New World Development

Greetings. Welcome to New World Development's FY 2025 Annual Results Announcement Webcast for Analysts and Investors. I am Patrick Chong, Head of IR, and also the moderator for this session. First of all, let me introduce to you our management. They are New World Development's Executive Director and CEO, Ms. Echo Wong. New World Development Executive Director, Mr. Sid Nam Hoi. New World Development Executive Director, CFO and Joint Company Secretary, Mr. Edward Lau. New World China, COO, Mr. Benny Chan. If you have any questions... Please type your questions into the chat box on the webcast during Q&A session. I will read out your questions. Now I will pass the floor back to Echo. Thank you, Patrick. Friends from the investment sector, greetings. Welcome to New World Group's FY 2025 Annual Results Announcement. Time flies. Half a year ago, when I first shared our company's performance with everyone, I outlined three key work directions. First, focus on the property business, continuously advancing and expanding business development to ensure normal and stable business continuity, business as usual. Second, improve the company's cash flow and actively manage our finances. Third, continuously optimize operational efficiency and governance capabilities and regularly provide everyone with the latest business updates. Through our team's dedicated efforts over the past period, we have achieved some modest results. I would like to share three key points with you. First, on 30th June, we successfully completed... an HK$88.2 billion bank refinancing. This refinancing provides us with valuable time to focus fully on developing our core business. I would like to once again express my gratitude to every bank for their support. Besides, yesterday we successfully secured the first tranche of an additional HK$3.95 billion of committed loan facility yesterday. This amount will be used to address the company's debt-related needs. In the future, we also have the flexibility to scale up further. Second, our core business delivered outstanding results. Despite persistent market uncertainties, We successfully achieved our annual property sales target of HK$26 billion, with multiple projects in Hong Kong and mainland China selling exceptionally well. Retail and office leasing also delivered strong results, with K11 Museum and Arts Mall in Hong Kong achieving record high foot traffic, while sales across multiple tenant categories saw double-digit growth. Third, our debt reduction efforts have yielded initial results. Both total debts and net debts declined throughout FY25, while cash flow improved significantly and returned to positive territory, reflecting our group's gradually stabilising financial position. I understand that our recently announced four-year results shows a loss of HK$16 billion on the books. However, there is no need for undue concern, as this figure is primarily impacted by several non-cash provisions and losses of a one-off nature. I will elaborate on this shortly. Looking ahead to the coming year, we'll continue our three directions. focusing on our core business, actively managing finances and enhancing operational efficiency. Among these, I would like to highlight two key points. First, we will seize the opportunity presented by market improvements. With falling interest rates and a rebound in property market sentiment, we will continue to push forward with sales and accelerate cash flow recovery. Second, we must maintain highly prudent operations while pursuing steady progress. Current market uncertainties persist. Interest rates have only been cut once this year so far, and the trajectory still contains risks. Our debt reduction efforts are just beginning, with a significant journey ahead. Yet, I firmly believe our team possesses the capability to navigate all challenges. Next, I would like to discuss The progress of the seven measures to reduce indebtedness that I proposed at the last results announcement and how we achieved steady progress. First, we continue actively selling development projects. In Hong Kong, all three of our pavilion collection projects were met with enthusiastic market response and achieved outstanding sales results. These include North Point State Pavilion, which successfully kicked off the year when launched. Meanwhile, Deepwater Pavilion in Wong Chuk Hang has generated over HK$10.7 billion in sales since its mid-year launch, making it this year's top-selling new development. Last Friday, our first new project for FY26, House Mills in Kowloon City, sold out all units listed on its price sheet on the very first day of sales. In mainland China, we also successfully exceeded our elevated full-year targets. Guangzhou's Central Park View, the Sillage, Canton Bay, and also Shenyang, the Parksville, all delivered exceptionally strong results. Second, actively advancing our asset disposal plan. Through property sales and asset disposal, we successfully achieved our FY25 annual sales target of HK$26 billion. Our FY26 annual sales target will be further increased to HK$27 billion. Third, unlocking the value of the Group's farmland holdings to fully advance the Northern Metropolis project. The MaSik Road project in collaboration with China Merchant Share Co. commenced construction in March this year, set to deliver 2,300 units with sales expected as early as FY27. The first phase of the Yuen Long South project developed jointly with China Resources Land has completed the land premium payment. Construction is expected to commence within this year, with pre-sales anticipated as early as FY27. Fourth, we will enhance rental return. Our commercial properties in Hong Kong and mainland China are performing well. Office leasing remains robust despite current market conditions. and we will continue to strive to increase rental income. Fifth, streamline costs and reduce CAPEX and OPEX. We strictly manage expenses, with CAPEX and OPEX both showing significant further reductions in FY25. We will continue to prioritize cost efficiency in the coming period. Sixth, suspend dividend payments. We have temporarily suspended dividend payments to shareholders and perpetual bondholders to preserve cash. Seventh, proactive treasury management. We have completed the previously mentioned HK$88.2 billion bank refinancing, providing greater flexibility for future business development and financial needs. Moving forward, we'll continue to work diligently and fight every tough battle. Finally, I would like to express my gratitude to the management team, every colleague in the company, and all friends and institutions that have supported us. It is through everyone's united effort that the situation has begun to stabilize. Now, let me very quickly share our financial performance for FY25. Specifically, regarding core operating profits and segment results, Although we recorded solid contracted sales in both Hong Kong and mainland China in FY25, the property delivery volume was lower than FY24 due to the impact of mainland China's delivery schedule. Besides, we incurred some pre-opening expenses for several newly opened investment properties in FY25, So, core operating profit for FY25 decreased by 13% year-on-year, while segment results declined 4% year-on-year. Excluding the impact of asset disposals and new openings or new development, Expenses on revenue, the IP segment recorded a 2% increase in segment results. K11's segment results also rose by 4%, demonstrating that despite the continued relative weakness in the retail and office markets, our investment properties continued to deliver stable performance. Our FY25 loss attributable to shareholders was HK$16.3 billion, with the second half recording a loss of about HK$9.7 billion. While this exceeded the first half's loss of HK$6.6 billion, it was mainly impacted by several non-cash provisions and losses of a one-off nature. Notably, having previously adjusted valuations for some investment properties, the full-year fair value loss on IP for FY25 was only about HK$400 million, including a HK$300 million impairment on the office portion of 11 skies. Prior to property development, significant impairment charges were also made. Related provisions for the first half of FY25 amounted to HK$3.4 billion, while the second half of FY25 recorded about HK$5.1 billion. Although the market sentiment and transaction volume for Hong Kong real estate improved, in the latter half of FY25, property prices remained relatively weak. Therefore, we made corresponding provisions in line with market conditions. Besides, In second half of FY25, we recorded HK$5.2 billion of other provisions and one-off losses, primarily comprising three components. First, due to changes in Hong Kong's overall retail environment, we correspondingly adjusted the valuation of the 11 skies retail portion, resulting in a provision of HK$2.7 billion. Second, we disposed of certain long-dominant legacy projects in mainland China during the second half of FY25, resulting in a loss of about HK$1.2 billion. Third, bulk transactions and other businesses also incurred one-off loss of about HK$1.3 billion. On the expenses side, G&A expenses amounted to HK$3.5 billion, down 16% year-on-year. Decrease exceeded the 9% decline recorded in the first half of the year, mainly due to our ongoing organisational optimisation effort. By enhancing collaboration between mainland China and Hong Kong teams, we improved departmental efficiency across functions like IT, finance, HR and ESG, successfully achieving cost savings. CapEx amounted to HK$12.6 billion. A significant 15% decrease year-on-year, and it is also below our latest FY25 CAPEX guidance of HK$13 billion. This is mainly due to our continued strict control over CAPEX. In FY26, we'll further reduce CAPEX to below HK$12 billion. Regarding debts, our total debts continued to decrease. Reaching a level as of the end of June 2025, our total debt decreased by HK$5.7 billion compared to June 2024 and slightly decreased by HK$0.5 billion compared to December 2024. This is due to the refinancing completed with banks in the second half of FY25. Edward will elaborate more shortly. Notably, apart from total debts, our net debts also decreased, falling by HK$4.5 billion compared to December 2024. This is mainly due to our cash flow returning to positive territory. Regarding the refinancing progress and debt reduction that everyone is most concerned about, let me pass the floor to Edward, our CFO, to explain. Thank you, Echo. Regarding refinancing progress, I believe everyone has read our announcement. I will briefly summarise it here. The amount of our refinancing this time reached HK$88.2 billion. I would also like to take this opportunity to once again thank all banks for their support. As Echo mentioned earlier, completing this refinancing has strengthened our financial position, including... This refinancing has extended the earliest maturity date of certain bank loans to three years later, specifically 30 June 2028, thereby enhancing the group's short- to medium-term liquidity. As shown in the right chart, our debt, maturing within two years, decreased by HK$44.8 billion, falling from HK$73.8 billion in June 2024 to HK$29 billion in June 2025. Of this, HK$29 billion, HK$6.1 billion represents bonds maturing within the next two years. About 80% of this amount, or HK$4.9 billion, will mature in the second half of FY27. The remaining HK$22.9 billion consists of bank loans. Of this amount, about 98%, that is HK$22.4 billion, represents secured loans. This means Our debt, maturing in FY26, totals only HK$6.6 billion, with HK$1.3 billion being bonds. This refinancing also provides greater flexibility for our future business developments and financial needs. Regarding total debt... We successfully reduced it by HK$5.7 billion in FY25, from HK$151.6 billion in June 2024 to HK$146 billion in June 2025. At the same time, we successfully controlled the scale of net debts. reducing it from HK$124.6 billion in December 2024 to HK$120.1 billion in June 2025, a decrease of HK$4.5 billion. The net gearing ratio slightly increased to 58.1%, primarily due to shareholders' equity declining from HK$224.9 billion at the end of June 2024 to HK$206.7 billion at the end of June 2025. This decline was impacted by the previously mentioned property development impairment and one-off losses, offsetting the decrease in net debt. However, benefiting from interest rate cut in the U.S. and Hong Kong, our average interest rate decreased from 5% in FY24 to 4.8% in FY25. Consequently, the reduction in total debts combined with lower interest rates resulted in our total financing costs decreasing by HK$1.3 billion, from HK$8.7 billion in FY24 to HK$7.4 billion in FY25. I will pass the floor back to ECHO. Thank you, Edward. I will provide a detailed overview of each business segment. Regarding Hong Kong DP, our attributable contracted sales for FY25 reached HK$11 billion. All three Pavilion Collection projects launched in FY25 were well received by the market, demonstrating buyers' preference for the New World Development brand and products, as well as their confidence in us. Our Super Luxury project, Deepwater Pavilion in Hong Kong Island Southern District offers 825 units across two phases. Since sales commenced in May 2025, performance has been exceptionally strong. To date, over 620 units have been sold, generating total contracted sales exceeding HK$10.7 billion, making it the highest-grossing new development in Hong Kong this year to date. Our residential project, States Pavilion in North Point, offers 388 residential units. Launched in January during a relatively sluggish Hong Kong property market, it immediately set three major records in 2025. that is, becoming the first project this year to sell out its first batch of units on the same day, achieving the highest per square foot price for a new development on the Hong Kong island at the time, and reaching a peak price of HK$51,000 per square foot. To date, over 335 units have been sold, with total transaction value exceeding HK$3.7 billion. Our Kitech project, Pavilion Forests, commenced sales in July 2024, offering a total of 1,305 residential units. To date, over 690 units have been sold, with contracted sales exceeding HK$4.8 billion, making it the highest-selling pre-sale project in Kai Tech's runway area to date. Besides residential properties, we continued to advance the sales of the Group's office project in West Kowloon, Leveraging the group's effective sales strategy, the office project at 83 Wing Hong Street has attracted numerous owner-occupiers and investors. To date, the project has recorded cumulative total contracted sales of about HK$470 million since launch. The Twin Tower Landmark Grade A office project at 83 King Lam Street, Changsha 1, is a leasing project right now. And then there is the NCB Innovation Centre at 888 Lai Chee Kok Road recorded sales of HK$1.3 billion in FY25. Now, I will pass to Mr. Sid Nam Hoi to explain our upcoming property project deployment in Hong Kong and progress in the Northern Metropolis development. Afterwards, Benny will share updates on mainland property development. Mr. Sid, please. Thank you, Echo. I will outline our upcoming development projects in Hong Kong. We have ample land bank for short, medium and long term and will continue to drive sales with full force to ensure steady turnover. As Echo just mentioned, in FY26, besides units from our three Pavilion projects, we also have a series of new launches entering the market. This includes last Friday's debut of our first brand new FY26 project, and that is house meals. on Ngat Sin Long Road in Kowloon City within School District 41, all units listed on the price sheet sold out on the very first day of sales. Besides, we'll progressively launch other projects in Kowloon, including two bohemian collection developments in prime West Kowloon locations, one on Canton Road and the other on Kun Chong Street, plus a low-density luxury residence on Rose Street in Kowloon Town. Besides, the 530 units in Phase 3 of Pavilion Farm, Our development above Tai Wai Station are also expected to be launched in FY26. The above projects will collectively provide over 2,100 units in FY26. Furthermore, our JV projects will continue sales, such as the Knights Bridge in Kai Tak, Miami Key Double Coast in Kai Feng in Kowloon Bay, and also the Legacy Project. on Victoria Road and Mid-Levels West will also be launched within this year. The Chief Executive reiterated in last week's policy address the need to accelerate development of the Northern Metropolis and has already established the Northern Metropolis Development Committee. The government is currently conducting detailed planning for areas including the Sun Tian, Sai City, Ao Tam Mei and Lao Fao Shan. Meanwhile, survey and design work for the Hong Kong Shenzhen Western Railway commenced this year, with the goal of opening service by 2035. By then, the journey from Hong Shui Kieu to Tianhai will only take 15 minutes. Our group has long-standing operations in the district, enabling us to capitalize on policy alignment and accelerate development. We possess about 15 million square feet of farmland area, with existing plans expected to provide about 12 million square feet of land bank. Among these, two projects have already completed land premium payments, providing about 500,000 square feet of attributable GFA. a road project, a JV with China Merchants Share Co., which will provide 2,300 units. Construction commenced in March 2025, with the sales expected to commence as early as FY27. The other is the Phase 4 project in Long Tin Village, Yuen Long, developed in partnership with China Resources Land. Land premium payment has just been completed, allowing construction to commence immediately. This project will deliver over 700 units also for launch the earliest in FY27. Besides these two projects, several more are expected to complete land exchange process within the next one to two years. They include Yuen Long Lam Ho Village, Yuen Long Long Tin Village Phase 2, Long Tin Village Phase 5, and also in Sai Kung Sha Ha, estimated to add about 2 million square feet of attributable GFA for the group. Over the next three to five years, we'll continue pursuing urban planning applications and land exchange applications, which are projected to increase the group's attributable gross floor area by about 6.2 million square feet. Key projects include Tongyan Sanchun, Wing Kee Village, Wing Ling Village, and Shepang Hong Road. The planning application for Yunlong Shepang Hong Road was approved by the Town Planning Board in January 2025. And similarly, the Wing Ning Village in Yuen Long land-sharing pilot scheme project, the Town Planning Board recently approved amendments to the statutory plan this month to rezone the site for residential use. Regarding long-term outlook, the main projects currently planned include San Tin Lin Ban Village, Ngau Tam Mei and Lao Fao Shan, which together can provide nearly 3.2 million square feet of attributable GFA. In summary, I want to emphasize that we have Thank you, Mr Sitt. 26 September last year, the Politburo of the CPC Central Committee explicitly called for promoting the real estate market to halt, decline and stabilise, marking the arrival of a policy inflection point. Then on 13 June this year, the State Council Executive Meeting further proposed establishing a new development model for the real estate market, signalling an even clearer stance on achieving market stabilisation and boosting industry confidence. Since this year, local governments have actively responded with significantly accelerated policy rollouts. Major cities including Beijing, Shanghai, Guangzhou, Shenzhen and Hangzhou, Tier 1 cities, have implemented measures across multiple fronts, such as optimizing or lifting purchase restrictions, lowering down payment ratio, reducing mortgage rates and refining price caps. Notably, Shenzhen's new policy released on 5th September this year removed purchase quantity restrictions in multiple districts, further boosting market confidence. Consistently adhering to our philosophy of developing high-quality projects, we have successfully capitalized on policy dividend, achieving outstanding results across multiple regional projects. In FY25, the group's mainland contracted sales reached 14 billion RMB. Even after adjusting our annual target upward in response to market changes, we successfully exceeded our goals. Numerous projects achieved individual sales exceeding 1 billion RMB. For instance, Guangzhou Central Park View, a benchmark luxury project, sold 2 billion RMB upon its launch, demonstrating both strong pricing power and market demand. Other projects like Guangzhou New World Sillage and Canton Bay and Shenyang Parksville reflect the market's support and recognition for high-quality residential developments. In addition to outstanding sales performance, we successfully delivered three high-end residential projects in this fiscal year, including Hangzhou New World River Opus, Guangzhou New Metropolis Mansion, and Shanghai City Gather. Then regarding asset disposals, in FY25, we saw the Beijing Xinjing office, Ningbo New World office building, as well as commercial properties and parking spaces in locations including Guangzhou, Central Park View, Lingnan New World, and Shenyang will continue asset disposal to accelerate capital recovery. In the coming years, the group will continue to launch property development projects in mainland China, First-year cities are beginning to relax purchase restrictions, guiding the market towards high-quality products. Over the next two years, we will continue to market premium projects including Guangzhou Central Park View, the sillage, Shenyang, the parks view, and so on, high-quality projects. And Shenzhen Longgang 188 project will commence sales in FY26. This is a large-scale project. with total gross floor area of 650,000 square meters, offering 3,000 residential units across two phases. Its prime location at the core intersection of Luohu, Yantian and Tingshan districts provides significant transportation advantages, with direct access to border crossings and high-speed rail stations within 30 minutes. Over the coming year, the group is also in negotiations for multiple asset disposal. We'll continue to adapt to market changes and leverage our sales strengths We are confident in achieving our annual targets. Now I will pass the floor back to ECHO. Thank you, Benny. As mentioned at the beginning, regarding IPs, we continued to deliver solid performance in FY25. Despite the challenging macroeconomic environment, overall segment results and K11 segment results grew 2% and 4% year-on-year respectively. In Hong Kong, our office leasing performance remained strong. Our occupancy rate performed well, with K11 Atelier in Tsim Sha Tsui and North Point, as well as Manin Building and New World Tower in Central maintaining high occupancy rates. For shopping malls, K11 Museum and Art Mall maintained high occupancy rates of 96% and 100% respectively. with foot traffic reaching record highs in FY25. In August this year, both malls achieved their highest single-month foot traffic since opening, with overall foot traffic increasing 20% year-on-year. Leveraging its prime location, unique positioning and robust foot traffic, Musea continues to attract numerous major international brands. Since July last year, over 10 international brands First-tier luxury brands have successfully opened new stores, upgraded existing stores or expanded their footprint. Among these, Loewe's newly upgraded concept store, St. Laurent's Hong Kong flagship store and Rolex's special concept store opened in FY25. Upgrades for AP and VCA stores were completed during the recent summer holiday period. Looking ahead, Prada's new duplex store and Balenciaga's new store will open sequentially in FY26. This summer, international luxury brands at Musea achieved over 20% year-on-year sales growth. Besides, we continue to promote... interactive experiences for our customers, with two major events taking place at K-11 Museum this summer vacation. First, the Cristiano Ronaldo Hong Kong Museum, the first of its kind in Asia, opened in early July, drawing numerous fans. Second, the large-scale exhibition of the popular Japanese anime character Chikawa was held at K-11 Museum's waterfront in August. These events further boosted museums, food traffic, and sales performance. Atmore, positioned to target the Gen Z market, has capitalized on the green economy trends by actively introducing multiple anime and trendy pop toys brands. Examples include the globally popular pop mart and card game giants Caillou and Toys R Us' first live play concept store in Asia. successfully cultivating a stable young consumer base. The grain economy has significantly boosted sales performance for related merchants with sales from anime and trendy pop-toy merchants increasing by over 65% year-on-year in FY25. In mainland China, our overall project occupancy rates remain sound primarily due to our effort in brand enhancement and tenant mix adjustments. which delivered richer experience to consumers and sustained consumption momentum. Shenyang K11 introduced seven new brands to northeast China and Shenyang, a first-door in FY25, co-hosted over 30 events with tenants, attracted more than 13 million visitors throughout the year, and achieved record-breaking sales. During FY25, Two new K11 projects opened in mainland China, Shenzhen E-Coast and Ningbo K11. Shenzhen E-Coast, the first K11 flagship project in mainland China, grandly opened before this year's May Day Golden Week. Since its opening, it has recorded over 12 million visitors. averaging 100,000 daily food traffic. On the first day of May Day holiday alone, 300,000 people came, and high food traffic was maintained during public holidays like the Dragon Boat Festival, establishing it as a new cultural and tourism hotspot in the GBA. Ningbo K11 was opened in September last year and has gained strong market recognition. Since opening, it has recorded more than 5 million visitors. The project has also brought several new stores to the local area, including Ningbo's First. Zutaya Bookstore, establishing itself as a landmark in Ningbo and the East China region, in the coming period will continue to see several major investment property projects officially open, including Guangzhou's second K-11 will open on 29th September 2025, that is next Monday, creating another landmark. TOD complex for Guangzhou, Changlong, Wangbo. On 28 May this year, we signed a strategic cooperation agreement with the Shanghai government, officially launching the major project K-11 Elysia to establish a lifestyle hub for high-end consumption and cultural experiences along Huaihai Road. The K-11 office Atelier section will open. in the second half of next year with key initial partners including MS and a Singapore-based law firm, Rajat and Tan. Meanwhile, the Hangzhou New World Arts Centre project has entered its harvest phase. The project boasts a total GFA of 740,000 square metres. Apart from residential units, it encompasses diverse formats, including K-11 art mall, K-11 atelier, a hotel, saleable commercial components such as office towers and retail streets. Office buildings and commercial streets have been progressively delivered. Phase 2 has reached its structural completion and is expected to achieve full completion by the end of 2025. Regarding capex, as shown in this chart, you can see that our capex for FY25 further decreased from HK$14.8 billion in FY24 to HK$12.6 billion, mainly due to 1. We continued to strictly control spending on each project, optimizing and enhancing construction cost efficiency while maintaining high building quality. Two, regarding land bank, we aligned with government policies this year, seizing opportunities to convert farmland into land bank. This reduced both the cost of replenishing land bank and capital expenditure. In FY26, we'll continue our efforts to control capex, strictly limiting it to below HK$12 billion. In terms of operating expenses, we have optimized our corporate structure and processes to reduce daily operating expenses. Our G&A expenses in FY25 amounted to HK$3.5 billion, representing a 16% decrease compared to the previous year. Comparing with FY23, it is down 30%. We'll continue to effectively control our operating expenses, ensuring that every dollar counts. Based on our current financial situation, we have decided to continue suspending dividend payments and perpetual bond coupons. I'd like to take this opportunity to review our progress in treasury management. First, our company successfully completed Second, Third, Fourth, Overall total debt continues to decrease with net debt reduced by HK$3.6 billion over the past year and the net gearing ratio has stabilised. Moving forward, we will continue to enhance our company's cash flow, actively manage our finances and prudently handle our debt obligations to achieve steady progress. I would like to once again express my sincere gratitude to all investors, especially banks, for their tremendous support over the past few months. This has strengthened our confidence, and we believe the future will get better. Thank you all. Thank you, Echo. Now we will start Q&A session. We have already received many questions. so we have actually categorized them briefly our management will answer them one by one first question our debt position so in fy25 net debt decreased so does the company have concrete goal for debt reduction and timetable let me take this question now Reducing indebtedness is our important work, and I have been emphasizing this. In the coming year, we will strive for progress and stability. We will seize market improvement opportunities to manage our treasury and cash flow. We have put in place seven measures to reduce indebtedness, and this year you have seen initial success and achievements. Our total debt and net debt in FY25 came down by HK$5.7 billion and HK$3.5 billion respectively. Well, this year we have completed HK$88.2 billion bank refinancing. For the group, we increased short-term and medium-term liquidity. As a result, in the future, in the coming few years, we'll have more time to steadily develop with full force our core businesses. We will continue to strive for steady progress and promote sales and actively improve cash flow to reduce total debt. That is our topmost target. We have not set short to medium term target for net gearing ratio because That involves a lot of asset disposal progress, cash recovery and interest rate environment factors. Thank you, Echo. Next question is related to your prep. So some time ago, New World announced that for a number of perpetual bonds, coupon payment will be deferred. So now you have completed the refinancing project. When are you going to resume payments? In the market, there are rumors that the company will discuss with bondholders about LME options. So when will there be a concrete proposal? Edward, can you take the question? Thank you, Echo. Concerning deferment of payment of perpetual coupon, well, our group has adhered to our prudent capital management principle, and that is a decision to preserve cash. All along, our company has been actively managing our finances. Our goal is to lower total debt. We comply with all debt obligations for perpetual coupon distribution. We comply with all contractual terms in our action. So in relation to coupon payments and related changes about the perpetual, we will go according to the contract and related regulatory requirements. And at appropriate times, we will make disclosure and make announcement. Recently in the market, there are a lot of speculations and rumors in the media about New World. So everything should be based on official announcement. Please do not believe in market rumors. As said earlier, our company has the objective of reducing indebtedness. So the management will continue to keep an open mind to assess different financial tools. In the future, if there is concrete arrangement, we will make disclosure according to the laws. Thank you, Edward. The next question is also about debts. So all along, the company emphasizes that reducing indebtedness is the goal. But yesterday, you took out a new bank loan. So what is the use of the proceeds? And for this new bank loan, Is it in conflict with your goal of reducing indebtedness, Edward? Thank you, Echo. As Echo mentioned just now yesterday, we got the first tranche of additional HK$3.95 billion committed credit facility. We're going to use it to meet debt-related needs of our company. As stated in the announcement in the future, we can increase the scale according to needs. As said earlier, this year we have successfully controlled the scale of net debt. For the whole year, net debt decreased by HK$3.5 billion. This shows that our cash flow has improved. While risk will be controllable, we will make good use of financing tools to help our company to increase or enhance liquidity. We will continue to actively improve our cash flow and expedite capital recovery and also our asset disposal plan. So for all these goals, they are for the purpose of reducing indebtedness in the long run. Thank you, Edward. Next question is about the majority shareholder. Will the majority shareholder consider injecting capital? I will take this question. Sometime earlier, we issued an announcement to clarify. So far, we have not received any capital injection plan from the majority shareholder. This question is a similar question. It says, right now, Is it true that the company continues to undertake that there won't be rights issue? If there is no rights issue, will you consider share placement? If so, then are you going to place the shares to the majority shareholder? For CTF Service and CTF Jewelry, recently they issued convertible bonds one after the other. Will New World also consider issuing CB? Let me take this question. Some time ago, we said that Our major goal is to improve our cash flow right now. As management of the company, we will prudently consider any capital tools and options. But so far, we do not have any plan about rise issue, share placement, or issuance of convertible bonds. Thank you, Echo. Next question, about this year's P&L. This year, for the whole year, results still showed loss of more than $10 billion. So at the next result announcement, do you think there will still be a loss? When do you think you can achieve a turnaround, Edward? Thank you. Just now, Echo said that this year, on the book, full-year results or full-year loss was affected by one-off provisioning and one-off... So there are impacts about interest rate environment, overall macro market environment and so on. The U.S. Fed so far had cut rate once, but overall interest rate trajectory still sees a lot of uncertainty. It is difficult to make any forecast now. As mentioned just now, we'll continue to optimize our operating efficiency. We will enhance our property sales results and recurring revenue. We will strictly manage our expenses. We will try our best to achieve steady progress. And when the market improves, we are confident that our profit will improve. The next question is about 11 skies. Are you talking with airport authority about lowering rent or selling 11 skies? Let me answer this question. All along we have got deliberation with airport authority. There are external rumors about 11 skies and the airport authority has made a response sometime earlier. You can take reference from that response. So far we do not have anything to add. Thank you, Echo. Next question is about the recent policy address. The policy address states that the government wants to expedite development of the northern metropolis. What kind of help will that be to New World in specific? Mr. Sip, thank you. Echo. The group welcomes the government's decision to expedite development of the northern metropolis, and that will be the setting up of Northern Metropolis Development Committee. This is conducive to the creation of new economic... opportunities for Hong Kong. We have 15 million square feet of farmland land bank. A lot of them is in the northern metropolis prime site. We will use different channels to release value of the farmland and to expedite capital recovery. We'll actively bring in strategic working partners to enhance development potential. Now, we work with China Merchant Shell Co. in Fenlang Massic Road project. We have completed payment of land premium. And this year, in March, construction commenced. 2,300 residential units can be offered and sales can start in FY27, the earliest. We also work with China Resources Land in Yunlong Longtingchun Phase 4. We completed land premium payment this month. After that, construction will commence. 700 units can be offered and they can be launched as soon as FY27, the earliest. Thank you. The next question is about mainland China property developments. So what are the management's views? In Shenzhen, recently there are new policies released. What kind of help will that be to the company? Benny, thank you. Echo. Yes, in Shenzhen, there are two projects that will be launched soon in the market. In Shenzhen, there are new policies. They will definitely help the sales of our new projects. Let me add a few points about the new policies. They cover 80% of the areas of Shenzhen. Number of units purchased restriction is abolished for non-Shenzhen hukou people. The purchase restrictions are lowered. And then for first unit and second property unit mortgage rate, it is unified at 3.05%. And this has lowered the cost for property buyers significantly. And it also helps the purchase desire. In the first week after the new policies, for first-hand residential transactions in Shenzhen, comparing with August, same period, there is an increase by 40%. September and October are traditional peak seasons. Together with these new policies, turnover is being driven, and the main demand is from upgraders. And for our two projects in Shenzhen, the first one is the Longjiang 188 project, It is in the non-restricted area. There is convenient traffic. Within 30 minutes, people can go to the border control points and high-speed rail station. Apart from local residents, there are many Hong Kong people who may be interested to buy properties in Shenzhen. They will be attracted to the projects. Another project in Shenzhen is in Nanshan, Sealy Urban Renewal Project. So all the demolition works had been completed. The main body construction is being approved by the government already in 2026. We will launch the project to the market. Thank you, Benny. Next question about K11. Some time ago... The former CEO of New World, Dr. Adrian Chang, established K11 by AC. So together with New World Group and K11 brand under the group, what are the relationship? Let me take this question. K11 is wholly owned, registered trademark and brand of our group. When Dr. Adrian Chang left our group, he sought the consent of our group to use K11 by AC brand. K11 by AC, current investment, businesses and operations, including the asset light management projects, are not related at all with K11 and New World Group. At the same time, the Hong Kong K11 museum that we are operating and managing, K11 Art Mall, Guangzhou K11 and Shanghai K11, and also the K11 projects mentioned in our annual report are totally not related to K11 by AC. Finally, I would like to supplement that apart from our group series of companies, K11 series under our group, At present, do not manage other property projects developed by third parties. Thank you, Echo. Next question is about asset disposal. Some time ago, there are rumors in the market about K11 Art Mall. Apart from that, does the group have plans to sell Shanghai K11? This year, regarding asset disposal, do you have any concrete goals? No, the market is not that good. There are many developers which want to sell properties to achieve encashment. So when you dispose of assets, do you encounter big difficulty? Let me answer this question. Regarding... false market rumors we will not make further comments but I would like to state the point that from time to time our group receives asset inquiries from potential buyers this shows that our assets are of good quality and they are attractive in the market in the market There is both buying and selling. This is normal. These are normal behaviors. I would like to emphasize that we will only sell our assets when our targeted price is reached. Because of time, I will now read out the last question. This question is about recent rate cuts. How much help is brought to your interest expenses? How much interest is saved in the coming FY? How much money do you think you need to repay? Edward, thank you, Echo. Yes, rate cuts helps our group. to lower funding costs. Based on our current debt structure, if interest rate falls 1%, we can save around HK$800 million annual interest expenses. As mentioned earlier, debt that will mature in the coming one year amounts to only HK$6.6 billion. We will actively do financial planning. We'll use diversified tools to manage our refinancing risk. Thank you, Edward. Finally, once again, thank you all for joining New World Development's FY 2025 Annual Results Announcement today. Thank you.