CK ASSET(01113)2024-04-19 08:45Financial Performance - Group revenue for 2023 was HKD 71,082 million, a decrease from HKD 79,551 million in 2022[3] - Profit attributable to shareholders in 2023 was HKD 17,340 million, down from HKD 21,683 million in 2022[3] - Earnings per share for 2023 were HKD 4.86, compared to HKD 5.98 in 2022[3] - The company's profit attributable to shareholders from continuing operations for 2023 was HK19.627 billion in 2022[11][12] - The company's total profit attributable to shareholders, including discontinued aircraft leasing business, was HK21.683 billion in 2022[11][12] - The company proposed a final dividend of HK2.05 per share, a decrease of 10.1% from HK$2.28 per share in 2022[11][13] - Property sales revenue for the year was HKD 13.153 billion, a significant decrease from HKD 25.756 billion in 2022, primarily due to weaker market conditions in Hong Kong and Mainland China[28] - The company's share of income from joint ventures in 2023 was HKD 23,520 million, up from HKD 22,889 million in 2022[44] - Profit from joint ventures in 2023 was HKD 7,773 million, compared to HKD 7,486 million in 2022[44] - The company's total bank and other borrowings at year-end were HKD 54.9 billion, an increase of HKD 6.3 billion from 2022[47] - The company's net debt at year-end was HKD 12.4 billion, with a net debt to total capital ratio of approximately 3%[47] - The company repurchased 45,557,000 shares for a total consideration of HKD 1,969,034,325 between March and December 2023[27] - The company repurchased a total of 45,557,000 shares at a total cost of HKD 1,969,034,325 (excluding fees) during the year[121] - The repurchased shares were subsequently canceled, reducing the total issued shares to 3,548,884,333 as of December 31, 2023[121] Investment Properties and Assets - Investment properties increased to HKD 147,223 million in 2023 from HKD 125,186 million in 2022[3] - Fixed assets decreased to HKD 73,027 million in 2023 from HKD 70,267 million in 2022[3] - Total equity increased to HKD 399,436 million in 2023 from HKD 393,707 million in 2022[3] - The company completed the acquisition of Civitas Social Housing PLC, expanding its investment property portfolio, with rental income from Civitas starting in the second half of 2023[14][16] - The company's investment property portfolio, including joint ventures, totaled 22 million square feet, with 13.1 million in Hong Kong, 4.6 million in Mainland China, and 4.3 million overseas[33] - The company completed the acquisition of Civitas, which owns 697 properties in the UK, enhancing its investment property portfolio and fixed rental income[32] - Property rental income increased to HKD 5.909 billion in 2023 from HKD 5.843 billion in 2022, driven by retail, office, and other property rentals[31] Property Development and Sales - The group's Blue Coast project is set to launch in March 2024[10] - The company's property sales revenue decreased in 2023 due to a cautious land reserve policy in recent years, but it plans to continue seeking quality land reserves for future development[15] - The company completed several property developments in 2023, including 21 BORRETT ROAD Phase 2 with a gross floor area of 149,123 sq. ft. and 100% ownership[24] - The company expects to complete several property developments in 2024, including Blue Coast with a gross floor area of 583,715 sq. ft. and a cooperative development model[25] - As of December 31, 2023, the company had contracted but unrecognized property sales totaling HKD 19.415 billion, with HKD 11.758 billion expected to be recognized in 2024[30] - The company's land bank for development stood at 74 million square feet, with 7 million in Hong Kong, 63 million in Mainland China, and 4 million overseas[30] - The company terminated the sale agreement for Bristow Investments Limited, resulting in the forfeiture of a HKD 2.077 billion deposit, which was recognized as income[29] Awards and Recognition - The group won six awards at the "2023-2024 Asia Pacific Property Awards," including the "Best Office Development in Hong Kong" for the Cheung Kong Center Phase II[6] - The group's Horizon Hotels & Suites Limited won the "Superior Hotel + Residence Brand Award" at the "2023 Corporate Brand Achievement Awards"[7] - The group was awarded the "Outstanding Listed Company Award 2023" by am730, Asia PR, and Phoenix Network[9] - The company achieved "Platinum" ratings for "Ma On Shan Plaza" and "Metropolis Tower" under the "BEAM Plus Existing Buildings (2.0) Comprehensive Assessment Scheme," and "Millennium City 5" received a "Platinum" WELL certification from the International WELL Building Institute[91] Sustainability and ESG - The company set a commitment in 2023 to achieve net-zero carbon emissions in line with the Science Based Targets initiative (SBTi) and submitted short-term and long-term targets for verification[20] - The company prioritizes sustainable development, integrating environmental, social, and governance (ESG) considerations into investment decisions and operational measures[91] - The company emphasizes innovation and sustainability, integrating environmental, social, and governance (ESG) principles into its investment decisions and business operations[132] - The company's Sustainability Committee held two meetings in 2023, with full attendance from all members, including the Chairman and independent non-executive directors[200] - The Sustainability Committee reviewed the company's 2022 sustainability goals, strategies, and progress, including targets for energy, water, waste, and greenhouse gas emissions[200] - The company is exploring the feasibility of setting science-based targets for carbon neutrality, as discussed by the Sustainability Committee[200] - The Sustainability Committee reviewed potential climate-related financial risks, including physical and transition risks, impacting the company[200] - The company revised its policies on information security, environment, human rights, and supplier code of conduct in 2023, as reviewed by the Sustainability Committee[200] Corporate Governance - The company adheres to the principles of high-quality corporate governance, emphasizing a high-quality board, robust internal controls, and transparency and accountability to all shareholders[128] - The company's core values include integrity, responsibility, prudence, diversity, and collaboration, which guide its business operations and decision-making[131] - The company's strategy focuses on maintaining rigorous financial discipline, effective risk management, and internal controls to achieve excellent operational and financial performance[132] - The company maintains a zero-tolerance policy towards bribery, corruption, and fraud, with regular internal and external risk assessments conducted to identify potential risks in business operations and partnerships[135] - The company has established various communication channels with stakeholders, including employees, shareholders, investors, customers, and suppliers, to maintain effective and meaningful dialogue[135] - The Board of Directors consists of 16 members, including 7 executive directors and 9 independent non-executive directors, with over half being independent non-executive directors as of December 31, 2023[138] - The Board of Directors is responsible for shaping and monitoring corporate culture, setting long-term strategic goals, and ensuring effective communication with shareholders and stakeholders[137] - The company has made changes to its Board composition, including the resignation of an executive director and the appointment of a new independent non-executive director in 2023[139] - The Chairman and Managing Director, Mr. Li Ka-shing, leads the Board in setting the company's strategic direction and ensuring effective governance practices[140] - The Board conducts annual performance evaluations, with the 2023 assessment showing satisfaction with Board performance and identifying areas for continuous improvement[136] - The company provides directors and officers with adequate and appropriate liability insurance since its listing on the Hong Kong Stock Exchange[138] - The company ensures that its Board composition reflects the necessary expertise, experience, and diversity to support the group's business needs[139] - The company held 4 board meetings in 2023, with all directors attending except for Mr. Chow Nin-mou due to medical reasons[143] - The board consists of 16 members, with 9 being independent non-executive directors, representing approximately 56% of the board[147] - The company's executive committee is chaired by the chairman and managing director, and includes all executive directors and 8 general managers/business unit heads[141] - Ms. Ng Ka Hing resigned as executive director and member of the executive committee effective April 28, 2023[142] - The board maintains a balanced composition of executive and non-executive directors, ensuring a high degree of independence[147] - The chairman and independent non-executive directors held 2 meetings in 2023 without the presence of other directors[145] - All directors have access to board documents and related information, and can seek independent professional advice if necessary[142] - The company's articles of association allow directors to attend board meetings in person, by telephone, or through electronic communication[145] - The audit committee is composed solely of independent non-executive directors, while the nomination and remuneration committees are mostly composed of independent non-executive directors[147] - The company's management provides monthly updates and other materials to the board to keep them informed of the group's latest business developments[145] - The company appointed 1 new independent non-executive director during the year ended December 31, 2023, in accordance with the company's articles of association, director nomination policy, and board diversity policy[148] - The company's independent non-executive directors received fixed fees for their roles, with additional fees for serving on board committees, and these fees are not performance-based[148] - The chairman holds two meetings annually with independent non-executive directors without the presence of other directors to discuss governance and board efficiency[149] - The company provides comprehensive onboarding materials and briefings to new directors, including governance policies, legal responsibilities, and group strategies[151] - Directors are encouraged to participate in continuous professional development, with tailored training provided by the company at its expense[151] - Directors primarily engage in professional development through reading company-prepared materials, attending seminars, and reviewing industry publications[151] - All directors confirmed compliance with the standard code regarding their trading of the company's securities for the year ended December 31, 2023[153] - The company has established written guidelines for employee trading of securities, aligned with the standard code and applicable to employees with confidential or insider information[154] - The Board has established five committees: Audit, Remuneration, Nomination, Sustainability, and Executive Committees, each with defined terms of reference[155] - Li Ka-shing serves as Chairman of the Executive Committee and is a member of the Audit and Remuneration Committees[156] - The company secretary provides compliance advice to the Board and management, ensuring alignment with regulatory requirements and corporate governance practices[157] - The company secretary facilitates communication between the Board, management, shareholders, and other stakeholders, ensuring timely responses to regulatory inquiries[157] - The company secretary ensures detailed records of Board and committee meetings, with draft and final minutes distributed to directors for review[157] - The company secretary confirmed compliance with the qualifications, experience, and training requirements under the listing rules as of December 31, 2023[159] - Directors received continuous professional development training during the year, with specific training codes assigned to each director[152] - The company has adopted policies for handling confidential information, disclosure, and securities trading, in compliance with the Securities and Futures Ordinance[154] Risk Management and Internal Controls - The company has established a Risk Management Task Force to oversee the operation of the Enterprise Risk Management System[169] - The company's Enterprise Risk Management System is designed to prevent, detect, and handle significant misstatements or losses, and to manage operational risks[168] - The company's Board of Directors is ultimately responsible for determining and assessing the risks the company is willing to accept to achieve its goals[169] - The company has implemented a whistleblowing policy for employees and stakeholders to report potential misconduct related to financial reporting or internal controls[167] - The company's Audit Committee reviews and approves the Risk Management Policy and its subsequent amendments[173] - The company's Enterprise Risk Management System includes a three-line defense model involving management, the Risk Management Task Force, and the Internal Audit Department[171] - The company's Audit Committee conducts annual reviews of the Enterprise Risk Management System and internal controls to ensure their effectiveness[173] - The company's Risk Management Policy provides guidance on identifying, prioritizing, and addressing significant risks, including ESG risks[169] - The company's Board of Directors ensures the effectiveness of the Enterprise Risk Management System and internal controls through continuous monitoring[172] - The company has established a Risk Management Task Force led by an executive director to oversee the enterprise risk management system, ensuring it is integrated into daily operations and regularly reviewed[174] - Internal Audit Department conducts independent assessments of the enterprise risk management system, providing recommendations for improvement and reporting results to the Audit Committee[174] - Department/function heads and overseas subsidiaries are responsible for managing operational risks, including identifying and assessing risks related to new business and environmental, social, and governance (ESG) factors[175] - The company adopts the COSO Enterprise Risk Management Framework, integrating risk management into strategic planning, business operations, and decision-making processes[176] - Risk assessment involves four main stages: risk identification, risk evaluation, risk response, and risk monitoring and reporting[176][177][178][179][181] - Risk mitigation strategies include acceptance, reduction, sharing, and avoidance, with plans reviewed and approved by the Risk Management Task Force[180] - Risk owners are responsible for monitoring the implementation and effectiveness of risk mitigation plans, providing regular updates to the Risk Management Task Force[181] - The company has established procedures for communicating risk events internally and externally, ensuring timely and accurate information dissemination[182] - Crisis management protocols are in place, involving executive directors and key personnel to handle escalated crisis events[183] - The company's risk management and internal control systems were confirmed to be effective by the board as of December 31, 2023, with no significant issues identified that could affect stakeholders[184] - The company maintains a zero-tolerance policy towards bribery, corruption, and fraud, with regular training and policies in place to ensure compliance with anti-corruption laws and regulations[185] - The company's internal audit department independently evaluates risk management and internal control systems, reporting findings to the audit committee annually[184] - The company's corporate governance and sustainability policies provide a framework for ethical business practices and compliance across all operations[185] Board Composition and Diversity - The company's board currently has 5 female directors, accounting for approximately 31% of the board members[191] - The overall gender diversity of the company's employees (including senior management) is approximately 51% female and 49% male as of the end of 2023[191] - The company will continue to maintain employee gender diversity[191] - The company's board members are required to retire by rotation at least once every 3 years[192] - The nomination committee considers the contribution and diligence of retiring independent non-executive directors when recommending their re-election[192] - As of December 31, 2023, no independent non-executive director has served for more than 9 years[193] - The nomination committee reviewed the board's structure, size, diversity, and expertise in 2023, recommending the appointment of Ms. Li Huimin as an independent non-executive director[188] - The nomination committee ensures board diversity and succession planning, considering factors such as education, expertise, experience, and demographic diversity when selecting candidates[189] - The nomination committee met once in 2023, with all members, including Chairman Bai Shengwen, Li Zeju, and Luo Bishi, attending the meeting[187] - The nomination committee is authorized to seek independent professional advice if necessary, with costs covered by the company[188] - The nomination committee ensures that board candidates align with the company's strategic goals and contribute to enhancing shareholder value[189] Remuneration and Compensation - The remuneration committee is primarily composed of independent non-executive directors, with Ms. Hung Siu Lin serving as the chair[194] - The remuneration committee held 1 meeting in 2023 and 1 meeting in 2024, with all members attending[195] - The remuneration committee is responsible for recommending the company's overall director and management remuneration policies and structures[195] - The remuneration committee has access to sufficient resources and can seek independent professional advice if necessary[195] - The company's executive directors and senior management have a significant portion of their compensation tied to corporate and individual performance, with no stock option plans in place[197] - The company's independent non-executive directors receive fixed fees for their roles, with additional fees for committee duties, not linked to corporate performance[197] - The company's compensation policy for 2023-2024 was reviewed and approved by the Board in March 2024, ensuring alignment with corporate goals and market trends[196] - The company considered integrating climate-related factors into its compensation policy, as recommended by the Hong Kong Stock Exchange[196] Audit and Compliance - The company's external auditor, Deloitte, provided audit services, tax services, and consulting services for HKD 45 million, HKD 1 million, and HKD 41 million respectively in 2023[166] - The company publishes semi-annual financial results within two months after the end of the relevant period and annual financial results within three months after the end of the fiscal year[160] - The Audit Committee consists of 7 members, all of whom are independent non-executive directors, with more than one member possessing appropriate professional qualifications or expertise in accounting or financial management[161] - The Audit Committee held four meetings in 2023, with external auditors invited to attend three of them[161] - The Audit Committee reviewed the financial reports for the 2022 annual results, 2023 interim results, and unaudited financial results for Q1 and Q3 2023[163] - The Audit Committee reviewed the effectiveness of the risk management and internal control systems[163] - The Audit Committee reviewed the audit results and fees of the external auditors[163] - The Audit Committee reviewed internal policies, including anti-fraud, anti-bribery, anti-money laundering, and information security policies[