X 九龍倉 始創於一八八六年 九龍倉置業地產投資有限公司 ( 於開曼群島註冊成立的有限公司 ) 股份代號：1997 2024年年報 設計、印刷及製作：智盛財經媒體有限公司 www.gennexfm.com 目 錄 2 3 4 42 財務評議 48 企業管治報告 69 董事會報告 87 獨立核數師報告 91 綜合損益表 92 綜合全面收益表 93 綜合財務狀況表 94 綜合權益變動表 95 綜合現金流量表 97 財務報表附註 133 重要會計政策 152 主要附屬公司 6 12 32 20 35 11 公司資料 股東資料 企業概覽 海港城 時代廣場 新加坡資產 主席 報告書 財務撮要 獎項及殊榮 企業可持續發展 業務評議 26 中環組合 9 31 154 主要物業撮要表 156 五年財務摘要 公司 資料 董事會 吳天海先生 （主席兼常務董事） 徐耀祥先生 （副主席兼執行董事） 凌緣庭女士 （執行董事） 李偉中先生 獨立非執行董事 歐肇基先生 OBE 周德熙先生 GBS 蔣麗苑女士 JP 梁君彥議員 GBM, GBS, JP 廖淥波先生 韋理信先生 余灼強博士 楊永強教授 GBS, OBE, JP 公司秘書 許仲 ...

Financial Performance - The group's basic net profit increased by 2% to HKD 6.139 billion (2023: HKD 6.011 billion), equivalent to HKD 2.02 per share (2023: HKD 1.98 per share) [3] - Total revenue decreased by 3% to HKD 12.912 billion (2023: HKD 13.306 billion), with operating profit also down by 3% to HKD 9.691 billion (2023: HKD 9.993 billion) [16] - Investment property income fell by 1% to HKD 10.801 billion (2023: HKD 10.916 billion), while operating profit decreased by 2% to HKD 9.102 billion (2023: HKD 9.247 billion) [16] - Hotel revenue decreased by 1% to HKD 1.541 billion (2023: HKD 1.561 billion), with operating profit down 53% to HKD 99 million (2023: HKD 209 million) [16] - Shareholders' profit attributable to the group was HKD 890 million, a decrease from HKD 4.76 billion in the previous year, resulting in basic earnings per share of HKD 0.29 compared to HKD 1.57 last year [22] - The net profit for the year was HKD 875 million, a significant decline of 81.12% compared to HKD 4,644 million in 2023 [43] - The company reported a net profit of HKD 2,053 million for 2024, compared to HKD 5,782 million in 2023, reflecting a significant decline of 64.60% [53] Assets and Liabilities - Total assets reached HKD 238.1 billion, down from HKD 245.3 billion in the previous year, with 95% of assets located in Hong Kong [24] - Total assets decreased from HKD 245,322 million in 2023 to HKD 238,072 million in 2024, reflecting a reduction of 2.57% [45] - The total liabilities decreased from HKD 49,715 million in 2023 to HKD 46,088 million in 2024, a decline of 5.26% [45] - Total liabilities decreased to HKD 5,371 million in 2024 from HKD 6,256 million in 2023 [74] Investment Properties - The total value of investment properties reported a 3% impairment loss, with a fair value of HKD 221.8 billion [18] - Investment property assets totaled HKD 221.8 billion, accounting for 94% of operating assets, with Harbour City valued at HKD 152.5 billion and Times Square at HKD 43.7 billion [25] - The fair value loss on investment properties was HKD 5,665 million, compared to a loss of HKD 1,147 million in the previous year [41] Debt and Financial Position - The group maintained a net debt ratio of 18%, reducing borrowing costs by 10% [4] - The group plans to manage debt actively amid uncertain interest rate prospects, achieving the lowest net debt level since listing at HKD 34.2 billion [5] - Net debt decreased by HKD 2.1 billion to HKD 34.2 billion, with a net debt to total equity ratio declining to 17.8% from 18.6% [30][32] - Financial expenses were HKD 1.8 billion, down from HKD 2.17 billion in the previous year, with an effective borrowing interest rate rising to 5.6% [20] - Total interest expenses decreased to HKD 2,024 million in 2024 from HKD 2,261 million in 2023 [66] Revenue Breakdown - Revenue from Hong Kong was HKD 12,181 million, a slight decrease from HKD 12,329 million in 2023 [60] - Development property revenue decreased significantly to HKD 152 million from HKD 238 million, a drop of 36.03% [55] - Investment income fell to HKD 281 million from HKD 465 million, a decrease of 39.51% [55] - Other income netted HKD 83 million in 2024, a significant recovery from a loss of HKD 726 million in 2023 [66] Dividends and Shareholder Information - The total dividend for the year is HKD 1.24 per share, representing 65% of the basic net profit from investment properties and hotels [4] - Total dividends declared per share were HKD 1.24 in 2024, down from HKD 1.28 in 2023 [72] - The second interim dividend's ex-dividend date is set for April 3, 2025, with a payment date of April 24, 2025 [79] - The annual general meeting is scheduled for May 15, 2025, with a record date of May 12, 2025 [80] Future Outlook - The company expects challenges in 2025 due to escalating trade conflicts and global economic uncertainty, but anticipates potential recovery in retail and hotel sectors with government support [13] - The company plans to finance its capital expenditures through internal financial resources and bank borrowings [37] - The company has committed capital expenditures of HKD 900 million for the coming years, with HKD 200 million already incurred [37] Employee and Operational Information - The company employed approximately 2,900 staff members as of December 31, 2024 [39] - Employee costs increased to HKD 59 million in 2024 from HKD 52 million in 2023, including share-based payment expenses of HKD 11 million [65] Governance and Communication - The board of directors includes a mix of executive and independent non-executive members, ensuring diverse governance [82] - The company is preparing for its annual general meeting, emphasizing shareholder participation and voting rights [81] - The company is committed to maintaining transparency and timely communication with its shareholders regarding dividends and meetings [79] - The fiscal year-end report will be announced on March 10, 2025, providing insights into the company's performance [83]

Financial Performance - The group's basic net profit increased by 2% to HKD 3.123 billion, compared to HKD 3.059 billion in 2023, equivalent to HKD 1.03 per share[5] - The group recorded an unrealized revaluation loss of investment properties amounting to HKD 4.426 billion, leading to a loss attributable to shareholders of HKD 1.052 billion, compared to a profit of HKD 1.805 billion in 2023[5] - Total revenue remained stable at HKD 6.501 billion, slightly up from HKD 6.473 billion in 2023, while operating profit decreased by 1% to HKD 4.915 billion[16] - Investment property revenue increased by 2% to HKD 5.542 billion, with operating profit rising by 1% to HKD 4.718 billion[16] - Hotel revenue rose by 7% to HKD 748 million, but operating profit decreased by 64% to HKD 24 million[16] - The attributable loss to shareholders was HKD 1.052 billion, a significant decline from a profit of HKD 1.805 billion in the previous year, resulting in a basic loss per share of HKD 0.35[22] - The total comprehensive income for the period was a loss of HKD 1,052 million, which includes a loss of HKD 795 million from investments[46] - The company reported a loss attributable to shareholders of HKD 10.52 billion for the six months ended June 30, 2024, compared to a profit of HKD 18.05 billion for the same period in 2023[69] Dividends and Shareholder Returns - The first interim dividend is set at HKD 0.64 per share, down from HKD 0.67 per share in 2023, totaling HKD 1.943 billion[6] - The company paid an interim dividend of HKD 1,852 million, consistent with the previous year, reflecting a stable dividend policy[48] - The interim dividend declared is HKD 0.64 per share, totaling HKD 1.943 billion, down from HKD 0.67 per share and HKD 2.034 billion in the previous year[71] Market Conditions and Economic Outlook - The retail sales in Hong Kong showed a significant decline in the second quarter, reversing the post-pandemic recovery trend[7] - The office rental market remains under pressure, with an occupancy rate of 88% as of June, and rental income down by 2%[9] - The group anticipates that uncertainties from global economic slowdown and geopolitical tensions will continue to impact the local economy[13] Financial Position and Assets - Total assets reached HKD 238.9 billion, down from HKD 245.3 billion at the end of the previous year, with 95% of assets located in Hong Kong[24] - Investment properties accounted for HKD 223 billion, representing 94% of total operating assets, with Harbour City valued at HKD 151.6 billion and Times Square at HKD 46 billion[25] - Net debt decreased by HKD 1.2 billion to HKD 35.1 billion, with a net debt to total equity ratio declining to 18.3% from 18.6%[30][32] - The total assets of the group as of June 30, 2024, amounted to HKD 238.9 billion, a decrease from HKD 245.3 billion as of December 31, 2023[44] - The net asset value of the group as of June 30, 2024, was HKD 191.6 billion, down from HKD 195.6 billion at the end of 2023[44] Cash Flow and Financial Management - The group recorded an operating cash inflow of HKD 4.9 billion for the period, primarily from rental income, resulting in a net cash inflow of HKD 3.3 billion from operating activities[35] - The company reported a net cash inflow from operating activities of HKD 3,261 million, compared to HKD 3,174 million for the same period in 2023, representing an increase of 2.7%[48] - The company reported a decrease in financing cash outflows to HKD 3,338 million for the current period, down from HKD 8,226 million in the previous year, indicating improved cash management[48] - The company’s investment activities resulted in a net cash outflow of HKD 66 million, a significant decrease from the previous year's inflow of HKD 4,708 million, highlighting a shift in investment strategy[48] Financial Expenses and Taxation - Financial expenses totaled HKD 882 million, down from HKD 990 million in the previous year, with an effective borrowing interest rate rising to 5.7% from 4.7%[19] - Tax expenses decreased by 3% to HKD 607 million, compared to HKD 627 million in the previous year[20] - The tax expense for the six months ended June 30, 2024, was HKD 607 million, compared to HKD 627 million for the same period in 2023[67] Employee and Compensation - The company has approximately 2,900 employees as of June 30, 2024, with compensation based on job responsibilities and market trends[38] - The annual remuneration for the chairman increased from HKD 300,000 in 2023 to HKD 350,000 in 2024, representing a 16.67% increase[104] - The annual remuneration for non-chairman directors increased from HKD 250,000 in 2023 to HKD 300,000 in 2024, reflecting a 20% increase[104] Share Options and Ownership - The company has granted a total of 3,500,000 share options to directors under the share option plan, representing 0.12% of the total issued shares[99] - The average exercise price for the share options is HKD 36.58, with a vesting period starting from August 14, 2024[93] - Major shareholders include BlackRock Group with 153,217,040 shares (5.05%) and a short position of 5,108,000 shares (0.17%)[96] - The company has no outstanding or expired share options for directors during the financial period[94] Investment Properties and Future Plans - The investment property segment primarily involves leasing and management, with a focus on shopping malls, offices, and serviced apartments located mainly in Hong Kong[53] - The company plans to continue expanding its investment properties and hotel operations to drive future growth[59]

Financial Performance - Basic net profit increased by 2% to HKD 3.123 billion (2023: HKD 3.059 billion)[3] - Group recorded a loss of HKD 1.052 billion due to non-cash investment property revaluation impairment of HKD 4.426 billion (2023: HKD 1.133 billion)[3] - Shareholders' loss was HKD 1.052 billion, with basic loss per share of HKD 0.35 (2023: profit of HKD 1.805 billion and earnings per share of HKD 0.59)[16] - Underlying net profit increased by 2% to HKD 3.123 billion (2023: HKD 3.059 billion), with underlying earnings per share of HKD 1.03 (2023: HKD 1.01)[16] - Revenue for the six months ended June 30, 2024, was HKD 6.501 billion, a slight increase from HKD 6.473 billion in the same period in 2023[30] - Operating profit before depreciation, amortization, interest, and taxes was HKD 5.035 billion, down from HKD 5.065 billion in 2023[30] - Net loss for the period was HKD 1.067 billion, compared to a net profit of HKD 1.780 billion in 2023[30] - Group total revenue for 2024 was HKD 6,501 million, compared to HKD 6,473 million in 2023[38] - Operating profit for 2024 was HKD 4,673 million, slightly up from HKD 4,671 million in 2023[38] - Basic loss per share for 2024 was HKD 1,052 million, compared to a profit of HKD 1,805 million in 2023[44] Dividend and Shareholder Information - First interim dividend of HKD 0.64 per share (2023: HKD 0.67 per share) with a total distribution of HKD 1.943 billion (2023: HKD 2.034 billion)[4] - Interim dividend ex-date set for August 23, 2024[50] - Deadline for submitting share transfer documents for the interim dividend is August 26, 2024, at 4:30 PM[50] - Record date and time for the interim dividend is August 26, 2024, at 6:00 PM[50] - Interim dividend payment date is September 10, 2024[50] - Shareholders must submit transfer documents and relevant share certificates to the company's Hong Kong share registrar by August 26, 2024, at 4:30 PM to receive the interim dividend[50] - First interim dividend for 2024 was HKD 0.64 per share, totaling HKD 1,943 million, down from HKD 0.67 per share and HKD 2,034 million in 2023[45] Investment Properties - Investment property revenue increased by 2% to HKD 5.542 billion (2023: HKD 5.455 billion), with operating profit up 1% to HKD 4.718 billion (2023: HKD 4.677 billion)[12] - Investment properties recorded a 2% revaluation impairment, with a net unrealized revaluation impairment of HKD 4.426 billion (2023: HKD 1.133 billion)[13] - Investment properties totaled HKD 223 billion, accounting for 94% of operating assets (2023: HKD 227.6 billion and 93%)[19] - Investment properties in Hong Kong accounted for HKD 583 million of the total capital expenditure[28] - Investment properties revenue increased to HKD 5,542 million in H1 2024, up from HKD 5,455 million in H1 2023[35] Retail and Office Market Performance - Overall retail sales in Q2 experienced a double-digit sharp decline[5] - Harbour City's overall revenue (including hotels) increased by 5%, with operating profit up 3%[6] - Office rental market remains weak with a June-end occupancy rate of 88% and a 5% decline in operating profit[7] - Times Square's shopping mall revenue increased by 4% and operating profit rose by 6%, with an end-period occupancy rate of 94%[9] Hotel Industry Performance - Hotel industry faces challenges with intense competition and pressure on room rates, though Marco Polo hotels maintained stable occupancy rates[8] - Hotel revenue rose to HKD 748 million in H1 2024 compared to HKD 697 million in H1 2023[35] Financial Expenses and Borrowing - Financial expenses amounted to HKD 882 million, including unrealized gains of HKD 189 million from cross-currency and interest rate swaps[15] - Actual borrowing interest rate increased to 5.7% (2023: 4.7%) due to rising Hong Kong Interbank Offered Rate[15] - Total interest expense for 2024 was HKD 1,042 million, up from HKD 1,031 million in 2023[41] Assets and Liabilities - Total assets reached HKD 238.9 billion, with 95% located in Hong Kong (2023: HKD 245.3 billion)[18] - Net debt decreased by HKD 1.2 billion to HKD 35.1 billion (2023: HKD 36.3 billion), with net debt to total equity ratio declining to 18.3% (2023: 18.6%)[23][24] - Total assets as of June 30, 2024, were HKD 238.942 billion, down from HKD 245.322 billion at the end of 2023[32] - Total liabilities decreased to HKD 47.370 billion from HKD 49.715 billion at the end of 2023[32] - Net assets stood at HKD 191.572 billion, down from HKD 195.607 billion at the end of 2023[32] Revenue Breakdown - Fixed rental income grew to HKD 4,352 million in H1 2024 from HKD 4,218 million in H1 2023[36] - Variable rental income decreased to HKD 454 million in H1 2024 from HKD 542 million in H1 2023[36] - Management and service income increased to HKD 607 million in H1 2024 from HKD 586 million in H1 2023[36] - Other rental-related income rose to HKD 106 million in H1 2024 from HKD 93 million in H1 2023[36] - Total revenue from operations under HKFRS 15 increased to HKD 1,469 million in H1 2024 from HKD 1,398 million in H1 2023[36] - Hong Kong region revenue for 2024 reached HKD 6,194 million, a slight increase from HKD 6,050 million in 2023[38] Corporate Governance and Board Structure - The company deviated from the Corporate Governance Code by having the same individual serve as both Chairman and CEO, which is deemed appropriate for long-term strategy planning and execution[49] - The Board of Directors consists of 4 executive members and 8 independent non-executive directors[50] Other Financial Information - Total committed and uncommitted credit facilities and issued debt securities amounted to HKD 50 billion, with HKD 36 billion utilized[25] - Operating cash inflow was HKD 4.9 billion (2023: HKD 4.8 billion), mainly from rental income, with net cash inflow from operating activities of HKD 3.3 billion (2023: HKD 3.2 billion)[27] - Total estimated capital expenditure for the coming years is HKD 1.1 billion, with HKD 231 million already committed[28] - Development properties revenue significantly decreased to HKD 8 million in H1 2024 from HKD 22 million in H1 2023[35] - Investment revenue dropped to HKD 140 million in H1 2024 from HKD 244 million in H1 2023[35] - Total depreciation and amortization for 2024 was HKD 120 million, down from HKD 125 million in 2023[39] - Employee costs increased to HKD 533 million in 2024 from HKD 476 million in 2023[39] - Other income net for 2024 was HKD 70 million, a significant improvement from a loss of HKD 282 million in 2023[40] - Tax expense for 2024 was HKD 607 million, down from HKD 627 million in 2023[42] - The company employed approximately 2,900 people as of June 30, 2024[29] - No purchase, sale, or redemption of any listed securities by the company or its subsidiaries during the financial period[50]

Visitor Traffic and Retail Performance - In 2023, the average weekend foot traffic at Harbour City reached 280,000 visitors per day[12]. - The number of visitors to Hong Kong and retail sales were only 52% and 84% of 2018 levels, respectively[11]. - The group successfully attracted luxury brands such as De Beers, Fendi, and Van Cleef & Arpels, increasing the number of high-end street stores to 16, with some achieving double-digit sales growth[12]. - Overall revenue for Harbour City increased by 10%[24]. - The rental rate for Harbour City shopping mall reached 97% by year-end[24]. - The total revenue for Times Square decreased by 3%, with a shopping mall revenue increase of 3%[34]. - Times Square's shopping mall rental rate improved to 95%[34]. Financial Performance - Group revenue increased by 7% to HKD 13.3 billion, compared to HKD 12.5 billion in 2022[17]. - Operating profit rose by 13% to HKD 10 billion, up from HKD 8.8 billion in the previous year[17]. - Basic net profit decreased by 3% to HKD 6 billion, down from HKD 6.2 billion in 2022[17]. - Shareholders' profit attributable to the group was HKD 4.8 billion, a significant recovery from a loss of HKD 8.9 billion in 2022, representing a 154% increase[17]. - Total assets decreased by 4% to HKD 245.3 billion, compared to HKD 255.2 billion in 2022[17]. - Net debt reduced by 20% to HKD 36.3 billion, down from HKD 45.1 billion in the previous year[17]. - The company declared a second interim dividend of HKD 0.61 per share, consistent with the previous year, leading to a total annual dividend of HKD 1.28 per share, down from HKD 1.31 in 2022[17]. Sustainability and Corporate Social Responsibility - The group aims to achieve long-term goals by 2030, including reducing greenhouse gas emissions, electricity intensity, and water usage[9]. - The group continues to be included in the Hang Seng Sustainable Development Index with an AA+ rating[9]. - The group is committed to corporate social responsibility initiatives, including various educational and artistic programs[9]. - The group aims to achieve carbon neutrality by 2030 through reducing direct emissions and electricity consumption, with ongoing reviews of these targets to align with global agendas[59]. - The group has obtained ISO 14001 environmental management system certification during the reporting year, enhancing its environmental performance[59]. - The group is actively exploring opportunities for developing green and smart building renovation technologies, including the use of innovative products like iPaint[59]. - The group has established a robust governance structure to address environmental, social, and governance challenges, led by a sustainability oversight committee[57]. Governance and Board Structure - The company has strengthened its corporate governance framework to enhance transparency and accountability for stakeholders[83]. - The board consists of 12 directors, with 4 executive directors and 8 independent non-executive directors, ensuring strong independence with independent directors making up 67% of the board[89]. - The company aims to maintain at least 17% female representation on the board, with 2 female directors currently serving[89]. - The board's diversity policy is reviewed at least annually to ensure its effectiveness and compliance with regulatory requirements[89]. - The company has adopted a nomination policy to guide the selection and appointment of directors, ensuring a transparent process[91]. Risk Management and Internal Controls - The audit committee oversees the identification and reporting of risks, including environmental, social, and governance risks[113]. - The company has implemented a robust internal control framework to safeguard assets and ensure the reliability of financial information[117]. - The board is responsible for preparing the financial statements in accordance with the Hong Kong Financial Reporting Standards and ensuring internal controls to prevent material misstatements[195]. - The audit identified significant risks related to fraud, necessitating a high level of professional skepticism throughout the audit process[196]. Community Engagement and Donations - The group donated HKD 3 million to the Hong Kong Community Chest in 2023, supporting those in need[63]. - The company reported a total donation of HKD 32 million during the fiscal year[140]. - The company actively engages in community activities, with over 1,600 volunteer hours contributed by its team in 2023[63]. Future Outlook and Strategic Initiatives - The company provided guidance for the next fiscal year, projecting a revenue growth of 10% to 12%[153]. - The company is considering strategic acquisitions to enhance its market position, with a budget of $100 million allocated for potential deals[152]. - The board emphasized a focus on sustainability initiatives, aiming for a 30% reduction in carbon footprint by 2025[153].

Financial Performance - Core business revenue from investment properties and hotels increased by 8%, with operating profit rising by 12%[2] - The group's underlying net profit decreased by 3% to HKD 6.01 billion, equivalent to HKD 1.98 per share[3] - Group revenue increased by 7% to HKD 13.31 billion, while operating profit rose by 13% to HKD 9.99 billion, primarily due to improved performance in investment properties and hotels after border reopening[14] - Hotel revenue surged by 67% to HKD 1.56 billion, turning a loss of HKD 230 million in 2022 into a profit of HKD 209 million in 2023[14] - Investment property revenue increased by 2% to HKD 10.91 billion, with operating profit up 6% to HKD 9.24 billion, accounting for 82% and 93% of the group's total, respectively[14] - The company reported a net profit of HKD 4.6 billion for the year, a significant recovery from a loss of HKD 8.9 billion in 2022[30] - Total revenue for 2023 reached HKD 13,306 million, an increase from HKD 12,459 million in 2022, representing a growth of 6.8%[35] - Operating profit for the group was HKD 9,993 million in 2023, compared to HKD 8,841 million in 2022, representing a year-on-year increase of 13.0%[40] Asset and Liability Management - Total valuation of investment properties decreased by 0.4% to HKD 228 billion, accounting for 93% of the group's assets[2] - Net debt decreased by HKD 8.8 billion, with the debt ratio declining to 18.6%[2] - The total assets decreased to HKD 245,322 million in 2023 from HKD 255,249 million in 2022, a decline of 3.9%[32] - Total liabilities decreased to HKD 49,715 million in 2023 from HKD 60,368 million in 2022, a reduction of 17.5%[32] - Net assets increased to HKD 195,607 million in 2023, compared to HKD 194,881 million in 2022, a growth of 0.4%[32] - The total available credit and issued debt securities amounted to HKD 52.1 billion as of December 31, 2023, with HKD 37.4 billion utilized, leaving HKD 14.7 billion unutilized[26] - As of December 31, 2023, the net debt of the group (excluding the port enterprises) decreased to HKD 36.1 billion from HKD 44.7 billion in 2022, resulting in a net debt to total equity ratio of 18.6% compared to 23.2% in 2022[25] Dividends and Shareholder Returns - The first interim dividend of HKD 0.67 per share was paid, with a second interim dividend of HKD 0.61 per share to be paid in April 2024, totaling HKD 1.28 per share for the year[4] - The first interim dividend for 2023 is HKD 0.67 per share, totaling HKD 2,034 million, compared to HKD 0.70 per share and HKD 2,125 million in 2022[46] - The second interim dividend for 2023 is HKD 0.61 per share, totaling HKD 1,852 million, consistent with the same amount in 2022[46] Operational Insights - Harbour City saw a 10% increase in overall revenue and a 13% rise in operating profit[5] - The retail rental rate stabilized, with expectations of further increases as sales recover[5] - The office rental rate was under pressure, with an occupancy rate of 88% at year-end, and revenue down by 6%[7][10] - The overall revenue of Times Square decreased by 3%, while the occupancy rate improved to 95%[9] - The group recorded an operating cash inflow of HKD 9.7 billion for the year, up from HKD 8.6 billion in 2022, primarily driven by rental income[27] - The net cash inflow from operating activities was HKD 5.9 billion, down from HKD 6.7 billion in the previous year[27] Future Outlook and Challenges - The outlook for 2024 indicates potential positive signs, but uncertainties from global economic slowdown and geopolitical tensions may cause volatility[12] - The company plans to continue expanding its investment property portfolio, focusing on markets in Hong Kong and mainland China[34] Financial Challenges - Other net losses amounted to HKD 720 million, primarily due to fair value losses on financial instruments and impairment of development properties[16] - Financial expenses rose to HKD 2.17 billion, with the effective borrowing rate increasing to 5.4% from 2.5% in 2022[17] - Tax expenses decreased by 17% to HKD 1.14 billion, compared to HKD 1.36 billion in 2022[18] - Interest expenses rose to HKD 2,261 million in 2023, up from HKD 1,142 million in 2022, marking an increase of 98.1%[43] Corporate Governance and Compliance - The company has complied with all principles of the Corporate Governance Code, with the exception of the separation of roles between the Chairman and CEO[50] - No purchases, sales, or redemptions of the company's listed securities were made during the fiscal year[51] - The annual general meeting is scheduled for May 7, 2024, with a record date of May 2, 2024[52]

Financial Performance - The group's underlying net profit decreased by 9% to HKD 3.059 billion, compared to HKD 3.373 billion in 2022, resulting in earnings per share of HKD 1.01, down from HKD 1.11 in 2022[4]. - Group revenue increased by 4% to HKD 6.473 billion from HKD 6.210 billion in 2022, with operating profit rising by 11% to HKD 4.949 billion[16]. - The group’s net profit for the period was HKD 1.78 billion, compared to a loss of HKD 1.53 billion in 2022[33]. - Total revenue for the six months ended June 30, 2023, was HKD 6.473 billion, an increase from HKD 6.210 billion in the same period of 2022[32]. - Operating profit for the group reached HKD 4,940 million, up 11.1% from HKD 4,446 million in the same period last year[46]. Dividends - The interim dividend is set at HKD 0.67 per share, down from HKD 0.70 in 2022, with a total payout of HKD 2.034 billion, representing 65% of the underlying net profit from investment properties and hotels[5]. - The company declared an interim dividend of HKD 0.67 per share, totaling HKD 2,034 million, compared to HKD 0.70 per share in 2022[51]. Revenue Segments - Overall revenue, including hotels, increased by 8%, and operating profit rose by 12%[6]. - Hotel revenue surged by 90% to HKD 697 million, with operating profit of HKD 67 million, recovering from a loss of HKD 172 million in 2022[16]. - Investment property income rose by 2% to HKD 5.455 billion, with operating profit increasing by 6% to HKD 4.677 billion[16]. - The investment property segment generated revenue of HKD 5,455 million with an operating profit of HKD 4,677 million for the six months ended June 30, 2023[41]. - The hotel segment achieved revenue of HKD 697 million with an operating profit of HKD 67 million for the six months ended June 30, 2023[41]. Occupancy and Rental Rates - Shopping mall revenue increased by 9%, with operating profit up by 16%, and occupancy rates improved to 96% by the end of June 2023[7]. - Office rental income and operating profit both declined by 8%, with an occupancy rate of 88% as of June 30, 2023[8]. - The occupancy rate for the Central portfolio remained stable at 96% for the Carfield Building, while the Wanchai Building's rate improved to 81%, despite a 12% drop in revenue[12]. - The Singapore assets have shown rapid growth since 2022, with shopping mall occupancy rates at 99% and 98%, and office occupancy at 100%[14]. Financial Position - Net financial expenses increased to HKD 999 million from HKD 609 million in 2022, with the effective borrowing rate rising to 4.7%[18]. - Shareholders' equity increased by HKD 200 million to HKD 190.6 billion, equivalent to HKD 62.77 per share[20]. - Total assets reached HKD 248.6 billion, with 94% located in Hong Kong[21]. - Net debt decreased by HKD 6.1 billion to HKD 39.1 billion, with a net debt to total equity ratio declining to 20.1%[25]. - The total value of investment properties amounted to HKD 227.4 billion, accounting for 92% of operating assets[22]. Cash Flow - The group recorded an operating cash inflow of HKD 4.8 billion for the period, primarily from rental income, compared to HKD 4.3 billion in 2022[29]. - The group reported a net cash inflow from investment activities of HKD 4.7 billion, a significant improvement from a cash outflow of HKD 2.3 billion in 2022[29]. - Operating cash inflow for the six months ended June 30, 2023, was HKD 4,802 million, an increase from HKD 4,309 million in the previous year[37]. - The net cash used in financing activities was HKD 8,226 million for the six months ended June 30, 2023, compared to HKD 785 million in the same period of 2022[37]. Governance and Compliance - The company has adopted a set of corporate governance codes, complying with all principles except for the separation of the roles of Chairman and CEO, which is deemed more effective for long-term strategy execution[64]. - All directors have complied with the company's securities trading code and the standard code during the financial period ending June 30, 2023[65]. - The company maintains a balanced distribution of power and authority within its board, which consists of experienced and capable members, with over half being independent non-executive directors[64]. - The company has confirmed that there are no short positions held by directors or the CEO as of June 30, 2023[66]. Shareholder Information - Major shareholders include Wheelock and Company Limited holding 1,487,051,651 shares (48.98%) and Big Heritage Limited holding 1,316,421,651 shares (43.36%) as of June 30, 2023[67]. - The company has a share option scheme approved on May 9, 2023, with a total of 303,622,732 options available, but no options were granted during the financial period ending June 30, 2023[68].

Financial Performance - The group's underlying net profit decreased by 9% to HKD 3.059 billion, compared to HKD 3.373 billion in 2022, with earnings per share at HKD 1.01, down from HKD 1.11 in the previous year[3]. - The group's revenue increased by 4% to HKD 6.473 billion, compared to HKD 6.21 billion in 2022[15]. - The operating profit rose by 11% to HKD 4.949 billion, up from HKD 4.444 billion in 2022, primarily due to improved hotel performance following border reopening[15]. - The group reported a profit of HKD 1.78 billion, compared to a loss of HKD 1.53 billion in the same period of 2022[32]. - The group’s total comprehensive income for the period was HKD 1.902 billion, compared to a loss of HKD 4.967 billion in the previous year[33]. - The company reported a total operating profit of HKD 2,567 million, compared to HKD 1,006 million in the previous year, reflecting a significant increase of approximately 155.5%[38]. - Basic earnings per share for the six months ended June 30, 2023, were HKD 1.80, compared to a loss of HKD 1.46 per share in 2022[47]. Revenue Segments - Overall revenue for Harbour City increased by 8%, with operating profit rising by 12%[5]. - Shopping mall revenue increased by 9%, with operating profit rising by 16%[6]. - The overall revenue for Hollywood Plaza increased by 5%, with operating profit rising by 8%[12]. - Hotel revenue surged by 90% to HKD 697 million, with an operating profit of HKD 67 million, recovering from a loss of HKD 172 million in 2022[15]. - Revenue for the investment property segment increased to HKD 5,455 million, up from HKD 5,360 million, reflecting a growth of approximately 1.77% year-over-year[38]. - The development property segment reported revenue of HKD 22 million, a significant decrease from HKD 185 million, indicating a decline of about 88.1%[38]. Dividends and Shareholder Returns - The first interim dividend is set at HKD 0.67 per share, totaling HKD 2.034 billion, which represents 65% of the underlying net profit from investment properties and hotels[4]. - The first interim dividend declared was HKD 0.67 per share, totaling HKD 2,034 million, down from HKD 0.70 per share or HKD 2,125 million in the previous year[48]. - Shareholders' equity increased by HKD 200 million to HKD 1,906 billion, equivalent to HKD 62.77 per share[20]. Market Conditions and Challenges - Retail sales growth slowed from 24% in Q1 to 18% in Q2, with visitor numbers and retail sales still significantly below pre-pandemic levels, at 37% and 85% of 2019 figures respectively[5]. - The office rental market remains under pressure, with a decline in revenue and operating profit by 8%, and an occupancy rate of 88% as of June 30, 2023[7]. - The group continues to face challenges from rising costs, particularly in labor and energy, impacting profit margins in both investment properties and hotel segments[5]. - Hotel room rates have increased, but overall demand showed signs of slowing in Q2, with the Marco Polo Prince Hotel reopening but not yet fully operational due to staffing shortages[8]. Assets and Liabilities - Total assets reached HKD 2,486 billion, with 94% located in Hong Kong[21]. - Total assets decreased from HKD 255,249 million as of December 31, 2022, to HKD 248,617 million as of June 30, 2023, representing a decline of approximately 2.5%[34]. - Total liabilities decreased from HKD 60,368 million to HKD 53,686 million, a reduction of about 11.1%[34]. - The net asset value increased slightly from HKD 194,881 million to HKD 194,931 million, indicating a marginal growth of 0.03%[34]. Debt and Financial Management - Financial expenses rose to HKD 990 million, up from HKD 609 million in 2022, with the effective borrowing rate increasing to 4.7% from 1.4%[18]. - As of June 30, 2023, net debt decreased by HKD 6.1 billion to HKD 39.1 billion, the lowest level since the company's listing, with a net debt-to-equity ratio of 20.1% (2022: 23.2%)[25]. - Total available credit and issued debt securities amounted to HKD 53.1 billion, with HKD 40.1 billion already utilized as of June 30, 2023[26]. - Interest expenses increased to HKD 1,031 million from HKD 323 million in the previous year, representing a substantial rise of 219.51%[44]. Operational Insights - The group employed approximately 2,800 staff members as of June 30, 2023, with compensation based on job responsibilities and market trends[30]. - The company has estimated capital expenditures of HKD 11 billion for the coming years, with HKD 4 billion already committed[29]. - The company maintains a liquid investment portfolio with a total market value of HKD 8.6 billion as of June 30, 2023[27]. Governance and Compliance - The company has adhered to the Corporate Governance Code during the financial period, with the only exception being the roles of Chairman and CEO held by the same individual[52]. - No purchases, sales, or redemptions of the company's listed securities were made during the financial period[53]. - The board consists of experienced members, ensuring a balanced distribution of power and authority[52].

Financial Performance - Group revenue decreased by 22% to HKD 12.459 billion (2021: HKD 16.043 billion) primarily due to the phased withdrawal from non-core property development [12]. - Basic net profit fell by 5% to HKD 6.175 billion (2021: HKD 6.518 billion), while the loss attributable to shareholders was HKD 8.856 billion (2021: profit of HKD 4.391 billion) reflecting a 302% decline [12]. - Total revenue for the year 2022 increased by 2% to HKD 8,175 million, with operating profit rising by 7% to HKD 6,345 million [18]. - Total revenue for 2022 was HKD 12,459 million, a decrease of 22.4% from HKD 16,043 million in 2021 [188]. - Operating profit for 2022 was HKD 8,841 million, down 2.5% from HKD 9,064 million in 2021 [188]. - The company reported a net loss of HKD 8,943 million for 2022, compared to a profit of HKD 4,439 million in 2021 [188]. - The fair value of investment properties decreased by HKD 14,913 million in 2022, compared to a decrease of HKD 2,203 million in 2021 [188]. - Total assets as of December 31, 2022, were HKD 255,249 million, down from HKD 272,268 million in 2021 [191]. - The company reported a total comprehensive income of HKD 5,684 million for 2021, which decreased to a loss of HKD 11,674 million in 2022, reflecting a significant decline in performance [192]. Market Conditions - In 2022, the retail sales in Hong Kong recorded a moderate year-on-year decline of 0.8%, primarily due to fewer tourists and contributions from the local market [7]. - The overall market environment remains challenging, with increased competition and cautious tenant behavior impacting leasing decisions [30]. - The group continues to face challenges from external uncertainties, including inflation and geopolitical tensions, impacting consumer behavior and asset prices [7]. - The hotel sector is preparing for the return of travelers, although facing challenges related to labor shortages [14]. - The outlook for 2023 anticipates gradual recovery in the retail and hotel sectors as travel resumes, despite initial challenges such as limited flight availability and labor shortages [11]. Corporate Governance - The group maintains a robust governance structure to address environmental, social, and governance challenges, led by a dedicated sustainability steering committee [52]. - The company has implemented a zero-tolerance policy towards corruption and strictly adheres to anti-corruption laws and regulations [52]. - The board consists of 12 members, with 4 executive directors and 8 independent non-executive directors, enhancing overall independence and diversity [86]. - The company has adopted a board diversity policy, recognizing the benefits of a diverse board for enhancing overall performance [86]. - The company has established a set of securities trading codes that exceed the standards set by the Listing Rules, ensuring compliance among all directors during the fiscal year [97]. Sustainability Initiatives - The group aims to achieve long-term goals by 2030, including reducing greenhouse gas emissions and water usage, while maintaining sustainable business performance [6]. - The company emphasizes long-term positive social impact and environmental sustainability, aligning its business strategies with the United Nations Sustainable Development Goals [51]. - The company has set long-term environmental goals for 2030, including reducing direct emissions and electricity consumption [54]. - The group secured a sustainable development performance-linked loan of HKD 500 million in 2022 to support its sustainability commitments [55]. - The company is integrating environmental measures to formulate a carbon neutrality roadmap in support of Hong Kong's Climate Action Blueprint 2050 [55]. Investment Properties - Investment properties account for 90% of the group's total assets, primarily located in Hong Kong, making the group vulnerable to economic conditions and regulatory changes in the region [172]. - Revenue from investment properties represented 85% of the company's total income for the year ending December 31, 2022 [183]. - The company emphasizes the importance of accurate valuation of investment properties due to their significant impact on overall profit, with small errors potentially leading to substantial financial misstatements [182]. - The company employs external valuation firms to assess the fair value of investment properties, ensuring independence and objectivity in the valuation process [182]. - The rental income may be adversely affected by oversupply in shopping malls and office spaces, leading to potential adjustments in rental levels due to external economic factors [172]. Community Engagement - The group was recognized as the second highest fundraising organization for the Community Chest for two consecutive years and holds an AA+ rating in the Hang Seng Sustainability Index [6]. - The group is committed to corporate social responsibility through various community projects, including art scholarships and design internship programs [5]. - The "School Activation" program has supported over 87,000 students through partnerships with over 70 organizations since its launch in 2011 [57]. - The group reported a total donation of HKD 44 million during the fiscal year [138]. Financial Position - The total assets as of December 31, 2022, amounted to HKD 255.324 billion, with net asset value per share decreasing to HKD 62.70 (2021: HKD 67.89), an 8% decline [12]. - The group maintained a stable debt-to-equity ratio of 23.2%, with net debt reduced by HKD 2.385 billion to HKD 45.149 billion [12]. - The company has a strong financial position with a liquid investment portfolio valued at HKD 13.1 billion [73]. - The company’s total equity decreased from HKD 210,876 million at the beginning of 2022 to HKD 194,881 million by the end of the year, indicating a decline in shareholder value [192]. - The company’s cash and cash equivalents decreased from HKD 1,800 million at the beginning of 2022 to HKD 1,340 million at the end of the year, reflecting liquidity challenges [193].

Financial Performance - The group's unaudited net profit increased by 3% to HKD 3.37 billion, equivalent to HKD 1.11 per share, compared to HKD 3.27 billion or HKD 1.08 per share in the previous year[5]. - The group reported a net loss attributable to shareholders of HKD 1.468 billion due to an investment property revaluation loss of HKD 50.39 billion, compared to a profit of HKD 2.97 billion in the previous year[5]. - Basic net profit increased by 3% to HKD 3.37 billion, while investment property profit also rose by 3% to HKD 3.42 billion[18]. - The group recorded a revenue of HKD 6,210 million for the six months ended June 30, 2022, down from HKD 7,485 million in 2021[38]. - The group reported a loss attributable to shareholders of HKD 1,468 million for the six months ended June 30, 2022, compared to a profit of HKD 2,970 million in 2021[38]. - The company reported a loss of HKD 1,530 million for the six months ended June 30, 2022, compared to a profit of HKD 2,954 million in the same period of 2021[39]. - The company’s comprehensive loss for the period totaled HKD 4,967 million, compared to a comprehensive income of HKD 4,869 million in the prior year[39]. - The total revenue for the group was HKD 6,210 million, down from HKD 7,485 million in the same period of 2021, representing a decrease of approximately 17%[46]. - The operating profit for the group was HKD 4,446 million, compared to HKD 4,428 million in the previous year, indicating a slight increase[46]. Dividends and Shareholder Returns - The interim dividend is set at HKD 0.70 per share, totaling HKD 2.125 billion, which represents 65% of the net profit from investment properties and hotels[6]. - The first interim dividend declared was HKD 0.70 per share, totaling HKD 2,125 million, compared to HKD 0.67 per share or HKD 2,034 million in 2021[57]. Revenue and Market Performance - Overall revenue decreased by 17%, primarily due to reduced contributions from the listed subsidiary, Harbour Enterprises[7]. - The retail sector faced a 2.6% decline in sales, with the group implementing marketing strategies to stimulate sales post-pandemic[7]. - The group's shopping mall revenue increased by 1%, and operating profit rose by 6% despite ongoing retail market competition[7]. - The overall revenue for Times Square decreased by 15%, with operating profit down by 3% due to market challenges[12]. - The hotel segment reported a revenue increase of 7% to HKD 366 million, with losses narrowing to HKD 172 million[19]. - Investment property revenue amounted to HKD 5,360 million, down from HKD 5,483 million in the previous year, reflecting a decrease of 2.2%[49]. - Revenue from hotel operations increased to HKD 366 million, compared to HKD 343 million in 2021, representing a growth of 6.7%[49]. Assets and Liabilities - Total assets reached HKD 266.1 billion, with 93% located in Hong Kong[25]. - Total assets decreased to HKD 266,103 million as of June 30, 2022, down from HKD 272,268 million at the end of 2021[40]. - Non-current assets, including investment properties, decreased to HKD 259,862 million from HKD 266,879 million[40]. - Total liabilities increased slightly to HKD 62,196 million from HKD 61,392 million[41]. - Net assets decreased to HKD 203,907 million from HKD 210,876 million[41]. - The company’s equity attributable to shareholders decreased to HKD 199,329 million from HKD 206,106 million[41]. Debt and Financing - Net debt decreased by HKD 7 billion to HKD 468 billion as of June 30, 2022, compared to HKD 475 billion in 2021[29]. - The debt-to-equity ratio increased to 23.0% from 22.5% in the previous year[31]. - Total bank borrowings and other borrowings as of June 30, 2022, were HKD 49,046 million, slightly down from HKD 49,334 million as of December 31, 2021[61]. - Current borrowings (due within one year) increased to HKD 5,250 million from HKD 4,500 million, a rise of 16.7%[61]. - Total finance costs for the period were HKD 609 million, compared to HKD 359 million in 2021, indicating an increase of 69.5%[53]. Operational Metrics - The occupancy rate for office spaces increased to 87% as of June 2022, with revenue and operating profit both rising by 3%[10]. - The office rental rates for K. Wah Centre and Carvery Centre were 92% and 98% respectively as of June 2022, while retail spaces were fully leased[15]. - The rental rates for the retail properties in Singapore were 96% for K. Wah Plaza and 89% for Scotts Square as of June 2022[17]. Employee and Governance - The group employed approximately 2,700 staff as of June 30, 2022, with compensation based on job responsibilities and market trends[37]. - The total annual remuneration for the directors has seen changes, with the highest being HKD 3,631,000 for Wu Tianhai, an increase from HKD 3,558,000 in the previous year[79]. - The company has complied with the corporate governance code, except for one provision regarding the separation of the roles of Chairman and CEO, which is deemed appropriate for strategic execution[72]. Future Commitments and Investments - Total capital commitments for the coming years are estimated at HKD 13 billion, with HKD 5 billion already incurred[35]. - The company has unspent commitments totaling HKD 1.33 billion, with HKD 516 million already incurred and HKD 819 million yet to be incurred as of June 30, 2022[16]. - The company has a commitment of HKD 9.62 billion related to joint ventures in mainland China, an increase from HKD 8.93 billion as of December 31, 2021[70].