Financial Data and Key Metrics Changes - The company reported a loss attributable to shareholders of HKD 16.3 billion for FY 2025, with a second-half loss of approximately HKD 9.7 billion, which exceeded the first half's loss of HKD 6.6 billion, primarily due to noncash provisions and one-off losses [18][19][71] - Core operating profit decreased by 13% year on year, while segment results declined by 4% year on year [17] - Total debt decreased by HKD 5.7 billion from HKD 151.6 billion in June 2024 to HKD 146 billion in June 2025, and net debt fell by HKD 4.5 billion [22][26] Business Line Data and Key Metrics Changes - The property business achieved annual sales of HKD 26 billion, meeting its target despite market uncertainties [6] - The investment properties segment recorded a 24% year-on-year growth in overall segment results, with K11 segment results also growing by 24% [45] - In Hong Kong, attributable contracted sales for FY 2025 reached HKD 11 billion, with strong performance from multiple projects [28] Market Data and Key Metrics Changes - The company noted improvements in market sentiment and transaction volume for Hong Kong real estate in the latter half of FY 2025, although property prices remained weak [19] - In Mainland China, the group’s contracted sales reached RMB 14 billion, exceeding adjusted annual targets [41] Company Strategy and Development Direction - The company will continue to focus on its core business, actively manage finances, and enhance operational efficiency [8] - Plans include advancing asset disposal, enhancing rental returns, and unlocking the value of farmland holdings [13][14] - The company aims to leverage market improvements and maintain prudent operations amid ongoing uncertainties [9] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating challenges and emphasized the importance of cash flow recovery and debt reduction [9][60] - The company acknowledged the impact of interest rate cuts on financing costs, projecting significant savings with further rate reductions [87] Other Important Information - The company has temporarily suspended dividend payments to preserve cash [15][54] - A significant refinancing of HKD 88.2 billion was completed, enhancing liquidity and extending loan maturities [24][55] Q&A Session All Questions and Answers Question: What are the company's concrete goals for debt reduction and timetable? - The company aims for steady progress in reducing total debt and net debt, having already achieved initial success in FY 2025 [58][59] Question: When will the company resume payments for deferred perpetual bonds? - The company will adhere to contractual terms and make announcements at appropriate times regarding coupon payments [61][62] Question: How does the new bank loan align with the goal of reducing indebtedness? - The new bank loan will be used to meet debt-related needs, and the company has successfully controlled net debt, indicating improved cash flow [65][66] Question: Will the majority shareholder consider injecting capital? - There are currently no plans for capital injection from the majority shareholder [68] Question: What is the company's outlook on achieving profitability? - Management indicated that profitability improvements depend on market conditions and ongoing operational efficiency enhancements [71][72] Question: How will recent rate cuts affect interest expenses? - A 1% decrease in interest rates could save the company around HKD 800 million in annual interest expenses [87]

Federal Reserve Policy Outlook - The Federal Reserve is expected to implement two more rate cuts in October and December, with a potential cut in January as well, unless there is a significant change in labor market data [2][14] - A target of 100 basis points reduction to around 3.25% is suggested to alleviate pressure on the small banking system and improve return on equity [3][10] Impact on Small Banking Sector - Current return on equity for small banks is below their cost of capital, and a 100 basis points cut could elevate it above 10%, enabling asset growth and credit creation [10][14] - The yield curve for small banks remains flat, which is unusual, and they require lower deposit rates to improve their financial health [11][9] Market Performance Expectations - The small banking sector and small-cap stocks, particularly the Russell 2000, are anticipated to perform well due to the expected rate cuts [15][14] - There is a suggestion to underweight consumer-facing sectors such as staples and discretionary goods, as they face margin pressures from tariffs [16] Tariffs and Inflation Dynamics - Import prices from China have been declining at an annualized rate of 3.6%, indicating that China is absorbing the tariffs without passing them onto consumers [21][22] - The current economic environment shows limited ability to pass through price increases, suggesting that inflation is unlikely to rise significantly [23] AI and Productivity Trends - AI investments have not yet shown significant returns, with a study indicating that 95% of companies investing in AI are currently seeing no return [25] - The pandemic has accelerated productivity trends, particularly in sectors substituting capital for labor, although AI's impact on productivity statistics is still emerging [24][26]

Financial Data and Key Metrics Changes - The company reported a revenue of RMB 15.5 billion, with property sales amounting to RMB 11.7 billion and a net profit of RMB 1.47 billion, reflecting a year-on-year decline due to the impact of COVID-19 and rental concessions [20][21][24] - The profit attributable to shareholders was RMB 906 million, and total rental income decreased by 4% to approximately RMB 2.8 billion [7][20] - The net gearing ratio remained stable at 45%, although it increased by 13% due to the redemption of a US$600 million perpetual note [8][26] Business Line Data and Key Metrics Changes - Property sales were primarily driven by two projects in Shanghai, contributing over RMB 10 billion to total sales [21] - Rental income, excluding joint ventures, saw an 8% decline year-on-year, while the overall rental income, including joint ventures, decreased by 4% [20][22] - The company maintained a gross profit margin of 43%, consistent with historical performance [23] Market Data and Key Metrics Changes - The Chinese GDP dropped to 3% in 2022, with the residential market experiencing its deepest downturn since 1998 [10][12] - Retail sales in Shanghai contracted by 9.1% due to lockdowns, but there are signs of recovery in consumer spending post-COVID [13][14] - The office market faced challenges with increased vacancy rates and oversupply, leading to a cautious outlook [14][15] Company Strategy and Development Direction - The company plans to focus on selective markets, particularly in first-tier cities and leading second-tier cities, to replenish its land bank and capture urban regeneration opportunities [36][37] - The strategy includes maintaining strong liquidity, capital management, and leveraging brand strength for new land acquisitions [16][17] - Sustainability efforts have led to significant reductions in carbon emissions and energy intensity, with a focus on green building certifications [17][18] Management Comments on Operating Environment and Future Outlook - Management expressed caution regarding the market operating environment, noting a crisis of confidence among buyers and ongoing challenges in the real estate sector [12][16] - The company anticipates a gradual recovery in the market, driven by easing policies and urban regeneration initiatives [10][36] - Management is preparing for potential acquisition opportunities as the market stabilizes, although they believe the market has not yet bottomed out [75][86] Other Important Information - The company declared a final dividend of HKD 0.064 per share, bringing the total dividend for 2022 to HKD 0.10 per share [9] - A share buyback plan of up to HKD 500 million was approved, with 35 million shares repurchased [9] Q&A Session Summary Question: What is the contract sales target for financial year 2023? - The sales target for 2023 is RMB 13 billion, with 80% of the residential GFA available for sales coming from Wuhan [62] Question: What are the plans for refinancing the U.S. Dollar senior notes due in the second half of 2023? - The company will focus on onshore financing due to lower costs and better liquidity, and it is unlikely to issue new U.S. Dollar bonds unless market conditions improve significantly [66][68] Question: Are there any off-balance sheet liabilities related to joint ventures? - There are no liability issues with joint venture projects, as all partners are substantial companies with good credit [70] Question: What projects should investors expect in Shanghai? - The company is confident in opportunities in Shanghai, particularly in urban regeneration projects like Panlong Tendi [72] Question: Are there any M&A or land banking opportunities in the pipeline? - The company is cautiously monitoring M&A opportunities arising from market corrections but believes the market has not yet bottomed out [74][75] Question: How is the Wuhan property market performing? - The Wuhan property market is showing signs of recovery, with a 28.6% year-on-year increase in housing transactions in early 2023 [80] Question: What is the status of the Xueersi Xinjiang IPO? - The IPO is currently on pause due to market conditions, with no rush to list until the right market window is identified [82] Question: How does management view the current market and policy opportunities? - Management believes the market is stabilizing but still faces challenges, and they are preparing to acquire good assets at bargain prices when opportunities arise [86]