New World Development

Good afternoon. Welcome to New World Development's FY2026 Interim Presentation, Online Analyst and Investors Meeting. I am IR Director, Patrick Chong. I am the moderator for this meeting. First of all, let me introduce our management in attendance. They are New World Development Executive Director and CEO, Ms. Echo Wang. New World Development Executive Director, Mr. Sidnam Hoy. New World Development Executive Director and CFO and Joint Company Secretary, Mr. Edward Lau. New World Development Executive Director and New World China CEO, Mr. Benny Chan. If you have any questions, please feel free to type into the chat box on webcast. During Q&A session, I will read out your questions. Now I will pass the floor to Echo. Friends from the investment community, greeting. A year ago, at the interim results announcement for FY 2025, when I first appeared before you as CEO, I proposed seven strategies to reduce debt. Namely, one, accelerate property sales. Two, sell non-core assets. Three, unlock the value of farmland. Four, increase rental return. Five, streamline costs. Six, suspension of dividend payments. Seven, proactive treasury management. At the same time, at last September's annual results announcement, I also pointed out that after completing HK$88.2 billion in refinancing and implementing a series of measures by the group, our company's situation has begun to stabilise. Today, I can tell you that our company's operations and finances remain stable. The seven strategies to reduce debt have worked. Among them, I would like to highlight three points. First, our business continues to improve. Our contracted sales in the first half reached HK$13.8 billion, more than half of our full-year target of HK$27 billion. Leasing for our shopping malls and office spaces has also steadily improved. On the cost side, we took a three-pronged approach to reduce capex, OPEX and financing costs. Second, we completed the debt exchange program, successfully boosting shareholders' equity. We carried out a debt exchange program from November to December last year, which significantly reduced our perpetual bonds by HK$8.7 billion and our USD bonds by about HK$400 million, and also increased shareholders' equity by HK$8 billion. This bond swap will lower our future perpetual bond costs and is an important step in our debt reduction efforts. Third, our loss narrowed and financial costs continued to decline. Our company's loss for the first half this year decreased to HK$3.7 billion from HK$6.6 billion in the same period last year, down more than 40%. This figure is also lower than the HK$9.7 billion loss from the last fiscal year. This loss is mainly due to non-cash provisions we made for some DP and IP projects in response to market conditions. Excluding these non-cash provisions, our profit attributable to shareholders for this period should be positive. As interest rates entered a downward cycle, our total financing cost for the first half decreased by about HK$600 million compared to the same period last year, with average interest rate down by 80 basis points. I would like to highlight two points. First, we plan to launch a total of over 1,300 units in Hong Kong in the second half of FY26. including the remaining units from our two Pavilion projects, Phase 3 of Pavilion Farm, and a series of new projects. Additionally, contracted sales from our two new projects, House Mills and Austin Bohemian, totaling about HK$1 billion, will also be recognised in the second half of FY26. Second, our net debt as of last December increased compared to June due to the timing of property money collection, accounting treatment of our Hong Kong JVs and the repayment of construction loans for those JVs. So Edward will explain this in greater detail later. Going forward, we will continue our seven strategies to reduce debt, seizing opportunities as the market improves. With market conditions improving and interest rates falling, we will accelerate sales while continuing to reduce OPEX and CAPEX. There is still a long way to go in our debt reduction journey. I am pleased to see that the company's operations and financial position remain stable. I have confidence that the team and I have enough capabilities to continue to meet the challenges ahead. Now, I will very quickly share with you our financial performance for the first half FY26. In terms of core operating profit and segment results, although we recorded solid contracted sales in the first half, the timing of property delivery in Hong Kong and mainland China impacted the pace of revenue recognition. Property delivery volume in the first half, FY26, was lower than that in the same period of FY25, resulting in an 18% decrease in core operating profit to HK$3.6 billion and a 24% decline in segment results. Regarding IPs, excluding the impact on revenue from assets sold and newly opened properties, the IP segment's performance recorded a 5% increase, mainly due to our strict cost control. which has driven continuous improvement in the IP segment's profitability. Our loss attributable to shareholders for first half FY26 was HK$3.7 billion, down over 40% year-on-year, mainly due to several one-off non-cash provisions. among which the fair value loss on IP was above HK$1.1 billion. On DPs, we also made corresponding non-cash provisions in line with market conditions. As I just mentioned, excluding these non-cash provisions, our profit attributable to shareholders for this period should be positive. On expenditure side, G&A expenses was HK$1.5 billion, down 18% year-on-year, mainly because we continued to optimise our organisational structure and the cost-saving measures previously implemented have taken effect this year, successfully delivering further cost savings. For FY26, our capex guidance is below HK$12 billion. In the first half, we spent HK$3.5 billion, down 30% year-on-year. On the debt front, our total debt continued to decrease. As of the end of December 2025, total debt was HK$1.7 billion lower than in June 2025. Our net debt increased by HK$2.6 billion since June 2025. The main reason will be explained by Edward later. Next, I would like to talk about the situation in the Hong Kong and mainland China property markets. The Hong Kong property market has already rebounded by over 5% from its recent low, but compared to its 2021 peak, it is still down by about 25%. The U.S. is expected to continue to cut interest rates, and combined with the strong performance of Hong Kong stocks over the past year, many prospective buyers are shifting their stock market profit into the real estate market, which we believe will help drive the market's recovery. Our company's future focus is on continuing to push sales forward with full force and accelerating cash recovery. Over the past six months, we delivered strong results in the Hong Kong market. The pace and performance of our sales have further improved, with several projects selling strongly. Contracted sales for the first half reached HK$10.3 billion, the highest since 2021. I will provide a detailed explanation later. As for the mainland property market, to improve the on-site sales environment, we postponed the launch of new projects in Shenzhen. As a result, contracted sales decreased compared to last year, with contracted sales in mainland China reaching about 3.2 billion RMB in the first half. But you don't need to worry, as this is within our expectation. In the second half of the year, we plan to launch the No. 188 Shenzhen New World Project, which will offer around 3,000 units to contribute to our sales in the second half. Overall, we are confident that we can achieve our HK$27 billion target set at the beginning of the year. And we have also made good progress in the northern metropolis and our farmland projects. Later on, Mr. Sid will share with you shortly. In terms of IPs, in Hong Kong, K11 Musea and K11 Atelier at Victoria Dockside, as well as K11 Art Mall, continue to maintain near 100% occupancy rates, while other office buildings have also recorded significant improvement. Among them, the Manning House and New World Tower in Central have occupancy rates of 97% and 90% respectively. Our Twin Tower office on King Lamb Street in Changsha 1 was completed in mid-2024 with... floor area of 1.2 million square feet. It has achieved a 74% occupancy rate in mainland China. The flagship K-11 project E-Coast in Shenzhen, which opened in April last year, and K-11 Hansi Guangzhou, which was opened at the end of September last year, have both seen sustained increase in occupancy rate. And our office, K11 Atelier Huaihai, part of K11 Alicia in Shanghai, is expected to begin... occupancy in the second half of this year, with a pre-lease rate already above 50%. Overall, our company's operations remain stable and continue to improve. As for the debt situation that everyone is concerned about, I will defer to our CFO Edward to explain. Thank you, Echo. As Enko just mentioned, we carried out a debt exchange program last November and December to give our bond investors another option. allowing them to exchange their existing perpetual bonds and bonds for new bonds tied to the Victoria Dockside project. Here's a quick update on the result of that program. Investors submitted a total of about HK$17.9 billion of perpetual bonds and HK$1.9 billion of bonds to take part in this exchange, all of which were accepted by us and were exchanged for new perpetual bonds and bonds. Upon completion of the debt exchange, the nominal value or the book value of our perpetual bonds has been reduced by HK$8.7 billion from HK$35 billion to HK$26.3 billion. The book value of the USD bonds has been reduced by HK$400 million from HK$17.7 billion to HK$17.3 billion. The impact of the decline in perpetual bonds and USD bonds, combined with the HK$400 million cash expenses from the perpetual bond exchange, resulted in an HK$8.7 billion increase in shareholders' equity. It should be noted that this debt exchange led to a decrease in perpetual bonds, which is part of total equity. While shareholders' equity increased, these two offset each other, so the net gearing ratio will not change significantly. Our net debt as of December 2025 rose by HK$2.6 billion compared to June, mainly due to, first, in the first half of FY26, although the immediate repayment ratio for our projects is generally high, such repayment plan typically takes 120 to 180 days to collect payment. For example, House Mills in Kowloon City and Austin Bohemian in West Kowloon. So the cash will only come back during second half of FY26. Second, a large portion of our contracted sales for FY2025 and first half of FY26 came from JV projects of Deepwater Pavilion, Pavilion Forest, the Knights Bridge and the Legacy. The cash received from these JVs is not recorded as part of the listed company's cash until it is distributed to us. Third, in first half FY26, the construction work for some of our JV projects has been completed, so the related construction loans have also matured. The developers we partnered with have already repaid those loans. As for the remaining loan guarantee, the cash from project sales is expected to be sufficient to repay it. Regarding total debts, We reduced total debt by HK$1.7 billion in first half FY26, from HK$146 billion in June 2025 to HK$144.3 billion in December. Net debt increased by HK$2.6 billion from June 2025 due to the factors mentioned earlier. Additionally, because of one-time non-cash impairments on IP and DP, our net gearing ratio rose slightly, but it remains below 60%. Benefiting from rate cuts in the US and Hong Kong, our average interest rate decreased by 80 basis points from 4.7% in first half FY25 to 3.9%. our total financing cost decreased by HK$600 million from HK$3.7 billion in first half FY25 to HK$3.1 billion in first half FY26. Now back to ECHO. Thank you, Edward. In this part, I will provide you with a detailed update on each of our businesses. As mentioned earlier, Regarding Hong Kong property development, benefiting from the recovery of the Hong Kong property market combined with the effort of our team and our strong brand effect, our contracted sales for first half FY26 reached HK$10.3 billion, the highest since 2021. In first half FY26, we launched three major new projects. Two of them are projects from our Bohemian collection targeting... young people with sophisticated lifestyle demand these two new projects are house mules in the school district number 41 of kowloon city and austin bohemian near the west kowloon high speed rail station they were launched in september and december of last year respectively Both projects were met with strong market demand, selling out all available units on the first day of launch. Their combined contracted sales reached HK$1.2 billion. Besides, the legacy in western mid-levels launched with Henderson Land in September 2025. is the residential project with the most units recording sales of over HK$100 million in 2025. To date, the legacy has sold a total of 36 units with combined contracted sales reaching HK$6.1 billion. In addition to the new projects for FY26, the three pavilion collection projects we launched in FY25 continued to be in high demand in the market. Our super luxury project in Hong Kong's southern district, Deepwater Pavilion, has achieved outstanding sales since its launch last May. To date, Deepwater Pavilion has sold 768 units, representing over 93% of its total number of units. with total contracted sales exceeding HK$13.3 billion, making it the top-selling new development in Hong Kong for contracted sales in 2025. Last month, a four-bedroom unit was sold at HK$107 million. per square foot price was over HK$63,000, setting a new high for similar properties in the area. Our residential project in North Point State Pavilion sold out all 388 units by mid-December of last year. Total contracted sales exceeded HK$4.2 billion. Our project in Kai Tak Pavilion Forest was launched in July 2024. It offers a total of 1,305 residential units. To date, over 890 units have been sold, with total contracted sales of about HK$6.4 billion, making it the best-selling pre-sale project in the runway area of Kitech to date. Now, Mr. Sid will explain our upcoming Hong Kong property developments and the progress in the northern metropolis. Afterwards, Benny will also update you on the status of our property developments in mainland China. Thank you, Echo. I will talk about our upcoming development projects in Hong Kong. we will continue to push sales with full force. In second half FY26, besides continuing to sell units from the two Pavilion projects, we also have a series of new projects to be launched to meet market demand, including two projects in Kowloon. Our first brand new project of the year on Rose Street, Kowloon, focusing on low-density luxury residential project with large three to four-bedroom units, and also the new bohemian collection in Tsim Sha Tsui adjacent to Kowloon Station and West Kowloon, adjacent to Austin Station and West Kowloon High-Speed Rail Station, which was just named Grand Austin Bohemian yesterday. In addition, we have 540 units at Phase 3 Pavilion Farm on top of Tai Wai Station, and they are expected to be launched in the second half FY26. The above projects will altogether offer over 1,300 units in second half FY26. Besides, our other JV projects will continue to be launched, such as the legacy in the western mid-levels, the Knights Bridge in Kai Tak, Pavilion Forest in Kai Tak, Double Coast Miami Key, and also Typhoon in Kowloon Bay. And in the northern metropolis, In the government's budget, the day before yesterday, the government announced that it will accelerate investment in the northern metropolis development to unlock potential of private land. We have been actively supporting the government's policies with two of our projects already broken ground in 2025. The first is the partnership project with China Merchant Shell Co. on Ma Shik Road in Fenling, which will provide 2,300 units. It broke ground in March 2025 and is expected to be launched for sale as early as FY27. The other one is Longtingquan Phase 4 project in Yunlong, a collaboration with China Resources Land. We paid the land premium in September 2025 and we commenced construction in November. This project will offer over 700 units and is expected to be launched in FY2027 at the earliest. In addition to Northern Metropolis, our other farmland projects are also progressing smoothly. For example, the Sai Kung Sha Ha project. The planning application for residential use of the additional land was approved by Town Planning Board last November. In summary, we have already secured our medium to long-term supply to support the group's development plan. I will now hand over to Benny to talk about our mainland property developments. Thank you, Mr. Sid. Since July 2025, overall policy direction for the mainland property market has been very clear, adhering to high-quality development. As financial support and subsidy policies continue to penetrate, coupled with optimizations of the city-specific measures, such as Shanghai's latest seven measures, sales in first-tier cities have begun to recover. Purchasing confidence has further strengthened. To improve on-site sales environment, we delayed the launch of new project in Shenzhen. As a result, our contracted sales in the first half decreased by about... decreased. In the first half, contracted sales was around 3.2 billion RMB. Our focus in the first half was on clearing the inventory of existing projects. Among these, New Metropolis Mansion... Phase 1 has been delivered, while New World Guangzhou Canton Bay and the silage had already been sold out and been fully delivered. In Guangzhou, Central Park View has been is continuing to be sold, and Shenyang Parksville continues to lead the region in sales. This year, we'll continue to roll out our existing premium projects. Our urban renewal project in Shenzhen, New World No. 188, will also debut in the first half this year. This project has a total GFA of around 630,000 square metres. It will offer about 3,000 residential units, along with a 60,000 square metre pedestrian shopping street. aiming to create a high-quality Hong Kong-style living community. The first residential phase, Wellspring, is expected to be launched for sale in Q2 2026. This project has significant transport advantages. Located near the Grand Stadium in the Central Hub, it benefits from a three-zone intersection with direct access to the border crossing and high-speed rail station within 30 minutes. Meanwhile, another URO project A project in Sili located in the heart of Nanchang's innovation district is progressing smoothly. It is expected to go on sale in Q3 2026. This project's residential area is around 65,000 square meters and will be able to attract high net worth talent from the local innovation and technology sector. Looking ahead, 2026 is the opening year of the 15th Five-Year Plan and the market will continue to improve with policies centred on high-quality development. We'll continue to maintain our outstanding brand influence and strong product delivery capabilities adhere to high-quality standards and drive our business towards steady positive growth. Back to Echo. Thank you, Benny. As I mentioned at the beginning, in terms of IPEs, we continued to perform well in the first half of FY26, with overall segment results growing by 5% year-on-year. In Hong Kong, our office occupancy rate continued to rise, with K11 Atelier at Victoria Dockside maintaining near 100% occupancy rate. Manning House and New World Tower in Central have occupancy rate at 97% and 98% respectively. 83 King Lamb Street has occupancy rate rising to 74%. On shopping malls, K11 Musea and K11 Art Mall continue to have high occupancy rate of 98% and 100% respectively. K11 Musea continues to attract many major international brands. Since its opening, we have continuously enhanced our brand mix, consistently drawing high-quality food traffic. Since July 2024, more than 10 top-tier international luxury brands have moved in, upgraded or expanded. Among them, the store upgrades for AP and VCA were completed in the first half FY26. Looking ahead, a brand new duplex store of Prada, Miu Miu, and popular yoga brand Alo Yoga, among others, will open later this year. On the mainland, in first half FY26, our project's occupancy rates remained robust, primarily because we enhanced our brand and adjusted our mix of offerings to deliver a richer experience for consumers, continuously driving consumer vitality. Our K11 properties in mainland China continued to perform well, with overall sales up 23% year-on-year during the National Day Golden Week. They also recorded about 120% year-on-year growth during the Christmas and New Year period at the end of 2025. To advance the potential of the GBA's one-hour consumption circle, two K-11 projects in core cities of the region opened in 2025. They are K-11 Equals Shenzhen and K-11 Hansi Guangzhou. Since its opening, K-11 Equals Shenzhen has been actively fostering the first-door economy, achieving strong operational performance. As of the end of 2025, it has recorded over 13 million visitor visits. Additionally, K-11 Hanxi Guangzhou also opened in September 2025, introducing about 50 regional and even national first doors. It welcomed around 700,000 visitors during the national day period. and also surpassed 650,000 visitor mark during Christmas and New Year. In addition to traditional commercial design, the project also innovatively integrates intangible cultural heritage from Ningnan culture into its modern retail space, actively responding to the region's need for high-quality development. Over the coming period, we will continue to have several large-scale investment property projects to be officially opened, including our flagship project K11 Elysia, located in the prime area of Huaihai Middle Road in Shanghai. It is progressing steadily. The office portion K11 Atelier will officially open at the end of this year. The project is currently over 50% pre-leased. The first batch of key anchor tenants includes Dasing Group, as well as world-renowned retailers, law firms and financial service institutions. Hangzhou Wangjiang Xincheng project is also about to enter its final phase. The commercial components Hangzhou K11 Art Mall and K11 Atelier are slated to open gradually starting in Q4 2027. Regarding CapEx, our CapEx guidance for FY26 is below HK$12 billion. As shown in this chart, in first half FY26, Our capex was HK$3.5 billion, down HK$1.4 billion year-on-year, mainly because we continue to strictly control expenditure on each project, optimising and improving construction... cost efficiency while maintaining high quality construction. On land reserves, we align with government policies and seize opportunities to convert farmland into our land bank, reducing the cost of replenishing land reserves and capex. Regarding OPEX, by optimizing our corporate structure and processes to reduce daily operating expenses, our G&A for the first half FY2026 was HK$1.5 billion, down 18% year-on-year, and down 38% from the same period in FY2023. We will continue to effectively control our OPEX and spend only as necessary. Based on our financial situation, we have decided to continue to suspend payments of dividend and group-level perpetual bond interest, that is, the interest on the old perpetual bonds. I'd like to take this opportunity to review our financial management progress with you. First, in FY25, we successfully completed an HK$88.2 billion refinancing project. Second, Last September, we successfully secured a new HK$3.95 billion bank credit facility. Although we currently have no need and no plan to draw on this facility, obtaining the new credit line provides additional standby funds and strengthens our liquidity. Third, we implemented a debt exchange program to enhance our shareholders' equity. Going forward, we will continue to actively manage our finances and pursue steady progress. Finally, I'd like to once again thank our investors and the banks for the confidence they've placed in us over the past few months. Our team has worked very hard during this period, leading to ongoing improvements in our operations. We are very grateful to everyone, and I believe the future will only get better. Thank you all once again. Thank you, Echo. Now it is time for Q&A. We have already received many questions, and we have done some classification and sorting out. The management will answer the questions one by one. First, this is a question about your results. From FY24 till now, the company has been making a loss. So, management, when do you think you can achieve a turnaround? I will take this question. In first half this year, the loss is mainly affected by non-cash provisions and one-off loss. This time, in view of the market conditions for some DPs and IPs, we have made non-cash provisions. If we exclude these non-cash provisions, then this time, profit attributable to shareholders should be a positive number. In first half this year, the loss decreased. In the same period last year, it was HK$6.6. It came down to HK$3.7 this year. So it's down more than 40%. And in second half last year, the loss was HK$9.7 billion. We are again lower. So this shows that we have achieved good progress in expanding revenue and reducing costs. We'll continue to improve operating efficiency. We will continue to enhance our property sale achievements and recurring revenue. We will strictly control cost so as to achieve progress and instability. I have confidence that when the market conditions improve, then our profitability will gradually improve. Thank you, Echo. Next question is about refinancing. New World last year completed refinancing of $88.2 billion. So for this refinancing starting 2028, it will mature gradually. So there is two years or so to go. What are some plans of the group to achieve long-term financial health? I will take this question. you may know that the real estate industry has quite long cycle so our strategic achievements need longer time to be fully realized. Last year Almost on this day, well, I took office of CEO in 2024 and I introduced seven strategies to reduce that. And all along, our company has been very pragmatic in improving operations and financial position. This result can reflect that our company's loss has decreased and our business... is developing steadily. So this shows that our company's operations are moving towards the positive side. In the future, we will maintain stability on all fronts. At the same time, as I said, we will try our best to achieve progress and stability. We will try to identify new growth drivers. Thank you, Echo. Next question. So this question is about the debt exchange program. In first half FY26, through this debt exchange program, the company had reduced bonds and perpetual bonds by about $9.1 billion Hong Kong dollars. Will that be similar move in the future? Edward, thank you. Echo, regarding debt management, moves, well, our company will consider our overall interest and overall financial health. In relation to debt exchange, at the present moment, we do not have further plan. Our group will continue to promote project sales. Eko mentioned that we will try to accelerate cash recovery, so we will maintain stable cash flow. At the same time, our utmost goal is to reduce total debt. Thank you, Edward. Next question is also about the debt exchange program. So for the newly issued perpetuals, will interest be paid as scheduled? Will there be other plans to handle the remaining perpetual bond interest in the future? Under what circumstances will the group resume the distribution of ordinary dividend and perpetual bond distribution? Edward, please. Thank you, Echo. Regarding the new perpetual bonds, our group will make distribution according to the terms. For the perpetual bond on the group level, i.e. the old perpetuals, the interest payment will be suspended. So just now we already made an announcement via the hong kong exchanges and clearing limited and as mentioned earlier we would like to offer a choice to investors so that they can make flexible decision according to their own circumstances all along our group has been managing our finances uh proactively we are reducing our total debt and we will discharge our liability obligations in terms of the payment of interest of perpetual bonds, we will act in accordance with all the contract terms. And regarding interest payment and other relevant changes about perpetuals, we will follow contract terms. We will also comply with regulatory requirements at appropriate times. We will make the necessary notification and announcement. Thank you, Edward. Next question. Does the company have any plan about rights issue and share placement? Let me answer this question. We want to improve the company's cash flow all along. This has been our main direction. As the management of the company, we will very carefully consider all capital tools and options. However, at present, we do not have any plan about rise issue or share placement. Thank you, Echo. Next question. An investor asked, in this fiscal year, what are some other JV projects in which you need to repay loan and what will be the impact on the company's cash flow? Edward, please. Right. From our financial statements, you can see that as of the end of December 2025, guaranteed loan contracts only have around $1 billion remaining. This $1.7 billion should be repaid by money that we will recover from our projects' sales. Next question is about property sale. In Hong Kong, how much inventory do you still have? In the coming two years, how many units will be launched in Hong Kong? What will be some focal projects? Mr. Sid, please. For our residential units, we have enough inventory. In FY26, our plan is that in the second half of the year in Hong Kong, we will launch more than 1,300 units. In second half FY26, apart from the two Pavilion projects units, we have some new projects that will be launched. We have two projects in Kowloon. This year, our first brand-new project is in Kowloon Road Street. It is a low-density luxury project, Pavilion Rosa, and also Bohemian Collection in Tsim Sha Tsui, House Muse. Sorry, Grand Austin Bohemian. And Phase 3 Pavilion Farm on Tai Wai Station, there are 548 units. They will be launched in second half FY26. In FY27, we will emphasize our two projects in the northern metropolis and also... our project in Pak Ching Kok, Cheung Kwan O. The two projects in the Northern Metropolis already commenced construction last year. In the government's budget, the government once again stated the importance of the Northern Metropolis development to Hong Kong. So they will accelerate development of the northern metropolis and attract more business in order to release potential of private land. And we will try our best to tie in our work with the government's policies. Thank you, Mr. Sid. Another question is about the mainland. In the second half of the year, what are some new projects and what do you think will be their sales? Benny, thank you. Echo, as mentioned in the presentation, In the first half, our focus is to digest the existing units of the existing projects. We'll continue to sell the existing projects. The first phase of new metropolis mentioned had been completed, and Canton Bay and Also, when Yunyao had already been sold out and all the units have been delivered, for the Silage and Central Parkview, we will continue to promote sales. For Shenyang Parkview, it is number one in local sales. For new projects in FY26, our focus is that in the second half, we will launch. The urban renewal project in Shenzhen, that is New World No. 188. Total GFA is around 630,000 square metres. There will be 3,000 residential units with a 60,000 square metre pedestrian commercial street. Our goal is to develop a high-quality Hong Kong-style living community. And then for Phase 1 Wellspring, It will be launched for sale in Q2 this year. It enjoys very good transport advantage. It is at the intersection of three districts, and within 30 minutes, you can reach the border crossing and the high-speed rail station. With our very good brand strength and our product capabilities, these projects will make contribution to sales in the second half of the year. Thank you, Benny. Next question. is about New World Department Store. So New World Department Store recently announced a personnel change. And ECHO will also be responsible for daily management and operations of New World Department Store. So what are the reasons behind this move? Will there be new plan for New World Department Store? Do you have plan to dispose of New World Department Store business? Let me take this question. Regarding New World Department Store, it is... a listed company under New World Development Group. For New World Group, our overall direction is to strengthen our management efficiency. New World Department Store business is on the mainland, as you know. I am relatively more familiar with the mainland, so for me to also take up such a position and responsibilities is reasonable. This approach is such that the group will enjoy a lot of synergies. So regarding this arrangement and this operation arrangement, it is an normal personnel change. At present, we do not have planned to dispose of New World Department Store. In the past one year, the group has been strictly controlling the expenses of each project. And by optimizing organizational structure and processes, we are effective in saving day-to-day expenses. For New World Department Store and New World Development, in the coming six months, we'll continue to effectively control our operating expenses so that we will only spend what we ought to. Okay, thank you, Echo. Next question. In second half 2025, the Federal Reserve reduced interest by 0.75%. So how much help was there for your interest expenses? How much interest have you saved? And what do you think will be the coming interest rate trend and what will be the impact on the property market? Edward, please. Okay, thank you, Echo. As mentioned in our presentation, last year in November and December, we implemented a debt exchange program so that the nominal value of our perpetuals had come down by 8.7 billion Hong Kong dollars. For our USD bond, it's decreased by about 400 million Hong Kong dollars. And for shareholders' equity, there is an increase by 8.7 billion Hong Kong dollars. So this greatly reduced our cost of our future perpetuals. This is a very important step of our debt reduction. As mentioned earlier, interest rate is coming down. So in the first half, our interest expenses achieved a reduction of 600 million Hong Kong dollar year on year. Regarding interest rate trend, the market expects that there will still be changes, so we will continue to be prudent. We expect that interest cut will lead to positive impact on us, and such positive impact will be gradually seen in the second half of the year. Thank you, Edward. Next question. According to earlier reports, the company plans to repay the bonds that will mature in 2026 and 2027, and you do not have any intention to put in place further debt management measures. Is this your company's plan now? And what income, what revenue will you use to repay maturing bonds? bonds. For perpetuals, are you going to resume interest payment or are you going to redeem them, Edward? All along, our group has been discharging our financial obligations. For perpetuals, there is no maturity date. For perpetual interest distribution, we are doing it in line with contract terms. We are making prudent decision. Based on the latest announcement that we just released through the Hong Kong X, we will suspend the payment of perpetual bond interest for the old perpetuals. And for LME, we do not have any relevant plan for the time being. We will continue to promote our projects to actively improve cash flow so as to reduce total debts. That is our topmost goal. Thank you, Edward. Because of time... I will now read out the last question. This question is about 11 skies. Regarding 11 skies, has there been any new progress, please? Let me take this question. Our company will not comment on rumors in the market. In the past, Together with the airport authority, we had already clarified on those rumours. Right now, we have been in deliberation with the airport authority, and for the time being, there is nothing for me to supplement. Thank you, Echo. Finally, once again, let me thank you all for joining New World Development's FY2026 interim presentation. Thank you all.