Financial Performance - The group's underlying net profit increased to HKD 1.81 billion, compared to HKD 0.42 billion in 2022, primarily due to a reduction in property impairment provisions to HKD 1.03 billion from HKD 2.54 billion[3]. - The group's attributable profit was HKD 0.696 billion, up from HKD 0.057 billion in 2022[3]. - The group confirmed a 33% decrease in recognized revenue to HKD 3.32 billion, with operating profit down 88% to HKD 0.076 billion[8]. - Group revenue decreased by 1% to HKD 8.13 billion (2022: HKD 8.20 billion) and operating profit decreased by 10% to HKD 3.14 billion (2022: HKD 3.47 billion)[13]. - The operating profit for the same period was HKD 3,139 million, down 9.8% from HKD 3,479 million year-on-year[37]. - The net profit attributable to shareholders for the period was HKD 696 million, significantly up from HKD 57 million in the previous year, representing a growth of 1,126.3%[38]. - The total comprehensive income for the six months ended June 30, 2023, was a loss of HKD 6,064 million, compared to a loss of HKD 3,810 million for the same period in 2022, indicating a worsening of approximately 59.0%[40]. Revenue Breakdown - Revenue from the logistics segment decreased by 21% to HKD 1.22 billion, with operating profit down 49% to HKD 0.203 billion[11]. - Investment property revenue decreased by 4% to HKD 2.48 billion (2022: HKD 2.59 billion) and operating profit decreased by 6% to HKD 1.68 billion (2022: HKD 1.79 billion)[13]. - Development property revenue increased by 1% to HKD 2.68 billion (2022: HKD 2.67 billion) but operating profit decreased by 87% to HKD 64 million (2022: HKD 480 million)[13]. - Hotel revenue rebounded by 77% to HKD 296 million (2022: HKD 167 million) with operating profit of HKD 44 million (2022: loss of HKD 47 million)[13]. - The investment properties segment generated revenue of HKD 2,480 million, while the development properties segment contributed HKD 2,688 million, showing a year-on-year increase of 0.52% and 0.52% respectively[49]. - The logistics segment reported revenue of HKD 1,221 million, down from HKD 1,542 million in the previous year, indicating a decline of 21%[50]. - The hotel segment's revenue was HKD 296 million, an increase from HKD 167 million in the previous year, representing a growth of 77%[50]. Dividends and Shareholder Returns - The interim dividend per share remains at HKD 0.20, with a total payout of HKD 0.611 billion, unchanged from 2022[4]. - Shareholders' attributable profit was HKD 696 million (2022: HKD 57 million) with basic earnings per share of HKD 0.23 (2022: HKD 0.02)[19]. - The company declared an interim dividend of HKD 611 million for the period, consistent with the previous year's dividend payments[40]. - The first interim dividend declared was HKD 0.20 per share, totaling HKD 611 million, consistent with the previous year[60]. Assets and Liabilities - The total assets as of June 30, 2023, amounted to HKD 215,509 million, a decrease from HKD 221,745 million in the previous year[39]. - The net assets of the company stood at HKD 149,657 million, down from HKD 155,707 million year-on-year[39]. - The group's total liabilities as of June 30, 2023, were HKD 17.525 billion, with HKD 8.163 billion already incurred and HKD 13.491 billion yet to be incurred[77]. - The net debt increased to HKD 15 billion, with a net debt to total equity ratio of 10.1%, up from 3.4% in December 2022[28]. - The group's total available credit and issued debt securities amounted to HKD 42.6 billion, with HKD 23.9 billion drawn down[29]. Cash Flow and Investments - The group recorded a net cash inflow from operating activities of HKD 2.1 billion, down from HKD 2.7 billion in the previous year[33]. - The net cash inflow from operating activities for the six months ended June 30, 2023, was HKD 5,407 million, compared to HKD 2,725 million for the same period in 2022, indicating a significant increase of approximately 98.5%[41]. - The net cash used in investing activities was HKD 9,368 million for the six months ended June 30, 2023, compared to HKD 1,979 million in the previous year, reflecting a substantial increase of approximately 373.5%[41]. - The net cash inflow from financing activities was HKD 3,428 million for the six months ended June 30, 2023, compared to a net outflow of HKD 7,620 million in the same period of 2022, showing a turnaround in financing activities[41]. - The cash and cash equivalents balance as of June 30, 2023, was HKD 8,858 million, down from HKD 18,404 million as of June 30, 2022, representing a decrease of approximately 52.1%[41]. Market Conditions and Future Outlook - Contracted sales in mainland China reached RMB 1.4 billion, down from RMB 2.3 billion in 2022, with an area of 64,200 square meters involved[7]. - The retail leasing market showed slow recovery, with rental rates and occupancy continuing to be under pressure[9]. - The group plans to launch a new hotel brand in Changsha in the fourth quarter, adding 286 rooms to its portfolio[10]. - The group plans to continue expanding its investment portfolio, focusing on both local and overseas markets, particularly in real estate and emerging economies[49]. - The logistics division is expected to enhance its operational efficiency through technological advancements and strategic partnerships in the coming quarters[49]. Governance and Compliance - The company has adhered to all principles of the Corporate Governance Code during the reporting period, with the exception of the separation of roles between the Chairman and CEO[79]. - The company’s board consists of experienced individuals, with more than half being independent non-executive directors, ensuring balanced power distribution[79]. - The company’s interim financial data for the six months ending June 30, 2023, was reviewed by the audit committee with no discrepancies noted[78]. Employee and Management Information - The company employed approximately 6,200 staff as of June 30, 2023, with around 1,100 in management roles[36]. - Employee costs amounted to HKD 825 million, slightly down from HKD 837 million in the previous year, reflecting a decrease of 1.43%[52]. - The company has committed to maintaining its workforce and utilizing government subsidies to support employee retention during challenging economic conditions[53].

Financial Performance - The group's underlying net profit increased to HKD 1.81 billion, up from HKD 0.42 billion in 2022, primarily due to a reduction in property development provisions to HKD 1.03 billion from HKD 2.54 billion[3]. - Shareholders' profit attributable to the group rose to HKD 0.696 billion, compared to HKD 0.057 billion in 2022[3]. - Group revenue decreased by 1% to HKD 8.13 billion, while operating profit fell by 10% to HKD 3.139 billion[12]. - Total comprehensive income for the period was HKD -5,420 million, compared to HKD -3,810 million in the previous year, indicating a worsening in overall financial performance[33]. - Operating profit for the same period was HKD 3,139 million, down 9.8% from HKD 3,479 million in 2022[31]. - The group recorded a net cash inflow from operating activities of HKD 2.1 billion, down from HKD 2.7 billion in the previous year[27]. - The company reported a fair value loss on equity investments of HKD 4,224 million, compared to a loss of HKD 602 million in 2022, indicating significant market volatility[33]. Revenue Breakdown - Revenue from the logistics infrastructure segment decreased by 21% to HKD 1.22 billion, with operating profit down 49% to HKD 0.203 billion[10]. - The hotel segment saw a revenue increase of 77% to HKD 0.296 billion, recovering to an operating profit of HKD 0.044 billion[9]. - Revenue from investment properties in mainland China fell by 5% to HKD 2.434 billion, with operating profit down 7% to HKD 1.653 billion[8]. - The group’s development property revenue decreased by 48% to HKD 0.311 billion, with operating profit down 77% to HKD 0.094 billion[6]. - Development property revenue increased by 1% to HKD 2.6888 billion, but operating profit plummeted 87% to HKD 64 million, reflecting a significant drop in gross margin to 4% from 18%[12]. - The logistics segment reported revenue of HKD 1,221 million, a decrease from HKD 1,542 million, representing a decline of 20.77%[40]. - The investment segment reported a revenue of HKD 1,160 million, down from HKD 901 million, reflecting a decrease of 28.73%[40]. Dividends and Shareholder Returns - Interim dividend declared at HKD 0.20 per share, with a total payout of HKD 0.611 billion, unchanged from 2022[4]. - The group reported a basic and diluted earnings per share of HKD 0.20, with total profit attributable to shareholders reaching HKD 696 million, compared to HKD 57 million in the previous year[45]. - Basic and diluted earnings per share increased to HKD 0.23 from HKD 0.02, reflecting a substantial improvement in profitability[31]. Assets and Liabilities - Non-current assets totaled HKD 163,466 million as of June 30, 2023, a slight decrease from HKD 162,287 million at the end of 2022[34]. - Current assets decreased to HKD 52,043 million from HKD 59,458 million, primarily due to a reduction in cash and bank deposits[34]. - Total liabilities were HKD 65,852 million, a marginal decrease from HKD 66,038 million in the previous year[34]. - The group’s land bank decreased to 1.6 million square meters, with no new land acquisitions during the period[7]. - Shareholders' equity decreased by 4% to HKD 145.6 billion, equivalent to HKD 47.65 per share[19]. Financial Ratios and Debt - Net debt increased by HKD 9.7 billion to HKD 15 billion, with a net debt to total equity ratio of 10.1%, up from 3.4% in December 2022[25]. - Total interest expenses for the six months ended June 30, 2023, amounted to HKD 566 million, a significant increase from HKD 281 million in the same period of 2022, reflecting a rise in the average effective borrowing interest rate from 2.1% to 4.9%[43]. - The group’s total financial expenses, including other financial costs, were HKD 399 million, compared to HKD 156 million in the previous year, indicating increased financial pressure[43]. Future Outlook and Expenditures - Major capital and development expenditures for 2023 totaled HKD 2.485 billion, with HKD 2.315 billion allocated to property investments and developments[28]. - Future estimated major expenditures amount to HKD 17.525 billion, with HKD 7.556 billion already committed[29]. Operational Insights - The group employs approximately 6,200 staff, with compensation based on job responsibilities and market trends[30]. - The company operates 16 hotels in Asia, with four fully owned or partially held by the group[39]. - The logistics division includes container terminal operations in Hong Kong and mainland China, contributing to the group's diversified business model[39]. Tax and Governance - The group’s tax expenses for the six months ended June 30, 2023, totaled HKD 676 million, down from HKD 1,019 million in the same period of 2022, with a notable decrease in tax provisions for prior years[44]. - The company has adhered to the corporate governance code throughout the financial period, with a notable exception regarding the roles of the chairman and CEO being held by the same individual, deemed appropriate for strategic execution[50].

Land Reserves and Property Portfolio - The company's land reserve in Hong Kong and Mainland China totals 2.8 million square feet, with 600,000 square feet located at the Peak[3] - The company's land reserve for development properties in Mainland China is 1.7 million square meters as of the end of 2022[3] - The company's luxury property portfolio at the Peak continues to cater to high-end customers with top-tier customization and craftsmanship[3] - The company's International Finance Centers in Chengdu and Changsha have become local landmarks due to their prime locations and excellent retail management[3] - The company's land reserves include 2.8 million square feet in Hong Kong and 1.7 million square meters in mainland China, with flagship projects such as Mount Nicholson and The Peak[77] Hotel Operations - The company manages 16 hotels across Mainland China, Hong Kong, and the Philippines, offering over 5,000 rooms and suites[3] - Hotel segment revenue decreased by 26% to HKD 369 million, with an operating loss of HKD 27 million[32] - Hotel income decreased by 26% to HKD 369 million (2021: HKD 497 million), resulting in an operating loss of HKD 27 million (2021: profit of HKD 39 million)[53] - The Wharf Hotels group, including The Murray Hong Kong and Niccolo Hotels, received multiple accolades such as Forbes Travel Guide Five-Star Awards and TripAdvisor Travelers' Choice Awards[41] Financial Performance - The company's rental income experienced its first decline in recent years due to the pandemic and macroeconomic challenges in Mainland China[11] - The company's sales volume and recognized revenue from development properties significantly decreased in 2022[11] - Group revenue decreased by 19% to HKD 18.064 billion due to significant reductions in property development recognition in Hong Kong and Mainland China, and a reversal in investment property income growth[14] - The group reported a net loss attributable to shareholders of HKD 1.705 billion, with a basic net profit of HKD 303 million excluding investment property revaluation losses[14] - Total assets amounted to HKD 221.7 billion, with a net asset value of HKD 151.6 billion, equivalent to HKD 49.60 per share[14] - Net debt decreased by 60% to HKD 5.3 billion, with a debt ratio reduced to 3.4%[14] - Revenue decreased by 19% to HKD 18,064 million, and operating profit decreased by 23% to HKD 6,603 million[19] - Basic net profit dropped by 92% to HKD 303 million, and shareholder's loss was HKD 1,705 million[19] - Total assets decreased by 13% to HKD 221,745 million, and net debt decreased by 60% to HKD 5,316 million[19] - Development property revenue in Hong Kong decreased by 79% to HKD 905 million, and operating profit decreased by 59% to HKD 616 million[25] - Contracted sales in Mainland China decreased by 70% to RMB 4.2 billion, with unrecognized sales of RMB 8.5 billion at year-end[27] - Mainland China investment property revenue decreased by 11% to HKD 4,798 million, and operating profit decreased by 9% to HKD 3,226 million[30] - Logistics infrastructure revenue decreased by 1% to HKD 2,964 million, and operating profit decreased by 1% to HKD 763 million[34] - Throughput at Modern Terminals in Hong Kong decreased by 11% to 4.4 million TEUs, while Shenzhen's throughput increased by 19% to 2 million TEUs[35] - Hong Kong Air Cargo Terminals' cargo volume decreased by 18% to 1.6 million tons due to weak demand and cross-border restrictions[36] - Group's basic net profit decreased by 92% to HKD 303 million (2021: HKD 3.646 billion), and shareholders' share of the group's loss was HKD 1.705 billion (2021: profit of HKD 6.019 billion)[52] - Group revenue decreased by 19% to HKD 18.064 billion (2021: HKD 22.378 billion), and operating profit decreased by 23% to HKD 6.603 billion (2021: HKD 8.536 billion)[53] - Investment property income decreased by 11% to HKD 4.871 billion (2021: HKD 5.467 billion), and operating profit decreased by 9% to HKD 3.247 billion (2021: HKD 3.575 billion)[53] - Development property income decreased by 33% to HKD 7.462 billion (2021: HKD 11.193 billion), and operating profit decreased by 68% to HKD 935 million (2021: HKD 2.939 billion)[53] - Logistics income decreased by 1% to HKD 2.964 billion (2021: HKD 3.002 billion), and operating profit decreased by 1% to HKD 763 million (2021: HKD 771 million)[53] - Unrealized revaluation loss on investment properties amounted to HKD 735 million (2021: HKD 31 million)[54] - Other net expenses amounted to HKD 5.367 billion (2021: HKD 1.019 billion), including impairment provisions for development properties of HKD 4.24 billion (2021: HKD 3.336 billion)[55] - Financial expenses increased by 143% to HKD 646 million (2021: HKD 266 million), with the actual borrowing interest rate rising to 2.6% (2021: 1.8%)[56] - Tax expenses decreased by 43% to HKD 1.66 billion (2021: HKD 2.898 billion), including deferred tax of HKD 194 million due to revaluation surplus of mainland investment properties (2021: HKD 852 million)[58] - Group's underlying net profit decreased by 92% to HKD 303 million (2021: HKD 3.646 billion), with development properties loss expanding to HKD 4.054 billion (2021: HKD 1.252 billion)[58] - Total contracted sales dropped by 74% to HKD 5.678 billion (2021: HKD 21.864 billion), with Hong Kong sales decreasing by 79% to HKD 1.025 billion (2021: HKD 4.914 billion)[59] - Shareholders' equity decreased by 6% to HKD 151.6 billion (2021: HKD 162 billion), equivalent to HKD 49.60 per share (2021: HKD 53.02 per share)[60] - Total operating assets decreased by 10% to HKD 205.9 billion (2021: HKD 228.6 billion), with Hong Kong operating assets increasing by 1% to HKD 95.6 billion (2021: HKD 94.6 billion)[61] - Investment properties portfolio was reported at HKD 69.2 billion (2021: HKD 76.5 billion), accounting for 34% of total operating assets (2021: 33%)[62] - Development properties assets decreased by 11% to HKD 43 billion (2021: HKD 48.5 billion), including Hong Kong development properties of HKD 28.5 billion (2021: HKD 23.6 billion)[63] - Associates and joint ventures' interests decreased by 14% to HKD 30.8 billion (2021: HKD 35.9 billion)[64] - Long-term investments totaled HKD 48.9 billion (2021: HKD 52.9 billion), with HKD 40.3 billion in listed equities (2021: HKD 44.1 billion)[65] - Sales deposits decreased by 15% to HKD 8.2 billion (2021: HKD 9.6 billion), to be recognized in the coming years[66] - Net debt decreased by 60% to HKD 5.3 billion as of December 31, 2022, compared to HKD 13.2 billion in 2021, primarily due to the sale of long-term investments and reduced construction costs offset by land premium payments for the Kowloon Godown redevelopment[67] - The net debt to total equity ratio further declined to 3.4% in 2022 from 7.9% in 2021, reflecting a stronger financial position[67] - Total available credit facilities and issued debt securities amounted to HKD 35.9 billion, with HKD 19.9 billion utilized as of December 31, 2022[68][69] - The company's debt portfolio is primarily denominated in USD, HKD, and RMB, with funds mainly used for investment properties, development properties, and port investments[70] - Operating cash inflow before working capital changes was HKD 5.1 billion in 2022, down from HKD 7.5 billion in 2021, with total operating cash inflow reaching HKD 6.2 billion[71] - Total capital and development expenditures for 2022 amounted to HKD 7.905 billion, with HKD 6.546 billion allocated to development properties[72] - Future commitments for major expenditures over the next few years are estimated at HKD 21.654 billion, with HKD 8.163 billion already committed[74] - The company's dividend policy aims to distribute approximately 30% of its underlying net profit, subject to board approval based on financial performance and cash flow[75] - The first interim dividend of HKD 0.20 per share was paid on September 15, 2022, and the second interim dividend of HKD 0.20 per share will be paid on April 27, 2023, totaling HKD 0.40 per share for the year[134] - Revenue for 2022 decreased to HKD 18,064 million from HKD 22,378 million in 2021, a decline of 19.3%[192] - Operating profit before depreciation, amortization, interest, and taxes dropped to HKD 7,320 million in 2022 from HKD 9,290 million in 2021, a decrease of 21.2%[192] - Net loss attributable to shareholders was HKD 1,705 million in 2022, compared to a profit of HKD 6,019 million in 2021[192] - Basic and diluted loss per share was HKD 0.56 in 2022, down from a profit of HKD 1.97 per share in 2021[192] - Total comprehensive loss for 2022 was HKD 9,241 million, compared to a comprehensive income of HKD 4,758 million in 2021[193] - Fair value changes in equity investments resulted in a loss of HKD 1,520 million in 2022, compared to a loss of HKD 4,054 million in 2021[193] - Exchange differences on translation of Mainland operations led to a loss of HKD 5,035 million in 2022, compared to a gain of HKD 1,929 million in 2021[193] - Share of other comprehensive income from associates and joint ventures was a loss of HKD 1,252 million in 2022, compared to a gain of HKD 544 million in 2021[193] - Total assets decreased to HKD 221,745 million in 2022 from HKD 253,700 million in 2021, a decline of 12.6%[194] - Investment properties decreased to HKD 69,222 million in 2022 from HKD 76,525 million in 2021, a decline of 9.5%[194] - Bank deposits and cash decreased to HKD 14,648 million in 2022 from HKD 23,559 million in 2021, a decline of 37.8%[194] - Total liabilities decreased to HKD 66,038 million in 2022 from HKD 87,323 million in 2021, a decline of 24.4%[194] - Net assets decreased to HKD 155,707 million in 2022 from HKD 166,377 million in 2021, a decline of 6.4%[194] - The company reported a net loss of HKD 1,705 million in 2022 compared to a net profit of HKD 6,019 million in 2021[195] - Other comprehensive income showed a loss of HKD 7,508 million in 2022 compared to a loss of HKD 1,706 million in 2021[195] - Total equity decreased to HKD 155,707 million in 2022 from HKD 166,377 million in 2021, a decline of 6.4%[195] - The company paid dividends of HKD 611 million for the second interim dividend of 2021 and the first interim dividend of 2022[195] - Non-controlling interests' dividends paid were HKD 207 million in 2022 compared to HKD 710 million in 2021[195] - Operating cash inflow from operations increased to HKD 6,692 million in 2022 from HKD 3,553 million in 2021, reflecting improved operational efficiency[199] - Net cash from investing activities decreased to HKD 4,312 million in 2022 from HKD 11,314 million in 2021, primarily due to lower proceeds from the sale of other long-term investments[196] - Net cash used in financing activities increased to HKD 17,552 million in 2022 from HKD 7,414 million in 2021, driven by higher repayments of bank and other borrowings[196] - Cash and cash equivalents decreased by HKD 7,057 million in 2022, ending the year at HKD 14,648 million compared to HKD 23,559 million at the end of 2021[196] - The company paid HKD 1,222 million in dividends to company shareholders in both 2022 and 2021, maintaining consistent shareholder returns[196] - Interest paid decreased to HKD 132 million in 2022 from HKD 494 million in 2021, reflecting lower interest expenses[196] - Proceeds from the sale of other long-term investments decreased to HKD 14,273 million in 2022 from HKD 23,284 million in 2021, impacting overall investment cash flow[196] - New bank and other borrowings decreased significantly to HKD 8,258 million in 2022 from HKD 35,123 million in 2021, indicating reduced reliance on external financing[196] - The company's operating profit decreased to HKD 6,603 million in 2022 from HKD 8,536 million in 2021, reflecting challenging market conditions[199] - Cash and cash equivalents at the end of 2022 were HKD 14,648 million, down from HKD 23,559 million at the end of 2021, primarily due to higher cash outflows in financing activities[198] Sustainability and ESG Initiatives - The company has set a long-term goal for 2030 to reduce water usage, carbon emissions, electricity intensity, and waste as part of its sustainability efforts[4] - The company was awarded the AA+ rating in the Hang Seng ESG Index and received the Social Responsibility Advanced Index certification from the Hong Kong Quality Assurance Agency[4] - The group is integrating green efforts and has set a long-term goal for 2030 to reduce carbon emissions, energy intensity, water, and waste[16] - The group's ESG rating improved to AA+ in 2022, and it remains a constituent of the Hang Seng Sustainability Index Series[16] - The company implemented a Climate Change Policy Statement to address climate-related risks and opportunities, following TCFD recommendations[46] - Shanghai Wheelock Square achieved LEED Platinum certification, and Shanghai Times Square obtained ISO 50001 Energy Management System certification in 2022[47] - Wharf Holdings secured green loans to enhance the environmental performance of Chengdu IFS and Changsha IFS, and raised sustainability-linked loans to support ESG improvements[48] - The group's climate risk assessment includes scenario analysis to identify physical and transition risks and opportunities under different climate conditions[178] - The group's sustainability efforts are detailed in the independently published "Sustainability Report 2022"[178] Logistics and Infrastructure - The company's Modern Terminals and Hong Kong Air Cargo Terminals are key contributors to Hong Kong's status as an international trade and transportation hub[3] - Modern Terminals handled over 140 million TEUs in its 50 years of operation, but faced challenges in 2022 with declining throughput due to external environment deterioration and cross-border restrictions[13] - Throughput at Modern Terminals in Hong Kong decreased by 11% to 4.4 million TEUs, while Shenzhen's throughput increased by 19% to 2 million TEUs[35] - Hong Kong Air Cargo Terminals' cargo volume decreased by 18% to 1.6 million tons due to weak demand and cross-border restrictions[36] - The logistics segment, operating container terminals in Hong Kong and China, faces risks from global economic downturns, geopolitical tensions, and supply chain decentralization, with efforts focused on improving operational efficiency and financial stability[174] Corporate Governance and Board Structure - The company's Board of Directors consists of 12 members, including 5 executive directors and 7 independent non-executive directors, with a female representation of 25%[85] - The company aims to maintain at least the current level of female representation on the Board, with an ultimate goal of achieving gender equality[85] - The company's Board diversity includes 25% male and 75% female representation, with age groups primarily between 60-69 years (42%) and 70 years or above (50%)[87] - The company's Board members have diverse professional experiences across industries such as finance/accounting, real estate development, logistics, and public service[87] - The company adheres to the Corporate Governance Code, with the exception of Code Provision C.2.1, which allows the Chairman to also serve as the Managing Director for strategic planning efficiency[81] - The company has strengthened its corporate governance framework to ensure proper management, transparency, and accountability, benefiting shareholders and stakeholders[79] - The company's corporate culture is deeply rooted in high standards of business ethics and integrity, aligned with its mission and strategic goals[82] - The company's risk management framework includes oversight of major risks, including environmental, social, and governance (ESG) risks, and internal control systems[84] - The company's nomination committee reviews the

Financial Performance - The group reported a 33% decrease in revenue, with operating profit down 19%[4] - The basic net profit increased to HKD 428 million, compared to a loss of HKD 360 million in the previous year[5] - Revenue from Hong Kong properties decreased by 75% to HKD 603 million, with operating profit down 40% to HKD 412 million[8] - Revenue from mainland China development properties decreased by 29% to HKD 49.91 billion, with operating profit down 44% to HKD 609 million[9] - The group recorded a 60% decrease in contracted sales to RMB 2.3 billion, with an area of 78,000 square meters involved[9] - Group revenue decreased by 33% to HKD 8.209 billion, down from HKD 12.337 billion in 2021[17] - Operating profit decreased by 19% to HKD 3.479 billion, compared to HKD 4.301 billion in 2021[17] - Shareholders' profit decreased by 95% to HKD 57 million, down from HKD 1.038 billion in 2021[23] - The net profit attributable to shareholders for the six months ended June 30, 2022, was HKD 175 million, a significant drop of 84.7% from HKD 1,150 million in the previous year[41] - Total comprehensive income for the period was HKD (3,810) million, compared to HKD 6,908 million in the same period of 2021, indicating a decline of 155.2%[41] Asset and Equity Changes - Total assets decreased by 3% to HKD 222.5 billion, down from HKD 228.6 billion in 2021[26] - Total equity decreased by 3% to HKD 157.6 billion, compared to HKD 162 billion in 2021[25] - Development property assets decreased by 9% to HKD 44.4 billion, including mainland development properties at HKD 21.1 billion and Hong Kong development properties at HKD 23.3 billion[28] - The equity in joint ventures and associates decreased to HKD 34 billion, down from HKD 35.9 billion[29] - The net asset value as of June 30, 2022, was HKD 161,950 million, down from HKD 166,377 million, a decline of 2.6%[42] Cash Flow and Debt Management - The group recorded a net cash inflow of HKD 2.7 billion from operating activities, with a significant increase in sales deposits contributing to this[35] - Net debt decreased by 18% to HKD 10.9 billion, with a net debt to total equity ratio of 6.7%[31] - Cash and cash equivalents decreased by HKD 4,192 million during the six months ended June 30, 2022, compared to an increase of HKD 3,164 million in the same period of 2021[44] - Total bank borrowings and other borrowings as of June 30 were HKD 29.281 billion, down from HKD 36.745 billion at the end of 2021[64] Segment Performance - The group operates in five reportable segments: investment properties, development properties, hotels, logistics, and investments, with a focus on diversifying its business operations[48] - The logistics segment generated revenue of HKD 1,542 million, an increase from HKD 1,361 million in the previous year, showing a growth of approximately 13.3%[50] - Revenue from investment properties was HKD 2,595 million, while revenue from development properties was HKD 2,674 million, indicating a significant drop from HKD 6,704 million in the previous year[50] Dividend and Shareholder Information - The first interim dividend remains unchanged at HKD 0.20 per share, totaling HKD 610 million[6] - The first interim dividend declared was HKD 0.20 per share, totaling HKD 611 million, consistent with the previous year[60][61] - The company has a significant shareholder, K. Wah International Holdings Limited, holding 1,942,964,551 shares, representing 63.58% of the total issued shares[84] Governance and Compliance - The company has complied with all corporate governance codes except for one, which allows the same person to serve as both chairman and CEO[78] - The company’s board of directors includes independent non-executive directors, ensuring governance and oversight[90] - All directors have adhered to the company's securities trading code during the reporting period[79] Investment and Fair Value Changes - The investment property portfolio is valued at HKD 74.8 billion, accounting for 34% of total assets, with mainland properties valued at HKD 56.9 billion and Hong Kong properties at HKD 17.9 billion[27] - The fair value change of equity investments resulted in a loss of HKD (602) million, contrasting with a gain of HKD 4,776 million in the prior year[41] - The fair value of listed investments as of June 30, 2022, is HKD 45,569 million, an increase from HKD 44,100 million as of December 31, 2021[67]

Financial Performance - The group's underlying net profit increased by 7% to HKD 3.646 billion, with a significant reliance on logistics and investment properties for growth[14]. - Shareholders' profit rose by 56% to HKD 6.019 billion, with earnings per share at HKD 1.97[14]. - Total assets reached HKD 253.7 billion, with a net asset value of HKD 162 billion, equivalent to HKD 53.02 per share[14]. - The net debt was reduced by half to HKD 13.2 billion, resulting in a debt ratio decrease from 15.6% to 7.9% compared to December 31, 2020[14]. - Revenue for the year 2021 was HKD 22,378 million, representing a 7% increase from HKD 20,997 million in 2020[20]. - Operating profit decreased by 23% to HKD 8,536 million from HKD 11,104 million in the previous year[20]. - Basic net profit increased by 7% to HKD 3,646 million, compared to HKD 3,417 million in 2020[20]. - The total equity increased by 2% to HKD 166,377 million from HKD 163,476 million in 2020[20]. - The basic earnings per share rose by 6% to HKD 1.19 from HKD 1.12 in the previous year[20]. - The group recorded a revenue increase in its Hong Kong property segment to HKD 4,317 million, with operating profit rising to HKD 1,492 million[23]. Land and Property Development - As of the end of 2021, the group's land reserves for development properties in mainland China totaled 2.1 million square meters[3]. - The group has a cautious outlook on future land acquisitions, reflecting the changing market dynamics and intensified competition[3]. - The land reserve decreased to 2.1 million square meters, reflecting a more cautious approach to acquiring new land parcels due to strict price control measures and regulatory policies[27]. - The group focuses on six key cities in mainland China for property development, utilizing joint ventures to mitigate risks[84]. - The Mount Nicholson project achieved contracted sales totaling HKD 2,100 million, with 10 units remaining unsold out of 67[24]. Awards and Recognition - The group received multiple awards in 2021, including the "Ten Years + Business Caring" logo from the Hong Kong Council of Social Service and the Annual Responsible Brand Award at the 11th China Public Welfare Festival[4]. - The group maintains its position as a constituent of the Hang Seng Sustainable Development Index and received an AA rating from Hang Seng ESG[4]. - The company received the second place in the performance of commercial real estate enterprises for the year 2021, according to the China Real Estate Media "Viewpoint" performance index[44]. Corporate Social Responsibility - The group provided HKD 10 million through the "Kowloon Wharf Emergency Support Fund" to assist families affected by the fifth wave of the COVID-19 pandemic in Hong Kong[4]. - The group emphasizes its "Creating Tomorrow" philosophy, extending to community engagement and support for various charitable initiatives[3]. - The company has committed HKD 100 million to support pandemic relief efforts[15]. - The "School Start" program has benefited nearly 80,000 students across 82 schools, supported by 72 partner organizations[57]. - The company has been actively involved in charitable organizations and non-governmental organizations, reflecting its commitment to corporate social responsibility[157]. Sustainability and Environmental Initiatives - The company aims to achieve direct greenhouse gas emissions of zero by 2030 and carbon neutrality by 2050[52]. - The company has implemented a "Climate Change Policy Statement" across all business units to address climate-related risks and opportunities[50]. - The company upgraded the LED lighting system at Changsha International Finance Center to reduce energy consumption, showcasing its commitment to energy efficiency[51]. - The company has installed approximately 300 solar panels, providing 140,000 kWh of electricity, which is expected to reduce carbon emissions by over 51,800 kg compared to traditional power generation[52]. - The company actively promotes environmental awareness through community activities, such as the "Nature WEserve" event in Chengdu[51]. Governance and Board Structure - The board consists of 13 directors, including 6 executive directors and 7 independent non-executive directors, enhancing governance and oversight[90]. - The company has adopted a formal nomination policy since January 2019 to ensure a balanced and diverse board composition[92]. - The company emphasizes the importance of board diversity as a strategic goal for sustainable development[90]. - The company has established three board committees: Audit Committee, Remuneration Committee, and Nomination Committee, with their roles and responsibilities disclosed on the company website[104]. - The company has a directors' liability insurance policy in place to provide appropriate protection for its directors[141]. Risk Management - The board is responsible for overseeing the risk management and internal control systems to protect the interests of the company and its shareholders[112]. - The company has established a whistleblowing mechanism to allow employees and stakeholders to report any suspected misconduct confidentially[117]. - The company emphasizes the importance of continuous review and improvement of risk management systems to adapt to changes in the business and regulatory environment[116]. - Financial risks faced by the group include interest rate risk, foreign currency risk, equity price risk, and credit risk, with management policies in place to address these[191]. - The group actively assesses regulatory changes to mitigate legal and compliance risks across its operations in Hong Kong and mainland China[190]. Shareholder Communication - The group has adopted a Shareholder Communication Policy to ensure shareholders have access to unbiased and comprehensible information regarding financial performance and strategic goals[122]. - The company holds at least one annual general meeting to facilitate direct interaction with shareholders, allowing them to pose questions to board members and auditors[123]. - The company encourages shareholders to participate in meetings electronically to minimize health risks due to the ongoing pandemic[126]. - The group prioritizes shareholder privacy, ensuring that personal information is protected and disclosed only when legally required[124]. - The company regularly communicates with the investment community through various formats, including investor briefings and roadshows[124]. Financial Risks and Audit - The audit identified key audit matters related to the valuation of investment properties, emphasizing the significant judgments and estimates involved[196]. - The financial statements were prepared in accordance with Hong Kong Financial Reporting Standards, reflecting a true and fair view of the group's financial position as of December 31, 2021[194]. - The audit opinion confirmed that the financial statements were properly prepared in compliance with the Hong Kong Companies Ordinance[194]. - The audit committee has concluded that the risk management and internal control systems are effective and sufficient as of December 31, 2021[120]. - The company engaged external valuation firms to ensure independence and objectivity in the valuation process[196].