CK Asset Holdings Limited

Welcome to CK Asset Holdings interim results for 2024. My name is Gerald Ma. I'm gonna go through the results presentation, which will take about 15 minutes, hopefully less than that, and then I'll open the floor for questions with our management team afterwards. On my right, our chairman, Mr. Victor Lee, and followed by Mr. Edmund Ip, our deputy chairman and our executive committee member, Mr. Simon Mann. We are all with you today and happy to be showing you our results. Let's go to the presentation, shall we? First half 2024 revenue 34.7 billion down 4.9%. Profit before IP revaluation 6.7 billion or $1.91 cents down 9.1% on a per share basis. IP revaluation 1.8 billion, giving us a profit to shareholders 8.6 billion or $2.44 down 15.3% on a per share basis. We're happy to declare a interim dividend of 39 cents down 9.3% in line with our profit before revaluation. Netbook value up 1.4% to $110.23. Principal activities analysis. 87% of our revenue and 82% of our profit contribution is now recurrent in nature, giving us a very strong foundation to move forward. In terms of geographical spread, 39% of contribution from Hong Kong, 8% from the mainland and 53% from overseas. Turning to divisional performances. We recorded fewer sales recognition in the first half leading to a lower contribution. Revenue 4.6 billion, profit contribution 1.8 billion, Margin, overall margin, a solid 39.3%. Major contribution coming from Laguna Verona Dongguan, 457 million. LYOS from Hongshuiqiu, 439 million. 90 Repulse Bay giving us 327 million. Upper West Shanghai giving us 212 million. So we recorded solid margins across all markets, 40.1 from Hong Kong, 40.3 from the mainland and 24.5 from overseas. We still have 28.4 billion of contracted sales, which we have not yet recognized. that is up from 19.4 billion at the end of last year, mainly due to the successful launch of Blue Coast. 5.4 billion of the 28 billion will be recognized or scheduled for recognition in 2024 financial year. Property rental, 3.1 billion of revenue, up 9%, profit contribution, 2.4 billion, up 6%, and a very healthy 78.4% margin. Contribution from our social infrastructure from the UK, 648 million. Cheung Kong Center, 512 million. Hutchinson Logistics Center, 327 million. And the Whampoa, 325 million. If you look at the different sector contribution from different sector, from a revenue perspective, retail 971 down 7.6%, office 890 down 7.7%. industrial holding firm at 385 million, social infrastructure up 171% to 648 million, giving us a total of 3.1 billion of revenue contribution. If you look at profit contribution, 1.8 billion from Hong Kong and 139 from the mainland and 489, giving us 2.4 billion of contribution altogether. We have 22.2 million of investment properties in our portfolio and recorded in the first half, a fair value increase of 1.4 billion before tax and non-controlling interest. This is a result of the net increase we have in Hong Kong, mainly from Hutchinson Logistics Center and a revaluation deficits from a number of our mainland property assets. the after tax and after controlling, after non-controlling interest valuation came to 1.8 billion in the box of the, the bottom of the box in the middle. Hotels and service suites, we had a solid recovery in both margin and contribution this year. 823 million of profit contribution, up 29%, and margin recovery from 32.7 last year to 38.6 this year. Average occupancy for our daily hotels, 81%, and 88% for our service suites. And to no surprise, Hong Kong recorded the majority of our contribution, 853 million. Property and project management, we have 264 million square feet under management and a very steady profit contribution of 180 and a very good margin of 40.4%. Our pub operation, again, we have about 2,600 pubs across the UK. The sector is still affected by the high cost pressure and also the slow recovery in terms of volume recovery and recorded a 5% increase in revenue in the first half and a 2% increase of profit contribution to 597 million. Infrastructure and Utility Asset Division. These are JVs and the respective percentages. Just to highlight that CK William, which is our Australian joint venture company, also acquired Phoenix Energy in the first half of this year, a Northern Ireland gas network for 312 million pounds. UK Power Network, also acquired UU Solar, a owner operator of renewable generation assets in the UK in the first half as well for 88 million pounds. 2024 first half revenue came to 12.6 billion. and contribution came to almost 4.1 billion with a 32.6% margin. You see that Dutch Enviro Energy, which is essentially AVR, had a negative contribution due to a fire incident for one of our facilities last year. I'll turn the rest of the floor to Simon to finish the rest of the presentation, Simon.

As of 1 June 2024, the group's interest in real estate investment trusts remained more or less the same, 34.5% in Wushan Ridge, which owned and managed a portfolio of 11.8 million square feet of hotels and service suites, office and retail properties on the mainland. A 26% in Fortune REIT, which own and manage a portfolio of 3 million square feet of retail properties in Hong Kong and Singapore. A 18% interest in the Prosperity REIT, which own and manage a portfolio of 1.3 million square feet of office, retail, and industrial properties in Hong Kong. Wei Chenry is an associate. and we share a net loss of 4 million Hong Kong dollars for the period. Taking into account is net rental of 56 million and exchange loss of 60 million upon realized upon bank loan repayment during the period. Distribution received from Fortune REIT and Possible REIT amounted to 113 million and we recognize as investment income. together with the 3 million distribution from Wish and Read, a total distribution of 116 million was received by the group during the pivot. For the Gearing and Maturity Profile, as of 30 of June, 2024, the group's bank and other loan amounted to Hong Kong dollar 56.1 billion. 14.9, repayable within one year, $34.9 billion within two to five years, and $6.3 billion beyond five years. Taking into account bank balance and deposit of $32.8 billion on hand as of 30 of June, 2024, the group carried a net debt of $23.3 billion. The net debt to net total capital ratio was 5.5%, and the net debt to shareholders fund ratio was 6%. We received credit rating from Moody's, A2 Stable, and credit rating from Standard & Poor's, A Stable. As of 30 of June, 2024, the group had a total land bank of 132 million square feet. 74 million square feet was under development. 22 million square feet was held for rental. Nine million square feet was for hotel and service suite operation. And 27 million square feet was for pub operation. Photographic location, 28 million square feet was in Hong Kong and 69 million square feet was on the mainland and 35 million square feet overseen mainly in the United Kingdom.

Pass it back to you Gerald for Q and A section. Thanks very much, Simon. That was short and sweet, I hope. And now we will open the floor for questions. I can see many of you have joined us online today and questions have begun flooding in. I will go through each of them and consolidate your questions that you may have. Please keep them coming. Again, thank you to our chairman, our deputy chairman for joining us. I'll go to the first questions. CKA's profit before revaluation on a per share basis dropped 9.5%, largely because of the 48% drop in development contribution. Can you give us your overall thoughts on your results?