Chairman & CEO's Statement

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David Chiu

Chairman and Chief
Executive Officer

As you may know, we have a very clear business focus to become a leader in providing overseas properties, hospitality and entertainment services to the Asia’s middle class. I am pleased to report to our Shareholders that this strategic positioning is yielding encouraging results with record-breaking profitability last year. The Group experienced continuous development and expansion through the implementation of a series of effective business initiatives. We made several key achievements, and I am particularly proud that our recurring cash flow business grew strongly and we secured exciting opportunities that allow the Group to continue to grow in the coming years.

We continued to pursue our “Dual-Engine” development strategy targeting growth in both recurring cashflow streams and built-to sell business. Great efforts have been made in all three recurring cashflow businesses, namely hotel, car park, and gaming and entertainment operations, with recurring income accounted for more than half of our core cash profit. Hotel segment achieved encouraging growth mainly driven by overall RevPAR growth and new acquisitions. The business also has a clear growth visibility with many new hotels in the development pipeline. In respect of our car park operations, we continued our expansion in the UK and continental Europe, pursuing car park acquisitions with high yields.

Gaming and entertainment segment became our new income contributor following the acquisition of TWC and investment in a stake in The Star. With the first phase of Queen’s Wharf Brisbane integrated resort expected to open in late 2022, we can expect the contribution from this segment will continue to grow. We believe that our strategy, featuring regional diversification and growing our four core businesses and reallocation of capital, will enable us to gain a higher return on equity than our industry peers in the long term.

Property development continued to be a core business of the Group. We have built a strong property development portfolio to maintain future growth. During the last financial year, we continued to score historic new highs in our cumulative pre-sales value. Such figure points to a clear visibility for the Group’s property sales in the years to come. The land resources we now have is sufficient for the Group’s development in the next decade.

The reason why we are diversified regionally with a clear focus of targeting the middle-class segment is simply that the real estate industry has cycles. Regional diversification enables us to acquire land at a lower cost from different markets at appropriate timing. We will continue to invest in regions with strong population growth and strong demand for housing. This includes key cities in the UK and Australia as well as selected cities in Asia.

In Manchester, in particular, housing for middle class has great potentials. At the moment, weaker pound and Australian dollar against the Hong Kong dollar has provided us with a good opportunity to allocate capital in these regions. Despite fierce competition in land acquisition, Greater Bay Area is also another region we will explore given its growth potentials. For land acquisition in Hong Kong, as mentioned in our last year’s annual report, we remain cautious as we see prices have risen beyond affordability of the general public and profit margin has become thinner. In respect of hotel operations, I am delighted to report that our hotel RevPAR in Hong Kong continued to improve, owing to an increase in tourist arrivals from Asian countries and long-haul tourism as well as a rebound of Mainland tourists. For other overseas hotel markets, our hotel operations also continued to benefit from more frequent travel and greater demand from the Asia’s middle class. Going forward I expect new room additions in Australia and the UK will drive the growth of our hotel operations.

Across

Mainland China, Hong Kong, Malaysia, Singapore, Australia, New Zealand, the United Kingdom and Continental Europe

Across Hong Kong, Mainland China, Malaysia, London, and Australia, we specialise in the property market and attain long-term profit from hotel developments and car parks. With recurring income generated by our hotel operations and car park business, our focus has expanded to include the residential market, with a view to targeting the rising middle class. Our residential products are designed to meet the needs of first-time home buyers and young families, a demographic group that offers significant growth potential in the region.

Standing on these solid foundations, I have every confidence that the Group's long-term prospects are bright. Our inherent strength will allow us to weather storms, advancing our value and the growth of tomorrow. On behalf of the Group, I would like to thank all those who contribute to our success: our shareholders, our partners, our employees and our customers. Thank you.