Thank you all for coming to Hysan Development 2023 annual results announcement, analyst briefing session. Let me introduce our panel for this afternoon. Our Chairman, Ms. Irene Lee, our Executive Director and COO, Mr. Ricky Lui, and our CFO, Mr. Roger Hao. I will start today's session with a presentation from Irene, Ricky, and Roger, and we will follow that with time to take questions. And now let's invite Irene to start. Irene, please. Hello, everyone. Welcome, and I hope this is a very, very good year of the Dragon. In fact, it was very, very good that—Did you hear the dragon dance outside, welcoming you all? We're actually bringing the new year in for some of our tenants here. So let me start. This is a year of global upheaval, and the world gradually did recover from the pandemic, but many continuing and new challenges were impediments to recovery. Hong Kong was not immune to the impact of external factors. While there were improvements, especially in tourist numbers, consumption was still cautious, and the export sector remained weak. Cities in the Greater Bay Area offered attractive day and weekend trips for Hong Kong, which resulted in an imbalance in tourist flows. Our portfolio. The demand for expansion by our key retail anchor tenants gave us confidence and impetus to execute our big strategic rejuvenation. Retail turnovers slightly increased, despite approximately 10% of our retail area being closed for our renovations. The rental reversion rate on renewals, rent review, and new lettings was predominantly positive during 2023. Despite the structural changes in the office sector, our office portfolio has demonstrated resilience and settled at a relatively stable occupancy rate of 89%. Lee Gardens is a highly desirable and competitive choice with our premium office space and facilities. We continue to diversify our tenant mix, and we have taken up new tenants in the high-end retailer sector, as well as the service trades. Our investment in flexible workspace or co-work, complements and hedges our office portfolio in the new office ecosystem. I would like to pass on to Ricky now to talk about our results and our operating business. Thank you, Chairman. Good afternoon. For the 2023 annual result, this year, we, our revenue is HKD 3.2 billion, which is about 7% down from last year. For about occupancy, the retail is ninety-seven percent, office at eighty-nine percent, residential is sixty percent. As Irene has mentioned, about 10% of our retail space were taken off for major enhancement, which affect retail income. The office and residential sectors were still under pressure. Our dual engine, office and retail portfolio provide resilience and strength in the face of uncertainty. When we come to office, the eighty-nine percent occupancy, it's come with a slower than expected economic recovery of Hong Kong office market and this also remain weak for the current moment. Landlords defend occupancy with more flexible lease terms and enhanced rental incentive as increased supply came to market. The Lee Gardens unique environment, convenience, and strong retail connections appeal to sector like high-end retailer and medical and healthcare services. On the right-hand side, and if you look at the pie chart, you can see the retailer and the medical and health sectors now take up over 12% of our whole portfolio. About retail, the recovery was impeded by a challenging external environment and a strong Hong Kong dollar. Retail sector is undergoing a transformation. The focus of tourists has shifted from shopping to experience-based tourism. It present a challenge to the retail industry, but also an opportunity to our Lee Gardens, where we have been focusing on placemaking and curation of unique content and experiences. This year, we also see a good growth on our turnover rent, which is up 45%, while the sales is slightly better than last year. We talk about our community. We offer the Lee Gardens is a place that offer choices. It connect people and curate communities through diverse offerings. From this graph, you can see we have the—t his is quite a one-stop place where you can have the house of luxuries, the urban vibrance as our lifestyle park when the Lee Garden Eight is completed. We just finished the Lee Garden One and also Lee Garden Five renovation, and our tenants is now undergoing their fit out. We're expecting them to open starting from the second quarter of 2024—o n the other end of the portfolio, the Hysan Place, we promoted a concept about Urbanhood, which means we are trying to present the urban pulse through our curation of content and experience. For example, the B1/B2 to our Hysan Place, which just opened, have over 40 lifestyle entertainment F&B brands from various Asian cities, including some making their first time in Hong Kong appearance. On marketing, the performance of our loyalty clubs, the Club Avenue and the Lee Gardens Club, are still strong, and the festive promotions and leisures are having good response. But at the same time, we're adding more power to the marketing through putting up the Urban Park, the Urban Sky, Playd ot. All this unique space, which is a skate park within the commercial building. An art and culture place, like a forum place, to hold different kind of talks and presentation about art and culture. The Playd ot is a few thousand big, indoor playroom for family to mingle with their kids. We never forget about online, offline channels. Nowadays, we make good use of this online, offline channels. For example, our power-up campaign, as well as the collaboration with, say, different kind of bank and other brands that making use of channel, making it much more effective. About the pillars, the Caroline Hill, the also the core expansion. Caroline Hill has a very good progress on the construction work, and everything is on track. For Lee Gardens Shanghai, after the completion of our upgrade, in the second quarter of this year, the office had taken up 30% occupancy by the end of the year. VILLA LUCCA, we are, for now, we are – we have sold or leased for more than 25% of the house and apartments. When we come to the asset light pillars, both IWG and New Frontier has present very solid performance. IWG, as we believe, is become a very critical part and integrated into the modern office solution ecosystem. New Frontier is riding on the rising demand for premium healthcare services in China, which align with the economic growth of this, of the country. About sustainability, this year, we maintain or getting better grade from all the rating agency. With the efforts of the team, we also receive different kind of awards and accolades, which is representing the effort of the team. Some figures about the environmental performance. The carbon intensity is 38% down from the baseline. The electricity intensity purchased is also down 21%. Out of the whole portfolio, 2.7 million sq ft of our building are Green- certified. We also committed to Science Based Targets in this year. One of the initiative we have put up is about promoting green mobility at Lee Gardens. Now, Lee Gardens is the largest EV charging hub on Hong Kong Island. We have over 160 EV chargers available in Lee Gardens. There will be a lot more when Lee Garden Eight is completed. And about connectivity and accessibility, we know that we will have a weatherproof pedestrian link system by the time Lee Garden Eight is completed, together with our upgrade and renovation of Lee Gardens. Okay, may I pass it to Roger about some financials? Yeah. Thank you, Ricky and Irene, and good afternoon, everyone. I will be brief, so that we can dedicate more time to the Q&A. Just a few key numbers that I want to highlight here. As you can see from this page, shareholders' funds, HKD 67.2 billion. NAV per share, HKD 65.4. And dividend per share, as you all know now, is whole year is HKD 1.08. A little bit on our liability side, next page. Overall, well, net gearing is 27.2%, with an effective interest rate of 4.2%. Fixed- rate debt continue to be our major portion of the our overall debt portfolio, currently standing at 62%, with average debt maturity of 4.5 years. Undrawn committed facilities at the end of 2023 is HKD 11.4 billion. That is, you know, one of the spare contingency cash pool for us to in case we need it. And sustainable finance it account for about half of our total indebtedness. And I think one last thing on this page worth noting is as you can see from the graph on the left-hand side, in 2024, that is this coming twelve months, we only have a very minimal level of debt come due, which is about 0.6% of our total indebtedness. So we don't have any particular high pressure in terms of refinancing this year. Then finally, just for the record and for your easy reference, our cap rate. As you can see from this page, the cap rate basically are the same, same as that of interim and same as that of the end of last year. So for retail, it's between 5.25%-5.5%. Office, 4.25%-5%, and residential staying at 3.75%. So that concludes my presentation. I think, then, we can now go to Q&A. Thank you, Roger. Thank you, management. So now it's time for Q&A. Maybe we let's start with the floor. Is anyone would like to ask any question? Thank you, management, for the presentation. This is Sam Wong from Jefferies. I have two questions, if I may. First, just want to get a sense, you know, what is the retail sales recovery rate in the second half for this year, you know, versus a pre-COVID year? You know, with the, with the luxury revamp finishing this year, how do you comment on the rental reversion outlook for, on the retail side this year? So that's the first one. And the second one is that recently we are seeing, you know, some news headlines on one of your FI tenants moving out on the office side. So any follow-up plan there yet? Okay. I think maybe, Ricky, why don't you talk to the retail last half, 2023 half, and then the coming period, right? Yeah. I think when you look at the second half of this year, you see the growth of our retail sales, and particularly there, there's 10% of our retail area being under renovations. It's not really 100% back to 2018, okay? But we see the positive sign of it. As an outlook, we—f rom the response from the tenants, as we mentioned, even the renovation is driven by tenants looking for expansions. So, both the Lee Gardens and the Hysan Place, we see the demand or interest from tenants who want to open new shop or expand. So, I would say, we are still positive about the outlook of the retail, and we also see the tourists coming back. As I mentioned, Lee Gardens community's uniqueness about curations of content and experience do make us do provide us an opportunity to go to shop more customers to our place. Maybe I just want to add a little bit of insight. We are seeing an increased amount of inquiry from high-end brand tenants looking for office space, so that is, for us, a very interesting, good sign, for expansion. The market is somewhat bifurcated, as you know. The luxury end is strong and continues to be strong. I think for Lee Gardens, because we have shown extreme resilience in the last four years, COVID and during the riots, and that is why the luxury brands have chosen us to expand their flagships. I think it is very good and very important that brands consolidate. I really feel they should consolidate, and they should pick their places of strength, and we are seeing that. Now, as for the middle sector and the affordable sector, again, that's quite patchy, and you need to curate very intensely with a lot of new elements. And that is why I think with the introduction of, let's say, our, we call it Urbanh ood, which is our new two floors, basement floors in Hysan Place, that is introducing something very, very new. It's a train station, airport style, the sense of transience, the sense of walking through. So many people are now saying they will only go through the Hysan Place exit— rather than the other exit. I won't mention other people, right? Because they come through, and, and they see this whole new world. So I think it is really important to look from two lenses. The luxury lenses is quite different and very, very strong. And then the other lens, it's not lacking strength, but you need to be very, very good at curating— Yes And giving newness. Maybe I also, I mean, supplement by, you know, some of the comment on the rental reversions. Yeah. As you all can see from the announcement, the retail rental reversion we mentioned that is predominantly positive. The reason why we highlight that is, you know, all of our 250+ tenants, there are a few number of tenants that is, you know, part of the rejuvenation area. Some of them are numerically, it's negative. But I think what's more important, especially from a leading indicator perspective, is the underlying health of the rest of the tenant group. And as you can see from the result, year-on-year, our retail revenue dropped by 7%. Based on the rental reversion trend we see, first of all, in 2023, that is the current year, other than a few particular tenants which result take us into the negative drop, we see they are in a positive area. And going forward, we also expect, you know, with the renovation completed, the overall rental reversion will continue to be positive. And so that, that's one thing important. And the other is, in terms of the renovation, in particular, the one that is almost completed in Lee Gardens, which will gradually open in phases. We expect, you know, post the renovations, the rental on a per sq ft basis, on average, increase by around a positive mid-teens. So that is another very strong support in terms of the earnings path going forward. Thank you, management. Okay, so, yeah. Yep, thank you, management. This is Mark Leung from UBS. I have two questions. I think the first one is regarding on our dividend cut. I think we are just the final dividends, and just want to check what is the rationale behind, and going forward, how should we see our dividend policy? Is it based on payout or based on free cash flow? And then the second question is regarding on the perpetual securities we are having. I think one of the perpetual bond, we are having a adjustment going forward. So what are our treatment on that one? Will we refinance that with the existing bank loan so that we can enjoy cheaper funding costs? Thank you. Maybe I'll talk about the philosophy first, and I'll let Roger talk about the slightly more technical issues. As you know, Hysan has had the same—we have not reduced our dividend for 21 years. You know, come GFC, come pandemic, we have always held firm. I think the real estate world, there has been a structural change. You can see the office structural change is there, retail, different reshuffling of, you know, high-end and the mid, low-end. So we see there is a lot of uncertainties, plus all the other, you know, geopolitical stuff that we talk about. I won't go into that. So the world out there is uncertain. In the last 3-4 years since the riots and since the pandemic, you know, as you know, that we have. The business has been tough, and we have held firm to our dividend, giving out the same level for the last 3 years. What we see, apart from wanting to have some sunny choice, we want to be conservative, we want to be—y ou know, we're a 100-year-old company. We intend to stay around forever. We want to be more conservative. We want to conserve cash. Because the other reason, the other bright side is we actually see a lot of very exciting opportunities, so we would like to build for the future. As you know, in the last several years, 5, 6, 7 years, we have been pivoting our business for growth. Now, you can't do it forever on debt, so you need to have enough firepower to build. Now, we've been building our core. You know, Caroline Hill is a very big investment for us, and as you can see, the entire Lee Gardens is undergoing what I call re-imagination. You need to do that to stay ahead of the game. And at the same time, we're building our pillars. So we're building our asset-light business in the medical and health sector, in the co-working sector, which we really deeply believe are very important go-forward positions. We have also built some develop-and-sell. So, some of you who have been with us a long time know I talk about pops, earnings pops, and we want to have, you know, regular, vintages for earnings pops. So all this requires capital. So for me, we need to reset and make sure that we have enough firepower for future growth. Now, Roger, maybe you want to discuss a little bit the technical side, if— Sure. Yeah. Well, two questions. One is on the dividend side— And then on the Perps, yeah A nd our policy and the amount of cut or reset. And as we mentioned before, obviously, every year we look at our operating results and the cash need for the next few years, as well as the economic outlook. And then back to the business, as Irene and Ricky mentioned earlier, retail, we probably see the trough already, but the recovery, you know, obviously it is slower than we expected, we want it to be. But you can see that, like, for example, turnover rent, we did see a good turnover rent. And rental reversion-wise, we also expect it will be trending better next year. Plus, we are putting the renovated space back into production, basically, especially for Lee Garden. We already have all those newly renovated space committed by all these brand already. So we have a slightly better visibility in terms of the revenue stream from the retail part. But office, I think, based on no matter is the overall demand, supply, the overall economy, forecast and all that, I think we will still see some challenges in the upcoming years, especially the rents that's going to the expiring rent, the rent related to existing leases that is going to expire, will be pretty much the same as this year. So I mean, if the spot rent remain the same, then we will see another year of negative reversions, to be honest. So we have seen positive factors in the portfolio, as well as some continuing challenges. So with that, we haven't seen the full recovery yet, plus the cash required for the next few years. But having said all this, we want to adjust the dividend to a level that if things getting better and better, we would have a better chance to maintain our stable and progressive dividend path. So that's all been the things that we are trying to do. We want to shape it more towards the shape of our business going forward, rather than if the business goes up or down, we just get stuck at a level. So we actually want to reset expectations and reset our own discipline. If the business is going through some, you know, going through volatility, we want to be able to shape it. But I think, I do think that we have reached the bottom. Retail is looking better, but the fact that we have a dual engine. You know, in the past, we've always had the dual engine philosophy, where if retail is volatile, and retail traditionally is more volatile, office will always pick up the slack. The issue is office has the structural change has caused a very big gap in business, in office, and retail is still quite fatigued, still lacking confidence. So the catch-up, the timing, we hope, is not quite there. So we would like to have ample ability to cater to our business needs, and not fall short. Thank you, Irene. And, to Mark's, second question about the, perpetual securities. Well, this one, you know, the, $850 million subordinated perps, with a first call date, I think, September 2025. So it is approximately, 18 months before, you know, that due date. We monitor, obviously, the, the loan market and the bond market, as to what is the, most proper solutions for us, and I would say that, we, still have some time. And, you know, in terms of the interest rate, obviously, this morning when I wake up, you know, the news about the latest, Fed meeting minutes, and all of a sudden, it's changed a little bit hawkish now. So, we don't have a crystal ball, but we will look at, you know, available options. I think, I can also report to you that, you know, based on our most recent discussion with the banks, we still see a lot of interest and appetite in providing financing solutions to us. So we'll see. Thank you, management. Karl, please. Uh, Karl? Hi. Thanks. Karl, Karl Choi from Bank of America. Three questions. First one is just to follow up on the dividend question under—y eah, totally understood the rationale. Just to confirm, it's still a stable and progressive dividend, but at a lower rate and not necessarily a change to a payout approach, right? Just want to confirm that. And second is, could you remind us where the occupancy cost stood at the end of last year? And a bit technical, in terms of the rental pickup for Lee Gardens One and Five, the now that you have handed back the space, presumably there is rent-free period. Should— should we start to see a pickup in rent because you amortize a rent-free period, or do we have to wait till they actually, you know, they start paying rent, which probably will be second half? And third question is, update on Shanghai. We saw that 30% occupancy. Where do we see things, sort of, going forward in 2024? Thanks. I think, Roger, why don't you answer the first two, and Ricky can quickly cover Shanghai? Thanks, Karl. Right. Well, stable and progressive has been, you know, our objective all along, given the quality of the asset and the quality of the income stream. Obviously, the last few years, we have experienced quite a lot of challenges, and that's why we want to do a reset, instead of like, you know, accepting the dividend amount. But, we'll see, in particular, in the second half of this year, whether in particular, the interest rate environment and the overall economic environment, we'll see the ability to do that. But, obviously, that is one of the key objective we're trying to achieve. Your second question is about the occupancy cost. It, overall, for the portfolio as a whole is around mid-teens, which is, from a historical point of view, quite a relatively healthy level. And in terms of the rental recovery for Lee Garden One and Five, after the renovation is completed, again, as Ricky mentioned, there is about 10% in total of the area. Lee Gardens account for approximately maybe 6% of that 10, and progress is good, and we just need to wait until the income ramp up. So in 2023, that is the year where we are most affected. You can see that the income was affected by approximately like 6%-7%. So we expect, when these area get back into production in terms of revenue, we will have a ramp-up of the rental. But given the timing, I expect 2024, we will probably see a mid-single-digit increase in revenue from those areas. But on a full year recurring annual basis, we should be able to see a high single-digit or maybe early teens recovery. I think, if I remember correctly, all of the shops, the luxury shops, should be ready by end of this year. I mean, it should be open this year, just maybe one last shops, maybe towards the end of the year or beginning of 2025. Yes. Let's put it this way, Karl. We are working very hard right now already to work with our tenants to make sure when they come out of the renovations, the rebirth is going to be on a productive production per square foot basis. Has to be—i t's not linear. It has to be better. So flagship stores, the ability to have stock, their targeted clients, we have high expectations of both my staff and our tenants. So we really hope that this whole rebirth is going to be quite a significant event for us. And I hope I'm gonna check on all of you, whether you spend money. You should support our turnover rent, okay? Ricky, you want to talk about Shanghai? Oh, Shanghai, I think it's similar to Hong Kong. No one will say the office market is easy. It's tough. Good thing is about that, we have upgraded our building after we take, we bought the building. The result of the upgrade is very well received by the market, and that's what first thing. The second thing is about the underwriting. Comp, you know, right opposite our building is the One Museum Place, which is one of the most expensive, best building in Shanghai. We are charging a rental 60% of what they are charging, so that means we are quite very competitive, in that end, from that angle. And then the tenants that we already committed are very good company, good names. And in the pipelines, we are also have about 30%-40% of the space being in serious discussions. So, we hope that we can close some of the deal and push up the occupancy in this year. You have 30% done? Yeah. With another, hopefully, 30%-40% in the pipeline, but in serious negotiations, so- Yeah. Fingers crossed. Thank you, management. Is there any more questions from the floor? Yeah. Hi, management. Thank you for the presentation. Just, two quick questions. Could you give us more color on the 20% lease expiry for the office portfolio? And, how do you see the vacancy rates in the near term? And secondly, could you give us more color on the upcoming, CapEx plan for the coming two years? Thank you. Okay, that'd be great. Okay. Maybe let me try to answer the questions. As I mentioned earlier, the office lease expiring this year in 2024. They are having a similar expiring rent, so that should give you a feel about, you know, the hurdles. It's still a bit early. I mean, although it's in February. Normally, in terms of the runway of, you know, expiry, we will be doing a lot of catch-up towards the middle of the year. As I mentioned, there are certain challenges depending on the spot rent movement. So we are not underestimating those challenges, but if the market is getting to stabilized and, you know, the office, the spot rent remain the same, so probably we'll see another year of negative reversion. But as Chairman mentioned, we are working 200% efforts to, you know, to, to defend our occupancy. So that's the, the colors that I can give you about office so far. And in terms of CapEx, as you all know, we have two major source of CapEx. One is the Caroline Hill project, and the other is the, the rejuvenation project that we're talking about. Both are under good progress. For the Caroline Hill project, as you all know that we have secured project financing from a bank consortium as well. And the two together plus our other normal type of property management, maintenance CapEx should be about HKD 2 billion a year for the next few years. So that is the level of CapEx that we are dealing with at the moment. Thank you, management. May I check, is there any more questions from the floor? Okay. So I think, thank you all for coming today, and we all look forward to seeing you all again in our more vibrant and more excited Lee Gardens in the future. Thank you. Thank you. Thank you very much. Thank you.