CK Asset Holdings Limited Stock

Good afternoon. My name is Gerald Ma. To my right, Mr. Simon Man and Mr. Yue Seng Chiu, two of my fellow ExCo members. We are your presenters for the CK Asset Holdings Limited 2026 Interim results. We will also be taking on the questions, your submitted questions after the presentation.

So let's get right to it. Interim results highlights. Underlying profit up 5% and the dividend per share increased to HKD 0.41 per share. If you take the HKD 6.6 billion of underlying profit or HKD 1.90 per share, setting off against various adjusting items such as change in fair values in our REITs, change in fair values in investment properties, reduction in value of an associate and disposal gains of UKPN and UK Rail will give you the underlying -- or give you the profit attributable to shareholders of HKD 8.7 billion or HKD 2.48, up 37.8%. Dividend per share, up 5.1%, corresponding to the increase in underlying profit and net book value up almost 1% to HKD 114.31.

Principal activities analysis. Property sales revenue gone up 3x to HKD 21.6 billion, but profit contribution was only HKD 765 million, more on that later. If you look at all the other divisions, property rental, hotel and service suite operation, property and project management, pub operation, infrastructure and utility asset operations, revenues were all up and profit contribution were all up with the exception of the infrastructure and utility asset operation division, mainly because of the disposal of the 2 joint ventures that we had.

Total revenue was HKD 54.5 billion and profit contribution, HKD 9.5 billion. 60% of our revenue or HKD 32.85 billion was recurrent in the first half and 92% of profit contribution or HKD 8.7 billion is also deemed recurring in the first half. Profit contribution by region. Hong Kong was 35%; the U.K., almost 34%; Germany, 9%, Australia and Canada and the U.S., 8%, respectively; and other European countries, mainly our operations under [ Eastern ], HKD 453 million, accounting for almost 5% and the Mainland was 1.6%. So very well diversified.

If we look at the individual divisions, property sales, again, revenue HKD 21.6 billion, profit contribution, HKD 765 million. The booking of Blue Coast I and II lifted revenue to over HKD 21 billion. Overall development margin was still quite low, 3.5% in the first half. If you look at the different regional contribution, Hong Kong gave us HKD 626 million of profit contribution, margin was 3%. The Mainland was somewhat irrelevant in the first half, very few bookings and very few projects sold. It only HKD 48 million of contribution. The U.K., namely Chelsea Waterfront had HKD 300 million of revenue and almost HKD 100 million of contribution.

Margin was healthy, 32.3%. And others is really an agricultural land, mainly a piece of agricultural land in Queensland, Australia, which we sold at a slight negative margin. Major contribution or contributors from the Blue Coast, HKD 332 million. Borrett Road Phase 1 gave us HKD 130 million and Chelsea Waterfront just over HKD 100 million. We still have over HKD 6 billion of contracted sales not yet recognized, of which a little bit over half is scheduled for recognition in 2026.

Turning to the rental division. The performance in the first half was quite resilient, HKD 3 billion of revenue, profit contribution, HKD 2.4 billion and margin was 78.5%. All 3 metrics were -- went up a little bit. If you look at the revenue by use of property, retail, we still had a bit of negative reversion was down 4.8%. Office because of the contribution of CKC 2 went up 4.8%. And industrial buildings had a pullback as well, but more than compensated by our contribution from the social infrastructure sector, up 6.1% to HKD 712 million. Others are mainly the residential and car parks contribution or revenue or contribution.

Major contributors from Cheung Kong Center, HKD 464 million; Hutchison Logistics Center, HKD 308 million; and the Whampoa Retail Complex, HKD 299 million. We have a total of 24 million square feet of investment properties. We recorded a decrease in fair value of investment properties of HKD 2.1 billion. This is before tax and before MI. If you look at the change in fair value, net of tax and MI, the numbers on your right -- on the right is about HKD 1.5 billion. And the bulk of that came from a write-down of Upper West Shanghai, both the office and commercial. So altogether, that's over HKD 900 million.

Hotel and service suite operation. We had a solid contribution from this sector in the first half. Room rate had a decent positive movement. The daily hotels went up by about 8% and service suites went up by about 4% in terms of average room rate. Occupancy was very steady, 88% for hotel rooms and 90% for service suites, giving us a good revenue increase of 6.3%, profit contribution went up by 7.9% and margin also improved slightly. Property and project management, 246 million square feet under management, very steady revenue and profit contribution and margins always healthy 40-plus percent.

Pub operation, we have a total of roughly 2,500 pubs, about 1,500 of them are what we call managed pubs under Pub Company. About 1,000 of them are under the Pub Partners division, what we call tenanted pubs or franchise pubs. And then we have 2 breweries, one in Scotland, one in England, producing and distributing our beers. And on the back of very -- still very tough macro conditions in the U.K., the division actually delivered a decent performance in the first half, mainly because we had a one-off brand disposal. We sold a brand called Old Speckled Hen to a Spanish brewer, which gave us a bit of a boost as well as a few asset disposal. So the profit contribution went up 14.3% compared to the first half of 2025.

So the next few pages, I will defer to my colleague, Yue Seng.

Thank you, Gerald. We have delivered a very solid performance across our infrastructure business. The profit contribution, it's essentially flat to 2025, and it comes in at about HKD 4.6 billion. This is despite we only have 4 months of contribution from UK Power Networks, which was disposed during the year. And also bearing in mind that we have not captured in this number the interest income that we earned on the proceeds that we got from UKPN Limited and also from Eversholt disposal. Overall, I think most of our businesses actually has performed very well and as planned, benefiting really from the positive inflation environment and also, we have positive foreign exchange movement in our favor also during this period.

Talking a little bit more on the disposal of Eversholt UK Rails and also UK Power Networks. Overdone, obviously, in the first half. For Eversholt, which is our rail leasing business in the U.K., we sold the whole business for GBP 1.1 billion, of which our share is 20%, and that resulted in a gain of HKD 826 million from the transaction. And for UK Power Networks, as you all know, I mean, it's a major transaction for the group. The overall equity value that we disposed was close to GBP 11 billion, of which GBP 2.1 billion it's CKA share. That result in our profit of disposal from the transaction, HKD 8.9 -- almost HKD 9 billion. No really further -- any further update on other divestment at this point. We obviously did both of these deals to realize shareholder value from these investments and also bring us proceeds that we're looking to invest, obviously subject to meeting our return requirements.

So Simon will go through the next 2 pages for us.

Okay. At 30th of June 2026, the group's interest in the 3 listed real estate investment trust remain about the same. 35.1% in the Hui Xian REIT, which own and manage 11.8 million square feet of hotel and service suites, office and retail properties on the Mainland. 25.5% in the Fortune REIT, which own and managed 3 million square feet of retail properties in Hong Kong and Singapore. 17.2% in the Prosperity REIT, which own and manage 1.3 million square feet of office, retail and industrial properties in Hong Kong. Hui Xian REIT is an associate, and the group share a net rental of HKD 96 million, net rental [ power ] of HKD 96 million for the first half in 2026. It was HKD 77 million for the same period last year and received a distribution of HKD 7 million this year, whereas only HKD 3 million in the first half of 2025. And distribution received from Fortune REIT and Prosperity REIT amounted to HKD 104 million this year, which was HKD 107 million in the first half 2025 and were all recognized as investment income.

For gearing and maturity profile, at the interim period end date, the group's bank and other loans balance amounted to HKD 43.8 billion, a decrease of HKD 7.6 billion when compared with the balance at the year-end date of 2025. And maturity was HKD 10.1 billion repayable within 1 year, HKD 29 billion within 2 to 5 years and HKD 4.7 billion beyond 5 years. Taking in account the group's bank balance and deposit of HKD 65.7 billion on hand, the group had a net cash position of HKD 21.9 billion. And we have credit rating from Moody's A2 stable and from Standard & Poor's A stable.

The group has a total land bank of 125 million square feet. 63 million square feet was under development, of which 6 million square feet located in Hong Kong, 54 million square feet on the Mainland, 3 million square feet overseas. 24 million square feet was held for rental, of which 13 million was in Hong Kong and 6 million on the Mainland, 5 million overseas. 9 million square feet was held for hotel and service suite operation with 8 million square feet in Hong Kong and 1 million square feet on the Mainland. And 26 million square feet was held for pub operation in the United Kingdom. So overall, we have 27 million square feet of land bank in Hong Kong and 61 million square feet of land bank on the Mainland and 34 million square feet overseas, mainly in the United Kingdom.

So that's the formal presentation that we've done. Thank you, Simon and Yue Seng for helping out. So we now will begin our Q&A session. Again, the 3 of us will divide the work, and I know Sophia has been organizing the questions. Maybe Sophia, you ask the questions to 3 of us, and I will try to direct traffic if I'm not answering the questions myself.

Thank you very much, Gerald. So while I collect the question, may I start with the first one. How would you comment on your first half 2026 results?

So I guess, overall, we can say that the group is in a very strong position from a balance sheet perspective. However, macro trends and geopolitical developments are really becoming increasingly unpredictable. This really calls for caution in our approach to everything from how we manage our existing businesses to how we assess any and all new opportunities. It seems -- it really seems like abrupt changes in the macroeconomic environment and political environment. It's the only constant at the moment. And at times, -- personally, I would say at times, I do feel quite helpless. How can one plan for the future? How do we run our businesses and project forward? It's very, very difficult.

So we will manage our privileged position very carefully while we continue to look for ways to enhance value for shareholders. Having said that, the underlying profit for the group increased by 5% year-over-year. It does highlight the resilience of our recurring income amidst the -- all the uncertainties that we see and demonstrates that our conservative and diversified approach is shielding us from excessive volatilities. But the focus is on maximizing the performance of all of our group businesses and cautiously move forward.

Okay. So I'll now start by asking a question on the Property Division. Given the group's net cash position, so what are your current thoughts on your preferred use of capital or choice of investments?

Yue Seng, maybe.

Sure. I think we -- first of all, I think having -- as Gerald mentioned in his previous answer, we have a privileged position of having that cash. But at the same time, I think there's a lot of uncertainty right now in the market. And I think we look at the cash and want to put it into good use and at the same time, maintain our financial and investment discipline. I think that's very, very important. I think we continue to look for investment with recurring income stream. I think that's investment mainly asset-heavy investments, long contracted cash flow, developed market and with a stable legal environment, that always has been our investment discipline.

On top of it, I think opportunistically, we will try to proactively evaluate kind of opportunities in Hong Kong and Hong Kong properties, land bank in Hong Kong as well as in China. I think all being said, I think with the uncertainty in the overall environment, we just need to try to make sure the investment that we make meets our risk profile and also meets our return expectations.

Thanks, Yue Seng. I see the next few questions, if I may. The next 3 questions, maybe let Simon help me out a little bit. Go ahead, Sophia.

Okay. So going into the principal activities. So what is your view on Hong Kong's property market?

Well, we have seen a solid improvement in both volume and price for residential transaction in the first half of 2026. There is still good demand for high-end projects like the one at Borrett Road, which continues to set record price. While the market has been supported by strong local demand and purchases from the Mainland, the momentum may slow down if the price of oil continues to be volatile and the level of interest rates stays high or further increase. [Foreign Language]

Thank you, Mr. Man. Continuing on with questions on the Property Division. Your development profit has dropped by 57%, even though revenue almost doubled with development margins at 3.5%. How should we think about this? And what are your expectations on margins going forward?

For the first half year results, the overall development contribution and margin were impacted by the low margin of Blue Coast I and Blue Coast II, which were acquired at a high land cost. But projects like Borrett Road continue to give healthy margins. The margin for other projects under development may be less than what we previously anticipated if prices stay at the current levels.

Okay. So could you comment on your Mainland property sales activities?

The Mainland property market was still difficult in the first half. We have launched Regency Garden Phase 5B in the second quarter, and the market response was positive. Well, we will continue to promote our projects with incentives to encourage sales. Somehow it is still a purchasers' market. [Foreign Language]

Okay. Next question is a very interesting one. Do you have any comment on the potential impact on the property market from the recent announcements related to tax on offshore income from the Mainland?

Maybe I'll take on this one and the next one. I think at a high level, these rules and regulations have always been there. So it's not something new. The recent announcement, I think, really provided a very clear guidance on compliance. That's what I would say on that. The next question, please.

Okay. The next question is about our rental portfolio. The rental portfolio seems to be quite resilient. Any further comments on that? Also, the Hong Kong office market sentiment seems to be improving. What is the current occupancy rate for Cheung Kong Center Phase 2, CKC 2? What are the trends in relation to Central Grade A office rents?

The strength of this division is mainly due to -- in the past 2, 3 years due to our expansion and investment into the social infrastructure sector overseas, mainly in the U.K., Germany and Sweden. For CKC 2, our balance sheet strength and lower cash cost for this project have allowed us to be a bit more patient than others in the last couple of years when the market was not in a good place, the Central market was not in a good place. So I know a lot of you might have seen articles commenting on CKC 2's latest occupancy being over 60%.

I guess, we can confirm that we are seeing decent demand and CKC 2 is beginning to provide a solid contribution to our rental income. So hopefully, in Central, better days -- or for CKC 2, better days are ahead. In general, there is a bit of momentum in Central, and landlords of quality buildings are beginning to be able to be more selective on the mix of tenants and asking rent. Having said that, outside Central, it is still a very difficult market. So depending on the inflationary pressure, movement of interest rates, let's see it can go -- it can get better or not.

The next question is about our social infrastructure portfolio. So how has your social infrastructure portfolio performed? Are there plans to expand in the social infrastructure sector in other countries?

Yue Seng, please.

Sure. I think when we say social infrastructure portfolio, these are basically in contrast to the Hong Kong rental segment, these are very long-dated contracts with inflation-linked rental adjustment every year. So we do benefit from the now higher than normal inflation in these different markets. Overall, the segment now contributed more than HKD 750 million in the first half, which is a positive for us because it does help offset some of the weakness that we see in Hong Kong.

We have been looking for more opportunity, obviously, in the sector, and we look at different assets, different types of assets in different countries. And we try to stick to our investment thesis of trying to invest in triple net lease portfolio. However, I would say, overall, I mean, from my experience is that it is a difficult market, with a lot of uncertainty. So despite our net cash position, we try to be actually very, very cautious even when we are looking at this relatively more stable segment. So there are new opportunities, but we just need to be -- continue to be very, very careful.

Okay. The next question is around our hotel and service suites. Hotel and service suites contribution have increased by 8%. What were the main growth drivers? And would you consider converting some of your rooms to student accommodation like other peers have been doing?

Yue Seng, please?

Sure. I think Gerald mentioned in the presentation that the occupancy of our hotel and service suite segment is actually very stable, approximately 88%, 90%, respectively. And it's obviously has achieved very, very steady growth in average room rate during this period. I think specifically on the whole student accommodation, it seems like it's a trend as a fashion kind of trend that a lot of people are converting existing properties to meet the increased demand. We have actually been serving this education sector overall with our service suites offering for a long period of time, especially you can imagine our portfolio around the Hong Kong area, that's squarely right next to a lot of the schools. So I think overall, I think we are seeing this segment, I guess, indirectly also benefiting from the student accommodation demand, and we're happy to see that the division overall is performing very, very well.

Thank you. On to the Pub Operation Division. The Pub Division recorded an increase in contribution of 14%. What is your outlook for the pub industry? And should we expect more impairment at the end of the year?

I'll take on this one. We had -- this division had a decent result in the first half, again, because we had some one-off gains. The market environment in the U.K. continues to be very challenging for Green King. There's inflationary cost pressures, softer market volume, dropping or lowering of level of disposable income and changing policies. So we have to commend the team, our cost rationalization and estate optimization programs and efficiency programs that improved our overall standard and the level of efficiency across the entire group, but there's more work to be done. So we're not nowhere near the finish line.

While if you look at the -- on the policy front, the recently announced 20% reduction in business rates will definitely help the sector. But on the other hand, what other people may not be paying attention to, there are other policy changes that were announced much earlier coming into effect, I think, very soon, I think, in April, such as deposit return scheme. So we have to return our used bottles or cans or else we have to -- we can't get our deposit back. So there's a cost to it. There's administrative burden and cost to it, and there are changing -- changes made to the employment -- the Employment Rights Act, which will put further pressure -- cost pressure on the industry again. So we are really hoping there will be more good news in the coming budget announcement.

And this is a good example of what I meant earlier by unpredictability. New policies in many -- not just in the U.K., but many countries trying to manage the national debt burden, the cost of living issue and also how to increase investments in the U.K. And then you also have other geopolitical events that are happening. So it's very, very hard to draw up a medium-term plan to run the business right now. [Foreign Language]

In terms of impairment, which was your other question, we'll know in a few months after discussing with our auditors regarding the long-term outlook for the sector and the level and direction of travel of the U.K. gilt rate, which is the issue -- the issue for the sector and the country.

Thank you. Please comment on the result of your infrastructure portfolio. What are your longer-term plans for the sector? And would you consider selling other assets in your portfolio?

Yue Seng?

I think I covered in the -- when we go through the slides, I mean, the key message is that the infrastructure portfolio is performing very well, very resilient, HKD 4.6 billion in profit contribution despite only having 4 months of UKPN and not including the impact of the interest income from the cash we received. So it's actually -- I mean, the portfolio is performing very, very well.

On the question on we'll be selling other assets, I think as a group, we always will look for the best value for shareholders. So if we -- like UKPN like UK Rail, we receive a good offer that delivers shareholder value, we will definitely consider. But at this point, we don't have any kind of further update in terms of any divestment. On the flip side, obviously, as I mentioned, we are looking at whether it's social infrastructure or core infrastructure, we're looking at trying to deploy new capital to these investments while being -- as I mentioned, I feel like I have said it 3 times already that we try to be very, very disciplined despite our net cash position. So we're definitely looking at new things, but being very, very careful at the same time.

So I see that we have 2 more questions relevant to the proceedings. I'll invite Simon to answer the last 2 questions for us.

Right. The next question is about write-down. A write-down of HKD 6 billion was recorded in relation to Hui Xian REIT. Could you explain the rationale for this, please?

The booking of the impairment was mainly because the market value of Hui Xian units has been well below the group's book carrying amount. And after our assessment, it was determined that a write-down was necessary, but it was a noncash item.

Thank you, Mr. Man. The next question, CKA's interim dividend per share increased by 5.1%, while no special dividend was declared. What are your comments on capital return to shareholders and any share buyback on the horizon?

The increase in interim dividend per share is consistent with our stated approach to link dividend payout to the overall financial results and outlook. Considering the interim results reported, the Board has not decided to make a special dividend on the back of the disposal gain of the 2 U.K. joint ventures. As for buyback of shares, it is one of the ways to deliver long-term value to shareholders, and we will remain opportunistic in our approach.

I believe we've answered most of, if not all of the questions submitted. We thank you for joining our presentation and Q&A session as usual. We will see you next time. Thank you very much.

Good afternoon. Welcome to the CK Asset Holdings Limited 2025 Annual Results Analyst Presentation. My name is Gerald on my right are two of my fellow ExCo members, Simon Man; and [indiscernible], our Chairman, Mr. Victor Li, will join us shortly for the Q&A session after the presentation.

So we'll quickly go into it. 2025 results highlights. Revenue came to HKD 85.85 billion, up 19.9% and profit before investment property revaluation, $11.96 billion or HKD 3.42, up 2.7%. We recorded an IP revaluation deficit of HKD 1.11 billion last year or HKD 0.32 leading to a profit attributable to shareholders of HKD 10.85 billion or $3.10, down 20.3%. We declared a final dividend of HKD 1.39, making full year dividend HKD 1.78. Dividend per share, hence, up 2.3%, and over last year. Net book value per share also has risen by 2.3% to HKD 113.8.

Turning to our principal activities. 76% of our revenue and 85% of our profit contribution are now recurring in nature. By geography, 31% of contribution from Hong Kong, 11% from the mainland and 58% from overseas, making us a very different company compared to other property companies in Hong Kong. Looking at divisional performances, property sales. So we recorded much stronger sales recognition this year -- last year, but margins were low due to provisions for properties for sale. Revenue came to HKD 2.5 billion 45 billion, up 105.3% profit contribution after provisions at HKD 2.7 billion, up 24%.

Overall margin post provision was 13.4%. Major contribution came from three projects: the Greenwich Phase 2, Beijing, HKD 1.15 billion, the coast line Phase 1 and 2 in Hong Kong, HKD 1.1 billion and Regency Garden Phase 5b-15b2a from Shanghai, HKD 957 million. If you look at the Hong Kong contribution margin, it was 4.2% to mainland 27.8% and overseas HKD 11.6 million billion, making the post provision margin overall margin at 13.4%. The pre-provision overall margin was 24.9%. We still have $20.7 billion of contracted sales, which we have not yet recognized, the bulk of which will be recognized in 2026.

Turning to our Property Rental division. The performance from last year was pretty resilient. From this division. As you can see, revenue dropped by only 1.9% to 6 -- just over HKD 6 billion and profit contribution dropped by 22% came to HKD 4.6 billion, and margin was pretty steady at 76.6%. Major contribution came from Cheng Kong Center, HKD 945 million; Hutchison Logistics Center, HKD 640 million and the [indiscernible] HKD 622 million.

As you can see, overall revenue dropped by 1.9%, but it's not quite apple-to-apple because our social infrastructure income from Sweden and Germany were not recorded as part of social infrastructure income revenue here. they are actually recorded as part of our gain from financial instruments. And last year's results also included Shanghai Westgate development, which no longer -- the joint venture has ended this year. So if you take Shanghai West gate out from last year's results and include our Swedish and German portfolio into this year's results, actually the overall revenue would have gone up by 2.7%.

In terms of contribution, as you can see, is a small decrease of 2.2%. So the increase of social infrastructure property contribution actually have successfully offset the challenges we have faced in the Hong Kong and mainland markets. In total, we have 22.4 million square feet of investment properties and recorded a revaluation deficit of close to $1.1 billion. And it mostly came from 3 assets, 181 retail commercial mall and CKC1 and CKC2. Hotel and service suite operation, very solid contribution in a pretty competitive market. HKD 4.6 billion of revenue, up 6% profit contribution.

You see here it's up 0.4%. But last year, we actually had some written back provision. So if you take that out, we actually -- profit contribution would have gone up by 8.1% compared to last year. So very, very solid. That good performance was largely because of the improvement in the hotel occupancy compared to 2024 from 82% to 90%. So as you can see, both our hotel room occupancy and our average service suites occupancy were roughly around 90% last year.

Property and project management extremely steady, $910 million revenue, $367 million, largely the same compared to last year and 40 -- a very healthy 40.3% contribution margin with over 248 million square feet under our management. So we have 2,500 roughly 2,500 pubs in the U.K., 1,500 under top company, what we call managed directly managed operated pubs about 1,000 under top partners division, what we call tenanted or lease or franchise pubs and 2 breweries, 1 in England, 1 and Scotia. Revenue went up by 7.4% to HKD 26.23 billion last year and operating before asset impairment went up by 9.1% to $1.9 billion.

We recorded a HKD 1.6 billion of asset impairment largely due to the well-publicized, continued cost pressure in the U.K. and tough macro conditions. As a result, the profit contribution post impairment came to HKD 313 million, down 41.9%. These are our joint ventures together with our sister companies, within the infrastructure and utility asset operation division. And you can see their respective shareholding on the right. very healthy a 3.6% increase in profit contribution to HKD 8.6 billion. Contribution margin was 31.4%, and welcome to our Chairman, and two interesting points in terms of performance in thumb in water, a healthy contribution margin of 32% contribution of HKD 1.05 billion, which is up 29% from last year due to our very good price resets.

As well as Dutch and Vero Energy HKD 119 million of contribution, up 61% from last year. due to the full recovery from our energy from waste operation post the reconstruction of redevelopment of our plants. We have -- in January, we completed the disposal of Eversholt U.K. rails, and we will be able to book a gain of HKD 670 million, which will be recognized this year.

Jerry, if I may. And just a comment on pubs. Earlier, you -- we keep calling it pub operation. And sometimes our shareholder may misunderstand as if the main business is the operation of the pub. Actually, it's two businesses. One is the operation and one is property. We haven't forgotten that we're mainly a property company. So we own most of the shops. So the asset impairment is mainly on the property, operation is growing. So 1 is a noncash, One is a cash and less separate between operation and shops.

So I think Simon, correct me if I'm wrong -- but -- but I think the best way maybe in the future, we referred to it, we put in a name sort of pub and property or something like that. No, no, I'm not going to come up with the name, you should come up with the name, but something to reflect the fact that it's -- we're not renting the shops that we're the 1 the shops.

So that's right, 90% of our properties are actually freehold or extremely long 300 years or 900 years long leasehold. Yes. Next page. We I've also announced this proposed disposal of U.K. power network subject to closing conditions. If successful, approximately $8.4 billion of gain will be recorded this year as well as receiving $2.2 billion of cash upon closing. So I'll turn it over to Simon for the next few patients.

France, as of 31st December 2025, the group's interest in the fee listed real estate investment trust remain more or less the same. 3.4% in the [indiscernible], which owned and managed 11.8 million square feet of hotel and serviced suites, office and retail properties on the Mainland and 25.6% in the Fortune REIT, which only managed 3 million square feet of retail public in Hong Kong and in Singapore and 17.4% interest in the poster which own and manage 1.3 million square feet of office, retail and industrial public in Hong Kong.

[indiscernible] is an associate so -- and we share a net rental profit of HKD 126 million for the year. Last year, it was HKD 48 million and received distribution of only HKD 7 million. during the year. For the fortune rate and post dividend, distribution received from the amounted to HKD 220 million this year and HKD 226 million last year and were recognized as investment income. So altogether, we see a total distribution of HKD 227 million from the 3 listed lease. For the endearing and maturity profile, at the end, the group's bank and other loans amounted to HKD 51.4 billion, a decrease of HKD 1.3 billion from last year. HKD 11.6 billion which repayable within 1 year, 34.6 billion within 2 to 5 years and HKD 5.2 billion beyond 5 years.

Taking into account our bank balance and cash on hand of HKD 41.7 billion at the EMA, the group carry a net debt of only HKD 9.7 billion. The net debt to net total capital ratio was approximately 2.3% and the net debt to shareholders was 2.4%. And our credit rating from Moody's is A2 and from stable and a credit rating from Standard & Poor is stable. At the end, the group had a total land bank of 122 million square feet. 65 million square feet was held under development for sales. 22 million square feet was held for [indiscernible] and 9 million square feet was held for hotel and service operation.

26 million square feet was held for pub operation. For [indiscernible] Gold, 27 million square meters in Hong Kong 1 million square feet was on the mainland and 34 million square feet overseas, mainly in the United Kingdom. So that completes our presentation, Themis.

There's one more. So we've made very good progress on our commitment to sustainability. Last year, we have achieved 38% reduction in Scope 1 and 2 emission from 2019 levels. And we are one of the early adopters of the storage new climate-related disclosure requirements and develop a transition plan with underpinned by 6 deep carbonization levels. And a few highlights here, both it, if you can read it, great -- we've acquired over 350,000 hectares of agricultural land in Australia for carbon sequestration, which is basically grazing.

We achieved final Platinum rating for our new buildings. As well as acquisition of additional biogas capacity in the U.K. through EDL, one of the Infrastructure division and a number of awards we are pretty proud of. So that's the end of our presentation. Maybe let's go to our Q&A session, and thank you for sending in your questions. I will be reading out the questions and then our Chairman will be answering them or directing traffic and invite some of our members to answer these questions. Now before we answer your submitted questions, I'd like to invite the Chairman to share a few of his thoughts.

Yes. Thank you, Joe. I just checked on my mobile. Oil price is over HKD 115 already. So this is worrying. With the geopolitical environment, more volatile and unpredictable than ever. We feel quite fortunate that our conservative and diversified approach to investments has continued to serve our group well. We have a very resilient balance sheet and a broad mix of businesses, which focuses on delivering predictable cash flows.

On this point, I think the market is fully aware that they use the word our DNA and the way we operate are quite different from other property companies in Hong Kong. At the same time, we recognize that there is very little visibility in the world right now. And there are no clear trends that are immune to disruptions. If the war in the Middle East continues for longer than what the market expects, inflation will go higher in every economy and it will be difficult for interest rates to come down. Because of this, we must be extremely cautious, even when we see good opportunities. And you certainly will not see us borrowing a lot of money to invest. We will focus on creating long-term value for our shareholders through becoming a better operator in every business that we are in as well as unlocking the underlying value of our businesses should opportunities arise. Thank you.

Thank you, Chairman. The next question with respect to the announced sale or post sale of the U.K. power networks, could you please explain the rationale? And what will be the use of proceeds? And will there be a special dividend for shareholders.

But the main reason is we received an extremely attractive offer for this quality assets. And it will be wrong if we miss the opportunity to unlock the value excellent value for shareholders and realize an attractive return from businesses that we had built and transformed over the last 15, 16 years. The mere size of this transaction or consideration is incredibly significant to say the least. The capital returning to the group will open all total new opportunities, options for us going forward. not to mention, put our balance sheet in an even stronger position and a good watch it. As for special dividend, it's too early to make any decision when the transaction has not even been completed. Let's wait for the money to be received first. Thank you.

Thank you, gentlemen. [Foreign Language].

Last year, you said you were interested in pursuing Hong Kong opportunities but did not -- not many deals materialize last year. Why was that? And is Hong Kong development or land purchase, CKA's top priority or our overseas investments more attractive.

Well, we grow up in Hong Kong, and the city has a special place now heard. And we have always been keen on investing more in Hong Kong, be it in commercial, retail properties or land sites. But as I've said in different divisions of our group, we have no must-win mentality. [Foreign Language] the only focus on any acquisition opportunity is whether the return meets our minimum threshold and whether the risks are manageable. We will continue to pursue new opportunities while maintaining our financial discipline. Thank you.

Next question. What is your view on Hong Kong's property market? How does the recent market volume impact CKA's launch strategy, especially for Victoria blossom.

Transaction volumes have seen a solid improvement, owing to the improvement in market sentiment. But developers are still pricing in pricing in a prudent manner as inventory levels are still high. No one has a crystal ball, but recent numbers do seem to show that both residential and office markets are bottoming and improving, bearing unforeseeable circumstances, of course. As for Victoria blossom, our sales team will determine the timing for the launch of the project. as well as several other existing projects, and we have confidence in them.

Next question. Your overall development margins post provision was 13.4%. How should we think about your development margins -- that's a question for Simon.

Okay. Thank you. In general, all developers are still in the process of selling quite expensive inventory from the past. Although our inventory may be less expensive, the margins are not great. From time to time, especially when public markets are challenging, we will make provisions for projects as part of our conservative approach to manage our balance sheet, and we will continue to be conservative in this respect. For the year, development margins before provision for Hong Kong was 24.2%. And margins before provision for Mainland and oversea projects were 36.5% and 11.6%, respectively.

Thank you, Simon. Next question. What is your view on the government raising stamp duty for ultra luxury or luxurious units? How would that impact your high-end project like board road development?

Almost not much impact. The super luxury market is a small part of the overall residential market. So there should not be much impact to the overall sentiment. For the luxury bias, it is more about having them to find the right product in the market. We believe that our borrow development is certainly one of these unique projects, which offers both a sending view, the right address and the convenience located right in the heart of our city. Thank you.

Thank you, Chairman. Your Mainland property sales remained quite slow last year. What will you do to drive sales on the mainland?

The main market is still somewhat subdued. So we are doing what we can to generate interest from not just Mainland buyers. But recently, we've got good encouragement from prospective buyers from Hong Kong who are interested to own property on the Mainland. So certainly, a lot more Hong Kong buyers buying in the Mainland, which is a good sign.

Next question is about the office market. The office market sentiment seems to be improving. Indeed, what is your current occupancy rate for CKC 2? And what is your strategy to further raise this?

This question was asked by the press earlier and answered by our fellow [ ExCo ] members. Let me quote his answer, we should offer a good perspective on this topic. The -- what you said is the sentiment in the office market definitely is continuing improving. And one thing to note about CKC is that it was the old Hughes House redevelopment. That's why our cash cost is actually very low. It should be the lowest among all new offices.

So together with the strength of our balance sheet, we can afford to be more patient than others in the last few years when the market wasn't at a good place. Now that the market is bottom out, it may be the opportune time for our leasing team to market this space in the high-quality building that fully captures the view of the entire Victoria Harbor. Thank you. Are there plans to expand in your social infrastructure sector? And how has the German portfolio performed this question can only answer what you say?

Thank you, Chairman. I think our social infrastructure portfolio provides us with a very predictable inflation-linked annuity that is contracted for over 20 years and on effectively a triple net basis. So we're quite grateful that this income from these assets has largely been able to offset the challenges and impact we've seen in the Hong Kong office and retail sector in the last few years. We completed the acquisition of our German portfolio this year and the portfolio is performing as expected. They are more suitable opportunity with the right return profile, as the Chairman said, with about the mentality of must win. We would definitely want to do more in Germany, the U.K. as well as some other countries as well.

Thank you, [indiscernible]. Next question is about our hotel division, hotel. And our hotel and service apartment contribution was stable year-on-year. Any comment on that?

While the true industry recorded year-on-year increase in tourist arrivals, helped by various initiatives and events with the industry. We're confident in the strength of our division's market offer and positioning. The occupancy for both our short-stay hotels and extended, say, service suites remained about 90% last year, which is quite decent. A good thing to note is recently, I tried to make a booking for one of my friends arriving from overseas, and I was told that the hotel I want is full. So I happily have to move by friend to another hotel. So the GM want to apologize. We say, I said, no, no, no, no. This is the happiest message. You can give me.

Thank you, Chairman. Next question is about the pub division. The Pulp division recorded a drop in earnings post impairment. Could you explain the reasons behind the impairment? And how do you plan to manage coming cost pressures?

But Gerald, you have the better to answer this question, but I'm going to change your question. We should really call it the property and pub division or something like that or a property, whatever you come up with. So let's separate impairment on property versus pub operation.

So the top state division, Greene King recorded a pre-impairment earnings growth -- so at the operating level or an increase of 9.1% as the team introduced various ways to drive sales and mitigate cost inflation challenges. However, the overall outlook of the economy, coupled with the effects of the U.K. government budget announced in November last year.

It obviously impacted the auditors outlook on the valuation of top properties leading to an impairment recorded in 2025. So as can said, operating -- at the operating level, I think improved, we were able to improve results a little bit at the asset level because of outlook, there was an impairment.

Sorry, Chuck. Also this is a very funny accounting. On shop set of property that performs better than our cost, you never write it up. But on shops that is worse than your budget or what is on books, you write down. So it's a one-way street on this. This is -- this is not the way I would use as management account. But this is the public account for legal reporting.

But I don't think it reflects the correct situation. So you might have seen some news reports from yesterday in the U.K, we are investing in various initiatives to drive sales growth, improve operational efficiency and mitigate further cost headwinds. It's not easy for the team, but we are hopeful that better days are ahead of that.

I know I got a call one day from both Frank and Kenning. They are in London coming up and said, Victor congratulations. I said why? We can't even get a seat in your pup. It's so full without standing on the street. And they want to sit also they can they left to another topic.

I think it's part of the culture to actually stand...

You can stand and drink. I don't think you can stand and eat. That's where I draw the line.

Okay. I think this will be the last question. Including in your final dividend of HKD 1.39 per share, full year dividend has increased by 2.3% year-over-year. How should we look at CPA dividend trend going forward? Will you consider correlating dividend to your recurrent income. Alternatively, will you be doing share buyback.

Will continue to link dividend payout to overall financial results and outlook. Our full year dividend is consistent with that stated approach. As for buyback of stocks, this is one of the ways to deliver long-term value to shareholders will continue to be opportunistic in our approach on this front. Thank you.

Thank you, Chairman. So this marks the end of our analyst presentation. I think given the world in term, I think in thermal, I think we're in a good place. Thank you for joining us, and we will see you next time.