Genscript Biotech (01548) H2 2024 Earnings Call March 12, 2025 08:40 AM ET Company Participants Shiniu Wei - Chief Financial OfficerWeihui Shao - CEO & COORay Chen - President of GenScript Life Science Group Conference Call Participants Daisy Cheng - AnalystLinhai Percy Zhao - Equity Research AnalystNone - Analyst Operator Good day and thank you for standing by. Welcome to Gentscript BioTech twenty twenty four Annual Results Conference Call. At this time, all participants are in a listen only mode. After th ...

Financial Data and Key Metrics Changes - The group's revenue increased by 6.1% year over year to approximately $590 million [38] - The net profit recorded was around $2.9 billion, primarily due to a one-time investment gain from the deconsolidation of Legend [38] - Adjusted net profit from continuing operations remained stable at approximately $59.8 million [38] - The Life Science Group's revenue was approximately $455 million, representing a 10.2% year-over-year growth [38] - Adjusted operating profit for the Life Science Group was about $90.4 million, reflecting a 15.5% increase year over year [39] Business Line Data and Key Metrics Changes - The Protein segment, representing about 25% of Life Sciences revenue, achieved nearly 50% revenue growth in 2024 [6][22] - ProBio's revenue was $95 million, experiencing a decline of about 13.2% year over year [39] - Bestime's revenue grew by about 24.6% to $53.7 million, achieving an adjusted operating profit of approximately $2.1 million [39][44] Market Data and Key Metrics Changes - Revenue from industrial customers increased largely due to the development of more multinational companies [40] - Revenue from China accounted for about 19% of Bestime's revenue, indicating a strong market presence [34] - The addressable market for protein regions is over $4.5 billion, with growing demand driven by antibody drug discovery and AI-driven protein engineering [22] Company Strategy and Development Direction - The company aims for full-year revenue growth for the Life Science business to be around 10% to 15% in 2025 [49] - ProBio is targeting a revenue growth of 15% to 20% for 2025, excluding the impact of the Lenovo deal [49] - Bestime is targeting constant currency revenue growth of 20% to 25% with a gross margin around 45% [49] Management's Comments on Operating Environment and Future Outlook - Management noted a strong recovery in the second half of 2024, driven by robust demand from AI-related applications and antibody drug research [40] - The company is confident in maintaining growth trends due to continuous R&D investment and expansion into overseas markets [56] - Management expressed optimism about improving profitability in the coming years despite short-term margin pressures [64] Other Important Information - The company has over 250 patents and more than 480 patents in the application process, positioning it as a global leader in the industry [11] - The company joined the United Nations Global Compact, solidifying its commitment to sustainability [12] - A new facility for Bestime is under construction, representing a total investment of RMB 800 million, slated for completion by 2027 [37] Q&A Session Summary Question: Order trend and outlook for 2025 - Management expects faster growth in Europe and the U.S., with moderate growth in China and Asia Pacific [54] Question: Net margin outlook for Life Science segments - Life Science business is targeting growth of 10% to 15% with flat gross margin [55] Question: Impact of global tariffs - Management believes tariffs will not significantly impact business results, focusing on quality and delivery speed [62][63] Question: Gross profit margin for Life Science Group - Short-term profit margins may decrease due to local production expansion, but long-term profitability is expected to improve [64] Question: CapEx guidance for 2025 - Overall CapEx spending will be roughly flat compared to 2024, with increases in specific segments like Bestime [76]

Financial Data and Key Metrics Changes - In Q4 2024, the company achieved a net profit of RMB 80 million, marking it as the second profit-making company among EV startups [7] - Total revenue for 2024 was RMB 32.16 billion, up by 92% from 2023 [8] - The gross profit (GP) margin for 2024 was 8.4%, an increase of 7.9 percentage points from 0.5% in 2023 [9] - The attributable net loss was reduced to RMB 2.82 billion from RMB 4.22 billion in 2023, a decrease of RMB 1.4 billion [9] - Operating net cash improved to RMB 2.47 billion from RMB 1.08 billion in 2023 [10] - Free cash flow increased to RMB 6.32 billion from a negative RMB 0.32 billion [10] Business Line Data and Key Metrics Changes - The company delivered 32,724 vehicles in 2024, a growth of 103.8% compared to 14,400 in 2023 [8] - C series deliveries in 2024 were 22,571, representing a 12.9% improvement from 2023 [11] - Monthly sales in Q4 exceeded 8,000 vehicles [12] Market Data and Key Metrics Changes - The company has captured a top five position in respective markets, with significant growth in sales and market presence [14] - As of December 2024, the company had accumulated over 600,000 vehicle deliveries [11] Company Strategy and Development Direction - The company plans to launch the B series models in 2025, targeting a sales goal of 500,000 units by 2025 [13] - The company is focusing on expanding its retail network, with 695 stores covering 264 cities, an increase of 82 cities from 2023 [17] - A joint venture with Stellantis was formed to manage export sales and localized production overseas [20] Management's Comments on Operating Environment and Future Outlook - Management expects deliveries in 2025 to range from 500,000 to 600,000 units, with a GP margin target of 10% to 11% [25] - The company aims to achieve profitability in 2025 [26] - Management highlighted the importance of in-house R&D and cost improvements contributing to GP margin growth [30][31] Other Important Information - The company has been rated AA by MSCI for two consecutive years, leading its peers in sustainable development [22] - The Leap 3.5 architecture was launched, enhancing the company's technological capabilities [60] Q&A Session Summary Question: Guidance for 2025 including sales, GP margin, and profitability - The company expects deliveries in 2025 to be between 500,000 to 600,000 units, with a GP margin target of 10% to 11% and aims for profitability [25][26] Question: Model planning for 2025 - The company will launch three new models on the B platform in 2025, with facelifts for existing C series models [26][27] Question: Capacity and demand for additional capacity - The company plans to add factory capacity to meet production improvements [27] Question: Contribution of in-house R&D to GP margin - The improvement in GP margin is attributed to increased sales volume, model mix, and in-house production [30][31] Question: Overseas sales guidance and expansion - The company estimates overseas sales in 2025 to be around 50,000 to 60,000 units, with a focus on expanding sales channels [44] Question: Timing for new products above 200,000 yuan - The high-end platform D products are expected to launch in the first half of 2026 [38] Question: Autonomous driving product layout - The company is preparing to roll out autonomous driving technology across its platforms [39] Question: Profit guidance for overseas business in 2025 - The target for Leapmotor International is to break even while focusing on expanding sales channels [41] Question: Breakdown of export units in 2024 - The current product mix for exports includes T03 and C1O, with T03 being more prevalent at this stage [69] Question: Investment in autonomous driving - The company plans to invest over RMB 800 million in autonomous driving development in 2025 [73]

Financial Data and Key Metrics Changes - In 2024, the company handled 24.6 billion parcels, a year-on-year increase of 31% [7] - Revenue reached $10.3 billion, marking a year-on-year increase of 16% [7] - Adjusted EBIT was $301 million, a significant turnaround from a loss of $335 million in the previous year [7] - Net profit was $114 million, representing the first full year of profitability in the company's history [7][28] - Total revenue increased by 15.9% year-on-year from $8.8 billion in 2023 to $10.3 billion in 2024 [19] - Adjusted net profit reached $200 million in 2024, a turnaround from an adjusted net loss of $432 million in 2023 [28] Business Line Data and Key Metrics Changes - In China, the company handled 19.8 billion parcels, a year-on-year increase of 29%, with adjusted EBIT reaching $147 million [8][25] - In Southeast Asia, parcel volume increased by 41% to 4.6 billion parcels, with revenue rising by 22.3% to $3.2 billion [12][21] - New markets saw a 22% increase in parcel volume, handling 281 million parcels, with revenue growing by 76.1% to $576 million [15][25] - The cross-border business revenue decreased by 88.7% to $75 million due to a strategic shift to focus on B2B [27] Market Data and Key Metrics Changes - The company's market share in China increased to 11.3%, while in Southeast Asia, it reached 28.6%, marking a 3.2 percentage point increase from 2023 [8][12] - The cumulative parcel volume of China's express delivery industry grew by 21.5% in 2024, indicating a robust market environment [10] Company Strategy and Development Direction - The company aims to solidify its market position in Southeast Asia and China while expanding into new markets [16] - Strategies include reducing costs through refined management, leveraging expertise from China, and enhancing service quality [16] - The company plans to capture changes in business flow due to e-commerce globalization and strengthen its brand [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the express delivery industry but expressed confidence in long-term growth and profitability [17] - The company is committed to continuous self-improvement and maintaining a competitive edge in a challenging market [17] - Management expects to achieve full-year EBITDA breakeven for new markets in 2025 [55] Other Important Information - The company reported a significant improvement in cash flow, with a net cash inflow from operating activities of $807 million in 2024 [28] - Free cash flow turned positive for the first time, reaching $252 million [29] Q&A Session Summary Question: Performance of TikTok Shop in Mexico and expectations for parcel volume growth - Management indicated that TikTok Shop began operations in Mexico in February 2025, and the performance is still in early stages [32] - The company expects meaningful contributions to parcel volume growth in new markets as operations develop [32] Question: Expectations for domestic parcel volume growth and competition in 2025 - The company reported a 29% year-on-year increase in parcel volume in China, with expectations to maintain growth despite competition [33] Question: Specific measures for cost reduction in China and future expectations - Management highlighted improvements in operational efficiency and cost optimization measures, with expectations for further reductions [36] Question: Competitive trends in the return parcel market - Management noted that return services have higher profitability than normal delivery services, and competition is expected to increase [38] Question: Business strategy in Southeast Asia and price trends - The company aims to increase market share and expects unit prices to decrease by 5% to 10% annually over the next few years [44] Question: Cash flow position and pressures from debt repayment - The company maintains a strong cash position with sufficient cash equivalents to cover interest-bearing debt, with no near-term repayment pressures [47] Question: Updates on new markets and potential opportunities - Management is optimistic about achieving breakeven in new markets by 2025 and is exploring opportunities in Latin America and the Middle East [55] Question: Year-on-year volume growth in Southeast Asia and major volume drivers - The company expects a parcel volume growth of 20% to 30% in Southeast Asia for 2025, with strong growth observed in the first two months [59] Question: CapEx adjustments in Southeast Asia - The company plans to continue investing in Southeast Asia to solidify its market leadership and capture growth opportunities [63]

Financial Data and Key Metrics Changes - The company reported a significant increase in revenue, reaching $2.5 billion, representing a 15% year-over-year growth [1] - Net profit for the quarter was $300 million, up from $250 million in the same period last year, indicating a 20% increase [1] Business Line Data and Key Metrics Changes - The mining segment saw a revenue increase of 10%, contributing $1.2 billion to total revenue [1] - The processing segment reported a 25% increase in revenue, totaling $800 million, driven by higher demand for processed minerals [1] Market Data and Key Metrics Changes - The Asia-Pacific market accounted for 60% of total sales, with a 12% increase in demand compared to the previous year [1] - The North American market showed a robust growth of 18%, contributing $500 million to the overall revenue [1] Company Strategy and Development Direction and Industry Competition - The company plans to expand its operations in the Asia-Pacific region, focusing on increasing production capacity to meet rising demand [1] - Management highlighted the competitive landscape, noting that the company aims to differentiate itself through sustainable mining practices and technological innovation [1] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong demand for minerals and a favorable pricing environment [1] - The company anticipates continued growth in the next fiscal year, projecting a revenue increase of 10% to 15% [1] Other Important Information - The company announced plans to invest $200 million in new technology to enhance operational efficiency [1] - A dividend of $0.05 per share was declared, reflecting the company's strong financial position [1] Q&A Session Summary Question: What are the key drivers for growth in the next quarter? - Management indicated that increased demand in the Asia-Pacific region and higher commodity prices are the main growth drivers [1] Question: How does the company plan to address environmental concerns? - The company is committed to sustainable practices and has implemented several initiatives to reduce its environmental footprint [1] Question: What is the outlook for the North American market? - Management noted that the North American market is expected to continue its growth trajectory, supported by infrastructure investments [1]

Financial Data and Key Metrics Changes - Revenue increased by 6.5% to $14.6 billion, with organic growth of 6.5% or 6.8% in local currencies [7][10] - Net profit rose by 14.9% to $1.12 billion, with a net profit margin improvement of 60 basis points to 7.7% [9][10] - Free cash flow reached $1.6 billion, a 23% increase from $1.3 billion in 2023, representing a 142% conversion of net profits [17] - Earnings per share increased by 15.1% to $61.43 [9] Business Line Data and Key Metrics Changes - Power Equipment division, accounting for 94% of total revenue, grew by 7.3% or 7.6% in local currencies to $13.7 billion [10][11] - Milwaukee brand achieved sales growth of 11.6% in local currencies, while Ryobi Power Tools grew by 6.7% [8][10] - Floorcare and Cleaning divisions saw a revenue decline of 4.5% in local currency, but operating profits increased by 4.73% [10][11] Market Data and Key Metrics Changes - North America, contributing 76% of revenue, grew by 5.5% in local currencies [11] - Europe, making up approximately 16% of the business, experienced over 10% growth in local currencies [11] - The rest of the world, led by Australia, delivered impressive local currency growth of 12.5% [11] Company Strategy and Development Direction - The company emphasizes innovation and a strong culture as key drivers of success, aiming to maintain market leadership through continuous investment in R&D [4][12] - Focus on expanding into new markets and user segments, leveraging the strengths of the Milwaukee and Ryobi brands [30][32] - The strategy includes a relentless focus on safety and productivity solutions for core trades, with a unique approach to embedded partnerships [68][69] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue delivering strong financial results, highlighting a culture of innovation and collaboration [19][46] - The company is aware of potential disruptions in the market and is committed to continuous innovation across all business aspects [39][40] - Future growth is expected to be driven by expanding product offerings and enhancing customer engagement [30][32] Other Important Information - The Board recommended a final dividend of HKD 118 per share, a 20.4% increase compared to the previous year [10] - The company aims to achieve a net cash position by 2025, with a focus on reducing high-cost debts [17][18] Q&A Session Summary Question: What are the growth opportunities for Ryobi and Milwaukee? - Ryobi is focusing on expanding its cordless ecosystem, which has seen a 15% compounded annual growth since 2016, and aims to convert users from legacy power sources [49][50] - Milwaukee is committed to enhancing safety and productivity for core trades, with a unique strategy that has resulted in 12% sales growth in 2024 [70][71] Question: How does the company plan to maintain its competitive advantage? - The company emphasizes its culture and people as key competitive advantages, fostering collaboration and innovation across all levels [19][22] - Continuous investment in breakthrough technology and understanding user needs are critical to maintaining market leadership [85][86]

Financial Data and Key Metrics Changes - In 2024, the company generated an EBITDA of $333 million, an underlying profit of $114 million, and a net profit of $132 million, resulting in a 7% return on equity and trading per share of 19.9% of sales [1] - The company has a strong balance sheet with net cash of approximately $20 million and committed liquidity of $548 million [1][14] - The total dividend recommended amounts to $61 million, representing 50% of the net profit for the full year, excluding vessel disposal gains [2][16] - The company completed a $40 million share buyback program, buying back and canceling 138 million shares, reducing issued share capital by 2% [2] Business Line Data and Key Metrics Changes - The core business generated $178 million before overheads, benefiting from a stronger freight market, while operating activity contributed $70 million with a margin of $630 per day over 27,610 days [1][11] - Average market spot freight rates for Handysize and Supramax increased by 24% year on year to $11,200 and $12,920 per day, respectively [3] - Dry bulk loading volumes grew approximately 2% year on year, driven by robust Chinese demand, while minor bulk loading decreased by 3% [5][6] Market Data and Key Metrics Changes - Thermal dry bulk demand growth, particularly from China for coal and bauxite, supported the trade market in 2024, despite a weakening market in the fourth quarter [3][4] - Grain loadings increased by 4% year on year due to increased loadings from Argentina and the U.S., while Ukraine grain loadings increased by 84% year on year [6][7] - Iron ore loadings increased by 4% year on year, driven by increased production from key exporters and strong Chinese demand [7] Company Strategy and Development Direction - The company aims to optimize capital allocation and maintain a robust capital structure to enable strategic investments and growth initiatives [17][29] - The company is focused on acquiring modern secondhand vessels while selling older, less efficient vessels to enhance shareholder value [3][24] - The long-term strategy includes transitioning to net zero emissions by 2050 and maximizing growth optionality through newbuilding vessels and long-term charters [25][26] Management's Comments on Operating Environment and Future Outlook - Management anticipates a weaker start to 2025 due to market corrections in the fourth quarter of 2024, but expects steady improvements in the first quarter of 2025 [4][60] - The company remains cautiously optimistic about the year ahead, prepared to seize opportunities arising from increased productivity [23][28] - Management highlighted that geopolitical tensions and trade tariffs could create volatility but may also provide advantages in the short term [41][42] Other Important Information - The company paid a total of $66 million in dividends, including final and interim dividends for 2023 and 2024 [16] - The company’s owned vessels have a total net book value of approximately $1.7 billion, with a market value estimated at $2 billion [17] - A new Chief Financial Officer, Jimmy Woo, will join the company in December 2025 [30] Q&A Session All Questions and Answers Question: Impact of U.S. potential actions on Chinese vessels - Management acknowledged that the majority of their ships are Japanese built, with only 25% being Chinese built, and noted that any regulations would impact trading patterns [34][35] Question: Outlook on dividends and impact of tariffs - Management confirmed a total 50% dividend for 2024 and a $40 million share buyback program, stating that U.S. tariffs may not significantly impact operations as the U.S. is not a major importer of dry bulk [39][40] Question: Percentage of owned fleet that is Chinese built - Management stated that 25% of the owned fleet is Chinese built, and they are always looking for opportunities in the market, including potential purchases from Chinese shipyards [44][45] Question: Cover ratio and rates in the first quarter of 2025 - Management indicated that the cover ratio is lower than the previous year, allowing for more flexibility to optimize ship positioning and maximize earnings [58][61]

Financial Data and Key Metrics Changes - The operating revenue for 2024 reached RMB 9.89 billion, representing a year-on-year increase of 48% [31] - The operating expense ratio declined to around 20%, an 8% decrease compared to the previous year [32] - The asset management scale grew to RMB 108.1 billion by December 2024, a 39% increase from the end of the previous year [32] Business Line Data and Key Metrics Changes - The transaction volume of auto financing reached RMB 69.1 billion in 2024, a year-on-year increase of 5% [10] - The financing amount for new energy vehicles grew by 44% compared to the same period last year [10] - The fintech business facilitated financing transactions of RMB 21.1 billion in 2024, representing a year-on-year growth of 107% [14] Market Data and Key Metrics Changes - The new passenger vehicle sales in China reached 27.56 million units in 2024, a year-on-year growth of 5.8% [5] - The annual sales of new energy passenger vehicles exceeded 10 million units for the first time, with a year-on-year growth of 41% [5] - The Chinese auto finance market is expected to reach RMB 3 trillion in 2024 [6] Company Strategy and Development Direction - The company aims to deepen its presence in the automotive and clean finance sectors, leveraging technology-driven financial innovation [3] - The focus is on enhancing cooperation with major shareholders like Tencent and expanding into AI and big data applications [3][4] - The company plans to optimize its value-added service product system and deepen cooperation with insurance institutions [20] Management's Comments on Operating Environment and Future Outlook - The management expressed optimism for 2025, expecting revenue growth of 15% to 20%, reaching around RMB 11.5 to 12 billion [58] - The company anticipates that the consumption potential will be further unleashed due to new policies and the popularization of intelligent driving [6] - Management noted that the financial penetration rates in China still have significant room for improvement compared to developed markets [8] Other Important Information - The cumulative number of auto financing transactions exceeded 4 million units by May 2024, with a cumulative transaction volume approaching RMB 400 billion by December 2024 [4] - The company has established a risk control management system that covers the entire business process, ensuring effective risk management [26] Q&A Session Summary Question: What is the purpose for the high volume of loans? Will that generate pressure on liquidity and cash flow in 2025? - Management indicated that 50% of loans are for basic needs and the other 50% for special interest rate loans, with no expected pressure on cash flow in 2025 due to improved technology services [45][46] Question: What is the tracking model and features of the consumers? - The company has two categories for tracking models: a SaaS system for data collection and an online traffic model for charging fees, with a focus on the latter for revenue [48][49] Question: What is the contribution rate from the AI model to the company's revenue? - AI is considered a core competitiveness, utilized across various processes including customer acquisition and risk control, significantly enhancing operational efficiency [53][54] Question: What is the guidance for the 2025 business and growth rate? - The company expects a revenue growth of 15% to 20% in 2025, estimating revenue to reach around RMB 11.5 to 12 billion [58] Question: Will there be a decrease in the cost of assets and specific measures for cost control? - Management believes there is potential for a decrease in capital and asset costs, with plans to deploy AI applications for operational efficiency [60][62] Question: How will competition in the auto finance industry affect the company? - Management acknowledged increased competition but believes it will not significantly impact the company due to its focus on different consumer segments compared to banks [64][66] Question: What are the plans for the fintech business in the short and long term? - The company aims for a transaction revenue target of RMB 35 billion in the next three years, with a focus on high-quality development and leveraging big data technologies [71][73]

Financial Data and Key Metrics Changes - Sales surpassed the USD 100 million milestone for the first time, reaching USD 116.8 million, an increase of 24% year on year [3][4] - Gross profit increased to RMB 64.1 billion, up 26%, with a gross margin of 54.9%, improving by 0.9 percentage points compared to the previous year [3][4] - Net profit rose to USD 38 million, growing 35% year on year, with a net margin of 32.6%, an improvement of 2.8 percentage points [4] - Diluted EPS reached USD 0.35 per share, and a special dividend of USD 19.0201 per share was declared [4][5] Business Line Data and Key Metrics Changes - Fixed First Connectivity segment sales increased by 18% to USD 17.1 million, while Mobile First Connectivity segment sales grew by 34% to USD 66.2 million [5] - Warranty and Support Services segment increased by 6% year on year to RMB 25.3 million, and Software Licenses segment grew by 26% year on year to RMB 8.2 million [5] - Recurring revenue reached USD 32.2 million, up 12% year on year, but slightly decreased to 27.6% of total sales [6] Market Data and Key Metrics Changes - Sales to North America increased by 38% to USD 7.8 million, while sales to EMEA rose by 6% to USD 29.1 million [7] - Sales to Australia and New Zealand jumped 78% year on year to USD 4.2 million, while sales to Asia decreased by 12% to approximately USD 8.8 million [7][8] Company Strategy and Development Direction - The company aims to enhance connectivity solutions across various sectors, focusing on collaboration with partners like Starlink to expand its reseller network [13][14] - Plans to launch new products with edge computing capabilities and deepen collaboration with Starlink were highlighted [18][19] - The company is committed to maintaining a product-led approach, focusing on innovation and customer needs rather than setting specific growth targets [45][66] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, citing strong fundamentals and the potential for multi-year projects [40][41] - The company views global changes as opportunities, emphasizing a positive attitude towards challenges [22][25] - Management noted that the recurring revenue model is expected to grow as the ecosystem becomes easier to use [66] Other Important Information - Operating cash flows were strong at USD 55.2 million, with a cash position of nearly USD 66 million at year-end [11][12] - Inventory turnover improved significantly, now at 115 days [12] Q&A Session Summary Question: Will enterprise switches and antennas contribute meaningfully to revenue? - Management indicated that while growth is occurring, it is not substantial yet, but the antenna business is growing well [27][28][30] Question: How is the long-duration data plan performing? - The data plan is generating meaningful revenue, and there is potential for further value propositions [32][33] Question: What is the outlook for 2025? - Management remains optimistic, noting that both project and run rate businesses are performing well [39][40] Question: How does the company plan to utilize its cash reserves? - The company is open to share buybacks but remains focused on product development and competitive offerings [43][44] Question: What is the takeout rate and reasons for non-subscription? - The takeout rate is 34%, with reasons for non-subscription including lack of need for cloud management for smaller users [85][86] Question: Are there plans to penetrate the consumer market? - Management expressed interest in experimenting with new ideas and potentially accessing the consumer market in the future [68][69] Question: What is the contribution of Starlink to revenue? - Starlink has helped with brand awareness but does not contribute significantly to revenue [72][74][80]

Financial Data and Key Indicators Changes - The group's underlying profit for the six months ended December 31, 2024, was approximately HKD 10.5 billion, representing a 17.5% year-on-year increase, primarily due to higher property development profit from Hong Kong [5] - Reported profit decreased by 17.7% year-on-year to HKD 7.5 billion, influenced by a net revaluation loss of around HKD 2 billion on investment properties [5] - Underlying earnings per share rose by 17.5% to HKD 3.61, while reported earnings per share fell by 17.7% to HKD 2.6 [6] - The net debt as of December 2024 was HKD 107.8 billion, with a net gearing ratio of 17.8%, down from 18.3% [8] Business Segment Performance Changes - Property development profit increased by 22.8% to approximately RMB 2.5 billion, mainly due to higher revenue from property development in Hong Kong [6] - Net rental income decreased by 3.5% to around HKD 9 billion, with declines in both Hong Kong and Mainland portfolios [7] - Hotel operating profit dropped to BRL 377 million from BRL 430 million, a decrease of 12% year-on-year [30] Market Data and Key Indicators Changes - The group's total land bank in Hong Kong was about 56.9 million square feet, with 37.6 million square feet completed and 19.3 million square feet under development [12] - In Hong Kong, contracted sales increased by 344% year-on-year to about HKD 16 billion, driven by several key projects [15] - The Mainland's recognized property sales decreased by 61% year-on-year to about RMB 617 million, primarily due to lower sales volume of residential units [23] Company Strategy and Development Direction - The group aims to maintain prudent financial management, focusing on cash flow management, strict control of construction CapEx, and strengthening recurring income from property investments [9][10] - The company plans to launch new projects when ready and sell unsold residential units and non-core properties [10] - The group is committed to enhancing its property investment portfolio's competitiveness through asset enhancement initiatives and maintaining close relationships with tenants [36] Management's Comments on Operating Environment and Future Outlook - The management expressed cautious optimism for the Hong Kong residential market, citing lower mortgage rates and a robust rental market [58] - For the Mainland, the management noted that supportive policies are expected to drive domestic consumption and restore buyer confidence in the property market [35] - The company remains confident in achieving its sales target of RMB 4 billion for the financial year 2025, with several new launches planned [66] Other Important Information - The group has achieved a 25% reduction in greenhouse gas emissions for key commercial buildings ahead of schedule and aims for a further 35% reduction by 2029 [31] - The company is developing Hong Kong's first privately funded solar farm, expected to be completed in 2025 [32] Q&A Session Summary Question: Expectations for Hong Kong residential home prices - Management noted that lower mortgage rates are expected to continue, which may support the residential market despite high supply levels [58] Question: Revision of Hong Kong property contract sales - Management indicated that they are confident in achieving their sales targets and have several new projects launching in the upcoming months [66] Question: Profit margin outlook for property development in Hong Kong - Management acknowledged that profit margins have been affected but expressed confidence in achieving high unit prices for premium projects [61] Question: Outlook for Mainland China residential demand - Management highlighted a polarization in the market, with strong sales in Tier one and Tier two cities, supported by government policies [63] Question: Concerns about liquidity in the sector - Management reassured that the company maintains a strong financial position with ample undrawn bank lines, mitigating potential risks [78] Question: Dividend policy considerations - Management confirmed that the dividend policy will remain at 40% to 50% of earnings per share [79] Question: Risk of further cap rate expansion - Management believes that further cap rate expansion is unlikely due to decreasing interest rates [80]