Financial Performance - For the six months ended June 30, 2023, the company's revenue was approximately HKD 181.8 million, a decrease of 1% compared to HKD 184.5 million for the same period in 2022[6]. - The net profit for the period was HKD 2,535,000, a significant decline of 96.9% compared to HKD 82,587,000 in the same period last year[40]. - Total comprehensive income for the period was HKD 3,572,000, down 96.1% from HKD 91,797,000 year-on-year[42]. - The gross profit for the same period was HKD 92,238,000, representing an increase of 4.9% from HKD 88,045,000 in the previous year[40]. - The operating profit increased to HKD 132,105,000, up 27% from HKD 104,161,000 in the prior year[40]. - The company reported a significant increase in fair value gains from investment properties amounting to HKD 74,303,000 for the period[40]. - The company reported a net profit of HKD 2,535,000 for the first half of 2023, a significant decrease from HKD 82,587,000 in the same period last year[55]. - The total revenue for the six months ended June 30, 2023, was HKD 181,799,000, a decrease of 1% from HKD 184,492,000 in the same period of 2022[53]. Asset Management and Investment - The income from asset management services during the period was approximately HKD 109.6 million, an increase from HKD 103.6 million for the same period in 2022[8]. - The segment profit from asset management services increased to approximately HKD 31.7 million, up from HKD 18.3 million in the same period last year[8]. - The company continues to provide asset management services to Vanke Hong Kong and its subsidiaries, with management fees calculated at 1.25% for projects in the UK and the US, and 1.8% for projects in Hong Kong[8]. - The fair value of the company's investment in the Regal Center was approximately HKD 2,046.8 million as of June 30, 2023, compared to HKD 1,994.3 million as of December 31, 2022[7]. - The average rent for the Regal Center was HKD 9.5 per square foot, slightly up from HKD 9.4 per square foot in the previous year[9]. - Total income from leasing units and parking spaces in the Regal Center was approximately HKD 48.8 million, down from HKD 49.5 million for the same period in 2022[9]. - The company has plans to continue exploring new investment opportunities both locally and overseas to diversify and expand its business[33]. Financial Position - As of June 30, 2023, the group's total equity attributable to shareholders was approximately HKD 4.27 billion, a slight decrease from HKD 4.30 billion as of December 31, 2022[20]. - The company's total equity decreased to HKD 4,270,456,000 as of June 30, 2023, down 0.7% from HKD 4,301,942,000 at the end of 2022[45]. - The group's interest-bearing bank and other borrowings were approximately HKD 622.4 million as of June 30, 2023, down from HKD 657.7 million as of December 31, 2022, primarily due to loan repayments[20]. - The debt-to-equity ratio as of June 30, 2023, was 14.6%, a slight decrease from 15.3% as of December 31, 2022[22]. - The group had cash and bank balances of approximately HKD 546.2 million as of June 30, 2023, down from HKD 585.1 million as of December 31, 2022[23]. - The company's non-current assets increased to HKD 3,491,498,000 as of June 30, 2023, compared to HKD 3,638,152,000 at the end of 2022, reflecting a decrease of 4.0%[44]. - Current assets rose to HKD 1,846,616,000, up 7.4% from HKD 1,719,513,000 at the end of 2022[44]. Expenses and Liabilities - The total expenses for the period included salaries and wages amounting to HKD 63,631,000, slightly up from HKD 62,775,000[56]. - Financing costs rose to HKD 19,570,000, compared to HKD 14,108,000 in the previous year, marking an increase of 38%[56]. - The company's total liabilities decreased to HKD 666,000,000 as of June 30, 2023, down from HKD 697,529,000 at the end of 2022, indicating a reduction of 4.5%[44]. - The total liabilities as of June 30, 2023, were HKD 343,798,000, slightly up from HKD 335,066,000 at the end of 2022[70]. Market Outlook - The company anticipates that the real estate market will face pressure in the second half of 2023 due to rising interest rates and cautious buyer sentiment[32]. - The company expects stable rental rates and occupancy for its investment property, Regal Center, in the second half of 2023[33]. Corporate Governance - The company has adhered to the corporate governance code as stipulated in the listing rules throughout the reporting period[80]. - There were no significant changes in the board of directors' information that required disclosure since the last annual report[83]. - The company has not established any share option schemes during the reporting period[88]. - The company has not engaged in any share buybacks or redemptions during the reporting period[82]. Shareholder Information - Vanke holds 292,145,949 shares, representing 75.0% of the total equity[89]. - CITIC Securities holds 30,080,000 shares, representing 7.72% of the total equity[89].

Financial Performance - The company reported a profit attributable to shareholders of approximately HKD 28,200,000 for the year, a decrease of about 93% compared to HKD 424,600,000 in the previous year[10]. - The decline in profit was primarily due to the absence of one-time termination fees from tenants in California, which contributed approximately HKD 163,000,000 to the previous year's earnings[10]. - The company recorded a segment profit of approximately HKD 78,900,000 before fair value changes of investment properties, representing a 1% increase from HKD 77,900,000 in the previous year[15]. - The company incurred a loss of HKD 67,000,000 from the Mission Street group, a significant decrease from a profit of HKD 95,900,000 in the previous year[17]. - Revenue from the investment tool related to Park Row was approximately HKD 51,400,000, a decrease of about 41% from HKD 87,600,000 in the previous year[18]. - The profit from the asset management segment decreased to approximately HKD 38.3 million from HKD 75.3 million in the previous year, attributed to increased operating expenses and reduced capital investment in related projects[53]. - The group completed the sale of Ryder Court, valued at GBP 132 million, on January 28, 2022, resulting in a significant decrease in rental income from this property to approximately HKD 3.3 million from HKD 46.1 million in the previous year[26][54]. - The company's return on equity decreased to 0.7% in 2022, down from 10.3% in 2021, primarily due to the sale of Ryder Court and reduced contributions from Mission Street Group[123]. Revenue and Rental Income - Total rental income and parking revenue for the year amounted to approximately HKD 98.1 million, slightly down from HKD 98.7 million in the previous year[29]. - The average rental rate at the Regal Center remained stable, reflecting the company's commitment to providing stable returns to shareholders[41]. - The average rental price at the Regal Center remained stable at HKD 9.5 per square foot for both 2021 and 2022, compared to HKD 9.7 in 2018 and HKD 10.0 in 2019[104]. - The average rental income from Ryder Court is no longer relevant for measuring the company's performance since it ceased contributing to revenue from January 29, 2022[73]. Capital Expenditure and Financing - The company has undertaken capital expenditure contracts amounting to HKD 98,300,000 for the development of the Spring Street property as of December 31, 2022[2]. - As of December 31, 2022, the company had bank financing of HKD 1,000,000,000, of which HKD 646,400,000 had been drawn down[2]. - The group’s interest-bearing bank and other borrowings as of December 31, 2022, were approximately HKD 657.7 million, down from HKD 1,265.7 million in the previous year, mainly due to the sale of assets[59]. - The group’s cash and bank balances as of December 31, 2022, were HKD 585.1 million, a decrease from HKD 811.9 million in the previous year[60]. - The company entered into a financing agreement for a term loan of HKD 1,000,000,000 with a bank, which is for a period of 12 months with options for up to four consecutive 12-month extensions[182]. Property Management and Development - The company continues to hold interests in several properties in Hong Kong, San Francisco, and New York, including units and parking spaces in the Regal Center[12]. - The company is involved in various property development projects, including the TW6 project and the development of the Spring Street property[16]. - The occupancy rate of the Regal Center was maintained at 96% in 2022, consistent with the previous years from 2018 to 2021[99]. - The occupancy rate of the Regal Center has shown a declining trend over the past five years, with a peak of 99% in 2018 and a drop to 95% in 2022[62]. - The service cost to revenue ratio for the Regal Center increased from 25.1% in 2021 to 27.9% in 2022, indicating a decline in operational efficiency[76]. - The asset management service cost to revenue ratio rose significantly from 66.9% in 2021 to 80.6% in 2022, reflecting increased costs in that segment[76]. - The group has property development and investment projects in Hong Kong and the United States[168]. - The group has established joint venture arrangements for acquiring property development projects in Hong Kong and the U.S.[168]. Shareholder and Dividend Information - The total distributable reserves as of December 31, 2022, amounted to HKD 1,758,214,000, an increase from HKD 1,622,079,000 in 2021[115]. - The board proposed a final dividend of HKD 0.09 per share for the year ended December 31, 2022, totaling approximately HKD 35,058,000, unchanged from the previous year[111]. - The board recommends a final dividend of HKD 0.09 per share, consistent with the previous year[127]. - The major shareholder, Vanke, holds 292,145,949 shares, representing 75.0% of the equity[162]. Corporate Governance and Compliance - The company did not engage in any significant investments or acquisitions during the year, aside from previously disclosed transactions[93]. - The company did not report any major changes in its capital structure during the year[113]. - The company has no knowledge of any significant contracts with directors that could create a conflict of interest[142]. - The company’s public shareholding percentage complies with the listing rules as of the last practicable date before the report was published[139]. - The group’s financial statements for the year ended December 31, 2022, were audited and presented to the board[129]. Environmental and Social Responsibility - The company emphasizes environmental policies, encouraging tenants to adopt eco-friendly practices to minimize resource consumption[70]. - The company is committed to using energy-efficient equipment in its properties and offices as part of its sustainability initiatives[91]. - The group made charitable donations of HKD 34,000 during the year, down from HKD 78,000 in the previous year[131]. - The company expressed gratitude to employees for their efforts during the challenging year due to the pandemic[107]. Future Outlook - The company is optimistic about the long-term development of the Hong Kong property market and intends to develop Lianfang I into a residential project[196].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不會就因本公 告全部或任何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何 責任。 萬 科 海 外 投 資 控 股 有 限 公 司 VANKE OVERSEAS INVESTMENT HOLDING COMPANY LIMITED （於開曼群島註冊成立之有限公司） （股份代號：01036） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 業 績 公 告 業績 萬科海外投資控股有限公司（「本公司」，連同其附屬公司統稱「本集團」）董事會 （「董事會」）欣然公佈本集團截至二零二二年十二月三十一日止年度之綜合業 績如下： 綜合損益表 截至二零二二年十二月三十一日止年度 二零二二年 二零二一年 附註 港幣千元 港幣千元 收入 3 353,228 461,205 服務成本 (189,180) (182,434) 毛利 164,048 278,771 其他收入 4 1,488 753 出售一間附屬公司之收益 18 38,384 – 行政及其他經營開支 (81,937) (65 ...

Financial Performance - For the six months ended June 30, 2022, the company's revenue was approximately HKD 184.5 million, a decrease of 20% compared to HKD 230.7 million for the same period in 2021[13]. - Gross profit for the same period was HKD 88,045,000, down 40% from HKD 147,341,000 year-on-year[49]. - Operating profit decreased to HKD 104,161,000, a decline of 42% from HKD 180,427,000 in the previous year[49]. - Net profit for the period was HKD 82,587,000, representing a significant drop of 70% compared to HKD 271,566,000 in the prior year[49]. - Earnings per share (basic and diluted) were HKD 0.21, down from HKD 0.70 in the same period last year[49]. - Total comprehensive income for the period was HKD 91,797,000, compared to HKD 270,798,000 in the previous year, reflecting a decrease of 66%[52]. - The group's profit before tax for the six months was HKD 111,713,000, compared to HKD 282,526,000 for the same period last year, indicating a significant decline[70]. - The company reported a profit of HKD 82,587 for the six months ended June 30, 2022, down from HKD 271,539 for the same period in 2021, representing a decrease of approximately 69.5%[59]. Revenue Sources - The income from asset management services during the period was approximately HKD 103.6 million, down from HKD 114.8 million in the same period of 2021[15]. - Asset management fee income decreased to HKD 103,557,000 from HKD 114,797,000, representing a decline of 10%[67]. - Rental income from investment properties was HKD 44,799,000, down 29% from HKD 63,527,000 in the prior year[67]. - Interest income from investment instruments fell to HKD 27,905,000 from HKD 44,326,000, a decrease of 37%[67]. - Property management fee income was HKD 8,231,000, up from HKD 8,057,000 in the previous year, reflecting a growth of 2%[67]. Asset Management and Investments - The company acquired Enigma Company Limited for HKD 848.7 million, with plans to develop the acquired property into a residential project expected to contribute revenue in the second half of 2024[10]. - The company completed the sale of its entire equity interest in Ryder Court, valued at GBP 132 million, on January 28, 2022[9]. - The company holds a 45% equity interest in the Mission property in San Francisco[11]. - The company recognized a share of profit from joint ventures of approximately HKD 29,200,000, significantly up from HKD 1,400,000 for the six months ended June 30, 2021, due to the reversal of previously over-provided construction costs[20]. - The total investment in joint ventures, including Ultimate Vantage and Goldwin, was approximately HKD 194,500,000 as of June 30, 2022, up from HKD 173,500,000 as of December 31, 2021[20]. Financial Position - The total equity attributable to shareholders was approximately HKD 4,356,900,000 as of June 30, 2022, an increase from HKD 4,299,900,000 as of December 31, 2021[28]. - The company’s interest-bearing bank and other borrowings were approximately HKD 661,200,000 as of June 30, 2022, down from HKD 1,265,700,000 as of December 31, 2021, primarily due to asset sales[28]. - Total liabilities decreased significantly to HKD 1,025,633,000 from HKD 1,651,044,000, showing improved financial stability[55]. - The net assets attributable to joint ventures decreased to HKD 351,614,000 as of June 30, 2022, from HKD 401,788,000 at the end of 2021[81]. - The company reported a current portion of accounts receivable of HKD 167,910,000 as of June 30, 2022, compared to HKD 223,203,000 at the end of 2021[86]. Cash Flow and Investments - The net cash generated from operating activities for the six months ended June 30, 2022, was HKD 134,919, compared to HKD 126,516 for the same period in 2021, reflecting an increase of about 6.3%[62]. - The net cash used in investing activities for the six months ended June 30, 2022, was HKD 164,943, compared to HKD 11,980 in the previous year, indicating a substantial increase in cash outflow for investments[62]. - The company incurred a payment of HKD 805,445 for the acquisition of subsidiaries, compared to HKD 1,855 in the previous year, indicating a significant increase in investment activity[62]. - The group has capital expenditure commitments of HKD 258,600,000 for the development of properties as of June 30, 2022, down from HKD 280,100,000 as of December 31, 2021[34]. Corporate Governance and Shareholder Information - The company has complied with the corporate governance code throughout the reporting period[113]. - Major shareholder Vanke holds 292,145,949 shares, representing 75.0% of the equity[124]. - The company did not recommend the payment of an interim dividend for the period, consistent with no dividends declared for the same period in 2021[78]. - The company approved a final dividend of HKD 35,058 for the previous year, which was paid out during the reporting period[59]. - The company reported a dividend payable of HKD 35,058,000 as of June 30, 2022, compared to no dividends payable as of December 31, 2021[90].

Financial Performance - Vanke Overseas Investment Holdings Limited reported a significant increase in revenue, achieving a total of 1.2 billion HKD for the fiscal year, representing a 15% year-over-year growth[6]. - The company reported a profit attributable to shareholders of approximately HKD 424.6 million for the fiscal year 2021, representing a growth of about 129% compared to HKD 185.7 million in 2020[18]. - The company's revenue for the year was approximately HKD 461,200,000, a decrease of about 3% compared to HKD 474,500,000 in the previous year[23]. - The income from asset management services was approximately HKD 228,700,000, a decrease from HKD 237,300,000 in the previous year, with segment profit dropping to about HKD 75,300,000 from HKD 90,300,000[25]. - The fair value gain for the year was approximately HKD 191,300,000, compared to a fair value loss of HKD 56,200,000 in the previous year[24]. - The company has established a new management service framework agreement effective from October 30, 2020, to enhance asset management capabilities in Hong Kong, the UK, and the USA[19]. - The group generated revenue of approximately HKD 228,700,000 under the new management service framework agreement for the year ended December 31, 2021[144]. Market Expansion and Strategy - Vanke has outlined a positive outlook for the upcoming year, projecting a revenue growth of 10-12% driven by new project launches and market expansion strategies[6]. - Vanke is pursuing market expansion in Southeast Asia, with plans to enter three new countries by the end of the next fiscal year, targeting a market share increase of 5% in these regions[6]. - The company has completed a strategic acquisition of a local real estate firm for 300 million HKD, which is expected to enhance its market presence and operational capabilities[6]. - The company completed the acquisition of Enigma Company Limited, which indirectly holds properties in Hong Kong, on January 31, 2022, with plans to develop these into residential projects[22]. - The board believes that the acquisition of Enigma represents an attractive investment opportunity, crucial for expanding the property portfolio and revenue base in a competitive environment[140]. Operational Efficiency - Vanke has implemented new strategies to improve operational efficiency, aiming for a 10% reduction in operational costs over the next year[6]. - The company reported a net profit margin of 18%, reflecting improved cost management and operational efficiencies compared to the previous year[6]. - The service cost to revenue ratio for Regal Centre increased to 25.1% in 2021 from 21.6% in 2020, attributed to rising direct operating expenses and declining revenue[61]. - Ryder Court's service cost to revenue ratio rose to 9.9% in 2021 from 1.6% in 2020, due to costs associated with vacant areas and decreased revenue[61]. Financial Health and Assets - Vanke's total assets have increased to 5 billion HKD, marking a 12% increase from the previous fiscal year, indicating strong financial health[6]. - As of December 31, 2021, the company's equity attributable to shareholders was approximately HKD 4,299,900,000, an increase from HKD 3,911,500,000 as of December 31, 2020, reflecting a net increase of HKD 423,500,000 after dividend payments of HKD 35,100,000[37]. - The group's interest-bearing bank and other borrowings amounted to approximately HKD 1,265,700,000 as of December 31, 2021, down from HKD 1,301,700,000 as of December 31, 2020, primarily due to loan repayments and depreciation of GBP against HKD[37]. - The debt-to-equity ratio as of December 31, 2021, was 29.4%, a decrease from 33.3% as of December 31, 2020, while the net debt-to-equity ratio was 10.6%, down from 17.7%[38]. Employee and Management - The employee turnover rate for the company in 2021 was 22%, up from 16% in 2020, indicating a significant increase in staff attrition[93]. - The average employee tenure as of December 31, 2021, was 1.8 years, compared to 1.3 years in 2020, suggesting a decrease in employee retention[93]. - The group had 105 employees as of December 31, 2021, an increase from 96 employees in 2020, leading to a significant rise in employee costs to approximately HKD 131 million from HKD 111 million in 2020[95]. - The remuneration committee held two meetings during the year ended December 31, 2021, to review the remuneration policies for all directors and senior management[184]. Corporate Governance - The company has complied with the corporate governance code as stipulated in the listing rules throughout the year ended December 31, 2021[155]. - The board of directors consists of four executive directors and three independent non-executive directors as of the report date[157]. - The independent non-executive directors provide sufficient checks and balances to protect the interests of shareholders and the group[164]. - The company has established measurable goals to achieve board diversity, which are discussed and approved annually by the Nomination Committee[190]. Risk Management - The company has a risk management system in place to monitor and mitigate key risks, including reputation and compliance risks[83]. - The management regularly assesses major risks and presents evaluations to the Audit Committee, along with action plans for identified deficiencies[198]. - The company has implemented a risk management and internal control system, which is reviewed at least annually by the board[196]. Environmental and Social Responsibility - The company is committed to environmental policies, aiming to improve resource efficiency and reduce emissions during operations[85]. - The company has not identified any significant environmental regulations that could adversely affect its property leasing and management operations[86]. - The company made charitable donations of HKD 78,000 during the year, down from HKD 158,000 in 2020[109].

vanke 萬科海外投資控股有限公司 (於開曼群島註冊成立之有限公司) (股份代號：01036) 110 N 韓最 截至二零二一年六月三十日止六個月 公司資料 | --- | --- | --- | |---------------------------------------------|--------------------|-----------------------------------------------------| | | | | | 董事會 | 公司秘書 | | | 執行董事 | 葉凱雯 | | | 張旭 （主席） | | | | 闕東武 （首席執行官） | 核數師 | | | 李凱彥 | 畢馬威會計師事務所 | | | 周悅 | | （根據財務匯報局條例註冊之公眾利益實體核數師） | | （自二零二一年五月二十六日起獲委任） | | | | 非執行董事 | | 本公司之法律顧問 （香港法例） | | 陳志裕 | 禮德齊伯禮律師行 | Maples and Calder (Hong Kong) LLP （開曼群島法例） | | （自二零二一年五月二十六日起辭任） | | | | | ...

[Company Information](index=2&type=section&id=Company%20Information) This section provides fundamental company details, including board composition, key committees, and essential contact information - The company's board of directors includes executive directors such as Chairman Zhang Xu and CEO Que Dongwu, as well as non-executive and independent non-executive directors[5](index=5&type=chunk) - KPMG is the company's auditor, with Reed Smith Richards Butler and Maples and Calder (Hong Kong) LLP serving as legal advisors[5](index=5&type=chunk) - The company's principal place of business is located at 55/F, Bank of China Tower, 1 Garden Road, Central, Hong Kong[5](index=5&type=chunk) [Management Discussion and Analysis](index=3&type=section&id=Management%20Discussion%20and%20Analysis) This chapter reviews the company's business performance, financial position, and future outlook for the six months ended June 30, 2020, noting significant revenue growth and stable financial health [Business Review](index=3&type=section&id=Business%20Review) The Group's revenue significantly increased by 356% to HKD 233.2 million, driven by property rentals, investment tool interest, and asset management services, with related profit growing 222% [Property Investment](index=3&type=section&id=Property%20Investment) Property investments, including Regent Centre and Ryder Court, maintained high occupancy and increased rental income, with segment profit growing despite fair value losses from exchange adjustments Property Investment Key Metrics | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Revenue | HKD 233.2 million | HKD 51.1 million | 356% increase | 7 | | Related Profit (excluding fair value changes and share of associates' results) | HKD 99.0 million | HKD 30.7 million | 222% increase | 8 | | Fair Value Loss on Investment Properties | HKD 27.7 million | HKD 32.6 million (gain) | Turned from gain to loss | 8 | | Regent Centre Occupancy Rate | 97% | 98% | 1% decrease | 9 | | Regent Centre Average Rent | HKD 10.0 per sq ft | HKD 9.9 per sq ft | Slight increase | 9 | | Regent Centre Rental Income | HKD 51.4 million | HKD 51.1 million | Slight increase | 9 | | Ryder Court Rental Income | HKD 24.8 million | N/A | New contribution | 10 | | Property Investment Segment Profit (before fair value changes) | HKD 63.8 million | HKD 40.0 million | 60% increase | 10 | - The fair value of Ryder Court investment decreased from **HKD 1,149.5 million** as of December 31, 2019, to **HKD 1,045.7 million** as of June 30, 2020[8](index=8&type=chunk) [Property Development](index=4&type=section&id=Property%20Development) Property development projects, including TW6, Mission Street, Park Row, and Chun Yeung Street, show varied progress with most TW6 units sold, Mission Street under renovation, and Park Row generating interest income - Over **99%** of units in the TW6 project (The Pavilia Farm) have been sold, generating approximately **HKD 10.1 billion** in total proceeds, with most units delivered to buyers[12](index=12&type=chunk) Property Development Key Metrics | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Share of TW6 Associate's Results | Loss of HKD 1.1 million | Profit of HKD 14.5 million | Turned from profit to loss | 13 | | Share of Mission Street Group Loss | HKD 15.4 million | N/A | New loss incurred | 14 | | Investment Tool Income (Park Row) | HKD 42.6 million | N/A | New contribution | 14 | | Property Development Segment Profit | HKD 28.8 million | HKD 18.0 million | 60% increase | 16 | - The Mission Street property is expected to generate revenue starting in **2021**, and the Chun Yeung Street property is anticipated to be completed in **2022**[14](index=14&type=chunk)[16](index=16&type=chunk) [Asset Management](index=5&type=section&id=Asset%20Management) The Group commenced asset management services for Vanke Hong Kong and its subsidiaries in late 2019, generating significant revenue and profit with a 1.25% annual service fee Asset Management Key Metrics | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Asset Management Service Revenue | HKD 114.4 million | N/A | New contribution | 17 | | Asset Management Service Segment Profit | HKD 38.5 million | N/A | New contribution | 18 | - Service fees are calculated at **1.25% per annum** of the total invested capital by Vanke Hong Kong contracting parties in relevant projects[17](index=17&type=chunk) [Head Office and Corporate Expenses](index=5&type=section&id=Head%20Office%20and%20Corporate%20Expenses) Head office and corporate expenses significantly decreased, mainly due to the absence of prior period's acquisition-related legal and professional fees Head Office and Corporate Expenses | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Head Office and Corporate Expenses | HKD 7.3 million | HKD 17.9 million | 59.2% decrease | 19 | [Finance Income](index=5&type=section&id=Finance%20Income) Finance income decreased due to lower bank interest rates, reduced average bank balances, and a smaller average shareholder loan receivable from Goldrich Holdings Limited Finance Income | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Total Finance Income | HKD 5.5 million | HKD 14.7 million | 62.6% decrease | 20 | | Interest Income from Bank Deposits and Balances | HKD 2.7 million | HKD 11.1 million | 75.7% decrease | 20 | | Interest Income from Shareholder Loan Receivable from Goldrich Holdings Limited | HKD 2.8 million | HKD 3.6 million | 22.2% decrease | 20 | [Events After Reporting Period](index=5&type=section&id=Events%20After%20Reporting%20Period) No significant events impacting the Group's operations, results, or financial position have occurred since the reporting date - No events significantly affecting the Group's operations, results, or financial position occurred after the reporting period[21](index=21&type=chunk) [Financial Review](index=6&type=section&id=Financial%20Review) The Group maintained a robust financial position with increased shareholders' equity, reduced borrowings, lower gearing ratios, ample liquidity, and managed exchange rate risks, with capital commitments for property development [Liquidity, Financial Resources, Gearing Ratio and Capital Structure](index=6&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20Gearing%20Ratio%20and%20Capital%20Structure) Shareholders' equity increased, total interest-bearing borrowings decreased, and gearing ratios improved, reflecting reduced financial leverage and ample liquidity Liquidity and Capital Structure Key Metrics | Metric | As of June 30, 2020 | As of December 31, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Company Shareholders | HKD 3,785.9 million | HKD 3,764.3 million | 0.58% increase | 23 | | Interest-Bearing Bank and Other Borrowings | HKD 1,186.6 million | HKD 1,258.0 million | 5.68% decrease | 23 | | Debt-to-Equity Ratio | 31.3% | 33.4% | 2.1 percentage points decrease | 24 | | Net Debt-to-Total Equity Ratio | 17.4% | 21.4% | 4.0 percentage points decrease | 24 | | Bank Balances and Cash | HKD 526.8 million | HKD 450.9 million | 16.8% increase | 25 | - Total outstanding bank loans amounted to **HKD 1,116.257 million**, with **HKD 702.212 million** due after one year but within two years, and **HKD 404.372 million** due after two years but within five years[24](index=24&type=chunk) [Exchange Rate Fluctuation Risk](index=7&type=section&id=Exchange%20Rate%20Fluctuation%20Risk) The Group manages exchange rate risk through foreign exchange monitoring and natural hedging, including funding Ryder Court's equity investment with GBP-denominated bank loans - The Group operates in Hong Kong, the US, and the UK, with assets and liabilities denominated in **HKD, USD, and GBP**[27](index=27&type=chunk) - Natural hedging is employed to mitigate GBP foreign exchange risk by funding the Ryder Court equity investment with **GBP-denominated bank loans**[27](index=27&type=chunk) [Capital Commitments](index=7&type=section&id=Capital%20Commitments) The Group's capital commitments, primarily for the Chun Yeung Street property development, increased from the previous period Capital Commitments | Metric | As of June 30, 2020 | As of December 31, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Chun Yeung Street Property Capital Expenditure Commitments | HKD 46.1 million | HKD 24.7 million | 86.6% increase | 28 | [Contingent Liabilities and Financial Guarantees](index=7&type=section&id=Contingent%20Liabilities%20and%20Financial%20Guarantees) As of the reporting period end, the Group had no outstanding contingent liabilities or financial guarantees - The Group had no outstanding contingent liabilities or financial guarantees as of **June 30, 2020**[29](index=29&type=chunk) [Pledge of Assets](index=7&type=section&id=Pledge%20of%20Assets) Certain investment properties are pledged as security for bank financing, and the carrying value of these pledged assets has decreased Pledged Assets | Metric | As of June 30, 2020 | As of December 31, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Carrying Value of Pledged Investment Properties | HKD 1,045.7 million | HKD 1,149.5 million | 9.03% decrease | 30 | [Significant Investments, Acquisitions and Disposals in Subsidiaries and Associates](index=7&type=section&id=Significant%20Investments%2C%20Acquisitions%20and%20Disposals%20in%20Subsidiaries%20and%20Associates) No significant investments, acquisitions, or disposals occurred during the period beyond those disclosed, and no major investment plans were authorized - No other significant investments, acquisitions, or disposals occurred during the period[31](index=31&type=chunk) - The Board has not authorized any plans for significant investments or additions to capital assets[31](index=31&type=chunk) [Employees and Remuneration Policy](index=7&type=section&id=Employees%20and%20Remuneration%20Policy) Employee headcount and staff costs increased significantly due to a large influx of employees in 2019, with remuneration based on market terms, responsibilities, and performance Employees and Staff Costs | Metric | As of June 30, 2020 | As of December 31, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Number of Employees | 93 employees | 91 employees | 2 employees increase | 32 | | Staff Costs (including directors' emoluments) | HKD 62.1 million | HKD 4.3 million | 1344% increase | 32 | | Total Fees Payable to Vanke Hong Kong | HKD 5.3 million | HKD 1.0 million | 430% increase | 32 | - The significant increase in staff costs was primarily due to **28 and 54 employees** transferring to the Group on **June 30, 2019, and November 1, 2019**, respectively[32](index=32&type=chunk) [Dividends](index=7&type=section&id=Dividends) The Board does not recommend an interim dividend for the current period - The directors do not recommend the payment of an interim dividend for the current period[33](index=33&type=chunk) [Outlook](index=8&type=section&id=Outlook) Despite global uncertainties from COVID-19, trade friction, and Brexit, the Group remains financially robust, seeking new investment opportunities and expecting stable returns from its property and asset management businesses - **2020** is anticipated to be full of uncertainties, influenced by the **COVID-19 pandemic**, the **US presidential election**, **US-China trade agreements**, and **Brexit**[35](index=35&type=chunk) - The Group maintains a **sound financial position**, is prepared for economic pressures, and will explore investment opportunities in other global real estate markets[35](index=35&type=chunk) - Occupancy rates and average rents for Regent Centre in Hong Kong and Ryder Court in London are expected to remain **stable in the second half of 2020**, with investment tools and asset management businesses generating **stable revenue and profit**[35](index=35&type=chunk) [Review Report on Interim Financial Information](index=9&type=section&id=Review%20Report%20on%20Interim%20Financial%20Information) KPMG reviewed the interim financial information under HKSA 2410, concluding no material non-compliance with IAS 34 and HKAS 34 - KPMG has reviewed the interim financial information in accordance with **Hong Kong Standard on Review Engagements 2410**[37](index=37&type=chunk)[39](index=39&type=chunk) - The review concluded that no matters were found to suggest the interim financial information was not prepared in all material respects in accordance with **IAS 34** and **HKAS 34**[40](index=40&type=chunk) [Consolidated Statement of Profit or Loss](index=10&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2020, revenue grew significantly to HKD 233 million, but profit decreased to HKD 54.84 million due to fair value losses and increased finance costs Consolidated Statement of Profit or Loss Key Data | Metric | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Revenue | 233,191 | 51,136 | | Gross Profit | 146,242 | 40,622 | | Fair Value (Loss)/Gain on Investment Properties | (27,686) | 32,564 | | Operating Profit | 109,833 | 54,705 | | Finance Income | 5,522 | 14,666 | | Finance Costs | (21,587) | – | | Share of Results of Associates | (16,488) | 14,451 | | Profit Before Taxation | 77,280 | 83,822 | | Income Tax | (22,440) | (6,060) | | Profit for the Period | 54,840 | 77,762 | | Earnings Per Share – Basic and Diluted | 0.14 | 0.20 | - Revenue increased by **356%**, primarily due to contributions from new businesses, but fair value of investment properties shifted from a gain to a loss, and new finance costs were incurred[42](index=42&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=11&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2020, total comprehensive income was HKD 56.652 million, a decrease from the prior year, including exchange differences from overseas subsidiary translations Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Metric | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Profit for the Period | 54,840 | 77,762 | | Exchange Differences on Translation of Financial Statements of Overseas Subsidiaries | 1,812 | – | | Total Comprehensive Income for the Period | 56,652 | 77,762 | | Total Comprehensive Income Attributable to Company Shareholders | 56,662 | 77,762 | - New exchange differences of **HKD 1.812 million** arose from the translation of financial statements of overseas subsidiaries in the current period[45](index=45&type=chunk) [Consolidated Statement of Financial Position](index=12&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2020, total assets less current liabilities increased to HKD 4.996 billion, driven by reduced current liabilities from loan repayment and increased cash, despite decreases in investment properties and associate interests Consolidated Statement of Financial Position Key Data | Metric | As of June 30, 2020 (HKD thousand) | As of December 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Investment Properties | 3,050,170 | 3,153,973 | | Interests in Associates | 424,413 | 453,786 | | Bank Balances and Cash | 526,769 | 450,893 | | Net Current Assets | 857,149 | 366,238 | | Total Assets Less Current Liabilities | 4,996,783 | 4,628,474 | | Loan From an Intermediate Holding Company (Current Liabilities) | – | (424,600) | | Bank Loans (Non-Current Liabilities) | (1,106,584) | (761,580) | | Net Assets | 3,786,128 | 3,764,534 | | Total Equity Attributable to Company Shareholders | 3,785,871 | 3,764,267 | - The loan from an intermediate holding company was **fully repaid** during the period, leading to a significant reduction in current liabilities[47](index=47&type=chunk)[91](index=91&type=chunk) - Non-current bank loans significantly increased, reflecting an adjustment in the financing structure[47](index=47&type=chunk) [Consolidated Statement of Changes in Equity](index=14&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2020, total equity attributable to shareholders increased to HKD 3.785 billion, driven by profit and overseas exchange differences, partially offset by dividends Consolidated Statement of Changes in Equity Key Data | Metric | As of June 30, 2020 (HKD thousand) | As of June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Total Equity Attributable to Company Shareholders at Beginning of Period | 3,764,267 | 3,666,767 | | Profit for the Period | 54,850 | 77,762 | | Exchange Differences on Translation of Overseas Operations | 1,812 | – | | Total Comprehensive Income | 56,662 | 77,762 | | Approved Final Dividend for Previous Year | (35,058) | (35,058) | | Total Equity Attributable to Company Shareholders at End of Period | 3,785,871 | 3,709,471 | - Exchange reserve shifted from a negative to a positive value, reflecting a **positive exchange difference** from the translation of overseas operations[52](index=52&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=15&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2020, net cash from operating activities significantly increased, investment activities generated net inflow, and financing activities resulted in net outflow, with cash and cash equivalents rising to HKD 526 million Condensed Consolidated Statement of Cash Flows Key Data | Metric | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Net Cash From Operating Activities | 115,618 | 30,427 | | Net Cash From/(Used In) Investing Activities | 25,853 | (851,908) | | Net Cash (Used In)/From Financing Activities | (62,269) | 330,929 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 79,202 | (490,552) | | Cash and Cash Equivalents at End of Period | 526,769 | 934,533 | - Net cash from operating activities significantly increased, primarily due to higher cash generated from operations and tax refunds[55](index=55&type=chunk) - Investing activities shifted from a net outflow in the prior period to a net inflow, mainly due to repayments from associates and bank interest income[55](index=55&type=chunk) - Financing activities shifted from a net inflow in the prior period to a net outflow, primarily due to the repayment of loans from an intermediate holding company and bank loans[55](index=55&type=chunk) [Notes to the Unaudited Interim Financial Information](index=16&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Information) This chapter details the interim financial information's basis of preparation, accounting policies, revenue, segment data, taxation, earnings per share, dividends, investment properties, and related party transactions [General Information](index=16&type=section&id=General%20Information) Vanke Overseas Investment Holding Company Limited, a Cayman Islands-registered company listed on HKEX, primarily engages in asset management, property development, and investment, with Vanke Co., Ltd. as its ultimate holding company - The Company is a limited liability company incorporated in the **Cayman Islands**, with its shares listed on the **Hong Kong Stock Exchange**[57](index=57&type=chunk) - The Group is primarily engaged in **asset management, property development, and property investment** businesses[57](index=57&type=chunk) - **Vanke Co., Ltd.** is considered the ultimate holding company of the Company[57](index=57&type=chunk) [Basis of Preparation and Principal Accounting Policies](index=16&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) Interim financial information is prepared under IAS 34 and HKAS 34, with the Group's first IFRS compliance statement effective January 1, 2019, requiring no adjustments for transition - The interim financial information is prepared in accordance with **International Accounting Standard 34** and **Hong Kong Accounting Standard 34**[58](index=58&type=chunk) - The Group explicitly stated its compliance with **International Financial Reporting Standards** for the first time, with a transition date of **January 1, 2019**[58](index=58&type=chunk) - Management believes no adjustments are required to the financial position, performance, or cash flows on the date of transition to **IFRS** or for the comparative periods[60](index=60&type=chunk) [Revenue and Segment Information](index=18&type=section&id=Revenue%20and%20Segment%20Information) The Group's revenue sources include property management, asset management, investment property rentals, and investment tool interest, with asset management being a new revenue stream this period Revenue Composition | Revenue Source | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Property Management Fee Income | 8,369 | 7,789 | | Asset Management Fee Income | 114,379 | – | | Rental Income from Investment Properties | 67,867 | 43,347 | | Interest Income from Investment Tools | 42,576 | – | | Total Revenue | 233,191 | 51,136 | - The Group is segmented into **property investment, property development, and asset management**[64](index=64&type=chunk) Segment Results | Segment | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Property Investment Segment Results | 36,132 | 72,609 | | Property Development Segment Results | 28,829 | 18,001 | | Asset Management Segment Results | 38,510 | – | | Total Segment Results | 103,471 | 90,610 | [Other Income](index=20&type=section&id=Other%20Income) Other income, mainly from early lease termination compensation and miscellaneous sources, decreased compared to the prior year Other Income Composition | Income Source | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Compensation Received from Tenants for Early Lease Termination | 62 | 300 | | Others | 54 | 55 | | Total | 116 | 355 | [Profit Before Taxation](index=20&type=section&id=Profit%20Before%20Taxation) Profit before taxation was impacted by reduced finance income, increased finance costs, and associate losses, with new interest expenses from various loans and lease liabilities Finance Income and Costs | Metric | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Finance Income | (5,522) | (14,666) | | Interest Expense on Bank Loans | 9,774 | – | | Interest Expense on Loan From an Intermediate Holding Company | 7,902 | – | | Interest Expense on Lease Liabilities | 3,212 | – | | Total Finance Costs | 21,587 | – | Other Major Expenses | Metric | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Depreciation | 4,864 | 48 | | Contributions to Defined Contribution Plans | 1,210 | 53 | | Salaries, Wages and Other Benefits | 60,903 | 4,258 | | Net Exchange Loss | 198 | 1,651 | [Income Tax](index=21&type=section&id=Income%20Tax) Income tax expense significantly increased due to higher Hong Kong profits tax, overseas tax provisions, and deferred tax recognition Income Tax Composition | Tax Category | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Current Tax – Hong Kong Profits Tax | 12,837 | 4,791 | | Current Tax – Overseas | 8,391 | – | | Deferred Tax | 1,212 | 1,269 | | Total | 22,440 | 6,060 | - Hong Kong profits tax is provided at a rate of **16.5%**, while overseas tax is calculated at the rates applicable in the respective jurisdictions[76](index=76&type=chunk)[77](index=77&type=chunk) [Earnings Per Share](index=21&type=section&id=Earnings%20Per%20Share) Basic and diluted earnings per share for the period were HKD 0.14, a decrease from the prior year due to lower profit, with no difference between basic and diluted EPS Earnings Per Share | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Basic and Diluted Earnings Per Share | HKD 0.14 | HKD 0.20 | | Profit Attributable to Company Shareholders | HKD 54.85 million | HKD 77.762 million | | Number of Shares in Issue | 389,527,932 shares | 389,527,932 shares | - The Company had no potential dilutive shares in issue during the period[78](index=78&type=chunk) [Dividends](index=21&type=section&id=Dividends) The Board does not recommend an interim dividend for the current period; the previous year's final dividend was HKD 0.09 per share - The directors do not recommend the payment of an interim dividend for the current period[79](index=79&type=chunk) Dividends Paid | Dividend Type | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Approved Final Dividend for Previous Year (HKD 0.09 per share) | 35,058 | 35,058 | [Investment Properties](index=22&type=section&id=Investment%20Properties) Investment properties were revalued at period-end, resulting in a fair value loss mainly from exchange adjustments, with valuations performed by independent surveyors Investment Property Movements | Metric | As of June 30, 2020 (HKD thousand) | As of December 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Beginning of Period | 3,153,973 | 1,968,000 | | Fair Value (Loss)/Gain | (27,686) | 943 | | Exchange Adjustment | (76,117) | 48,795 | | End of Period | 3,050,170 | 3,153,973 | - The fair value loss on investment properties was primarily due to **exchange adjustments**[81](index=81&type=chunk) - Valuations were conducted by independent professional valuers, **JLL Corporate Appraisal and Advisory Limited** and **Knight Frank LLP**[81](index=81&type=chunk) [Interests in Associates and Amounts Due From/To Associates](index=22&type=section&id=Interests%20in%20Associates%20and%20Amounts%20Due%20From%2FTo%20Associates) Total interests in associates and amounts due from associates decreased, with Goldrich Holdings Limited's receivables bearing preferential interest and Ultimate Vantage Limited's payables being unsecured and interest-free Interests in Associates and Amounts Due From/To Associates | Metric | As of June 30, 2020 (HKD thousand) | As of December 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Share of Net Assets | 250,177 | 252,056 | | Amounts Due From an Associate (Non-Current Portion) | 174,236 | 201,730 | | Total | 424,413 | 453,786 | | Amounts Due From an Associate (Current Portion) | 4,042 | 5,699 | | Amounts Due To Ultimate Vantage Limited | 148,185 | 148,185 | - Amounts due from Goldrich Holdings Limited bear interest at the **Hong Kong dollar prime rate less 2.1% per annum**[84](index=84&type=chunk) [Trade and Other Receivables and Other Non-Current Assets](index=23&type=section&id=Trade%20and%20Other%20Receivables%20and%20Other%20Non-Current%20Assets) Total trade and other receivables slightly decreased, with trade receivables mostly within 30 days, and amounts due from intermediate holding companies and fellow subsidiaries being unsecured, interest-free, and repayable on demand Trade and Other Receivables | Metric | As of June 30, 2020 (HKD thousand) | As of December 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Trade Receivables | 1,934 | 1,075 | | Unamortized Rental Receivables | 50,908 | 58,723 | | Other Receivables | 15,668 | 9,111 | | Amounts Due From an Intermediate Holding Company | 30,332 | 41,857 | | Amounts Due From Fellow Subsidiaries | 18,477 | 11,196 | | Total | 128,297 | 132,551 | | Current | 85,886 | 82,827 | | Non-Current (Unamortized Rental Receivables) | 42,411 | 49,724 | - Trade receivables are due within **15 to 90 days** from the date of revenue recognition[86](index=86&type=chunk) - Amounts due from an intermediate holding company and fellow subsidiaries are **unsecured, interest-free, and repayable on demand**, primarily arising from asset management services[88](index=88&type=chunk) [Other Payables and Accruals](index=24&type=section&id=Other%20Payables%20and%20Accruals) Total other payables and accruals increased, driven by a significant rise in amounts due to an intermediate holding company, with most payables expected within one year Other Payables and Accruals | Metric | As of June 30, 2020 (HKD thousand) | As of December 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Other Payables | 2,984 | 21,310 | | Rental and Other Deposits Received | 25,093 | 24,810 | | Accruals | 38,680 | 29,385 | | Amounts Due To an Associate | 148,185 | 148,185 | | Amounts Due To an Intermediate Holding Company | 41,856 | 10,054 | | Amounts Due To a Fellow Subsidiary | – | 309 | | Total | 256,798 | 234,053 | - Amounts due to an intermediate holding company and fellow subsidiaries are **unsecured, interest-free, and repayable on demand**[90](index=90&type=chunk) [Loan From an Intermediate Holding Company](index=24&type=section&id=Loan%20From%20an%20Intermediate%20Holding%20Company) The unsecured loan from an intermediate holding company was fully repaid during the period, bearing interest at LIBOR plus 2.1% or the lender's average capital cost - The loan from an intermediate holding company was **fully repaid** during the period[91](index=91&type=chunk) - The loan was **unsecured**, bearing interest at **LIBOR plus 2.1% per annum** or the lender's latest average cost of capital, whichever is higher[91](index=91&type=chunk) [Bank Loans](index=25&type=section&id=Bank%20Loans) Total bank loans significantly increased due to new Hong Kong loan facilities, with both Hong Kong and UK facilities bearing floating rates, secured by assets, and all financing covenants complied with Total Bank Loans and Maturity Profile | Metric | As of June 30, 2020 (HKD thousand) | As of December 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Total Bank Loans | 1,116,257 | 771,937 | | Repayable Within One Year or On Demand | 9,673 | 10,357 | | Repayable After One Year But Within Two Years | 702,212 | 10,357 | | Repayable After Two Years But Within Five Years | 404,372 | 751,223 | - A new Hong Kong loan facility of **HKD 1 billion** was obtained, with **HKD 406.27 million** utilized[93](index=93&type=chunk)[94](index=94&type=chunk) - Hong Kong loan facilities bear interest at **LIBOR plus 2.1% per annum**, while UK loan facilities bear interest at **LIBOR plus 1.95% per annum**[94](index=94&type=chunk)[95](index=95&type=chunk) - UK loan facilities are secured by **UK investment properties**, and Hong Kong loan facilities are secured by **equity interests in Hong Kong subsidiaries and rental-related receivables**[94](index=94&type=chunk)[95](index=95&type=chunk) - The Group did not breach any covenants related to drawing down financing as of **June 30, 2020**[97](index=97&type=chunk) [Commitments](index=26&type=section&id=Commitments) The Group's capital commitments, mainly for the contracted Chun Yeung Street property development, increased from the previous period Capital Commitments | Commitment Type | As of June 30, 2020 (HKD thousand) | As of December 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Contracted | 46,110 | 23,767 | | Authorized But Not Contracted | – | 905 | | Total | 46,110 | 24,672 | [Significant Related Party Transactions](index=26&type=section&id=Significant%20Related%20Party%20Transactions) The Group conducted significant related party transactions, including management and administrative fees paid, asset management fees received, and key management personnel remuneration Significant Related Party Transactions | Transaction Type | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Management and Administrative Fees Payable to an Intermediate Holding Company | 5,270 | 1,037 | | Asset Management Fee Income Received/Receivable From an Intermediate Holding Company | 63,303 | – | | Asset Management Fee Income Received/Receivable From Fellow Subsidiaries | 51,076 | – | | Key Management Personnel Remuneration | 870 | 950 | - Management and administrative fees and asset management fee income are charged based on **mutually agreed terms**[100](index=100&type=chunk)[101](index=101&type=chunk) - For the six months ended June 30, 2019, the Group acquired certain subsidiaries through an intermediate holding company and fellow subsidiaries for a total consideration of **HKD 1,086.537 million**[102](index=102&type=chunk) [Other Information](index=27&type=section&id=Other%20Information) This chapter covers corporate governance, directors' securities transactions, share dealings, director updates, and major shareholder interests, confirming compliance and disclosing credit facilities with specific covenants [Review of Interim Financial Information](index=27&type=section&id=Review%20of%20Interim%20Financial%20Information) The Group's interim financial information was reviewed by independent auditor KPMG and the Audit Committee, with no disagreements - The interim financial information is unaudited but has been reviewed by **KPMG**[104](index=104&type=chunk) - The Audit Committee has reviewed the interim financial information and has **no disagreements**[104](index=104&type=chunk) [Compliance with Corporate Governance Code](index=27&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company consistently complied with the Corporate Governance Code in Appendix 14 of the Listing Rules throughout the reporting period - The Company has consistently complied with the **Corporate Governance Code** in Appendix 14 of the Listing Rules throughout the period[105](index=105&type=chunk) [Compliance with Model Code for Securities Transactions by Directors](index=27&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the Model Code for directors' securities transactions, and all directors confirmed compliance during the period - The Company has adopted the **Model Code** in Appendix 10 of the Listing Rules as the code of conduct for directors' securities transactions[106](index=106&type=chunk) - All directors confirmed compliance with the required standards set out in the Model Code throughout the period[106](index=106&type=chunk) [Purchase, Sale or Redemption of Shares](index=27&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Shares) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's shares during the reporting period - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares[107](index=107&type=chunk) [Update on Directors' Information Pursuant to Rule 13.51B(1) of the Listing Rules](index=27&type=section&id=Update%20on%20Directors%27%20Information%20Pursuant%20to%20Rule%2013.51B%281%29%20of%20the%20Listing%20Rules) This section updates director information since the 2019 annual report, including Ms. Que Dongwu's appointment to Vanke's supervisory board and Mr. Chen Weixi's new independent non-executive directorship - Ms. Que Dongwu was appointed as an **employee representative supervisor** of the 10th session of the supervisory board of Vanke Co., Ltd[108](index=108&type=chunk) - Mr. Chen Weixi was appointed as an **independent non-executive director** of China Shandong Hi-Speed Financial Group Limited[108](index=108&type=chunk) [Directors' Interests in Shares or Debentures](index=28&type=section&id=Directors%27%20Interests%20in%20Shares%20or%20Debentures) As of June 30, 2020, certain directors held interests in Vanke A/H shares and shares of Vanke US Management LLC and Lithium Topco Limited Directors' Interests in Associated Corporations | Director Name | Associated Corporation Name | Share Class | Total Interests | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Zhang Xu | Vanke | A Shares | 904,039 | 0.0093% | | Que Dongwu | Vanke | A Shares | 60,700 | 0.0006% | | Chen Zhiyu | Vanke | H Shares | 500,203 | 0.0264% | | Li Kaiyan | Vanke US Management LLC | Ordinary Shares | 20% | 20% | | Lin Lily | Vanke Overseas UK Management Limited | Ordinary Shares | 490 | 9.8% | | Lin Lily | Lithium Topco Limited | Ordinary Shares | 521 | 0.0521% | | Lin Lily | Lithium Topco Limited | Preference Shares | 95 | 0.0551% | - Mr. Li Kaiyan indirectly holds interests in Vanke US Management LLC through his controlled corporation, **Minerva US LLC**[113](index=113&type=chunk) - Ms. Lin Lily indirectly holds share interests in Lithium Topco Limited through her controlled corporation, **Valliance Capital Europe LP**[114](index=114&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=29&type=section&id=Directors%27%20Rights%20to%20Acquire%20Shares%20or%20Debentures) Zhang Xu, Que Dongwu, Li Kaiyan, and Ms. Lin Lily are beneficiaries of Vanke's Business Partner Scheme, and the Company had no share option schemes or other arrangements for directors to acquire shares or debentures - Zhang Xu, Que Dongwu, Li Kaiyan, and Ms. Lin Lily are beneficiaries of **Vanke's Business Partner Scheme**[115](index=115&type=chunk) - Vanke's Business Partner Scheme involves depositing a portion of bonuses into a **collective account for investment management**[115](index=115&type=chunk) - The Company did not establish any **share option schemes** during the period[116](index=116&type=chunk) [Major Shareholders' Interests and Short Positions Discloseable Under the SFO](index=30&type=section&id=Major%20Shareholders%27%20Interests%20and%20Short%20Positions%20Discloseable%20Under%20the%20SFO) As of June 30, 2020, Vanke and CITIC Securities Company Limited were major shareholders, holding 75.0% and 7.72% of share interests, respectively Major Shareholders' Interests | Major Shareholder Name | Capacity | Total Number of Shares in Which Shareholder is Interested | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Vanke | Held by controlled corporation | 292,145,949 | 75.0% | | CITIC Securities Company Limited | Held by controlled corporation | 30,080,000 | 7.72% | - Vanke holds shares in the Company through its indirect wholly-owned subsidiary, **Wkland Investments Company Limited**[118](index=118&type=chunk) - CITIC Securities Company Limited holds shares in the Company through its direct wholly-owned subsidiary, **CSI Capital Management Limited**[119](index=119&type=chunk) [Credit Facilities Subject to Specific Performance Covenant of Controlling Shareholder](index=31&type=section&id=Credit%20Facilities%20Subject%20to%20Specific%20Performance%20Covenant%20of%20Controlling%20Shareholder) Chericourt Company Limited secured a HKD 1 billion loan facility with a specific covenant: Vanke's beneficial ownership of Future Best Developments Limited's issued share capital must remain at least 30% to avoid default - Chericourt Company Limited entered into a **HKD 1 billion** term loan facility agreement with a bank[121](index=121&type=chunk) - The loan facility includes a specific covenant: if Vanke ceases to be the beneficial owner of at least **30%** of the entire issued share capital of Future Best Developments Limited, it will constitute an **event of default**[121](index=121&type=chunk) - Should an event of default occur, the loan facility, together with accrued interest and all other accrued amounts, will become **immediately due and repayable**[121](index=121&type=chunk) [Publication of Interim Report](index=31&type=section&id=Publication%20of%20Interim%20Report) Printed and electronic versions of this interim report are available on the Company's and HKEX websites, with shareholders able to change communication preferences free of charge - Printed copies of this interim report in both English and Chinese are available and published on the Company's website (**www.vankeoverseas.com**) and the HKEX website (**www.hkexnews.hk**)[123](index=123&type=chunk) - Shareholders can change their preferred method of receiving company communications **free of charge**[123](index=123&type=chunk)

vanke 萬科海外投資控股有限公司 (於開曼群島註冊成立之有限公司) (股份代號：01036) 報室 f 厚 目錄 公司資料 2 1 萬科海外投資控股有限公司 二零一九年年度報告 | --- | --- | |--------------------------|-------| | | | | 董事履歷詳情 | | | 管理層論述及分析 | | | 董事會報告 | | | 企業管治報告 | | | 環境、社會及管治報告 | | | 獨立核數師報告 | | | 綜合損益表 | | | 綜合損益及其他全面收益表 | | | 綜合財務狀況表 | | | 綜合權益變動表 | | | 綜合現金流量表 | | | 財務報表附註 | | | 附屬公司總覽 | | | 物業項目總覽 | | | 五年財務摘要 | | | | | 1 公司資料 董事會 執行董事 張旭(主席) 闕東武(首席執行官) 李凱彥 (自二零一九年八月十五日起由非執行董事調任) LIN Lily (自二零一九年八月十五日起由非執行董事調任) 非執行董事 陳志裕 獨立非執行董事 陳維曦 羅芷妍 岑信江 (自二零一九年二月二十八日起辭任) 張安志 (自二零 ...

[Company Information](index=3&type=section&id=Company%20Information) This section provides key details about the company's board members, auditor, company secretary, and principal place of business - Board members include Executive Directors Zhang Xu (Chairman), Que Dongwu (CEO), Li Kaiyan, and Lin Lily, Non-executive Director Chen Zhiyu, and Independent Non-executive Directors Chen Weixi, Luo Zhiyan, and Zhang Anzhi[6](index=6&type=chunk) - The auditor is KPMG, and the principal bankers are Bank of China (Hong Kong) Limited[6](index=6&type=chunk) - The company secretary is Chan Wing Kit (appointed since August 15, 2019), and the principal place of business is 55/F, Bank of China Tower, 1 Garden Road, Central, Hong Kong[6](index=6&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's operational and financial performance, including business segments, liquidity, and future outlook [Business Review](index=4&type=section&id=Business%20Review) The group's revenue for the six months ended June 30, 2019, primarily from Regent Centre rentals, increased by 2%, while profit attributable to shareholders decreased due to lower fair value gains on investment properties, but profit excluding fair value changes rose by 29% driven by associate earnings and interest income, with acquisitions in London, San Francisco, and New York completed during the period | Metric | 2019 (HKD '000) | 2018 (HKD '000) | | :--- | :--- | :--- | | Revenue | 51,100 | 50,300 | | Profit attributable to shareholders | 77,700 | 171,000 | | Profit excluding fair value changes of Regent Centre | 45,200 | 35,000 | - Acquisitions of equity interests or investment vehicles in certain properties located in London, UK, San Francisco, and New York, USA were completed[9](index=9&type=chunk) - The management services framework agreement became effective on June 30, 2019, under which the Group will provide management services to Vanke Hong Kong contracting parties[9](index=9&type=chunk) [Property Investment](index=4&type=section&id=Property%20Investment) The Group's property investments include Regent Centre in Hong Kong and the newly acquired Ryder Court in the UK, with Regent Centre maintaining high occupancy and increased average rent, but fair value gains on investment properties significantly decreased, and Ryder Court is expected to generate income in the second half Regent Centre Operating Data | Metric | June 30, 2019 | June 30, 2018 | | :--- | :--- | :--- | | Occupancy Rate | 98% | 97% | | Average Rent (HKD per sq ft) | 9.9 | 9.6 | Investment Property Financial Data | Metric | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Fair Value of Investment (HKD) | 2,001,500,000 | 1,968,000,000 | | Fair Value Gain (HKD) | 32,600,000 | 136,000,000 | - Ryder Court did not generate revenue for the Group during the period and is expected to contribute from the second half of 2019[16](index=16&type=chunk) [Property Development](index=5&type=section&id=Property%20Development) The Group's property development business, primarily through its associate Ultimate Vantage Limited in the Pavilia Bay project, has sold over 99% of its units, leading to a significant increase in associate earnings - Over **99%** of Pavilia Bay project units have been sold, with total proceeds of approximately **HKD 10 billion**[17](index=17&type=chunk) Investment in and Profit from Associates | Metric | June 30, 2019 (HKD) | December 31, 2018 (HKD) | | :--- | :--- | :--- | | Total Investment in Associates | 330,800,000 | 346,400,000 | | Share of Profit from Associates | 14,500,000 | 800,000 | - During the period, approximately **HKD 1,400,000** was repaid for amounts due from Ultimate Vantage and approximately **HKD 28,700,000** for amounts due from Goldrich[18](index=18&type=chunk) [Asset Management](index=6&type=section&id=Asset%20Management) Starting from the second half of 2019, the Group will provide asset management services for UK and US projects to Vanke Hong Kong contracting parties, charging an annual fee of 1.25% of the total invested capital - Asset management services for UK and US projects will be provided to Vanke Hong Kong contracting parties starting from the second half of 2019[22](index=22&type=chunk) - The asset management service fee is **1.25% per annum** of the total invested capital by Vanke Hong Kong contracting parties in the relevant projects[22](index=22&type=chunk) [General and Administrative Expenses](index=6&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses significantly increased during the period, primarily due to higher staff costs and legal and professional fees related to acquisitions and management services General and Administrative Expenses | Metric | 2019 (HKD) | 2018 (HKD) | | :--- | :--- | :--- | | General and Administrative Expenses | 17,900,000 | 5,500,000 | - The increase in expenses was primarily due to higher staff costs and legal and professional fees related to acquisitions and management services[23](index=23&type=chunk) [Finance Income](index=6&type=section&id=Finance%20Income) Finance income significantly increased during the period, driven by higher bank interest rates and balances, as well as interest income from loans to associates Finance Income | Metric | 2019 (HKD) | 2018 (HKD) | | :--- | :--- | :--- | | Total Finance Income | 14,700,000 | 7,400,000 | | Interest Income from Bank Deposits and Balances | 11,100,000 | 4,000,000 | | Interest Income from Shareholder Loan to Goldrich | 3,600,000 | 3,400,000 | - The increase in finance income was primarily due to higher bank interest rates and bank balances[24](index=24&type=chunk) [Financial Review](index=6&type=section&id=Financial%20Review) The Group's financial position shows an increase in shareholders' equity, but also significant interest-bearing bank and other borrowings due to property investments and acquisitions, leading to a substantial rise in the debt-to-equity ratio, with rights issue proceeds fully utilized and liquidity expected to be sufficient [Rights Issue](index=6&type=section&id=Rights%20Issue) The net proceeds of HKD 1,032,000,000 from the 2015 rights issue were fully utilized during the period, with HKD 393,000,000 used to partially pay for acquisitions - The 2015 rights issue raised net proceeds of **HKD 1,032,000,000**[26](index=26&type=chunk) - During the period, the remaining net proceeds of approximately **HKD 393,000,000** from the rights issue were used to partially pay for acquisitions, and the net proceeds from the rights issue have been fully utilized[31](index=31&type=chunk) - There were no material changes to the intended use of proceeds[32](index=32&type=chunk) [Liquidity, Financial Resources, Gearing Ratio and Capital Structure](index=7&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20Gearing%20Ratio%20and%20Capital%20Structure) The Group's equity attributable to shareholders increased, but interest-bearing bank and other borrowings significantly rose due to property investments and acquisition financing, causing both the debt-to-equity ratio and net debt-to-equity ratio to increase from zero, while bank balances and cash decreased, but Regent Centre remains unencumbered and available for fundraising Liquidity and Gearing Ratios | Metric | June 30, 2019 (HKD) | December 31, 2018 (HKD) | | :--- | :--- | :--- | | Equity attributable to shareholders | 3,709,500,000 | 3,666,800,000 | | Interest-bearing bank and other borrowings | 1,165,100,000 | Nil | | Debt-to-equity ratio | 31.4% | Nil | | Net debt-to-equity ratio | 6.2% | Nil | | Bank balances and cash | 934,500,000 | 1,425,100,000 | - Bank loans of **HKD 738,600,000** and a loan from an intermediate holding company of **HKD 366,000,000** are arranged on a floating interest rate basis, while lease liabilities of **HKD 60,500,000** are on a fixed interest rate basis[33](index=33&type=chunk) - Regent Centre is currently unencumbered and available for fundraising and generating additional cash resources[35](index=35&type=chunk) [Exchange Rate Fluctuation Risk](index=8&type=section&id=Exchange%20Rate%20Fluctuation%20Risk) Operating in Hong Kong, the US, and the UK, the Group faces exchange rate risks related to HKD, USD, and GBP, which it monitors and mitigates through measures like natural hedging - The Group operates in Hong Kong, the US, and the UK, with assets and liabilities denominated in HKD, USD, and GBP[39](index=39&type=chunk) - Natural hedging for GBP foreign exchange risk is achieved by funding its equity investment in Ryder Court with a loan from an intermediate holding company[39](index=39&type=chunk) [Capital Commitments](index=8&type=section&id=Capital%20Commitments) As of June 30, 2019, the Group had no significant capital commitments - As of June 30, 2019, the Group had no significant capital commitments (December 31, 2018: nil)[40](index=40&type=chunk) [Contingent Liabilities and Financial Guarantees](index=8&type=section&id=Contingent%20Liabilities%20and%20Financial%20Guarantees) As of June 30, 2019, the Group had no outstanding contingent liabilities or financial guarantees - As of June 30, 2019, the Group had no outstanding contingent liabilities or financial guarantees (December 31, 2018: nil)[40](index=40&type=chunk) [Pledge of Assets](index=8&type=section&id=Pledge%20of%20Assets) The Group's bank loans are secured by all assets held by its indirect non-wholly owned subsidiary, Lithium Real Estate (Jersey) Limited, which owns the Ryder Court investment property in London - Bank loans are secured by all assets held by the indirect non-wholly owned subsidiary, Lithium Real Estate (Jersey) Limited[41](index=41&type=chunk) - This subsidiary holds the company's investment property, Ryder Court, located in London[41](index=41&type=chunk) [Significant Investments, Acquisitions and Disposals in Subsidiaries and Associates](index=8&type=section&id=Significant%20Investments%2C%20Acquisitions%20and%20Disposals%20in%20Subsidiaries%20and%20Associates) Apart from the acquisitions disclosed in Note 19 to the interim financial information, there were no other significant investments, acquisitions, or disposals in subsidiaries and associates during the period - Apart from the acquisitions disclosed in Note 19, there were no other significant investments, acquisitions, or disposals in subsidiaries and associates during the period[41](index=41&type=chunk) [Employees and Remuneration Policy](index=8&type=section&id=Employees%20and%20Remuneration%20Policy) The Group experienced a significant increase in employee numbers and staff costs, primarily due to an increase in the number of directors and higher average remuneration for Hong Kong office staff, while administrative and management support fees from Vanke Hong Kong decreased Employee and Remuneration Data | Metric | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Number of Employees | 33 | 3 | | Staff Costs (HKD) | 4,300,000 | 3,200,000 | | Fees Payable to Vanke Hong Kong (HKD) | 1,000,000 | 1,300,000 | - **28** employees were transferred to the Group during the period, incurring no related staff costs[42](index=42&type=chunk) - Remuneration and benefits are determined based on market terms, individual responsibilities, and performance[42](index=42&type=chunk) [Dividends](index=8&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the current period - The Directors do not recommend the payment of an interim dividend for the period (six months ended June 30, 2018: nil)[43](index=43&type=chunk) [Outlook](index=9&type=section&id=Outlook) Despite global economic uncertainties, the Group maintains a cautiously optimistic outlook, seeking diversified development and expansion opportunities in Hong Kong and overseas property markets, with new acquisitions and management personnel expected to enhance investment capabilities in the UK and US, and new properties anticipated to generate revenue and profit in the second half - Despite the US-China trade war, Brexit, and economic uncertainties in Hong Kong, the Group will maintain a cautiously optimistic attitude[47](index=47&type=chunk) - The Group will continue to seek opportunities for diversified development and business expansion in Hong Kong and overseas property markets[47](index=47&type=chunk) - New acquisitions and the addition of management personnel with expertise in the UK and US property markets will enhance the Group's investment and expansion capabilities in these markets[47](index=47&type=chunk) - Occupancy rates and average rents for Regent Centre and Ryder Court are expected to remain high in the second half of 2019, and newly acquired UK and US investment properties and investment vehicles are anticipated to generate revenue and profit[47](index=47&type=chunk) [Review Report on Interim Financial Information](index=10&type=section&id=Review%20Report%20on%20Interim%20Financial%20Information) KPMG has reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410, concluding no matters that would lead them to believe the information is not prepared in all material respects according to HKAS 34 - KPMG has reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[51](index=51&type=chunk) - The review concluded that nothing has come to the reviewer's attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[52](index=52&type=chunk) [Consolidated Statement of Comprehensive Income](index=11&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) This statement summarizes the Group's financial performance, including revenue, profit before tax, and total comprehensive income attributable to shareholders for the period Summary of Consolidated Statement of Comprehensive Income | Metric | 2019 (HKD '000) | 2018 (HKD '000) | | :--- | :--- | :--- | | Revenue | 51,136 | 50,328 | | Gross Profit | 40,622 | 39,623 | | Increase in fair value of investment properties | 32,564 | 136,005 | | Operating Profit | 54,705 | 169,486 | | Finance Income | 14,666 | 7,440 | | Share of results of associates | 14,451 | 756 | | Profit Before Taxation | 83,822 | 177,682 | | Taxation | (6,060) | (6,718) | | Profit and total comprehensive income for the period attributable to shareholders of the Company | 77,762 | 170,964 | | Earnings Per Share—Basic and Diluted (HKD) | 0.20 | 0.44 | [Consolidated Statement of Financial Position](index=12&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This statement presents the Group's financial position, detailing assets, liabilities, and equity as of the reporting date Summary of Consolidated Statement of Financial Position | Metric | June 30, 2019 (HKD '000) | December 31, 2018 (HKD '000) | | :--- | :--- | :--- | | **Assets** | | | | Total Non-current Assets | 4,203,331 | 2,306,572 | | Investment Properties | 3,136,799 | 1,968,000 | | Interests in Associates | 481,574 | 338,435 | | Investment Instruments | 522,798 | - | | Bank Balances and Cash | 934,533 | 1,425,085 | | **Liabilities** | | | | Total Current Liabilities | (622,141) | (38,798) | | Loan from an Intermediate Holding Company | (365,979) | - | | Bank Loans (Current) | (9,919) | - | | Total Non-current Liabilities | (828,918) | (40,966) | | Bank Loans (Non-current) | (728,735) | - | | Lease Liabilities (Non-current) | (57,948) | - | | **Equity** | | | | Total Equity attributable to shareholders of the Company | 3,709,471 | 3,666,767 | | Total Equity | 3,709,682 | 3,666,767 | [Consolidated Statement of Changes in Equity](index=14&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement details the changes in the Group's equity attributable to shareholders, including profit for the period, dividends, and other equity movements Summary of Consolidated Statement of Changes in Equity | Metric | June 30, 2019 (HKD '000) | June 30, 2018 (HKD '000) | | :--- | :--- | :--- | | Total Equity at January 1 | 3,666,767 | 3,001,610 | | Profit and total comprehensive income for the period | 77,762 | 170,964 | | Final dividend approved for previous year | (35,058) | (11,686) | | Acquisition of subsidiaries | 203 | - | | Contribution from non-controlling interests | 8 | - | | Total Equity at June 30 | 3,709,682 | 3,160,888 | [Condensed Consolidated Statement of Cash Flows](index=15&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement provides a summary of the Group's cash flows from operating, investing, and financing activities for the period Summary of Condensed Consolidated Statement of Cash Flows | Metric | 2019 (HKD '000) | 2018 (HKD '000) | | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 30,427 | (16,583) | | Net cash (used in)/generated from investing activities | (851,908) | 441,094 | | Payment for acquisition of subsidiaries (net of cash and cash equivalents acquired) | (1,020,715) | - | | Net cash generated from/(used in) financing activities | 330,929 | (11,686) | | Proceeds from loan from an intermediate holding company | 365,979 | - | | Net (decrease)/increase in cash and cash equivalents | (490,552) | 412,825 | | Cash and cash equivalents at end of period | 934,533 | 1,278,730 | [Notes to the Unaudited Interim Financial Information](index=16&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Information) This section provides detailed notes and explanations supporting the unaudited interim financial information, covering accounting policies, segment data, and significant transactions [General Information](index=16&type=section&id=General%20Information) The Company is a limited liability company incorporated in the Cayman Islands, listed on the Hong Kong Stock Exchange, primarily engaged in asset management and property development and investment, with Vanke Co., Ltd. as its ultimate holding company - The Company is a limited liability company incorporated in the Cayman Islands, with its shares listed on the Hong Kong Stock Exchange[75](index=75&type=chunk) - The Group is principally engaged in asset management and property development and investment[75](index=75&type=chunk) - Vanke Co., Ltd. is the ultimate holding company of the Company[75](index=75&type=chunk) [Basis of Preparation and Principal Accounting Policies](index=16&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The interim financial information is prepared in accordance with HKAS 34 and the Listing Rules, with accounting policies consistent with the prior year's financial statements, except for the adoption of HKFRS 16 "Leases" - The interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[76](index=76&type=chunk) - Except for the adoption of HKFRS 16 "Leases" and certain amendments to HKFRSs, the interim financial information has been prepared in accordance with the same accounting policies adopted in the financial statements for the year ended December 31, 2018[76](index=76&type=chunk)[81](index=81&type=chunk) [Changes in Accounting Policies](index=17&type=section&id=Changes%20in%20Accounting%20Policies) The Group first adopted HKFRS 16 "Leases," requiring capitalization of all leases as a lessee by recognizing right-of-use assets and lease liabilities, with no significant change to lessor accounting, and no impact on the opening equity balance - First-time adoption of Hong Kong Financial Reporting Standard 16 "Leases," replacing Hong Kong Accounting Standard 17 "Leases"[81](index=81&type=chunk)[82](index=82&type=chunk) - As a lessee, all leases are capitalized, recognizing right-of-use assets and lease liabilities, with recognition exemptions applied for short-term leases and leases of low-value assets[84](index=84&type=chunk) - Impact on interim financial information: The adoption of HKFRS 16 had no impact on the opening balance of the Group's equity[86](index=86&type=chunk) [Revenue and Segment Information](index=18&type=section&id=Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from investment property rentals and property management fees, with segment reporting divided into property investment and property development, showing increased property investment segment results before fair value changes and significantly enhanced property development segment results due to share of associate profits Revenue Composition | Revenue Category | 2019 (HKD '000) | 2018 (HKD '000) | | :--- | :--- | :--- | | Rental income from investment properties | 43,347 | 42,649 | | Property management fee income | 7,789 | 7,679 | | Total Revenue | 51,136 | 50,328 | - The Group has two segments: property investment and property development[90](index=90&type=chunk) Segment Results (Before Fair Value Changes) | Segment | 2019 (HKD '000) | 2018 (HKD '000) | | :--- | :--- | :--- | | Property Investment | 40,045 | 38,869 | | Property Development | 18,001 | 4,261 | [Other Income](index=20&type=section&id=Other%20Income) The Group's other income primarily consists of compensation received from tenants for early lease terminations Other Income Details | Income Category | 2019 (HKD '000) | 2018 (HKD '000) | | :--- | :--- | :--- | | Handling fee income | - | 111 | | Compensation received from tenants for early lease terminations | 300 | 32 | | Others | 55 | 51 | | Total | 355 | 194 | [Profit Before Taxation](index=20&type=section&id=Profit%20Before%20Taxation) Profit before taxation is calculated after deducting depreciation, defined contribution plan contributions, salaries and other benefits, and net exchange losses, and including finance income Profit Before Taxation Adjustments | Item | 2019 (HKD '000) | 2018 (HKD '000) | | :--- | :--- | :--- | | Finance income | (14,666) | (7,440) | | Interest income from bank deposits and balances | (11,116) | (4,046) | | Interest income from amounts due from an associate | (3,550) | (3,394) | | Depreciation | 48 | 56 | | Contributions to defined contribution plans | 53 | 37 | | Salaries, wages and other benefits (including directors' emoluments) | 4,258 | 3,260 | | Net exchange losses | 1,651 | - | [Taxation](index=21&type=section&id=Taxation) The Group's taxation expense comprises current tax (Hong Kong Profits Tax) and deferred tax, with Hong Kong Profits Tax provisioned at a rate of 16.5% Taxation Expense Details | Tax Category | 2019 (HKD '000) | 2018 (HKD '000) | | :--- | :--- | :--- | | Current tax (Hong Kong Profits Tax) | 4,791 | 5,228 | | Deferred tax (origination and reversal of temporary differences) | 1,269 | 1,490 | | Total | 6,060 | 6,718 | - Hong Kong Profits Tax is provided at a rate of **16.5%** on the estimated assessable profit for the period[102](index=102&type=chunk) - Share of taxation expense of associates of **HKD 277,000** has been included in the share of results of associates for the period[103](index=103&type=chunk) [Earnings Per Share](index=21&type=section&id=Earnings%20Per%20Share) The Group's basic and diluted earnings per share are both HKD 0.20, as there were no potentially dilutive shares outstanding during the period Earnings Per Share Data | Metric | 2019 (HKD) | 2018 (HKD) | | :--- | :--- | :--- | | Basic and Diluted Earnings Per Share | 0.20 | 0.44 | | Profit attributable to shareholders of the Company (HKD '000) | 77,762 | 170,964 | | Number of shares in issue (shares) | 389,527,932 | 389,527,932 | - Diluted earnings per share are equal to basic earnings per share as there were no potentially dilutive shares in issue during the period[104](index=104&type=chunk) [Dividends](index=21&type=section&id=Dividends) The Board does not recommend an interim dividend for the current period, while a final dividend of HKD 0.09 per share for the previous year was approved and paid - The Directors do not recommend the payment of an interim dividend for the period (six months ended June 30, 2018: nil)[105](index=105&type=chunk) Dividends Paid for Previous Financial Years | Dividend Type | 2019 (HKD '000) | 2018 (HKD '000) | | :--- | :--- | :--- | | HKD 0.09 per share (2018: HKD 0.03 per share) | 35,058 | 11,686 | [Property, Plant and Equipment](index=22&type=section&id=Property%2C%20Plant%20and%20Equipment) Additions to property, plant and equipment during the period primarily consisted of right-of-use assets arising from the lease of office properties under fixed monthly payment terms - Additions to property, plant and equipment amounted to **HKD 9,656,000** during the period[109](index=109&type=chunk) - Primarily right-of-use assets arising from the lease of office properties under fixed monthly payment terms[109](index=109&type=chunk) [Investment Properties](index=22&type=section&id=Investment%20Properties) The Group's investment properties were revalued at the end of the period, showing a significant increase in fair value primarily due to investment properties acquired through subsidiary acquisitions, with valuations conducted by independent surveyors Changes in Fair Value of Investment Properties | Metric | June 30, 2019 (HKD '000) | December 31, 2018 (HKD '000) | | :--- | :--- | :--- | | At January 1 | 1,968,000 | 1,830,000 | | Acquisition of subsidiaries | 1,135,339 | - | | Additions | 896 | 1,995 | | Fair value gains | 32,564 | 136,005 | | At June 30/December 31 | 3,136,799 | 1,968,000 | - Investment properties were valued by independent surveyors, JLL Corporate Appraisal and Advisory Limited and Knight Frank LLP[110](index=110&type=chunk) [Interests in Associates and Amounts Due from/to Associates](index=22&type=section&id=Interests%20in%20Associates%20and%20Amounts%20Due%20from%2Fto%20Associates) The Group's total interests in associates increased, mainly due to new associate acquisitions during the period, while amounts due from Goldrich Limited decreased, and amounts due to Ultimate Vantage Limited were newly recognized Interests in Associates and Amounts Due from/to Associates | Metric | June 30, 2019 (HKD '000) | December 31, 2018 (HKD '000) | | :--- | :--- | :--- | | Share of net assets | 249,915 | 79,714 | | Amounts due from an associate (non-current portion) | 231,659 | 258,721 | | Total | 481,574 | 338,435 | | Amounts due from an associate (current portion) | 6,375 | 7,973 | | Amounts due to an associate (current portion) | (125,585) | - | - The balance includes newly acquired associates of **HKD 157,165,000** through the acquisition of subsidiaries during the period[115](index=115&type=chunk) - Amounts due from Goldrich Limited are unsecured and bear interest at the Hong Kong Prime Rate less **2.1% per annum**[116](index=116&type=chunk) - Amounts due to Ultimate Vantage Limited are unsecured, interest-free, and repayable on demand[116](index=116&type=chunk) [Investment Instruments](index=23&type=section&id=Investment%20Instruments) The Group holds an investment instrument bearing interest at 14.15% per annum, maturing on December 20, 2020, which is partially secured and guaranteed by one of the borrowers, Zhou Holdings Limited - The investment instrument bears interest at **14.15% per annum** and will mature on December 20, 2020 (borrower has an option to extend for one year)[117](index=117&type=chunk) - The instrument is guaranteed by Zhou Holdings Limited, one of the borrowers[117](index=117&type=chunk) - A balance of **HKD 341,305,000** is secured by the equity interest of the borrower, while the remaining **HKD 181,493,000** is unsecured[117](index=117&type=chunk) [Trade and Other Receivables](index=23&type=section&id=Trade%20and%20Other%20Receivables) The Group's total trade and other receivables significantly increased, primarily due to a substantial rise in unamortized rental receivables, most of which are non-current Trade and Other Receivables Details | Item | June 30, 2019 (HKD '000) | December 31, 2018 (HKD '000) | | :--- | :--- | :--- | | Trade receivables | 891 | 530 | | Unamortised rental receivables | 61,276 | 944 | | Other receivables | 862 | 870 | | Deposits | 3,243 | 2,603 | | Prepayments | 758 | 127 | | Total | 67,033 | 5,074 | | Current | 14,696 | 5,074 | | Non-current (unamortised rental receivables) | 52,337 | - | Ageing Analysis of Trade Receivables | Ageing | June 30, 2019 (HKD '000) | December 31, 2018 (HKD '000) | | :--- | :--- | :--- | | 0 to 30 days | 810 | 500 | | 31 to 90 days | 81 | 30 | | Total | 891 | 530 | [Other Payables and Accrued Charges](index=24&type=section&id=Other%20Payables%20and%20Accrued%20Charges) The Group's total other payables and accrued charges significantly increased, primarily including advances received and accrued expenses, with most expected to be paid or recognized as income within one year Other Payables and Accrued Charges Details | Item | June 30, 2019 (HKD '000) | December 31, 2018 (HKD '000) | | :--- | :--- | :--- | | Other payables | 1,191 | 1,148 | | Advances received | 13,857 | 510 | | Rental and other deposits received | 24,777 | 24,673 | | Accrued charges | 24,013 | 5,588 | | Total | 63,838 | 31,919 | - Except for rental and other deposits received for properties of **HKD 16,379,000** which are expected to be repaid after one year, all other payables and accrued charges are expected to be settled or recognized as income within one year or repayable on demand[124](index=124&type=chunk) [Amounts Due to an Intermediate Holding Company and Fellow Subsidiaries](index=24&type=section&id=Amounts%20Due%20to%20an%20Intermediate%20Holding%20Company%20and%20Fellow%20Subsidiaries) Amounts due to an intermediate holding company and fellow subsidiaries are unsecured, interest-free, and repayable on demand - Amounts due to an intermediate holding company and fellow subsidiaries are unsecured, interest-free, and repayable on demand[125](index=125&type=chunk) [Loan from an Intermediate Holding Company](index=24&type=section&id=Loan%20from%20an%20Intermediate%20Holding%20Company) The loan from an intermediate holding company is unsecured, bears interest at LIBOR plus 2.1% per annum or the lender's latest average cost of capital (whichever is higher), and is repayable when the Group obtains third-party financing - The loan from an intermediate holding company is unsecured, bears interest at LIBOR plus **2.1% per annum** or the lender's latest average cost of capital (whichever is higher)[126](index=126&type=chunk) - Repayable when the Group obtains third-party financing[126](index=126&type=chunk) [Lease Liabilities](index=25&type=section&id=Lease%20Liabilities) The Group's lease liabilities are primarily long-term, with most maturing after five years, reflecting the impact of adopting HKFRS 16 "Leases" Lease Liabilities Maturity Profile (Present Value) | Maturity Time | June 30, 2019 (HKD '000) | | :--- | :--- | | Within one year | 2,522 | | After one year but within two years | 2,659 | | After two years but within five years | 4,515 | | After five years | 50,774 | | Total | 60,470 | [Bank Loans](index=26&type=section&id=Bank%20Loans) The Group incurred new secured bank loans, primarily denominated in GBP, for subsidiary acquisitions, collateralized by assets held by the subsidiary, bearing floating interest rates, and subject to financial covenants Bank Loan Details | Item | June 30, 2019 (HKD '000) | December 31, 2018 (HKD '000) | | :--- | :--- | :--- | | Secured bank loans | 741,786 | - | | Capitalised other borrowing costs | (3,132) | - | | Total bank loans | 738,654 | - | - Bank financing of **GBP 75,000,000** (equivalent to **HKD 743,910,000**) is secured by all assets held by a subsidiary, including the Group's investment properties of **HKD 1,135,339,000** as of June 30, 2019[134](index=134&type=chunk) - Bank loans bear interest at LIBOR plus **1.95% per annum** and will mature on January 16, 2022[134](index=134&type=chunk) - As of June 30, 2019, there were no breaches of any covenants related to the drawdown of financing[134](index=134&type=chunk) [Acquisition of Subsidiaries](index=27&type=section&id=Acquisition%20of%20Subsidiaries) The Group completed the acquisitions of Lithium Topco Limited (UK property investment), 657-667 Mission Limited (US property investment), and Supreme J Limited (US investment instrument) on June 30, 2019, for a total consideration of approximately HKD 1,086.5 million, resulting in significant cash outflows during the period - Acquisition of approximately **99.95%** effective interest in Lithium Topco Limited (UK property investment) for a consideration of approximately **HKD 406,643,000**[137](index=137&type=chunk) - Acquisition of the entire issued share capital of 657–667 Mission Limited (US property investment) for a consideration of approximately **HKD 157,096,000**[138](index=138&type=chunk) - Acquisition of the entire issued share capital of Supreme J Limited (US investment instrument) for a consideration of approximately **HKD 522,798,000**[139](index=139&type=chunk) Total Consideration and Cash Outflow for Acquisition of Subsidiaries | Item | Amount (HKD '000) | | :--- | :--- | | Total consideration | 1,086,537 | | Cash consideration paid | 1,049,577 | | Net cash outflow | 1,020,715 | - Given that the above acquisitions were completed on June 30, 2019, these subsidiaries did not contribute any revenue or profit to the Group during the period[142](index=142&type=chunk) [Significant Related Party Transactions](index=29&type=section&id=Significant%20Related%20Party%20Transactions) The Group engaged in significant related party transactions during the period, primarily involving management and administrative fees paid to an intermediate holding company and key management personnel remuneration Significant Related Party Transactions | Transaction Item | 2019 (HKD '000) | 2018 (HKD '000) | | :--- | :--- | :--- | | Management and administrative fees payable to an intermediate holding company | 1,037 | 1,284 | | Key management personnel remuneration | 950 | 1,238 | [Other Information](index=30&type=section&id=Other%20Information) This section covers additional information including the review of interim financial information, compliance with corporate governance, directors' securities dealings, and major shareholders [Review of Interim Financial Information](index=30&type=section&id=Review%20of%20Interim%20Financial%20Information) The Group's interim financial information has been reviewed by independent auditor KPMG and the audit committee, both without reservation - The interim financial information is unaudited but has been reviewed by the independent auditor, KPMG, whose unmodified review report is included in this interim report[150](index=150&type=chunk) - The interim financial information has also been reviewed by the Company's audit committee, which had no disagreements[150](index=150&type=chunk) [Compliance with Corporate Governance Code](index=30&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company has complied with the code provisions of the Corporate Governance Code set out in Appendix 14 to the Listing Rules throughout the period - The Company has complied with the code provisions set out in the Corporate Governance Code in Appendix 14 to the Listing Rules throughout the period[151](index=151&type=chunk) [Compliance with Model Code for Securities Transactions by Directors](index=30&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for directors' securities dealings, and all directors confirmed compliance throughout the period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules as its code of conduct for directors' securities transactions[152](index=152&type=chunk) - Following specific enquiry with the Directors, all Directors confirmed that they have complied with the required standards set out in the Model Code throughout the period[152](index=152&type=chunk) [Purchase, Sale or Redemption of Shares](index=30&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Shares) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares during the period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares during the period[153](index=153&type=chunk) [Update on Directors' Information Pursuant to Rule 13.51B(1) of the Listing Rules](index=30&type=section&id=Update%20on%20Directors'%20Information%20Pursuant%20to%20Rule%2013.51B(1)%20of%20the%20Listing%20Rules) Since the publication of the 2018 annual report, there have been changes in directors' information, including Mr. Li Kaiyan and Ms. Lin Lily being re-designated as executive directors, and adjustments to several directors' annual remuneration and meeting allowances - Mr. Li Kaiyan and Ms. Lin Lily were re-designated from non-executive directors to executive directors, effective August 15, 2019[154](index=154&type=chunk) - Mr. Li Kaiyan and Ms. Lin Lily will each receive a fixed annual remuneration of **HKD 200,000** for their services to the Board[155](index=155&type=chunk) - Mr. Chen Zhiyu, Mr. Chen Weixi, Ms. Luo Zhiyan, and Mr. Zhang Anzhi will each receive annual remuneration for their services to the Board, including a fixed director's fee and allowances for attending Company meetings[155](index=155&type=chunk) [Directors' Interests in Shares or Debentures](index=31&type=section&id=Directors'%20Interests%20in%20Shares%20or%20Debentures) As of June 30, 2019, some directors held interests in shares of Vanke Co., Ltd., an associated corporation of the Company, primarily long positions in A shares and H shares Directors' Interests in Vanke Shares | Director's Name | Share Class | Number of Ordinary Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Zhang Xu | A shares | 904,039 | 0.009% | | Que Dongwu | A shares | 150,700 | 0.002% | | Chen Zhiyu | H shares | 500,203 | 0.032% | - All disclosed interests in shares are long positions in shares of an associated corporation of the Company[157](index=157&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=31&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares%20or%20Debentures) Mr. Zhang Xu, Ms. Que Dongwu, Mr. Li Kaiyan, and Ms. Lin Lily are beneficiaries of Vanke's 2014 Business Partner Scheme, and the Company had no share option scheme in place during the period - Mr. Zhang Xu, Ms. Que Dongwu, Mr. Li Kaiyan, and Ms. Lin Lily are beneficiaries of Vanke's Business Partner Scheme adopted in 2014[158](index=158&type=chunk) - At no time during the period was the Company or any of its subsidiaries or the Company's holding company or its subsidiaries a party to any arrangement to enable the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate[158](index=158&type=chunk) - The Company had no share option scheme in place during the period[159](index=159&type=chunk) [Major Shareholders](index=32&type=section&id=Major%20Shareholders) As of June 30, 2019, Vanke Co., Ltd. and its subsidiaries were the Company's major shareholders, holding 75.0% equity, while CITIC Securities Company Limited and its subsidiaries held 7.72% equity Major Shareholders' Shareholding | Name of Major Shareholder | Capacity of Interest | Total Number of Shares in which Shareholder is Interested | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Vanke | Held by controlled corporation | 292,145,949 | 75.0% | | CITIC Securities Company Limited | Held by controlled corporation | 30,080,000 | 7.72% | - Vanke holds **292,145,949** ordinary shares of the Company through its indirect wholly-owned subsidiary, Wkland Investments Company Limited[163](index=163&type=chunk) - CSI Capital Management Limited holds **30,080,000** ordinary shares of the Company, and it is a direct wholly-owned subsidiary of CITIC Securities Company Limited[164](index=164&type=chunk) [Publication of Interim Report](index=32&type=section&id=Publication%20of%20Interim%20Report) Printed copies of the interim report in both English and Chinese are available and can be viewed on the Company's website and the HKEX website, with shareholders able to change their communication preferences at any time - Printed copies of the English and Chinese versions of the interim report are available and can be viewed on the Company's website (www.vankeoverseas.com) and the HKEX website (www.hkexnews.hk)[165](index=165&type=chunk) - Shareholders may at any time change their choice of means of receiving corporate communications from the Company free of charge by giving reasonable written notice to the Company's Hong Kong Share Registrar or by email to vankeoverseas.ecom@computershare.com.hk[165](index=165&type=chunk)

[Company Information](index=4&type=section&id=Company%20Information) The report lists key company information including core management, board members, committees, auditor, legal counsel, principal bankers, and registered office - The report lists the company's core management, board members, various committee compositions, auditor (KPMG), legal counsel, principal bankers, and registered office[8](index=8&type=chunk)[9](index=9&type=chunk) [Biographical Details of Directors](index=5&type=section&id=Biographical%20Details%20of%20Directors) The report details the personal biographies of executive, non-executive, and independent non-executive directors, including their roles within and outside Vanke, professional backgrounds, and industry experience - The report provides detailed personal biographies of executive directors, non-executive directors, and independent non-executive directors, including their tenure within and outside the Vanke system, professional backgrounds, and industry experience[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk) - Executive Director Mr Zhang Xu also serves as Executive Vice President and Chief Operating Officer of Vanke Co, Ltd, while Executive Director Ms Que Dongwu is Vanke's Vice President and General Manager of Overseas Business Division, indicating close management ties between the company and its parent company Vanke[12](index=12&type=chunk)[13](index=13&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's business and financial performance, strategic outlook, and key risks for the reporting period [Business Review](index=7&type=section&id=Business%20Review) The Group's total revenue increased by **5%** to approximately **HK$102 million**, primarily driven by rental income growth from Regent Centre, with investment property fair value growing **8%** to **HK$1.968 billion** - **2018 Key Performance Indicators** | Indicator | 2018 | 2017 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Total Revenue | HK$101.8 million | HK$96.5 million | +5% | | Investment Property Fair Value | HK$1.968 billion | HK$1.83 billion | +8% | | Related Profit (excluding fair value changes) | HK$540.8 million | HK$54.2 million | +898% | [Leasing and Property Management](index=7&type=section&id=Leasing%20and%20Property%20Management) The Group's core leasing asset, Regent Centre, saw increased rental rates and occupancy, boosting segment revenue to **HK$101.8 million** and segment profit (excluding fair value changes) to **HK$77.4 million** - **Regent Centre Leasing Performance** | Indicator | End of 2018 | End of 2017 | | :--- | :--- | :--- | | Occupancy Rate | 99% | 97% | | Average Monthly Rent | HK$9.7/sq ft | HK$9.5/sq ft | - An upgrade of Regent Centre's air-conditioning system was completed in the first quarter of 2018, with a total expenditure of approximately **HK$31 million**, aimed at improving energy efficiency and cooling performance[24](index=24&type=chunk) [Property Development and Financing](index=8&type=section&id=Property%20Development%20and%20Financing) This segment recorded a **14,688%** profit increase to **HK$473 million**, mainly from recognizing sales profit from the 'Pavilia Bay' property development project by associate Ultimate Vantage - The Group's share of profit from associates (Ultimate Vantage and Goldrich Holdings) was **HK$466 million**, compared to only **HK$46 thousand** in the same period last year, primarily due to the recognition of sales profit from the "Pavilia Bay" project[29](index=29&type=chunk) - The Group provides mortgage financing services to buyers of the "Pavilia Bay" project through another associate, Goldrich Holdings[27](index=27&type=chunk) [Financial Review](index=9&type=section&id=Financial%20Review) The Group maintains a robust financial position with no interest-bearing debt and significantly increased bank balances and cash, while key performance indicators demonstrate stable leasing and enhanced profitability [Rights Issue](index=9&type=section&id=Rights%20Issue) The report details the utilization of net proceeds from the 2015 rights issue, with approximately **HK$393 million** remaining reallocated for future land or property acquisitions - **Net Proceeds from Rights Issue Utilization (as at end of 2018)** | Item | Total Unutilized (HK$ million) | | :--- | :--- | | Acquisition of land or properties | 393 | | Total Unutilized | 393 | [Liquidity and Financial Resources](index=10&type=section&id=Liquidity%20and%20Financial%20Resources) At year-end 2018, the Group's equity attributable to shareholders increased to **HK$3.667 billion**, with no interest-bearing debt and bank balances and cash significantly rising to **HK$1.425 billion** - **Liquidity Indicators (End of 2018)** | Indicator | Amount | | :--- | :--- | | Equity attributable to shareholders | HK$3.667 billion | | Interest-bearing debt | 0 | | Bank balances and cash | HK$1.425 billion | [Key Performance Indicators](index=10&type=section&id=Key%20Performance%20Indicators) The Group's five key performance indicators show improved occupancy and average rent, stable service cost-to-income ratio, zero gearing, and a significant increase in return on equity to **20.3%** - **Overview of 2018 Key Performance Indicators** | Indicator | 2018 | 2017 | | :--- | :--- | :--- | | Occupancy Rate of the Property | 99% | 97% | | Average Rent of the Property | HK$9.7/sq ft | HK$9.5/sq ft | | Service Cost-to-Income Ratio | 22.4% | 22.3% | | Gearing Ratio | 0% | 0% | | Return on Equity | 20.3% | 5.3% | [Principal Risks and Uncertainties](index=16&type=section&id=Principal%20Risks%20and%20Uncertainties) The Group faces key risks including high reliance on the Hong Kong property market, potential underperformance of business partners, M&A uncertainties, funding needs for acquisitions, and potential conflicts of interest with its parent company Vanke - The Group's business is highly concentrated in Hong Kong, making its performance susceptible to fluctuations in Hong Kong's economic conditions and property market[77](index=77&type=chunk) - As the parent company Vanke operates businesses in Hong Kong through two platforms, the Group (75% owned) and Vanke Hong Kong (100% owned), and some directors hold positions in both platforms, there are potential business competition and conflicts of interest[84](index=84&type=chunk) [Environmental Policy](index=18&type=section&id=Environmental%20Policy) The Group is committed to environmentally sound business practices, aiming to reduce emissions and optimize resource use through efficiency improvements, energy-saving equipment, and promoting eco-friendly measures among stakeholders - In property development projects, the Group strives to obtain environmental certifications such as BEAM Plus (Hong Kong) and LEED (US) where practicable[86](index=86&type=chunk) [Relationships with Suppliers, Customers and Employees](index=18&type=section&id=Relationships%20with%20Suppliers%2C%20Customers%20and%20Employees) The Group maintains close cooperation with its property management company and strives for excellent tenant service, while noting an **89%** employee turnover rate in 2018 attributed to normal replacement and efficiency improvements - The employee turnover rate in 2018 was **89%**, a significant increase from **17%** in 2017, which the company attributed to normal staff replacement and efforts to enhance work efficiency[92](index=92&type=chunk) [Employees and Remuneration Policy](index=19&type=section&id=Employees%20and%20Remuneration%20Policy) The Group reduced its employee count to three by year-end 2018, leading to a decrease in staff costs (including directors' emoluments) from **HK$7.8 million** to **HK$5.4 million**, with administrative support provided by Vanke Hong Kong on a cost basis - **Changes in Employees and Costs** | Indicator | End of 2018 | End of 2017 | | :--- | :--- | :--- | | Number of Employees | 3 | 6 | | Staff Costs | HK$5.4 million | HK$7.8 million | [Outlook](index=19&type=section&id=Outlook) Management anticipates economic uncertainties in 2019 due to global factors, with the Group planning to diversify its business by seeking opportunities in Hong Kong and overseas, while expecting stable high occupancy and rents for Regent Centre - Facing macroeconomic uncertainties, the Group's strategy is to continue pursuing business diversification and expanding into Hong Kong and overseas markets[94](index=94&type=chunk) [Final Dividend](index=20&type=section&id=Final%20Dividend) The Board recommends a final dividend of **HK$0.09** per share for the year ended December 31, 2018, a **200%** increase from the previous year, subject to approval at the Annual General Meeting - **Final Dividend Proposal** | Year | Final Dividend Per Share | | :--- | :--- | | 2018 | HK$0.09 | | 2017 | HK$0.03 | [Report of the Directors](index=21&type=section&id=Report%20of%20the%20Directors) This statutory disclosure outlines the company's principal business as investment holding, confirms annual results, and recommends a final dividend of **HK$0.09** per share - This report is a statutory disclosure document, outlining the company's principal business as investment holding and confirming the annual results and the proposed final dividend of **HK$0.09** per share[100](index=100&type=chunk)[102](index=102&type=chunk) - The report discloses directors' shareholdings in associated corporations (Vanke) and major shareholder information, with Vanke Co, Ltd holding **75.0%** of the company's shares through an indirect wholly-owned subsidiary[113](index=113&type=chunk)[119](index=119&type=chunk) - The report identifies directors' interests in competing businesses, clarifying a potential competitive relationship between the Group and Vanke Hong Kong Group in Hong Kong property development business[130](index=130&type=chunk)[131](index=131&type=chunk) - **Major Customer and Supplier Proportions** | Category | Proportion | | :--- | :--- | | Largest Customer | 9.7% | | Top Five Customers (total) | 26.4% | | Largest Supplier | 72.4% | | Top Five Suppliers (total) | 88.3% | [Environmental, Social and Governance Report](index=28&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) This report covers the Group's property leasing and management business (Regent Centre), detailing environmental initiatives like energy-saving upgrades and disclosing key environmental data, alongside social responsibility policies and community engagement - The scope of this report covers only the Group's property leasing and management business (Regent Centre), excluding property development and financing businesses led by joint venture partners[143](index=143&type=chunk) - Environmentally, the Group completed an energy-saving upgrade of Regent Centre's air-conditioning system, and the report discloses key environmental data such as electricity consumption, water usage, and paper recycling[144](index=144&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) - Regarding social responsibility, the report outlines the company's equal opportunity employment policy, healthy and safe working environment, anti-corruption whistleblowing system, and community investment activities[151](index=151&type=chunk)[153](index=153&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) [Corporate Governance Report](index=31&type=section&id=Corporate%20Governance%20Report) The report confirms the company's compliance with the Corporate Governance Code for 2018, with minor deviations corrected, and details the board's composition, committee functions, and oversight of risk management and internal controls - The report confirms that, except for a few deviations such as the non-separation of the Chairman and Chief Executive Officer roles, the company complied with the Corporate Governance Code throughout 2018, with the deviation corrected in February 2019[163](index=163&type=chunk) - The Board of Directors comprises two executive directors, three non-executive directors, and three independent non-executive directors, meeting the requirement that independent non-executive directors constitute at least one-third of the board[170](index=170&type=chunk)[174](index=174&type=chunk) - The report details the responsibilities, composition, and annual work summaries of the Remuneration Committee, Nomination Committee, and Audit Committee, reflecting the operation of the company's governance structure[179](index=179&type=chunk)[185](index=185&type=chunk)[197](index=197&type=chunk) - The Board is responsible for overseeing the Group's risk management and internal control systems and has reviewed their effectiveness for the year, deeming them effective and adequate[195](index=195&type=chunk)[196](index=196&type=chunk) [Independent Auditor's Report](index=42&type=section&id=Independent%20Auditor%27s%20Report) KPMG issued an unqualified opinion on the Group's 2018 consolidated financial statements, with 'Valuation of investment properties' identified as a key audit matter due to its significant impact and subjective judgments - Auditor KPMG issued an unqualified opinion on the company's consolidated financial statements for the year ended December 31, 2018, stating that the financial statements present a true and fair view of the Group's financial position and performance[219](index=219&type=chunk) - The report identifies "Valuation of investment properties" as a key audit matter because investment properties account for **53%** of the Group's total assets, their fair value changes significantly impact profit before tax, and the valuation involves significant subjective judgments and estimates (e.g., capitalization rates and market rents)[221](index=221&type=chunk)[227](index=227&type=chunk) [Financial Statements](index=46&type=section&id=Financial%20Statements) This section presents the Group's consolidated financial performance, position, equity changes, and cash flows for the reporting period, along with detailed notes explaining accounting policies and financial data [Consolidated Statement of Comprehensive Income](index=46&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) The Group's profit and total comprehensive income surged by **336%** to **HK$677 million** in 2018, primarily driven by a significant increase in share of results of associates from **HK$46 thousand** to **HK$466 million** - **Consolidated Statement of Comprehensive Income Summary (HK$ thousand)** | Item | 2018 | 2017 | | :--- | :--- | :--- | | Revenue | 101,780 | 96,460 | | Gross Profit | 78,976 | 74,940 | | Operating Profit | 203,329 | 162,169 | | Share of Results of Associates | 465,682 | 46 | | Profit Before Tax | 689,790 | 167,791 | | **Profit for the Year** | **676,843** | **155,149** | | Earnings Per Share (HK$) | 1.74 | 0.40 | [Consolidated Statement of Financial Position](index=47&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) At year-end 2018, total assets increased to **HK$3.747 billion** and net assets to **HK$3.667 billion**, driven by rising investment property fair value and increased bank balances, maintaining a robust financial structure with no interest-bearing debt - **Consolidated Statement of Financial Position Summary (HK$ thousand)** | Item | 2018 | 2017 | | :--- | :--- | :--- | | **Non-current Assets** | **2,306,572** | **2,053,988** | | Investment Properties | 1,968,000 | 1,830,000 | | Interests in Associates | 338,435 | 223,772 | | **Current Assets** | **1,439,959** | **1,023,408** | | Bank Balances and Cash | 1,425,085 | 865,905 | | **Net Assets** | **3,666,767** | **3,001,610** | | **Total Equity** | **3,666,767** | **3,001,610** | [Consolidated Statement of Changes in Equity](index=48&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) Total shareholders' equity increased from **HK$3.002 billion** at the beginning of the year to **HK$3.667 billion** at year-end, primarily due to the **HK$677 million** profit for the year, net of the **HK$11.686 million** final dividend paid - **Summary of Changes in Equity (HK$ thousand)** | Item | Amount | | :--- | :--- | | As at January 1, 2018 | 3,001,610 | | Profit and Total Comprehensive Income for the Year | +676,843 | | Approved Final Dividend for Prior Year | -11,686 | | **As at December 31, 2018** | **3,666,767** | [Consolidated Statement of Cash Flows](index=49&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Net cash and cash equivalents increased by **HK$559 million** for the year, with **HK$66.7 million** from operating activities and a significant **HK$504 million** net inflow from investing activities, mainly from associate dividends and repayments - **Consolidated Statement of Cash Flows Summary (HK$ thousand)** | Item | 2018 | 2017 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 66,698 | 83,082 | | Net Cash from Investing Activities | 504,168 | 90,587 | | Net Cash Used in Financing Activities | (11,686) | (11,686) | | **Net Increase in Cash and Cash Equivalents** | **559,180** | **161,983** | | Cash and Cash Equivalents at Beginning of Year | 865,905 | 703,922 | | **Cash and Cash Equivalents at End of Year** | **1,425,085** | **865,905** | [Notes to the Financial Statements](index=50&type=section&id=Notes%20to%20the%20Financial%20Statements) These notes provide detailed explanations of key accounting policies, significant judgments, and breakdowns of financial data, covering revenue, segment information, investment property valuation, associate investments, dividends, and financial risk management [Revenue and Segment Information](index=65&type=section&id=Revenue%20and%20Segment%20Information) Group revenue primarily comprises rental income (**HK$86.3 million**) and property management fees (**HK$15.48 million**), with the 'Leasing and Property Management' segment contributing all revenue and **HK$213 million** in segment results, while 'Property Development and Financing' contributed **HK$473 million** in segment results without revenue - **2018 Segment Results (HK$ thousand)** | Segment | Revenue | Segment Results | | :--- | :--- | :--- | | Leasing and Property Management | 101,780 | 213,357 | | Property Development and Financing | 0 | 473,217 | | **Total** | **101,780** | **686,574** | [Investment Properties](index=74&type=section&id=Investment%20Properties) The Group's investment properties were valued at **HK$1.968 billion** at year-end 2018, an increase of **HK$136 million** from the beginning of the year, with valuation performed by independent surveyors using the income capitalization approach - The fair value measurement of investment properties is classified as Level 3, utilizing significant unobservable inputs such as capitalization rates (**3.5%-4%**) and market rent per square foot (**HK$9.5-10.3**)[366](index=366&type=chunk) [Interests in Associates and Amounts Due from Associates](index=77&type=section&id=Interests%20in%20Associates%20and%20Amounts%20Due%20from%20Associates) The Group holds **20%** interests in Ultimate Vantage Limited (UVL) and Goldrich Holdings Limited, with UVL's 'Pavilia Bay' project generating **HK$2.007 billion** in profit for the year, significantly contributing to the Group's profit - Associate UVL's property development project "Pavilia Bay" recognized **HK$9.959 billion** in revenue and **HK$2.007 billion** in profit in 2018, serving as the primary source of the Group's profit for the year[383](index=383&type=chunk) [Dividends](index=72&type=section&id=Dividends) The Board proposes a final dividend of **HK$0.09** per share for 2018, totaling approximately **HK$35.06 million**, subject to shareholder approval, while the 2017 final dividend of **HK$0.03** per share was paid during the year - **Dividend Distribution Status** | Financial Year | Dividend Type | Amount Per Share | Status | | :--- | :--- | :--- | :--- | | 2018 | Final Dividend | HK$0.09 | Proposed | | 2017 | Final Dividend | HK$0.03 | Paid in 2018 | [Financial Risk Management and Fair Value](index=84&type=section&id=Financial%20Risk%20Management%20and%20Fair%20Value) The Group primarily faces credit and liquidity risks, but is not exposed to interest rate or foreign exchange risks due to no interest-bearing borrowings and all operations being Hong Kong-based and denominated in HKD - The Group has no interest-bearing borrowings and is therefore not affected by fluctuations in market interest rates[417](index=417&type=chunk) - All of the Group's assets and operations are in Hong Kong, and cash flows are denominated in Hong Kong dollars, thus there is no foreign exchange risk[418](index=418&type=chunk) [Overview of Property Projects](index=89&type=section&id=Overview%20of%20Property%20Projects) This section provides a summary of the Group's key property projects, including Regent Centre (100% owned, completed for investment) and Pavilia Bay (20% interest, completed for sale) - **Major Property Projects** | Project Name | Location | Type | Effective Interest | Status | | :--- | :--- | :--- | :--- | :--- | | Regent Centre | Kwai Chung, New Territories | Industrial/Warehouse | 100% | Completed and held for investment | | Pavilia Bay | Tsuen Wan, New Territories | Residential | 20% | Completed and held for sale | [Five-Year Financial Summary](index=90&type=section&id=Five-Year%20Financial%20Summary) This section presents a five-year summary of key financial figures, including revenue, profit for the year, and net assets, illustrating the Group's financial performance and growth trends over time - **Five-Year Financial Summary (HK$ thousand)** | Item | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 101,780 | 96,460 | 91,244 | 89,067 | 85,809 | | Profit for the Year | 676,843 | 155,149 | 131,320 | 161,705 | 137,555 | | Net Assets | 3,666,767 | 3,001,610 | 2,858,147 | 2,738,513 | 1,552,423 |