Financial Performance - Hotel portfolio revenue for the first half of 2020 was HKD 259.7 million, a decrease of 67.9% compared to HKD 810.2 million in the same period of 2019[14]. - Total rental income for the trust group decreased by 64.5% to HKD 104.9 million from HKD 295.5 million year-on-year[14]. - The total revenue, including HKD 14.3 million in government subsidies, fell by 68.0% year-on-year[17]. - The net loss after tax for the first half of 2020 was HKD 2,037.1 million, with a net loss of HKD 13.2 million excluding fair value changes of investment properties and derivative financial instruments[18]. - The net loss attributable to shareholders was HKD 2,037.1 million in the first half of 2020, a drastic decline of 5,532.3% from a profit of HKD 37.5 million in the previous year[46]. - The total comprehensive loss attributable to unit holders was HKD 2,037,076,000, compared to a profit of HKD 37,542,000 in the prior period[165]. - The basic and diluted loss per unit was HKD 0.95, a sharp decline from HKD 0.02 in the same period last year[165]. - The loss before tax for the period was HKD 2,033,090,000, compared to a profit of HKD 71,820,000 in the previous year, indicating a significant downturn[165]. Asset Valuation - The fair value of investment properties decreased by HKD 1,941.6 million during the reporting period[18]. - The fair value of investment properties was HKD 15,572 million as of June 30, 2020, compared to HKD 17,500 million as of December 31, 2019[65]. - The fair value loss on investment properties was HKD 1,941,616,000 for the period, compared to HKD 74,951,000 in the previous year, highlighting a significant impact on asset valuation[165]. - The fair value of investment properties as of June 30, 2020, for The Langham, Hong Kong was HKD 5,645,000,000, down from HKD 6,475,000,000 as of December 31, 2019, indicating a decrease of 12.85%[193]. Debt and Liabilities - The debt ratio increased to 46.2% from 40.6% at the end of 2019[14]. - Total outstanding borrowings amounted to HKD 7,227 million, resulting in a debt ratio of 46.2% as of June 30, 2020[19]. - The total liabilities increased to HKD 7,218,807,000 from HKD 7,158,505,000, indicating a slight increase of 0.8%[168]. - The asset-to-liability ratio increased to 46.2% as of June 30, 2020, compared to 40.6% as of December 31, 2019[63]. Revenue from Hotels - The average revenue per available room (RevPAR) for the hotel portfolio dropped by 85.7% due to a 91.2% decline in guest numbers and a 69.8 percentage point decrease in occupancy rate[17]. - Average revenue per available room (RevPAR) for Hong Kong Langham Hotel, Hong Kong Cordis Hotel, and Hong Kong Eaton Hotel fell by 93.5%, 81.9%, and 76.4% respectively in July 2020 compared to the previous year[27]. - The total revenue for Hong Kong Langham Hotel in H1 2020 was HKD 75.2 million, reflecting a year-on-year decline of 74.8%[52]. - The total revenue for Hong Kong Cordis Hotel in H1 2020 was HKD 107.0 million, reflecting a year-on-year decline of 70.6%[52]. - The total revenue for Hong Kong Eaton Hotel in H1 2020 was HKD 77.5 million, reflecting a year-on-year decline of 47.6%[52]. Fundraising and Financial Strategy - The company anticipates that the fundraising plan will raise at least HKD 648 million, potentially up to HKD 1,019 million if all unit holders participate[23]. - The fundraising proceeds will primarily be used to repay part of the outstanding loans and to deposit additional collateral as part of the financial covenant relief mechanism[23]. - The company expects the fundraising to strengthen its financial position and ensure continued operations without breaching financial covenants[24]. - The company is exploring feasible options to improve its financial situation, including hiring financial advisors for strategic planning[22]. Corporate Governance - The trust and the company have maintained compliance with applicable corporate governance codes and regulations during the six-month period ending June 30, 2020[89]. - The group has established multiple corporate governance measures to address potential conflicts of interest, ensuring the interests of unit holders are protected[88]. - The audit committee is responsible for overseeing the execution of governance measures related to the Eagle priority agreements, ensuring compliance with their terms[94]. - The remuneration committee has a formal and transparent process for determining the remuneration of executive directors and senior management, ensuring competitive yet reasonable compensation[100]. Employee and Community Engagement - The average training hours per employee in the first half of 2020 was approximately 9.5 hours, emphasizing the company's commitment to employee development[137]. - The company has established a corporate social responsibility program, CONNECT, focusing on governance, environmental protection, community engagement, and employee welfare[137]. Market Outlook - The outlook for the international travel and tourism industry remains bleak, with expectations of a slow recovery for the hotel sector post-pandemic[24]. - The group experienced a significant decline in operational performance due to the COVID-19 pandemic, impacting the overall gross profit from the hotels[182].

Hotel Portfolio and Operations - The hotel portfolio includes three properties: The Langham, Hong Kong; Cordis, Hong Kong; and Eaton, Hong Kong, with a focus on high-end accommodations in Asia [2]. - The Langham, Hong Kong has a building area of 375,000 square feet and is located in a prime shopping and leisure area [6]. - Cordis, Hong Kong is the only large luxury hotel in the Mong Kok area, featuring 669 rooms and a building area of 580,000 square feet [9]. - Eaton, Hong Kong underwent significant renovations in 2018, transforming it into a culturally themed hotel with a building area of 339,000 square feet and 465 rooms [12]. - The company is part of the Langham Hospitality Group, which manages 23 hotels across various brands and has over 15 projects in development across China, Southeast Asia, Australia, and North America [14]. - The Langham brand emphasizes luxury and elegance, while the Cordis brand focuses on high-end service and modern design [15][16]. - The properties are strategically located near major transportation hubs, facilitating easy access for guests [4][7]. - The hotels are positioned in vibrant commercial and cultural districts, attracting both local and international visitors [2][10]. Financial Performance - The company declared a final distribution of HKD 3.4 per unit for the year ended December 31, 2019, down from HKD 10.5 in 2018, resulting in a total annual distribution of HKD 12.1 per unit [30]. - The distribution yield based on the closing price of HKD 2.36 per unit as of December 31, 2019, is 5.1% [30]. - The board decided to reduce the distribution rate from 100% to at least 90% of distributable income starting in 2020 to increase cash reserves amid a challenging trading environment [29]. - The company reported a mid-term distribution of HKD 8.7 per unit in September 2019 [30]. - The hotel portfolio revenue decreased by 17.1% to HKD 1,350.9 million in 2019 from HKD 1,629.8 million in 2018 [35]. - Total rental income after service fees dropped by 21.4% to HKD 483.9 million in 2019 compared to HKD 615.5 million in 2018 [35]. - The profit attributable to unit holders, excluding changes in fair value of investment properties and derivative financial instruments, fell by 45.9% to HKD 168.6 million in 2019 from HKD 311.6 million in 2018 [35]. - Average revenue per available room (RevPAR) for the hotel portfolio decreased by 31.1% for the year, with a 55.5% decline in the second half of 2019 [38]. - The overall hotel market in Hong Kong saw a 23.9% decline in average revenue per available room for the entire year [38]. - The financing cost increased by 16.6% to HKD 220.2 million in 2019 due to rising interest rates [42]. - The total value of the hotel portfolio decreased to HKD 17,500 million as of December 31, 2019, down from HKD 20,177 million at the end of 2018 [44]. - The net asset value per unit was HKD 4.68 as of December 31, 2019, compared to HKD 6.14 at the end of 2018 [44]. - The debt ratio increased to 40.6% as of December 31, 2019, up from 34.2% at the end of 2018 [44]. - Total rental income (excluding service fees) decreased by 21.4% to HKD 483.9 million in 2019, with floating rental income down 32.4% to HKD 325.4 million [52][53]. - Net property income fell by 23.6% to HKD 448.3 million in 2019 due to increased property-related expenses, which rose by 24.9% to HKD 35.6 million [58][59]. - The fair value of investment properties (hotel portfolio) decreased by HKD 2,788.4 million in 2019, resulting in a loss attributable to unitholders of HKD 2,634.7 million [61][65]. - Distributable income decreased by 36.9% to HKD 259.1 million under the 100% distribution policy in 2019 [66]. - The total distributable income for the year ended December 31, 2019, was HKD 259.1 million, a decrease of 36.9% from HKD 410.5 million in 2018 [81]. Operational Challenges and Strategies - The company is focused on enhancing cash reserves to better navigate the ongoing asset enhancement activities [29]. - The group remains confident in Hong Kong's long-term recovery as a world-class business and leisure travel destination despite current adverse market conditions [49]. - Global marketing expenses decreased by 28.9% in 2019, reflecting the overall decline in revenue [54]. - The average daily room revenue for the Hong Kong Langham Hotel decreased by 30.9% year-on-year, with an occupancy rate of 75.3% compared to 91.2% in 2018 [71]. - The average daily room revenue for the Hong Kong Cordis Hotel decreased by 29.4% year-on-year, with an occupancy rate of 73.1% compared to 95.0% in 2018 [71]. - The average daily room revenue for the Hong Kong Eaton Hotel decreased by 29.9% year-on-year, with an occupancy rate of 71.6% compared to 87.0% in 2018 [71]. - The number of room nights occupied by mainland Chinese travelers decreased by 19.4%, accounting for 35.9% of total occupied room nights [74]. - The food and beverage business experienced a decline of 10.7% year-on-year, although it performed better than the accommodation segment during the social unrest [76]. Environmental and Social Responsibility - The company emphasizes energy and water conservation, waste management, and climate change as part of its corporate social responsibility initiatives [112]. - The hotels received the EarthCheck Platinum certification, recognizing over ten years of sustainable practices [117]. - The Hong Kong Eaton Hotel was awarded the LEED v4 Gold Rating for Interior Design and Construction [117]. - The hotels have implemented waste reduction measures, including recycling and reusing materials such as paper, metal, and glass [122]. - The introduction of a new "Green Meeting Package" aims to provide sustainable meeting solutions and reduce environmental impact [129]. - The company has partnered with EarthCheck to implement a systematic approach to address various environmental issues in hotel management, ensuring compliance with regulations and continuous improvement in environmental performance [114]. - Employees contributed over 2,500 hours of support to charitable and social projects in 2019 [130]. - The company supported the "Water Bottle Initiative" by providing free water dispensers and educational talks in schools and community centers [135]. - The company organized the "Magic Pink Afternoon Tea," donating HKD 10 for each tea set sold to the Hong Kong Breast Cancer Foundation [141]. - The company has been actively involved in environmental initiatives, including the "Soap Recycling Program" to support hygiene projects across Asia [138]. Governance and Management - The company has committed to maintaining high standards of corporate governance to enhance its image and create value for unit holders [162]. - The board of directors consists of 50% independent non-executive directors, ensuring a balanced governance structure [190]. - The trust group has adhered to all applicable corporate governance codes and has adopted some of the recommended best practices during the review year [184]. - The management team has extensive experience, with the CFO having approximately 40 years in the hotel industry and the investor relations head possessing 18 years of experience in real estate [105][107]. - The company is focused on enhancing communication and engagement with shareholders and investors through its investor relations department [107]. - The management board is responsible for ensuring the trust's obligations under the trust deed are fulfilled, including safeguarding unit holders' rights [200]. - The company has a risk management policy in place to identify potential risks and opportunities [196]. - The board conducts regular reviews of financial controls and compliance systems [199]. - The company emphasizes ethical and responsible business practices to maintain stakeholder trust while expanding operations [155]. - The company has a strong internal control and accountability system to ensure ethical business practices [112]. Employee Development and Safety - The company expanded its talent development program in 2019, focusing on attracting and retaining young talent [150]. - In 2019, the average training hours per employee increased to 26 hours from 21.8 hours in 2018, indicating a strengthened training program [154]. - The management committee members received an average of 9.3 hours of training in 2019, while managers and general staff averaged 26.4 hours [154]. - The Lost Time Injury Frequency Rate (LTIFR) improved from 35 in 2018 to 21 in 2019, indicating better workplace safety [149]. - The accident rate decreased from 8.3 in 2018 to 6.3 in 2019, reflecting enhanced safety measures [149]. - The company participated in the Y-WE program, providing one week of work experience to help youth understand hotel operations [134]. - The company has been recognized as a "Good Employer" under the Mandatory Provident Fund Scheme for the 2018-19 period [142].

Financial Performance - Hotel portfolio revenue for the first half of 2019 was HKD 810.2 million, a 6.5% increase from HKD 761.1 million in the same period of 2018[16]. - Total rental income for the trust group was HKD 295.5 million, up 3.8% from HKD 284.6 million year-on-year[16]. - Profit attributable to unit holders, excluding fair value changes of investment properties and derivative financial instruments, decreased by 4.8% to HKD 137.3 million from HKD 144.2 million[16]. - Distributable income for the period was HKD 184.6 million, down 2.3% from HKD 189.0 million in the previous year[16]. - The interim distribution per unit was set at HKD 0.087, a decrease of 3.3% from HKD 0.090 in 2018[11]. - Net profit for the trust group fell by 94.5% to HKD 37.5 million, while distributable income decreased by 2.3% to HKD 184.6 million[25]. - The average revenue per available room (RevPAR) for the hotel portfolio in the first half of 2019 was HKD 1,530, a decrease of 5.0% year-on-year, primarily due to a 3.3% drop in average daily rate to HKD 1,684 and a 1.7 percentage point decline in occupancy rate to 90.8%[49]. - Total room revenue for the hotel portfolio increased by 0.5% year-on-year to HKD 451.3 million, accounting for 55.7% of total hotel revenue[49]. - Basic and diluted earnings per unit decreased to HKD 0.02 from HKD 0.32 year-over-year[164]. Asset and Debt Management - The total value of the hotel portfolio as of June 30, 2019, was HKD 20,180 million, slightly up from HKD 20,177 million at the end of 2018[16]. - Net asset value per unit decreased to HKD 6.04 from HKD 6.14 at the end of 2018[16]. - The debt ratio as of June 30, 2019, was 34.4%, compared to 34.2% at the end of 2018[16]. - As of June 30, 2019, the total borrowings of the trust group were HKD 6,985 million, with 57.3% of the borrowings fixed at a weighted average swap rate of 1.65%[59]. - The trust group's total assets as of June 30, 2019, were HKD 20,332.5 million, with a debt-to-asset ratio of 34.4%[62]. - Cash reserves stood at HKD 66.4 million as of June 30, 2019, down from HKD 86.9 million at the end of 2018[63]. - The fair value of investment properties decreased by HKD 75.0 million, leading to a 94.5% drop in profit attributable to unitholders to HKD 37.5 million[41]. Revenue and Expenses - Average room revenue decreased, but food and beverage revenue at the Hong Kong Eaton Hotel increased significantly, contributing to a 14.7% growth in total food and beverage revenue for the hotel portfolio[20]. - The average interest rate for the trust group rose to 2.7% in the first half of 2019, up from 2.0% in the same period of 2018, leading to a 16.0% increase in financing costs to HKD 100.3 million[21]. - Financing costs increased by 16.0% year-on-year to HKD 100.3 million, with interest expenses rising by 34.1% to HKD 90.8 million[38]. - The overall operating profit margin decreased by 0.3 percentage points to 40.1%, despite a 5.7% increase in operating profit before global marketing expenses[20]. Market Conditions and Strategy - The trust group expects significant slowdowns in hotel business performance due to ongoing protests, with current room bookings and revenue expected to decline by at least 20% in August[26]. - The trust group has adopted a more flexible pricing strategy to maximize hotel occupancy rates in response to potential adverse factors affecting the hotel industry[26]. - The number of mainland Chinese travelers increased by 12.4% year-on-year, accounting for 39.3% of total visitors to Hong Kong[51]. Corporate Governance - The company has established a strong governance framework, ensuring compliance with regulatory requirements and best practices[81]. - The board's composition reflects a balance of industry experience and independent oversight, which is crucial for sustainable growth[73][74]. - The trust group is committed to maintaining high standards of corporate governance to enhance the company's image and create value for unit holders[82]. - The trust and the company have complied with applicable corporate governance codes and best practices as of June 30, 2019[89]. - The audit committee consists of three independent non-executive directors, ensuring effective oversight of financial reporting and risk management[99]. Human Resources and Community Engagement - The total number of employees in the hotels remained stable compared to December 31, 2018, with competitive salary levels and performance-based bonuses[136]. - The average training hours per employee in the hotels during the first half of 2019 was approximately 14.1 hours[137]. - The trust's commitment to corporate social responsibility included approximately 835 hours of community service and volunteer activities by hotel staff in the first half of 2019[137]. Financial Reporting and Compliance - The financial statements were prepared in accordance with Hong Kong Accounting Standards No. 34[160]. - Deloitte conducted a review of the financial statements and found no issues that would lead to a belief that the statements were not prepared in accordance with the relevant standards[162]. - The financial statements were prepared on a going concern basis, considering the group's existing banking relationships and the fair value of its assets[179]. - The group has not experienced any lease modifications during the reporting period[194].

Hotel Portfolio and Management - The hotel investment portfolio includes The Langham Hong Kong, Cordis Hong Kong, and Eaton HK, focusing on high-end hotels in Asia[6] - The group currently manages 22 hotels under the Langham, Cordis, and Eaton brands across four continents, with over 20 projects in various stages of development[21] - The hotels are strategically located in vibrant commercial and leisure districts, enhancing their appeal to both local and international guests[6] - The company aims to expand its presence in key markets in Asia and North America through new hotel openings and renovations[21] - The investment strategy includes a focus on luxury and modern hospitality experiences, catering to the evolving preferences of millennial travelers[20] - The company emphasizes unique service offerings and artistic design elements to enhance guest experiences[22] - Future developments will include new luxury hotels and innovative hospitality concepts to meet market demand[23] Financial Performance - The total distributable income for the trust group for the year ended December 31, 2018, was HKD 410,491,000, a decrease from HKD 437,200,000 in 2017[39] - The board proposed a final distribution of HKD 0.105 per unit for the year ended December 31, 2018, down from HKD 0.111 per unit in 2017, maintaining a distribution rate of 100%[39] - The total distribution for the year 2018, including the interim distribution of HKD 0.090 per unit, amounted to HKD 0.195 per unit, resulting in a distribution yield of 6.7% based on the closing price of HKD 2.90 per unit on December 31, 2018[39] - The trust group's existing policy is to distribute not less than 90% of the total distributable income to unit holders[39] - The total rental income under HKFRS 15 rose by 1.3% to HKD 615.5 million, compared to HKD 607.6 million in 2017[50] - Net property income grew by 1.1% to HKD 587.0 million, while financing costs increased by 23.1% to HKD 188.8 million due to rising interest rates[50] - The overall average room revenue for the hotel portfolio increased by 11.5% year-on-year, with the Langham Hotel in Hong Kong seeing a growth of 12.4%[49] - The total value of the hotel portfolio reached HKD 20,177 million as of December 31, 2018, up from HKD 19,373 million in 2017[51] - The net asset value per unit was HKD 6.14, reflecting a discount of 52.8% compared to the closing price of HKD 2.90 on December 31, 2018[51] - The overall profit attributable to unit holders, excluding changes in fair value of investment properties and derivative financial instruments, decreased by 8.7% to HKD 311.6 million[50] Operational Efficiency and Growth - The company has entered into interest rate swap contracts totaling HKD 5 billion, effectively fixing 57.1% of its HKD 7 billion bank loans[51] - The average room revenue is expected to improve due to the completion of major transportation infrastructure projects, enhancing visitor access to Hong Kong[57] - The compound annual growth rate (CAGR) for new hotel developments is projected to slow to 3.3% over the next three years, down from 3.6% in the previous three years[58] - The company anticipates continued growth in visitor numbers to Hong Kong, albeit at a more moderate pace in 2019[56] - The fair value of investment properties recorded an increase of HKD 594.2 million in 2018, but decreased by 26.5% compared to previous years[70] Environmental Sustainability - The company achieved EarthCheck Gold Certification for its hotels, recognizing five years of sustainable development efforts[116] - The company upgraded 150 LED ceiling light panels and installed a steam recovery dishwasher at the Hong Kong East Hotel to save energy, water, and chemicals[118] - The hotels have adopted energy-saving and water-saving measures to enhance operational efficiency, including the installation of energy-efficient technologies[125] - The hotels have implemented waste reduction measures, including recycling and reusing materials such as paper, plastics, and food waste donations[122] - The hotels have initiated a "phased elimination" of single-use plastics, replacing plastic straws with biodegradable alternatives made from potato starch and using reusable metal straws[124] Corporate Governance and Management - The company is committed to maintaining high standards of corporate governance and transparency in its operations[105] - The board includes independent directors with extensive experience in finance and real estate, enhancing corporate governance[99] - The company aims to leverage the expertise of its board members, including former executives from major financial institutions, to drive strategic initiatives[101] - The trust group has established multiple corporate governance measures to address potential conflicts of interest and protect the interests of unit holders[193] - The trust and the company have adhered to all applicable governance codes and have adopted some best practices during the review year[196] Community Engagement and Employee Development - In 2018, the hotels' staff contributed approximately 1,400 hours to charitable and social projects, demonstrating a commitment to community engagement[136] - The hotels have actively engaged with stakeholders to promote sustainable practices, including a "Walk 10,000 Steps" challenge to encourage employees to walk more[127] - The hotels organized a "Health and Vitality Week" in the fourth quarter, promoting physical and mental well-being among employees[160] - The hotels have implemented various training programs, including the "First60" certification course and the "LCC" program, to develop employee skills[166] - The average training hours for employees were reduced due to the flexibility and ongoing development of the learning programs[171]