CK Asset Holdings Limited

Welcome to CK Asset Holdings 2025 Interim Results Analyst Briefing. We have with us today two Executive Committee members, Mr. Simon Mann and Mr. Gerald Ma presenting the group's interim results and to answer questions the audience may have. Please submit your questions using the webcast platform and we will handle those during the Q&A session. Thank you, Mr. Mann and Mr. Ma.

Thank you, Sophia. Let's get right to it. 2025 interim results highlights. Revenue $39.13 billion, up 12.7% from 2024. Profit before IP revaluation, $6.8 billion. On per share basis, $1.94, up 1.6%. We recorded a IP revaluation deficit of $503 million. As a result, profit attributable to shareholders came to $6.3 billion or $1.80 on a per share basis, down 26.2%. We declared a dividend per share of $0.39, which is the same as first half 2024. Net book value up 1.7% to $112.65. Our recurrent revenue has gone up to $31.76 billion. and our recurrent profit contribution has improved to almost 8.5 billion. As a percentage of the total, 81% of our revenue and 83% of our profit contribution are now recurrent in nature. 27% of our contribution from Hong Kong, 15% from the mainland, and 58% from overseas. turning to divisional performance. Property sales. Revenue came to $7.34 billion, up almost 59%. Profit contribution, $1.77 billion, down 2.9%. Contribution margin was 24%, which is pretty decent as an overall margin, but weaker compared to 2024, and I'll explain, give you some highlights and details in the pages to follow. Major contribution from three projects highlighted here, Regency Garden from Shanghai, the Greenwich from Beijing, and Lagonville from Beijing. If you look at the contribution margin from the mainland and overseas, they're pretty healthy, 38.4% and 30.6%. You see that the Hong Kong contribution margin was 2.6% largely because of provisions we took for two projects, Victoria Blossom and Blue Coast. If we exclude these two numbers, the provisions that we took for these two projects, the pre-provision margin would have been close to 42%. We still have $28.5 billion worth of contracted sales, which we have not recognized, the bulk of which almost $23 billion is scheduled for recognition in 2025, later on this year. So we do have quite a bit of cash coming in towards the end of the year, and mainly from a couple of projects. The Blue Coast, the Coastline, Perfect 10 in Singapore, and the Greenwich in Beijing. Property rental, $3 billion of revenue, down 3.7%. $2.3 billion of profit contribution, down 5.3%, and still a pretty healthy contribution margin of 77.1%. Overall occupancy in Hong Kong was around 86%, and our European portfolio came in at over 99%. Major contribution, Cheung Kong Centre, $477 million, Hutchinson Logistics Center, $328 million, and the Whampoa, $315 million. If you look at the revenue by use of property, you see a big drop, 11.5% for our retail properties from $971 to $859 million. If you look at the profit contribution, by geography, you see that the biggest drop was from the mainland, 43.9%, $139 million, down to $78 million this year. This is because the joint venture we had in Shanghai, Shanghai Westgate Mall and Tower, had expired, so we no longer have the contribution from the mainland or from those retail properties. In addition to that, if you look at the social infrastructure, we recorded a 3.5% increase from 648 to 671 million of revenue. So this does not include the social infrastructure we have from Sweden and our German portfolio, which we acquired late last year. They were structured as an investment, so it's not included here. So if on a really apple-to-apple basis, if you had included the social infrastructure from Sweden and Germany and excluded the impact of Shanghai Westgate Mall, both on the revenue and on the profit contribution basis, there would be a slight increase compared to 2024. Altogether, we have 22.4 million square feet of investment properties but we recorded a fair value decrease of $542 million, which is a before tax and before non-controlling interest number. That number mainly was caused by the reduction in fair value of 1881 heritage.

Turning to the hotel and service suite,