Core Viewpoint - Hong An Real Estate (01243) and Hong An Group (01222) announced a joint venture agreement for property acquisition, indicating a strategic move to enhance their investment portfolio and operational profitability through collaboration with experienced investors [1] Group 1: Joint Venture Agreement - Hong An Real Estate's indirect wholly-owned subsidiary, Prime Resonance, has entered into a shareholder agreement with ADPF Oregon and Harmonia Crest Limited for property acquisition [1] - The property in question is registered under multiple land lots in Kowloon, Hong Kong, and currently operates as "Yue Yi Hotel • Mong Kok" [1] Group 2: Strategic Benefits - The collaboration with ADPF Oregon is seen as a valuable opportunity to leverage Hong An Group's expertise in property investment and asset management [1] - The partnership aims to enhance and expand the investment property portfolio while generating operational profit shares for both Hong An Group and Hong An Real Estate [1]

Core Viewpoint - Hong Kong's Macro Properties (01243) and Macro Group (01222) announced a joint venture agreement for property acquisition, enhancing their investment portfolio and operational profits through collaboration with experienced investors [1] Group 1: Joint Venture Agreement - Macro Properties' indirect wholly-owned subsidiary, Prime Resonance, has entered into a shareholder agreement with ADPF Oregon and Harmonia Crest Limited for property acquisition [1] - The property in question is registered under multiple land lots in Kowloon, Hong Kong, currently operating as "Hotel MOKO" [1] Group 2: Strategic Benefits - The collaboration with ADPF Oregon is seen as a valuable opportunity to leverage Macro Properties' expertise in property investment and asset management [1] - The partnership aims to enhance and expand the investment property portfolio while generating operational profit shares for both Macro Group and Macro Properties [1]

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聯合公佈之內容概不 負責，對其準確性或完整性亦不發表聲明，並明確表示，概不就因本聯合公佈全部 或任何部分內容而產生或因依賴該等內容而引致之任何損失承擔任何責任。 （於百慕達註冊成立之有限公司） WANG ON GROUP LIMITED （宏安集團有限公司）* （股份代號：1222） WANG ON PROPERTIES LIMITED （於百慕達註冊成立之有限公司） （股份代號：1243） 宏安地產有限公司 聯合公佈 須予披露交易 有關 就收購物業 成立合營企業 成立合營企業 宏安董事會及宏安地產董事會欣然聯合宣佈，於二零二五年七月三十一日，宏安 地產之間接全資附屬公司Prime Resonance已與ADPF Oregon及合營公司訂立股東 協議，內容有關就收購該物業成立合營企業。 有關合營公司的最高資本承擔總額約為291,040,000港元，其中Prime Resonance及 ADPF Oregon將分別出資約43,660,000港元及約247,380,000港元。因此，合營公司 之股份將由Prime Resonance及ADPF Oregon分別持 ...

CONTENTS 目錄 | Corporate Information | 2 | | --- | --- | | 公司資料 | | | Financial Highlights | 5 | | 財務撮要 | | | Chairman's Statement | 8 | | 主席報告 | | | Management Discussion and Analysis | 17 | | 管理層討論及分析 | | | Biographies of Board of Directors and Senior | 47 | | Management | | | 董事會及高級管理層履歷 | | | Corporate Governance Report | 53 | | 企業管治報告 | | | Report of the Directors | 83 | | 董事會報告 | | | Independent Auditor's Report | 108 | | 獨立核數師報告 | | | Consolidated Statement of Profit or Loss and | 118 | | Other Compre ...

Annual Financial Summary [Key Financial Indicators](index=1&type=section&id=Key%20Financial%20Indicators) Hon An Group Limited announced key financial highlights for the fiscal year ended March 31, 2025, showing significant revenue growth of 38.2%, but increased loss attributable to owners of the parent by 22.3%, a 16.5% decrease in net assets, and expanded loss per share, though the gearing ratio improved | Indicator | FY2025 (million HKD) | FY2024 (million HKD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,740 | 1,983 | +38.2% | | Gross Profit | 809 | 824 | -1.8% | | Loss Attributable to Owners of the Parent | (922) | (754) | +22.3% | | Loss Per Share (HK cents) | (6.51) | (5.52) | +17.9% | | Indicator | As of March 31, 2025 (million HKD) | As of March 31, 2024 (million HKD) | Change | | :--- | :--- | :--- | :--- | | Net Assets | 6,780 | 8,119 | -16.5% | | Net Assets Per Share (HKD) | 0.48 | 0.53 | -9.4% | | Gearing Ratio | 58.7% | 62.9% | -4.2 percentage points | Consolidated Financial Statements [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group's total revenue significantly increased this year, but the annual loss and loss attributable to owners of the parent expanded due to higher cost of sales, selling and distribution expenses, net impairment losses on financial assets, and share of loss of joint ventures | Indicator | FY2025 (thousand HKD) | FY2024 (thousand HKD) | | :--- | :--- | :--- | | Total Revenue | 2,740,186 | 1,983,234 | | Gross Profit | 808,760 | 823,641 | | Other Income and Gains, Net | 124,210 | 241,421 | | Selling and Distribution Expenses | (560,829) | (365,552) | | Administrative Expenses | (463,276) | (491,567) | | Net Impairment Losses on Financial Assets | (112,108) | (21,762) | | Finance Costs | (354,594) | (364,377) | | Net Write-down of Properties Under Development | — | (692,355) | | Write-down of Properties Held for Sale | (229,273) | (2,919) | | Share of Profit/Loss of Joint Ventures | (288,662) | 268,419 | | Loss Before Tax | (1,192,711) | (878,152) | | Loss for the Year | (1,190,135) | (916,466) | | Loss Attributable to Owners of the Parent | (922,431) | (753,847) | | Basic and Diluted Loss Per Share (HK cents) | (6.51) | (5.52) | - Total comprehensive loss for the year increased from **990,404 thousand HKD** in FY2024 to **1,258,465 thousand HKD** in FY2025[7](index=7&type=chunk) [Consolidated Statement of Financial Position](index=5&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2025, the Group's total assets and net assets both decreased, but net current assets increased and total current liabilities significantly reduced, reflecting an improved liquidity position | Indicator | As of March 31, 2025 (thousand HKD) | As of March 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Total Non-current Assets | 8,225,712 | 9,060,253 | | Total Current Assets | 5,503,300 | 8,522,392 | | Total Current Liabilities | 2,488,640 | 5,993,498 | | Net Current Assets | 3,014,660 | 2,528,894 | | Total Assets Less Current Liabilities | 11,240,372 | 11,589,147 | | Total Non-current Liabilities | 4,460,053 | 3,470,137 | | Net Assets | 6,780,319 | 8,119,010 | | Equity Attributable to Owners of the Parent | 4,332,547 | 5,266,304 | | Non-controlling Interests | 2,447,772 | 2,852,706 | | Total Equity | 6,780,319 | 8,119,010 | Notes to the Financial Information [Basis of Preparation and Changes in Accounting Policies](index=7&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) This financial information is prepared in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance, using the historical cost convention, with investment properties and certain financial assets/liabilities measured at fair value; newly adopted accounting standards had no material impact on the Group's financial position or performance this year - Financial information is presented in **Hong Kong Dollars**, with all values rounded to the nearest thousand[12](index=12&type=chunk) - The Group first adopted revised HKFRS 16 (Lease Liabilities in a Sale and Leaseback Transaction) and HKAS 7 and HKFRS 7 (Supplier Finance Arrangements), but these had **no impact** due to the absence of relevant transactions[13](index=13&type=chunk)[14](index=14&type=chunk) [Operating Segment Information](index=8&type=section&id=Operating%20Segment%20Information) The Group operates five reportable operating segments: property development, property investment, wet markets, pharmaceutical products, and treasury management, with management assessing segment performance based on adjusted profit/loss before tax and inter-segment sales conducted at market prices - The Group's five reportable operating segments are: **property development, property investment, wet markets, pharmaceutical products, and treasury management**[15](index=15&type=chunk)[19](index=19&type=chunk) | Segment | FY2025 Segment Revenue and Income (thousand HKD) | FY2024 Segment Revenue and Income (thousand HKD) | FY2025 Segment Results (thousand HKD) | FY2024 Segment Results (thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Property Development | 1,388,586 | 460,851 | (822,432) | (802,230) | | Property Investment | 12,113 | 23,375 | 72,264 | 232,967 | | Wet Markets | 653,433 | 708,690 | 202,280 | 176,895 | | Pharmaceutical Products | 749,274 | 784,528 | (34,832) | 52,448 | | Treasury Management | 40,845 | 98,518 | (174,660) | (73,844) | | Total | 2,836,254 | 2,056,898 | (757,380) | (413,764) | [Revenue, Other Income and Gains, Net](index=9&type=section&id=Revenue,%20Other%20Income%20and%20Gains,%20Net) The Group's total revenue significantly increased due to a substantial rise in property sales, but other income and gains, net, decreased due to the absence of a reversal of long-term payables from the previous year | Revenue Source | FY2025 (thousand HKD) | FY2024 (thousand HKD) | | :--- | :--- | :--- | | Sale of Properties | 1,352,492 | 432,944 | | Sale of Goods | 822,373 | 871,994 | | Pharmaceutical Management and Promotion Services | 14,449 | 12,526 | | Chinese Medicine Services | 12,361 | 14,773 | | Commission Income from Operating Agricultural Product Trading Markets | 80,005 | 83,688 | | Ancillary Services for Agricultural Product Trading Markets | 88,731 | 87,062 | | Asset Management Fees | 24,998 | 36,216 | | Interest Income from Treasury Business | 15,027 | 55,435 | | Sub-lease Income | 143,769 | 197,341 | | Gross Rental Income from Operating Leases of Investment Properties | 185,258 | 184,780 | | Dividend Income from Financial Assets | 723 | 7,122 | | Total Revenue | 2,740,186 | 1,983,234 | | Other Income and Gains, Net | FY2025 (thousand HKD) | FY2024 (thousand HKD) | | :--- | :--- | :--- | | Total Other Income | 94,078 | 215,305 | | Total Gains | 30,132 | 26,116 | | Total Other Income and Gains, Net | 124,210 | 241,421 | - Government subsidies primarily originated from **support for agricultural product trading markets by the PRC government** and the **SME Marketing Fund in Hong Kong**[21](index=21&type=chunk) [Loss Before Tax](index=11&type=section&id=Loss%20Before%20Tax) The Group's loss before tax expanded, primarily influenced by factors such as cost of properties sold, inventory costs, employee benefit expenses, net impairment losses on financial assets, and share of loss of joint ventures | Item | FY2025 (thousand HKD) | FY2024 (thousand HKD) | | :--- | :--- | :--- | | Cost of Services Provided | 196,578 | 207,320 | | Cost of Properties Sold | 1,196,656 | 334,682 | | Cost of Inventories Recognized as Expense | 418,094 | 455,106 | | Depreciation of Property, Plant and Equipment | 53,610 | 56,307 | | Depreciation of Right-of-use Assets | 78,697 | 80,836 | | Auditor's Remuneration | 11,480 | 12,940 | | Total Employee Benefit Expenses | 499,439 | 450,528 | | Total Net Impairment Losses on Financial Assets | 112,108 | 21,762 | - Net impairment losses on financial assets significantly increased, mainly due to **higher impairment losses on loans and interest receivables**[22](index=22&type=chunk)[40](index=40&type=chunk) [Finance Costs](index=12&type=section&id=Finance%20Costs) The Group's finance costs slightly decreased, primarily due to the repayment of bank and other borrowings, partially offset by a reduction in capitalized interest | Item | FY2025 (thousand HKD) | FY2024 (thousand HKD) | | :--- | :--- | :--- | | Interest on Bank and Other Borrowings | 403,821 | 453,788 | | Interest on Lease Liabilities | 42,205 | 49,000 | | Interest on Unsecured Notes | 679 | 8,847 | | Subtotal | 446,705 | 511,635 | | Less: Capitalized Interest | (92,111) | (147,258) | | Total | 354,594 | 364,377 | - The decrease in finance costs was mainly due to the **repayment of bank and other borrowings**[40](index=40&type=chunk) [Income Tax](index=12&type=section&id=Income%20Tax) The Group recorded an income tax credit this year, contrasting with an income tax expense in the prior year, primarily due to tax benefits from dividend withholding tax and the release of over-provision for prior years | Item | FY2025 (thousand HKD) | FY2024 (thousand HKD) | | :--- | :--- | :--- | | Current - Hong Kong Expense for the Year | 2,008 | 7,268 | | Current - Mainland China Expense for the Year | 15,231 | 47,575 | | Land Appreciation Tax | 9,508 | 13,456 | | Over-provision in Prior Years | (13,085) | (391) | | Deferred | (16,238) | (29,594) | | Total Tax Expense/(Credit) for the Year | (2,576) | 38,314 | - The income tax credit was mainly due to **tax benefits from dividend withholding tax** and the **release of over-provision for prior years** enjoyed this year[43](index=43&type=chunk) [Dividends](index=13&type=section&id=Dividends) The Board does not recommend the payment of any dividends for the years ended March 31, 2025 and 2024, and no interim dividends were paid - The Board does not recommend the payment of a **final dividend** for the years ended March 31, 2025 and 2024[28](index=28&type=chunk)[37](index=37&type=chunk) - No interim dividends were paid for the six months ended September 30, 2024, or September 30, 2023[37](index=37&type=chunk) [Loss Per Share Attributable to Owners of the Parent](index=13&type=section&id=Loss%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Parent) Both basic and diluted loss per share increased, calculated based on the loss attributable to owners of the parent and the weighted average number of ordinary shares outstanding | Indicator | FY2025 (thousand HKD) | FY2024 (thousand HKD) | | :--- | :--- | :--- | | Loss Attributable to Owners of the Parent | (922,431) | (753,847) | | Number of Shares (thousand shares) | FY2025 | FY2024 | | :--- | :--- | :--- | | Weighted Average Number of Ordinary Shares Outstanding | 14,261,016 | 15,354,768 | | Less: Weighted Average Number of Treasury Shares | (94,405) | (1,709,509) | | Weighted Average Number of Ordinary Shares for Basic and Diluted Loss Per Share Calculation | 14,166,611 | 13,645,259 | - The basic and diluted loss per share amounts were **not adjusted for dilution** as the share options issued had no dilutive effect on the basic earnings per share amount[29](index=29&type=chunk) [Trade Receivables](index=14&type=section&id=Trade%20Receivables) The Group's net trade receivables decreased, with credit terms ranging from 7 to 120 days, no significant concentration of credit risk, and no collateral held; overdue balances are regularly reviewed by senior management | Item | FY2025 (thousand HKD) | FY2024 (thousand HKD) | | :--- | :--- | :--- | | Trade Receivables | 97,226 | 129,798 | | Impairment | (19,169) | (21,000) | | Net Book Value | 78,057 | 108,798 | | Ageing Analysis | FY2025 (thousand HKD) | FY2024 (thousand HKD) | | :--- | :--- | :--- | | Within 1 Month | 60,452 | 63,325 | | 1 to 3 Months | 16,043 | 15,197 | | 3 to 6 Months | 852 | 15,391 | | Over 6 Months | 710 | 14,885 | | Total | 78,057 | 108,798 | - Trade receivables include amounts due from **joint ventures of 5,942 thousand HKD** (2024: 2,336 thousand HKD) and **associates of 9,575 thousand HKD** (2024: 5,341 thousand HKD)[32](index=32&type=chunk) [Loans and Interest Receivables](index=15&type=section&id=Loans%20and%20Interest%20Receivables) Total loans and interest receivables decreased, but impairment provisions significantly increased, reflecting the Group's more cautious assessment of credit risk amidst economic uncertainty | Item | FY2025 (thousand HKD) | FY2024 (thousand HKD) | | :--- | :--- | :--- | | Loans and Interest Receivables, Secured | 215,090 | 273,300 | | Loans and Interest Receivables, Unsecured | 61,962 | 79,013 | | Subtotal | 277,052 | 352,313 | | Less: Impairment Provision | (138,319) | (78,924) | | Portion Classified as Current Assets | 128,978 | 244,060 | - The effective interest rate for **secured loans** ranges from **5% to 22% per annum**, with credit periods from 3 months to 5 years[35](index=35&type=chunk) - The effective interest rate for **unsecured loans** ranges from **1% to 33% per annum**, with credit periods from 3 months to 113 months[35](index=35&type=chunk) [Trade and Bills Payables](index=15&type=section&id=Trade%20and%20Bills%20Payables) Total trade and bills payables significantly decreased, and the Group has established financial risk management policies to ensure all payables are settled within credit terms | Ageing Analysis | FY2025 (thousand HKD) | FY2024 (thousand HKD) | | :--- | :--- | :--- | | Within 1 Month | 63,326 | 143,578 | | 1 to 3 Months | 2,105 | 4,339 | | 3 to 6 Months | 412 | 1,578 | | Over 6 Months | 28,266 | 41,654 | | Total | 94,109 | 191,149 | - Trade and bills payables are **interest-free**, with an average credit period ranging from **30 to 360 days**[34](index=34&type=chunk) Management Discussion and Analysis [Financial Performance Review](index=16&type=section&id=Financial%20Performance%20Review) The Group's revenue grew by 38.2% this year due to increased residential project sales, but loss attributable to owners of the parent expanded by 22.3%, mainly impacted by property write-downs, joint venture losses, and higher selling expenses, with a decline in gross profit margin | Indicator | FY2025 (million HKD) | FY2024 (million HKD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,740.2 | 1,983.2 | +38.2% | | Loss Attributable to Owners of the Parent | (922.4) | (753.8) | +22.3% | | Gross Profit | 808.8 | 823.6 | -1.8% | | Gross Profit Margin | 29.5% | 41.5% | -12.0 percentage points | | Other Income and Gains, Net | 124.2 | 241.4 | -48.5% | | Administrative Expenses | 463.3 | 491.6 | -5.8% | | Selling and Distribution Expenses | 560.8 | 365.6 | +53.4% | | Finance Costs | 354.6 | 364.4 | -2.7% | | Net Impairment Losses on Financial Assets | 112.1 | 21.8 | +414.2% | | Other Expenses | 49.3 | 174.8 | -71.8% | | Net Fair Value Loss on Financial Assets and Liabilities at FVTPL | (34.6) | 3.2 (Gain) | Turned to Loss | | Net Fair Value Loss on Investment Properties Owned | (34.0) | (104.0) | -67.3% | | Net Write-down of Properties Under Development | — | (692.4) | Turned to Nil | | Write-down of Properties Held for Sale | 229.3 | 2.9 | +7703.4% | | Share of Loss/Profit of Joint Ventures | (288.7) (Loss) | 268.4 (Profit) | Turned to Loss | | Income Tax Credit/Expense | 2.6 (Credit) | 38.3 (Expense) | Turned to Credit | - The increase in revenue was primarily due to **higher sales and delivery of completed residential projects** in the current fiscal year[38](index=38&type=chunk) - The increase in loss attributable to owners of the parent was mainly due to **write-down of properties held for sale, increased share of loss of joint ventures, and higher selling and distribution expenses**[38](index=38&type=chunk) [Business Segment Review](index=18&type=section&id=Business%20Segment%20Review) The Group's business segments showed mixed performance: property development revenue surged but remained at a loss; wet markets and agricultural trading markets saw revenue decline but profit grow; property investment rental income decreased; pharmaceutical business revenue slightly dropped but actively expanded e-commerce and product innovation; treasury management lending business revenue sharply fell; asset management and student accommodation performed steadily; and property management is expected to expand [Property Development](index=18&type=section&id=Property%20Development) The property development segment saw significant revenue growth, primarily from residential project sales by Hon An Properties Group, but the segment still recorded a loss; the Group actively expanded its land bank and completed several property sales and leaseback transactions | Indicator | FY2025 (million HKD) | FY2024 (million HKD) | | :--- | :--- | :--- | | Segment Revenue (Sales to External Customers) | 1,352.5 | 432.9 | | Segment Loss | 822.4 | 802.2 | - Hon An Properties Group contributed approximately **1,228.0 million HKD** in revenue, while China Agricultural Products Group contributed approximately **124.5 million HKD**[46](index=46&type=chunk) - Hon An Properties Group entered into a **joint venture partnership with Chevalier International Holdings Limited** to develop the Yau Tong Sze Shan Street project[47](index=47&type=chunk) - China Agricultural Products Group sold 100% equity interest in Huaian Hongjin Agricultural and Sideline Products Logistics Co., Ltd., generating a **disposal gain of approximately 35.8 million HKD**[48](index=48&type=chunk) - Hon An Properties Group's land bank has a total gross floor area of approximately **966,200 square feet**, of which approximately **134,900 square feet** has been pre-sold[50](index=50&type=chunk) [Wet Markets and Agricultural Product Trading Markets](index=20&type=section&id=Wet%20Markets%20and%20Agricultural%20Product%20Trading%20Markets) The wet markets and agricultural product trading markets segment experienced a slight decrease in revenue but an increase in segment profit; the Group manages approximately 320 wet market stalls in Hong Kong and operates eleven agricultural product trading markets across five provinces in China, continuously optimizing the shopping environment and consolidating its market position | Indicator | FY2025 (million HKD) | FY2024 (million HKD) | | :--- | :--- | :--- | | Segment Revenue (Sales to External Customers) | 599.6 | 667.1 | | Segment Profit | 202.3 | 176.9 | - China Agricultural Products Group contributed approximately **378.7 million HKD** in revenue, Hong Kong wet market operations contributed approximately **143.8 million HKD**, and Hong Kong fresh meat stalls and other retail operations contributed approximately **77.1 million HKD**[52](index=52&type=chunk) - The Group manages approximately **320 wet market stalls** under the "Man Yau" and "Daily • Fresh" brands in Hong Kong, with a total gross floor area exceeding **120,000 square feet**[53](index=53&type=chunk) - The Group operates **eleven agricultural product trading markets** across five provinces in China through China Agricultural Products Group[56](index=56&type=chunk) - The disposal of equity interest in a China wet market management joint venture was completed for a total consideration of **150 million HKD**[55](index=55&type=chunk) [Property Investment](index=22&type=section&id=Property%20Investment) The Group's total book value of investment properties owned decreased, and rental income declined; Hon An Properties Group's investment property portfolio maintains a high occupancy rate, while Watsons Group's retail properties are primarily for self-operation and franchising; the Group also sold some retail shops and holds second-hand residential properties for sale | Indicator | As of March 31, 2025 (million HKD) | As of March 31, 2024 (million HKD) | | :--- | :--- | :--- | | Total Book Value of Investment Properties Owned | 2,774.7 | 3,109.5 | | Rental Income (Sales to External Customers) | 5.9 | 7.9 | - Hon An Properties Group's investment properties have an overall occupancy rate of approximately **97%**, including the recently launched "The Urbanite"[57](index=57&type=chunk) - Hon An Properties Group's joint venture sold shops in Tin Sang Building for a total consideration of approximately **168.5 million HKD**, recognizing a loss of approximately **99.8 million HKD**[58](index=58&type=chunk) - Watsons Group sold a retail shop in Shui Wo Street, Kowloon, Hong Kong, for a consideration of **33 million HKD**[59](index=59&type=chunk) [Pharmaceutical and Health Food Products Business](index=22&type=section&id=Pharmaceutical%20and%20Health%20Food%20Products%20Business) Watsons Group's pharmaceutical and health food products segment saw a slight decrease in revenue, but the Group actively expanded its retail business, developed cross-border e-commerce using platforms like Douyin, and launched several new products; its "Pat Chun" brand maintained a leading position in the Hong Kong cough syrup market and expanded its distribution network in Mainland China | Indicator | FY2025 (million HKD) | FY2024 (million HKD) | | :--- | :--- | :--- | | Segment Revenue (Sales to External Customers) | 741.4 | 777.2 | - Watsons Group strategically expanded its retail business by **opening new stores in popular tourist areas** and optimizing operating hours[61](index=61&type=chunk) - Cross-border e-commerce development using platforms like Douyin achieved **significant sales growth and enhanced brand awareness** in the Mainland China market[62](index=62&type=chunk) - Successfully launched **three new products**: Bai Cao Ling Zhi Huang, Qu Shi Qing, and Xue Ji Wan[63](index=63&type=chunk) - The "Pat Chun" brand maintained its **number one position in the Hong Kong cough syrup market for the 15th consecutive year**, and expanded distribution to over **10,000 stores** in Mainland China[64](index=64&type=chunk) [Treasury Management](index=24&type=section&id=Treasury%20Management) The Group's liquid investments and cash balances decreased, and lending business revenue sharply declined by nearly 50%, primarily due to a shrinking loan portfolio; the Group adopted a more cautious approach in evaluating loan applications, leading to a significant increase in impairment losses on loans receivable | Indicator | As of March 31, 2025 (million HKD) | As of March 31, 2024 (million HKD) | | :--- | :--- | :--- | | Total Liquid Investments and Cash and Bank Balances | 1,014.2 | 1,614.8 | | Lending Business Revenue | 14.4 | 28.6 | - Lending business revenue decreased by approximately **49.7%**, mainly due to a **reduction in the loan portfolio**[68](index=68&type=chunk) - Active loan accounts decreased from 37 to 16, and total loan balances decreased from approximately **237.1 million HKD** to approximately **116.0 million HKD**[68](index=68&type=chunk) - Expected credit losses recognized on loans receivable significantly increased to approximately **78.8 million HKD** (2024: approximately 4.8 million HKD)[70](index=70&type=chunk) - Secured loans accounted for approximately **72.3%**, with a weighted average interest rate of approximately **12.3%**[68](index=68&type=chunk)[69](index=69&type=chunk) [Asset Management](index=26&type=section&id=Asset%20Management) Hon An Properties Group provides asset management services for joint ventures in residential development and commercial investment, earning asset management fees, acquisition fees, development fees, leasing fees, and incentive fees - Hon An Properties Group provides asset management services by **establishing joint ventures with strategic partners**[72](index=72&type=chunk) - Revenue sources include **asset management fees, acquisition fees, development fees, leasing fees, and incentive fees**[72](index=72&type=chunk) [Student Accommodation](index=26&type=section&id=Student%20Accommodation) Hon An Properties Group formed a joint venture with AG to renovate a hotel property into "The Urbanite" student accommodation, which is now fully operational with an occupancy rate exceeding 97%, serving students from over 20 institutions in Hong Kong - "The Urbanite" student accommodation project was **renovated and redeveloped in Q3 2024**[73](index=73&type=chunk) - The property offers **720 rooms with 1,424 beds**, achieving an occupancy rate of **over 97%**[73](index=73&type=chunk) [Property Management](index=26&type=section&id=Property%20Management) Hon An Properties Group's property management business, launched in 2017, currently manages eight projects and is expected to expand with increasing residential project deliveries, while continuously investing in professional teams and advanced technology - Hon An Properties Group's property management business currently manages **eight projects**[74](index=74&type=chunk) - The management fee pricing model is based on a **certain percentage of the total annual expenses** for each building[74](index=74&type=chunk) - The property management business is expected to **expand with increasing residential project deliveries**[74](index=74&type=chunk) [Liquidity and Financial Resources](index=26&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's equity attributable to owners of the parent and total equity both decreased, along with total assets and cash resources; however, total borrowings reduced, improving the net debt to equity ratio, as the Group continues to strengthen financial risk control and maintain a prudent financial management approach | Indicator | As of March 31, 2025 (million HKD) | As of March 31, 2024 (million HKD) | | :--- | :--- | :--- | | Equity Attributable to Owners of the Parent | 4,332.5 | 5,266.3 | | Total Equity | 6,780.3 | 8,119.0 | | Total Assets | 13,729.0 | 17,582.6 | | Total Cash and Bank Balances | 738.0 | 1,242.9 | | Total Market Value of Liquid Investment Portfolio | 276.2 | 371.9 | | Total Debt | 4,716.3 | 6,346.9 | | Net Debt to Equity Ratio | 58.7% | 62.9% | - Capital commitments amounted to approximately **1,400.0 million HKD** (2024: 1,798.1 million HKD), primarily attributable to the **property development business**[78](index=78&type=chunk) - Pledged property, plant and equipment, investment properties, properties under development, properties held for sale, loans receivable, and pledged deposits serve as **collateral for bank facilities**[77](index=77&type=chunk) | Interest-bearing Debt Portfolio | As of March 31, 2025 (thousand HKD) | As of March 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Fixed-rate Interest-bearing Debt | 1,783,300 | 762,100 | | Floating-rate Interest-bearing Debt | 2,933,000 | 5,584,800 | | Total | 4,716,300 | 6,346,900 | [Material Investments, Acquisitions and Disposals](index=30&type=section&id=Material%20Investments,%20Acquisitions%20and%20Disposals) The Group holds financial assets and liabilities measured at fair value through other comprehensive income and fair value through profit or loss, primarily comprising equity securities, debt investments, and funds; the Group adopts a prudent investment strategy and acquired office property lease and right-of-use assets during the year | Investment Type | As of March 31, 2025 Fair Value (thousand HKD) | As of March 31, 2024 Fair Value (thousand HKD) | | :--- | :--- | :--- | | Financial Assets at Fair Value Through Other Comprehensive Income | 73,705 | 119,638 | | Financial Assets and Liabilities at Fair Value Through Profit or Loss | 202,532 | 252,295 | | Total | 276,237 | 371,933 | - Financial assets at fair value through other comprehensive income include **listed equity securities and listed/unlisted debt investments**, which the Group intends to hold long-term for stable income generation[84](index=84&type=chunk) - Financial assets and liabilities at fair value through profit or loss include **investments in unlisted funds and derivative financial instruments**[85](index=85&type=chunk) - Acquisition of **right-of-use assets for office properties** amounted to approximately **50 million HKD**[87](index=87&type=chunk) [Events After the Reporting Period](index=31&type=section&id=Events%20After%20the%20Reporting%20Period) Several significant events occurred after the balance sheet date, including Watsons Group's disposal of retail shops, China Agricultural Products Group's signing of sale and leaseback agreements and equity reduction, and Hon An Properties' disposal of "The Urbanite" equity and signing of a future joint venture framework agreement with AG - Watsons Group's subsidiary sold a retail shop in Kweilin Street, Kowloon, Hong Kong, for a consideration of **19.5 million HKD** (April 2025)[88](index=88&type=chunk) - China Agricultural Products Group's subsidiary signed two sale and leaseback agreements for construction projects in Luoyang City and Puyang City, with sale prices of **RMB 51 million** and **RMB 20.4 million**, respectively (May 2025)[88](index=88&type=chunk) - China Agricultural Products Group's subsidiary reduced its equity interest in a non-wholly owned subsidiary to zero for a total consideration of approximately **RMB 24.7 million** (May 2025)[88](index=88&type=chunk) - Hon An Properties sold its respective **20% equity interests in "The Urbanite"** to a limited partnership indirectly managed by AG for a total consideration of approximately **87.2 million HKD**, and signed a framework agreement to establish a new joint venture (June 2025)[88](index=88&type=chunk) [Foreign Exchange](index=32&type=section&id=Foreign%20Exchange) The Group faces significant foreign exchange risk from the Renminbi, primarily due to currency translation risk from its China operations, resulting in translation losses; currently, the Group has no foreign exchange hedging policy - The Group faces significant foreign exchange risk from the **Renminbi**, mainly due to currency translation risk arising from the net assets of its PRC subsidiaries[90](index=90&type=chunk) | Indicator | FY2025 (million HKD) | FY2024 (million HKD) | | :--- | :--- | :--- | | Translation Loss | 74.0 | 77.6 | - The Group currently has **no foreign exchange hedging policy**[90](index=90&type=chunk) [Employees and Remuneration Policy](index=32&type=section&id=Employees%20and%20Remuneration%20Policy) As of March 31, 2025, the Group had 1,900 employees, with remuneration policies based on industry practice, individual performance, and experience, offering MPF, medical, retirement benefits, and specialized training programs | Indicator | As of March 31, 2025 | As of March 31, 2024 | | :--- | :--- | :--- | | Total Number of Employees | 1,900 | 2,111 | - Approximately **47% of employees are located in Hong Kong and Macau**, with the remainder in Mainland China[91](index=91&type=chunk) - Remuneration policies are determined based on **industry practice, individual performance, and experience**, offering bonuses, share options, medical, retirement benefits, and specialized training programs[91](index=91&type=chunk) [Principal Risks and Uncertainties](index=33&type=section&id=Principal%20Risks%20and%20Uncertainties) The Group faces multiple principal risks, including Hong Kong property market volatility, land bank acquisition, rising construction costs, property development cycles, reliance on third-party contractors, fair value fluctuations of financial assets, credit risk of borrowings, competition in wet market business, policy and supply chain risks in pharmaceutical business, internet risks, RMB exchange rate fluctuations, and industry policy risks in agricultural product trading markets; the Group has implemented internal controls and risk management policies to address these challenges - Hong Kong's economic conditions may directly impact the **property market**[92](index=92&type=chunk) - Risks include **land bank acquisition, rising construction costs, and the cyclical nature of the property development business**[92](index=92&type=chunk) - Fluctuations in **fair value gains or losses on financial assets and investment properties**[92](index=92&type=chunk) - **Credit risk and recoverability of loans** provided[92](index=92&type=chunk) - Wet market management contracts may be **lost due to intense market competition**[92](index=92&type=chunk) - **Industry policy risks** in the pharmaceutical business and **supply chain disruptions** due to material shortages or inflation[92](index=92&type=chunk) - **RMB exchange rate fluctuations** against HKD may affect profit repatriation and investments[92](index=92&type=chunk) - The Group has implemented a series of **internal controls and risk management policies**, and established various committees to address potential risks[93](index=93&type=chunk) [Prospects](index=33&type=section&id=Prospects) Hong Kong's economy faces challenges from global volatility and geopolitical tensions, with moderate GDP growth projected; the Group's business segments will adopt responsive strategies: Hon An Properties focusing on sales and debt refinancing; wet markets optimizing operations to counter competition; Watsons leveraging AI and e-commerce to expand in the Greater Bay Area and Southeast Asia; and China Agricultural Products Group expanding its network with a "light asset" strategy; the Group remains confident in achieving sustainable growth - Hong Kong's GDP grew by **2.5% in 2024**, with a projected growth of **2.3% in 2025**[95](index=95&type=chunk) - Hon An Properties Group will accelerate sales of residential and commercial projects, implement prudent risk management, and **mitigate interest burdens through debt refinancing**[96](index=96&type=chunk) - The wet market business will address competition from online shopping and shifting consumer spending by **optimizing operations and achieving economies of scale** through effective communication and cooperation with landlords[97](index=97&type=chunk) - Watsons will expand its telemedicine consultation platform, implement **AI-driven CRM systems**, and heavily invest in **e-commerce and live-streaming commerce** in the Greater Bay Area and Southeast Asia[98](index=98&type=chunk)[99](index=99&type=chunk) - China Agricultural Products Group plans to leverage its industry-leading position to expand its China business with a **"light asset" strategy** and explore e-platform development to seize opportunities from rural development policies[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - The Group is confident in achieving **sustainable growth** and creating long-term value for stakeholders, supported by its strategic investments and diversified business portfolio[102](index=102&type=chunk) Corporate Governance and Other Information [Environmental, Social and Governance](index=35&type=section&id=Environmental,%20Social%20and%20Governance) The Group is committed to environmental protection, participating in BEAM Plus schemes, upgrading industrial facilities for eco-friendliness, and integrating sustainability into corporate policies; concurrently, the Group actively fulfills social responsibilities by donating to NGOs and NPOs, and values strong relationships with customers and suppliers - The Group promotes **environmental protection in the workplace**, encouraging paper recycling and an energy-saving culture[103](index=103&type=chunk) - Hon An Properties Group participates in **BEAM Plus schemes**, Watsons Group upgrades industrial facilities to be more environmentally friendly, and China Agricultural Products Group integrates **sustainability into corporate policies**[103](index=103&type=chunk) - The Group fulfills its corporate social responsibility by **donating to various non-governmental and non-profit organizations**[104](index=104&type=chunk) - The Group values **strong relationships with suppliers and customers**, selecting quality partners and maintaining good communication[105](index=105&type=chunk) [Compliance with Corporate Governance Code](index=36&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company substantially complied with all applicable code provisions of the Corporate Governance Code during the fiscal year, with the exception of the Chairman and Chief Executive roles being combined, which constitutes a deviation that the Board will continuously review - The Company has complied with all applicable code provisions of the **Corporate Governance Code** as set out in Appendix C1 of the Listing Rules for the fiscal year ended March 31, 2025[106](index=106&type=chunk) - **Deviation**: Mr. Tang Ching Ho, the Chairman of the Board, also holds the position of Managing Director, which deviates from code provision C.2.1 requiring the roles of chairman and chief executive to be separate[106](index=106&type=chunk) [Directors' Securities Transactions](index=36&type=section&id=Directors'%20Securities%20Transactions) The Company has adopted a strict code of conduct for directors' securities transactions, and all directors confirmed compliance with the Model Code throughout the year, with no instances of non-compliance found - The Company has adopted a **code of conduct** no less exacting than the Model Code set out in Appendix C3 of the Listing Rules[108](index=108&type=chunk) - All Directors have confirmed their compliance with the Model Code throughout the year, and **no instances of non-compliance** by any Director were noted[108](index=108&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=37&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the year, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, except for Watsons Group's disposal of some shares and the Company's cancellation of shares received as a special dividend - Save for the disposal of **1,083,552 shares** of the Company by Watsons Group on April 29, 2024, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[110](index=110&type=chunk) - The Company cancelled **1,187,123,105 shares** of the Company on April 29, 2024, which were received as a special dividend from Watsons Group, partially paid in shares of the Company[110](index=110&type=chunk) - As of March 31, 2025, the Company held **no treasury shares**[110](index=110&type=chunk) [Audit Committee](index=37&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, held two meetings during the year to review the Group's accounting principles, financial reporting, audit plan, compliance, internal controls, and risk management matters - The Audit Committee comprises **three independent non-executive directors**, with Mr. Siu Kam Chau as Chairman[111](index=111&type=chunk) - Two regular meetings were held during the year to review the Group's **accounting principles and practices, financial reporting matters, audit plan, regulatory compliance, internal controls, and risk management**[112](index=112&type=chunk) [Auditor's Scope of Work](index=38&type=section&id=Auditor's%20Scope%20of%20Work) Ernst & Young agreed that the consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income, and related notes disclosed in this announcement are consistent with the amounts in the Group's draft consolidated financial statements for the year, but their work does not constitute an assurance engagement and they express no opinion or conclusion on this announcement - Ernst & Young agreed that the consolidated financial information disclosed in this announcement is **consistent with the amounts in the Group's draft consolidated financial statements** for the year[113](index=113&type=chunk) - Ernst & Young's work does not constitute an assurance engagement, and therefore they **express no opinion or conclusion** on this announcement[113](index=113&type=chunk) [Annual General Meeting and Closure of Register of Members](index=38&type=section&id=Annual%20General%20Meeting%20and%20Closure%20of%20Register%20of%20Members) The Company will hold its Annual General Meeting on August 19, 2025, and the register of members will be closed from August 14 to August 19, 2025, to determine eligibility for attending and voting - The Company will hold its Annual General Meeting on **Tuesday, August 19, 2025, at 12:15 p.m.**[114](index=114&type=chunk) - The register of members will be closed from **Thursday, August 14, 2025, to Tuesday, August 19, 2025**, to determine eligibility for attending and voting at the Annual General Meeting[115](index=115&type=chunk) - All share transfer documents, accompanied by the relevant share certificates, must be lodged with Tricor Investor Services Limited for registration no later than **4:30 p.m. on Wednesday, August 13, 2025**[115](index=115&type=chunk)

Market Overview - The Shanghai Composite Index is struggling to maintain the 3400-point level, with significant support from major financial institutions such as banks, brokerages, and insurance companies [1] - Market sentiment remains cautious, with trading volumes not keeping pace, leading to increased volatility and sector rotation among hot sectors like innovative drugs, CPO, IP economy, precious metals, rare earth permanent magnets, and automotive parts [1] Key News - Ant Group concept stocks surged in Hong Kong, with Yunfeng Financial rising by 100% at one point and closing up approximately 60%, following news that Ant Group plans to apply for stablecoin licenses in Singapore and Hong Kong [2] - The innovative drug sector continues to rise, with stock prices increasing while price-to-earnings ratios are decreasing, indicating a potential value reassessment as corporate earnings growth outpaces stock price increases [2][4] Precious Metals - Gold stocks in A-shares experienced a sudden surge, with Hengbang Co. and Chaohongji both hitting the daily limit, driven by heightened demand for gold as a safe haven amid escalating geopolitical tensions in the Middle East [4] - Platinum and silver have also seen significant price increases, with platinum rising nearly 40% this year, surpassing gold's performance, and silver reaching a 13-year high above $36 per ounce [4][5] Demand and Supply Dynamics - The demand structure for platinum shows that 40% is used in automotive catalysts, 25% in jewelry, 20% for industrial purposes, and 9% for investment [6] - Silver's demand structure indicates that industrial demand accounts for 58.5%, jewelry for 17.9%, investment for 16.4%, and other uses for the remainder [7] - The supply-demand gap for platinum is expected to widen, with the World Platinum Investment Council projecting the lowest total supply in five years by 2025, while investment demand is significantly increasing [8] - The global industrial demand for silver is anticipated to exceed 55% by the end of 2025, with a projected supply gap of 8,800 tons, driven by the energy revolution and technological advancements [8] Investment Implications - The rise of white metals like silver and platinum is expected to boost the precious metals sector, with companies involved in the silver and platinum supply chain likely to benefit from this trend [8]

Financial Performance - Revenue for the six months ended September 30, 2024, was HKD 1,230 million, an increase of 8.3% compared to HKD 1,136 million in the same period of 2023[3] - Gross profit decreased by 1.6% to HKD 428 million from HKD 435 million year-on-year[3] - Profit attributable to equity holders of the parent company was HKD 86 million, down 22.5% from HKD 111 million in the previous year[3] - Basic and diluted earnings per share decreased by 24.7% to HKD 0.61 from HKD 0.81[3] - Total income from customer contracts was HKD 1,029 million, up from HKD 918 million, reflecting a strong growth in customer engagement[6] - The company reported a pre-tax profit of HKD 117 million, down from HKD 208 million in the previous year[6] - Other income totaled HKD 42,764,000, down from HKD 71,497,000, indicating a decrease of 40.3%[50] - The company reported a pre-tax profit of HKD 117,073,000, down from HKD 208,410,000, a decrease of 43.9%[36] - The total other income and net gain was HKD 78,901,000, compared to HKD 94,152,000 in the previous year, a decline of 16.2%[50] Assets and Liabilities - Net asset value increased by 1.0% to HKD 8,198 million from HKD 8,119 million[3] - The asset-to-liability ratio improved by 10.5 percentage points to 52.4% from 62.9%[3] - The total non-current assets amounted to HKD 9,119 million, showing a slight increase from HKD 9,060 million[20] - As of September 30, 2024, total current liabilities amounted to HKD 4,936,887, a decrease from HKD 5,993,498 as of March 31, 2024, representing a reduction of approximately 17.7%[22] - The net current assets were reported at HKD 2,075,426, down from HKD 2,528,894, indicating a decline of about 17.9%[22] - Total non-current liabilities decreased to HKD 2,997,541 from HKD 3,470,137, reflecting a reduction of approximately 13.6%[22] - The total equity increased to HKD 8,197,604 from HKD 8,119,010, showing a growth of about 1.0%[22] - The issued share capital decreased to HKD 141,667 from HKD 153,538, a decline of approximately 7.7%[22] - The group's total assets amounted to approximately HKD 16,132,000,000 as of September 30, 2024, down from HKD 17,582,600,000 on March 31, 2024[123] Revenue Breakdown - Revenue from property sales reached HKD 529,585,000, up from HKD 375,110,000, marking a 41.0% increase year-over-year[34] - Revenue from agricultural product trading commissions was HKD 42,253,000, compared to HKD 45,136,000, reflecting a decrease of 6.5%[34] - Revenue from property development and sales reached approximately HKD 529,600,000, with a profit of about HKD 57,200,000, compared to HKD 375,100,000 and HKD 10,100,000 respectively for the same period last year[89] - Revenue from property development and sales in China was approximately HKD 101,700,000, a slight decrease from HKD 116,700,000 in the same period last year[92] - The pharmaceutical and health food product segment reported revenue of approximately HKD 344,100,000, a decrease of about 6.0% from HKD 365,900,000 in the previous six months[104] Expenses and Costs - Selling and distribution expenses increased to approximately HKD 232,100,000 from HKD 197,300,000 year-on-year, primarily due to higher commission expenses and increased advertising costs[83] - Administrative expenses for the period were approximately HKD 254,700,000, slightly up from HKD 253,400,000 in the previous year[85] - The cost of property sales for the same period was HKD 433,485, significantly higher than HKD 302,892 in 2023[56] - Financing costs for the six months ended September 30, 2024, totaled HKD 172,814, a slight decrease from HKD 173,426 in the same period of 2023[53] Corporate Governance and Compliance - The company has adopted revised Hong Kong Financial Reporting Standards, which did not impact its financial position or performance significantly[28] - The company has complied with the corporate governance code, with the exception of the separation of roles between the chairman and CEO, which is currently held by the same individual[151] - The board emphasizes high levels of corporate governance, focusing on transparency, accountability, and independence to enhance competitiveness and operational efficiency[151] - The audit committee, consisting of three independent non-executive directors, has reviewed the unaudited consolidated financial information for the six months ending September 30, 2024[154] Strategic Initiatives and Future Outlook - The group aims to increase land reserves through various channels, including public tenders and old building acquisitions[97] - The group is strategically positioning itself to leverage opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area, focusing on traditional Chinese medicine and health food sectors[146] - The group plans to launch four innovative health products targeting glucose levels, cholesterol levels, liver health, and joint function in the coming year, expected to positively contribute to its performance[146] - The group is actively expanding its cross-border e-commerce channels, achieving over 200% growth in sales compared to the same period last year[105] Employment and Economic Environment - As of September 30, 2024, the group employed 2,005 staff, a decrease from 2,111 on March 31, 2024, with approximately 46% based in Hong Kong and Macau[139] - The Hong Kong economy is expected to face challenges, with a projected GDP growth of about 3.3% year-on-year for Q2 2024, slowing to approximately 1.8% in Q3 2024 due to global uncertainties[143]

Financial Performance - Total revenue for the fiscal year 2024 was HKD 1,983,234, a decrease of 44.9% compared to HKD 3,603,458 in fiscal year 2023[3] - Revenue from customer contracts amounted to HKD 1,539,203, down 51.4% from HKD 3,165,341 in the previous year[3] - Gross profit for the year was HKD 823,641, representing a decline of 22.3% from HKD 1,059,615 in fiscal year 2023[3] - The company reported a net loss of HKD 916,466 for the year, compared to a profit of HKD 98,754 in the previous year[3] - Basic and diluted earnings per share were HKD (5.52 cents), a significant drop from HKD 0.09 cents in fiscal year 2023[6] - Total revenue for the year ending March 31, 2024, was HKD 1,539,203, a decrease of 51.4% from HKD 3,165,341 in 2023[28] - The group reported a loss of approximately HKD 916,500,000 (2023: profit of HKD 98,800,000), with core profit at about HKD 68,200,000 (2023: HKD 276,300,000) after excluding non-cash and non-recurring items[135] Revenue Breakdown - Revenue from property sales was HKD 432,944, down 79.8% from HKD 2,140,165 in the previous year[28] - Revenue from product sales increased to HKD 899,293, up 10.2% from HKD 815,674 in 2023[28] - The pharmaceutical and health products segment reported total revenue of approximately HKD 777.2 million, an increase of about 10.9% from HKD 701 million in 2023[124] - Revenue from the street market and agricultural product trading business increased by approximately 1.4% to about HKD 667,100,000 (2023: HKD 657,700,000) with a profit of approximately HKD 176,900,000 (2023: HKD 170,200,000)[146] Expenses and Costs - Total operating expenses increased to HKD 450,528 from HKD 349,656, reflecting a rise in employee benefits and other costs[52] - The cost of sales for the year was HKD 364,377, compared to HKD 288,359 in the previous year[62] - Administrative expenses were approximately HKD 491,600,000 (2023: HKD 513,000,000), remaining stable and controlled[130] - Financing costs increased to approximately HKD 364,400,000 (2023: HKD 288,400,000) due to rising bank and other borrowing rates, with an average borrowing rate of about 7.3% (2023: 4.9%)[130] Assets and Liabilities - Non-current assets totaled HKD 9,060,253, down 20.6% from HKD 11,414,567 in 2023[38] - Current assets increased to HKD 8,522,392, up 22.4% from HKD 6,972,503 in 2023[38] - The group's total debt as of March 31, 2024, is approximately HKD 6,346,900,000, compared to HKD 6,246,600,000 in the previous year[169] - The net debt-to-equity ratio increased to approximately 62.9% as of March 31, 2024, compared to 49.4% in the previous year[169] - The total assets of the group as of March 31, 2024, were approximately HKD 17,582,600,000, a decrease from HKD 18,387,100,000 in the previous year[195] Investments and Development - The company plans to continue focusing on market expansion and new product development to improve future performance[3] - The company is expanding its land reserves through public tenders and acquisitions, aiming to establish a solid foundation for future development projects[107] - A new joint venture was established to acquire and operate a property in Kowloon, which will be redeveloped into a student dormitory providing 720 rooms, expected to reopen in Q3 2024[193] Cash Flow and Liquidity - The group's liquidity investments and cash balance as of March 31, 2024, amounted to approximately HKD 1,614,800,000, a decrease of about 29.0% from HKD 2,274,300,000 on March 31, 2023[185] - The group’s cash and bank balances decreased to HKD 1,193,104 from HKD 1,570,628, a decline of 23.9%[38] Market and Product Development - The company launched new products, including a formula for respiratory support and joint health products, in collaboration with Hong Kong Polytechnic University, aiming to meet evolving health needs in the community[125] - The "Pei's" mosquito repellent product line has established a leading position in the Hong Kong market, with revenue increasing by 7.2% compared to last year[156] Risk Management - The company maintained strict control over accounts receivable to minimize credit risk, with overdue amounts regularly reviewed by senior management[68] - The group continues to enhance financial risk controls and maintain a prudent financial management policy to ensure operational flexibility[172]

Financial Performance - The Group's revenue for the six months ended 30 September 2023 decreased by approximately 44.6% to approximately HK$1,136.1 million, compared to approximately HK$2,050.5 million for the same period in 2022[14]. - Profit attributable to owners of the parent for the Period was approximately HK$111.0 million, a significant recovery from a loss of approximately HK$23.6 million in the same period last year[16]. - The decrease in revenue was primarily due to reduced sales from property development projects in which the Group has a controlling stake[15]. - The increase in profit was attributed to higher share of results from joint ventures and increased sales and gross profit from pharmaceutical and health food products[16]. - The Group did not recommend the payment of any interim dividend for the six months ended 30 September 2023, consistent with the previous year[13]. Cost and Expenses - The increase in finance costs was noted due to interest rate increments during the Period compared to the corresponding period in 2022[16]. - Administrative expenses were approximately HK$253.4 million, down from HK$270.5 million in the previous period, while selling and distribution expenses decreased to approximately HK$197.3 million from HK$203.6 million[23]. - Finance costs increased to approximately HK$173.4 million from HK$130.9 million, mainly due to rising interest rates[24]. Strategic Focus - The Group's performance reflects a strategic shift towards enhancing its pharmaceutical and health food product lines[16]. - The management highlighted the importance of addressing the challenges in property project deliveries to stabilize revenue streams moving forward[15]. - Future strategies may include further investments in joint ventures to leverage growth opportunities in the health sector[16]. - The Group aims to improve operational efficiency to mitigate the impact of rising finance costs on profitability[16]. Property Development - The property development segment recorded revenue of approximately HK$375.1 million and segment profit of approximately HK$10.1 million, down from HK$1,358.2 million and HK$130.0 million respectively for the six months ended 30 September 2022[39]. - Revenue from the Group's property development business in the PRC was approximately HK$116.7 million, a slight increase from HK$108.2 million in the previous period, attributed to more property sales deliveries[40]. - Revenue contribution from Wang On Properties Group's property development was approximately HK$258.4 million, primarily from sales of "The Met. Azure" and "LADDER Dundas" projects[43]. Agricultural and Fresh Market Operations - Fresh market and agricultural produce exchange market segment recorded a revenue increase of approximately 0.4% to approximately HK$332.7 million for the six months ended 30 September 2023[49]. - The CAP Group contributed approximately HK$193.8 million from agricultural produce exchange markets in China, while fresh market operations in Hong Kong contributed approximately HK$138.9 million[49]. - The Group operates 11 agricultural produce exchange markets across five provinces in China, significantly expanding its presence in this segment[57]. Pharmaceutical and Health Food Products - Revenue from the pharmaceutical and health food products segment reached approximately HK$365.4 million, representing a 22.3% increase from HK$298.7 million for the six months ended September 30, 2022[71]. - Revenue from Chinese pharmaceutical and health food products increased by approximately 23.8% to approximately HK$329.0 million, compared to HK$265.7 million for the six months ended September 30, 2022[72]. - New products, including Cordyceps Plus for respiratory support, were introduced to address seasonal influenza and long Covid symptoms[78]. Financial Position - The Group's net assets as of 30 September 2023 were approximately HK$9,250.5 million, a slight decrease from HK$9,379.4 million as of 31 March 2023[34]. - Total borrowings as of 30 September 2023 were approximately HK$6,536.3 million, resulting in a net debt position of approximately HK$5,351.4 million[34]. - The Group maintained a healthy cash balance of approximately HK$1,333.0 million as of 30 September 2023, down from HK$1,749.0 million as of 31 March 2023[34]. Investment and Acquisitions - On September 6, 2023, the Group agreed to acquire 2,007,700,062 ordinary shares of CAP for HK$200 million, increasing its equity interest in CAP from approximately 53.37% to 73.54%[149]. - The Group has partnered with APG Strategic Real Estate Pool for the acquisition and redevelopment of residential properties in Hong Kong[112]. - The Group's investment strategy remains prudent, with a focus on long-term holdings aimed at generating stable income[143]. Market Conditions and Economic Outlook - The Chief Executive's recent Policy Address included measures to ease property policies, such as reducing buyers' stamp duties on new homes by half, which is expected to positively impact the property market[169]. - The Group anticipates increased competition in fresh market operations due to a rise in the number of operators and the growing acceptance of online shopping and delivery services[170]. - The unemployment rate in Hong Kong dropped to 2.8% from July to September 2023, indicating an improving labor market[171]. Corporate Governance and Shareholding - As of September 30, 2023, Mr. Tang holds a total of 486,915,306 shares through Caister Limited and 531,000,000 shares through Billion Trader Investments Limited, both of which are wholly-owned by him[189]. - Ms. Yau holds 810,322,940 shares of WYT, which is about 69.19% of the total issued shares[191]. - The company has not granted any rights to acquire shares or debentures to any directors or chief executives during the period[197].

[Interim Financial Highlights](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) This section provides a concise overview of the Group's key financial performance and position for the six months ended September 30, 2023 Interim Financial Highlights for the Six Months Ended September 30, 2023 | Metric | 2023 (Unaudited) HK$ Million | 2022 (Unaudited) HK$ Million | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,136 | 2,050 | -44.6% | | Gross Profit | 435 | 532 | -18.2% | | Profit/(Loss) Attributable to Owners of the Parent | 111 | (24) | +562.5% | | Earnings/(Loss) Per Share—Basic and Diluted (HK Cents) | 0.81 | (0.17) | +576.5% | | Net Assets (as at September 30) | 9,250 | 9,379 | -1.4% | | Net Assets Per Share (HK$) (as at September 30) | 0.60 | 0.61 | -1.6% | | Gearing Ratio (as at September 30) | 57.9% | 49.4% | +8.5 Percentage Points | [Condensed Consolidated Financial Statements](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the Group's condensed consolidated financial statements, including the statement of profit or loss and other comprehensive income, and the statement of financial position [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended September 30, 2023, the Group's revenue significantly decreased to HK$1,136.1 million from HK$2,050.5 million in the prior period, yet profit for the period substantially increased to HK$189.7 million from HK$2.6 million, primarily driven by a significant rise in share of profits from joint ventures Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended September 30) | Metric | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 1,136,119 | 2,050,479 | | Cost of Sales | (701,427) | (1,518,319) | | Gross Profit | 434,692 | 532,160 | | Other Income and Gains, Net | 94,152 | 74,569 | | Selling and Distribution Expenses | (197,343) | (203,589) | | Administrative Expenses | (253,419) | (270,459) | | Net Impairment Loss on Financial Assets | (12,266) | (11,628) | | Other Expenses, Net | (54,250) | (36,208) | | Finance Costs | (173,426) | (130,910) | | Write-down of Properties Under Development | — | (5,620) | | Write-down of Properties Held for Sale | — | (16,261) | | Net Fair Value Loss on Financial Assets and Liabilities at Fair Value Through Profit or Loss | (10,606) | (23,573) | | Net Fair Value Gain on Investment Properties Owned | 1,921 | 18,599 | | Share of Profits: Joint Ventures | 377,692 | 108,362 | | Share of Profits: Associates | 1,263 | 722 | | Profit Before Tax | 208,410 | 36,164 | | Income Tax Expense | (18,696) | (33,541) | | Profit for the Period | 189,714 | 2,623 | | Profit/(Loss) Attributable to Owners of the Parent | 110,968 | (23,613) | | Profit Attributable to Non-controlling Interests | 78,746 | 26,236 | | Total Comprehensive Loss for the Period | (71,528) | (460,314) | [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of September 30, 2023, the Group's total assets slightly increased to HK$18,464.0 million from HK$18,387.1 million, while net assets marginally decreased to HK$9,250.5 million from HK$9,379.4 million, with total current liabilities at HK$5,073.0 million and non-current liabilities at HK$4,140.5 million Condensed Consolidated Statement of Financial Position (As at September 30) | Metric | September 30, 2023 (HK$ Thousand) | March 31, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 1,121,267 | 1,195,656 | | Investment Properties | 3,560,996 | 3,764,015 | | Properties Under Development | 2,135,674 | 1,992,527 | | Interests in Joint Ventures | 4,084,869 | 3,638,403 | | Financial Assets at Fair Value Through Other Comprehensive Income | 195,451 | 323,376 | | Financial Assets at Fair Value Through Profit or Loss | 208,802 | 201,934 | | Total Non-current Assets | 11,649,401 | 11,414,567 | | **Current Assets** | | | | Properties Under Development | 3,021,297 | 2,436,349 | | Properties Held for Sale | 1,190,980 | 1,484,068 | | Inventories | 307,947 | 209,607 | | Trade Receivables | 96,230 | 93,022 | | Loans and Interest Receivables | 308,861 | 290,862 | | Cash and Bank Balances | 1,121,245 | 1,570,628 | | Total Current Assets | 6,814,595 | 6,972,503 | | **Total Assets** | 18,463,996 | 18,387,070 | | **Current Liabilities** | | | | Trade Payables | 188,614 | 155,151 | | Other Payables and Accruals | 1,003,686 | 1,024,273 | | Contract Liabilities | 171,887 | 219,225 | | Interest-bearing Bank and Other Borrowings | 3,518,723 | 3,176,660 | | Total Current Liabilities | 5,073,023 | 4,686,727 | | **Non-current Liabilities** | | | | Interest-bearing Bank and Other Borrowings | 2,938,699 | 2,944,719 | | Deferred Tax Liabilities | 563,932 | 611,887 | | Total Non-current Liabilities | 4,140,515 | 4,320,977 | | **Net Assets** | 9,250,458 | 9,379,366 | | **Total Equity** | 9,250,458 | 9,379,366 | [Notes to the Condensed Consolidated Interim Financial Information](index=7&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) This section provides detailed notes explaining the basis of preparation, changes in accounting policies, segment information, and specific financial line items [Basis of Preparation](index=7&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) This condensed consolidated interim financial information is prepared in accordance with HKAS 34 and Appendix 16 of the Listing Rules, using the historical cost convention, except for investment properties and certain financial assets measured at fair value, with all figures presented in HK dollars and rounded to the nearest thousand - This condensed consolidated interim financial information is prepared in accordance with **Hong Kong Accounting Standard 34** and the disclosure requirements of **Appendix 16 of the Listing Rules**[50](index=50&type=chunk) - The financial information is prepared on the historical cost basis, except for investment properties, financial assets at fair value through other comprehensive income, and financial assets and liabilities at fair value through profit or loss, which are measured at fair value[51](index=51&type=chunk) - All figures are presented in **Hong Kong dollars** and, unless otherwise stated, are rounded to the nearest thousand[51](index=51&type=chunk) [Changes in Accounting Policies and Disclosures](index=8&type=section&id=%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E5%8F%8A%E6%8A%AB%E9%9C%B2%E4%B9%8B%E8%AE%8A%E5%8B%95) The Group adopted several new and revised HKFRSs, including amendments to HKAS 1, 8, and 12, primarily affecting accounting policy disclosures, the definition of accounting estimates, and deferred tax recognition, with no material impact on the Group's financial position or performance as existing policies align or fall outside the scope of these revisions [HKAS 1 (Amendments)](index=8&type=section&id=%E9%A6%99%E6%B8%AF%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87%E7%AC%AC1%E8%99%9F%EF%BC%88%E4%BF%AE%E8%A8%82%EF%BC%89) HKAS 1 (Amendments) requires entities to disclose material accounting policy information instead of significant accounting policies, applied by the Group from April 1, 2023, impacting annual consolidated financial statements' disclosures but not the interim condensed consolidated financial information - HKAS 1 (Amendments) requires entities to disclose **material accounting policy information** instead of significant accounting policies[52](index=52&type=chunk) - The Group has applied these amendments from **April 1, 2023**, which are expected to affect the accounting policy disclosures in the Group's annual consolidated financial statements but have no impact on the unaudited condensed consolidated interim financial information[52](index=52&type=chunk) [HKAS 8 (Amendments)](index=8&type=section&id=%E9%A6%99%E6%B8%AF%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87%E7%AC%AC8%E8%99%9F%EF%BC%88%E4%BF%AE%E8%A8%82%EF%BC%89) HKAS 8 (Amendments) clarifies the distinction between changes in accounting estimates and policies, defining estimates as monetary amounts in financial statements subject to measurement uncertainty, applied by the Group from April 1, 2023, with no impact due to consistent accounting estimate policies - HKAS 8 (Amendments) clarifies the distinction between changes in accounting estimates and changes in accounting policies, defining an accounting estimate as a **monetary amount in financial statements that is subject to measurement uncertainty**[39](index=39&type=chunk) - The Group has applied the amendments to accounting policy changes and accounting estimate changes occurring on or after **April 1, 2023**, but these amendments have had **no impact** on the Group's financial position or performance as the Group's policies for determining accounting estimates are consistent with these amendments[39](index=39&type=chunk) [HKAS 12 (Amendments) Single Transaction](index=9&type=section&id=%E9%A6%99%E6%B8%AF%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87%E7%AC%AC12%E8%99%9F%EF%BC%88%E4%BF%AE%E8%A8%82%EF%BC%89%E5%96%AE%E4%B8%80%E4%BA%A4%E6%98%93) HKAS 12 (Amendments) narrows the scope of initial recognition exemption, requiring entities to recognize deferred tax assets and liabilities for equal taxable and deductible temporary differences arising from transactions like leases and decommissioning liabilities, with no significant impact on the Group's net deferred tax position or financial performance - HKAS 12 (Amendments) narrows the scope of the initial recognition exemption, so that it **no longer applies to transactions that give rise to equal taxable and deductible temporary differences** (e.g., leases and decommissioning liabilities)[53](index=53&type=chunk) - These amendments have had **no significant impact** on the net deferred tax asset and deferred tax liability position or the Group's financial position or performance[53](index=53&type=chunk) [HKAS 12 (Amendments) International Tax Reform](index=9&type=section&id=%E9%A6%99%E6%B8%AF%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87%E7%AC%AC12%E8%99%9F%EF%BC%88%E4%BF%AE%E8%A8%82%EF%BC%89%E5%9C%8B%E9%9A%9B%E7%A8%85%E5%8B%99%E6%94%B9%E9%9D%A9) HKAS 12 (Amendments) introduces a mandatory temporary exception and disclosure requirements for deferred taxes arising from OECD Pillar Two model rules, applied retrospectively by the Group, with no impact as the Group falls outside the scope of these rules - HKAS 12 (Amendments) introduces a **mandatory temporary exception** to the recognition and disclosure of deferred taxes arising from the implementation of the Pillar Two model rules issued by the Organisation for Economic Co-operation and Development[40](index=40&type=chunk) - The Group has applied these amendments retrospectively, and as the Group is **not within the scope of the Pillar Two model rules**, these amendments have had **no impact** on the Group[40](index=40&type=chunk) [Operating Segment Information](index=9&type=section&id=%E7%B6%93%E7%87%9F%E5%88%86%E9%A1%9E%E8%B3%87%E6%96%99) The Group's operating segments include property development, property investment, wet markets, pharmaceutical products, and treasury management, with performance assessed by adjusted profit before tax, excluding bank interest income, finance costs, fair value losses on financial assets, and head office expenses, and inter-segment sales transacted at market prices [Definition of Operating Segments](index=9&type=section&id=%E7%B6%93%E7%87%9F%E5%88%86%E9%A1%9E%E5%AE%9A%E7%BE%A9) The Group's five reportable operating segments are property development, property investment (investing in industrial and commercial properties and residential units for rental income or sales profit), wet markets (management and sub-leasing of wet markets and slaughtering businesses, including agricultural product trading markets in Mainland China), pharmaceutical products (production and sale of pharmaceutical and health food products), and treasury management (financing, investment, and asset management of debt and other securities for interest income) - The Group's five reportable operating segments are: **Property Development, Property Investment, Wet Markets, Pharmaceutical Products, and Treasury Management**[54](index=54&type=chunk)[83](index=83&type=chunk) - The Property Development segment refers to the **development of properties**[54](index=54&type=chunk) - The Property Investment segment refers to the **investment in industrial and commercial properties and residential units** for rental income or sales profit[83](index=83&type=chunk) - The Wet Markets segment refers to the **management and sub-leasing of wet markets and slaughtering businesses**, which also includes the management of agricultural product trading markets in Mainland China[41](index=41&type=chunk) - The Pharmaceutical Products segment refers to the **production and sale of pharmaceutical and health food products**[54](index=54&type=chunk) - The Treasury Management segment refers to **financing, investment in debt and other securities for interest income**, and asset management through investment vehicles on behalf of the Group's capital partners[83](index=83&type=chunk) [Reportable Segment Information](index=10&type=section&id=%E5%8F%AF%E5%A0%B1%E5%91%8A%E5%88%86%E9%A1%9E%E8%B3%87%E6%96%99) For the six months ended September 30, 2023, external customer sales revenue for the property development segment significantly decreased to HK$375.1 million from HK$1,358.2 million, while pharmaceutical products' external sales increased to HK$365.4 million from HK$298.7 million, and treasury management's segment result shifted from a loss of HK$14.3 million to a profit of HK$29.7 million Segment Revenue and Results for the Six Months Ended September 30 | Segment | 2023 External Sales (HK$ Thousand) | 2022 External Sales (HK$ Thousand) | 2023 Segment Results (HK$ Thousand) | 2022 Segment Results (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Property Development | 375,110 | 1,358,229 | 10,105 | 129,995 | | Property Investment | 2,955 | 5,406 | 365,476 | 80,521 | | Pharmaceutical Products | 365,388 | 298,653 | 57,721 | 100,257 | | Wet Markets | 332,707 | 331,272 | 29,692 | (14,269) | | Treasury Management | 59,959 | 56,919 | (18,242) | (32,315) | | Total | 1,136,119 | 2,050,479 | 444,752 | 264,189 | [Revenue, Other Income and Gains, Net](index=11&type=section&id=%E6%94%B6%E5%85%A5%E3%80%81%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Total revenue for the period was HK$1,136.1 million, primarily from sales of goods (HK$426.3 million) and property sales (HK$375.1 million), a significant decrease from HK$2,050.5 million in the prior period, while other income and gains, net, increased to HK$94.2 million, mainly due to higher bank interest income and government grants [Revenue Analysis](index=11&type=section&id=%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) For the six months ended September 30, 2023, the Group's total revenue was HK$1,136.1 million, primarily from sales of goods (HK$426.3 million) and property sales (HK$375.1 million), with a significant decrease in property sales revenue and an increase in goods sales revenue compared to the prior period Revenue Sources (For the Six Months Ended September 30) | Revenue Source | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Sales of Properties | 375,110 | 1,358,229 | | Sales of Goods | 426,250 | 349,762 | | Commission Income from Operating Agricultural Product Trading Markets | 45,136 | 51,505 | | Ancillary Services for Agricultural Product Trading Markets | 44,752 | 47,390 | | Provision of Asset Management Services | 26,185 | 9,107 | | Interest Income from Treasury Business | 32,171 | 42,693 | | Sub-leasing Income | 93,537 | 85,961 | | Gross Rental Income from Operating Leases of Investment Properties | 91,375 | 100,713 | | Dividend Income from Financial Assets | 2,250 | 6,107 | | Loss on Disposal of Financial Assets at Fair Value Through Profit or Loss | (647) | (988) | | **Total Revenue** | **1,136,119** | **2,050,479** | - For the six months ended September 30, 2023, total revenue from contracts with customers was **HK$917,433 thousand**, with **HK$375,110 thousand from sales of properties** and **HK$365,388 thousand from sales of goods**[87](index=87&type=chunk) - For the six months ended September 30, 2022, total revenue from contracts with customers was **HK$1,815,993 thousand**, with **HK$1,358,229 thousand from sales of properties** and **HK$298,653 thousand from sales of goods**[61](index=61&type=chunk) [Other Income and Gains, Net Analysis](index=14&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D%E5%88%86%E6%9E%90) Other income and gains, net, for the period increased to HK$94.2 million from HK$74.6 million in the prior period, primarily driven by higher bank interest income (HK$9.2 million vs HK$3.2 million) and gains from disposal of property, plant and equipment (HK$13.3 million), while government grants decreased from HK$4.7 million to HK$1.2 million Other Income and Gains, Net Analysis (For the Six Months Ended September 30) | Item | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Bank Interest Income | 9,217 | 3,162 | | Management Fee Income | 6,158 | 6,419 | | Forfeiture of Customers' Deposits | 4,992 | 4,655 | | Government Subsidies | 1,180 | 4,739 | | Others | 49,950 | 39,906 | | Gain on Disposal of a Subsidiary | — | 14,551 | | Gain on Early Redemption of Unsecured Notes | 7,903 | 774 | | Gain on Modification/Termination of Lease Contracts | 1,410 | — | | Gain on Disposal of Investment Properties | — | 363 | | Gain on Disposal of Property, Plant and Equipment Items | 13,330 | — | | Net Gain on Disposal/Redemption of Financial Assets at Fair Value Through Other Comprehensive Income | 12 | — | | **Total Other Income and Gains, Net** | **94,152** | **74,569** | [Finance Costs](index=15&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) For the six months ended September 30, 2023, the Group's finance costs increased to HK$173.4 million from HK$130.9 million in the prior period, primarily due to higher interest on bank and other borrowings (HK$204.2 million vs HK$123.3 million), partially offset by increased capitalized interest Finance Costs Analysis (For the Six Months Ended September 30) | Item | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Interest on Bank and Other Borrowings | 204,245 | 123,260 | | Interest on Lease Liabilities | 25,153 | 21,983 | | Interest on Unsecured Notes | 5,552 | 12,153 | | **Total Finance Costs** | **234,950** | **157,396** | | Less: Interest Capitalized | (61,524) | (26,486) | | **Net Finance Costs** | **173,426** | **130,910** | [Profit Before Tax](index=16&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) The Group's profit before tax includes various expenses and gains such as cost of services, property sales cost, inventory cost, depreciation, net impairment losses, and net exchange differences, with a significant increase in net impairment loss on property, plant and equipment to HK$48.8 million from HK$8.5 million in the prior period Items Deducted From/(Credited To) Profit Before Tax (For the Six Months Ended September 30) | Item | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Cost of Services Provided | 100,067 | 101,823 | | Cost of Properties Sold | 302,892 | 1,158,784 | | Cost of Inventories Recognized as Expense | 218,026 | 197,641 | | Depreciation of Owned Assets | 28,859 | 30,779 | | Depreciation of Right-of-use Assets | 40,343 | 40,234 | | Net Loss/(Gain) on Disposal of Property, Plant and Equipment | (13,330) | 320 | | Loss/(Gain) on Disposal of a Subsidiary | 2,665 | (14,551) | | Fair Value Loss on Sub-leased Investment Properties | 80,214 | 59,979 | | Net Impairment Loss on Property, Plant and Equipment Items | 48,809 | 8,474 | | Net Loss/(Gain) on Disposal/Redemption of Financial Assets at Fair Value Through Other Comprehensive Income | (12) | 23,027 | | Net Impairment Loss on Financial Assets | 12,266 | 11,628 | | Net Exchange Differences | 2,776 | 4,387 | | Direct Operating Expenses Arising from Investment Properties That Generated Rental Income | 228 | 92 | - For the six months ended September 30, 2022, wage subsidies of **HK$17,556,000** granted under the Employment Support Scheme of the Anti-epidemic Fund were received and recognized in "Administrative expenses" to offset employee benefit expenses[68](index=68&type=chunk) [Income Tax](index=17&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) The Group's income tax expense, comprising Hong Kong profits tax, corporate income tax in other jurisdictions, and PRC Land Appreciation Tax, decreased to HK$18.7 million for the six months ended September 30, 2023, from HK$33.5 million in the prior period, mainly due to increased deferred tax credits and reduced PRC tax expenses Income Tax Expense (For the Six Months Ended September 30) | Item | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Current — Hong Kong | 7,912 | 9,820 | | Current — Expense for the Period in Other Jurisdictions | 9,551 | 19,403 | | Land Appreciation Tax | 9,436 | 4,846 | | Deferred | (8,203) | (528) | | **Total Tax Expense for the Period** | **18,696** | **33,541** | - Hong Kong profits tax is provided at a rate of **16.5%** on the estimated assessable profit for the period[22](index=22&type=chunk) - PRC Land Appreciation Tax is provided at a **progressive tax rate range** on the appreciation value[22](index=22&type=chunk) [Earnings/(Loss) Per Share Attributable to Owners of the Parent](index=17&type=section&id=%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%99%AE%E9%80%9A%E8%82%A1%E6%AC%8A%E7%9B%8A%E6%8C%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%94%E6%BA%A2%E5%88%A9%E2%88%95%EF%BC%88%E虧%E6%90%8D%EF%BC%89) For the six months ended September 30, 2023, profit attributable to owners of the parent was HK$111.0 million, with basic and diluted earnings per share of HK$0.81 cents, a significant improvement from a loss of HK$23.6 million and HK$0.17 cents per share in the prior period, with no dilutive effect from China Agri-Products' share options Calculation of Basic and Diluted Earnings/(Loss) Per Share (For the Six Months Ended September 30) | Item | 2023 (HK$ Thousand/Thousand Shares) | 2022 (HK$ Thousand/Thousand Shares) | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Owners of the Parent | 110,968 | (23,613) | | Weighted Average Number of Ordinary Shares in Issue | 15,355,711 | 15,977,520 | | Less: Weighted Average Number of Treasury Shares | (1,716,749) | (1,716,749) | | Weighted Average Number of Ordinary Shares for Basic and Diluted Earnings/(Loss) Per Share Calculation | 13,638,962 | 14,260,771 | | Basic and Diluted Earnings/(Loss) Per Share (HK Cents) | 0.81 | (0.17) | - The share options issued by China Agri-Products had **no dilutive effect** on the basic earnings/(loss) per share amounts presented[96](index=96&type=chunk) [Loans and Interest Receivables](index=19&type=section&id=%E6%87%89%E6%94%B6%E8%B2%B8%E6%AC%BE%E5%8F%8A%E5%88%A9%E6%81%AF) As of September 30, 2023, the Group's total loans and interest receivables amounted to HK$337.9 million, with a current portion of HK$308.9 million; secured loans are accounted for at effective annual interest rates of 5% to 27%, and unsecured loans at 1% to 33%, with some overdue loans classified as Stage 2 or 3 reflecting expected credit losses Loans and Interest Receivables (As at September 30) | Item | 2023 (HK$ Thousand) | March 31, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Loans and Interest Receivables, Secured | 325,260 | 309,108 | | Loans and Interest Receivables, Unsecured | 85,747 | 79,074 | | **Total** | **411,007** | **388,182** | | Less: Impairment Allowance | (73,153) | (75,723) | | **Net** | **337,854** | **312,459** | | Less: Loans and Interest Receivables Classified as Non-current Assets | (28,993) | (21,597) | | **Current Portion** | **308,861** | **290,862** | - Secured loans and interest receivables are accounted for at amortized cost with effective annual interest rates ranging from **5% to 27%**, and credit periods ranging from **1 month to 10 years**[127](index=127&type=chunk) - Unsecured loans and interest receivables are accounted for at amortized cost with effective annual interest rates ranging from **1% to 33%**, and credit periods ranging from **1 month to 72 months**[99](index=99&type=chunk) - As of September 30, 2023, **HK$52,319 thousand** and **HK$138,090 thousand** of loans and interest receivables were overdue and classified as **Stage 2 and Stage 3** respectively, for the assessment of expected credit losses[128](index=128&type=chunk) [Trade Receivables](index=20&type=section&id=%E6%87%89%E6%94%B6%E8%B3%A6%E6%AC%BE) As of September 30, 2023, the Group's net trade receivables slightly increased to HK$96.2 million from HK$93.0 million, with strict credit risk control and regular review of overdue balances, and trade receivables are interest-free with no significant concentration of credit risk Trade Receivables (As at September 30) | Item | 2023 (HK$ Thousand) | March 31, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Trade Receivables | 120,072 | 117,166 | | Less: Accumulated Impairment | (23,842) | (24,144) | | **Net** | **96,230** | **93,022** | Ageing Analysis of Trade Receivables (As at September 30) | Ageing | 2023 (HK$ Thousand) | March 31, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Within 1 Month | 57,285 | 48,599 | | 1 to 3 Months | 17,295 | 24,898 | | Over 3 Months but Within 6 Months | 17,216 | 12,864 | | Over 6 Months | 4,434 | 6,661 | | **Total** | **96,230** | **93,022** | - The Group's credit period generally ranges from **7 to 120 days**, and credit limits are reviewed regularly to maintain strict control and minimize credit risk[129](index=129&type=chunk) [Trade Payables](index=21&type=section&id=%E6%87%89%E4%BB%98%E8%B3%A6%E6%AC%BE) As of September 30, 2023, the Group's trade payables increased to HK$188.6 million from HK$155.2 million, with interest-free terms and average credit periods ranging from 30 to 360 days, and the Group has established financial risk management policies to ensure timely payment of all payables within credit terms Ageing Analysis of Trade Payables (As at September 30) | Ageing | 2023 (HK$ Thousand) | March 31, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Within 1 Month | 126,014 | 104,921 | | 1 to 3 Months | 17,374 | 11,236 | | Over 3 Months but Within 6 Months | 2,976 | 1,117 | | Over 6 Months | 42,250 | 37,877 | | **Total** | **188,614** | **155,151** | - Trade payables are **interest-free** and have an average credit period ranging from **30 to 360 days**[103](index=103&type=chunk) - The Group has established financial risk management policies to ensure that all payables are paid within the credit period[103](index=103&type=chunk) [Comparative Amounts](index=21&type=section&id=%E6%AF%94%E8%BC%83%E9%87%91%E9%A1%8D) The Group has reclassified certain comparative amounts to conform with the current period's presentation and disclosure - Certain comparative amounts have been **reclassified** to conform with the current period's presentation and disclosure[131](index=131&type=chunk) [Management Discussion and Analysis](index=22&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides an in-depth analysis of the Group's financial performance, business operations, liquidity, and future outlook [Financial Results](index=22&type=section&id=%E8%B2%A1%E5%8B%99%E6%A5%AD%E7%B8%BE) For the six months ended September 30, 2023, the Group's revenue decreased by 44.6% to HK$1,136.1 million, primarily due to fewer property development project deliveries; despite this, profit attributable to owners of the parent turned from a loss of HK$23.6 million to a profit of HK$111.0 million, mainly driven by increased share of joint venture results and pharmaceutical sales growth, partially offset by higher finance costs [Revenue](index=22&type=section&id=%E6%94%B6%E5%85%A5) The Group's revenue for the period decreased by approximately 44.6% to about HK$1,136.1 million, primarily due to reduced sales from property development projects where the Group holds controlling interests - The Group's revenue for the period decreased by approximately **44.6% to approximately HK$1,136.1 million** (six months ended September 30, 2022: approximately HK$2,050.5 million)[21](index=21&type=chunk) - The decrease in revenue was primarily due to **reduced sales from property development projects** where the Group holds controlling interests during the period[21](index=21&type=chunk) [Gross Profit and Gross Profit Margin](index=22&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) The Group recorded a gross profit of approximately HK$434.7 million with a gross profit margin of 38.3% for the period, a change from HK$532.2 million and 26.0% in the prior period, with the decrease in gross profit mainly attributable to fewer property project deliveries Gross Profit and Gross Profit Margin (For the Six Months Ended September 30) | Metric | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Gross Profit | 434.7 | 532.2 | | Gross Profit Margin | 38.3% | 26.0% | - The decrease in gross profit was mainly due to **fewer property project deliveries** during the period[135](index=135&type=chunk) [Profit/(Loss) Attributable to Owners of the Parent](index=22&type=section&id=%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%AC%8A%E7%9B%8A%E6%8C%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%94%E6%BA%A2%E5%88%A9%E2%88%95%EF%BC%88%E虧%E6%90%8D%EF%BC%89) Profit attributable to owners of the parent for the period was approximately HK$111.0 million, a significant improvement from a loss of HK$23.6 million in the prior period, primarily driven by increased share of joint venture results and higher sales and gross profit from pharmaceutical and health food products, partially offset by reduced gross profit from fewer property project deliveries and increased finance costs Profit/(Loss) Attributable to Owners of the Parent (For the Six Months Ended September 30) | Metric | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Owners of the Parent | 111.0 | (23.6) | - The increase in profit was mainly due to **(i) an increase in the share of results of joint ventures**, and **(ii) an increase in sales and gross profit generated from the production and sale of pharmaceutical and health food products**[106](index=106&type=chunk) - This was partially offset by **(a) a decrease in gross profit due to fewer property project deliveries** and **(b) an increase in finance costs** compared to the same period in 2022 due to rising interest rates[106](index=106&type=chunk) [Other Income and Gains, Net](index=22&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Other income and gains, net, for the period increased to approximately HK$94.2 million from HK$74.6 million in the prior period, primarily due to gains from the disposal of property, plant and equipment items Other Income and Gains, Net (For the Six Months Ended September 30) | Metric | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Other Income and Gains, Net | 94.2 | 74.6 | - The increase was mainly due to **gains from the disposal of property, plant and equipment items**[107](index=107&type=chunk) [Expenses](index=23&type=section&id=%E8%B2%BB%E7%94%A8) Administrative expenses of approximately HK$253.4 million, selling and distribution expenses of HK$197.3 million, and net impairment loss on financial assets of HK$12.3 million remained stable and controlled compared to the prior period, while other expenses of HK$54.3 million increased primarily due to higher impairment losses on property, plant and equipment Key Expenses (For the Six Months Ended September 30) | Expense Category | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Administrative Expenses | 253.4 | 270.5 | | Selling and Distribution Expenses | 197.3 | 203.6 | | Net Impairment Loss on Financial Assets | 12.3 | 11.6 | | Other Expenses | 54.3 | 36.2 | - The increase in other expenses was mainly due to **increased impairment losses on property, plant and equipment**[25](index=25&type=chunk) [Net Fair Value Loss on Financial Assets and Liabilities](index=23&type=section&id=%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2%E5%8F%8A%E8%B2%A0%E5%82%B5%E5%85%AC%E5%B9%B3%E5%80%BC%E虧%E6%90%8D%E6%B7%A8%E9%A1%8D) Net fair value loss on financial assets and liabilities at fair value through profit or loss for the period decreased to approximately HK$10.6 million from HK$23.6 million in the prior period, primarily due to reduced fair value losses on fund investments Net Fair Value Loss on Financial Assets and Liabilities (For the Six Months Ended September 30) | Metric | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Net Fair Value Loss | 10.6 | 23.6 | - The decrease was mainly due to **reduced fair value losses on financial assets at fair value through profit or loss**, primarily fund investments[109](index=109&type=chunk) [Property Write-downs](index=23&type=section&id=%E7%89%A9%E6%A5%AD%E6%92%B2%E6%B8%9B) There were no write-downs of properties under development or properties held for sale during the period, compared to write-downs of approximately HK$5.6 million for properties under development and HK$16.3 million for properties held for sale in the prior period Property Write-downs (For the Six Months Ended September 30) | Item | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Write-down of Properties Under Development | — | 5.6 | | Write-down of Properties Held for Sale | — | 16.3 | - The write-down of properties under development in the same period of 2022 related to a **property under development in Hong Kong**[110](index=110&type=chunk) - The write-down of properties held for sale in the same period of 2022 related to a **commercial property held for sale in Hong Kong** and **two agricultural product trading markets in Mainland China**[139](index=139&type=chunk) [Net Fair Value Gain on Investment Properties](index=23&type=section&id=%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD%E5%85%AC%E5%B9%B3%E5%80%BC%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Net fair value gain on investment properties owned for the period was approximately HK$1.9 million, a decrease from HK$18.6 million in the prior period, primarily due to reduced net fair value gains on several investment properties in Mainland China Net Fair Value Gain on Investment Properties (For the Six Months Ended September 30) | Metric | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Net Fair Value Gain | 1.9 | 18.6 | - The decrease was mainly due to **reduced net fair value gains on several investment properties in Mainland China**[138](index=138&type=chunk) [Share of Profits of Joint Ventures](index=23&type=section&id=%E6%87%89%E4%BD%94%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%E6%BA%A2%E5%88%A9) Share of profits of joint ventures for the period significantly increased to approximately HK$377.7 million from HK$108.4 million in the prior period, primarily due to increased profit contributions from the commercial portfolio Share of Profits of Joint Ventures (For the Six Months Ended September 30) | Metric | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Share of Profits of Joint Ventures | 377.7 | 108.4 | - The increase was mainly due to **increased profit contributions from the commercial portfolio**[111](index=111&type=chunk) [Finance Costs](index=23&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Finance costs for the period increased to approximately HK$173.4 million from HK$130.9 million in the prior period, primarily due to higher interest expenses Finance Costs (For the Six Months Ended September 30) | Metric | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Finance Costs | 173.4 | 130.9 | - The increase was mainly due to **higher interest expenses**[137](index=137&type=chunk) [Income Tax Expense](index=24&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense for the period decreased to approximately HK$18.7 million from HK$33.5 million in the prior period, primarily due to increased deferred tax credits and reduced PRC tax expenses Income Tax Expense (For the Six Months Ended September 30) | Metric | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Income Tax Expense | 18.7 | 33.5 | - The decrease was mainly due to **increased deferred tax credits** and **reduced PRC tax expenses** during the period compared to the same period in 2022[112](index=112&type=chunk) [Business Review](index=24&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's business review covers five segments: property development, wet markets and agricultural product trading markets, property investment, pharmaceutical and health food products, and treasury management, with property development revenue declining due to fewer Hong Kong project deliveries but slight growth in China, stable wet market revenue and expansion in China's agricultural product trading markets, diversified property investment including joint ventures, a 22.3% increase in total pharmaceutical business revenue with significant progress in both Chinese and Western medicine products, and a decrease in treasury management's lending business revenue offset by an increase in asset management services revenue due to new managed assets [Property Development](index=24&type=section&id=%E7%89%A9%E6%A5%AD%E7%99%BC%E5%B1%95) Property development segment revenue primarily derives from Wang On Properties Group's residential and commercial property sales in Hong Kong and China Agri-Products Group's property sales in China, with Hong Kong property development revenue significantly decreasing due to fewer deliveries, while China property development revenue slightly increased due to more deliveries [Hong Kong Property Development](index=25&type=section&id=%E9%A6%99%E6%B8%AF%E7%89%A9%E6%A5%AD%E7%99%BC%E5%B1%95) Wang On Properties Group's property development segment contributed approximately HK$258.4 million in revenue for the period, primarily from sales of 'The Met. Azure' and 'LADDER Dundas', a significant decrease from HK$1,250.0 million in the prior period Wang On Properties Group Property Development Segment Contribution to Revenue (For the Six Months Ended September 30) | Item | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Wang On Properties Group Property Development Segment Contribution to Revenue | 258.4 | 1,250.0 | - Revenue was mainly due to the recognition of sales from **"The Met. Azure"** and **"LADDER Dundas"**[114](index=114&type=chunk) [China Property Development](index=25&type=section&id=%E4%B8%AD%E5%9C%8B%E7%89%A9%E6%A5%AD%E7%99%BC%E5%B1%95) The Group's property development business in China (through China Agri-Products Group) recorded revenue of approximately HK$116.7 million for the period, a slight increase from HK$108.2 million in the prior period, primarily due to increased deliveries of properties for sale China Property Development Business Revenue (For the Six Months Ended September 30) | Item | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | China Property Development Business Revenue | 116.7 | 108.2 | - The slight increase in revenue was mainly due to **increased deliveries of properties for sale** during the period compared to the same period in 2022[144](index=144&type=chunk) [Development Land Portfolio](index=25&type=section&id=%E7%99%BC%E5%B1%95%E7%94%A8%E5%9C%B0%E7%B5%84%E5%90%88) Wang On Properties Group's development land portfolio comprises various residential and commercial projects in Hong Kong with expected completion years ranging from 2023 to 2028, and the Group actively seeks to increase land bank through public tenders and acquisition of old buildings Wang On Properties Group Development Land Portfolio (As at the Date of this Announcement) | Location | Approximate Site Area (sq. ft.) | Approximate Gross Floor Area (sq. ft.) | Intended Use | Expected Completion Year | | :--- | :--- | :--- | :--- | :--- | | Pok Fu Lam Project | 28,500 | 28,500 | Residential | 2023 | | Tai Kok Tsui Project | 6,800 | 61,500 | Residential and Commercial | 2024 | | Ap Lei Chau Project I | 7,200 | 74,200 | Residential and Commercial | 2025 | | Ap Lei Chau Project II | 4,100 | 38,500 | Residential and Commercial | 2025 | | Wong Tai Sin Project I | 9,600 | 81,300 | Residential and Commercial | 2025 | | Wong Tai Sin Project II | 10,400 | 93,700 | Residential and Commercial | 2025 | | Ngau Tau Kok Project | 5,200 | 46,300 | Residential and Commercial | 2025 | | Fortress Hill Project | 12,400 | 131,600 | Residential and Commercial | 2026 | | Quarry Bay Project | 4,200 | 39,100 | Residential and Commercial | 2026 | | Ap Lei Chau Project III | 6,600 | 68,800 | Residential and Commercial | 2027 | | Yau Tong Project | 41,700 | 269,000 | Residential and Commercial | 2028 | - Wang On Properties Group is actively seeking various channels to **increase its land bank**, including participating in public tenders and acquiring old buildings[146](index=146&type=chunk) [Wet Markets and Agricultural Product Trading Markets](index=26&type=section&id=%E8%A1%97%E5%B8%82%E5%8F%8A%E8%BE%B2%E7%94%A2%E5%93%81%E4%BA%A4%E6%98%93%E5%B8%82%E5%A0%B4) The Group, with over two decades of experience in wet markets and agricultural product trading markets, saw segment revenue slightly increase by 0.4% to approximately HK$332.7 million for the period, primarily contributed by China Agri-Products Group (HK$193.8 million) and Hong Kong wet market operations (HK$138.9 million), with stable slaughtering business revenue and a renewed lease for the Chung On Shopping Centre wet market [Hong Kong Wet Market Operations](index=26&type=section&id=%E9%A6%99%E6%B8%AF%E8%A1%97%E5%B8%82%E7%87%9F%E9%81%8B) The Group manages approximately 600 stalls under the 'Man Yau' and 'Daily Fresh' brands in Hong Kong, totaling over 150,000 sq. ft. of floor area, enhancing the shopping environment and strengthening relationships with tenants and local communities through thoughtful layout design, improvement works, and quality management services - The Group manages approximately **600 stalls** under the "Man Yau" and "Daily Fresh" brands in Hong Kong, with a total floor area of **over 150,000 sq. ft.**[117](index=117&type=chunk) - The Group aims to provide a more comfortable and spacious shopping environment and strengthen relationships with tenants and local communities through thoughtful layout design, improvement works, and quality management services[117](index=117&type=chunk) - The Group received notification from Link Properties Limited agreeing to **renew the lease for Chung On Shopping Centre wet market** for a term of **six years**, until January 31, 2029[174](index=174&type=chunk) [Slaughtering Business](index=27&type=section&id=%E5%B1%A0%E5%AE%B0%E6%A5%AD%E5%8B%99) The slaughtering business generated stable revenue of approximately HK$35.1 million for the period, consistent with HK$35.0 million in the prior period, with 18 operational meat stalls as of September 30, 2023, and the Group considers this business to have low development risk Slaughtering Business Revenue (For the Six Months Ended September 30) | Item | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Slaughtering Business Revenue | 35.1 | 35.0 | - As of September 30, 2023, there were **18 operational meat stalls**[118](index=118&type=chunk) [China Agricultural Product Trading Markets](index=27&type=section&id=%E4%B8%AD%E5%9C%8B%E8%BE%B2%E7%94%A2%E5%93%81%E4%BA%A4%E6%98%93%E5%B8%82%E5%A0%B4) The Group, through China Agri-Products Group, operates 11 agricultural product trading markets across five provinces in China, significantly expanding its business scope and establishing a solid position in the industry, providing a foundation for future sustained development and expansion - The Group currently operates **11 agricultural product trading markets** across **five provinces in China** through China Agri-Products Group[175](index=175&type=chunk) - The acquisition of these agricultural product trading markets has significantly expanded the Group's business in the wet markets and agricultural product trading markets segment in China, providing a **solid foundation for future sustained development and expansion**[175](index=175&type=chunk) [Property Investment](index=27&type=section&id=%E7%89%A9%E6%A5%AD%E6%8A%95%E8%B3%87) The Group's property investment portfolio includes owned investment properties and several joint venture projects, with owned investment properties totaling approximately HK$3,561.0 million in book value as of September 30, 2023, and joint venture properties like Tuen Mun Tin Sang Building, Ma On Shan 'Lake Silver' and Tseung Kwan O 'The Parkside' commercial properties, and Aberdeen Jumbo Court car park platform generally exhibiting high occupancy rates [Owned Investment Properties](index=27&type=section&id=%E8%87%AA%E6%9C%89%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD) As of September 30, 2023, the Group's owned investment properties in Hong Kong and China, comprising commercial, industrial, and residential units, had a total book value of approximately HK$3,561.0 million, a decrease from HK$3,764.0 million as of March 31 Total Book Value of Owned Investment Properties (As at September 30) | Item | 2023 (HK$ Million) | March 31, 2023 (HK$ Million) | | :--- | :--- | :--- | | Total Book Value of Owned Investment Properties | 3,561.0 | 3,764.0 | [Joint Venture Property Investments](index=28&type=section&id=%E5%90%88%E8%B3%87%E4%BC%81%E6%A5%AD%E7%89%A9%E6%A5%AD%E6%8A%95%E8%B3%87) Wang On Properties Group participates in several joint venture property investments, including a 64% interest in the Tuen Mun Tin Sang Building joint venture, which is fully leased with some shop units sold; commercial properties 'Lake Silver' and 'The Parkside' in partnership with KKR have been renovated, improving tenant mix and achieving 100% and over 97% occupancy rates respectively; and the Jumbo joint venture acquired the Aberdeen Jumbo Court car park platform, fully leased and expected to meet future parking demand - Wang On Properties Group holds a **64% interest in the Tin Sang Building joint venture**, which is fully leased, and **3 out of 15 shop units have been sold**[149](index=149&type=chunk) - Wang On Properties Group, in partnership with KKR, holds a **50% equity interest in two commercial properties**, "Lake Silver" in Ma On Shan and "The Parkside" in Tseung Kwan O, which have been renovated to improve tenant mix and increase rental yields, with **Lake Silver fully leased** and **The Parkside achieving an occupancy rate of over 97%**[150](index=150&type=chunk) - The Jumbo joint venture acquired an **8-story car park platform at Jumbo Court in Aberdeen**, providing **509 parking spaces**, which is expected to meet significant parking demand and is currently **fully leased**[177](index=177&type=chunk) [Second-hand Residential Properties and Property Disposals](index=28&type=section&id=%E4%BA%8C%E6%89%8B%E4%BD%8F%E5%AE%85%E7%89%A9%E6%A5%AD%E5%8F%8A%E7%89%A9%E6%A5%AD%E5%87%BA%E5%94%AE) As of September 30, 2023, the Group still holds 8 second-hand residential properties valued at approximately HK$42.8 million and will continue to seek suitable disposal opportunities, while Watsons Group completed two property disposals during the period for a total consideration of HK$137.8 million - As of September 30, 2023, the Group still held **8 second-hand residential properties** with an estimated value of approximately **HK$42.8 million**, and will continue to seek suitable opportunities for disposal[151](index=151&type=chunk) - Watsons Group completed the disposal of a company holding a property at 11/F, Po Shing Industrial Building, 13 Ko Fai Road, Kowloon, Hong Kong for **HK$71.0 million**, and the sale of a property at Shop B and part of the open area on the ground floor of 66, 68, 70 and 72 Tai Wai Road, Sha Tin, New Territories, Hong Kong for **HK$66.8 million**[178](index=178&type=chunk) [Pharmaceutical and Health Food Products Business](index=28&type=section&id=%E9%86%AB%E8%97%A5%E5%8F%8A%E4%BF%9D%E5%81%A5%E9%A3%9F%E5%93%81%E7%94%A2%E5%93%81%E6%A5%AD%E5%8B%99) Total revenue for the pharmaceutical and health food products segment grew by approximately 22.3% to HK$365.4 million for the period, with Chinese medicine and health food products revenue significantly increasing by 23.8% alongside the establishment of a central decoction center and R&D collaboration with Hong Kong Polytechnic University; Western medicine and health food products revenue rose by 10.3%, with flagship brand 'Madame Pearl's' retaining its top cough syrup sales position and 'Pett's' mosquito repellent products performing well, while e-commerce and China market channels are actively being developed [Chinese Medicine and Health Food Products](index=29&type=section&id=%E4%B8%AD%E8%97%A5%E5%8F%8A%E4%BF%9D%E5%81%A5%E9%A3%9F%E5%93%81%E7%94%A2%E5%93%81) Revenue from Chinese medicine and health food products segment significantly increased by approximately 23.8% to HK$329.0 million, with Watsons Group establishing a central decoction center, expanding retail stores, entering e-commerce platforms, and collaborating with Hong Kong Polytechnic University on new product development like Cordyceps Cs4 Nano Selenium, earning Watsons the 'Most Frequently Used Chinese Health Product Brand in the Past 12 Months' award Chinese Medicine and Health Food Products Revenue (For the Six Months Ended September 30) | Item | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Chinese Medicine and Health Food Products Revenue | 329.0 | 265.7 | | Year-on-year Growth | +23.8% | | - Watsons Group established a **central decoction center in August 2023**, offering **24-hour Chinese medicine delivery services**[153](index=153&type=chunk) - Watsons Group collaborated with The Hong Kong Polytechnic University, discovering that **Cordyceps Cs4 Nano Selenium** helps promote osteocyte and bone matrix formation[181](index=181&type=chunk) - Watsons Group was awarded the title of **"Most Frequently Used Chinese Health Product Brand in the Past 12 Months"**[124](index=124&type=chunk) [Western Medicine and Health Food Products](index=30&type=section&id=%E8%A5%BF%E8%97%A5%E5%8F%8A%E4%BF%9D%E5%81%A5%E9%A3%9F%E5%93%81%E7%94%A2%E5%93%81) Western medicine and health food products revenue increased by approximately 10.3% to HK$36.4 million, with flagship brand 'Madame Pearl's' maintaining its 13-year reign as Hong Kong's top-selling cough syrup and 'Pett's' mosquito repellent products achieving favorable revenue, while Watsons Group actively develops e-commerce channels and collaborates with local distributors to accelerate 'Madame Pearl's' and 'Pett's' brand penetration in China Western Medicine and Health Food Products Revenue (For the Six Months Ended September 30) | Item | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Western Medicine and Health Food Products Revenue | 36.4 | 33.0 | | Year-on-year Growth | +10.3% | | - **"Madame Pearl's"** has been the **top-selling cough syrup in Hong Kong for 13 consecutive years**[184](index=184&type=chunk) - Watsons Group has actively invested resources in establishing **e-commerce channels**, including its own online platforms and selected third-party e-commerce platforms[158](index=158&type=chunk) - Watsons Group has collaborated with several local distributors to accelerate the **channel penetration of "Madame Pearl's" and "Pett's" brands in China**[185](index=185&type=chunk) [Treasury Management](index=31&type=section&id=%E8%B2%A1%E8%B3%87%E7%AE%A1%E7%90%86) Treasury management encompasses lending and asset management services; lending business revenue decreased by 30.6% to HK$16.3 million due to uncertain economic outlook and a more cautious lending approach, while asset management services revenue increased to HK$26.2 million due to new managed assets, with Wang On Properties Group establishing joint ventures with strategic partners to provide these services [Lending Business](index=31&type=section&id=%E5%80%9F%E8%B2%B8%E6%A5%AD%E5%8B%99) Lending business contributed approximately HK$16.3 million in revenue for the period, a decrease of about 30.6%, primarily due to reduced market demand amid an uncertain economic outlook and the Group's more cautious lending approach; as of September 30, 2023, the total loan portfolio was approximately HK$290.0 million, with 82.8% secured and 17.2% unsecured, carrying weighted average annual interest rates of approximately 13.2% and 13.9% respectively Lending Business Revenue (For the Six Months Ended September 30) | Item | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Lending Business Revenue | 16.3 | 23.5 | | Year-on-year Change | -30.6% | | - The decrease in revenue from the loan portfolio was due to a **general decline in market demand** caused by an uncertain economic outlook, and the Group's **more cautious approach** when accepting potential loan applications in a risky environment[162](index=162&type=chunk) - As of September 30, 2023, the Group had **42 active loan accounts** with a total loan balance of approximately **HK$290.0 million**, of which **82.8% were secured loans** and **17.2% were unsecured loans**[190](index=190&type=chunk) - The weighted average annual interest rate for secured loans was approximately **13.2%**, and for unsecured loans, it was approximately **13.9%**[162](index=162&type=chunk) [Asset Management](index=33&type=section&id=%E8%B3%87%E7%94%A2%E7%AE%A1%E7%90%86) Wang On Properties Group recorded asset management fee income of approximately HK$26.2 million for the period, a significant increase from HK$9.1 million in the prior period, primarily due to the addition of new managed assets; Wang On Properties Group has established joint ventures with several strategic partners to provide asset management services, including hotel renovation projects and residential property development Asset Management Fee Income (For the Six Months Ended September 30) | Item | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Fee Income | 26.2 | 9.1 | | Year-on-year Growth | +187.9% | | - The increase was mainly due to the **addition of new managed assets**[193](index=193&type=chunk) - Wang On Properties Group formed a joint venture with Angelo, Gordon & Co. L.P. to acquire and renovate a hotel building at 19 Luk Hop Street, Kowloon, Hong Kong, expected to **reopen in the first quarter of 2024**[165](index=165&type=chunk) - Wang On Properties Group partnered with APG Strategic Real Estate Pool to acquire residential properties in Hong Kong for **development and redevelopment for sale**[166](index=166&type=chunk) [Liquidity and Financial Resources](index=34&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) As of September 30, 2023, the Group's total assets were approximately HK$18,464.0 million, with cash resources of HK$1,333.0 million; total equity decreased to HK$9,250.5 million, and total borrowings increased to HK$6,536.3 million, resulting in a net gearing ratio of 57.9%, as the Group continues to strengthen financial risk control and maintain a prudent financial management approach [Assets and Cash Resources](index=34&type=section&id=%E8%B3%87%E7%94%A2%E5%8F%8A%E7%8F%BE%E9%87%91%E8%B3%87%E6%BA%90) As of September 30, 2023, the Group's total assets were approximately HK$18,464.0 million, with cash resources of HK$1,333.0 million, comprising cash and bank balances of HK$1,184.9 million and short-term investments of HK$148.1 million; total liquid investments, cash and bank balances amounted to HK$1,737.3 million, a 23.6% decrease from March 31 Assets and Cash Resources (As at September 30) | Item | 2023 (HK$ Million) | March 31, 2023 (HK$ Million) | | :--- | :--- | :--- | | Total Assets | 18,464.0 | 18,387.1 | | Total Cash Resources | 1,333.0 | 1,749.0 | | Of which: Cash and Bank Balances | 1,184.9 | 1,616.3 | | Of which: Short-term Investments | 148.1 | 132.7 | | Total Liquid Investments, Cash and Bank Balances | 1,737.3 | 2,274.3 | | Year-on-year Change | -23.6% | | [Equity](index=34&type=section&id=%E6%AC%8A%E7%9B%8A) As of September 30, 2023, equity attributable to owners of the parent decreased by approximately 0.3% to HK$5,900.9 million, and the Group's total equity (including non-controlling interests) decreased to HK$9,250.5 million Equity (As at September 30) | Item | 2023 (HK$ Million) | March 31, 2023 (HK$ Million) | | :--- | :--- | :--- | | Equity Attributable to Owners of the Parent | 5,900.9 | 5,916.3 | | Total Equity (Including Non-controlling Interests) | 9,250.5 | 9,379.4 | | Change in Equity Attributable to Owners of the Parent | -0.3% | | [Debt and Net Gearing Ratio](index=34&type=section&id=%E5%82%B5%E5%8B%99%E5%8F%8A%E6%B7%A8%E5%82%B5%E5%8B%99%E6%AC%8A%E7%9B%8A%E6%AF%94%E7%8E%87) As of September 30, 2023, the Group's total debt increased to approximately HK$6,536.3 million from HK$6,246.6 million, with the net gearing ratio rising by 8.5 percentage points to 57.9% from 49.4% as of March 31 Debt and Net Gearing Ratio (As at September 30) | Item | 2023 (HK$ Million) | March 31, 2023 (HK$ Million) | | :--- | :--- | :--- | | Total Debt | 6,536.3 | 6,246.6 | | Net Gearing Ratio | 57.9% | 49.4% | | Change in Net Gearing Ratio | +8.5 Percentage Points | | - The net gearing ratio is calculated as **net debt divided by total equity**; net debt is calculated as the total of interest-bearing bank and other borrowings, unsecured notes, and convertible notes, less cash and cash equivalents, restricted bank balances, and pledged deposits[198](index=198&type=chunk) [Pledged Assets](index=34&type=section&id=%E5%B7%B2%E6%8A%B5%E6%8A%BC%E8%B3%87%E7%94%A2) As of September 30, 2023, approximately HK$506.8 million in property, plant and equipment, HK$1,968.7 million in investment properties, HK$4,945.9 million in properties under development, HK$352.9 million in properties held for sale, and HK$58.3 million in pledged deposits were pledged as collateral for the Group's general banking facilities Book Value of Pledged Assets (As at September 30) | Asset Category | 2023 (HK$ Million) | March 31, 2023 (HK$ Million) | | :--- | :--- | :--- | | Property, Plant and Equipment | 506.8 | 539.8 | | Investment Properties | 1,968.7 | 2,218.0 | | Properties Under Development | 4,945.9 | 4,187.6 | | Properties Held for Sale | 352.9 | 601.4 | | Financial Assets at Fair Value Through Other Comprehensive Income | 0 | 126.9 | | Financial Assets at Fair Value Through Profit or Loss | 0 | 12.1 | | Pledged Deposits | 58.3 | 33.5 | - The aforementioned assets were pledged as collateral for the Group's general banking facilities[170](index=170&type=chunk) [Contingent Liabilities](index=35&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of September 30, 2023, the Group's capital commitments were approximately HK$1,407.6 million, primarily for property development, with capital commitments attributable to joint ventures of HK$186.5 million; the Group also provided bank guarantees up to HK$700.8 million for a joint venture's financing, of which HK$426.5 million was utilized, and guarantees of approximately HK$27.2 million for certain bank loans to customers of properties sold Contingent Liabilities (As at September 30) | Item | 2023 (HK$ Million) | March 31, 2023 (HK$ Million) | | :--- | :--- | :--- | | Capital Commitments of the Group | 1,407.6 | 1,409.3 | | Capital Commitments Attributable to Joint Ventures | 186.5 | 110.9 | | Bank Guarantees for Joint Venture Financing (Maximum) | 700.8 | 450.8 | | Bank Guarantees for Joint Venture Financing (Utilized) | 426.5 | 250.3 | | Loan Guarantees Provided to Customers of Properties Sold | 27.2 | 36.1 | | Contingent Liabilities Related to Guarantees | 0.176 | 0.328 | [Analysis of Interest-bearing Debt Portfolio](index=36&type=section&id=%E8%A8%88%E6%81%AF%E5%82%B5%E5%8B%99%E7%B5%84%E5%90%88%E5%88%86%E6%9E%90) As of September 30, 2023, the Group's total interest-bearing debt was approximately HK$6,536.3 million, with HK$749.8 million at fixed rates and HK$5,786.5 million at floating rates, and debt repayment periods distributed across within one year or on demand, second year, third to fifth year, and over five years Repayment Schedule of Interest-bearing Bank and Other Borrowings (As at September 30) | Repayment Period | 2023 (HK$ Thousand) | March 31, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Within 1 Year or On Demand | 2,991,238 | 2,964,731 | | In the 2nd Year | 1,576,253 | 2,251,228 | | In the 3rd to 5th Year (Inclusive) | 1,298,246 | 672,976 | | Over 5 Years | 64,200 | 20,515 | | **Total** | **5,929,937** | **5,909,450** | Repayment Schedule of Other Loans (As at September 30) | Repayment Period | 2023 (HK$ Thousand) | March 31, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Within 1 Year or On Demand | 78,923 | — | | In the 2nd Year | — | 125,189 | | **Total** | **78,923** | **125,189** | - As of September 30, 2023, the Group's total interest-bearing debt was approximately **HK$6,536.3 million**, of which approximately **HK$749.8 million bore interest at fixed rates**, while the remaining debt of approximately **HK$5,786.5 million bore interest at floating rates**[202](index=202&type=chunk) [Financial Risk Management](index=35&type=section&id=%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group continuously strengthens and improves financial risk control, adhering to a prudent financial management approach, ensuring efficient and effective operations while maintaining flexibility to address opportunities and changes through close monitoring of financial resources, and management believes the current financial structure is healthy with sufficient resources for foreseeable operational needs - The Group continuously strengthens and improves financial risk control and adheres to a **prudent financial management approach**[224](index=224&type=chunk) - Operating a centralized cash management system helps **optimize cash flow and minimize idle cash**, while prudent investment in liquid investments generates reasonable returns and maintains liquidity[224](index=224&type=chunk) - The Group's management believes that the Group's current financial structure is **healthy**, and its resources are **sufficient to meet its operational needs** for the foreseeable future[224](index=224&type=chunk) [Significant Investments Held, Material Acquisitions and Disposals of Subsidiaries, and Future Plans for Material Investments or Capital Assets](index=37&type=section&id=%E6%89%80%E6%8C%81%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%EF%BC%8C%E4%BB%A5%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) As of September 30, 2023, the Group held approximately HK$262.6 million in financial assets at fair value through other comprehensive income and HK$289.8 million in financial assets at fair value through profit or loss; during the reporting period, the Company completed the acquisition of approximately 20.17% equity in China Agri-Products, increasing its stake to about 73.54%, and Watsons Group signed a provisional agreement for property disposal post-reporting period, with no other future plans for material investments or capital assets beyond these disclosures [Financial Asset Investments](index=37&type=section&id=%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2%E6%8A%95%E8%B3%87) As of September 30, 2023, the Group held approximately HK$262.6 million in financial assets at fair value through other comprehensive income (including equity investments and bonds) and HK$289.8 million in financial assets at fair value through profit or loss (including equity investments, fu