chairman and CEO role, which the Board believes provides consistent leadership and cost savings; all directors confirmed Model Code compliance - The company has complied with all code provisions of the Corporate Governance Code as set out in Appendix 14 to the Listing Rules of The Stock Exchange of Hong Kong Limited, except for code provision C.2.1 (which states that the roles of chairman and chief executive officer should be separate)[111](index=111&type=chunk)[116](index=116&type=chunk)[119](index=119&type=chunk) - Mr. Cheng Kai Man currently holds both the Chairman and Chief Executive Officer positions; the Board believes that combining these roles provides strong and consistent leadership for the company, facilitates effective strategic planning and implementation, and significantly saves costs[60](index=60&type=chunk) - All directors have confirmed their compliance with the standards set out in the Model Code throughout the period[61](index=61&type=chunk)[119](index=119&type=chunk) - For the six months ended June 30, 2023, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[118](index=118&type=chunk) [Review and Approval](index=17&type=section&id=Review%20and%20Approval) The Audit Committee has reviewed the Group's unaudited financial results for the six months ended June 30, 2023 - The Audit Committee has reviewed the Group's unaudited financial results for the six months ended June 30, 2023[62](index=62&type=chunk)

Financial Performance - Total revenue for the year 2022 was HKD 439,482,000, an increase of 34.5% compared to HKD 326,398,000 in 2021[146]. - Gross profit for 2022 reached HKD 172,868,000, significantly up from HKD 49,104,000 in 2021, marking a gross margin improvement[146]. - Profit before tax surged to HKD 616,309,000, compared to HKD 73,868,000 in the previous year, reflecting a substantial increase of 736.5%[146]. - Net profit for the year was HKD 592,163,000, a remarkable rise from HKD 65,599,000 in 2021, indicating a growth of 803.5%[146]. - Basic earnings per share for 2022 was HKD 6.63, compared to HKD 0.73 in 2021, representing an increase of 807.5%[146]. - The company reported a gain from the sale of a subsidiary amounting to HKD 521,857,000, which was not present in the previous year[146]. - The fair value of investment properties experienced a net impairment loss of HKD 5,000,000 in 2022, contrasting with a gain of HKD 62,300,000 in 2021[146]. - Administrative expenses increased to HKD 37,977,000 from HKD 33,920,000, reflecting a rise of 6.0%[146]. - Financial costs rose significantly to HKD 23,098,000 from HKD 6,508,000, indicating an increase of 254.5%[146]. - The company's profit attributable to owners for the year ended December 31, 2022, was HKD 593 million, an increase of HKD 527 million compared to HKD 66 million in 2021[172][184]. Assets and Liabilities - The company's total equity as of December 31, 2022, was HKD 4,232,764,000, an increase from HKD 3,738,976,000 on January 1, 2021[66]. - Total non-current assets increased to HKD 4,971,785,000 in 2022 from HKD 4,175,608,000 in 2021, representing a growth of 19%[84]. - The company's total assets minus current liabilities reached HKD 4,536,518,000 in 2022, up from HKD 3,878,597,000 in 2021, an increase of 17%[96]. - Non-current liabilities included bank loans of HKD 219,715,000, which were not present in the previous year[63]. - Net current liabilities increased to HKD 435,267,000 in 2022 from HKD 297,011,000 in 2021, indicating a rise of 47%[96]. - The company’s bank loans decreased significantly to HKD 22,000,000 in 2022 from HKD 310,299,000 in 2021, a reduction of 93%[84]. - The company had unused bank financing totaling HKD 912,000,000 as of December 31, 2022, slightly up from HKD 910,500,000 in 2021[164]. - The overall debt amount is HKD 857 million, with interest payments of approximately HKD 25 million due in the coming year[171]. - As of December 31, 2022, the group's total debt was HKD 857 million, an increase from HKD 504 million in 2021, primarily due to the acquisition of the Ting Lan Hotel for HKD 1.42 billion[193]. Risk Management and Internal Controls - The audit committee reviewed the effectiveness and adequacy of the group's risk management and internal control systems during the year[6]. - The group established a risk management committee in 2019, focusing on business, financial, and property asset management risks[4]. - The board evaluates the effectiveness of existing controls and provides remediation plans when necessary[4]. - The internal audit team conducts independent reviews of the adequacy and effectiveness of the group's internal audit and control systems[4]. Shareholder and Dividend Policies - The company considers actual and future operational and liquidity conditions when deciding on dividend distributions[16]. - The company did not recommend the distribution of a final dividend for the year ended December 31, 2022, consistent with the previous year[35]. - The group has a dividend policy that allows for the declaration of dividends based on profits, with the option to distribute dividends in shares or other specified assets[139]. Hotel Operations and Market Conditions - The group operates eight hotels, with seven in Hong Kong and one in London, facing significant operational expenses and market volatility affecting profit margins[29]. - The market marginal profit for the hotel business is typically between 35% to 40% of total revenue, indicating potential for significant net profit reduction due to revenue reversals[29]. - The average occupancy rates for the hotels in 2022 ranged from 71% to 97%, with the highest being 97% at the Best Western Hotel Tsim Sha Tsui[175]. - Future hotel operations are expected to improve as the impact of COVID-19 lessens, but challenges remain due to economic and geopolitical instability[197]. - The future outlook for hotel and rental income remains challenging, with ongoing efforts to increase revenue and manage costs[198]. Acquisitions and Investments - The group acquired the Ting Lan Hotel at approximately HKD 6,570 per square foot, which includes 435 rooms and a total area of 216,314 square feet, excluding parking spaces[196]. - The group acquired the Wood Street Police Headquarters in London for GBP 40 million, covering 20,000 square feet with a total internal area of 117,472 square feet[199]. Environmental and Social Responsibility - The group aims to minimize its environmental impact through various measures to reduce carbon emissions and improve energy and water efficiency, with regular reviews of these measures[143]. - The company maintains a gender diversity policy, with women representing approximately 44% of both the board and total staff[13].

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的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確 表示，概不對就因本公告全部或任何部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 華大酒店投資有限公司 （於香港註冊成立之有限公司） （股份代號：201） 截至二零二二年十二月三十一日止年度之 末期業績公布 業績 華大酒店投資有限公司（「本公司」）之董事（「董事」）會（「董事會」）宣布截至二零二二年十二月三 十一日止年度之本公司擁有人應佔溢利為593,000,000港元（二零二一年：66,000,000港元），增加527,000,000港 元。本公司及其附屬公司（統稱「本集團」）在本年度之經審核綜合業績連同去年度同期之比較數字如下： 綜合損益表 截至二零二二年十二月三十一日止年度 二零二二年 二零二一年 附註 千港元 千港元 收入 3 客戶合約 403,159 284,082 租賃 36,281 42,316 股息收入 42 - 總收入 439,482 326,398 銷售成本 (25,701) (36,482) 其他服務成本 (166,960) (165,407) 物業、機器及設備 ...

Financial Performance - The profit attributable to the owners for the six months ended June 30, 2022, was HKD 106 million, an increase of HKD 97 million compared to HKD 9 million for the same period in 2021, representing a growth of 1,077.8%[5]. - Total revenue for the group rose by 93% to HKD 278.96 million, compared to HKD 144.71 million in the same period last year, attributed to the operation of quarantine hotels[10]. - Total revenue for the six months ended June 30, 2022, was HKD 275,401,000, a significant increase from HKD 142,476,000 for the same period in 2021, representing an increase of approximately 93.4%[67]. - The net profit for the six months ended June 30, 2022, was HKD 106,005,000, compared to HKD 8,763,000 for the same period in 2021, indicating a substantial increase of approximately 1,107.5%[67]. - Basic earnings per share for the six months ended June 30, 2022, was HKD 1.18, up from HKD 0.10 in the same period of 2021, reflecting a growth of 1,080%[67]. - The total comprehensive income for the six months ended June 30, 2022, was a loss of HKD 32,270,000, compared to a gain of HKD 3,506,000 for the same period in 2021[70]. - The group reported a profit of 105,958,000 HKD for the six months ended June 30, 2022, compared to 8,754,000 HKD for the same period in 2021, indicating a significant increase in profitability[125]. Revenue Sources - Revenue from hotel operations increased by 115% to HKD 256.6 million, up from HKD 119.5 million in the previous year, driven by increased room rates, occupancy, and dining revenue[10]. - Hotel operating revenue reached HKD 256,622,000 for the six months ended June 30, 2022, compared to HKD 119,493,000 in the previous year, marking a growth of 114.5%[103]. - Revenue from room rentals and ancillary services was HKD 238,852,000, up from HKD 118,575,000, reflecting a growth of 101.9%[103]. - The group’s hotel services segment generated an operating profit of HKD 127,506,000 for the six months ended June 30, 2022, compared to HKD 2,348,000 in the same period of 2021, showing a substantial improvement[107]. - The group’s property investment segment reported revenue of HKD 18,737,000, down from HKD 22,983,000 in the previous year, a decrease of 18.8%[107]. - The group’s securities investment segment contributed HKD 42,000 in revenue, unchanged from the previous year[107]. Expenses and Costs - The group’s service costs for the period were HKD 76.3 million, a decrease of HKD 2.9 million from HKD 79.2 million in the previous year[29]. - Administrative expenses increased by 14% to HKD 18.07 million, compared to HKD 15.83 million in the previous year[8]. - Total tax expenses for the six months ended June 30, 2022, amounted to 22,546,000 HKD, a substantial rise from 4,255,000 HKD in the previous year[119]. - The company incurred interest expenses of 4,349,000 HKD for the six months ended June 30, 2022, compared to 3,043,000 HKD for the same period in 2021, reflecting an increase in financial costs[118]. Assets and Liabilities - Non-current assets as of June 30, 2022, totaled HKD 2,426,981,000, down from HKD 2,879,814,000 as of December 31, 2021, representing a decrease of approximately 15.7%[74]. - Current assets as of June 30, 2022, were HKD 3,766,531,000, a decrease from HKD 4,175,608,000 as of December 31, 2021, indicating a decline of about 9.8%[74]. - Current liabilities as of June 30, 2022, were HKD 604,679,000, compared to HKD 572,404,000 as of December 31, 2021, showing an increase of approximately 5.6%[76]. - The total assets of the group as of June 30, 2022, amounted to HKD 4,452,389,000, slightly up from HKD 4,451,001,000 as of December 31, 2021[111]. - The group reported a total liability of HKD 697,420,000 as of June 30, 2022, compared to HKD 663,762,000 at the end of 2021, indicating an increase of 5.4%[114]. - The total equity decreased from 3,787,239 thousand HKD to 3,754,969 thousand HKD, a decline of about 0.9%[82]. Debt and Financing - As of June 30, 2022, the total debt of the group was HKD 492 million, a decrease of HKD 12 million from HKD 504 million as of December 31, 2021[32]. - The bank loans increased by HKD 84 million to HKD 394 million, while shareholder loans decreased by HKD 96 million to HKD 98 million[33]. - New bank loans amounted to 999,500 thousand HKD, indicating a significant increase in financing activities compared to the previous year[92]. - The bank loans secured by the group amounted to HKD 393,863,000 as of June 30, 2022, an increase from HKD 310,299,000 as of December 31, 2021[141][145]. - The effective annual interest rate on bank loans was 1.55% as of June 30, 2022, compared to 1.48% as of December 31, 2021[145]. Corporate Governance - The company has not appointed separate individuals for the roles of Chairman and CEO, with Mr. Zheng concurrently holding both positions, which the board believes provides consistent leadership and cost savings[61]. - The company has complied with the corporate governance code, with the exception of the deviation regarding the dual roles of Chairman and CEO[62]. - The company has adopted the standard code for securities trading by directors and confirmed compliance by all directors during the reporting period[62]. Employee and Shareholder Information - As of June 30, 2022, the company had 412 employees, a decrease from 424 employees as of December 31, 2021[35]. - The company holds 385,395,999 shares in Shun Ho Properties, representing 66.48% of its equity[46]. - The company has 226,454,825 shares in Shun Ho Holdings, accounting for 74.40% of its equity[46]. - The company has not granted any stock options under the employee stock option plan since its adoption in November 2013[48]. - There are no other individuals, apart from directors or senior management, holding interests in the company's shares as per the securities regulations[58]. Acquisitions and Sales - On May 11, 2022, Babenna Limited agreed to sell the entire issued share capital of Huacai Investment Limited for HKD 900 million, pending shareholder approval[39]. - The acquisition of the Tsing Yi Hotel is valued at HKD 1.42 billion, pending shareholder approval[40]. - The sale of the Huacai Investment will assist the group in acquiring the Tsing Yi Hotel at approximately HKD 6,570 per square foot[42]. - The company signed an agreement to acquire all issued shares of Haili for a cash consideration of HKD 1,420,695,000, subject to adjustments based on certain working capital[161]. - The company, through its wholly-owned subsidiary Babenna, entered into a sale agreement to sell all issued shares of Huacai for a cash consideration of HKD 900,000,000, with an adjusted maximum payment expected not to exceed HKD 920,000,000[161]. - Both acquisitions and sales are expected to be completed by September 2022, with the Haili acquisition still pending as of the financial report date[161].

Financial Performance - The company's profit attributable to shareholders for the year ended December 31, 2021, was HKD 66,000,000, an increase of HKD 268,000,000 compared to a loss of HKD 202,000,000 in 2020[7][9]. - Total revenue increased by 40% from HKD 235,072,000 in 2020 to HKD 329,290,000 in 2021, driven by a 54% increase in hotel operating income[11][12]. - Hotel operating income rose to HKD 284,082,000 in 2021 from HKD 183,859,000 in 2020, attributed to increased room rates, occupancy rates, and food and beverage income[11][12]. - The company reported a profit before tax of HKD 73,868,000, a turnaround from a loss of HKD 203,925,000 in 2020[88]. - Net profit for the year was HKD 65,599,000, compared to a loss of HKD 201,710,000 in the prior year[88]. - Basic earnings per share for the year was HKD 0.73, recovering from a loss of HKD 2.25 in 2020[88]. - Gross profit for the year was HKD 49,104,000, compared to HKD 8,778,000 in the previous year, indicating a significant improvement[88]. Revenue and Occupancy - The average occupancy rates for the hotels ranged from 74% to 97% across different properties in 2021[13]. - The tourism market in Hong Kong saw a 97.4% decline in overseas and Chinese tourist arrivals, with most hotels and retailers experiencing over a 90% drop in revenue[21]. - The hotel division's revenue margin is projected to be between 35% to 40% of total revenue[63]. - The group operates eight revenue-generating hotels, with six located in Hong Kong, one in Shanghai, and one in London, alongside the renovation project in London[23]. Expenses and Costs - The service costs for the group increased to HKD 165,400,000 in 2021 from HKD 138,200,000 in 2020, due to the absence of government subsidies to offset salary expenses[14]. - Administrative expenses (excluding depreciation) were HKD 31,000,000 in 2021, slightly up from HKD 30,000,000 in 2020[14]. - Management anticipates continued challenges in the hotel and retail sectors due to the ongoing impact of COVID-19, with low occupancy rates and high operational costs expected to persist[23]. Debt and Financial Position - The overall debt of the group as of December 31, 2021, was HKD 504 million, an increase of HKD 23 million (4.8%) from HKD 481 million in 2020[16]. - Bank loans decreased by HKD 37 million (10.7%) to HKD 310 million in 2021, while shareholder loans increased by HKD 60 million (44.8%) to HKD 194 million[17]. - Total interest expenses for the year were HKD 6.5 million, down from HKD 8.3 million in 2020, primarily due to a reduction in interest rates[17]. - The company reported a net current liability of HKD 297,011,000, worsening from HKD 124,074,000 in 2020[92]. Governance and Management - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange's listing rules, ensuring compliance with all provisions except for specific deviations noted[27]. - The board consists of nine directors, including five executive directors, one non-executive director, and three independent non-executive directors, with two independent directors possessing appropriate professional qualifications or relevant financial management expertise[28]. - The company has established a training and continuous professional development program for directors and senior management[32]. - The board is responsible for evaluating and determining the nature and extent of risks, ensuring effective risk management and internal control systems are maintained[36]. Shareholder Information - The company has established various communication channels with shareholders, including annual general meetings and briefings with investment analysts[50]. - The company’s retained earnings as of December 31, 2021, amounted to HKD 1,807,880,000, an increase from HKD 1,772,277,000 in 2020[51]. - The board does not recommend the payment of a final dividend for the year ending December 31, 2021, consistent with the previous year[51]. - The company has adopted a dividend policy aimed at providing stable and sustainable returns to shareholders, subject to various factors including financial condition and operational needs[50]. Investment and Property Management - The group acquired the Wood Street Police Headquarters in London for GBP 40 million, with plans to renovate it into a luxury hotel with approximately 216 rooms[22]. - The group owns approximately HKD 1,122,000,000 in investment properties located in Hong Kong and the UK as of December 31, 2021[69]. - The net fair value increase of investment properties recognized in the income statement for the year was approximately HKD 62,000,000[69]. - The carrying value of hotel properties as of December 31, 2021, is approximately HKD 2,340,000,000[26]. Risk Management - The company established a risk management committee in 2019, consisting of three executive directors, to oversee business, financial, and property asset management risks[37]. - The audit committee reviews the effectiveness of the risk management and internal control systems and reports to the board[37]. - The group conducted a going concern assessment, considering the ongoing impact of COVID-19 and available liquidity sources, which supports the preparation of financial statements on a going concern basis[125]. Accounting and Financial Reporting - The group adopted revised Hong Kong Financial Reporting Standards, which became mandatory this year, with no significant impact on the financial position and performance for the current and prior years[109]. - The consolidated financial statements are prepared based on historical cost, except for investment properties and certain financial instruments measured at fair value[126]. - The group recognizes rental income from operating leases on a straight-line basis over the lease term[152]. - Financial assets are classified and measured at amortized cost if held to collect contractual cash flows and cash flows solely represent payments of principal and interest[168].

Financial Performance - The company reported a profit attributable to owners of HKD 9,000,000 for the six months ended June 30, 2021, compared to a loss of HKD 154,000,000 for the same period in 2020, representing an increase of HKD 163,000,000[5]. - Total revenue increased by 45% to HKD 144,705,000 for the six months ended June 30, 2021, up from HKD 99,787,000 in the same period of 2020, primarily due to increased hotel occupancy and rental income[10]. - The company reported a profit before tax of HKD 13,018,000 for the six months ended June 30, 2021, compared to a loss of HKD 158,725,000 in the same period of 2020[71]. - Basic earnings per share for the six months ended June 30, 2021, was HKD 0.10, a significant improvement from a loss of HKD 1.72 in the same period of 2020[71]. - The total comprehensive income for the six months ended June 30, 2021, was HKD 3,506,000, compared to a loss of HKD 305,880,000 in the same period of 2020[78]. - The company experienced a fair value loss on equity investments of HKD 25,291,000 for the six months ended June 30, 2021, compared to a loss of HKD 75,997,000 in the same period of 2020[75]. - The company reported a foreign exchange gain of HKD 20,034,000 due to the translation of overseas operations for the six months ended June 30, 2021, compared to a loss of HKD 76,024,000 in the same period of 2020[76]. - The company’s gross profit for the six months ended June 30, 2021, was HKD 25,331,000, compared to a gross loss of HKD 28,090,000 in the same period of 2020[71]. Revenue Sources - Hotel operating income rose by 67% to HKD 119,493,000, compared to HKD 71,463,000 for the same period last year, driven by increased room rates and occupancy[10]. - Investment property income increased by 22% to HKD 22,983,000, attributed to rental income from the Royal Scot Hotel and other properties[10]. - The rental income from the Royal Scot Hotel in London increased by 8% compared to the same period last year[33]. - The company’s total income from customer contracts, leases, and dividend income for the six months ended June 30, 2021, was HKD 119,493,000, compared to HKD 71,463,000 in the same period of 2020, indicating a 67.3% increase[71]. Expenses and Costs - Service costs for the period were HKD 79,500,000, a slight decrease from HKD 80,600,000 in the previous year[26]. - Administrative expenses (excluding depreciation) were HKD 14,500,000, down from HKD 15,400,000 in the same period last year[26]. - Depreciation for hotel properties was HKD 37,700,000 for the period, slightly down from HKD 37,800,000 in the previous year[26]. - Financial costs decreased to HKD 3,043,000 for the six months ended June 30, 2021, from HKD 4,582,000 in the same period of 2020[71]. Debt and Financial Position - As of June 30, 2021, the total debt of the group was HKD 531 million, an increase of HKD 50 million from HKD 481 million on December 31, 2020[29]. - The capital-to-debt ratio increased to 14% from 13% as of December 31, 2020, based on total debt relative to the revalued hotel properties[29]. - The total interest expense for the period was HKD 3 million, down from HKD 4.6 million in the same period last year, primarily due to a decrease in interest rates[31]. - The group’s total liabilities included HKD 53,548 million in classified liabilities, up from HKD 47,668 million in the previous year, marking an increase of approximately 12.4%[123]. - The group’s total liabilities increased to HKD 684,563 million as of June 30, 2021, compared to HKD 631,902 million in the previous year, reflecting a growth of approximately 8.3%[123]. Employee and Operational Changes - The group had a total of 436 employees as of June 30, 2021, down from 498 employees on December 31, 2020[31]. - Management anticipates low likelihood of overseas and Chinese tourists returning to Hong Kong for the remainder of 2021, impacting hotel occupancy rates and operational costs[36]. - The company operates seven hotels and leases one hotel in London, with five of the local hotels designated as quarantine hotels since January 2021[10]. Governance and Shareholding - Major shareholder Shun Ho Properties holds 6,360,585,437 shares, representing 71.09% of the total shares[45]. - Credit Suisse Trust Limited and associated entities collectively hold 782,114,500 shares, accounting for 8.74% of the total shares[47]. - FMR LLC holds 469,451,000 shares, which is 5.25% of the total shares[52]. - The company has not appointed separate individuals for the roles of Chairman and CEO, with the current individual holding both positions[56]. - The company has adopted a revised nomination committee charter to fully comply with governance code requirements as of March 19, 2021[58]. Cash Flow and Assets - The company reported a net cash inflow from operating activities of HKD 55,097 thousand, a substantial improvement compared to an outflow of HKD 7,135 thousand in the same period last year[90]. - Current assets increased to HKD 258,271 thousand from HKD 163,429 thousand, with cash and cash equivalents rising significantly to HKD 242,483 thousand from HKD 143,317 thousand[82]. - The group recorded a positive operating cash inflow of HKD 48,627,000 and a net increase in cash and cash equivalents of HKD 97,703,000[97]. - The group has unused bank financing totaling HKD 910,500,000 as of June 30, 2021[97]. Impact of COVID-19 - The company did not declare an interim dividend for the six months ended June 30, 2021, due to the ongoing impact of the COVID-19 pandemic on hotel revenues and cash flow stability[6]. - The majority of hotels and retailers in Hong Kong experienced a revenue decline of over 90% due to the impact of COVID-19[32]. - The group’s financial position and performance have been affected by the COVID-19 pandemic and related travel restrictions[99]. - The group’s management conducted a going concern assessment considering the ongoing impact of the COVID-19 pandemic[97].