Financial Performance - The net profit attributable to the owners of the company for the year ended December 31, 2024, was HKD 71 million, an increase of HKD 24 million (+51%) compared to HKD 47 million in 2023[3]. - Total revenue for the year was HKD 683.973 million, up from HKD 606.035 million in 2023, representing an increase of approximately 12.8%[6]. - The company reported a loss before tax of HKD 293.006 million for the year, compared to a loss of HKD 16.154 million in 2023[6]. - The total comprehensive loss for the year was HKD 342.817 million, significantly higher than the loss of HKD 25.916 million in the previous year[8]. - The company's total assets decreased to HKD 8.952 billion from HKD 9.571 billion in 2023, reflecting a decline of approximately 6.5%[10]. - The company's cash and cash equivalents decreased to HKD 235.119 million from HKD 334.709 million in 2023, a decline of approximately 29.7%[10]. - The company reported a significant increase in administrative expenses, which amounted to HKD 67.430 million compared to HKD 87.181 million in the previous year[6]. - The company experienced a fair value loss on investment properties of HKD 312.632 million, compared to HKD 93.700 million in 2023[6]. - The basic loss per share for the year was HKD 68.84, compared to HKD 18.62 in 2023, indicating a worsening in per-share performance[6]. - The total financial costs for 2024 were HKD 64,989,000, slightly up from HKD 63,175,000 in 2023[21]. Revenue Sources - Hotel operating revenue increased to HKD 556,086,000 in 2024, up 13.9% from HKD 488,325,000 in 2023[18]. - Property rental income rose to HKD 127,887,000, a 8.7% increase from HKD 117,665,000 in the previous year[18]. - Total revenue for the year 2024 reached HKD 683,973,000, an increase of 12.8% from HKD 606,035,000 in 2023[14]. - The total revenue of the hotel group increased by 16% from approximately HKD 452,000,000 to approximately HKD 526,000,000[38]. - The rental income from commercial properties was HKD 128,000,000, an increase from HKD 118,000,000 in 2023[39]. Dividends and Shareholder Returns - The company did not recommend the payment of a final dividend for the year ended December 31, 2024, consistent with no dividend in 2023[4]. - The company did not declare any dividends for the year 2024, consistent with the previous year[23]. Operational Challenges - The company experienced a significant decline in hotel service performance at the Best Western Hotel Tsim Sha Tsui, with revenue dropping to HKD 53,177,000 from HKD 57,624,000[18]. - The hotel business and rental income face ongoing challenges, with management focusing on increasing revenue and controlling costs[46]. - Future prospects are impacted by the weak Chinese economy and high HKD to RMB exchange rates, affecting tourist behavior[45]. Acquisitions and Investments - The company acquired Jessville Manor in Hong Kong for HKD 207,000,000, with a construction area of 12,288 square feet[44]. - The company completed the acquisition of Jessville Manor for a total consideration of HKD 207,000,000 on April 15, 2024, which constitutes a major transaction requiring shareholder approval[48]. - The company successfully increased the annual rent of the Royal Scot Hotel in London by 34% to GBP 4,737,000[43]. Governance and Compliance - The audit committee reviewed the group's audited financial performance for the year ending December 31, 2024[53]. - The company has adopted the standard code of conduct for securities trading, with all directors confirming compliance throughout the year[51]. - The chairman and CEO positions are held by the same individual, which the board believes provides consistent leadership and cost savings[50]. - The financial statements for the year ending December 31, 2024, have been agreed upon by the auditors, Deloitte[54]. - The board of directors consists of four executive directors, one non-executive director, and three independent non-executive directors as of March 14, 2025[56]. Debt and Financial Position - The overall debt of the group was HKD 1,060,000,000, with a debt-to-asset ratio of 13%[41]. - The company plans to retain funds to ensure a more stable cash flow due to challenging economic conditions and high operational costs[29]. - The average hotel occupancy rate remained above 90% during the year[43].

[Company Information](index=1&type=section&id=Company%E8%B3%87%E6%96%99) This section details Shun Ho Holdings Limited's corporate information, including directors, registered office, bankers, auditors, and legal advisors - The chapter details Shun Ho Holdings Limited's essential corporate contacts, including its board of directors, registered office, principal bankers, auditors, and legal firms[1](index=1&type=chunk)[2](index=2&type=chunk) [Financial Highlights and Management Discussion](index=3&type=section&id=Financial%E6%91%98%E8%A6%81%E8%88%87%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96) [Interim Results](index=3&type=section&id=Interim%E6%A5%AD%E7%B8%BE) Net profit attributable to owners, before revaluation and depreciation, increased **25%** to **HKD 30 million** for the period Core Net Profit Performance | Metric | Six Months Ended June 30, 2024 (HKD) | Six Months Ended June 30, 2023 (HKD) | Change | | :--- | :--- | :--- | :--- | | Net Profit Attributable to Owners (Before Revaluation & Depreciation) | 30,000,000 | 24,000,000 | +25% | [Interim Dividend](index=3&type=section&id=Interim%E8%82%A1%E6%81%AF) The Board decided not to declare an interim dividend for the period to preserve cash flow amid challenging economic conditions - To navigate the challenging economic environment, the Board decided not to declare an interim dividend for 2024, consistent with the prior year's policy[4](index=4&type=chunk) [Business Performance Review](index=3&type=section&id=Management%E4%B9%8B%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) The Group's hotel business revenue grew **36%** and total revenue **27%**, while commercial property rental income remained stable [Hotel Business](index=3&type=section&id=Hotel%E6%A5%AD%E5%8B%99) Hotel business revenue grew **36%** to **HKD 260 million**, with Wah Da Hotel Group's core net profit surging **132%** to **HKD 42 million** Hotel Business Financial Performance | Metric | Six Months Ended June 30, 2024 (HKD) | Six Months Ended June 30, 2023 (HKD) | Change | | :--- | :--- | :--- | :--- | | Hotel Business Revenue | 260,000,000 | 191,000,000 | +36% | | Wah Da Hotel Core Net Profit | 42,000,000 | 18,000,000 | +132% | - The increase in Wah Da Hotel Group's profit is primarily due to a **41%** rise in hotel income and the absence of opening expenses, maintenance, and renovation costs for the Grand Bay Hotel[8](index=8&type=chunk) [Commercial Property Rental Income](index=5&type=section&id=Commercial%E7%89%A9%E6%A5%AD%E7%A7%9F%E9%87%91%E6%94%B6%E5%85%A5) Commercial property rental income remained stable at **HKD 60 million**, with London's Royal Scot Hotel annual rent increasing **34%** from H2 2024 - Commercial property rental income remained stable at **HKD 60 million** compared to the prior year[11](index=11&type=chunk) - Management successfully increased the annual rent for London's Royal Scot Hotel by **34%**, from **GBP 3.546 million** to **GBP 4.737 million**, with the new rental income to be reflected in the second half of 2024[10](index=10&type=chunk) [Liquidity and Financial Position](index=5&type=section&id=Liquidity) As of June 30, 2024, total debt was **HKD 1.078 billion**, with a stable **13%** gearing ratio, but floating-rate loans pose foreign exchange risk Financial Position Overview | Metric | June 30, 2024 (HKD) | December 31, 2023 (HKD) | | :--- | :--- | :--- | | Total Debt | 1,078,000,000 | 1,075,000,000 | | Gearing Ratio (vs. Capital Employed) | 13% | 13% | | Debt-to-NAV Ratio (vs. Revalued NAV) | 7% | 7% | - The Group's employee count increased from **562** to **622**[12](index=12&type=chunk) [Key Business Achievements](index=6&type=section&id=Key%E6%A5%AD%E5%8B%99%E6%88%90%E7%B8%BE) The Group maintained over **90%** hotel occupancy, increased total revenue by **27%** to **HKD 320 million**, and completed a major Hong Kong property acquisition - During the period, the Group's average hotel occupancy rate consistently exceeded **90%**[13](index=13&type=chunk) - The Group's total revenue increased by **27%** to **HKD 320 million**[13](index=13&type=chunk) - On April 15, 2024, the Group completed the acquisition of Jessville Manor on Pok Fu Lam Road, Hong Kong, for **HKD 207 million**[13](index=13&type=chunk) [Future Outlook](index=7&type=section&id=Outlook%E6%9C%AA%E4%BE%86) Future hotel and rental income prospects are challenging due to a weak Chinese economy, high HKD exchange rate, and trade war, with management focused on revenue and cost control - Weakness in the Chinese economy and a high Hong Kong dollar exchange rate against the RMB may lead to a slow recovery in Chinese tourist numbers, with more visitors opting for day trips within the Greater Bay Area[14](index=14&type=chunk) - The US-China trade war and declining import/export volumes in Hong Kong have impacted international trading company tenants in the Group's office buildings, putting pressure on occupancy rates[14](index=14&type=chunk) [Significant Matters and Corporate Governance](index=7&type=section&id=Significant%E4%BA%8B%E9%A0%85%E8%88%87%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) [Significant Acquisition](index=7&type=section&id=The%E9%9B%86%E5%9C%98%E4%B9%8B%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC) On April 15, 2024, the Group completed the acquisition of Jessville Manor in Hong Kong for **HKD 207 million**, constituting a major transaction - The Group completed the acquisition of Jessville Manor on April 15, 2024, for a total consideration of **HKD 207 million**[15](index=15&type=chunk) [Directors' and Major Shareholders' Interests](index=8&type=section&id=Directors%E6%96%BC%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8%E4%B9%8B%E6%AC%8A%E7%9B%8A) This section details directors' and major shareholders' interests in the company and its associates, with Chairman Mr. Cheng Kai Man holding approximately **74.40%** as the controlling shareholder - Chairman Mr. Cheng Kai Man, as the controlling shareholder, holds a total of **226,454,825** shares in the company, personally and through his controlled entities, representing approximately **74.40%** of the total share capital[17](index=17&type=chunk) - The ultimate holding company, Trillion Resources (BVI), beneficially owns and is deemed to own a total interest in **216,608,825** shares, representing **71.20%**[20](index=20&type=chunk)[21](index=21&type=chunk) [Corporate Governance](index=11&type=section&id=Corporate%E7%AE%A1%E6%B2%BB) The company largely complied with the Corporate Governance Code, with the Chairman also serving as CEO for consistent leadership, and all directors adhered to securities transaction standards - One deviation from the Corporate Governance Code exists: the roles of Chairman and Chief Executive Officer are combined and held by Mr. Cheng Kai Man, which the Board believes provides robust leadership and cost savings[23](index=23&type=chunk) - Ms. Cheng Wai Kwan retired as an Executive Director of the company on May 24, 2024[25](index=25&type=chunk) [Condensed Consolidated Financial Statements](index=13&type=section&id=Condensed%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Independent Review Report](index=13&type=section&id=Independent%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) Deloitte Touche Tohmatsu reviewed the Group's condensed consolidated financial statements for the period, issuing an unmodified report consistent with HKAS 34 - The auditor, Deloitte, issued an unmodified review conclusion on the interim financial statements[27](index=27&type=chunk)[29](index=29&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=15&type=section&id=Condensed%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) The Group reported a **HKD 107 million** loss for the period, primarily due to a **HKD 92.23 million** fair value loss on investment properties, despite a **27%** increase in total revenue to **HKD 320 million** Condensed Consolidated Statement of Profit or Loss Summary | Metric | Six Months Ended June 30, 2024 (HKD '000) | Six Months Ended June 30, 2023 (HKD '000) | | :--- | :--- | :--- | | Total Revenue | 319,575 | 251,033 | | (Loss) Profit Before Tax | (98,835) | 6,983 | | (Loss) Profit for the Period | (106,520) | 1,488 | | (Loss) Profit Attributable to Owners of the Company | (54,034) | 3,069 | | Basic (Loss) Earnings Per Share | (22.35) HK cents | 1.27 HK cents | [Condensed Consolidated Statement of Financial Position](index=17&type=section&id=Condensed%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2024, total assets were **HKD 9.736 billion** and total equity **HKD 8.358 billion**, with a shift from net current assets to a **HKD 92.99 million** net current liability Condensed Consolidated Statement of Financial Position Summary | Metric | June 30, 2024 (HKD '000) | December 31, 2023 (HKD '000) | | :--- | :--- | :--- | | Non-current Assets | 9,523,425 | 9,485,741 | | Current Assets | 212,226 | 373,141 | | Current Liabilities | 305,214 | 288,034 | | Net Current (Liabilities) Assets | (92,988) | 85,107 | | Total Equity | 8,357,564 | 8,478,028 | [Condensed Consolidated Statement of Cash Flows](index=21&type=section&id=Condensed%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) Net cash from operations improved to **HKD 107 million**, but investing activities had a **HKD 226 million** outflow due to property acquisition, reducing cash and equivalents to **HKD 185 million** Condensed Consolidated Statement of Cash Flows Summary | Metric | Six Months Ended June 30, 2024 (HKD '000) | Six Months Ended June 30, 2023 (HKD '000) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 106,642 | 42,746 | | Net Cash Used in Investing Activities | (226,013) | (1,300) | | Net Cash Used in Financing Activities | (28,727) | (55,534) | | Net Decrease in Cash and Cash Equivalents | (148,098) | (14,088) | | Cash and Cash Equivalents at End of Period | 184,817 | 281,317 | [Notes to the Financial Statements](index=23&type=section&id=Condensed%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [Basis of Preparation and Principal Accounting Policies](index=23&type=section&id=Basis%E5%9F%BA%E6%BA%96%E8%88%87%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) These condensed consolidated financial statements adhere to HKAS 34, with directors deeming the going concern basis appropriate despite net current liabilities, given available resources and consistent accounting policies - The directors consider the preparation of financial statements on a going concern basis appropriate, given the Group's financial resources, despite a net current liability of **HKD 92,988,000** at period-end[38](index=38&type=chunk) [Revenue and Segment Information](index=25&type=section&id=Revenue%E8%88%87%E5%88%86%E9%A1%9E%E8%B3%87%E6%96%99) Total revenue was **HKD 320 million**, with hotel services contributing **HKD 260 million** and property investment **HKD 59.82 million**, both segments reporting losses due to fair value changes and operational shifts Segment Revenue and Results | Segment | Revenue (HKD '000) | Segment Results (HKD '000) | | :--- | :--- | :--- | | Hotel Services | 259,757 | (1,066) | | Property Investment | 59,818 | (34,276) | | Securities Investment | – | – | [Earnings Per Share and Dividends](index=32&type=section&id=Earnings%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9%E8%88%87%E8%82%A1%E6%81%AF) Basic loss per share was **22.35 HK cents**, based on a **HKD 54.03 million** loss attributable to owners, with no dividends declared or paid during the period - Basic loss per share was **22.35 HK cents**, compared to earnings per share of **1.27 HK cents** in the prior year[53](index=53&type=chunk) - The Board resolved not to declare an interim dividend for 2024[52](index=52&type=chunk) [Analysis of Assets and Liabilities](index=32&type=section&id=Assets%E8%88%87%E8%B2%A0%E5%82%B5%E9%A0%85%E7%9B%AE%E5%88%86%E6%9E%90) The Group acquired **HKD 207 million** in investment properties and recognized a **HKD 92.23 million** fair value decrease, with total pledged bank loans at **HKD 1.025 billion** at **5.80%** effective annual interest - A fair value decrease of **HKD 92,232,000** on investment properties was recognized in the statement of profit or loss[55](index=55&type=chunk) - The Group acquired investment properties for a consideration of **HKD 207,000,000**[55](index=55&type=chunk) - As of June 30, 2024, total pledged bank loans amounted to **HKD 1,024,589,000** at an effective annual interest rate of **5.80%**[60](index=60&type=chunk)[61](index=61&type=chunk)

[Financial Results](index=1&type=section&id=Financial_Results) [Results Highlights](index=1&type=section&id=Results_Highlights) The Group's net profit before revaluation and depreciation increased, but after fair value losses, it recorded a net loss attributable to owners, reversing from a prior period profit - Net profit attributable to owners before revaluation and depreciation of land, property, and equipment was **HKD 30 million**, an increase of **HKD 6 million (25%)** from **HKD 24 million** in the prior period[1](index=1&type=chunk)[20](index=20&type=chunk) Key Performance Indicators | Indicator | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | **Profit (Loss) Attributable to Owners of the Company** | (HKD 54.034 million) | HKD 3.069 million | | **Basic (Loss) Earnings Per Share** | (22.35 HK cents) | 1.27 HK cents | [Condensed Consolidated Financial Statements](index=1&type=section&id=Condensed_Consolidated_Financial_Statements) This section presents the unaudited condensed consolidated financial statements for the six months ended June 30, 2024, showing increased total revenue but a net loss due to investment property fair value changes, with a shift to a net current liability position [Condensed Consolidated Income Statement](index=1&type=section&id=Condensed_Consolidated_Income_Statement) Total revenue increased by 27.3% to HKD 319.6 million, driven by hotel operations, but a net fair value loss on investment properties led to a current period loss of HKD 106.5 million, reversing from a prior period profit Summary of Consolidated Income Statement (HKD thousands) | Item | 1H 2024 | 1H 2023 | | :--- | :--- | :--- | | **Total Revenue** | 319,575 | 251,033 | | **Gross Profit** | 56,890 | 89,637 | | **Net Fair Value Loss on Investment Properties** | (92,232) | - | | **Profit (Loss) Before Tax** | (98,835) | 6,983 | | **Profit (Loss) for the Period** | (106,520) | 1,488 | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed_Consolidated_Statement_of_Comprehensive_Income) The period recorded a total comprehensive expense of HKD 120.5 million, a significant contrast to the prior period's total comprehensive income of HKD 54.57 million, primarily due to the net loss and foreign exchange losses from overseas operations - Total comprehensive (expense) income for the period was **(HKD 120.5 million)**, compared to an income of **HKD 54.57 million** in the prior period, primarily due to the current period's loss and a shift from positive to negative exchange differences on overseas operations[3](index=3&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed_Consolidated_Statement_of_Financial_Position) As of June 30, 2024, total assets were HKD 9.736 billion, stable from the period start, but liquidity shifted from net current assets to net current liabilities of HKD 92.99 million, primarily due to reduced bank balances and increased current bank loans, with total equity slightly decreasing to HKD 8.358 billion Summary of Statement of Financial Position (HKD thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | 9,735,651 | 9,858,882 | | **Total Liabilities** | 1,377,087 | 1,380,854 | | **Total Equity** | 8,357,564 | 8,478,028 | | **Net Current (Liabilities) Assets** | (92,988) | 85,107 | [Notes to the Financial Statements](index=5&type=section&id=Notes_to_the_Financial_Statements) This section details the basis of preparation, significant accounting policies, and disclosures for key items such as revenue, segment information, finance costs, taxation, and earnings per share, noting consistency with prior year policies and no material impact from new standard amendments [Basis of Preparation and Significant Accounting Policies](index=5&type=section&id=Basis_of_Preparation_and_Accounting_Policies) The interim financial statements are prepared in accordance with HKAS 34, with consistent accounting policies and methods as the 2023 annual financial statements, and new HKFRS amendments applied during the period had no material impact on financial position - These condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[5](index=5&type=chunk) - The accounting policies adopted for the current period are consistent with those presented in the 2023 annual financial statements, and newly issued amendments to standards had no material impact on the Group[6](index=6&type=chunk)[7](index=7&type=chunk) [Revenue and Segment Information](index=6&type=section&id=Revenue_and_Segment_Information) The Group's total revenue is primarily from hotel operations and property rentals, with hotel operating revenue growing 36% to HKD 260 million, driving overall revenue growth; however, the hotel services segment recorded an operating loss, and property investment segment performance significantly declined due to fair value losses on investment properties Analysis of Revenue Sources (HKD thousands) | Revenue Source | 1H 2024 | 1H 2023 | | :--- | :--- | :--- | | **Hotel Operating Revenue** | 259,757 | 190,509 | | **Property Rental Income** | 59,818 | 60,479 | | **Dividend Income** | - | 45 | | **Total** | **319,575** | **251,033** | Segment Results (HKD thousands) | Segment | 1H 2024 Results | 1H 2023 Results | | :--- | :--- | :--- | | **Hotel Services** | (1,066) | 30,674 | | **Property Investment** | (34,276) | 58,918 | | **Securities Investment** | - | 45 | [Notes on Key Financial Items](index=9&type=section&id=Notes_on_Key_Financial_Items) This section provides detailed breakdowns of finance costs, income tax, and earnings per share, noting that finance costs increased to HKD 33.5 million due to higher bank loan interest, resulting in a basic loss per share of 22.35 HK cents for the period - Finance costs increased to **HKD 33.5 million** from **HKD 28.01 million** in the prior period, primarily due to higher interest on bank loans[11](index=11&type=chunk) - Basic loss per share was **22.35 HK cents**, calculated based on the loss attributable to owners of **HKD 54.034 million** and 241.8 million issued shares[15](index=15&type=chunk) [Management Discussion and Analysis](index=12&type=section&id=Management_Discussion_and_Analysis) Management reviewed the period's business performance, highlighting strong hotel revenue growth and over 90% occupancy, while maintaining a robust financial position and low gearing despite economic challenges, and will continue to focus on cost control and revenue enhancement amidst a cautious market outlook [Business Review and Performance](index=12&type=section&id=Business_Review) Hotel business performed strongly with revenue up 36% to HKD 260 million and average occupancy over 90%, while commercial property rental income remained stable at HKD 60 million, and the annual rent for Royal Scot Hotel in London was successfully increased by 34%, expected to contribute in the second half - The Group's hotel operating revenue was **HKD 260 million**, a **36% increase** compared to the prior period[21](index=21&type=chunk) - The Group's average hotel occupancy rate consistently exceeded **90%+**[28](index=28&type=chunk) - The annual rent for the Royal Scot Hotel in London was successfully increased by **34%** from **GBP 3,546,000** to **GBP 4,737,000**, with the new rental income to be reflected in the second half of 2024[24](index=24&type=chunk)[28](index=28&type=chunk) [Liquidity and Gearing](index=14&type=section&id=Liquidity_and_Gearing) The Group maintains a robust financial structure with total debt of HKD 1.078 billion, and both the gearing ratio (relative to capital employed) at 13% and the gearing ratio (relative to fully revalued net assets) at 7% remained stable from the period start Gearing Ratios | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Debt** | HKD 1.078 billion | HKD 1.075 billion | | **Gearing Ratio (relative to capital employed)** | 13% | 13% | | **Gearing Ratio (relative to fully revalued net assets)** | 7% | 7% | [Significant Acquisitions and Outlook](index=15&type=section&id=Acquisitions_and_Outlook) During the period, the Group acquired Jessville Manor in Pok Fu Lam, Hong Kong, for HKD 207 million; looking ahead, management anticipates ongoing challenges from a weak Chinese economy, strong Hong Kong dollar, and US-China trade tensions, particularly impacting office property occupancy, and will continue efforts to increase revenue and control costs - On April 15, 2024, the Group acquired Jessville Manor at 128 Pok Fu Lam Road, Hong Kong, for a consideration of **HKD 207 million**[29](index=29&type=chunk) - The future prospects for hotel operations and rental income continue to face challenges, primarily from a weak Chinese economy, the strong Hong Kong dollar, and the impact of the US-China trade war on trade company tenants[30](index=30&type=chunk) [Other Disclosures](index=12&type=section&id=Other_Disclosures) This section covers dividend policy, securities transactions, and corporate governance practices, noting the Board's decision not to declare an interim dividend to conserve cash, and the company's compliance with most corporate governance code provisions, despite the Chairman and CEO roles being combined for consistent leadership and cost savings [Interim Dividend](index=12&type=section&id=Interim_Dividend) Given the challenging economic environment, market instability, and high operating costs, the Board decided not to recommend an interim dividend for the six months ended June 30, 2024, to conserve funds and safeguard the Group's cash flow - The Board does not recommend an interim dividend for the six months ended June 30, 2024, consistent with the prior period[19](index=19&type=chunk) [Corporate Governance](index=16&type=section&id=Corporate_Governance) The Audit Committee reviewed the unaudited financial results for the period, and the company complied with all Corporate Governance Code provisions, except for the combined roles of Chairman and CEO (held by Mr. Cheng Kai Man), which the Board believes provides strong leadership and cost savings - The Audit Committee has reviewed the Group's unaudited financial results for the six months ended June 30, 2024[34](index=34&type=chunk) - The company deviated from Corporate Governance Code provision C.2.1, which states that the roles of Chairman and Chief Executive should not be performed by the same individual; Mr. Cheng Kai Man currently holds both positions, which the Board believes provides strong and consistent leadership[35](index=35&type=chunk)

Financial Performance - The net profit attributable to shareholders for the year ended December 31, 2023, was HKD 47 million, a decrease of HKD 71 million compared to HKD 118 million in 2022, representing a decline of 60%[5]. - Total revenue for the year ended December 31, 2023, was HKD 606,035,000, a decrease of 1.07% from HKD 612,687,000 in 2022[147]. - The company reported a net loss of HKD 89,194,000 for the year, compared to a profit of HKD 647,217,000 in the previous year, indicating a significant decline[149]. - Basic loss per share for the year was HKD 18.62, down from earnings of HKD 106.72 per share in 2022[147]. - The gross profit margin decreased significantly, with gross profit of HKD 193,789,000 compared to HKD 279,912,000 in the previous year, reflecting a decline in profitability[147]. - The company recognized an impairment loss of HKD 93,700,000 on investment properties, compared to HKD 13,324,000 in the previous year, indicating increased challenges in asset valuation[147]. - The company reported a significant increase in financial costs, amounting to HKD 63,175,000, compared to HKD 27,359,000 in the previous year[147]. - The company's profit for the year ended December 31, 2023, is HKD 258,021, compared to a profit of HKD 647,217 in 2022, representing a decline of 60%[155]. - The cash generated from operating activities for the year is HKD 202,991, down from HKD 305,749 in the previous year, a decrease of 33.5%[157]. Revenue and Operations - Revenue from hotel operations increased by 5% to HKD 488 million in 2023, up from HKD 463 million in 2022[8]. - The net profit from hotel operations decreased by 45% to HKD 74.7 million in 2023, down from HKD 136.5 million in 2022[10]. - Total revenue for the Huada Hotel Group increased by 3% from HKD 439 million to HKD 452 million, driven by higher room rates and occupancy[11]. - The group's hotel revenue increased by 6% year-on-year, with an average occupancy rate exceeding 90%[16]. - The group operates nine hotels, with eight in Hong Kong and one each in London and China, facing high volatility due to various predictable and unpredictable factors[128]. Expenses and Costs - Administrative expenses (excluding depreciation) rose to HKD 83 million in 2023, up from HKD 56 million in 2022, an increase of 48%[12]. - Financial costs increased by 90% to HKD 43.8 million in 2023, compared to HKD 23.1 million in 2022[10]. - The hotel division's operating margin is only 35% to 40% of total hotel revenue, making it sensitive to significant revenue reversals[128]. Corporate Governance - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange listing rules, emphasizing high-quality board practices and accountability to shareholders[33]. - 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[37]. - The company is committed to maintaining good corporate governance practices and transparency with shareholders[32]. - The board is responsible for maintaining a sound and effective risk management and internal control system[44]. - The company emphasizes the importance of training and continuous professional development for directors and senior management[40]. Shareholder Information - The company does not recommend the payment of a final dividend for the year ended December 31, 2023, consistent with the previous year[6]. - The company has adopted a dividend policy allowing for the declaration and distribution of dividends to shareholders[80]. - The board retains the absolute right to review and amend the dividend policy at any time, considering factors such as financial condition and operational needs[82]. - Shareholders can request the convening of a general meeting if they hold at least 5% of the voting rights[74]. Investment Properties - The group owns approximately HKD 4,685,000,000 worth of investment properties located in Hong Kong and the UK as of December 31, 2023[135]. - The fair value net impairment of investment properties recognized in the consolidated income statement for the year was approximately HKD 94,000,000[135]. - The valuation of investment properties is a key audit matter due to its significant amount in the overall financial statements and the substantial judgment involved in determining fair value[135]. - Investment properties are measured at fair value after initial recognition, with changes in fair value recognized in the profit and loss statement[186]. Employee Information - The group has a total of 562 employees as of December 31, 2023, an increase from 387 employees in 2022[14]. - The remuneration for senior management included four individuals earning between HKD 1,000,000 and HKD 5,000,000, and one individual earning between HKD 10,000,001 and HKD 15,000,000[44]. - The company emphasizes human resources, offering competitive compensation and benefits to attract and retain skilled employees[124]. Market and Economic Conditions - The group faces challenges in the hotel and rental income sectors due to the weak Chinese economy and the impact of the US-China trade war on international trade companies[19]. - The group’s financial performance may be significantly impacted by changes in the overall economic climate, regulatory changes, and government policies in Hong Kong and mainland China[127]. - The group closely evaluates geopolitical prospects and economic developments in different countries to align its hotel portfolio with its risk tolerance[128]. Future Outlook - The group expects the number of overnight visitors to Hong Kong to continue rising in 2024, benefiting from the government's budget to promote tourism[19]. - The group is optimistic about the future rental prospects of the Royal Scot Hotel in London, as rental rates are linked to the UK retail price index, which has been rising in double digits[16]. - The group plans to continue its renovation project for the Wood Street Hotel in London, which will include approximately 216 rooms and various facilities[17].

Financial Performance - The net profit attributable to the owners of the company for the year ended December 31, 2023, was HKD 47 million, a decrease of HKD 71 million compared to HKD 118 million in 2022, representing a decline of approximately 60%[2] - Total revenue for the year was HKD 606,035 thousand, a slight decrease of 1.1% from HKD 612,687 thousand in the previous year[2] - The gross profit margin decreased significantly, with gross profit amounting to HKD 193,789 thousand, down from HKD 279,912 thousand, indicating a decline of approximately 30.7%[2] - The company reported a loss before tax of HKD 16,154 thousand, compared to a profit of HKD 688,444 thousand in 2022, marking a substantial shift in performance[2] - The total comprehensive loss for the year was HKD 25,916 thousand, a stark contrast to a comprehensive income of HKD 502,828 thousand in 2022[5] - Basic loss per share for 2023 was HKD 45,018,000, compared to a profit of HKD 258,021,000 in 2022[19] - Total financial costs increased to HKD 63,175,000 in 2023, up from HKD 27,359,000 in 2022[18] - The overall profit for the year decreased primarily due to increased hotel operating costs, startup expenses, maintenance costs, financial costs, and income tax expenses[28] Revenue Breakdown - Hotel operating revenue increased to HKD 488,325,000 in 2023, up 5.5% from HKD 462,692,000 in 2022[11] - Property rental income decreased to HKD 117,665,000, down 21.5% from HKD 149,953,000 in 2022[11] - Revenue from Hong Kong operations was HKD 566,077,000, a slight increase from HKD 559,045,000 in 2022[17] - Hotel business revenue increased by 5% to HKD 488 million for the year ended December 31, 2023, compared to HKD 463 million in 2022[25] - Total revenue for the hotel group increased by 3% from HKD 439 million to HKD 452 million, driven by higher room rates and occupancy rates[30] Assets and Liabilities - Non-current assets decreased to HKD 9,485,741 thousand from HKD 9,579,244 thousand, a reduction of approximately 1%[7] - Current liabilities decreased to HKD 288,034 thousand from HKD 229,351 thousand, indicating an increase of approximately 25.6%[7] - The total debt of the group as of December 31, 2023, was HKD 1,075 million, a decrease from HKD 1,102 million in 2022, with a debt-to-equity ratio of 7%[32] Operational Highlights - The company has adopted new and revised Hong Kong Financial Reporting Standards, which did not have a significant impact on the financial position and performance for the year[9] - The group’s trade receivables increased to HKD 23,880,000 in 2023, compared to HKD 23,573,000 in 2022[20] - Trade payables rose to HKD 53,957,000 in 2023, compared to HKD 61,377,000 in 2022[21] - The group has maintained a high occupancy rate across its hotels in Hong Kong, despite operational cost increases due to labor shortages[34][36] Future Outlook - The group expects the number of overnight visitors to Hong Kong to continue rising in 2024, benefiting from the government's budget to promote tourism[36] - The group is facing challenges in hotel and rental income due to the weak Chinese economy and the impact of the US-China trade war on international trade companies[36][37] Employee and Dividend Information - The company will not recommend a final dividend for the year ended December 31, 2023, due to the financial performance[22] - The company has a total of 562 employees as of December 31, 2023, up from 387 in 2022, indicating growth in workforce[32] Property Acquisitions and Renovations - The group acquired the Glamour Bay Hotel in December 2023, which has 435 rooms and a total area of 216,314 square feet[34] - The group has completed significant renovations and reopened the Glamour Bay Hotel and Shanghai Huamei International Hotel in August 2023[34] - The group plans to purchase properties for a total consideration of HKD 207 million, which includes multiple residential parking spaces[39][40] Market Conditions - In 2023, approximately 17 million overnight visitors came to Hong Kong, with about 12 million from China, compared to 23 million in 2019 before the pandemic[34] - The rental income from the Royal Scot Hotel in London is expected to rise, linked to the UK retail price index, which has been at a 40-year high[35] - The Royal Scot Hotel in London maintained a valuation of GBP 88.5 million, with rental income for the year remaining stable at GBP 3.546 million[30]

Financial Performance - The net profit attributable to shareholders for the six months ended June 30, 2023, was HKD 24 million, a decrease of HKD 60 million or 71.4% compared to HKD 84 million for the same period in 2022[4]. - Revenue from hotel operations decreased by 33% to HKD 191 million for the six months ended June 30, 2023, down from HKD 286 million in the same period last year[6]. - The operating profit from hotel operations plummeted by 87% to HKD 16.5 million, compared to HKD 126 million for the same period in 2022[9]. - Total revenue for the Huada Hotel Group decreased by 35% from HKD 279 million to HKD 182 million[10]. - Total revenue for the six months ended June 30, 2023, was HKD 251,033,000, a decrease of 30.9% compared to HKD 363,594,000 for the same period in 2022[31]. - Customer contracts revenue decreased to HKD 190,509,000, down 33.5% from HKD 286,391,000 year-on-year[31]. - Net profit for the period was HKD 1,488,000, a significant decline of 98.3% from HKD 89,035,000 in the previous year[31]. - Basic earnings per share dropped to HKD 1.27, compared to HKD 12.88 for the same period last year[31]. - The company reported a gross profit of HKD 89,637,000, down 56.0% from HKD 203,503,000 year-on-year[31]. - The company reported a pre-tax profit of HKD 6,983 thousand for the six months ended June 30, 2023, a significant decrease of 94.2% compared to HKD 120,819 thousand for the same period in 2022[40]. - The group reported a profit attributable to owners of HKD 3,069,000 for the six months ended June 30, 2023, compared to HKD 31,150,000 for the same period in 2022, showing a decline of approximately 90.2%[66]. - Basic earnings per share for the six months ended June 30, 2023, were HKD 0.0127, a decrease from HKD 0.1290 for the same period in 2022[66]. Expenses and Liabilities - Administrative expenses (excluding depreciation) increased by 115% to HKD 55.7 million, up from HKD 25.8 million in the previous year[11]. - The company incurred interest expenses of HKD 27,036 thousand, a substantial increase from HKD 4,674 thousand in the prior year[41]. - The group incurred interest expenses of HKD 28,010,000 for the six months ended June 30, 2023, compared to HKD 5,645,000 for the same period in 2022, indicating a significant increase[61]. - Current liabilities decreased to HKD 168,954,000 from HKD 229,351,000 at the end of the previous period[34]. - Non-current liabilities decreased slightly to HKD 1,168,961 thousand from HKD 1,173,747 thousand, indicating a reduction of approximately 0.4%[35]. - Total liabilities decreased to HKD 1,337,915,000 as of June 30, 2023, from HKD 1,403,098,000 as of December 31, 2022, representing a reduction of approximately 4.66%[59]. Assets and Equity - Non-current assets totaled HKD 9,589,013,000 as of June 30, 2023, slightly up from HKD 9,579,244,000 at the end of 2022[34]. - As of June 30, 2023, total equity increased to HKD 8,558,518 thousand from HKD 8,503,944 thousand at the end of 2022, reflecting a growth of approximately 0.64%[35]. - Total assets as of June 30, 2023, amounted to HKD 9,896,433,000, a slight decrease from HKD 9,907,042,000 as of December 31, 2022[56]. - The total carrying value of investment properties was approximately HKD 3,597,115,000 as of June 30, 2023, down from HKD 3,999,692,000 as of December 31, 2022[68]. Operational Highlights - Approximately 13 million visitors traveled to Hong Kong in the first half of 2023, with about 10 million coming from China, compared to 35 million visitors in the same period of 2019[13]. - The newly acquired Glamour Bay Hotel, with 435 rooms and a total area of 216,314 square feet, commenced operations on August 1, 2023[13]. - The occupancy rate of the Glamour Bay Hotel has remained high since its opening, and other hotels in Hong Kong are also expected to maintain high occupancy rates[14]. - The future outlook for hotel operations and rental income remains challenging due to the impact of the US-China trade war and declining import/export volumes in Hong Kong[14]. - The group operates nine revenue-generating hotels, with seven in Hong Kong, one in Shanghai, and one in London, while the Wood Street Hotel renovation project is ongoing[14]. Shareholder Information - The company’s director, Zheng Kaiwen, holds 226,454,825 shares, representing 74.40% of the total shareholding[16]. - Major shareholders include Mercury Fast with 62,602,700 shares (20.60%) and Trillion Resources (BVI) with 216,608,825 shares (71.20%) as of June 30, 2023[20]. Compliance and Governance - The interim results for the six months ended June 30, 2023, were reviewed by Deloitte, in accordance with the Hong Kong Institute of Certified Public Accountants' standards[23]. - The company maintained compliance with the corporate governance code, although the roles of Chairman and CEO are held by the same individual, which the board believes provides consistent leadership[24]. Cash Flow and Investments - Cash generated from operating activities decreased to HKD 49,669 thousand, down 76.8% from HKD 214,808 thousand in the previous year[41]. - The company recorded a net cash outflow from investing activities of HKD 1,300 thousand, compared to a much larger outflow of HKD 184,868 thousand in the previous year[41]. - The company’s cash and cash equivalents at the end of the period were HKD 281,317 thousand, down from HKD 312,444 thousand, representing a decrease of 9.95%[41]. Property and Investment Valuation - The fair value of investment properties did not change during the six months ended June 30, 2023, indicating stability in the property market[68]. - The carrying value of investment properties increased from HKD 3,907,000,000 to HKD 3,947,000,000, an increase of approximately 1%[80]. - The carrying value of hotel properties decreased from HKD 1,596,000,000 to HKD 1,570,000,000, a decrease of approximately 1.6%[80]. Fair Value Measurement - The fair value measurement is categorized into three levels: Level 1 based on quoted prices in active markets for identical assets or liabilities[83]. - Level 2 fair value measurement is derived from observable inputs other than quoted prices, including both direct and indirect data[83]. - Level 3 fair value measurement relies on valuation techniques using inputs that are not based on observable market data[83].

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。 順豪控股有限公司 (於香港註冊成立之有限公司) (股份代號：253) 二零二三年中期業績 業績 順豪控股有限公司（「本公司」）之董事（「董事」）會（「董事會」）宣布截至二零二三年 六月三十日止六個月之本公司擁有人應佔除稅後而未計重估及土地、物業及設備之折舊前之淨 溢利為 24,000,000 港元（截至二零二二年六月三十日止六個月：84,000,000 港元），減少 60,000,000港元。本公司及其附屬公司（統稱「本集團」）在本期之未經審核綜合業績連同去 年同期之比較數字如下： 簡明綜合損益表 截至二零二三年六月三十日止六個月 截至二零二三年 截至二零二二年 六月三十日止 六月三十日止 附註 六個月 六個月 千港元 千港元 (未經審核) (未經審核) 收入 3 客戶合約 190,509 286,391 租賃 60,479 77,161 股息收入 45 42 ...

Financial Performance - The company's profit attributable to owners for the year ended December 31, 2022, was HKD 258,000,000, an increase of HKD 228,000,000 compared to HKD 30,000,000 in 2021[5]. - Revenue from hotel operations increased by 34% to HKD 463,000,000, up from HKD 346,000,000 in the previous year[8]. - The profit attributable to the owners of Huada Hotel was HKD 593,000,000, a significant increase of HKD 527,000,000 from HKD 66,000,000 in 2021[9]. - The overall profit for the year increased primarily due to higher hotel revenue and the gain from the sale of a subsidiary[10]. - Total revenue for the year ended December 31, 2022, was HKD 612.687 million, an increase of 19.1% from HKD 514.409 million in 2021[147]. - Profit before tax increased significantly to HKD 688.444 million, compared to HKD 108.407 million in the previous year, representing a growth of 535.5%[147]. - Net profit for the year was HKD 647.217 million, up from HKD 79.637 million in 2021, marking an increase of 713.5%[147]. - Basic earnings per share rose to HKD 106.72, compared to HKD 12.58 in the prior year, reflecting a substantial increase of 749.6%[147]. - The company reported a gross profit of HKD 279.912 million, which is a 62.3% increase from HKD 172.418 million in 2021[147]. - The company recognized a profit of HKD 521.857 million from the sale of a subsidiary, contributing positively to overall earnings[147]. - The company reported a foreign exchange loss of HKD 144,809,000 due to the translation of overseas operations, compared to a loss of HKD 3,767,000 in the previous year[149]. Revenue and Income Sources - Rental income from commercial properties decreased to HKD 150,000,000 from HKD 168,000,000 in the previous year[12]. - The company’s total customer contracts revenue was HKD 462.692 million, a significant increase from HKD 346.416 million in 2021, representing a growth of 33.5%[147]. - The group owns eight revenue-generating hotels, with plans for renovations at the Wood Street Hotel in London, expected to enhance future income[17]. - The group anticipates that the Ting Lan Hotel will commence operations in summer 2023 after significant renovations, potentially generating substantial revenue from its 435 rooms and dining facilities[17]. Expenses and Costs - Administrative expenses (excluding depreciation) increased to HKD 56,000,000 from HKD 46,000,000, attributed to costs related to new acquisitions[12]. - Administrative expenses increased to HKD 59.923 million from HKD 49.797 million, indicating a rise of 20.5%[147]. - Financial costs rose to HKD 27.359 million, compared to HKD 9.774 million in the previous year, reflecting an increase of 179.5%[147]. - The company expects operational costs to rise significantly due to local labor shortages, while aiming to maintain high occupancy rates and control operational expenses[17]. Debt and Financial Position - As of December 31, 2022, the group's total debt was HKD 1,102,000,000, an increase from HKD 784,000,000 in 2021, primarily due to new bank loans for the acquisition of Ting Lan Hotel costing HKD 1,420,695,000[13]. - The capital-to-debt ratio increased to 13% in 2022 from 10% in 2021, indicating a higher leverage position[13]. - The company’s total liabilities decreased significantly, with bank loans dropping to HKD 55,200,000 in 2022 from HKD 738,408,000 in 2021, a reduction of 92.5%[151]. Corporate Governance - The board consists of nine members, including five executive directors, one non-executive director, and three independent non-executive directors, with two independent directors possessing appropriate professional qualifications[34]. - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange listing rules, ensuring compliance with the latest developments[31]. - The company has not appointed separate individuals for the roles of chairman and CEO, which is believed to provide consistent leadership and cost savings[31]. - The board is responsible for setting the strategic direction and monitoring the performance of senior management[36]. - The company encourages continuous professional development for all directors to enhance their knowledge and skills[38]. - The company is committed to maintaining high standards of corporate governance, focusing on board quality, internal controls, and transparency to shareholders[29]. Shareholder Communication - The company has established various communication channels with shareholders, including printed and electronic communications, and timely updates on the company website[78]. - The company is committed to maintaining effective and ongoing dialogue with shareholders as part of its shareholder communication policy[78]. - The company’s board has reviewed the effectiveness of its shareholder communication policy and believes it continues to enhance timely and transparent communication with shareholders[78]. Market Conditions and Challenges - The tourism market in Hong Kong saw a decline of over 90%, with only 605,000 overseas and Chinese tourists, significantly impacting hotel operations[14]. - The company faces challenges including rising interest expenses and increasing vacancy rates in commercial properties[8]. - The future outlook for hotel operations and rental income remains challenging and uncertain, with management focused on increasing revenue and controlling costs[17]. Environmental and Social Responsibility - The company has implemented various environmental measures to reduce carbon emissions and improve energy and water efficiency[122]. - The company established an Environmental, Social, and Governance (ESG) Committee in 2019 to manage and report on ESG performance and risks[54]. Investment and Acquisitions - The company plans to spend approximately HKD 50,000,000 to renovate the Ting Lan Hotel, which was acquired for HKD 1,420,695,000, and expects to commence operations in summer 2023[6]. - The acquisition of Ting Lan Hotel was made at approximately HKD 6,570 per square foot, with the hotel featuring 435 rooms and a total area of 216,314 square feet[14]. Audit and Risk Management - The audit committee held two meetings in 2022, with all members achieving a 100% attendance rate[53]. - The board confirmed the effectiveness of the group's risk management and internal control systems as of the report date[45]. - The group has established a risk management committee and an internal audit team to oversee risk and internal control processes[47].

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。 順豪控股有限公司 （於香港註冊成立之有限公司） （股份代號：253） 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 順豪控股有限公司（「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258,000,000港元（二零二一年：30,000,000港元），增加228,000,000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 附註 二零二二年 二零二一年 千港元 千港元 收入 3 客戶合約 462,692 346,416 租賃 149,953 167,993 股息收入 42 - 總收入 612,687 514,409 銷售成本 (32,731) (45,209) 其他服務成本 (199,435) (194,079) 物業、機器及設備之折舊 ...

Company Information [Directors and Company Particulars](index=2&type=section&id=Directors%20and%20Company%20Particulars) This section details Shun Ho Holdings Limited's key corporate information, including its board of directors, company secretary, auditor, and registered office - The Board of Directors comprises five executive directors, including Mr. Cheng Kai Man (Chairman), and three independent non-executive directors[2](index=2&type=chunk) - The company's registered office is located on the 3rd Floor, Shun Ho Tower, Ice House Street, Central, Hong Kong, with Deloitte Touche Tohmatsu as its auditor[2](index=2&type=chunk) Management Discussion and Analysis [Interim Results Overview](index=3&type=section&id=Interim%20Results%20Overview) Profit attributable to owners of the company significantly increased for the six months ended June 30, 2022, but no interim dividend is recommended due to the COVID-19 crisis and future investment needs Profit Attributable to Owners of the Company Comparison | Metric | As at June 30, 2022 for the six months ended (HKD) | As at June 30, 2021 for the six months ended (HKD) | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 31.00 million | 4.00 million | - The Board does not recommend distributing an interim dividend for the six months ended June 30, 2022, to safeguard the Group's reserves against pandemic impacts and support potential hotel acquisition projects[5](index=5&type=chunk) [Business Performance](index=3&type=section&id=Business%20Performance) The Group primarily engages in commercial property investment, leasing, development, and hotel investment and management, with hotel revenue significantly increasing while commercial property rental income slightly decreased [Hotel Business](index=3&type=section&id=Hotel%20Business) The hotel business segment experienced substantial revenue growth, largely driven by designated quarantine hotel operations in Hong Kong Hotel Business Revenue Comparison | Metric | As at June 30, 2022 for the six months ended (HKD) | As at June 30, 2021 for the six months ended (HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Hotel Business Revenue | 286.00 million | 145.00 million | +97% | Grand Hotel Group Key Financial Indicators Comparison | Metric | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Profit from Hotels | 126,031 | 373 | +33,688% | | Profit After Tax | 106,005 | 8,763 | +1,110% | - Grand Hotel Group's total revenue grew by **93%**, primarily because five of its six local hotels served as designated quarantine hotels, with four becoming 'Community Isolation Facility' hotels from February to May 2022[12](index=12&type=chunk) - The valuation of London's Royal Scot Hotel remained unchanged at **GBP 88.5 million**, with optimistic rental prospects as its rent increases are linked to the UK Retail Price Index, which reached a **40-year high of 12.3%** in July 2022[12](index=12&type=chunk) [Commercial Property Rental Income](index=5&type=section&id=Commercial%20Property%20Rental%20Income) Commercial property rental income saw a slight decrease, while administrative expenses increased due to new acquisition costs Commercial Property Rental Income Comparison | Metric | As at June 30, 2022 for the six months ended (HKD) | As at June 30, 2021 for the six months ended (HKD) | | :--- | :--- | :--- | | Commercial Property Rental Income | 77.00 million | 87.00 million | Administrative Expenses Comparison | Metric | As at June 30, 2022 for the six months ended (HKD) | As at June 30, 2021 for the six months ended (HKD) | | :--- | :--- | :--- | | Administrative Expenses (excluding depreciation) | 25.80 million | 20.60 million | - The increase in administrative expenses was primarily due to new acquisition costs incurred during the period[14](index=14&type=chunk) [Liquidity and Employees](index=5&type=section&id=Liquidity%20and%20Employees) Overall debt slightly increased, but the gearing ratio remained stable, while the total number of employees marginally decreased with remuneration based on market rates Overall Debt and Gearing Ratio Comparison | Metric | As at June 30, 2022 (HKD) | As at December 31, 2021 (HKD) | | :--- | :--- | :--- | | Overall Debt | 808.00 million | 784.00 million | | Gearing Ratio | 10% | 10% | - The increase in overall debt was due to new bank borrowings during the period[15](index=15&type=chunk) Number of Employees Comparison | Metric | As at June 30, 2022 | As at December 31, 2021 | | :--- | :--- | :--- | | Total Employees | 475 | 486 | [Key Business Achievements and Outlook](index=5&type=section&id=Key%20Business%20Achievements%20and%20Outlook) Hong Kong's tourism market was severely impacted by the pandemic, while the London Royal Scot Hotel shows optimistic rental prospects, and the Group is actively pursuing a luxury hotel renovation project in London - Hong Kong's tourism market was severely disrupted by COVID-19, with only **76,000** overseas and Chinese visitors, a year-on-year decrease of **99%**[16](index=16&type=chunk) - The London Wood Street Police Station headquarters has been approved for renovation into a luxury hotel with approximately **216** rooms, restaurants, bars, and other facilities; management is further applying to increase room numbers and preparing for renovation works[18](index=18&type=chunk) - Management believes that due to the ongoing impact of COVID-19, the likelihood of a large number of overseas and Chinese tourists returning to Hong Kong in the remainder of 2022 is low, and Hong Kong's hotel and retail sectors will continue to suffer from low occupancy rates and high operating costs[19](index=19&type=chunk) - The Group's six hotels in Hong Kong and Shanghai have signed short-term contracts with the government to operate as quarantine hotels, but it is expected that the government may shorten the quarantine period for inbound travelers, and hotels may resume competition with local hotels[19](index=19&type=chunk) [Significant Acquisitions, Disposals, and Major Investments](index=7&type=section&id=Significant%20Acquisitions,%20Disposals,%20and%20Major%20Investments) The Group plans to sell Grand City Hotel for HKD 900 million and acquire Rambler Crest Hotel for HKD 1.42 billion, expecting improved operational cost efficiency and long-term profit potential from the acquisition - The Group has agreed to sell Grand City Hotel for **HKD 900 million** (adjustable), which was approved by shareholders at the EGM but not yet completed as of the reporting date[21](index=21&type=chunk) - The Group has agreed to acquire Rambler Crest Hotel for **HKD 1.42 billion** (adjustable), which is subject to shareholder approval and not yet completed as of the reporting date[22](index=22&type=chunk) - The proceeds from the sale of Grand City Hotel will facilitate the acquisition of Rambler Crest Hotel, which is expected to significantly improve operational cost efficiency for this large hotel and offer long-term potential for increased operating profit and capital gains[22](index=22&type=chunk) [Purchase, Sale, or Redemption of Listed Securities](index=7&type=section&id=Purchase,%20Sale,%20or%20Redemption%20of%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2022 - Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2022[23](index=23&type=chunk) Directors' and Major Shareholders' Interests [Directors' Interests in Listed Securities](index=8&type=section&id=Directors'%20Interests%20in%20Listed%20Securities) As of June 30, 2022, Chairman Mr. Cheng Kai Man held a 74.40% equity interest in the Company and controlling interests in Shun Ho Property and Grand Hotel Group through his controlled entities Mr. Cheng Kai Man's Shareholding in the Company | Director Name | Capacity | Nature of Interest | Number of Shares/Relevant Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | 郑啓文 | Beneficial Owner and Interests of Corporations Controlled by Him | Individual and Corporate | 226,454,825 | 74.40% | Mr. Cheng Kai Man's Shareholding in Associated Corporations | Name of Associated Corporation | Capacity | Nature of Interest | Number of Shares/Relevant Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | 顺豪物业投资有限公司 | Beneficial Owner and Interests of Corporations Controlled by Him | Individual and Corporate | 385,395,999 | 66.48% | | 华大酒店投资有限公司 | Interests of Corporations Controlled by Him | Corporate | 6,360,585,437 | 71.09% | [Major Shareholders](index=10&type=section&id=Major%20Shareholders) As of June 30, 2022, Trillion Resources (BVI) was the ultimate holding company with a 71.20% equity interest, and Ms. Li Pui Ling was deemed to hold 74.40% due to her spouse Mr. Cheng Kai Man's interests Major Shareholders' Shareholding | Shareholder Name | Capacity | Number of Shares/Relevant Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Trillion Resources (BVI) | Beneficial Owner and Interests of Corporations Controlled by Him | 216,608,825 | 71.20% | | 李佩玲 | Spouse's Interest | 226,454,825 | 74.40% | Corporate Governance [Independent Review](index=11&type=section&id=Independent%20Review) The interim results for the six months ended June 30, 2022, were not audited but reviewed by Deloitte Touche Tohmatsu in accordance with HKSRS 2410 and by the Group's audit committee - The interim results for the six months ended June 30, 2022, were unaudited but reviewed by Deloitte Touche Tohmatsu in accordance with Hong Kong Standard on Review Engagements **2410** issued by the Hong Kong Institute of Certified Public Accountants[35](index=35&type=chunk) - The interim results and the 2022 interim report have been reviewed by the Group's audit committee[35](index=35&type=chunk) [Compliance with Corporate Governance Code](index=11&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with all code provisions of the Corporate Governance Code, with the exception of the Chairman and Chief Executive Officer roles being combined by Mr. Cheng Kai Man, which the Board believes provides strong leadership and cost savings - The Company complied with all code provisions of the Corporate Governance Code, with one deviation: code provision C.2.1 stipulates that the roles of Chairman and Chief Executive Officer should not be performed by the same individual, whereas Mr. Cheng Kai Man holds both positions in the Company[36](index=36&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive Officer provides robust and consistent leadership for the Company, facilitating effective strategic planning and implementation, and achieving significant cost savings[36](index=36&type=chunk) [Compliance with Model Code](index=12&type=section&id=Compliance%20with%20Model%20Code) The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the period - The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules, and all directors confirmed compliance with the standards stipulated in the Model Code during the period[38](index=38&type=chunk) Review Report on Condensed Consolidated Financial Statements Deloitte Touche Tohmatsu reviewed the condensed consolidated financial statements in accordance with HKSRS 2410 and found no material non-compliance with HKAS 34 - Deloitte Touche Tohmatsu reviewed the condensed consolidated financial statements in accordance with Hong Kong Standard on Review Engagements **2410**, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity,' issued by the Hong Kong Institute of Certified Public Accountants[41](index=41&type=chunk) - Based on the review, we have not become aware of any matter that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard **34**[42](index=42&type=chunk) Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss](index=14&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2022, the Company's revenue and profit for the period significantly increased, primarily due to a substantial rise in hotel services revenue, leading to a significant increase in basic earnings per share Key Data from Condensed Consolidated Statement of Profit or Loss | Metric | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Revenue | 363,594 | 232,345 | | Profit for the Period | 89,035 | 12,994 | | Profit Attributable to Owners of the Company | 31,150 | 4,293 | | Basic Earnings Per Share (HK cents) | 12.88 | 1.78 | - Revenue growth was primarily driven by customer contracts (hotel services) and rental income, with hotel services revenue increasing from **HKD 145,436 thousand** to **HKD 286,391 thousand**[43](index=43&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=15&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Despite a significant increase in profit for the period, total comprehensive expense for the period was negative due to exchange differences arising from the translation of foreign operations Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Profit for the Period | 89,035 | 12,994 | | Exchange Differences Arising from Translation of Foreign Operations | (131,077) | 20,034 | | Total Comprehensive (Expense) Income for the Period | (41,855) | 32,966 | | Total Comprehensive (Expense) Income Attributable to Owners of the Company | (19,495) | 11,777 | - Despite a significant increase in profit for the period, a large exchange difference (expense of **HKD 131,077 thousand**) arising from the translation of foreign operations resulted in the total comprehensive income for the period turning negative[49](index=49&type=chunk)[51](index=51&type=chunk) [Condensed Consolidated Statement of Financial Position](index=16&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2022, non-current assets slightly decreased, while current assets significantly grew from increased receivables and assets held for sale, expanding net current liabilities Key Data from Condensed Consolidated Statement of Financial Position | Metric | As at June 30, 2022 (HKD Thousand) | As at December 31, 2021 (HKD Thousand) | | :--- | :--- | :--- | | Non-current Assets | 8,346,658 | 8,766,717 | | Current Assets | 762,064 | 300,611 | | Current Liabilities | 978,791 | 882,391 | | Net Current Liabilities | (216,727) | (581,780) | | Equity Attributable to Owners of the Company | 4,022,262 | 4,036,257 | - Current assets significantly increased, primarily due to trade and other receivables rising from **HKD 11,961 thousand** to **HKD 58,342 thousand**, and new assets classified as held for sale totaling **HKD 380,526 thousand**[55](index=55&type=chunk) - Net current liabilities decreased from **HKD 581,780 thousand** at the beginning of the period to **HKD 216,727 thousand**, indicating an improvement in liquidity[57](index=57&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=18&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) The statement of changes in equity shows a negative total comprehensive expense attributable to owners of the Company, primarily influenced by changes in the exchange reserve - Changes in equity were primarily influenced by movements in the exchange reserve, resulting in a negative total comprehensive expense attributable to owners of the Company of **HKD 19,495 thousand**[52](index=52&type=chunk)[59](index=59&type=chunk) - The securities revaluation reserve includes a decrease of **HKD 12,252 thousand** in the value of securities attributable to the Group held by a former associate as at December 31, 2001, and a cumulative fair value loss of **HKD 1,530 thousand** on equity investments at fair value through other comprehensive income attributable to the Group[61](index=61&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Net cash from operating activities significantly increased, net cash used in investing activities was an outflow, and net cash from financing activities shifted to an inflow, leading to a substantial increase in cash and cash equivalents at period-end Key Data from Condensed Consolidated Statement of Cash Flows | Metric | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 211,634 | 114,674 | | Net Cash Used in Investing Activities | (184,868) | (441) | | Net Cash from (Used in) Financing Activities | 41,879 | (33,770) | | Net Increase in Cash and Cash Equivalents | 68,645 | 80,463 | | Cash and Cash Equivalents at End of Period | 312,444 | 260,395 | - Net cash from operating activities significantly increased, primarily benefiting from higher profit before tax and net impairment adjustments for investment properties at fair value[63](index=63&type=chunk) - Net cash used in investing activities significantly increased, mainly due to **HKD 142,070 thousand** paid for deposits for acquisition of a subsidiary and **HKD 49,500 thousand** for the purchase of investment properties[63](index=63&type=chunk) - Net cash from financing activities shifted from an outflow last year to an inflow, primarily due to new bank borrowings of **HKD 999,500 thousand**, offsetting bank loan repayments of **HKD 948,780 thousand**[65](index=65&type=chunk) Notes to the Condensed Consolidated Financial Statements [1. Basis of Preparation](index=22&type=section&id=1.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared on a going concern basis, despite current liabilities exceeding current assets, as management assesses sufficient financial resources, unused bank facilities, and ultimate holding company funding commitments - The condensed consolidated financial statements are prepared on a going concern basis, given that the Group's current liabilities exceeded its current assets by **HKD 216,727,000** as at June 30, 2022[70](index=70&type=chunk) - The Group possesses internal resources, unused bank facilities (totaling **HKD 2.12 billion**), and funding support commitments from its ultimate holding company, Trillion Resources Limited, to ensure fulfillment of financial obligations[70](index=70&type=chunk) - Management has conducted a going concern assessment, including the ongoing impact of COVID-19, and prepared cash flow forecasts and covenant calculations[70](index=70&type=chunk) [1A. Significant Events During the Interim Period](index=23&type=section&id=1A.%20Significant%20Events%20During%20the%20Interim%20Period) The COVID-19 pandemic and related restrictions negatively impacted the global economy and the Group's business, causing revenue and investment property fair value fluctuations, though participation in designated quarantine hotel schemes positively impacted revenue - The outbreak of COVID-19 and subsequent quarantine measures and travel restrictions implemented by various countries negatively impacted the global economy and business environment, directly or indirectly affecting the Group's operations, including fluctuations in revenue and fair value of investment properties[71](index=71&type=chunk) - During the interim period, six of the Group's hotels participated in the Designated Quarantine Hotel Scheme, and three also joined the Community Isolation Facility Hotel Scheme, which management believes will positively impact the Group's revenue[71](index=71&type=chunk) [2. Principal Accounting Policies](index=24&type=section&id=2.%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with investment properties and certain financial instruments measured at fair value. Amendments to HKFRS were first applied this period but had no significant impact on financial position or performance - The condensed consolidated financial statements are prepared on a historical cost basis, except for investment properties and certain financial instruments measured at fair value (where applicable)[73](index=73&type=chunk) - The application of amendments to Hong Kong Financial Reporting Standards during the period had no significant impact on the financial position and performance and/or disclosures in the Group's condensed consolidated financial statements for the current and prior periods[74](index=74&type=chunk) [3. Revenue](index=25&type=section&id=3.%20Revenue) Total Group revenue significantly increased, primarily driven by operating hotel revenue, with room rental and ancillary services being the largest contributors. Hong Kong contributed the vast majority of hotel services revenue Revenue Composition Comparison | Revenue Source | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Operating Hotel Revenue | 286,391 | 145,436 | | Property Rental Income | 77,161 | 86,909 | | Dividend Income | 42 | – | | **Total Revenue** | **363,594** | **232,345** | Hotel Services Revenue Breakdown | Type of Goods or Services | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Room Rental Income and Other Ancillary Services | 264,179 | 144,204 | | Food and Beverages | 22,212 | 1,232 | - Hong Kong contributed **HKD 276,521 thousand** in hotel services revenue, significantly exceeding Mainland China's **HKD 9,870 thousand**[78](index=78&type=chunk) [4. Segment Information](index=26&type=section&id=4.%20Segment%20Information) The Group reports by hotel services, property investment, and securities investment segments. Hotel services revenue and performance significantly increased, while property investment revenue and performance declined. Grand City Hotel's assets and liabilities are classified as held for sale Segment Revenue and Performance Comparison | Segment | H1 2022 Revenue (HKD Thousand) | H1 2021 Revenue (HKD Thousand) | H1 2022 Performance (HKD Thousand) | H1 2021 Performance (HKD Thousand) | | :--- | :--- | :--- | :--- | :--- | | Hotel Services | 286,391 | 145,436 | 125,953 | 1,574 | | Property Investment | 77,161 | 86,909 | 22,682 | 52,010 | | Securities Investment | 42 | – | 42 | – | - Hotel services segment performance significantly increased from **HKD 1,574 thousand** to **HKD 125,953 thousand**, primarily benefiting from the significant contributions of Ramada Hong Kong Harbour View and Grand View Hotel Causeway Bay[82](index=82&type=chunk) - The respective segment assets and liabilities of Grand City Hotel are presented in the condensed consolidated statement of financial position as assets classified as held for sale and liabilities associated with assets classified as held for sale[88](index=88&type=chunk) [5. Finance Costs](index=30&type=section&id=5.%20Finance%20Costs) Finance costs, primarily comprising interest on bank borrowings and amounts due to the ultimate holding company, slightly increased during the period Finance Costs Composition Comparison | Cost Source | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 4,825 | 3,949 | | Interest on Amounts Due to Ultimate Holding Company | 820 | 1,104 | | **Total Finance Costs** | **5,645** | **5,053** | [6. Income Tax Expense](index=30&type=section&id=6.%20Income%20Tax%20Expense) Income tax expense significantly increased, mainly due to a substantial rise in current tax in Hong Kong and an increase in deferred tax Income Tax Expense Composition Comparison | Tax Source | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Hong Kong Current Tax | 24,501 | 8,774 | | China Current Tax | 209 | – | | UK Current Tax | 3,108 | 4,029 | | Deferred Tax | 4,006 | 1,765 | | **Total Income Tax Expense** | **31,784** | **14,826** | - 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[98](index=98&type=chunk) [7. Profit for the Period](index=31&type=section&id=7.%20Profit%20for%20the%20Period) Profit for the period is stated after deducting or including depreciation expenses, interest income from bank deposits, and loss (gain) on disposal of property Profit for the Period Adjustment Items | Item | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Depreciation of Right-of-Use Assets | 419 | 427 | | Depreciation of Property, Plant and Equipment | 53,275 | 52,840 | | Interest Income from Bank Deposits | (204) | (136) | | Loss (Gain) on Disposal of Property, Plant and Equipment | 449 | (709) | [8. Dividends](index=31&type=section&id=8.%20Dividends) No dividends were declared or paid during the reporting period or the prior year. The Board resolved not to declare or recommend an interim dividend for the current period - No dividends were declared or paid to shareholders for the six months ended June 30, 2022 and 2021, nor for the years ended December 31, 2021 and 2020[100](index=100&type=chunk) - The Board resolved not to declare or recommend an interim dividend for the six months ended June 30, 2022 and 2021[100](index=100&type=chunk) [9. Earnings Per Share](index=32&type=section&id=9.%20Earnings%20Per%20Share) Basic earnings per share significantly increased, calculated based on profit attributable to owners of the Company and the number of shares in issue. No diluted earnings per share are presented for the current or prior period due to the absence of potential ordinary shares Basic Earnings Per Share Comparison | Metric | As at June 30, 2022 for the six months ended | As at June 30, 2021 for the six months ended | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company (HKD) | 31.15 million | 4.29 million | | Number of Shares in Issue (Shares) | 241,766,000 | 241,766,000 | | Basic Earnings Per Share (HK cents) | 12.88 | 1.78 | - The number of shares adopted in calculating earnings per share excludes shares of the Company held by a subsidiary[102](index=102&type=chunk) [10. Property, Plant and Equipment](index=32&type=section&id=10.%20Property,%20Plant%20and%20Equipment) During the reporting period, the Group's additions to property, plant and equipment decreased, and some property was disposed of Property, Plant and Equipment Changes | Item | As at June 30, 2022 for the six months ended (HKD) | As at June 30, 2021 for the six months ended (HKD) | | :--- | :--- | :--- | | Additions | 6.27 million | 7.40 million | | Disposals (carrying amount) | 638,000 | 1.34 million | [11. Investment Properties](index=32&type=section&id=11.%20Investment%20Properties) Investment properties are stated at fair value, with a loss arising from fair value changes during the period. Valuation is based on the income approach, considering term yields, reversionary yields, and market rents - Investment properties are stated at fair value based on valuations performed by independent professional valuers and the Company's directors, with the fair value assessed using the income approach to determine the market value of investment properties[104](index=104&type=chunk) Loss from Fair Value Changes of Investment Properties | Metric | As at June 30, 2022 for the six months ended (HKD) | As at June 30, 2021 for the six months ended (HKD) | | :--- | :--- | :--- | | Loss from Fair Value Changes | 53.70 million | 34.47 million | - The income approach considers current rents from existing leases and market levels of future reversionary income, capitalizing rents for fully leased properties to estimate their value on an open market basis[105](index=105&type=chunk) [12. Trade and Other Receivables](index=33&type=section&id=12.%20Trade%20and%20Other%20Receivables) Trade and other receivables significantly increased, primarily driven by trade receivables from customer contracts. The Group typically grants 30 to 60 days credit to hotel travel agents and certain customers Trade and Other Receivables Comparison | Item | As at June 30, 2022 (HKD Thousand) | As at December 31, 2021 (HKD Thousand) | | :--- | :--- | :--- | | Trade Receivables (from customer contracts) | 48,307 | 4,660 | | Lease Receivables | 2,434 | 3,073 | | Other Receivables | 7,601 | 4,228 | | **Total** | **58,342** | **11,961** | - Except for credit terms of **30 to 60 days** granted to hotel travel agents and certain customers, the Group does not grant any credit period to customers[109](index=109&type=chunk) [13. Deposits Paid for Acquisition of a Subsidiary](index=34&type=section&id=13.%20Deposits%20Paid%20for%20Acquisition%20of%20a%20Subsidiary) The Group paid an initial deposit of HKD 142.07 million for the acquisition of the entire issued share capital and related indebtedness of Haili Investment Limited - On May 11, 2022, an indirect wholly-owned subsidiary of the Group entered into a sale and purchase agreement with an independent third party of the Group to acquire the entire issued share capital of Haili Investment Limited and accept the assignment of the sale loan, being the total outstanding loan of Haili, for a consideration of **HKD 1.42 billion**, with an initial deposit of **HKD 142.07 million** paid[111](index=111&type=chunk) [14. Assets Classified as Held for Sale / Liabilities Associated with Assets Classified as Held for Sale](index=34&type=section&id=14.%20Assets%20Classified%20as%20Held%20for%20Sale%20/%20Liabilities%20Associated%20with%20Assets%20Classified%20as%20Held%20for%20Sale) The assets and liabilities of Grand City Hotel have been resolved by the Board for sale and classified as a disposal group held for sale, expected to be completed within twelve months - On May 11, 2022, the Company's directors resolved to dispose of the Group's subsidiary, Wah Choi Investment Limited (which holds a hotel named Grand City Hotel), and the assets and liabilities attributable to this subsidiary are expected to be sold within **twelve months**, thus classified as a disposal group held for sale[112](index=112&type=chunk) Assets and Liabilities Classified as Held for Sale | Item | As at June 30, 2022 (HKD Thousand) | | :--- | :--- | | Property, Plant and Equipment | 373,561 | | Bank Balances and Cash | 5,191 | | **Total Assets Classified as Held for Sale** | **380,526** | | Trade and Other Payables and Accruals | 1,524 | | Contract Liabilities | 5,147 | | **Total Liabilities Associated with Assets Classified as Held for Sale** | **8,371** | [15. Trade and Other Payables and Accruals](index=35&type=section&id=15.%20Trade%20and%20Other%20Payables%20and%20Accruals) Trade and other payables and accruals slightly decreased, primarily driven by a reduction in other payables and accruals Trade and Other Payables and Accruals Comparison | Item | As at June 30, 2022 (HKD Thousand) | As at December 31, 2021 (HKD Thousand) | | :--- | :--- | :--- | | Trade Payables | 4,814 | 5,351 | | Other Payables and Accruals | 33,221 | 35,490 | | **Total** | **38,035** | **40,841** | - An aging analysis of trade payables shows that the vast majority of amounts (**HKD 4,756 thousand**) are within **0-30 days**[115](index=115&type=chunk) [16. Bank Borrowings](index=36&type=section&id=16.%20Bank%20Borrowings) Total bank borrowings slightly increased, with all loans being floating-rate and secured by certain Group assets Total Bank Borrowings Comparison | Metric | As at June 30, 2022 (HKD Thousand) | As at December 31, 2021 (HKD Thousand) | | :--- | :--- | :--- | | Secured Bank Borrowings | 765,297 | 738,408 | - All of the Group's bank borrowings are floating-rate loans, with an effective annual interest rate of **1.28%** (December 31, 2021: **1.29%**)[119](index=119&type=chunk) - Bank borrowings are secured by certain assets of the Group, including investment properties, hotel properties, pledged shares of certain subsidiaries, assignments of property rental income, and assignments of insurance policies for certain hotel properties[135](index=135&type=chunk) [17. Share Capital](index=37&type=section&id=17.%20Share%20Capital) At the end of the reporting period, the number and amount of ordinary