Good afternoon, everyone. Welcome to Wharf REIC 's final results presentation. I am Angela Ng from the IR team. You can download the presentation from the QR code displayed on the LED wall. Our management today, including Mr. Stephen Ng, Chairman and Managing Director, and Mr. Horace Lee, Director. We will start with the PowerPoint presentation and then open the floor to the analysts for a Q&A session with the management. The theme for the presentation is "Top-line challenges remain hard." Now, let's take a look at the result highlights. Global economic and geopolitical uncertainties continue to pose challenges for the economy of Hong Kong and Mainland China. In such operating environments, group revenue decreased by 3% to HKD 12.9 billion. Revenue from Hong Kong IP, representing 81% of total, declined slightly by 1% to HKD 10.5 billion. In response to unfavorable interest rates, our financial priority in the past few years has been the management of debt and borrowing costs. During the year, net debt decreased further by HKD 2.1 billion to HKD 34.2 billion. Gearing ratio further improved to 17.8%. Net borrowing costs have peaked, decreasing by 10% year-on-year. While Hong Kong's economy shows moderate growth, demand for commercial properties remained weak, leading to a 3% decline in the total value of our investment properties. In 2024, the strong local currency and gradual pace of interest rate cuts continue to dampen both business and consumer confidence. Notably, the Hong Kong dollar against the RMB and Japanese yen hit decade high. Together with the continued strength against other currencies, it has weakened Hong Kong's competitiveness for both tourists and locals. As you can see from the chart, the overall recovery of Hong Kong visitor arrivals remained incomplete and uneven compared to the pre-COVID. Hong Kong retail sales also saw a slow recovery, with a 7% decline year-on-year, mainly driven by consumption downgrade from key markets and local spending leakage abroad. Under the weak market conditions, our Hong Kong IP revenue declined by 1%, but OP margins maintained relatively stable under our effective cost controls. Retail rents were dropped by weaker retail sales. Meanwhile, office rents remained weak, but it was partially offset by the improving occupancies among our office portfolio. To support sustainable value creation of our IP and hotel portfolio, the group has been taking an incremental approach and invested HKD 4.6 billion in total since our listing in 2017. This investment includes the addition of Ocean Terminal Extension, the office conversion from Hampton Court Serviced Apartments, and the recent strategic realignment of global brands on Canton Road frontage with the addition of multi-story Maisons, which have together solidified the leading position of our iconic properties. At the same time, we consistently enhance our brand value through proactive brand portfolio management. Thanks to our proven track record and strong relationship with best-in-class brands, Harbour City welcomed the duplex expansion of Celine, while Louis Vuitton is set to expand to four stories in the second quarter this year. Meanwhile, Louis Vuitton at Times Square opened earlier this year, and Loewe has committed to increasing its base. A series of promotional activities have also been launched to capture foot traffic and stimulate consumer spending. On the office front, in light of the high market vacancies, we maintain competitiveness by offering flexible lease terms and accelerating premises improvement. As a result, our office portfolio occupancy increased to 90% by year-end. Now, let's take a look at the financial highlights. Group revenue and operating profit declined by 3%. However, thanks to improvement in non-core DP business and a 10% reduction in borrowing costs, group UNP increased by 2%. Non-cash and unrealized net IP revaluation deficit widened, but cap rate remained unchanged and conservative. Since listing in 2017, we have been completely upfront and consistent about our distribution ratio of 65% of core UNP as a policy. Full-year DPS was HK$ 1.24. The group maintained some financial health with Moody's A2 rating. Net debt is at a record low of HK$ 34.2 billion, down by HK$ 17.8 billion since the end of 2020. Average interest cost was 5.6%. With this rate, a 17.8% net debt reduction would have saved $1 billion of interest every year. In view of the high-rate environment, our floating-rate debt further reduced to 80%. Interest cover stands strong at 4.7 times. In the following slides, we will walk through the performance of Harbour City, Times Square, and the hotel portfolio. First, Harbour City, which accounts for 70% of group revenue. Harbour City continued to receive stable demand, backed by critical mass and location advantage. Overall revenue increased by 2% to HKD 9.1 billion. Retail occupancy was healthy at 94%. Office occupancy rose to 90%, mainly driven by the expansion and commitments from finance and insurance companies. As the largest and most diverse shopping mall in Hong Kong, Harbour City maintains a steady and balanced mix of trade that caters to both local and tourists. Retail rental increased by 2% to HKD 5 billion. Canton Road frontage now features 16 best-in-class luxury brands, including the addition of Fendi. Inside Harbour City, we also welcome the expansion of de buts of various global brands and F&B outlets. Moving on to Times Square, we continue to refine its dynamics to enhance competitiveness. The mall has been enriched by the most popular luxury brands, while the upper floor will feature more experiential retailing and trendier dining options. On the other hand, office occupancy improved by 3 percentage points from the end of June to 90%, driven by tech, media, and financial companies. We will switch to our hotel portfolio, which includes the three Marco Polo Hotels on Canton Road and The Murray under Niccolo brand. The Murray, which is where we are today, has been awarded Forbes Travel Guide five stars for three consecutive years in 2024. Through consistent service excellence, our hotels maintain steady occupancy rates, but the overall industry is experiencing a decline in room rates, largely due to intense regional competition and price-sensitive travelers. To encourage repeat visits, we have launched a cross-hotel rewards program along with attractive package deals. Moving on to general outlook, a full market recovery remains uncertain as concerns about looming trading wars and unfavorable interest rates and currency persist. However, the central government's substantial stimulus packages, along with the Hong Kong government's ongoing efforts to attract quality visitors, may help revitalize the market once cyclical factors improve. In the last part of the presentation, I will walk through our efforts in ESG. We have formulated the 2030 targets, which are on track. Additionally, we are developing new carbon reduction targets in accordance with SBTi criteria. Our efforts have earned strong ESG ratings, including A rating from MSCI ESG Assessment. In recent years, Times Square has earned both LEED Platinum and WELL Health- Safety certifications. Up to the end of 2024, an accumulated total of HKD 11.1 billion sustainability-linked loans has been arranged. Energy-saving initiatives are actively adopted and pursued across our IP portfolio and Star Ferry. Youth development is also our key focus, and we are dedicated to various business-in-community initiatives, including our flagship project, WeC an. 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 for the analysts before we begin. If you have any questions, please raise your hand. Our hotel staff will provide you with a microphone. Please identify yourself and state the organization you represent before asking the question. If I did not do so, 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? May we take the first question from the floor? Cindy from Citi. Hi, management. Thanks for this opportunity. Two questions from me. One is on retail. We see from results that the second half of 2024 is seeing some more challenges in retail compared with the first half. Would you mind sharing with us the reversion and retail sales performance in the second half last year? If you remember, the first half, we see still positive reversion in Harbour City. How has the second half performance been doing? What's your initial outlook for 2025? Say do we see sentiment improve in the first two months? Still quite challenging. This is the first question. The second question is actually on the retail occupancy. Obviously, occupancy is still very healthy, but we see some fluctuation at both Harbour City and Times Square retail. Is it more a function of some proactive tenant remixing, or what are the reasons behind, and how is your plan in, say, retaining the brands and, say, attracting more brands this year? Thank you. Thank you. The retail market in Hong Kong, as you know, is going through a downward trend. It is experiencing a downward trend. That started actually from March or April 2023. Ever since then, the year-on-year growth, quote-unquote, growth has been negative, with the exception of, of course, January and February of last year, because they compared to pre-opening January and February. This is general knowledge, and I do not need to dwell on it. At Harbour City and Times Square, we're not performing too differently from the market. Generally, it's been down. We don't, looking ahead, first of all, we don't yet see improvement in the first half of this year. The first quarter is almost behind us, and we know there is no, quote-unquote, good news. The second quarter may surprise us but given that we haven't started to see momentum yet, even if the second quarter does improve, it will take a little while for the full impact of it to be realized. That is the way we look at the retail situation in Hong Kong in the first half of this year. Second half is difficult to predict. The U.S. president is toing and fro ing, and it makes the forecasting extremely difficult, if not impossible. The Two Sessions in Beijing produced favorable comments from certain quarters, from a number of quarters, but we have to see how quickly and how significantly that would translate into real dollars and cents at the Hong Kong level. I can't predict with any measure of certainty what the occupancy going forward would be or the rental would be, other than to say that I am not optimistic about the first half of this year. Second half, hopefully. I don't know. Not yet. Yeah. Okay. Thank you. May we take the second question from Khao Chen, JP Morgan? Thank you very much, management. On Hong Kong retail, just a follow-up question. Just curious if you can share a bit more colors on the performances by category in the past, let's say, past six months. Say is luxury doing better, or is it like F&B, or is it other retail? Yeah, can you share a bit more colors on that? With that, do you think we would need to do even more trade mix upgrades or trade mix changes in the coming year? That is my first question on Hong Kong retail. The second question is more on AEI. Just curious, in the coming year, do we plan any AEI? I guess from our side, we have always been anticipating some sort of AEI in Times Square because, as we see, the rental income in Times Square has been still declining. I am just curious, do we have any plan for Times Square for the next one to two years? Thank you. Good. Thank you. AEI and Retail. Retail. There is no marked difference between categories, so to speak. The difference is actually within each category. Some retailers within each category perform better than others. Uneven performance. It depends on the brand. Some of the brands are doing very well. Others are lagging quite far behind. On average, there is no marked difference between, for instance, luxury and non-luxury. A good example is along the Canton Road front, we talk about 16 shops. Those 16 collectively perform similarly as the rest of the mall. That is probably the best way to answer that question. For AEI, we do have some schemes which we are still trying to finalize for Times Square. Yes, we will be investing. The question is, what is the best scheme to make the investment worth every dollar of it? Hopefully, sometime within the next, the rest of the year, we will be able to finalize it and implement it. In the meantime, we're doing smaller, taking smaller steps. We're bringing back some tenants that would help us to reboot retail sales. Those are relatively small steps at this stage. The bigger plan is still in the making. Okay. Thank you. May we take the next question from Raymond Liu, HSBC? Thank you, management, for taking my questions. Maybe I have three questions I want to ask. The first question, actually, I want to reconcile the current situation in the high-end retail market in Hong Kong. Because if you look at the overall market, we actually saw that some of the top luxury brands do re-expand in a couple of shopping malls, including Times Square, which, what you just mentioned in Harbour City, also saw some expansion here. The overall retail market has been quite challenging. Can you share with us and connect the dots with us as well as investors? That is the first question. The second question actually is about the fixed rent as well as the turnover rent of your shopping malls here. Do we see the fixed rent continue to receive positive rental reversion, or are there some challenges going forward? That was the second question. The third question actually would be related to the second half the Chairman just mentioned, hopefully to be a bit better. Can you share a bit more color on what are the key things that you are looking for other than the policy from mainland China or anything that you particularly want to focus more on that you wish that we see some improvement in the retail and tourism market down the road? Thank you. Okay. Thank you. Now, to be fair, Angela suggested two questions. You asked three. I give you a choice. Which two would you like me to address? First two. Okay We can come back to the third later on if there are no other questions. Okay. For luxury retail, what we see is overall consolidation, i.e., most brands are looking for a smaller exposure in Hong Kong generally, but they're becoming selective. Some of them are expanding those locations which they consider priority while downsizing, if not closing, other locations. Hopefully, we'll be one of the landlords benefiting from this process of consolidation. So far, we're doing reasonably well, but there is competition, clearly. On the question of turnover rent versus fixed rent, turnover rent certainly dropped in the year 2024. Part of it is because of when new leases were written, the base rent increased. Part of it was because of conversion of turnover rent into base rent. Whether or not we can continue to see the same trend of conversion from turnover to base, I can't be very confident. I think in some cases, we will see that, but in other cases, we may see the reverse. Overall, I would think that the base rent portion would probably be stable, and the upside or downside will come in the turnover rent in 2025. Thank you. May we have the next question from Karl Choi, Bank of America? Hi. A couple of questions. First, could you discuss with us, share with us the occupancy costs that you saw in 2024, and is that sustainable, and whether, or in view of some vacancy, is there a chance that you actually need to lower some rents in order to boost the occupancy sort of in terms of your outlook? Second is the percentage of debt that is floating rate went down to 80%. What's the expectation for 2025 if you do see more chances to fix more of your debt? Ideally, how much would you want to fix? Okay. Occupancy costs is a little bit higher than what it was a year ago. Harbour City's occupancy cost is we're doing just about 20% overall. Times Square is not too different either. That's because of rental adjustment. Again, there are great variances from tenant to tenant. Some of our major tenants are reporting occupancy costs of single digits. There are others that are reporting triple digits. Overall, it is about 20%. Now, clearly, you would ask, and I have asked the same question, why are they still there if they're paying in rent as much as they get in sales? I'm asking the same question. Clearly, we need these tenants will either have to improve their sales, or they have to have a good reason for continuing to be there. Maybe there's an advertising value in it. Maybe there are reasons. We don't know. Or hopefully, they're not underreporting their sales. We don't have a fixed target as such to reduce our debt. It's a natural process of debt reduction. It goes back, I suppose, in a way to when we listed, we structured the listing vehicle to be not a REIT, but a REIC. Because we never liked the REIT code, which was rigid about distribution at 90% or higher. We did not think that would allow the company to manage a set down when interest rate goes up. At the IPO stage, we made it very clear that our dividend policy is 65% of our core earnings, i.e., underlying net profit, the basic earnings from Hong Kong IP and hotels. That allowed us to claw back the remaining 35% into A, CapEx, B, debt management, which was a good reason why we were able to reduce our debt by HKD 18 billion in the last four years at an interest cost equivalent to about HKD 1 billion last year. How much we can reduce our debt in 2025 can be quite easily calculated. Again, take our underlying net profit from Hong Kong IP and hotels, assuming it's not too different from last year. 35% of it will be cash that we can plow back into repaying debt, minus, of course, capital expenditure. We do not expect very large capital expenditures in 2025 because even if we go ahead with the Times Square expenditure, the bulk of it will probably not happen this year or payment of it in any case. More or less, it's a natural progression which you can estimate. Thank you. Any more questions from the floor? Simon Cheung from Goldman Sachs. Thanks for the presentation. I just broadly wanted to get a sense of what you are seeing in your shopping mall because I think your competitor mentioned that, what, 85% of the tenant sales is coming from locals. For example, I think that was in the briefing that Hong Kong Land mentioned about the landmark properties. For your property, I'm not sure whether you have any number that you can share. Also on your membership program, like VIC program, what sort of spending are you seeing? Related to that, remember back in the COVID period, you spent quite a bit of money to give out coupons and all those. Given the factor of that you're seeing, are you seeing the need to do so again? Thank you. Right. We don't have a scientific number about what proportion of our retail sales come from locals versus non-locals. We have a reasonable guesstimate that at Harbour City, up to 50% of it is generated by visitors. A lower proportion at Times Square, probably less than a third. VICs, what we call VICs, I do not know what other people call them, do not contribute a great part of our sales because particularly for the visitors, unless they are frequent visitors, they would not care to join loyalty programs. That is why I think overall our VIC proportion is probably lower than what some of our competitors claim. Coupons, we have no intention at this stage to restart coupons. It was a costly program, as you pointed out. It was a program we used in exceptional times. I do not think we are in exceptional times again yet. Thank you. We will have the question from Raymond Cheng of CGS. Hi, management. Can I have some color about your shopping mall foot traffic, especially after the Shenzhen government, right? They blessed the multi-visit visa. How's the foot traffic, especially in January and February? Also, any changes for those who are shop tenant sales, whether it's the high-end or F&B better? This is my first question. The second question, the Hong Kong New Stadium just opened, right, recently. Any expectation? Whether are you guys expect, say, given those are concerts, right? Those are big events could potentially bring some high-spending customers. Do you think your shop, your mall should be, could be benefited? Thank you. Right. Yes. Footfall has certainly increased. The number of visitors into Hong Kong has recovered. Although overall, there's still something like 30% below 2018, the recovery is not yet as healthy as most of us would like to see. Compared to even 2023, the numbers are higher. We see that in our malls as well. Unfortunately, they are not translating into commensurate improvements in retail sales, implying the per capita consumption has dropped. We are no different from our competitors in general. The opening of the sports park in Kai Tak is obviously a stimulus for the hospitality industry in Hong Kong. First of all, we do hope that the hotels will benefit. Our hotels are beginning to see a little bit of that, but it is still a little early to be too definitive about it. It will hopefully also benefit the retail trade. A slight upside too, an additional slight upside too, I hope, is when the multi-visit visas rather than one visit a week from GBA, right now it is only limited to Shenzhen. Now, when that's extended beyond Shenzhen to some of the other GBA cities, if that happens, hopefully we'll bring more visitors from those cities as well. Hopefully too, because those cities are a little farther away, they will tend to stay in Hong Kong rather than go back the same day. All of that is, at this stage, hypothesis. Whether or not other cities will be added and when, we don't know. That is why I can't be too optimistic about the first half of this year. Second half is anybody's guess. Thank you. We will have the next question from Percy at DBS. Hi, Management. Thank you for taking my question. This is Percy from DBS. Just one question regarding your equity portfolio holding. I recall previously we have actually sold a portion of our equity portfolio to reduce our debt. Just wondering what is your view on the current positioning? Is there any chance that we could replicate as well as to reduce our debt as well? Thank you very much. Yeah. Right. It was in 2023 when we sold a significant portion of our investments. The purpose was to deleverage. That exactly helped us to reduce not only our debt, but also our interest cost. What we sold at that time was primarily lower yield equities. What we have kept are the higher yield equities, high enough to result in a slight positive carry. If they were also negative carry, we would have considered liquidating some more. To the extent that they are slightly positive carry, we can afford to hang on to them. Hopefully, when interest rate falls further, the positive carry will become bigger. Thank you. The next question from Mark Leung UBS. Yeah. Thank you, Management, for taking my questions. I have three questions. I think the first one is regarding on the Hong Kong visitor mix. I think everyone knows that the mainland maybe visitation has not gone back to pre-COVID level, and the per capita spending is quite weak as well. On the positive side, we have seen the non-Chinese visitors actually has growing pretty strong. According to the Hong Kong governments, their per capita spending is even higher than the mainland. Just want to check if management see any tenant mix reshuffle needed for both of our tourist district mall in Harbour City and Times Square. I think that's the first question regarding on the tenant mix. The second question is regarding on the competitions regarding to our neighbor, Shenzhen. I recorded in early December last year, Shenzhen has allowed it, Man Kam To, Man Kam To, to allowing Hong Kong residents to have a tax refund after they shopping in mainland China. How do management view that the possibility for rollouts from the other landports in Hong Kong? I think that's the second question. What is our impact for the Hong Kong retail market in general? Thirdly is maybe I should wait on this first day, but I wouldn't like to check with management is for 2025 for the Hong Kong retail and China retail outlook because we have both operations in both regions, right? Which regions you think will outperform in this year? Thank you. Thank you. First of all, again, the rule is two questions. It's convenient for me to defer the second question given that it would be price sensitive. Could be price sensitive. We haven't announced for the other company yet. I'll deal with the first two questions. Visitor mix. There are a few destinations or rather a few source markets where visitors' recovery has exceeded 100% or are very close to 100%. The Philippines is one of them, certainly Macau, Thailand. Taiwan as well. Taiwan. We see ourselves benefiting from them as well. In particular, our hotels in Harbour City for historical and other reasons, they've done well in some of these markets, the Philippines and Thailand. We're doing not too badly in that regard. The tax rebate in Shenzhen, as far as we know, it's not been a significant factor. The volume is relatively insignificant as far as we know. I don't think it's had much impact on Hong Kong retail sales. Thank you. Due to concern of time, we will receive the last question from the floor if there is any. Thank you. I think we can conclude my briefing here today. We wish you a nice evening. Thank you for joining. Thank you.