Good afternoon. Welcome to the CK Asset Holdings Limited 2025 annual results analyst presentation.

My name is Gerald. On my right is two of my fellow ExCo members, Simon Man and Yue Seng Chiu Chairman, Mr.

Victor Li, will join us shortly for the Q&A session after the presentation. We'll quickly go into it.

2025 results highlights. Revenue came to $85.85 billion, up 19.9%.

Profit before investment property revaluation, $11.96 billion, or $3.42, up 2.7%. We recorded a IP revaluation deficit of $1.11 billion last year, or 32 cents, leading to a profit attributable to shareholders of $10.85 billion, or $3.10, down 20.3%.

We declared a final dividend of of $1.39, making full-year dividend $1.78. Dividend per share hence up 2.3% over last year.

Net book value per share also has risen by 2.3% to $113.28. Turning to our principal activities.

76% of our revenue and 85% of our profit contribution are now recurrent 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 $20.45 billion, up 105.3%. Profit contribution after provisions at $2.7 billion, up 24%.

Overall margin post-provision was 13.4%. Major contribution came from three projects: The Greenwich Phase 2, Beijing, $1.15 billion; The Coastline Phase 1 and 2 in Hong Kong, $1.1 billion; and Regency Garden Phase 5B1, 5B2A from Shanghai, $957 million.

If you look at the Hong Kong contribution margin, it was 4.2%, the mainland 27.8%, and overseas 11.6 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.

Our performance from last year was was pretty resilient from this division. As you can see, revenue dropped by only 1.9% to six just over $6 billion, and profit contribution dropped by 2.2%, came to $4.6 billion.

The margin was pretty steady at 76.6%. Major contribution came from Cheung Kong Center, $945 million; Hutchison Logistics Centre, $640 million; and The Whampoa, $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 and German Germany were not recorded as part of social infrastructure income revenue here. They are they are actually recorded as part of our gain from financial instrument.

Last year's results also included Shanghai Westgate development, which no longer the joint venture has ended this year. If you take Shanghai Westgate 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 a small decrease of 2.2%. The increase of social infrastructure property contribution actually have successfully offsetted the challenges we 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 one close to $1.1 billion. Mostly came from three assets: 1881 commercial mall, and CKC1 and CKC2.

Hotel and serviced suite operation, a very solid contribution in a in a pretty competitive market. $4.6 billion of revenue, up 6%; profit contribution, you see here, is up 0.4%, but last year we actually had some written-back provision.

If you take that take that out, we actually profit contribution would have gone up by 8.1% compared to last year, very, very solid. That good performance was largely because of the improvement in the hotel occupancy compared to 2024, from 82% to 90%.

As you can see, both our hotel room occupancy and our average serviced suites occupancy were roughly around 90% last year. Property and project management, extremely steady: $910 million revenue, 367 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.

We have 2,500, roughly 2,500 pubs in the UK: 1,500 under Pub Company, what we call managed, directly manage, operated pubs; about a 1,000 under Pub Partners division, what we call tenanted or lease or franchise pubs; and two breweries, one in England, one in and Scotland. Revenue went up by 7.4% to $26.23 billion last year, and operating profit before asset impairment went up by 9.1% to $1.9 billion.

We recorded a $1.6 billion of asset impairment largely due to the well-publicized continued cost pressure in the UK and and tough macro conditions. As a result, the profit contribution post-impairment came to $313 million, down 41.9%.

These are our joint ventures together with our sister companies within the infrastructure and utility asset operation division, and as you can see their respective shareholding on the right. Very healthy 3.6% increase in profit contribution to $8.66 billion.

Contribution margin was 31.4%. Welcome to our Chairman.

Two interesting points in terms of performance: Northumbrian Water, a healthy contribution margin of 32.1%, a contribution of $1.05 billion, which is up 29% from last year due to a a very good price resets, as well as Dutch Enviro Energy, a $119 million of contribution, up 61% from last year due to a full recovery from our energy-from-waste operation post the reconstruction or redevelopment of the of our plants. We have in January, we completed the disposal of Eversholt UK Rails, and we will be able to book a gain of $617 million, which will be recognized this year.

Gerald, if I may, add just a comment on pubs. Earlier, we keep calling it pub operation, and sometimes our shareholder may misunderstand as if the main business is the operation of the pub, but actually it's two businesses.

One is the operation, and one is property. We haven't forgotten that we're mainly a property company.

We own most of the shops. The asset impairment is mainly on the property.

Operation is growing. One is a non-cash, one is a cash.

Let's separate between operation and shops. I think Simon, correct me if I'm wrong.

I think the best way maybe in the future we put in a name sort of pub and property or something like that. No, I'm not going to come up with the name, you should come up with the name.

Something to reflect the fact that we're not renting the shops, that we're the owner of the shops.

That's right. The 90% of our properties are actually freehold or extremely long 300 years or 900 years long leasehold.

Next page. We have also announced the proposed disposal of UK Power Networks subject to closing conditions.

If successful, approximately $8.4 billion of gain will be recorded this year, as well as receiving $22.2 billion of cash upon closing. I'll turn it over to Simon for the next few pages.

Thanks, Gerald. As at as of 31st December 2025, the group's interest in the three listed real estate investment trusts remained more or less the same: 35.4% in the Hui Xian REIT, which own and manage 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 own and manage 3 million square feet of retail properties in Hong Kong and in Singapore; and 17.4% interest 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, we share and we share a net rental profit of $126 million for the year. Last year was $48 million.

Received distribution of only $7 million in during the year. For the Fortune REIT and Prosperity REIT, the the the dividend distribution received from them amounted to $220 million this year and $226 million last year, and were recognized as investment income.

Altogether, we received a total distribution of $227 million from the three listed REITs. For the gearing and maturity profile, at the year-end date, the group's bank and other loans amounted to HK$51.4 billion, a decrease of $1.3 billion from last year.

$11.6 billion was repayable within 1 year, $34.6 billion within 2 to 5 years, and $5.2 billion beyond 5 years. Taking into account our bank balance and cash on hand of $41.7 billion at the year-end date, the group carried a net debt of only HK$9.7 billion.

The net debt to net total capital ratio was approximately 2.3%, and the net debt to shareholders' fund was 2.4%. Our credit rating from Moody's is A2, and from stable, and and our credit rating from Standard & Poor's is A, stable.

At the year-end date, the group has a land 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 rental. And 9 million square feet was held for hotel and serviced suite operation.

26 million square feet was held for pub operation. For geographical, 27 million square feet was in Hong Kong, 61 million square feet was on the mainland, and 34 million square feet overseas, mainly in the United Kingdom.

That complete our presentation.

Chairman? Oh, that's one more.

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.

We are one of the early adopters of the Stock Exchange's new climate-related disclosure requirements, and developed a transition plan underpinned by six decarbonization levers. A few highlights here, bolded.

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 UK through EDL, one of the infrastructure division, and a number of awards that we're pretty proud of. That's the end of our presentation.

Maybe let's go to Q&A session. 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.

Yep, thank you, Gerald. I just checked on my mobile.

Oil price is over $115 already. 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, may I 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.

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 proposed sale of the UK 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?

The main reason is received an extremely attractive offer for this quality asset. It will be wrong if we miss the opportunity to unlock the 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 sorts of new options for us going forward, not to mention put our balance sheet in an even stronger position, and a good war chest.

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, Chairman. [Sau dou cin sin syun laa?]

. Last year, you said you were interested in pursuing Hong Kong opportunities, but not many deals materialized last year.

Why was that, and is Hong Kong development or land purchase CKA's top priority, or are overseas investments more attractive?

We grow up in Hong Kong, and the city has a special place in our heart. We have always been keen on investing more in Hong Kong, be it in commercial, retail properties, or land sites.

As I've said, in different divisions of our group, we have no must-win mentality. [Zung man gong giu dak go mou zi zoi bit dak?]

. 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 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. Developers are still 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.

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 property markets are challenging, we will make provisions for projects as part of our conservative approach to manage our balance sheet.

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 overseas projects were 6 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 Barker Road development?

Almost not much impact. The super-luxury market is a small part of the overall residential market, there should not be much impact to the overall sentiment.

For the luxury buyers, it is more about helping them to find the right product in the market. We believe that our Barker Road development certainly one of these unique projects which offers both a stunning 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 mainland market is still somewhat subdued, we are doing what we can to generate interest from not just mainland buyers, but recently we got good encouragement from prospective buyers from Hong Kong who are interested to own a property on the mainland. Suddenly 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 CKC2, 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, which should offer a good perspective on this topic.

What he said is the sentiment in the office market definitely is continuing improving. One thing to note about CKC2 is that it was the old Hutchison House redevelopment.

That's why our cash cost is actually very low, should be the lowest among all new offices. 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 bottoming 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 Harbour. Thank you.

Are there plans to expand in your social infrastructure sector, and how has the German portfolio performed?

This question can only be answered by Eusung. Oh,

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.

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 sectors the last few years. We completed the acquisition of our German portfolio this year, and the portfolio is performing as expected.

If there're more suitable opportunity with the right return profile, as the Chairman said, without the mentality of must-win, we would definitely want to do more in Germany, the UK, as well as some other countries as well.

Thank you, Eusung. Next question is about our hotel division: Your hotel and serviced apartment contribution was stable year-on-year.

Any comment on that?

The tourism industry recorded year-on-year increase in tourist arrivals, helped by various initiatives and events to boost 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-stay serviced 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.

I happily have to move my friend to another hotel. The GM want to apologize to me, I said, "No, this is the happiest message you can give me."

Thank you, Chairman. Next question is about the pubs division: The pub 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?

Gerald, maybe you have a better to answer this question. I want to change the question.

We should really call it the property and pub division, or something like that, or pub and property, whatever you'll come up with. Let's separate impairment on property versus pub operation.

The pub estate division, Greene King, recorded a pre-impairment earnings growth at the operating level, 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 UK government budget announced in November last year, it obviously impacted the auditors' outlook on the valuation of pub properties, leading to an impairment recorded in 2025.

As the Chairman said, at the operating level, I think we were able to improve results a little bit. At the asset level, because of outlook, there was a impairment.

Sorry, Gerald. Also, this is very funny accounting.

On property that performs better than our cost, you never write it up. On shops that is worse than your budget or what is on books, you write down.

It's one-way street on this. This is not the way I would use as management account, but this is the public account for legal reporting.

Right.

I don't think it reflects the correct situation.

You might have seen some news reports from yesterday in the UK. 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 us.

All I know is that I got a call one day from both Frank and Canning. They're in London.

Called me up said, "Victor, congratulations." I said, "Why?"

"We can't even get a seat in your pub. It's so full when I was standing on the street."

They want to sit down and eat, they left to another pub.

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

You can stand and drink. I don't think you can stand and eat.

That's true.

That's where I draw the line. Okay.

I think this will be the last question: Including in your final dividend of $1.39 per share, full-year dividend has increased by 2.3% year-over-year. How should we look at CKC CKA's dividend trend going forward?

Will you consider correlating dividend to your recurrent income? Alternatively, will you be doing share buyback?

We'll 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. We'll continue to be opportunistic in our approach on this front.

Thank you.

Thank you, Chairman. This marks the end of our analyst presentation.

I think given the world in turmoil, I think we're in a good place. Thank you.

Thank you for joining us, and we will see you next time.