Good afternoon, and welcome everyone. Before we begin, I'd like to extend my warmest wishes to wish everyone a happy Year of the Horse, Gong Hei Fat Choy.

Now let's start with the Group's financial review. Please note that all figures are in Hong Kong dollars unless stated otherwise.

For the six months ended December 2025, the Group's underlying profit was $12.2 billion, representing a year-on-year increase of 16.7%. This growth was mainly driven by higher profits from sales of trading and investment properties, together with lower finance costs.

The Group's leasing and other recurrent income remained resilient during the period. After factoring in net effect of realized fair value gains from the sale of investment properties and a net revaluation loss on investment properties, the reported profit came in at $10.2 billion, an increase of 36.2% year-on-year.

The underlying earnings per share was $4.21, while reported earnings per share was $3.54. Turning to dividend.

The Board has declared an interim dividend of 98 cents per share, an increase of 3.2% from 95 cents last year. Moving on to the profit breakdown by segment.

In property development, the Group recorded a profit of about $4.9 billion, representing a substantial increase of 94.9%. This was primarily driven by higher profit recognition from our projects on the Mainland.

Turning to property rental. The Group's net rental income remained broadly stable at around $9 billion, as a slight 1.2% decline in Hong Kong was largely offset by a 1% increase from the Mainland portfolio.

Hotel business recorded an operating profit of $428 million, an increase from $377 million reported in the same period last year. Profit from other business came in at about $2.3 billion, reflecting an 11.7% year-on-year decrease.

Taken together, this brings the Group total operating profit for the first half of fiscal year 2026 to $16.5 billion, representing a 14.3% increase year-on-year. Turning to our financial position.

Net debt stood at $83.6 billion as at the end of December 2025, with the gearing ratio improving to 13.5% from 15.1% in June last year. Interest cover for the period came in at 8.7 times, compared with 5 times a year ago.

As always, the Group upholds prudent financial management. The net debt has been reduced further since its peak in December 2023.

Net finance costs for the period decreased by 37% year-on-year, driven by lower debt and average cost of borrowing. The Group is in strong financial position, with sufficient resources to seize land opportunities in Hong Kong.

We will also maintain flexibility in a fast-changing operating environment. Details on the Group debt mix are outlined in the table here for your reference.

Our debt maturity profile was also well balanced. The Group's long-term financial strength is driven by four key pillars: first, a sizable and stable recurrent income stream; second, growth from new completions; third, leverage our reputable brand to drive a premium sales strategy; and fourth, ongoing portfolio reviews to enhance returns and improve asset turnovers.

Now let's turn to our land bank in Hong Kong. As at the end of December last year, the Group's total land bank in Hong Kong was about 57.3 million square feet of attributable GFA.

A detailed breakdown of our completed properties and those under development is shown in the pie charts here on this slide. Turning to land bank replenishment.

The Group continued to replenish our Hong Kong land bank through various channels at reasonable cost to support our future growth. In this slide, we highlight the three sites we acquired through various means, including tender, lease modification, and land exchange.

Now let's turn to the property development business in Hong Kong. During the period, the Group recognized property sales of $26.5 billion in Hong Kong, representing a 65% increase year-on-year.

Development profit came in at around $2 billion. Profit margin was 8% due to the booking of Cullinan Sky Phase 1.

We expect the booked sales margin to recover later. Moreover, if we include around $1.8 billion of underlying profit generated from the sale of Dynasty Court and Susan Peak, the overall profit margin would have been 13%.

Contracted sales not yet recognized totaled $22.2 billion, of which around $10.8 billion is expected to be recognized in the second half of this financial year. Turning now to Hong Kong residential.

Driven by stronger demand from end users and investors, Hong Kong primary residential market saw higher transaction volumes and a modest price recovery. The Group achieved contracted sales of about $17.4 billion in Hong Kong during the period.

Since January 2026, strong sales from Sierra Sea Phase 2 contributed an extra $9 billion. Major contributors to our contracted sales in the first half of this financial year are shown in the table.

This map provides an overview of our new projects to be launched in the next 10 months. We have built a strong pipeline which is diverse to cater to homebuyers across all segments and preferences.

In addition, we will continue to offer unsold units from completed projects, as well as selected non-core properties when ready. The next section is our Hong Kong rental portfolio.

During the period, the Group's gross rental income remained broadly flat year-on-year at about $8.8 billion. Overall average occupancy remained stable at around 92%.

The office portfolio held steady, while the retail portfolio recorded a slight decline in rental performance. In contrast, residential leasing grew 10% year-on-year, driven by steady increase in both rents and occupancy.

Our retail portfolio continued to perform well, achieving an average occupancy of 94%. Meanwhile, the Group malls registered year-on-year growth of tenant sales.

The Group will continue to leverage the shopping mall loyalty program, The Point, to increase customer stickiness with upgraded design and functions. Our VIP program, The Point Gold, was launched, offering exclusive services to premium customers.

For our office portfolio, overall occupancy was maintained at a high level of 91%. Notably, occupancy of IFC increased to 98% with support from the finance industry.

The Group continued to carry out asset upgrades to enhance quality of our office clusters. We are excited to launch IGC, an iconic new office project that will support West Kowloon's transformation into Central 2.0.

IGC is the dual gateway connecting Hong Kong, Mainland, and the world, ideal for big corporations to expand into the Mainland or to go global. The landmark is unique in its excellent transport network served by four MTR lines and directly connected to Hong Kong's only high-speed rail station.

The two twin block towers span 2.6 million square feet, with one tower handed over to key tenant UBS in early this year. IGC sets new standards for modern workplace, achieving the world's highest green standards, while connecting West Kowloon with its terraces and walkways.

The residential leasing portfolio saw higher rents and occupancy. It helps the Group to capture rising demand from incoming tenants and students.

Vega Suites on top of MTR Tseung Kwan O Station transformed hotel rooms into serviced suites suitable for long stay. In the next two to three years, the Group's recurrent income base will be expanded as new investment property come on stream, including two completed malls in Kowloon, as well as IGC and Artis Square Towers project.

Turning to our property business on the Mainland. As at the end of December 2025, the Group's total land bank on the Mainland was 64.6 million square feet in terms of attributable GFA.

The pie charts on this slide provide a detailed breakdown of our completed properties and properties under development. As for property development business on the Mainland, the Group recognized property sales on the Mainland increased year-on-year to about $5.9 billion, driven by higher residential sales volume.

Development profit rose to $2.9 billion with a satisfactory profit margin. About $4.1 billion of contracted sales have yet to be recognized.

Some $4 billion is expected to be recognized in the second half of this financial year. During the period, the Group achieved contracted sales of over RMB 1.3 billion on the Mainland.

Major contributors included the serviced apartment at Cullinan West, located in river west of Hangzhou IFC. Several projects will be launched over the next 10 months.

On our Mainland rental portfolio, during the period, the Group's gross rental income from the Mainland rental portfolio held steady at about $3.1 billion. In RMB terms, it was down 0.8% to RMB 2.8 billion.

An increase in income from retail portfolio offset a decrease in office rental. On the Mainland, our integrated projects feature complementary components and excellent access to public transport.

Our retail portfolio took a proactive approach to boost attractiveness, driving high occupancy and resilient performance. Meanwhile, our office portfolio, with its premium quality and comprehensive amenities, continued to appeal to multinational companies.

Our property investment portfolio will expand further with the completion of 3 ITC in Shanghai in the first half of this year. The completed Office Tower A has attracted a diverse mix of tenants, while the recently completed Tower B is drawing interest from multinational corporations.

Shopping mall ITC Maison will open in phases from first half this year. Hotel Andaz Shanghai ITC will see its grand opening in March this year.

Let's turn to our hotel business. During the period, the Group's hotel portfolio performed well.

Revenue increased 3% year-on-year to $2.8 billion. Operating profit increased 14% year-on-year to $428 million.

Luxury hotel in Hong Kong recorded a strong increase in RevPAR. The Ritz-Carlton, Shanghai, Pudong achieved record-high room rates.

The Royal Garden Kowloon East is the rebranded hotel above MTR Tseung Kwan O Station with 366 upgraded guest rooms. Moving on to ESG initiatives.

The Group remain committed to sustainability development. For details of these key initiatives and sustainability performance, you may refer to these slides or the appendix at the back.

Next, I will summarize the market and business prospects. In Hong Kong, steady economic growth continues under 'four centres and a hub' framework despite geopolitical headwinds.

Robust IPO activities and supportive policies are strengthening Hong Kong position as international financial and wealth management centres. With expected U.S.

rate cuts, rising rents and prices, home purchase demand is also gaining traction. In key Mainland cities, growth will be supported by high-tech investments and stronger ASEAN trade cooperation.

Ongoing efforts to advance opening up and domestic consumption should lift consumer confidence. A favorable mortgage environment and balanced housing measures will further support market stability.

As for the Group's business prospects, with our strong financial position, we will continue to seize opportunities to replenish our Hong Kong land bank, while maintaining prudent financial management. On development front, we will leverage our longstanding reputation to achieve premium pricing and rapid sales, re-strengthen our brand through quality and innovation, building premium homes with thoughtful design and modern facilities.

With a strong pipeline in place, we will continue to roll out new residential projects, unsold units, and non-core properties as they become ready. On property investment, we will sharpen the competitiveness of our portfolio and drive future recurrent income.

Besides enhancing our existing properties, new projects such as IGC in Hong Kong and 3 ITC in Shanghai will start to generate additional rental income gradually. I will end this presentation by summarizing highlights from the Chairman's statement.

Regardless of economic ups and downs, the Group continued to pursue new investment and add new landmarks to Hong Kong skyline. With changes comes opportunity, and the Group is ready to adapt to new circumstances.

Like the successful cases of IFC and ICC, the Group is confident that IGC can help us capture opportunities from economic transformation of Hong Kong. The Group will use the latest technologies to deliver high quality properties and services to enhance the quality of living.

This will fuel the growth of the company and Hong Kong alike, building sustainable communities that align with Hong Kong's further integration with national development. This is the end of my presentation.

Thank you.

Thank you for joining the briefing session again. Let me first introduce the panel members.

Starting from your left: Mr. K.W.

Lo, Member of the Executive Committee; Mr. Allen Fung, Executive Director; Mr.

Christopher Kwok, Executive Director; Mr. Victor Lui, Deputy Managing Director; Mr.

Raymond Kwok, Chairman and Managing Director; Mr. Mike Wong, Deputy Managing Director; Mr.

Adam Kwok, Executive Director; Mr. Frederick Li, Group Chief Accountant.

May I now invite our Chairman and Managing Director, Mr. Raymond Kwok, to share the key message of today's briefing.

Mr. Kwok, please.

Good afternoon, ladies and gentlemen. Welcome.

Gong Hei Fat Choy. I wish you all a prosperous Year of the Horse.

Thank you for attending today's briefing on our interim results. Let me start with highlights of our key developments.

For the six months ending in December 2025, the Group achieved satisfactory results. Thanks to the active residential market in Hong Kong, the Group achieved attributable contracted sales of about $17.4 billion in Hong Kong during the period.

Major contributors included Cullinan Sky Phase 2, NOVO LAND, Dynasty Court, and Victoria Harbour. In January 2026, the Group launched Phase 2A and 2B of Sierra Sea.

This project achieved a record-high subscription, with contracted sales of about $9 billion, yeah. Over the next 10 months, the Group plans to launch various new residential projects.

These projects include the second phase of Cullinan Harbour, a project near MTR Tsuen Wan West Station, and a project at Shap Pat Heung South in Yuen Long. The Group continued to support the development of the Northern Metropolis.

During the period, we have completed lease modification procedures for Kwu Tung South site. Including this site, the Group has, in total, eight projects under development in the Kwu Tung area, providing over 4.5 million square feet of gross floor area.

In addition, we have formed a task force to further explore the development potential of the area. Supported by our strong property sales and prudent financial management, the Group achieved lower gearing and high liquidity.

The healthy financial position allows the Group to acquire land should the opportunities arise. On property investment business in Hong Kong, the Group's portfolio continued to provide a substantial and stable recurring income.

Overall occupancy remained high. Early this year, we celebrated an important milestone with the completion of our International Gateway Centre, the IGC, sitting on top of the only high-speed rail station in Hong Kong.

Our IGC is the Group's latest world-class commercial landmark. This project is seamlessly connected to the high-speed rail station.

It is also one of the few high-speed rail stations in the world that sits right in the city center. At the same time, this landmark is conveniently served by the Airport Express and three major MTR lines, allows easy access to different districts and the airport, connecting destinations worldwide and all major cities on the Mainland.

With its strategic location and unrivaled connectivity, our IGC is set to become a two-way gateway linking Hong Kong with the Mainland and international markets. It offers an ideal location for wealth management companies and leading corporations to expand into the Mainland, or for Mainland companies to go global.

Apart from its great design and premium quality, our IGC is one of the greenest buildings in the world. The project has received LEED and WELL pre-certifications of the highest rating.

It is also the first new construction project in the Greater Bay Area to achieve an Excellent BREEAM rating. One of its towers was handed over to our anchor tenant UBS.

Leasing of the remaining towers is progressing smoothly. The Group is also developing the Artis Square Towers project at the West Kowloon harborfront.

This project is scheduled for completion in 2027. The two projects, i.e., IGC and our Artis Square Towers, will combine with our ICC in West Kowloon and existing properties nearby to form a commercial cluster of over 8 million square feet.

This will not only help to reshape West Kowloon to become Central 2.0, but also support Hong Kong's development into the world's biggest wealth management center. Building on the success of our IFC and ICC, the latest IGC can help us capture good opportunities at the onset of market upward trend.

On the retail front, we continued to adopt best market practices and upgrade our malls. We also leverage The Point, our membership program, to strengthen customer loyalty and improve shopper experience.

Moving on to our Mainland business, the Group achieved attributable contracted sales of about RMB 1.3 billion, mainly from the serviced apartments sale at Cullinan West of Hangzhou IFC. For property investment, our integrated projects on the Mainland put up a resilient rental performance.

Our 3 ITC in Shanghai will be completed in the first half of this year. The office building Tower B, which is the tallest building in Puxi, Shanghai, will provide premium office spaces with excellent transport connectivity.

Our ITC mall, we call ITC Maison, will open in phases from the first half of this year. Our hotel there, the Andaz Shanghai ITC, will have its grand opening in March, next month.

Upon the full completion of the whole project, it will become a one-stop destination for commerce, shopping, and entertainment. Moving forward, Hong Kong is pursuing further development under the vision of 'four centres and a hub'.

Confident in the long-term prospects of both Hong Kong and the Mainland, we shall leverage our brand and experience to embrace new opportunities. We will continue to deliver premium properties and great services, and we shall advance hand-in-hand with our home city, Hong Kong.

Thank you.

Thank you, Mr. Kwok.

We will now open the floor for questions. Before raising the questions, please identify yourself and the company you represent.

May I now have the first question, please? The gentleman on your right side in the first row, please.

Thank you. This is Griffin from Citi property team.

Happy New Year, and wish you all a happy, healthy Year of the Horse.

Same to you. Haha.

I have three questions if I can. The first one on residential outlook.

What is your view and your outlook for the Hong Kong property home price, and how much do you expect the home price to increase? Is the price recovery sustainable, and are we happy for it?

The second question is on the residential sales. Given a very strong momentum in the Hong Kong residential property market, will we revise up our financial year 2026 sales target and accelerate some of the new launches?

The third question is on the office. Can we have the update on the leasing progress for the IGC, as well as on the Artis Square Towers in the West Kowloon?

For the IGC, do we have a target occupancy by the end of this year? Thank you.

Yes, maybe I answer the first two questions on residential first. Yes, we all know that the Hong Kong residential market was entering into a new phase of recovery from second half of last year.

Primary transaction reached 20,000, which is a record over the decade, while our residential rents is also strengthening amid the inflows of talents and overseas students. Actually, the rents was peaking in last year already.

Although the pace of growth have been slowed down a bit in recent months, that may due to seasonal factors. I think positive rental carry will continue to attract a lot of investors and end users entering into the market, including those renters.

Although the U.S. interest rate remain unchanged recently, I think the low mortgage rate will happen later this year due to the drop of HIBOR.

That will also create strong support for the end users. We also have an improving supply-demand situation due to the slowing on construction and government land sales.

Actually, the inventory for sale, whether under construction or completed, is dropping. I think on all these factors, the market will continue to do well for the rest of the year.

Since we are only in the first year of recovery, normally in past history, property cycle will last for a few years. I think the strong momentum will continue, will sustain further.

On our sales target, apart from our sales recently on Sierra Sea Phase 2, in the coming 10 months, we shall have a number of projects to be launched, namely Phase 2 of Cullinan Harbour, and our Shap Pat Heung South project, and our Tsuen Wan residential project next to the West Rail station. In the second half of the year, that would be our Siu Lek Yuen project in Sha Tin, and also our Kwu Tung project next to the future MTR station, and lastly the Tung Shing Lei project in Yuen Long at the end of the year.

As I said, both the Shap Pat Heung South project and the Tsuen Wan residential project are belonging to medium size, we would like to keep our sales target on FY26 as $30 billion. Thank you.

KW on office, huh? Yeah.

Okay.

IGC is a rare project in terms of its scale, connectivity. Chairman mentioned about the fact that the project actually is being served by four railway lines.

One is serving the Mainland. From there to Shenzhen, Futian, it's only 15 minutes, within the CBD of Shenzhen, and not to mention connecting to other cities into the Mainland.

Also, we have the Airport Express Rail, which is next door seamlessly connected to IGC. That will bring tourists, visitors to the airport in less than 30 minutes.

Also the other two local MTR lines as well, that will bring people closer to each other to work, to home. With this connectivity, the unique design, the build quality, and also the sustainability credentials, the project is world-class.

That's why we have seen the interest about the project has been going up in the recent months. We have just delivered the whole tower, Tower 2B, to our anchor tenant, UBS, last month.

We have a lot of interest in the pipeline talking to us about various sizes. These people, they are mainly from the financial services sector, insurance companies, wealth managers, fund managers, banks.

We believe that we will be having the leasing progress well on track. Traction has already been taken place.

We are very confident about doing much better towards the next few months into the later part of the year. Year end, we are very confident about the leasing situation.

About AST, the Artis Square project, which is just next to the water, located inside the West Kowloon Cultural District, and this is a very unique proposition if you look at the fact that it is surrounded by performance venues, exhibition halls, and a lot of cultural stuff, and also it's next to the water and it's a lot of open spaces. It has already become a very good location in West Kowloon.

We see the beat is going up. More and more people is visiting the West Kowloon Cultural District.

We have also seen a lot of interest from the commercial sector about AST, given all the credentials that I've just mentioned. It's targeted to be ready by 2027, we believe the leasing is also taking shape.

Also because if you look at the recent activities in the financial market, influx of capital, these are all good factors contributing to the office leasing market as a whole. You may aware that occupancy level in core business districts has gone up.

Net take-up of about 1.8 million square feet has been recorded in 2025. That's quite a big contrast to what we have seen in the last few years.

The situation has been improving. More and more activities are going to happen in the pipeline already.

In short, IGC and AST, we see the leasing progress will be doing well in the coming months, in this year.

Thank you. Also our IGC is on top of the high-speed railway.

I think the high-speed railway provide even a better alternative for visitors to go to the Mainland than the airport. In fact, last year, in December, there were more Mainland-ers use the high-speed railway than using our airport to go back to the Mainland, yeah.

We see a strong growth in the traffic between Hong Kong and the Mainland. In fact, the high-speed railway covers all the major cities on the Mainland.

We are very positive towards Hong Kong as a global financial center, an asset management center, and wealth management center, especially for the Mainland. Thank you.

Thank you. Can I have the next question, please?

The gentleman on the right side, the third row.

Thank you, management. This is Karl Chan from JPMorgan.

I have three questions. The first one is about Hong Kong residential.

As we mentioned before, the Hong Kong home price outlook is getting more and more positive. Just curious, what is your latest pricing strategy for your residential projects in Hong Kong?

Say, for example, for Sierra Sea, we saw that you guys have been raising the prices, but I would say that the price hike is still not super aggressive, right? In the future, would you consider being even more aggressive in the pricing, or would you prefer to do this slowly to achieve a 100% sell-through rate every launch?

For DP margin for Hong Kong, would you expect any further improvement? What's your outlook for the Hong Kong development margin as a whole?

That's my first question. My second question is about asset disposal.

We have been disposing of Dynasty Court. Just curious if any other asset you may consider disposing of, any other non-core asset disposal, and will Sun Hung Kai actually consider selling some parts of the hotel assets to the student dorm operators?

Because recently, I guess student dormitory has been a hot topic, right? The second question is about disposal.

The last question is about capital allocation and dividend. Now our net gearing has further improved.

What's our latest capital allocation plan? How do we balance between land acquisitions, dividend, and share buyback?

Will Sun Hung Kai consider changing the dividend payout policy? I guess in the past few years, we have been discussing the possibility or raising the suggestion that maybe our dividend policy could be sticking to a certain payout ratio based on IP, recurring income, instead of just earnings.

Just curious on any change to the dividend policy. That's my three questions.

Thank you.

I answer the first four questions first. On our pricing strategy, we are always adhering to the current market condition.

In last month, we have quickly dispose almost 1,500 units in Phase 2 of Sierra Sea and fetching a total sales of over $9 billion. We have a moderate price increase to achieve such a take-up.

While for our luxury project like those in Kai Tak like Cullinan Sky, Cullinan Harbour, as market improve, we have also make adjustment on price increment. You can see that our pricing strategy is always flexible and efficient, and of course under the ground of to achieve the balance of volume and margin.

Regarding our development margin, as I said, as market improves, we have also some price increment on our luxury projects like Victoria Harbour, Cullinan Sky, Cullinan Harbour. Looking ahead, our two projects like Shap Pat Heung South and also the Tsuen Wan residential project, they are of relatively lower land cost, that can deliver a higher profit margin for us.

As I mentioned earlier, we are allowed in the first year of the property cycle of recovery, and I think the strong momentum will extend further. We are well positioned on a healthy development margin on our projects in the coming future.

Regarding asset disposal, apart from our IP Dynasty Court which we are selling now, for the time being, we don't have other plan to dispose our rental properties. However, including non-core asset disposal, we shall continue to review our portfolio from time to time, and also monitor closely the investment market.

Thank you.

On the capital allocation, land acquisition, etc., right, I think it's our current policy to just pay 50% of our profits as dividend, because there's still a lot of global uncertainty, and we would like to keep our powder dry in case of more opportunities coming up in Hong Kong, yeah. In our experience, as Victor said, we're just picking up for one year, right?

Therefore, there should be more opportunities come, especially in such a volatile world, yeah. Huh.

On the asset disposal, there's no intention for us to sell any of our hotels, right? Our hotels are all in very good location, and in fact, we don't have any office projects.

Lousy office projects everyone want to convert to a hotel, right?

Yes, I want to mention that normally the conversion of a student hostel is belonging to those Grade C commercial properties with low quality, low occupancy, and which does not apply to our portfolio. As our Townplace serviced apartment in West Kowloon is doing well, and we are able to attract premium tenants like those talents and also overseas students, especially those postgraduate students.

Thank you.

Also, we are doing well on our Tseung Kwan O serviced apartment, right,

and

hotel, yeah. In fact, we are converting the hotel into a Royal Garden hotel, yeah.

We are optimistic about a nice hotels and serviced apartment sector, yeah.

Thank you. Can I have the next question?

The gentleman in blue jacket.

Thank you, management. This is Mark Leung from UBS.

I got three questions. I think the first one, can I clarify the Chairman you just mentioned the dividend payout policy is 50%.

Is it we changed it from 40% to 50%, or now from 40% to 50% to now 50%, or should we stick back to previous this kind of 40% to 50% range? That's the first question for clarification.

The second question is more on the office rental outlook. Can we have any rental reversion guidance for IFC, ICC, and Kowloon East?

Any room to raise the rents because of the strong occupancy, and how is the recovery trend beyond Central? I think that's the first question for office.

Secondly will be on the retail side, given that the backdrop of the mainland e-commerce threat, and what is our leasing strategy? Are we planning to capitalize the rise of the Chinese brand, like maybe Lao Pu Gold?

Thank you very much.

Office KW,

huh?

Retail, Christopher, huh? Okay.

Yeah.

For office rental we have seen leasing activity accelerated with notable tenant upgrades and expansion needs. These mainly happen in the core business area of Hong Kong, by Central, West Kowloon, which has already become Central 2.0.

In these areas, we see banks, asset managers, funds, in particularly wealth management corporations, they are either considering or already taken more space. That happened, I would say, more than 12 months ago because it took time for them to consider, look at the right options, and then negotiate for terms, etc.

It take a bit of time. We have seen that happening quite solidly in the last 12 months, and we believe that will continue.

Office rents, particularly Central, has been fairly stable in the last 12 months. We haven't seen as what we've seen before, continuous drop in the rent.

That's about the full year is about 0.4% drop, so that's meaning stable. We definitely have seen rental stabilized.

For Tsim Sha Tsui, for example, is only down 1%, literally there's no change. Because demand is coming back, we could anticipate that, rent as the driving force behind it, but I think it's a bit too early to say.

We have to see whether that will sustain into, let's say, the next 12 months or so. As I said earlier, that growing demand for upgrades, flight for quality, so that actually has benefited IFC and ICC.

Both projects, they are in superb locations. These trophy buildings, we believe will continue to achieve high occupancy.

For IFC, we're now 98%, and for ICC is 91%, and we see these figures will go up. Although for IFC, 98%, there's not much room to go up before we hit 100.

We have seen 100% in IFC, many, many years, for many years already, and we believe that will come back very soon. For our Kowloon East portfolio, Millennium City, the big cluster there, the situation remains competitive.

Kowloon East is still having a lot of supply. That situation probably will not change in the short term.

As demand is coming back, we see that will improve in due course. At the moment, our priority is to maintain stable occupancy for the Group.

We need to see robust and stable occupancy, driving continuous income stream. That's our priority at the moment.

Thank you.

I like to add that actually we are positive on the Kowloon East because we are the largest landlord in that area, and we'll continue to upgrade our buildings and also to improve on the connectivity between the stations, between the Kwun Tong and Ngau Tau Kok Station, right, to our buildings. In fact, our target is to follow what Swire is doing on Island East, right?

Island East.

Island East. In fact, that's our goal.

We'll continue to upgrade the district and the area, right, and we have the best office building in Kowloon East, right?

Yes.

Regarding our latest IGC has the best ESG rating.

Yes, highest.

Maybe in Hong Kong and maybe even in China, right?

Yep.

Yep. Therefore, we believe that some of the tenants would want to move into a new building with very high ESG standard, yeah.

Christopher, retail, huh?

Sure, on the retail side, yeah, we are aware that there are more Mainland e-commerce operators entering the Hong Kong market, particularly in the delivery and kind of online goods market, and indeed, I think some of the traditional smaller ticket retailers maybe affected. I think on a broader macro side, I think the Hong Kong retail market has had a good recovery since the middle of last year.

We have observed kind of reversion to positive sales growth. I think the market is about 4% to 5% in the second half of last year, and for us, for Sun Hung Kai, we have always been above the market since the recovery.

We think that kind of trend will continue, riding on factors such as more mega events, more tourists coming to the city, and also the recovery of the stock market. We believe that these positive trends will still be present in 2026.

For our malls, I think the way we deal with this is as always, I think we care a lot about optimizing the tenant mix and also improving the customer experience at our shopping malls, right? Some examples include things that increasing our grab-and-go options in F&B sector, introducing more kind of IP stores or stores that can ride on the event economy, and also in terms of continuously enhancing our offline experiences, such as the newly opened Sky Garden in our New Town Plaza mall in Sha Tin.

As Chairman also mentioned in his statement earlier, we also have stepped up our efforts in upgrading our loyalty program. We've launched a VIP Gold program for The Point in the middle of last year, and we're also working to enhance our EV charging service across our properties network to offer better experience for the more affluent driver segment.

We believe all this will create stickiness for customers coming to our shopping malls. In terms of for Mainland brands, I think we welcome all good tenants or brands regardless whether where they're based, and I think having a presence in China gives us an edge in terms of being able to get closer to the market and figure out which may be the potential better operators to bring to Hong Kong, yeah.

The good news is all the Mainland brands, they want to come to Hong Kong, right, yeah? Also we already have the tenant relationship on the Mainland, right?

Therefore, it should be easier for us to bring them into our mall. Anyway, also for office and mall, the good news is the government is not releasing any more new land for the foreseeable future.

Therefore, especially on the mall side, we don't see any new buildings coming up to compete with us, right? Because at the moment, especially for office, especially for retail, right, they are very few new buildings of our size and of our location, yeah.

Therefore, I think we see that there will be good opportunity for us to increase our occupancy, right? Yeah.

Thank you.

The gentleman in the left side in blue blazer in the first row.

My name is Simon Cheung from Goldman Sachs. Thanks for the presentation.

Gong Hei Fat Choy to everyone. I have three questions.

One, moving on to China, I can't help to notice that you actually do achieve very high profit margin on your DP profits. Wondering whether you can share with us what is the outlook for the second half.

Do you have any contracted sales targets? If so, then what sort of projects would be the contributor into second half of the year?

The second questions, I think the market has been anticipating there may be some spin-off of some of the assets into the China REITs market in order to improve the ROE of the company, whether you have any plan for that as well. Then lastly, just back to Hong Kong, I think, Chairman, you did mention a lot about capital allocation strategy vis-a-vis dividend, etc.

In terms of land banking, obviously, we have seen a lot more active activities recently. Do you have any plan?

Do you have any targets? If so, given the current situations, what do you think are the profitability and IRR going forward if you are to bid some land in Hong Kong?

Thank you.

Adam, huh? Yeah.

Thank you. I think for China, most of our booking this year that the interim year came really from our signature niche projects, right?

It it really came a lot from Suzhou, our our our villas in there. We call it Lake Geneva.

For the next coming half of the interim year or the fiscal year, whether we can continue that, those, very niche, premium, demanding product depends also if we can get the price by the Suzhou government and so on. Obviously, if we get the price we want, we'll we'll continue to release it selectively, because it's very, very rare next to the lake, and it's, you don't have that in China anymore.

The The other ones, Hangzhou IFC, the Hangzhou Cullinan name, Victor doesn't give the Cullinan name easily to any of projects, for the Hangzhou, for the serviced apartment, get the Cullinan West and the coming Cullinan East names, that hopefully will be a good decent margin for us, too.

For the spin-off of REIT, I think the cost of borrowing is so low on the Mainland, and the banks are so keen to lend us money. Therefore, we will study the REIT idea, but it depends on how the new China REITs will be valued, yeah.

At the moment, there's no rush, yeah. We'll just focus on improving the occupancy and also improve on the tenant mix of our malls on the Mainland, yeah.

On the capital allocation, I think on the dividend side, we will try to maintain our absolute dividend per share as much as possible. Two points, right?

We'll try to stick to the 40% to 50%, and we'll try to keep our dividend at this level or higher, yeah. We'll try our best not to reduce the dividend per share, yeah.

The range you can expect will be 40% to 50%, yeah. Unless we are in the net cash situation.

For the interest of time, we will now have the last question, please. The gentleman in the second row.

Thank you, management. This is Raymond Liu from HSBC.

Happy Chinese New Year. I also got three major questions here.

For the first question, which is about the Hong Kong retail, can management provide us the retail sales and the retail rental reversion outlook for 2026? When do you expect Hong Kong retail rental income to resume positive growth?

For one of the major commercial mall, which is the retail space connecting IGC, when will it officially open, and what's the tenant commitment so far? The second question will be related to Shanghai ITC.

What is the latest pre-leasing rate for the office and retail portion of the 3 ITC? What will be our leasing strategy here, and when should we expect the full rental contribution from that?

The third question will be on the management change. We looked at there's a resignation of the Executive Director which manage the retail business.

Can management provide us more ideas about will there be any changes about the leasing strategies, how should we think of the leasing strategy going forward? That's the three major questions.

Thank you very much.

On the office, KW, huh? Yeah.

Thank you for your question. On ITC project in Shanghai, Tower A has already achieved over 90- 80% occupancy, and we are seeing that the trend is going strong.

The same as Hong Kong, major space users in Shanghai, they are going after good quality project. For ITC, we have a very good connectivity.

We've got three metro lines connecting the project, and we have a sizable mall coming up, and we got the Andaz Hotel going to be officially opened very soon. We believe all these are positive factors that will contribute to the success of this project, particularly on the office leasing side.

Now, Tower B has already been completed end of last year. We have already signed up a couple of tenants, and we are still talking to many other tenants, big ones, small ones.

Profile of these people spanning from retail, professional services, financial services, and etc. We have seen the trend actually has coming back.

Shanghai, being the economic center of China, is not a surprise to us to see that, particularly our project is of such a high quality in terms of size as well and in a very special location in Xujiahui, which is both historic and as modern as you name it, that neighborhood has it. We're confident that the leasing will continue to pick up, particularly for Tower B, it's being the tallest building in Puxi area.

We're doing something on the rooftop as well to make sure that we can capture the advantage of that particular project in respect to both visitors, whether they are coming just for a look or to Shanghai's site visit, or they are potentially our future tenants. We're going to do something on the top floor.

The mall is upcoming. I'll leave to my colleagues to further go through that.

I think we believe that the project will be successful, and we have full confidence in that. Thank you.

Maybe I also add to that, right, Tower B, it's the tallest building in Puxi, right?

Yep. Then

we have the Andaz Hotel opening up soon, right? In a way, we have the experience of leasing our IFC and ICC, right?

It's important to have the office, the first-class office, new and the best. We are also happy that for the ITC in Shanghai, all the neighboring buildings are so old.

We have the latest building and also best rating, right?

Yes.

Yeah. Therefore, I think our experiences, once we have the hotel and the office, and also the seamless connectivity to the subway, right?

Yes.

It's going to be a winning formula, yeah. In fact, it's the best location.

As KW said, we have in the hub of three major Shanghai stations, right? Yeah.

Therefore, I think with the best location and also the best building, and also have the best combination of office and a good hotel there, right, yeah?

We

are confident about the prospect of the ITC office. Christopher?

No,

I think in terms of the retail for for ITC, actually, the the initial phase is called ITC Dining, and it's on the fourth and fifth floor of the of the of the retail and office complex. It's been opened since the end of last year and it's been doing doing well.

We expect the mall to be to continue to open in phases this year, closely matching the moving date for for Tower B of the office, probably second half of of this year. We'll focus on the second and third levels, as well as the as the MTR level.

We position more as a one-stop destination for shopping, dining, leisure, and entertainment. I think like Chairman says, I think kind of we have the advantage of of being a new property, we'll have more outdoor spaces.

We also have a very strong connectivity with the MTR network, which will will bring natural traffic flow towards us, and we also have the support from the and the hotel. I think that will give us that gives us confidence in the long-term potential of the project.

Then for for for back to Hong Kong, I think the as as I mentioned just now, I think the retail sales has been on a positive trajectory since the middle of last year, and we see positive factors we mentioned supporting this trend into 2026. We also observe similar trends in sales improvement at our malls.

As as we've witnessed many times, I think rents usually sales is usually the indicator for rental income. We're confident that kind of better rent reversion will be reflected later this year.

For the for the West Kowloon project, I think we've talked about it extensively already. We see it as a as a again, it's as as a hub, a Central 2.0 hub, and it's an integrated project with with office, retail, and also sitting on top the Express Rail project.

As well, I think we should also mention that it has kind of a very nice 1.5-kilometer walkway which connects the old communities of Jordan and Yau Ma Tei all the way to West Kowloon District. I think we think there's a lot of creativity to to make some good use for good retail spaces in that in that area.

For for the mall, it'll be about 600,000 square feet. It's now being under interior fitting-out works, and we will open it also by phases starting later this year again in support of primarily first to support the moving in of our major tenants at the IGC project, and we will continue to open it by phases.

I think, again, I think we need to emphasize this. We we we This project is very unique because it's it's one of the it's a new high-spec, well-connected cluster in Hong Kong, in which I don't think we'll see any comparable project of the same sky and scale and positioning in the next 10 years or so.

We it gives us confidence in the long term, yeah. Anyway,

our strategy would be trying to achieve high occupancy as soon as possible, yeah, because I think we have gone through several cycles in the past before, yeah. It's important now, of course, to try to achieve high occupancy, yeah.

On the retirement of Maureen Fung, we're sad that she has to retire because of sickness, but we have a strong team supporting the company, yeah, and we have a strong and experienced team. In fact, it gives more opportunity for our young people to take up the challenge.

Therefore, I think in a way, it's quite normal and healthy, right, to promote more young people who can do well. There's good chance for them to show that they can do it, yeah.

Anyway, I think for our ITC, right, in Shanghai, right, it's a totally mature area in Puxi, right? The tallest building, and we have the hotel, connectivity, right, also have hub of the three railway lines, right, and surrounded by older office buildings, right?

In fact, actually, I think the reason why we call ITC, if it were not for our existing IFC, we would call it IFC Shanghai, right? Anyway, we already have a very successful IFC, therefore we have to name it differently, ITC, yeah.

For our IGC, right, we see the West Kowloon is a very mature area, right, with the ICC, the Elements, and the IGC. There's about 8 million square feet of cluster there, right?

Has a good harborfront, and has all the elements of success based on our experience on IFC and ICC. Hong Kong, I think we're doing better and better in terms of being a wealth management and asset management center, right?

We already see a lot of hedge funds or quant funds all coming to Hong Kong, right? It just shows their confidence.

Hong Kong definitely will be a stronger financial center in the future, yeah, and we are with a confidence. Thank you, yeah.

Ladies and gentlemen, this concludes today's analyst briefing. Thank you for coming again, and hope you enjoy the presentation.

Please stay, and we have some refreshment outside. Thank you.