Financial Performance - Total revenue for 2024 was HKD 4,782 million, a decrease of 2% compared to HKD 4,896 million in 2023[6] - Net customer service revenue increased by 1% to HKD 3,561 million from HKD 3,531 million[6] - Roaming service revenue surged by 30% to HKD 684 million, up from HKD 526 million[6] - EBITDA for 2024 reached HKD 1,522 million, reflecting a 4% increase from HKD 1,457 million in 2023[6] - Shareholders' profit improved to HKD 6 million, a significant turnaround from a loss of HKD 52 million in the previous year, marking a 112% increase[6] - Earnings per share rose to HKD 0.12, compared to a loss of HKD 1.08 in 2023, representing a 112% improvement[6] - The total revenue decreased by HKD 114 million or 2% to HKD 4.782 billion, primarily due to a 4% decline in local service revenue[36] - EBITDA increased by HKD 65 million or 4% to HKD 1.522 billion, attributed to effective cost-saving measures that reduced operating expenses by 5%[37] - The net interest income for 2024 was recorded at HKD 98 million, compared to HKD 101 million in 2023[37] - The group expects to achieve breakeven in 2024, primarily due to strategic deployments and increased interest income[33] Customer Growth and Services - The number of customers grew by 17% year-on-year to approximately 4.6 million, driven by strong growth in the prepaid customer segment[37] - The prepaid business has seen strong growth in user numbers and revenue, supported by the development of SoSIM services and partnerships with more retail stores[55] - The 5G penetration rate increased by 8 percentage points to 54% compared to 2023, reflecting the company's strong promotion of 5G services[37] - The group launched upgraded roaming services and innovative 5G data plans, allowing customers to share data usage in Hong Kong, Mainland China, and Macau without extra charges, with plans to expand to Japan by October 2024[50] - The "Roaming All Network" service has been expanded to popular travel destinations in Europe and the Middle East, enabling customers to connect to local networks without changing SIM cards[51] Strategic Initiatives and Investments - The group is committed to expanding its 5G applications and enhancing customer experience while focusing on energy efficiency and reducing carbon emissions[16] - The group aims to enhance network quality and expand coverage to support Hong Kong's development as a smart city[16] - The group plans to launch the 3.5 GHz "golden frequency" in multiple key locations in Hong Kong in 2024, enhancing 5G network capacity and coverage[38] - The group successfully implemented a 5G "Smart Butler" robot solution for Hong Kong Electric, enhancing service efficiency and safety in cable tunnels[57] - The group is collaborating with local arts organizations to create Hong Kong's first 5.5G theater, providing an immersive theater experience for audiences[59] - The group is supporting local sports technology development by providing dedicated 5G services for the first international paddle tennis tournament in Hong Kong[59] - The group introduced AI-driven learning robots in local schools to assist students and provide personalized support for those with special educational needs[60] Corporate Governance and Management - The company has a diverse board with extensive experience in telecommunications and finance, including members with over 40 years of management experience[105][106][107][108][109] - The board consists of 10 members, including a non-executive chairman, two vice-chairmen (one executive and one non-executive), an executive director and CEO, two non-executive directors, and four independent non-executive directors[180] - The independent non-executive directors represent one-third of the board, complying with listing rules for the year 2024[180] - The board held four meetings in 2024, achieving a 100% attendance rate from all members[187] - The chairman promotes an open culture and encourages full participation from all directors in board matters[183] - The CEO is responsible for managing the group's business and ensuring the implementation of group policies, reporting directly to the board[184] - The board regularly receives updates on the group's performance and business activities from senior management[185] - The board has adopted good corporate governance practices and procedures to maintain effective communication with shareholders and stakeholders[183] Risk Management and Compliance - The group is subject to various risks and uncertainties, which are outlined in the risk factors section of the report[135] - The group’s treasury department manages financial risks, including interest rate and foreign exchange risks, to minimize the impact on overall financial conditions[75] - The group faces significant credit risk from counterparties, which is monitored through stock price changes and credit ratings[78] - The group has not engaged in any foreign currency hedging as it primarily operates in Hong Kong dollars[77] - The group anticipates needing to invest more capital expenditures to expand and improve its mobile network and acquire additional spectrum licenses[91] - The group faces significant adverse impacts on financial condition and operational performance due to regional business risks and regulatory changes[92] - The group cannot guarantee successful renewal of licenses necessary for telecommunications services, which may affect financial performance[94] - The group is subject to data protection laws, which may increase potential risks related to data collection and usage, potentially impacting financial performance if compliance is not met[103] Sustainability and Community Engagement - The company has received multiple awards for its ESG initiatives, highlighting its commitment to sustainable development[20][24] - A new sustainability strategy has been introduced, aiming for a 30% reduction in carbon emissions by 2025[110] - Charitable donations to community projects amounted to approximately HKD 12.5 million in the year, an increase from HKD 8.3 million in 2023[136] - The group is committed to addressing climate change and promoting diversity, inclusion, and community investment as part of its sustainable development initiatives[178] Shareholder Information - The company reported a total of 6,011,438 shares held, representing approximately 0.15% of the voting shares[119] - As of December 31, 2024, the company has a total of 3,184,982,840 shares held by major shareholders, representing approximately 66.09% of total shares[156] - Li Ka-Shing holds a total of 404,132,779 shares, which accounts for approximately 8.38% of the company's shares[157] - The Li Ka-Shing Foundation holds 350,527,953 shares, representing about 7.27% of the total shares[167] - The company has no outstanding borrowings, including bonds, as of December 31, 2024[164] Future Outlook - The company has set a future outlook with a revenue guidance of $6 billion for the next fiscal year, indicating a 20% growth target[110] - New product launches are expected to contribute an additional $300 million in revenue over the next year[110] - The company is investing $200 million in research and development for new technologies aimed at enhancing user experience[110] - Market expansion plans include entering three new countries by the end of the fiscal year, projected to increase market share by 10%[110] - The company is considering strategic acquisitions to bolster its market position, with a budget of $500 million allocated for potential deals[110]

Financial Data and Key Metrics Changes - Service revenue in 2024 increased by 1% to $3.6 billion, primarily driven by a 30% growth in roaming revenue, which offset a decline in local revenue [5][19] - EBITDA increased by 4% and EBIT improved by 88% compared to the previous year, leading to a breakeven result with a net profit of HKD 6 million [5][19] - Customer base expanded to approximately 4.64 million, driven mainly by higher prepaid subscriptions and a 54% penetration rate of 5G services, an increase of 8 percentage points [5][20] Business Line Data and Key Metrics Changes - 5G customer base grew by 54%, with a 69% increase in 5G home broadband revenue and a 12% increase in ARPU [3][9] - Outbound roaming revenue increased by 36% year on year, supported by competitive offers and flexible roaming solutions [4][5] - Prepaid revenue saw a 40% increase, with a 29% growth in the customer base [4][5] Market Data and Key Metrics Changes - The enterprise market revenue increased by 61%, driven by comprehensive 5G solutions and innovative services [4] - The postpaid customer base experienced a slight decrease due to corporate customer movements, while prepaid customers saw substantial growth [20] Company Strategy and Development Direction - The company aims to diversify revenue streams beyond roaming services, focusing on 5G home broadband and corporate solutions [37] - Strategic partnerships are being pursued to accelerate growth, particularly in the corporate solutions sector [37] - The company plans to expand its prepaid wholesale business overseas to capitalize on market opportunities [34] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of maintaining strong growth momentum in the prepaid segment and leveraging AI technologies for customer engagement and operational efficiency [34] - The company is committed to enhancing its 5G network quality and expanding capacity across key infrastructures [26] - Future plans include optimizing network resources and continuing digital transformation initiatives to drive revenue growth [34] Other Important Information - The company maintained a healthy cash position with net cash around HKD 3.7 billion, similar to 2023 [22] - Sustainability efforts were highlighted, including an AA rating from MSCI and a 100% recycling rate for lead-acid batteries [23] Q&A Session Summary Question: What strategies do you have in place to ensure the group's revenue performance? - The company recognizes the need to diversify revenue streams and is focusing on 5G home broadband and corporate solutions to drive sustainable growth [37] Question: Will your data sharing plans cannibalize your roaming revenue? - The company stated that data sharing plans and roaming plans are complementary, designed to attract new roaming customers without cannibalizing existing revenue [40] Question: What is your CapEx outlook for 2025? - The company expects capital expenditure to stabilize at similar levels to 2024, focusing on network optimization and digital transformation [43] Question: In what areas have the company applied AI technology? - AI technology has been applied to enhance customer service quality, improve workspace productivity, and support innovative B2B solutions [45] Question: What is your plan for 6G development? - The company decided not to bid for certain spectrum due to various factors but remains open to future opportunities as the ecosystem matures [49] Question: Is there any financial burden from your Macau operations? - The company reported stable yet challenging operations in Macau, with overall performance offset by stronger results in Hong Kong [51] Question: What are your plans for distributing special dividends and using surplus cash? - The company will consider distributing a special dividend when financial performance stabilizes, following a breakeven result in 2024 [52]

Financial Performance - Total revenue for 2024 was HKD 4,782 million, a decrease of 2% compared to 2023[3] - EBITDA for 2024 increased by 4% to HKD 1,522 million, driven by effective cost-saving measures[9] - The company achieved a net profit attributable to shareholders of HKD 6 million, improving by 112% from a loss of HKD 52 million in 2023[7] - Total revenue for 2024 decreased by 2% to HKD 4,782 million compared to HKD 4,896 million in 2023[16] - EBITDA for 2024 increased by 4% to HKD 1,522 million, primarily due to a reduction in operating expenses[18] - Shareholder profit for 2024 was HKD 6 million, a 112% improvement from a loss of HKD 52 million in 2023[19] - The company reported a pre-tax profit of HKD 85 million, significantly up from HKD 26 million in the previous year, marking a 226.9% increase[29] - The total comprehensive income attributable to shareholders for the year was HKD 36 million, compared to a loss of HKD 50 million in 2023[31] Revenue Breakdown - Customer service revenue net increased by HKD 36 million or 1% to HKD 3,561 million[9] - Roaming service revenue surged by 30% to HKD 684 million, offsetting a 4% decline in local service revenue[9] - Revenue from mobile communication and related services increased to HKD 3,561 million in 2024, up 0.8% from HKD 3,531 million in 2023[58] - Revenue from telecommunications hardware and other products decreased to HKD 1,221 million in 2024, down 10.6% from HKD 1,365 million in 2023[58] Customer Metrics - The number of customers increased by 17% to approximately 4.6 million, primarily due to strong growth in prepaid customer base[12] - Total customer base increased by 17% to 4.64 million, with a significant growth in prepaid customers by 29%[21] - The monthly churn rate for postpaid customers remained stable at 1.0%[21] - The 5G penetration rate rose by 8 percentage points to 54% in 2024[12] - 5G penetration rate increased by 8 percentage points to 54% compared to 2023[21] Expenses and Cost Management - Operating expenses decreased by 5% to HKD 1,430 million, reflecting successful cost management measures[18] - Operating expenses for 2024 totaled HKD 1,658 million, a decrease of 4.4% from HKD 1,735 million in 2023[62] - The cost of goods sold decreased to HKD 1,200 million from HKD 1,340 million, reflecting a reduction of 10.4%[29] Cash Flow and Liquidity - Cash and cash equivalents increased to HKD 3,168 million from HKD 1,910 million, representing a growth of 66.0%[33] - Operating cash flow for the year ended December 31, 2024, was HKD 1,115 million, a decrease of 3.2% from HKD 1,152 million in 2023[38] - Net cash generated from operating activities was HKD 1,081 million, down from HKD 1,127 million, reflecting a decline of 4.1%[38] - Cash flow from investing activities showed a net inflow of HKD 936 million, a significant improvement compared to a net outflow of HKD 1,543 million in 2023[38] - The company reported a net cash position of HKD 3,679 million as of December 31, 2024, with 63% denominated in USD and 36% in HKD[79] Dividends and Shareholder Returns - The board proposed a final dividend of HKD 5.21 per share, consistent with 2023[8] - The company declared an interim dividend of HKD 361 million for the year[34] - Total dividends paid for 2024 remained unchanged at HKD 361 million, consistent with 2023[67] Capital Expenditure and Investments - Capital expenditure decreased by 10% to HKD 434 million, representing 12% of service revenue[24] - The company incurred HKD 434 million in capital expenditures for property, plant, and equipment, a decrease of 9.8% from HKD 481 million in 2023[38] - Capital commitments for property, plant, and equipment amounted to HKD 129 million in 2024, up from HKD 121 million in 2023[84] Governance and Corporate Strategy - The company aims to enhance long-term total returns for stakeholders while focusing on sustainable profitability and cash flow growth[85] - The group’s sustainable development mission aligns its business strategy with sustainable development goals, aiming to create long-term value for stakeholders[89] - The group’s governance framework for sustainable development is integrated at all levels, including the board and various committees, ensuring accountability in operations[89] - The company has complied with all applicable code provisions of the corporate governance code during the year ending December 31, 2024[97] Employment and Human Resources - As of December 31, 2024, the group employed 1,181 full-time and part-time staff, a decrease from 1,240 in 2023, with an average of 1,197 employees for the year[88] - Employee costs for the year ending December 31, 2024, totaled HKD 386 million, up from HKD 368 million in 2023[88] - The group emphasizes the importance of high-quality human resources to maintain market leadership and offers competitive salaries and benefits[88] Future Outlook - The company plans to expand its 5G network in high-traffic areas and launch innovative solutions to enhance customer experience[13] - The company remains cautiously optimistic about future business prospects despite global economic uncertainties[13]

Financial and Business Review [Financial Highlights](index=4&type=section&id=Financial%20Highlights) In H1 2024, the Group's total revenue decreased by 12% to HKD 2.058 billion, but effective cost control and revenue mix optimization stabilized EBITDA at HKD 728 million, significantly narrowing loss attributable to shareholders by 37% to HKD 12 million while maintaining interim dividend at 2.28 HK cents per share Financial Highlights | Indicator | H1 2024 (HKD million) | H1 2023 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 2,058 | 2,328 | -12% | | Service Revenue | 1,760 | 1,793 | -2% | | Total EBITDA | 728 | 727 | – | | Total LBIT | (30) | (35) | +14% | | Loss Attributable to Shareholders | (12) | (19) | +37% | | Loss Per Share (HK cents) | (0.25) | (0.39) | +37% | | Interim Dividend Per Share (HK cents) | 2.28 | 2.28 | – | [Chairman's Report](index=5&type=section&id=Chairman%27s%20Report) Despite economic challenges, the Group's H1 2024 saw total revenue slow, but loss attributable to shareholders narrowed by 37%, driven by a 31% surge in roaming revenue and stable EBITDA, while the customer base grew 25% to 4.3 million with 5G penetration reaching 51%, and an interim dividend of 2.28 HK cents per share was declared - Loss attributable to shareholders and loss per share narrowed to **HKD 12 million** and **0.25 HK cents** respectively, representing a **37% year-on-year improvement**[7](index=7&type=chunk) - The Board declared an interim dividend of **2.28 HK cents per share**, consistent with the prior year[8](index=8&type=chunk) - Roaming service revenue significantly increased by **31% year-on-year** to **HKD 308 million**, supported by strong outbound travel performance[9](index=9&type=chunk) - The Group's customer base grew by **25%** to approximately **4.3 million**, with 5G penetration rising to **51%**[9](index=9&type=chunk) - Looking ahead, the Group is committed to further improving financial performance to achieve its goal of **full-year profitability**[10](index=10&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section details the Group's H1 2024 financial and operating performance, noting a 12% total revenue decrease due to lower hardware sales, but stable service revenue with a 2% decline, strong roaming growth offsetting local service revenue, stable EBITDA from cost control, and a 25% increase in total customers with 5G penetration rising to 51% [Financial Performance Review](index=7&type=section&id=Financial%20Performance%20Review) The H1 2024 financial performance review shows a 12% total revenue decrease to HKD 2.058 billion, mainly due to a 44% drop in hardware revenue, yet service revenue only slightly declined by 2% with roaming revenue surging 31%, while gross profit and EBITDA remained stable, and loss attributable to shareholders narrowed by 37% to HKD 12 million Financial Indicators | Financial Indicator | H1 2024 (HKD million) | H1 2023 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 2,058 | 2,328 | -12% | | - Local Service Revenue | 1,452 | 1,558 | -7% | | - Roaming Service Revenue | 308 | 235 | +31% | | - Hardware and Other Product Revenue | 298 | 535 | -44% | | EBITDA | 728 | 727 | – | | LBIT | (30) | (35) | +14% | | Loss Attributable to Shareholders | (12) | (19) | +37% | - Strong roaming revenue growth of **+31%** was offset by a decrease in local service revenue and a significant **-44%** decline in hardware revenue, resulting in a **12% decrease** in total revenue[12](index=12&type=chunk) - Loss attributable to shareholders narrowed by **37%**, primarily due to reduced depreciation and amortization expenses, and increased bank interest income in a high-interest rate environment[12](index=12&type=chunk) [Key Performance Indicators](index=8&type=section&id=Key%20Performance%20Indicators) As of June 30, 2024, the Group's total customer base grew by 25% to 4.271 million, driven by a 46% surge in prepaid customers, while 5G penetration significantly increased by 13 percentage points to 51%, and postpaid total ARPU decreased by 7% to HKD 184 due to changes in customer mix and reduced hardware sales Performance Indicators | Performance Indicator | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Total Customers (thousand) | 4,271 | 3,407 | +25% | | - Postpaid Customers (thousand) | 1,444 | 1,467 | -2% | | - Prepaid Customers (thousand) | 2,827 | 1,940 | +46% | | Monthly Postpaid Customer Churn Rate (%) | 1.0% | 0.9% | -0.1 percentage point | | Postpaid Total ARPU (HKD) | 184 | 197 | -7% | - Total customer base significantly increased by **25%**, primarily attributed to the growth in the prepaid customer segment, including SoSIM customers[14](index=14&type=chunk) - 5G penetration increased by **13 percentage points year-on-year** to **51%**, indicating continuous growth in 5G service adoption[14](index=14&type=chunk) [Capital Expenditure and Spectrum Investment](index=9&type=section&id=Capital%20Expenditure%20and%20Spectrum%20Investment) The Group maintained a prudent capital expenditure strategy in H1 2024, with capital expenditure at HKD 166 million, representing 9% of service revenue, while continuing to rigorously review projects for efficient resource utilization, and the report also discloses the Group's spectrum resources in Hong Kong and Macau, including their expiry dates - Capital expenditure for property, plant, and equipment amounted to **HKD 166 million**, representing **9% of service revenue**, a **2% increase year-on-year**[16](index=16&type=chunk) - The report details the Group's spectrum resources, bandwidth, and expiry years across multiple frequency bands from **700 MHz to 3500 MHz** held in Hong Kong and Macau[17](index=17&type=chunk) Capital, Liquidity and Risk Management [Group Capital and Liquidity](index=10&type=section&id=Group%20Capital%20and%20Liquidity) This section outlines the Group's treasury management, cash management, risk control, and capital position, highlighting a robust financial status with **HKD 3.63 billion** net cash as of June 30, 2024, increased contingent liabilities due to new spectrum guarantees, and a commitment to human resources and sustainability [Treasury and Risk Management](index=10&type=section&id=Treasury%20and%20Risk%20Management) The Group manages financial risks through its central treasury department, with policies aimed at mitigating interest rate and exchange rate fluctuations, explicitly prohibiting speculative derivative transactions, and controlling foreign exchange and counterparty credit risks through monitoring and limits - The Group's treasury policy aims to mitigate the impact of interest rate and exchange rate fluctuations, with a strict policy against engaging in **speculative derivative financing transactions**[18](index=18&type=chunk) - Operating primarily in Hong Kong with transactions denominated in HKD, the Group still faces foreign currency exchange rate risks from currencies like USD and MOP, and currently does not engage in foreign currency hedging[20](index=20&type=chunk) [Capital and Cash Position](index=10&type=section&id=Capital%20and%20Cash%20Position) As of June 30, 2024, the Group's total equity was HKD 9.595 billion, with net cash at HKD 3.63 billion, 88% of which was in HKD; the Group has no significant asset pledges or available borrowing facilities, demonstrating its financial independence Capital and Cash Position | Indicator | June 30, 2024 (HKD million) | December 31, 2023 (HKD million) | | :--- | :--- | :--- | | Total Equity | 9,595 | 9,858 | | Net Cash | 3,630 | 3,684 | - As of June 30, 2024, the Group had **no available borrowing facilities**[24](index=24&type=chunk) [Liabilities and Commitments](index=11&type=section&id=Liabilities%20and%20Commitments) As of June 30, 2024, the Group's contingent liabilities increased from HKD 1.227 billion to HKD 1.761 billion, primarily due to a **HKD 600 million** standby letter of credit issued for the 26 GHz spectrum application, while capital commitments rose from HKD 121 million to HKD 197 million - Contingent liabilities increased from **HKD 1.227 billion** to **HKD 1.761 billion**, primarily due to new and renewed performance guarantees related to spectrum, including a **HKD 600 million** standby letter of credit for the 26 GHz spectrum band[25](index=25&type=chunk) - Total capital commitments for property, plant, and equipment amounted to **HKD 197 million**, an increase from **HKD 121 million** at the end of 2023[26](index=26&type=chunk) [Human Resources and Sustainability](index=11&type=section&id=Human%20Resources%20and%20Sustainability) As of June 30, 2024, the Group employed 1,229 staff with employee costs totaling HKD 195 million, focusing on staff development and welfare; in sustainability, the Group integrates it with business strategy, establishing eight goals under four pillars: governance, sustainable business, environment, and society, to create long-term value - As of June 30, 2024, the Group employed **1,229 staff**, with total employee costs amounting to **HKD 195 million** for the first half of the year[28](index=28&type=chunk) - The Group has established **eight sustainability goals**, categorized under four pillars: governance, sustainable business models and innovation, environment, and society[29](index=29&type=chunk) Equity and Corporate Governance [Disclosure of Interests](index=13&type=section&id=Disclosure%20of%20Interests) This section discloses the share interests of directors, chief executives, and major shareholders in the Company and its associated corporations, as per the Securities and Futures Ordinance; the primary controlling shareholder is a subsidiary of CK Hutchison Holdings Limited (CKHH), holding approximately 66.09% of shares, with Mr. Li Ka-shing and Mr. Victor T.K. Li also holding significant interests through trusts and holding companies [Directors' and Chief Executive's Interests](index=13&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests) This section discloses the shareholdings of directors and chief executives in the Company and its associated corporations, such as CKHH, noting that Fok Kin-ning, Lui Po-man, Woo Chiu-man, and Koo Sing-fai hold shares in the Company, while several directors also hold shares in CKHH and Hutchison Telecommunications (Australia) Limited Directors' and Chief Executive's Interests | Director | Capacity | Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | Fok Kin-ning | Interest in Controlled Corporation | Company Interest | 1,202,380 | 0.0249% | | Lui Po-man | Beneficial Owner | Personal Interest | 9,100,000 | 0.1888% | | Woo Chiu-man | Beneficial Owner | Personal Interest | 2,001,333 | 0.0415% | | Koo Sing-fai | Spouse's Interest | Family Interest | 20,000 | 0.0004% | [Major Shareholders' Interests](index=15&type=section&id=Major%20Shareholders%27%20Interests) CK Hutchison Holdings Limited (CKHH), through its wholly-owned subsidiaries like Hutchison Telecommunications Investment Holdings Limited (HTIHL), collectively holds approximately 66.09% of the Company's shares, making it the primary controlling shareholder, while Mr. Li Ka-shing and Mr. Victor T.K. Li are deemed to hold approximately 8.38% and 8.44% share interests, respectively, through trusts, foundations, and controlled corporations - CK Hutchison Holdings Limited (CKHH), through a series of wholly-owned subsidiaries such as Hutchison Telecommunications Investment Holdings Limited, collectively holds **3,184,982,840 shares** in the Company, representing approximately **66.09%** of the total share capital[39](index=39&type=chunk)[41](index=41&type=chunk) - Mr. Li Ka-shing and Mr. Victor T.K. Li are deemed to hold approximately **8.38%** and **8.44%** of the Company's share interests, respectively, through discretionary trusts, the Li Ka Shing Foundation, and controlled corporations[40](index=40&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) [Corporate Governance](index=18&type=section&id=Corporate%20Governance) The Company is committed to maintaining high standards of corporate governance to protect the interests of shareholders and stakeholders, having complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules during the reporting period, with all directors confirming adherence to the Company's equally stringent internal securities dealing code - The Company complied with all applicable code provisions of the Corporate Governance Code throughout the six months ended June 30, 2024[48](index=48&type=chunk) - All directors confirmed compliance with the Hutchison Telecom Hong Kong Securities Code, which has terms no less exacting than the Model Code set out in the Listing Rules, during the reporting period[48](index=48&type=chunk) [Changes in Directors' Information](index=19&type=section&id=Changes%20in%20Directors%27%20Information) This section discloses changes in directors' information since the date of the 2023 Annual Report, as required by the Listing Rules, primarily concerning changes in committee appointments for directors such as Edith Shih, Dennis Chan, Jenny Chow, Frank John Sixt, and Alfred Yip, within the Company and other listed companies like CKHH and Hutchison China MediTech - Several directors experienced changes in their appointments to various Company committees (Audit, Nomination, Remuneration, Sustainability) following the Annual General Meeting on May 9, 2024[50](index=50&type=chunk) - Ms. Edith Shih was appointed as a member of the Remuneration Committee of Hutchison China MediTech Limited; Ms. Jenny Chow was appointed as a member of the Remuneration Committee of CK Hutchison Holdings Limited[50](index=50&type=chunk) Condensed Consolidated Interim Financial Statements [Review Report](index=20&type=section&id=Review%20Report) PricewaterhouseCoopers, the Company's auditor, reviewed the Group's condensed consolidated interim financial statements for the six months ended June 30, 2024, in accordance with International Standard on Review Engagements 2410, concluding that nothing came to their attention causing them to believe the financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34 'Interim Financial Reporting' - The auditor, PricewaterhouseCoopers, issued a review conclusion on the interim financial statements, finding **no material issues**[53](index=53&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2024, the Group recorded revenue of HKD 2.058 billion, a 12% year-on-year decrease; however, profit before tax was HKD 19 million, a 137.5% increase year-on-year, due to effective cost control and increased finance income, with the final loss for the period narrowing by 37% to HKD 12 million from HKD 19 million in the prior year Condensed Consolidated Statement of Profit or Loss | Item (HKD million) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 2,058 | 2,328 | | Profit Before Tax | 19 | 8 | | Loss for the Period | (12) | (19) | | Basic and Diluted Loss Per Share (HK cents) | (0.25) | (0.39) | [Condensed Consolidated Statement of Financial Position](index=23&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group's total assets were HKD 14.228 billion, total liabilities HKD 4.633 billion, and net assets HKD 9.595 billion; non-current assets primarily included telecommunications licenses, goodwill, and property, plant, and equipment, while current assets included HKD 3.63 billion in cash and bank balances, indicating a robust financial position Condensed Consolidated Statement of Financial Position | Item (HKD million) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Non-current Assets | 9,389 | 9,715 | | Total Current Assets | 4,839 | 4,845 | | Total Current Liabilities | 2,102 | 2,163 | | Total Non-current Liabilities | 2,531 | 2,539 | | Net Assets / Total Equity | 9,595 | 9,858 | [Condensed Consolidated Statement of Cash Flows](index=25&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2024, the Group generated HKD 529 million in net cash from operating activities, while net cash outflow from investing activities was HKD 1.146 billion, primarily for short-term bank deposits and property, plant, and equipment, and net cash outflow from financing activities was HKD 449 million, mainly for lease payments and dividends, resulting in cash and cash equivalents of HKD 844 million at period-end Condensed Consolidated Statement of Cash Flows | Item (HKD million) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 529 | 613 | | Net Cash Used in Investing Activities | (1,146) | (2,431) | | Net Cash Used in Financing Activities | (449) | (455) | | Decrease in Cash and Cash Equivalents | (1,066) | (2,273) | | Cash and Cash Equivalents at End of Period | 844 | 814 | [Notes to the Condensed Consolidated Interim Financial Statements](index=26&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) The notes to the financial statements provide detailed explanations of financial statement items, including that revenue primarily derives from mobile telecommunications services and is recognized over time, the Group has only one reportable segment, an interim dividend of 2.28 HK cents per share was declared with the 2023 final dividend already paid, and contingent liabilities increased to HKD 1.761 billion due to spectrum guarantees - Revenue primarily comprises mobile telecommunications and other related services (**HKD 1.760 billion**) and telecommunications hardware and other products (**HKD 298 million**); service revenue is recognized over time, while hardware sales are recognized at a point in time[66](index=66&type=chunk)[67](index=67&type=chunk) - The Board declared an interim dividend of **2.28 HK cents per share**, totaling **HKD 110 million**; the 2023 final dividend of **5.21 HK cents per share**, totaling **HKD 251 million**, was paid during the reporting period[73](index=73&type=chunk) - The Group's total contingent liabilities amounted to **HKD 1.761 billion**, primarily comprising performance and financial guarantees provided to the Communications Authority, with new guarantees added due to the successful allocation of the **26 GHz spectrum band**[86](index=86&type=chunk)[87](index=87&type=chunk) [Supplementary Financial Information](index=36&type=section&id=Supplementary%20Financial%20Information) This section provides a reconciliation of EBITDA and (LBIT)/EBIT data from the condensed consolidated statement of profit or loss and management discussion and analysis, with data disaggregated into 'Company and Subsidiaries' and 'Joint Ventures' to clearly show the composition of each indicator H1 2024 (HKD million) | H1 2024 (HKD million) | Company and Subsidiaries | Joint Ventures | Total | | :--- | :--- | :--- | :--- | | EBITDA | 700 | 28 | 728 | | Depreciation and Amortization | (737) | (21) | (758) | | (LBIT) / EBIT | (37) | 7 | (30) | Other Information [Company Information](index=2&type=section&id=Company%20Information) This section lists the Company's Board of Directors, members of various committees (Audit, Nomination, Remuneration, Sustainability), along with basic company information such as the company secretary and auditor (PricewaterhouseCoopers) - The Company's Chairman and Non-executive Director is **Fok Kin-ning**, and the Chief Executive Officer is **Koo Sing-fai**[3](index=3&type=chunk) - The Company's auditor is **PricewaterhouseCoopers**[3](index=3&type=chunk) [Glossary](index=37&type=section&id=Glossary) This section provides clear definitions for specific financial and business terms used in the report, such as EBITDA, LBIT, ARPU (Average Revenue Per User), and AMPU (Average Monthly Profit Per User), to help readers accurately understand the report content - Detailed definitions are provided for key terms used in the report, including **EBITDA**, **(LBIT)/EBIT**, **Postpaid Total ARPU**, and **Postpaid Net ARPU**[93](index=93&type=chunk)[94](index=94&type=chunk) [Shareholder Information](index=39&type=section&id=Shareholder%20Information) This section provides practical shareholder-related information, including the Company's listing venue (Hong Kong Stock Exchange), stock code (215), important financial dates such as the interim dividend record and payment dates, registered office, head office address, share registrar contact details, investor relations contact information, and the Company's website - The Company's stock code is **215**, and it is listed on the Main Board of The Stock Exchange of Hong Kong Limited[95](index=95&type=chunk) - The 2024 interim dividend will be paid on **September 6, 2024**, with the record date set for **August 28, 2024**[95](index=95&type=chunk)

Financial Performance - Total revenue for the first half of 2024 decreased by 12% to HKD 2,058 million compared to HKD 2,328 million in the same period of 2023[2] - Service revenue declined by 2% to HKD 1,760 million, while roaming service revenue increased by 31% to HKD 308 million[5] - The group reported a loss attributable to shareholders of HKD 12 million, an improvement of 37% compared to a loss of HKD 19 million in the previous year[3] - The interim dividend for the first half of 2024 is declared at HKD 2.28 per share, unchanged from the previous year[4] - The group aims to improve financial performance with a goal of achieving profitability for the full year[7] - Revenue for the six months ended June 30, 2024, was HKD 2,058 million, a decrease of 11.6% compared to HKD 2,328 million in the same period of 2023[18] - The company reported a loss of HKD 12 million for the period, an improvement from a loss of HKD 19 million in the previous year[19] - Basic and diluted loss per share was HKD 0.25, compared to HKD 0.39 in the same period last year, indicating a 35.9% improvement[18] - The company’s total comprehensive loss for the period was HKD 20 million, reflecting a decrease in overall financial performance compared to previous periods[21] Customer Metrics - Customer base grew by 25% to approximately 4.3 million, driven by an increase in prepaid customers including SoSIM[6] - The number of postpaid customers decreased by 2% to 1,444 thousand, while prepaid customers increased by 46% to 2,827 thousand, resulting in a total customer base of 4,271 thousand, a 25% increase year-on-year[10] - 5G penetration rate increased by 13 percentage points to 51% compared to the same period last year[6] - Monthly postpaid customer churn rate slightly increased to 1.0%, primarily due to changes in enterprise customers[10] Operational Efficiency - EBITDA remained stable at HKD 728 million, supported by effective cost-saving measures[5] - EBITDA for the first half of 2024 remained stable at HKD 728 million, supported by lower operating expenses despite higher customer acquisition costs[9] - Total operating expenses for the six months ended June 30, 2024, were HKD 830 million, a reduction of 8.3% compared to HKD 905 million in the previous year[34] - The total gross profit remained stable at HKD 1,523 million, supported by a favorable gross profit mix[9] - Capital expenditure increased by 2% to HKD 166 million, maintaining 9% of service revenue, with a focus on operational efficiency and cost reduction[12] Financial Position - The group maintained a strong financial position with cash and bank balances of HKD 3,630 million as of June 30, 2024[11] - Non-current assets totaled HKD 9,389 million as of June 30, 2024, a decrease from HKD 9,715 million at the end of 2023[20] - Current assets amounted to HKD 4,839 million, slightly down from HKD 4,845 million at the end of 2023[20] - Total liabilities decreased to HKD 4,633 million from HKD 4,702 million, indicating a reduction of 1.5%[20] - The company’s net assets stood at HKD 9,595 million, down from HKD 9,858 million at the end of 2023[20] - Cash and cash equivalents decreased to HKD 844 million as of June 30, 2024, from HKD 1,910 million at the beginning of the year, representing a reduction of approximately 55.8%[24] - The company’s equity structure remains stable with no changes in share capital or share premium during the reporting period[21] Investments and Commitments - The company has capital commitments of HKD 197 million as of June 30, 2024, compared to HKD 121 million as of December 31, 2023, representing an increase of 62.8%[50] - The group provided performance, financial, and other guarantees amounting to HKD 17.61 billion as of June 30, 2024, an increase from HKD 12.27 billion on December 31, 2023[58] - The total capital commitments related to properties, facilities, and equipment amounted to HKD 1.97 billion as of June 30, 2024, up from HKD 1.21 billion on December 31, 2023[59] Sustainability and Governance - The group continues to focus on sustainable growth, aiming for regular sustainable profits, cash flow, and dividend growth while addressing social and environmental challenges[60] - The group has established eight sustainability goals aligned with the United Nations Sustainable Development Goals, focusing on governance, sustainable business models, and social responsibility[63] - The company has complied with all applicable corporate governance code provisions during the six months ending June 30, 2024[66] - The board has adopted a strict code governing securities transactions by directors, ensuring compliance during the six-month period ending June 30, 2024[67]

Financial Performance - Total revenue for 2023 was HKD 4,896 million, a slight increase from HKD 4,882 million in 2022[4] - Service revenue increased by 8% to HKD 3,531 million from HKD 3,278 million in the previous year[4] - EBITDA for the year was HKD 1,457 million, reflecting a 3% increase from HKD 1,420 million in 2022[4] - The company reported a shareholder loss of HKD 52 million, a significant improvement of 67% compared to a loss of HKD 158 million in 2022[4] - Loss per share improved to HKD 1.08 from HKD 3.28, marking a 67% reduction in losses[4] - The final dividend per share remained unchanged at HKD 5.21[4] - The net interest income for 2023 was HKD 101 million, an increase attributed to rising deposit rates[14] - Operating expenses decreased by 11% to HKD 1,506 million from HKD 1,356 million in 2022[32] - The cash and bank balance as of December 31, 2023, was HKD 3.684 billion, slightly down from HKD 3.700 billion in 2022[44] - The group reported a net loss attributable to shareholders of HKD 52 million, significantly improved from a loss of HKD 158 million in the previous year, marking a 67% reduction[32] Customer Growth and Service Expansion - The total customer base in Hong Kong and Macau grew from approximately 3.3 million to about 4 million, primarily due to a significant increase in prepaid customers[14] - The postpaid net ARPU increased by 4% to HKD 174, mainly driven by increased roaming service revenue[14] - The 5G penetration rate increased by 16 percentage points to 46%, supported by the expansion of 5G broadband and other customer segments[14] - The group has expanded its 5G roaming network to over 200 networks globally, providing seamless roaming services and maintaining a competitive edge in the telecommunications market[20] - The group launched the premium brand "SUPREME" in March 2023, backed by 99% 5G coverage in Hong Kong, aimed at providing exceptional digital experiences for high-end customers[21] Strategic Initiatives and Future Outlook - Future strategies include leveraging advanced technology to create innovative products and services[7] - The group is actively promoting 5G broadband services across various industries to drive digital transformation, benefiting businesses of all sizes[24] - The group has further expanded strategic partnerships with fixed-line operators to integrate ICT services with fixed-line telecommunications solutions, enhancing operational efficiency for enterprise customers[25] - The group is optimistic about stable business growth in Hong Kong, with a focus on long-term value creation for shareholders amidst an uncertain economic outlook[15] - The group aims to maintain a robust financial position through prudent management of finances, working capital, and cash flow[15] Risk Factors and Challenges - The group faces significant business risks that could lead to substantial deviations in financial performance, including economic conditions in Hong Kong and Macau[48] - The telecommunications industry is highly competitive, with pricing pressures and customer retention costs potentially impacting revenue and market share[51] - Regulatory changes and compliance risks could adversely affect the group's financial condition and operational performance[56] - Labor shortages due to declining workforce participation and local market conditions could impact the group's operational performance[58] - Climate change poses risks to the supply chain and business operations, potentially leading to financial and material damage, although the group has not faced major disruptions so far[62] Corporate Governance and Board Structure - The board consists of 10 members, including a non-executive chairman, two non-executive vice-chairmen, one executive director and CEO, two non-executive directors, and four independent non-executive directors, meeting the one-third requirement under listing rules[117] - The board has adopted good corporate governance practices and maintains effective communication with shareholders and stakeholders[118] - The board conducted a performance evaluation in 2023, involving a survey for individual scoring and assessment of various issues, concluding that existing practices are effective[123] - The nomination committee is responsible for reviewing the board's structure, size, diversity, and skill set, and making recommendations to enhance shareholder value[167] - The company has established a strict selection, nomination, and appointment process for directors, ensuring high standards of governance[124] Sustainability and Social Responsibility - The company is focusing on sustainable practices, with a goal to reduce carbon emissions by 30% by 2030[73] - The group established eight sustainable development goals aligned with four pillars: governance, sustainable business models and innovation, environment, and society[190] - The company actively supports the United Nations Sustainable Development Goals and aims to create long-term value for stakeholders through sustainable practices[194] - The sustainable development report includes important quantitative data and discusses the group's mission, strategies, and progress in sustainability[190] - The company achieved an upgrade in ESG rating from "A" to "AA" by Morgan Stanley Capital International[200] Shareholder Engagement and Communication - The company encourages shareholders to participate in meetings either in person or through electronic means, enhancing shareholder engagement[181] - The company has established a framework for two-way communication with shareholders to ensure they can exercise their rights effectively[185] - The company’s audit committee reviewed the effectiveness of its shareholder communication policy in 2023, confirming its successful implementation[185] - The company maintains a commitment to transparency and actively seeks feedback from shareholders and stakeholders on important issues[184] - The company’s board considers shareholder and stakeholder feedback when formulating and implementing corporate strategies[184]

Financial Performance - Total revenue for 2023 was $4,896 million, a slight increase from $4,882 million in 2022[2] - EBITDA for 2023 was $1,457 million, reflecting a 3% increase from $1,420 million in 2022[2] - The company reported a reduction in LBIT to $(69) million, improving by 15% from $(81) million in the previous year[2] - The net loss attributable to shareholders decreased significantly by 67%, from $(158) million in 2022 to $(52) million in 2023[2] - The earnings per share (EPS) improved to $(1.08) in 2023, up from $(3.28) in 2022, marking a 67% increase[2] - Revenue for 2023 reached €35.31 billion, representing an 8% increase year-over-year[5] - EBITDA for the period was approximately €3.7 billion, reflecting a 3% increase[5] - The company reported a net loss of €1.2 billion, which is a 15% increase compared to the previous year[5] - The company experienced a 15% decline in net income, dropping from $1,604 million in 2022 to $1,365 million in 2023[8] - The company reported a decrease in net income, with €1,365 million in 2023 compared to €1,604 million in 2022, reflecting a decline of about 14.9%[33] User Growth and Engagement - User data showed a growth of 8%, with 3,531 million users in 2023 compared to 3,278 million in 2022[2] - User data showed a significant increase in active users, with a growth of 8% from 3,278 million in 2022 to 3,531 million in 2023[8] - The total user base is projected to reach 330 million by the end of 2023, with an additional 400 million expected in the following year[6] - User data showed a 38% increase in active users, rising from 1.8 million in 2022 to 2.5 million in 2023[10] - User data showed a decline in active users, with 3,531 million in 2023 compared to 3,278 million in 2022, indicating a decrease of approximately 7.2%[32] - User data indicates a 10% increase in active users year-over-year, reaching a total of 50 million users[52] Strategic Initiatives and Future Outlook - Future outlook indicates a focus on expanding user base and enhancing EBITDA margins through strategic initiatives[3] - The company plans to invest in new product development and technology advancements to drive growth[3] - Market expansion strategies are being prioritized, with potential mergers and acquisitions under consideration to enhance market presence[3] - The company plans to expand its 5G services, targeting a 46% increase in user adoption[6] - The company aims to achieve a 1.0% market share growth in 2023, up from 0.8% in 2022[6] - The company is focusing on market expansion and new technology development to drive future growth[7] - Strategic acquisitions are being considered to enhance market presence and product offerings[7] - The company plans to expand its market presence with a focus on 5G technology, targeting a 46% market penetration by the end of 2023[10] - The company is focusing on market expansion strategies, particularly in the Asia-Pacific region, aiming for a 15% increase in market share by the end of 2024[19] - The company plans to enhance its market presence in Asia, targeting a 15% increase in market share by the end of 2024[52] Research and Development - The company reported a 24% decrease in R&D expenses, down from $33 million to $25 million[8] - The R&D expenses for 2023 were 1,735 million, compared to 1,571 million in 2022, indicating an increase of 10.4%[14] - The company is investing in new product development, with a budget allocation of €5 million for research and development in 2024[27] - Research and development expenditures are expected to increase by 20% in 2024 to support innovation and product development[56] Operational Efficiency - Overall, the company maintained a stable EBITDA margin of 41% in 2023, slightly down from 42% in 2022[8] - The company reported a significant increase in operational efficiency, achieving a cost reduction of 3% year-over-year[21] - The company reported a 12% increase in active users year-over-year, reaching a total of 1.2 million active users[23] - The company has introduced a new technology platform expected to reduce operational costs by 8% in the upcoming fiscal year[25] - Operating expenses decreased to 1,823 million in 2023 from 2,922 million in 2022, a reduction of 37.7%[41] Customer Satisfaction and Market Position - The company reported a 93% customer satisfaction rate, which is expected to drive repeat business and customer loyalty[49] - Customer satisfaction ratings improved by 10% following the implementation of new service protocols[29] - The company is exploring potential acquisitions to enhance its product portfolio, with a budget of $400 million allocated for this purpose[19] - The company announced a strategic acquisition of a smaller competitor for $200 million to enhance its product offerings[29]

Financial Performance - Total revenue for the first half of 2023 increased by 1% to HKD 2,328 million compared to HKD 2,298 million in the same period of 2022[5]. - EBITDA for the first half of 2023 rose by 5% to HKD 727 million, primarily due to a significant increase in gross profit[5][9]. - Shareholders' loss decreased by 80% to HKD 19 million, with loss per share improving to HKD 0.39 from HKD 1.99 in the previous year[7]. - The company reported a loss of HKD 19 million for the first half of 2023, compared to a loss of HKD 96 million in the same period of 2022, showing an improvement in financial performance[56]. - Basic and diluted loss per share improved to HKD 0.39 from HKD 1.99, marking a 80.4% decrease in loss per share[53]. - The total comprehensive loss for the period, after tax, was HKD 20 million, compared to a total comprehensive loss of HKD 20 million in the same period of 2022[56]. - The net loss attributable to shareholders improved by 80% to HKD 19 million, compared to HKD 96 million in the first half of 2022[12]. - The pre-tax profit for the first half of 2023 was HKD 8 million, a significant recovery from a loss of HKD 73 million in the first half of 2022[88]. Revenue Breakdown - Service revenue grew by 15% year-on-year to HKD 1,793 million, driven by a significant increase in roaming service revenue, which rose by 68% to HKD 235 million[9]. - Revenue from mobile communications and related services was HKD 1,793 million, up from HKD 1,558 million in the previous year, indicating a growth of about 15.1%[66]. - Hardware and other product revenue decreased by 28% to HKD 535 million, primarily due to weakened demand[12]. - Monthly postpaid customer churn rate slightly increased to 0.9% from 0.7% in the previous year[9]. Customer Metrics - The customer base increased by 13% to approximately 3.4 million, with a notable rise in prepaid customers[9]. - The number of prepaid customers increased by 26% to 1,940 thousand, while postpaid customers decreased by 1% to 1,467 thousand[13]. - The total customer base grew by 13% to 3,407 thousand, with postpaid customers now representing 43% of the total[13]. - 5G penetration rate increased by 18 percentage points to 38% compared to the same period last year[9]. Dividends and Shareholder Information - The company declared an interim dividend of HKD 0.0228 per share, unchanged from the previous year[8]. - The record date for the interim dividend is August 23, 2023, with the dividend to be paid on September 1, 2023[32]. - The company holds a total of 3,184,982,840 shares, representing approximately 66.09% of the total equity[39]. - Li Ka-Shing holds 404,132,779 shares, which accounts for about 8.38% of the total equity[40]. Cash Flow and Investments - The net cash generated from operating activities for the six months ended June 30, 2023, was HKD 613 million, compared to HKD 549 million in the same period of 2022, reflecting an increase of approximately 11.6%[58]. - The company’s investment activities resulted in a net cash outflow of HKD 2,431 million for the first half of 2023, compared to HKD 950 million in the same period of 2022, indicating increased investment activity[58]. - Cash and bank balances stood at HKD 3,718 million as of June 30, 2023, slightly up from HKD 3,700 million as of December 31, 2022[75]. Operational Metrics - Total operating expenses increased to HKD 905 million for the six months ended June 30, 2023, compared to HKD 724 million for the same period in 2022, representing a 25% increase[68]. - Employee costs for the six months ended June 30, 2023, totaled HKD 175 million, up from HKD 167 million in the first half of 2022[29]. - The average number of employees for the six months ended June 30, 2023, was 1,146, compared to 1,065 in the first half of 2022[29]. Future Outlook and Strategic Initiatives - The board remains optimistic about the business outlook, expecting further recovery in the roaming market and positive financial performance for the full year[10]. - The company has outlined a future outlook with a projected revenue growth of 10% for the next fiscal year[101]. - New product launches are expected to contribute an additional HKD 300 million in revenue, with a focus on enhancing user experience[101]. - The company is considering strategic acquisitions to enhance its market position, with a budget of up to HKD 500 million allocated for this purpose[101]. Sustainability and Governance - The group has established eight sustainability goals, with three prioritized to guide its sustainability strategy[30]. - The governance framework for sustainability includes various committees and working groups to ensure accountability and stakeholder engagement[30]. - The company emphasizes high corporate governance standards to enhance shareholder value and stakeholder interests[47]. - The company has adopted corporate governance principles to ensure transparency and accountability[47].

Financial Performance - Total revenue for the first half of 2023 was HKD 2,328 million, a 1% increase compared to HKD 2,298 million in the same period last year[2] - EBITDA increased by 5% to HKD 727 million, up HKD 32 million from HKD 695 million in the previous year[2] - Shareholders' loss improved by 80% to HKD 19 million, with loss per share reduced to HKD 0.39 from HKD 1.99[3] - The company is encouraged by the turnaround to profitability in June 2023 and is focused on achieving a positive full-year financial performance[7] - The group reported a loss of HKD 19 million for the six months ended June 30, 2023, compared to a loss of HKD 96 million in the same period of 2022, indicating an improvement[18] - The total comprehensive loss for the period was HKD 20 million, compared to a loss of HKD 19 million in the previous year[22] - The company reported a pre-tax profit of HKD 8 million for the first half of 2023, a significant recovery from a loss of HKD 73 million in the same period of 2022[57] Revenue Breakdown - Service revenue grew by 15% year-on-year to HKD 1,793 million, driven by a significant increase in roaming service revenue, which rose by HKD 95 million or 68% to HKD 235 million[5] - Revenue from mobile communications and related services reached HKD 1,793 million, up from HKD 1,558 million, indicating a growth of 15.1% year-over-year[33] - Revenue from telecommunications hardware and other products decreased to HKD 535 million from HKD 740 million, reflecting a decline of 27.7%[33] - Customer service revenue net increased by 15% to HKD 1,793 million, driven by a significant increase in roaming service revenue, which rose by 68% to HKD 235 million[9] Customer Metrics - The customer base increased by 13% to approximately 3.4 million, with a notable rise in 5G penetration rate by 18 percentage points to 38%[6] - The number of prepaid customers increased by 26% to 1,940 thousand, contributing to a total customer base of approximately 3,407 thousand, a 13% increase year-on-year[10] - Monthly postpaid ARPU increased by 12% to HKD 180, attributed to growth in enterprise solutions and roaming services[6] - The monthly postpaid customer churn rate slightly increased to 0.9%, while postpaid ARPU rose by 10% to HKD 197[10] Expenses and Costs - The total gross profit increased by 10% to HKD 1,528 million, with operating expenses rising by 14% to HKD 749 million[9] - Service costs increased to HKD 829 million for the six months ended June 30, 2023, compared to HKD 685 million in the same period of 2022, reflecting a rise of 21%[35] - The group incurred operating expenses of HKD 905 million for the six months ended June 30, 2023, compared to HKD 724 million in the same period of 2022[18] Dividends and Shareholder Returns - The board declared an interim dividend of HKD 0.0228 per share, consistent with the previous year[4] - The company paid dividends of HKD 251 million for the year 2022, consistent with the previous year's payment[25] - The interim dividend remained stable at HKD 110 million for both the six months ended June 30, 2023, and 2022, with an interim dividend per share of HKD 0.0228[40] Capital Expenditures and Investments - Capital expenditures (excluding telecommunications licenses) were HKD 163 million, a decrease of 4% compared to HKD 157 million in the previous year[8] - The company plans to continue investing in telecommunications licenses and infrastructure to support future growth[27] - Capital commitments as of June 30, 2023, increased to HKD 316 million from HKD 233 million at the end of 2022[54] Financial Position and Assets - The total non-current assets as of June 30, 2023, amounted to HKD 9,893 million, a decrease from HKD 10,179 million as of December 31, 2022[20] - The group's total equity as of June 30, 2023, was HKD 9,998 million, down from HKD 10,269 million at the end of 2022[20] - The group’s cash and cash equivalents totaled HKD 814 million as of June 30, 2023, compared to HKD 3,087 million at the end of 2022[20] - The group’s total current assets increased to HKD 4,857 million as of June 30, 2023, from HKD 4,777 million at the end of 2022[20] Financing and Interest Income - Interest and other financing income net for the first half of 2023 was HKD 46 million, a significant improvement from a net cost of HKD 27 million in the same period of 2022, due to a rise in deposit interest rates[11] - Interest and other financing income for the six months ended June 30, 2023, was HKD 91 million, significantly up from HKD 15 million in the same period of 2022, marking a growth of 506.7%[36] - The net interest and other financing income for the six months ended June 30, 2023, was HKD 53 million, compared to a net cost of HKD 23 million in the same period of 2022[36] Corporate Governance and Compliance - The company adhered to all applicable provisions of the corporate governance code as set out in Appendix 14 of the Listing Rules during the six months ended June 30, 2023[72] - The board has adopted the Hong Kong Securities Code to regulate securities transactions by directors, ensuring compliance during the six-month period ending June 30, 2023[73] Strategic Initiatives - The launch of a new premium brand "SUPREME" aims to provide leading 5G network services and personalized offerings to high-end consumers[7] - The group focuses on sustainable profitability, cash flow, and dividend growth while managing revenue growth and investment returns[66] - The group emphasizes sustainable development, aligning its business strategy with sustainable development goals to create long-term value for stakeholders[69]

Financial Performance - Service revenue for 2022 was HKD 3,278 million, a slight increase from HKD 3,241 million in 2021[21] - EBITDA for 2022 totaled HKD 1,420 million, down from HKD 1,477 million in 2021[21] - The company reported a loss attributable to shareholders of HKD 158 million, a significant decline from a profit of HKD 4 million in 2021, representing a decrease of 4,050%[21] - Earnings per share for 2022 were HKD (3.28), compared to HKD 0.08 in 2021, marking a decrease of 4,200%[21] - Total revenue decreased by HKD 503 million or 9% to HKD 4.882 billion, primarily due to a 25% decline in hardware and other product revenue[31] - EBITDA fell by HKD 57 million or 4% to HKD 1.42 billion, mainly due to reduced hardware revenue and increased network operating costs from 5G expansion[31] - The company's revenue for 2022 was HKD 4,882 million, a decrease of 9.4% from HKD 5,385 million in 2021[53] - Customer service revenue net amounted to HKD 3,278 million, slightly up from HKD 3,241 million in the previous year[53] - The net margin for customer service decreased to 86% from 87%, reflecting a 1 percentage point decline[53] - EBITDA for the service segment was HKD 1,420 million, down from HKD 1,477 million in 2021, with a service EBITDA margin of 42%, down 2 percentage points[53] Customer Metrics - The number of customers in Hong Kong and Macau increased from approximately 3.2 million to about 3.3 million, benefiting from the growth of prepaid and postpaid customers[31] - Postpaid customer churn rate improved significantly from 1.2% to 0.8%, attributed to network improvements and effective customer retention strategies[31] - The net ARPU for postpaid customers decreased by 2% to HKD 168, but showed significant improvement in the second half of 2022 as the market began to recover[31] - The total number of customers increased to approximately 3.3 million, up from 3.2 million in the previous year, driven by growth in prepaid customers and 5G postpaid subscriptions[57] - Monthly postpaid customer churn rate improved to 0.8% from 1.2% in the previous year, reflecting network improvements and effective customer retention strategies[57] Capital Expenditure and Investments - The company has invested over HKD 30 billion since 2019 to expand its mobile network and develop 5G capabilities[24] - Capital expenditures, excluding telecommunications licenses, were HKD 496 million, a reduction from HKD 874 million in the previous year[53] - Capital expenditure decreased by 43% to HKD 496 million, representing 15% of service revenue, as 5G network infrastructure development reached its peak[59] Dividends - The final dividend per share for 2022 remained unchanged at HKD 5.21[21] - The company plans to maintain the same level of dividend distribution as in 2020 until regular profit exceeds HKD 361 million, at which point dividends will be adjusted to 100% of annual profit[33] - The board proposed a final dividend of HKD 0.0521 per share, maintaining the same level as the previous year[32] - The interim dividend of HKD 0.0228 per share was paid to shareholders in early September 2022, with a proposed final dividend of HKD 0.0521 per share to be distributed on May 29, 2023[114] Strategic Initiatives - The company aims to promote Hong Kong as a smart city and explore new opportunities in the metaverse and Web 3.0 era[24] - The company continues to provide innovative mobile and data solutions through its 3 brand in Hong Kong and Macau[23] - The introduction of 5G broadband services has led to encouraging growth in user numbers, aligning with network expansion and enhancement projects[40] - The introduction of the "store-in-store" strategy expanded sales channels to over 400 points, enhancing customer experience[46] - The launch of the 5G smart parking solution improved customer experience by reducing wait times for parking[50] Governance and Management - The company has a strong governance structure with multiple independent non-executive directors, including Dr. Lan Hongzhen, who has extensive experience in public service and corporate governance[97] - The company has a robust management team with over 35 years of experience in various industries, ensuring effective oversight and strategic direction[93][94] - The company is committed to corporate governance, with members holding qualifications from recognized institutions and participating in various governance committees[94][97] - The board consists of 10 members, including a non-executive chairman and four independent non-executive directors, meeting the one-third independence requirement[141] - The company has established four permanent committees: Audit Committee, Nomination Committee, Remuneration Committee, and Sustainability Committee[154] Risks and Challenges - The group faces significant risks from market competition, which may impact customer acquisition and retention costs, growth rates, and market share[73] - The group is exposed to foreign exchange risks, primarily from receivables and payables denominated in currencies such as USD, MOP, RMB, EUR, and GBP[63] - The ongoing COVID-19 pandemic continues to pose uncertainties that may adversely affect the group's operations and financial performance[72] - The group is under pressure to develop and adopt new technologies to remain competitive in the rapidly evolving telecommunications industry[74] - The group faces risks from changes in legal and regulatory requirements that could adversely affect its financial condition and operational performance[78] Cybersecurity and Data Protection - The company faces increasing risks from cyberattacks, which could lead to significant operational disruptions and costly remediation expenses[85] - Potential costs related to cyberattacks may exceed the company's insurance coverage, impacting financial stability and operational performance[85] - The company is subject to data protection laws, and failure to comply could result in regulatory actions or civil claims, adversely affecting financial performance[86] - The group is committed to protecting personal data of customers and employees, adhering to applicable data protection laws[182] Shareholding and Ownership - The company has a total of 3,184,982,840 shares held by various controlled entities, representing approximately 66.09% of total shares[124] - Li Ka-Shing and his family collectively hold 404,132,779 shares, accounting for 8.38% of the company's total shares[125] - The Li Ka-Shing Foundation holds 350,527,953 shares, which is 7.27% of the total shares[125] - The company reported no outstanding borrowings or debt as of December 31, 2022[130] Corporate Social Responsibility - Charitable donations made by the group to community projects amounted to approximately HKD 3.8 million in the year, compared to HKD 1.8 million in 2021[116] - The company emphasizes the importance of maintaining a good reputation in the community and ensures timely and accurate information dissemination to the market[179]