Good afternoon, everyone. Welcome to the webinar of Wharf REIC Interim Results Briefing. I am Angela Ng, Investor Relations Manager. Our management team in the webinar include Mr. Stephen Ng, Chairman and Managing Director, and Mr. Horace Lee, Director. Before the presentation and the Q&A session, we will start with an opening remarks by the Chairman, Mr. Ng, please. Thank you, Angela. Good afternoon, everyone. I'd like to open with a couple of slides before handing over to Angela. We're very thankful for Xi Jinping's arriving in Hong Kong to celebrate the occasion of the 25th anniversary of Hong Kong SAR. We also was very thankful that in his official remark, he reaffirmed the national directive to ensure the solidarity of One Country, Two Systems. Hong Kong must preserve its unique position and advantage. In order to do so, expand open, convenient, and expedient international connectivity. That's also very encouraging to us, and we interpret that to say that failure to do so would seriously detriment the national mandate to uphold Hong Kong's leading position as an international financial, shipping, and trade center. Of course, that would help to reinvigorate Hong Kong as Asia's world city. One Country, Two Systems would serve as the bedrock for stability and prosperity. This would improve our presence as international financial, shipping, and trading center. Reconnection with the world, as well as with the mainland, would bring promising new opportunities to Hong Kong. That's important to us because Hong Kong is our home. As this chart shows you, 97% of our fixed assets are located in Hong Kong. 91% of our revenue is generated from Hong Kong. 97% of our taxes are paid in Hong Kong. 100% of our charitable donations go to beneficiaries in Hong Kong. Of course, as you know, Hong Kong and the rest of the world, in fact, are faced with a number of macro challenges. They include the geopolitical tension, which dominate the global agenda. Economically, quantitative tightening and interest rate hikes to tame inflation risk tipping the developed economies into recession. Structural diversification and reshoring of production supply chains would add fuel to inflation fire. Finally, de-globalization, global restructuring of supply chains, and that all of that may weaken the demand for the production and logistics capacity supplied by China. This is not an easy world to navigate, but here we are, and we will do everything we can to continue to deliver results to our shareholders. With that, I'd like to hand over to Angela to take you through the rest of the PowerPoint presentation. Thank you, Chairman. We will now focus on our results highlights. The group's revenue and operating profit were still hovering around the COVID low, and the early signs of slowing down the sharp decline was due more to cost management than to revenue recovery. The unrealized IP revaluation deficit of over HKD 5 billion, which turned profit to a loss, and NAV dropped to less than HKD 200 billion. Looking back to the first half, Hong Kong retail sales dropped by 2.6%, with inbound tourism still muted. Local demand was hard hit by the fifth COVID wave before the easing of social distancing measures and distribution of government's consumption vouchers in the second quarter. To capture market recovery post-fifth wave, our malls promptly launched an array of sales-driven marketing campaigns on top of the successful mall coupon program, which was rewarded by a rapid revival in foot traffic and spending sentiment. We continue to proactively invest in strategic brand realignment and acquisition of brands to capture opportunities for tomorrow. The prominent Canton Road frontage has celebrated the opening of Dior's new flagship last Sunday. It will also welcome new flagship by Piaget and Van Cleef & Arpels in the second half. Catering to the local-centric market, our innovative themed events and compelling voucher gamification are proven to be effective. The crowd-drawing robotic dinos exhibition was the first large-scale outdoor event in Hong Kong after the fifth wave, attracting 500,000 visitors. Our first of its kind, mall coupons and surprise offers also continued to be favored by the local shoppers. Harbour City rapidly regained momentum in business activities post-fifth wave, while Times Square is still facing fierce competition in a weak market. After three years of market adjustment, our Hong Kong retail revenue may finally be stabilizing. Retail revenue drop narrowed to 4%. As a whole, our Hong Kong IP occupancies were recovering, but negative reversion is still a concern. Revenue drop narrowed to 2% to HKD 5.2 billion, and the margin resilience was mainly driven by intelligent cost control, cost management. However, we see a rising pressure on office leasing under a slowing economy and new supply. Turning to the financial highlights. The group delivered a growth in UMP despite market headwinds, thanks to the resilient IP performance and narrowing loss in hotels. Group UMP increased by 3% to HKD 3.4 billion, while Hong Kong IP and hotel UMP increased by 5%. Group revenue decline was mainly led by the orderly exit from the low-margin DP business of HCDL, which is our 72% owned subsidiary. A non-cash IP revaluation deficit was reported, but cap rate remained stable. Dividend policy is maintained at 65% of UMP from IP and hotels in Hong Kong, which represents a DPS of HKD 0.70, a 4.5% year-on-year growth. In the following slides, we will walk through the performance of our core assets as well as financial management and outlook. First, Harbour City, which accounts for 73% of our Hong Kong IP revenue. Driven by effective mall strategies, Harbour City witnessed rapid recovery in local spending demand. Mall occupancy remained at 93%. On the office front, Harbour City strived to safeguard occupancy while maintaining rent at reasonable level. Office occupancy was 87%. As a whole, Harbour City revenue increased by 2% to HKD 4 billion. The one-stop-shop retail selection of over 500 diverse tenants forms a unique critical mass at Harbour City, attracting continuous leasing demand. You can see the breakdown of our rental income from the tree map diagram here. A balanced mix of fashion, leather goods, jewelry, beauty, and accessories account for around 80% of rental income. The ongoing vigorous tenant selection helps to add impetus and control risk. The shopping destination continued to be sought after by the top-tier brands during the time of COVID. With the addition of Dior flagship, the iconic Canton Road frontage showcases an unparalleled collection of world-class luxury brands, including Chanel, Dior, Gucci, Hermès, and LV. Piaget and Van Cleef & Arpels have also chosen to open a new flagship on Canton Road in the second half. Store opening and expansion in Harbour City continued to be active, which enhanced the mall's attractiveness. In view of the tough local market in the first four months of this year, Canton Road hotels have launched various attractive packages to attract day use and non-staying guests. Meanwhile, Prince Hotel has been soft reopened after renovation, and the hotel started to cater to special business in June. Next, we will talk about Times Square. Facing an intensifying competition in Causeway Bay, Times Square seized the chance to add aspirational brands to broaden customer base. Mall occupancy was 93%. Office tenants remained cautious and cost-conscious. Occupancy was steady at 90%. Switching to our regional mall, Plaza Hollywood. Enjoying a convenient location atop Diamond Hill MTR Station and public transport interchange, Plaza Hollywood achieved relatively stable demand. Occupancy was 93% and retail revenue was stable. Our core assets in Hong Kong also include the Central portfolio comprising Wheelock House, Crawford House, and the Murray Hotel. Office occupancies at Wheelock House and Crawford House remained solid at 92% and 98%, while the retail premises were fully let. For the Murray, it consistently outperformed its competitive set in revenue yield, and local demand has been recovering since the second quarter. The luxury hotel was proud to receive a new Forbes Travel Guide Five-Star Award earlier this year. Moving on to our Singapore assets on Orchard Road. Retail at Wheelock Place and Scotts Square is improving as daily lives in Singapore normalize. The rebound of business travel also brings optimism in economic growth. Moving on to the financial management. Net debt reduced to HKD 46.8 billion. Total assets was HKD 266 billion, and gearing ratio was 23%. Average interest cost remained at 1.4%, and interest cover was 13 x. The group maintained a premium Moody's A2 rating with stable outlook. Looking ahead, reconnection with the world and the mainland is the key to the group's IP and hotels performance. We will continue to closely monitor the rise in uncertainty in the macro environment and prepare for headwinds. In the last part of the presentation, I will walk through our efforts in sustainability. Wharf Group is a constituent in Hang Seng Corporate Sustainability Index with AA+ rating, and also one of the top 50 ESG leaders in Hong Kong on Hang Seng ESG 50 Index. We are also named second top donor for the community trust for two consecutive years, recognizing our contribution during COVID. Environmental protection and youth development remain the group's priorities. Our constant efforts to reduce greenhouse gas emission, air emission, and waste to landfills continue to bear fruits with noticeable reduction, as you see from this slide. Star Ferry also made another step to launch the third low-emission green ferry, Silver Star. We continue to support young people by empowering them to achieve their full potential with a wide range of program, namely our flagship project, WeCan, the Wharf Arts Scholarship Scheme, and Architectural Design Internship Program. That concludes my presentation. Now we will come to the Q&A session. For analysts with any questions, please press the Raise Hand button on your Zoom control panel. We already have several questions, and we will have the first questions from Ken Yeung, Citi. Hi. Thanks, management, for taking my questions. My first question is on your Harbour City performance. I think a couple of the clients are also quite surprised with their shopping mall still get 1% revenue up in this very tough time of Omicron. How can we tie this number versus the relatively tough market experience by other operators? This is the first question. Secondly is regarding the marketing is where we see margin improvement, which is largely due to marketing expense probably drop to now I see HKD 250 million. I see last year, every half, every six months is around HKD 500 million. This year, first half, probably because of fifth wave, we are half. What do we see in the second half of the year? Will we be still expecting something like HKD 500 million back to that level or much less than that for the second half of this year? Lastly, I would like to ask on your long-term investment. I see that you have bought some shares, which is not properties. Can I know what are those shares? [audio distortion] Okay, thank you. I can't comment on other people's performance because I don't know other than what they disclose publicly. Overall, the market is stabilizing from our perspective. The small increase from year- to- year, I would not want to read too much into it. It can be an anomaly, but the general trend is that the hard falls from the previous years is they're hopefully behind us. In the event Harbour City does not report a 1% increase year-on-year in the second half, and instead a 1% decline, I hope you wouldn't ask me why it is a 1% decline. I don't think we can be as precise as that, because it certainly depends on a number of factors, including new tenants, the change of tenancy and vacancies being filled up and rent-free period and all those things. I think that would be my take for your reference. In terms of marketing cost changes, an important factor in that is the redemption of these coupons. It seems to us the coupon program has worked effectively, and it has helped to bring footfall and consumption power back to the malls. When consumers come into the malls, they spend on everything, and not only on those on the deals, so to speak. Some of our tenants, who did not trade as well last year, are finding they can this year stand on their own feet, and they no longer need to participate in our coupons program, which is a very good sign. If we and the retailers don't need to, we'd rather not have to invest in the coupons. As a result of that, we've had to spend a little less than last year, in particular on these coupons. In spite of that, our tenants are trading satisfactorily as far as we know. In the absence of a bigger problem in the second half, we hope we can continue to hold the marketing costs down, without affecting our tenants' trading. The key is of course our tenants' trading, because that would in turn affect our revenue. I hope that answers that question as well. Your third question about these long-term investments. The majority of our long-term investments are property stocks, but there is a proportion, something like 20%, which are not in properties, but in very steady businesses with very steady recurrent cash flow and good dividend stream. We're not confining ourselves to property stocks. The majority is properties, but where we see good recurrent income from other non-property stocks, we have invested in them as well. Thank you for your questions. Thank you, Ken. We will take the next question from Karl Choi, Bank of America. Hi. I have a couple of questions regarding the outlook for retail rental income. You know, you mentioned that, you know, Hong Kong retail rental income may finally be stabilizing. Can you talk a bit about, you know, where occupancy cost right now is? Does it mean that even if the mainland borders remain closed for some time, you know, based on just local spending, is at a comfortable level in terms of occupancy costs that you think the rental income can be stable? Second is more on the other side, you know, obviously we don't know when the borders will reopen. When the borders finally reopen, you know, did you sort of restructure any of your, you know, a lot of your tenant agreements so that, for example, you lower the revenue sharing or you would still expect pretty big upside from turnover rent or if the borders can actually reopen? Thanks. Okay. I think well, the border's been closed for two and a half years, and the whole trade has gone through an adjustment phase. At some point in time, some of the tenants are going to take a longer view, and they would form a view about when borders would reopen and when their sales would start to normalize. The current occupancy cost may not be the most important factor for them to decide whether to sign a new lease. At the end of the day, I think all of us are waiting for return to normal times. There's an element of investment and risk-taking, of course, but business is about taking risks. Still, I would like to see occupancy costs for our tenants improving from this point of view. From this point in time, it is still higher than sustainable really. We certainly see tenants starting to invest a little bit down the road. Turnover rent, we haven't got a lot of restructuring in the manner that you're referring to. Of course, we have to face the market as well, and as general rental has been coming down over the last two and a half years, we've had to take lower rent for our new commitments as well. Generally, the turnover rent level hasn't changed significantly from what they were previously. Thank you. Thank you. The next question from Carson Leung, JP Morgan. Hello, Carson, please try to unmute yourself. Hi, can you hear me? Yes, we can now. Yep, thank you. First question is, just want to get some color on the latest rental reversion trend for the base rent. Second, with regard to the IP revaluation deficit, was it mainly driven by the decline in the passing rental or any change in the cap rate? I think lastly, a little bit follow-up to the previous question is assuming, I mean, there is always an uncertainty when the border will reopen, right? If we assuming there is no border reopening in the short term, I just want to gauge, I mean, from your point of view, is Harbour City, for example, the tenant mix right now, is competitive enough to cater for pure domestic consumption? Okay, thank you for your questions. Rental reversion, retail rental reversion generally is still soft. We're not seeing the large declines that we saw two years ago. In a number of cases, we're still having to take lower rent on renewal compared to the existing lease. To some extent, that's compensated by the better turnover rent that we're getting. Of course, you will realize that the mere fact that turnover rent increases over what it was a year ago, let's say, needs to be taken in context of a lower base rent. I mean, just take it to the extreme. If there were no base rent, then turnover rent would become very large suddenly. You can't just look at one element and say it's good or bad. You need to take the whole package into account. We're beginning to see some stabilization. Not quite, I can't say for sure we've hit the bottom, but we're beginning to see certainly slower declines. IP revaluation, as you know, it's a combination of different factors. It's the cap rate. It's the passing rent. It's also rental outlook. We've been advised by the valuer that the cap rates have not changed. The passing rent is what they are. They've been falling. Compared to six months ago, they are probably lower. There is also the element of outlook. With a combination of these factors, the valuers came up with a valuation which is lower than what it was six months ago. Part of it is in the offices, and part of it is in the retail. I would just add that a relatively small part of it is the valuation for Ocean Terminal. I say that because Ocean Terminal, unlike the rest of our core properties, does not have a 999-year lease. It has a finite lease and therefore, as time goes on, the value of that lease has to decline naturally. That's a part of it, too. Thank you. The third question is about assuming if there is no border reopening, could Harbour City existing current mix is enough to cater for pure domestic market? No. In the long term, no. I think I have to give you a simple, but true answer. If the borders remain closed for 10 years, we'll have to find a different model altogether. Thank you. The next question from Mark Leung, UBS. Yeah. Hi, management. Can you hear me? Yes, we can. Thank you. Thanks a lot for taking my questions. I got two questions in here. I think the first one is, could you remind us how much rental concession we have granted in first half of 2022? Maybe what is the magnitude compared to 2020, around that? Secondly, I find that I think we have a pretty impressive cost control measures. Other than lower selling and marketing expenses, may I know what kind of cost measures you have been taking to achieve these amazing results? Thank you. Thank you. Rental concession in 2021, I recall we offered rental concession for one month only, and that was the month of January. For 2022, we offered it for two months. Since the monthly rent roll is similar, roughly, I would say twice as much as a year ago. If you've been following us and following other investment property owners, you would realize that we adopt the accounting standard of amortizing rental concessions. It's not as straightforward as to just say last year was one month, this year is two months. It's not two to one. It's not like that. We amortize the rental concessions in accordance with the duration of respective leases. That's clearly stated in the accounting policies. That's the first question. Second question, remind me. Cost control measures. Oh, okay. Yeah. It's mainly in marketing. There are other things which we try to do more smartly than before. We always learn. Generally there is cost inflation, and we need to deal with that as well. Cost inflation, including people cost. For a lot of functions, we are finding it not easy to keep positions filled. That's happening to a lot of companies in Hong Kong in a number of functions. We try to do it as smart as we can. Where we need to spend, we certainly will. Where we can spend more wisely, we will certainly do so as well. Thank you. Thank you. The next question from Andy So, Haitong. Hey. Hi, management. I want to ask about the profitability in the first half of this year. What I see is that in the first half of this year, the gross margin was around 80%. 80% gross margin seems to be relatively high. Last year, for the first half, that number was just around 70%. May I know why gross margin has increased so substantially in the first half of this year? Should we expect that going forward, the cost margin will remain relatively high? Thanks. Okay. Thank you. I believe you're looking at the consolidated numbers. I don't have the numbers in front of me. You need to be careful if that's what you're looking at, because the revenue mix is quite different this year compared to what it was, same period last year. In particular, DP is a source of distortion. In the DP business, the margins are much lower than in IP. If I recall correctly, last year, during the first half, our listed subsidiary, Harbour Centre Development Limited, reported a substantial amount of DP revenue, which did not repeat this year. In comparing operating margins, you need to look at it sector by sector and not on a consolidated basis. Generally, the margins are fairly stable. Improvements cannot be as much as 10 percentage points in a year's time. Thank you. Thank you. The next question from Percy Leung, DBS. Hi, management. Thank you for taking my question. I have three questions. The first one, I would like to know what is the reason behind the divergent performance between Harbour City and Times Square. We saw that Harbour City, the retail revenue rose 1%, while that of Times Square decreased by 22%. Is it mainly due to the impact of rental concession? Secondly, regarding your financial, may I know the portion of fixed rate on your current borrowings? The last thing is more on the outlook. May I know what is your thoughts on the potential border reopening to international travelers? Would you expect any potential leakage in Hong Kong consumers going forward? Thank you. Thank you. I'll ask Horace to address the interest rate question later, and let me deal with the other two. You're absolutely correct in observing that Harbour City and Times Square performed in different directions, somewhat different directions. That's not unexpected as far as we're concerned. Harbour City is a market leader in the area where it is in. Whereas Times Square is competing in a marketplace where there is no clear leader. Where the competitors, I should say, are a lot closer to one another. As you would expect, the clear market leader has much more bargaining power when it comes to commercial negotiation, and that is Harbour City's case. For instance, Angela was also referring to our ability to convert our competitors' tenants into our tenants in Canton Road. The simple act of moving across the street and not necessarily on lower rent, these tenants just find it a better proposition to move into Harbour City to trade. So in other words, Harbour City is able to command better rent, better occupancy and everything else, whereas Times Square faces a lot more competition in the Causeway Bay area. Your last question, outlook. Clearly it depends on how the borders are reopened. First of all, I need to point out, of course, that for a border to truly reopen, it takes reopening on both sides. There's A side and B side to a border. The opening of the Hong Kong side is, of course, a lot more within our control, but the opening on the other side, let me call it the far side, is not. Today, a lot of borders at the far end in Europe and in North America are fairly open. As soon as the Hong Kong side removes its restrictions, people can move fairly easily and fairly normally between Hong Kong, Europe, Hong Kong, Singapore, Hong Kong, North America. Particularly when it comes to mainland China, unless and until the restrictions on the other side of the border also are removed, the removal of restrictions on this side would have limited impact on cross-border traffic in that direction. I don't think we have certainty about what would happen on the other side of the mainland border. We have done and we continue to do a number of scenario analysis, assuming different degrees of opening in Hong Kong and assuming different degrees of opening on the other side of the mainland border as well. You're right in pointing out that, as soon as the Hong Kong borders are reopened, a number of Hong Kong residents will be traveling outside and taking their consumption dollars away from Hong Kong and to places like Singapore, Japan, Europe, North America and so on. That we are certainly very conscious of. At the same time, hopefully we'll be able to bring in some people from Southeast Asia and from long-haul places as well. Before things can get back to normal, there is also one other very important factor, and that is the availability of flights and the cost of flights. If you have looked at or if you have asked about airline tickets recently, you would be shocked by how much more expensive they are compared to before COVID. We don't know how quickly prices will correct themselves to more affordable levels. We don't think removal of the quarantine restrictions in Hong Kong would give rise to immediate surge, let me use that term, in arrivals from overseas, but at least we would start to get them and we have to start somewhere. A gradual ramp-up is not a bad thing either, because Hong Kong, like many other places in the world, are facing a shortage of manpower as well. I don't think we in Hong Kong collectively can deal with a sudden influx of visitors. There are certainly not enough manpower to provide the kind of service they would expect from a place like Hong Kong if there is a sudden influx of visitors. We'll have to somehow or other attract people to come back, train them, and get ready for more visitors in the future. It's a very long way of answering your question, but let me now ask Horace to address the second point. Yes, sure. As for the lending rates, we are almost 100% on floating at the moment. Yeah, okay. Thank you. Thank you. For analysts who have questions, please feel free to raise your hand. Oh, this one. Okay, we will receive another question from Peter Yang from Goldman Sachs. Hello, Peter. Hello. Hi. Hi, management team. Can you hear me? Yeah, sorry. Yes, we can. Yeah. Thank you for the sharing. Maybe can I ask some questions about the office market? Yeah. Yeah, because I see that the office rent seems to be stabilizing. The revenue, like from Harbour City, is also stabilizing only down 1%. Could you share what's your outlook for the rental reversion for the office rent for the office portfolio? Thank you. Thank you. We think the office market is not likely to strengthen in the medium term. At least not until businesses are ready to invest in bigger space again. At the moment, a lot of people are sitting on the fence. They are in part also affected by the borders being closed. Some businesses have moved at least part of their requirement out of Hong Kong. There was one point in time when Hong Kong gained at the expense of Shanghai when Shanghai was in lockdown. I think some of the Shanghai requirements have gone to other places, notably Singapore. Singapore has also captured some of Hong Kong's requirement as well. The whole market is in a bit of a wait and see mood, we believe. Again, if there's more certainty about the borders, we hope confidence will come back to the market. Of course, there's quite a good deal of supply lining up to compete for a piece of the business. I would not be overly bullish on the office market at all. Thank you. Thank you. We will have the last question from Michael Wu, Morningstar. Hi, Stephen. Hi, Horace. I just wanna pick up the point on Times Square. Is there any other strategies longer term, not just on, you know, mix, changing the tenant mix, to improve the performance of Times Square? Yes. Yes. We're going through a stage of remaking it. Anytime you remake something, you need to take a bit of pain, and we're in the middle of the pain. Whether or not we will emerge stronger and better, we hope so. There is uncertainty. I'd be the first to admit. We see Times Square is the weaker between Times Square and Harbour City, no question about it. There's a lot more competition in Causeway Bay than there is in Harbour City. Times Square doesn't have nearly as much critical mass as we do in Harbour City. That's why we're trying to remake it, and hopefully, with a bit of help from reopening of the borders, we'd be able to do so. Thank you. Now, I believe that we will come to the end of our webinar today. Thank you for joining us. Thank you. I hope when we talk to you again in six or seven months time I have better things to tell you. At the moment, we are prudent, we're cautious. I hope we'll be able to continue to deliver a higher dividend as well. Thank you very much, and have a good evening. Thank you.