Financial Data and Key Metrics Changes - Revenue from core leasing business decreased by 1% due to depreciation of the renminbi, while operating profit increased by 1% and underlying profit improved by 3% compared to 2024 [8][9] - Overall proceeds from properties reached HKD 1.6 billion, the highest in the last eight years, with HKD 264 million booked in revenue [24][25] - Net gearing ratio decreased to 32.7%, lower than the previous year, aided by a scrip dividend arrangement and reduced CapEx [31][67] Business Line Data and Key Metrics Changes - Mainland rental revenue remained flat year-on-year, with retail revenue up by 1% and office revenue facing headwinds, down by 8% [10][19] - In Hong Kong, overall revenue decreased by 2%, with retail impacted by a single tenant's lease expiration [22][23] - New letting increased by 15% and renewal increased by 5%, indicating effective tenant management [15] Market Data and Key Metrics Changes - The mainland office market is expected to face challenges for another 18-24 months due to high supply and tenant bargaining power [20][21] - Hong Kong retail is seen as more structural, with a slower recovery expected compared to the cyclical nature of mainland retail [64][66] - Footfall and occupancy rates reached record highs, particularly in Q4, indicating a positive trend despite overall cautious outlook [57][59] Company Strategy and Development Direction - The company is focusing on its V3 strategy, which aims to expand with minimal capital expenditure and faster project execution [4][6] - Emphasis on enhancing existing properties and leveraging established teams and relationships to increase market share in key cities like Shanghai, Hangzhou, Wuxi, and Kunming [5][6] - The company plans to continue diversifying its retail offerings, focusing on non-luxury segments to capture growth opportunities [57][62] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing corrections in both Hong Kong and mainland markets, with a mix of structural and cyclical shifts [7] - There is cautious optimism for 2026, with expectations for tenant sales to improve, particularly in non-luxury segments [47][55] - The company is preparing for potential foreign investment returns to China, which could positively impact the market [22] Other Important Information - The company is committed to sustainability, achieving its 25/25 ESG goals and aiming for net-zero emissions by 2030 [35][36] - The company is planning significant expansions in key locations, with a projected RMB 1 billion investment for V3 projects [38][39] Q&A Session Summary Question: CEO succession plans and qualities sought in a new CEO - The current CEO plans to retire at 55, emphasizing personal goals and family time, with the board already informed a year in advance [48][50] - The board is actively seeking a successor, with no specific timeline announced yet [54] Question: Outlook for Mainland China retail in 2026 - Management remains cautiously optimistic, noting strong Q4 performance but still cautious about luxury brand recovery [55][56] - January sales are expected to be stable, with potential for good performance due to the timing of Chinese New Year [61] Question: Leasing strategy for 2026 and performance stabilization in Wuhan and Shenyang - The company plans to continue adding experiential, non-luxury spaces while monitoring luxury performance [76] - Stabilization in underperforming markets is anticipated by 2026 or 2027, with ongoing repositioning efforts [76] Question: Dividend considerations with lower gearing and CapEx - Future dividend increases will depend on earnings recovery, with no specific scenarios outlined yet [76]

Industry Overview - The Waste Management industry is benefiting from positive trends in government regulations, advanced technologies, and increased environmental awareness, with the global sector reaching $1.2 trillion in 2024 and projected to grow to $1.6 trillion by 2029 [1] - The industry is categorized into segments based on waste type, including industrial, commercial, domestic, and agricultural, with industrial waste gaining significance due to ongoing industrial expansion [3] - The Disposal services segment is the primary revenue-generating category, driven by the growing need for waste recycling [3] Technological Advancements - Technology plays a crucial role in waste management, with AI emerging as a key tool for sorting waste and enhancing recycling efforts, leading to more efficient and eco-friendly practices [5] - Waste-to-Energy (WTE) technologies, including thermal and biological solutions, are expected to grow from $48.1 billion in 2024 to $93 billion by 2034, with a CAGR of 6.8% [6] ESG Considerations - Waste management is integral to Environmental, Social, and Governance (ESG) goals, helping companies improve their ESG ratings and meet legal requirements while promoting sustainable practices [4] Market Performance - The Zacks Waste Removal Services industry currently holds a Zacks Industry Rank of 90, placing it in the top 37% of 243 Zacks industries, indicating strong near-term prospects [7][8] - Over the past year, the industry has declined by 7.3%, underperforming the broader sector's growth of 13.3% and the S&P 500's 13.7% [10] Current Valuation - The industry is trading at an EV-to-EBITDA ratio of 12.67X, compared to the S&P 500's 17.94X and the sector's 10.23X, indicating a relatively attractive valuation [13] Company Highlights Xylem (XYL) - Xylem's revenue increased by 7% year over year in Q3 2025, supported by strong growth in measurement and control solutions, with a backlog of nearly $5 billion [17] - The company has an EBITDA margin exceeding 23%, with management expecting it to remain around 22-23% for the full year [18] - Xylem has a Zacks Rank of 2 (Buy) and its shares have risen by 22.1% year-to-date [20] Zurn Elkay Water Solutions Corp (ZWS) - ZWS's sales improved by 11% year over year in Q3 2025, driven by growth initiatives despite challenges in the residential market [24] - The company has a Zacks Rank of 2 and its shares have increased by 26.2% year-to-date [26] Republic Services (RSG) - RSG's revenue grew by 3.3% year over year in Q3 2025, with an adjusted EBITDA margin of 32.8%, reflecting strong pricing and operational efficiency [29] - The company is committed to fleet electrification, with plans to increase its electric vehicle fleet [31] - RSG holds a Zacks Rank of 3 (Hold) and its shares have risen by 10% year-to-date [32]