Good evening, everyone. A very warm welcome to Wharf REIC Final Results Briefing. You may download the PowerPoint presentation from the QR code on the LED wall, and the webcast of the event will be uploaded to our corporate website afterwards. Our management today includes Mr. Stephen Ng, Chairman and Managing Director; Mr. Horace Lee, Director; and I'm Angela Ng, Investor Relations Manager. Before the presentation and Q&A section, may I invite Mr. Tin to come to the stage for an opening remarks? Good afternoon, ladies and gentlemen. Thank you very much for joining us tonight, this evening. I don't have much of an opening remark other than to welcome yourselves. We've published our results at noon today, over lunchtime. I think you've probably had a chance to look at it. My colleague Angela will take you through the PowerPoint presentation. I'd be happy to assist with answers to questions if you have any following the presentation. Feel free to ask whatever you wish, and I will feel free to answer whatever I wish. Thank you. Thank you, Chairman. So the theme for, the presentation is "Core Businesses Stabilize Amidst Doubling of Interest Costs." We are pleased to report resilient performance of our core investment properties and hotels' businesses. Full-year revenue from core businesses increased by 8% to HKD 12.5 billion, and operating profit increased by 12% to HKD 9.5 billion. Other business operations strengthened over the year. High interest rates weighed heavily on the group's bottom line, and the segmental UNP dropped by 3%. With profit stabilization in the second half, the second interim dividend is unchanged from 2022 at 61 HK cents per share, representing a full-year DPS of HKD 1.28 per share. IP valuation was stable at HKD 228 billion, accounting for 93% of the group's assets. Our net debt decreased further by HKD 8.8 billion to HKD 36.3 billion, which is the lowest level since the company was listed in 2017. Gearing ratio improved by 4.6 percentage points year-on-year to 18.6%. The lifting of border restrictions in early 2023 stimulated the recovery of Hong Kong's tourism and retail sectors. Hong Kong retail sales increased by 16% year-on-year, while Hong Kong hotel occupancies rose by 16 percentage points. Driven by the retail recovery, both Harbour City and Times Square experienced increasing leasing demand and occupancy. With the strategic management of tenant portfolio and effective marketing, our malls in Hong Kong achieved outperforming year-on-year growth in sales. Also, the strategic realignment of brands on Canton Road High Fashion frontage was well received among high spenders. This 530-meter high fashion frontage currently features 16 top luxury brands, which collectively generate over HKD 10 billion in sales in 2023. I will share more on this later. For our Hong Kong IP performance, it regained positive growth and reported a 2% increase in revenue to HKD 10.6 billion, with retail revenue increased by 8% to HKD 7.3 billion. Spot rent has stabilized, and turnover rent contribution increased by nearly 60%. In addition, amortization of the COVID rent relief is substantially completed. Now let's take a look at the financial highlights. Group revenue increased by 7% to HKD 13.3 billion, and operating profit increased by 13% to HKD 10 billion. IP and hotels' revenue increased by 8%, and operating profit by 12%. However, the rise in borrowing costs by HKD 1.1 billion to HKD 2.3 billion weighed down the UNP. Core UNP of Hong Kong IP and hotels dropped by 3%. Our dividend policy is consistent at 65% of core UNP, representing a full-year DPS of HKD 1.28. From this table, you can see that the year-on-year performance of revenue, OP, and UNP in the second half was stronger than the first half, and IP valuation was virtually unchanged as compared to the end of June. Despite the volatile business environment, the group maintained a premium Moody's A2 rating with stable outlook. Net debt and gearing further improved. Average interest cost for the year was 5.4%, majority on floating-rate debt. We are closely monitoring the HIBOR trends, and we are prudently converting part of it to fixed rates. Interest cover was healthy at 4.4 times. In the following slides, I will walk through the performance of Harbour City, Times Square, and the hotel portfolio. First, Harbour City, which accounts for 75% of our Hong Kong IP revenue. Driven by retail recovery, Harbour City saw a 10% increase in revenue to HKD 9 billion, and a 13% increase in operating profit to HKD 7.2 billion. Retail occupancy improved to 97%, and retail rent has stabilized, also gradually increasing. Certain luxury brands already achieved high double-digit sales growth versus pre-COVID. Thanks to the drawing power of the mall, office leasing demand improved among the insurance sector. Occupancy was maintained at 88% despite the weak leasing market. The three Marco Polo hotels on Canton Road also reported revenue improvement as inbound tourism gradually recovered. Our lineup of major crowd-drawing events was fruitful and attracted foot traffic exceeding the 2019 level. With over 500 diverse tenants, Harbour City maintains a balanced mix of traits that caters to both locals and tourists. Retail rental increased by 10% to HKD 4.9 billion. During the COVID pandemic, we seized the opportunity to strategically realign the brand portfolio on Canton Road. As part of the initiative, we welcomed the new flagships of eight top-tier luxury brands, namely Hermès, Dior, Fendi, Ferragamo, Miu Miu, De Beers, VCA, and Piaget. This 530-meter frontage showcased six top-tier luxury fashion and jewelry brands contiguously. They collectively generated over $10 billion in sales in 2023, which accounts for around 2.5% of Hong Kong's total retail sales. The sales performance is also on par with the 2018 level. In addition, some of the key tenants are among the world's highest store sales, which is a testament to Harbour City's outstanding sales productivity. Overall, there were around 100 brands committed leases at Harbour City last year. Celine and Gucci also had vertical expansion within the mall. At the same time, Times Square mall also made improvements. Mall occupancy increased to 95%, and retail revenue increased by 3%. Office occupancy was 88%. Then we will switch to our hotel portfolio, which includes The Murray, our Forbes 5-star hotel in Central under the Niccolo brand, and also the three Marco Polo hotels on Canton Road. Hotel segments turned around to operating profit in 2023. Occupancies improved notably during this Lunar New Year, as average daily mainland visitors exceeded the 2018 level. Prince Hotel completed renovation and fully opened in August. And moving on to the outlook. While there are positive signs of further recovery in inbound tourism, we recognize the increasing regional competition and the uncertain macro environment. In response to these challenges, the group continues to enhance the competitive edges of our IPs and hotels, actively supporting government campaigns aimed at boosting tourist and local spending. In the last part of the presentation, I will walk through our efforts in sustainability. The group has formulated the 2030 target to reduce environmental footprint, and the progress has been on track. Additionally, the group consistently maintains good ratings with leading ESG rating agencies and actively pursues sustainable financing. We are proud to announce that Times Square achieved LEED Platinum certification for existing buildings. This accomplishment reflects the group's commitment to ongoing AEI across our portfolio. Furthermore, the Star Ferry fleet now includes three low-emission green ferries and has participated in the Full Electric Ferry Pilot Program. Youth development is also our key focus, and we are dedicated to various business-in-community initiatives, including our flagship project WeCan. Continuous efforts were also made on promoting corporate governance, talent development, and workplace safety. That concludes my presentation. We will now proceed to the Q&A section. A quick housekeeping note before we begin: if you have any questions, please raise your hand. Our hotel staff will provide you with a microphone. And please identify yourself and state the organization you represent before asking the question. You may feel free to ask no more than two questions each time. Now, may I invite Mr. Ng and Mr. Lee to come to the stage, please? So now, may we take the first question from the floor? Karl Choi, Bank of America. Thanks for taking my question. Just wanted to ask about the retail sales recovery in the second half of last year. How did it go compared to the first half, or maybe in comparison to where you were in either 2018 or 2019? Also, can you give us a quick update on where the occupancy costs stood in the second half for the two properties as well? Thanks. Thank you. Retail sales started to recover after reopening, and March and April were seen as the high point in 2023 until December. Otherwise, between April and December, there was a gentle drift, downward drift, but relatively gentle. To try to compare the second half to the first half is not necessarily very relevant. First of all, there is seasonality. Secondly, reopening didn't actually start from January 1. It started a little later. But overall, the second half reflected more of a or at least all six months in the second half occurred post-reopening, whereas only four months or maybe five months maximum in the first half. Compared to 2018, for the full year as a whole bear in mind, it wasn't a full recovery year, but for the full year as a whole, it's probably still 20-ish% below 2018. But as Angela was referring to a little earlier, certain parts of our portfolio have already caught up to 2018 performance. Specifically, if you look at the 16 stores on the Canton Road front in Harbour City, in 2023, for the full year, they generated a total of more than HKD 10 billion in sales, notwithstanding the fact that during some months, some of the stores were actually not trading because of tenancy transition and therefore closure of business pending tenancy transition. In 2018, the same stores generated roughly the same amount of sales. But out of the 16 brands, eight are same-store brands, i.e., same brand, same store. The other eight are either new brands altogether or same brand, different store. What has happened is that we've been able to re-engineer that frontage. Some of the weaker-performing brands have been replaced by stronger-performing brands. And collectively, therefore, that street front has generated a similar amount of sales as in 2018. That's what we try to do regularly to all parts of our portfolio. This is the most conspicuous part and therefore and arguably the most important part. And that's what we focus our attention on first. The remainder will have to follow, hopefully with similar success. Occupancy costs? Occupancy costs as Occupancy costs as a whole is, for the year, a little under 20%. Thank you. May we have the next question from Sam of Jefferies? Thank you. Thank you, management, for the presentations and the opportunity to ask the questions. I just want to follow up on the retail recovery point. I wonder if we can get more granularity in terms of the recovery rates by assets, meaning for Harbour City and for Times Square, and also by segments, meaning for luxury and non-luxury. Also want to get your sense. A second question is, you know, want to get your sense on the retail sales outlook for 2024. Thank you. Recovery in Harbour City has outperformed Times Square. Times Square is still a work in progress. We are working on that. We expect to start to deliver some change for you to see, hopefully, towards the end of this year. So it will be some months. We've actually got commitments, but the tenants will not come in and start their decoration and fit-out work probably until third quarter. So hopefully, that will start to uplift Times Square as well. There's not much more I can tell you about Times Square at this point in time. Harbour City, the Canton Road front, I've covered. And there is no other equally conspicuous part of Harbour City that I can single out and discuss. But overall, sales recovery, as I was alluding to, it's so far only about 80% of pre-COVID. And that needs to be sustained. Now, whether or not that can be sustained or even improved in 2024 is clearly still a question that remains to be answered. We believe improvement will continue but gradual, in the absence of something that we or very few people foresee, either positively or negatively. So far this year, it seems to be good, but it's only two months into the year. And I don't have very definitive data points to share with you yet. Thank you. May we have the next question from Ken Yeung, Citi? Hi. It's Ken Yeung, Citi. First question on your treasury management. This is the first time I get to know that you want to fix some of your finance costs. Can I get to know what is the ratio as of end of last year? What is your target in terms of the fixed and floating of your debt that you want to go into? I mean, secondly, we do see a very sharp cut in terms of the gearing and net debt. Part of it is funded by the disposal of securities. Should we expect more disposal of the securities on that? And follow up on that is also the second question. The first question is, there's news saying that you're Singapore disposal of your IP. Can we get to know what is the timeline? Basically, is that used the proceeds will be used for also similarly as lower the gearing? Okay. Thank you. I'll answer part of the question, and I'll ask Horace to answer the rest. Yes, we've disposed of listed securities in the course of the second half of last year. So much of the impact of debt reduction was not felt last year because of the timing of the debt reduction. This year, of course, we expect to have full impact from that. And assuming interest rate does soften, that will be another factor to reduce our interest costs, borrowing costs, for 2024. We do not have much left in the portfolio of listed securities. So I would not expect any sizable reduction in that portfolio anymore. The sale of our Singapore Mall, we're in the middle of it. The process started in January. If everything goes well, hopefully, we would have a binding agreement signed by May and completion probably around the middle of the year. Proceeds of that will be applied against debt, initially at least. Interest rate swap? We adopted a floating approach for the last years. This year, of course, last year, 2023, we started to fix some fixed rates. Before that, our floating rate is almost not 100%. It's almost 99%. But last year, it's around 94%. So we are moving towards a more balanced distribution of fixed and floating. Regarding the liquidations of long-term equity investment for the reducing last year is around HKD 7.2 billion disposed, which helped to reduce the debt level substantially. Of course, as chairman has mentioned, this year, our balance of the long-term investment is about HKD 5.8 billion. So, of course, we cannot expect a similar level of disposal for this year. And the 5.8 includes Harbour City's portfolio because of consolidation. Thank you. May we have the next question maybe from Praveen, Morgan Stanley? Hi. Thank you. Two questions. One is on office. If you can tell us what's the outlook, both Harbour City and Times Square. What? Sorry. What? Outlook. Outlook. Just the outlook. It has been very slow and declining. So just wanted to understand if you are seeing some bottoming of that sector. And then the second question I have was interest expense as well. Would you be able to tell us when did this HKD 7.2 billion disposal happen during the half? So to understand net debt number, to analyze it, to understand if you have sold in December, then five months of this and so on. So third quarter. Let me answer that question. Third quarter? Third quarter. July? Well, July is part of third quarter. You're right. So then the other question on the interest expense is, the reason to sell your equity portfolio, was it because equity portfolio was generating less return than you would you get in interest in a fixed deposit, for example? Yes. Negative carry. Okay. Thank you. So office? Negative carry because as interest rate went up, the cost of that portfolio to us, the cost of funding that portfolio to us was becoming more and more costly. Office. I think the office situation in Harbour City is a little different from that in Times Square. In Harbour City, because of our location and because of the ability of the Harbour City Mall to draw a good number of mainland visitors, we get companies that sell financial services as tenants. Good example, insurance companies. They sell insurance policies. And they know if they set up an office in Harbour City, it would help them to sell more policies. Now, we don't have a similar situation in Times Square. And so financial services tenants in Times Square would not be as concentrated as they are in Harbour City. But we get other kinds, technology, other general trading, and so on and so forth. And then the competitive landscape is also a little different. Causeway Bay faces primary competition from Island East, whereas Tsim Sha Tsui faces competition more from Kowloon Bay. And competition is probably in that regard, competition is probably keener in Kowloon than in Hong Kong. Thank you. The next question from Cusson Leung, J.P. Morgan. Hi. Thank you very much. This is Cusson from J.P. Morgan. I have two questions. The first question is about rental reversion. Just curious if management can share a bit about our outlook on rental reversion, preferably by segment or by assets. And the second question is about potential disposal because we talked about Scotts Square, right? Just curious, do we have any plans to dispose of any other assets currently? Thank you. No. Scotts Square is the only asset that is on the market or that is planned to be on the market. To give you more color, Scotts Square is a strata-titled property. There is a shopping mall below. Location is very good. It's sandwiched between the Grand Hyatt on the right-hand side and the Marriott Hotel on the left-hand side. It's half a block from Orchard Road and Scotts Road. We built 330 apartment units on top of the shopping mall. All the apartment units were sold years ago. And we were left with this mall. We think, given that there is very little redevelopment potential anyway, while the market appears to be hot, we've been advised by our local consultants that this may be a good time to realize that asset and to reinvest in other things if the right opportunity comes along. And because it is a long-term investment and because we're following the advice of various consultants and so on and so forth, we believe we'd be able to avoid capital gains tax. And hopefully, therefore, all proceeds will initially be applied against debt. Whether or not we reinvest depends a great deal on finding a suitable investment in due course. Reversion. Office reversion is negative. That's not surprising. Whereas retail reversion is slightly positive. You will have seen too that another piece of information that I wanted to repeat is that the rental relief amortization that we've had to deal with in the past four years, 2020, 2021, 2022, 2023, is substantially over. That accounting treatment somehow or other distorted our reporting of actual performance. But hopefully, that is behind us substantially for the time being. Thank you. May we have the next question from Mark Leung, UBS? Yeah. Thank you, management. This is Mark Leung from UBS. I have a follow-up question on management, your comments on we finished or completed all the rental concession. So from a like-for-like basis, if we're excluding the rental concession, what will be the rental income, retail rental income growth for this year? I think that's the first questions. Second question is, recently, we see more media are talking about the multi-entry endorsements and the allowances for the mainland visitors. We call it the tax allowances. Shopping in Hong Kong could be updated. So what was your view on that one? And secondly, what's the likely timeline you think that will be announced? Thank you. Are you referring to 一周一行? 一签多行? Sorry. 免税. Okay. Well, that hasn't been announced yet, I don't think. 一签多行, that's releasing the 一周多行. 一周一行, sorry. So easier visiting. Generally, I think that's what you're referring to. Well, obviously, the visa restrictions and the customs are two factors impeding more retail sales in Hong Kong. And if they are relaxed and/or removed entirely, obviously, it will be positive for retail sales in Hong Kong. And maybe together with that, positive for the hospitality industry. Now, but it's difficult to predict at this point in time, or to estimate at this time, or to quantify it at this time because we don't really know the degree of relaxation and timing of it. So we'll just have to watch this space, as they say. The other question was rental concessions. Oh, rental Oh, rental concession. What happened with this? Because of the amortization accounting standard, in the years when rental concessions are given, parts of the concessions are deferred until subsequent years. That has a tendency of overstating the rental income during the years when concession is granted. The bulk of our concessions were granted in 2020. That was followed by smaller quantities in 2021 and 2022. But we stopped granting concessions after 2022. Therefore, most of the concessions granted in 2021 and 2022 would have been fully amortized with the expiration of respective leases. The effect of that was because concessions were granted in 2022, the reported rental income in 2022 was slightly deflated because of the amortization. And the impact, if we were to just look at the cash ignoring the amortization, I believe the year-on-year increase in rental income or total revenue from our IP would have added something like 4 percentage points, 4-5 percentage points. Thank you. Or, in other words, the amortization for last year is lower than the year before. So if you take out the amortization, that means the increase will be better than what has been reported. So the next question from Simon Cheung of Goldman Sachs. I just wanted to get a sense because all these comments about local Hong Kong going to travel to China and spend in Shenzhen. And we have seen some data on the Hong Kong retail sales, the low-end necessity spending actually come off. I don't know to what extent do you feel there's any impact to your mall? And maybe you can comment on what sort of category you have to observe. That's the first thing. And then the second thing, on Times Square, I think we had quite a number of results where you mentioned you're going to be revamping the properties. I want to get a sense how you are thinking of what sort of scale you're talking about in terms of capital investment into revamping the property. And lastly, obviously, your gearing has come off. Now that it's quite clean without the security, now it's sitting around 15% or so, 18%. How are you thinking going forward given all the disposal? Is that 10%-15% where you see being a more comfortable level? Thank you. That's an interesting question. To get to 10%, we'll need to reduce it by a further HKD 16 billion, something like that, HKD 16 billion. Well, maybe we have to change our dividend policy. No. No. No. Our dividend policy is very consistent. We have no intention of changing it. But to get from 18.6% to 10%, it will take some time. Successful disposal of Scotts Square would help. But that's only somewhere around HKD 2 billion-HKD 3 billion. We'll call it 3, 2. We're very comfortable with our gearing level. Our interest cover, having done the changing some of the floating rate to fixed rate debt, our interest cover is also comfortable. So we don't feel pressure on funding. The Times Square improvement, we have not finished working out that program yet. We will spend as much as we need to. I don't think we will spare any investment if necessary. Having said that, I don't think it is necessary to invest that much to turn it into a better asset. So I don't think we need to worry about that yet. We'll have a better picture sometime later. The other topic you raised, Hong Kong people going north to spend, to consume, in a way, many people related to the opposite direction, the flow in the opposite direction, i.e., not enough visitors coming from the other side or staying in Hong Kong if they come here. And maybe I would take this opportunity to address the second part first. I don't know whether you know that the Hong Kong Tourism Board recently published a report on what is it called? 2023, Hong Kong Tourism Performance 2023. It's not a very long report. It's about 10 pages or so. And included in there is some analysis of the behavior of various tourist groups, mainland visitors, short-haul visitors, non-mainland short-haul visitors, non-mainland long-haul visitors. Now, we often hear remarks like mainland visitors are more and more mainland visitors are not staying in Hong Kong. Overnight visitors are falling as a proportion of total mainland visitors. The data doesn't agree with that. According to the data, the reduction in mainland visitors between 2018 and 2023 is more serious among day travelers than those who stay overnight. Now, one of the reasons it doesn't go on to clarify why, but I think one of the reasons is because of the parallel importers in the northern part of Hong Kong. They're not coming to buy baby formula and daily necessities and so on. In fact, Hong Kong people are going north to buy their groceries. So with that number gone, the proportion of overnight visitors among mainland visitors has increased from 39% in 2018 to 46% in 2023. Proportionately, more of them are staying in Hong Kong. We just don't have enough totals. Another data point coming out of that report is that these overnight mainland visitors are staying longer, not shorter. They used to stay three nights. They're staying three and a half nights. They are spending less per capita, but not much less. They used to spend HKD 7,000. They now spend HKD 6,500. But they are and their spending consumption behavior has changed too. They're spending more on hotel bills. Previously, they were spending, if you work these numbers out, they were spending a thousand, a little over HKD 1,000 on hotel bills per capita. Now they're spending HKD 1,400+. Dining, they used to spend about HKD 900 on dining. They now spend HKD 1,300. So these same-day visitors are spending more on hospitality per capita and less on shopping. So it's good news for one part of our business and not as good news for another part of our business. But having said that, I think at the end of the day, we just need more of them in numbers. If the total numbers would increase given assuming the same ratio of 46% of them being overnight visitors, we don't need nearly as many total as we used to. I hope that's good news for Hong Kong. Hong Kong consumers going north, on the other hand, I see that as a cyclical behavior, cyclical driven by at least two main factors. One is currency. If and when the Hong Kong dollar weakens, they will find it less attractive to consume north of the border. Another factor is which may be a longer cycle. And that is as demand goes north, it will also tend to drive up prices up north at some point in time. I don't know how long that would take. And I don't know at what point in time these factors will start to turn the tide. But the whole idea of a GBA is mobility. Mobility of Hong Kong people going north is now obvious. Mobility of people coming south is less visible. And hopefully, with the relaxation in visa requirements and so on, we will start to see some of that too. At the end of the day, it's balance of payments. At the moment, it may be unbalanced. But I think part of that is also because of novelty. Whether the interest would sustain with the same intensity month in, month out for much longer, I don't know. It depends on what is on offer the other side and what is on offer this side. But overall, it's the GBA promise. And we're seeing the promise delivered. We should not be surprised if we put it that way. Thank you. In the interest of time, we will receive the last question from Raymond, HSBC. Thank you, management, for accepting my questions. Raymond from HSBC. So two questions. The first question is about retail recovery. So like the management just mentioned about the tenant sales, it's still around 20%-ish below the pre-COVID level. Can management share in terms of footfall, like the recovery rate over the past few months? This is the first question. And the second question is actually about the trend. So management, thank you for sharing with us all the trend about the recent tourists coming to Hong Kong in terms of spending behaviors. Can management also share with us the key trends within your shopping malls, Harbour City? What are the major changes for the tourists or the spenders within your mall? So what are you going to seize these opportunities? And the follow-up question here is, what is the latest split in terms of tenant sales between the local citizens and the tourists spending? Thank you. I don't think we have data to answer that last question. We can't differentiate between locals and non-locals. But luxury is doing well, clearly, in Harbour City, which is why the Canton Road, 16 stores in Canton Road are already delivering similar sales as in 2018. Dining is a bit weak, particularly dinner, supper time. Part of the reason is because of change in behavior. I think that's a common Hong Kong problem. Another, I think, common Hong Kong problem is increase in supply of dining options. Over the last few years, when retail was under pressure, more landlords, including ourselves, converted retail space into dining space. There's more competition. Therefore, the consumption dollars are spreading thinner than before. Those two are obvious sectors. Others, jewelry and watches seem to be doing well. That's arguably part of luxury. Electrical appliances, electronics, that's very dependent on product. Sportswear seems to be doing well. Those are the obvious categories that I can think of. Foot traffic. Foot traffic, I sometimes feel it's more than before. I go to work in the same building all the time. But it is comparable to before on key dates. Over the Chinese New Year period, for instance, generally, I think it's well recovered. Thank you. So we will consider this briefing to be concluded. Thank you all of you for joining today. And we wish you a nice evening. Thank you. Thank you.