Afternoon, everyone. Welcome to Wharf REIC final results presentation. I am Angela Ng from the IR team. You can download the PowerPoint presentation from the QR code on this LED wall. Our management presenting today includes Mr. Stephen Ng, Chairman and Managing Director, and Mr. Horace Lee, Director. Before I go through the PowerPoint presentation, let me first invite the Chairman for an opening remarks. Welcome to all of you and a very belated Happy New Year. Last year, 2025 was certainly not an easy year for investment properties in Hong Kong. You all know about the oversupply and then the weak demand. In spite of that, we did as well as we could, but the big difference last year was, of course, interest savings. The world was going through a strange time and continues to do so. Two weeks ago, we started to write reports for today's board meeting and for the announcements. Of course, in the middle of it, you all know what happened. We had to quickly scramble and redo parts of it. It's a great deal of uncertainty. If you attended some of our peers' briefings, results briefings two weeks ago, and if you were to ask them the same question today, they may be giving you a very different answer. In a way, we're fortunate we have the benefit of being two weeks later. We still don't have the answer. With that, I'd like to hand back to Angela and we'll chat afterwards. Thank you, Chairman. Let me start the presentation. The theme for the presentation is market challenges dampen group profitability. First of all, let's take a look at the results highlights. In 2025, Hong Kong's economy show tentative signs of improvement, but global risks and uncertainties continue to create external headwinds, which have weighed on the group's profitability. During the year, our underlying net profit deliver a solid 5% increase. Dividend per share rose by 6% to HKD 1.32, representing a year-on-year increase of 10% in the second half. This performance was supported by the group's ongoing deleveraging efforts. Net debt fell to HKD 32 billion, and gearing reached a new low of 17.2%. As a result, interest costs declined significantly, more than offsetting the mild reductions in revenue and profit. Our investment properties portfolio remains resilient with an overall occupancy rate of 92%. NAV per share was HKD 59.85 as at the year-end, representing a 3% mild drop. This slide highlights some economic indicators for the Hong Kong market. A rebound in the local stock market and residential property market, supported by a more favorable interest rate environment, provided a much- needed lift to the business climate last year. Inbound tourism also became more vibrant, with full- year visitors rising 12% and a more diversified mix of visitors with mainland and non-mainland visitors increasing by 15%. This positive momentum, combined with a stronger renminbi and improved local sentiment, helped retail sales turn positive in May last year, closing the year with a 1% increase. Despite this positive indicators, the overall consumption recovery remain uneven, posing a persistent challenge for landlords and the broader retail sector. In the second half of the year, Hong Kong's retail sales grew 5%, suggesting the market may be forming a new base. The recovery was mainly driven by discretionary spending. However, retailers' confidence remained fragile amid ongoing sector headwinds. As retail rent typically lags retail sales, Harbour City's retail revenue grew by a more modest 2% during the same period. For the office market, although office leasing activities regained traction, downward pressure on rental rates did not ease as the market continued to absorb significant new supply. In 2025, our office portfolio maintained an occupancy rate of over 90%, outperforming the market. Our tenant retention also remains strong at over 80%. This highlights the advantages of our prime locations and the unique drawing power of mixed- use offerings. Most notably, the Harbour City office cluster, which is a key hub for insurance and wealth management. We also continue to enhance the quality and appeal of our offices through ongoing upgrade. As the market demand still lacks supply in Hong Kong, our Hong Kong IP revenue slipped by 2%. Harbour City remained a key contributor, delivering a steady performance and accounting for around 80% of our Hong Kong IP revenue. For retail, the improvement in foot traffic is yet to translate into stronger financial performance. Rental reversion remains challenging. Office revenue increased by 1% on improved occupancy, though negative reversion persists. Now let's take a look at the financial highlights. Our Hong Kong IP and hotel underlying net profit, which is our core UNP, increased by 7%, driven primarily by over HKD 600 million reduction in borrowing costs, which more than offset the mild declines in revenue and operating profit. The non-cash and unrealized IP revaluation deficit led to a group loss, but cap rates remain unchanged. Our dividend policy has been consistent since IPO. Full- year DPS increased by 6% to HKD 1.32. Given the volatile global economic outlook and uncertain interest rate trajectory, we remain vigilant and continue to prioritize a strong balance sheet and capital flexibility. While asset value is declining, we continue to deleverage to keep gearing low. With 83% of debt in floating rate, we benefit from lower HIBOR, reducing average interest costs by 1.5 percentage points to 4.1%. Interest cover remains strong and our financial health is affirmed by Moody's A2 rating with stable outlook. In the following slides, we will walk through our performance of Hong Kong investment properties. Firstly, Harbour City, which is a gem in our portfolio and also the best location for luxury and all brands looking to establish a strong presence or a flagship in Hong Kong. During the year, retail revenue remained stable with occupancy at 92%. Office revenue rose and occupancy increased to 91%, supported by sizable commitments from insurance and wealth management companies. The mall continues to deliver an optimal trade mix that meets the market needs. Here you could see the balanced mix of trade at Harbour City and its retail rental was stable at HKD 5 billion. During the year, a number of international and domestic brands expanded or made debut at Harbour City, including Louis Vuitton's expansion to four stories, La Perla opens second store in the mall, Urban Revivo's Hong Kong debut, and Breguet's Kowloon debut. For Times Square, it continues to rejuvenate the tenant mix. Louis Vuitton opened and Loewe expanded. Trendy F&B options were also added on the basement level. Retail occupancy was 95% and office occupancy was 90% with high retention rate. We will switch to our hotel portfolio, which includes the three Marco Polo Hotels on Canton Road and The Murray under Niccolo brand. The hotel sector is energized by a more vibrant inbound tourism market. The group's hotel revenue and occupancy both improved, although average room rates were behind expectation as customer remains price sensitive. The Canton Road hotels deliver solid results for both room revenue and non-room revenue, driven by new room categories and targeted promotions. The Murray also recorded double-digit growth in occupancy and RevPAR. Also, we are proud that The Murray received the one Michelin Key, recognizing its exceptional hospitality. Now we will go through our effort and performance in sustainability. Last year, the group's near-term science-based targets were approved by SBTi, which mark an important milestone for our sustainability efforts. Our efforts in ESG also earned us strong ratings and green building certifications, including LEED Platinum for Times Square and Harbour City's offices. Sustainable financing made up 37% of financing as of December last year, while an accumulated total of HKD 17.5 billion sustainability-linked loans has been arranged. More details about our ESG efforts could be found in the PowerPoint presentation. In the final part of the presentation, we will walk through the global and Hong Kong outlook, which some of you may have already read in the results announcement released this afternoon. The current business environment is characterized by significant and accelerating global disruptions. First, geopolitical tensions and intensifying global conflicts are reshaping markets and compressing planning horizons for corporates. Second, rapid technological change, particularly China's advancing innovation and the pervasive influence of AI, is creating new opportunities while disrupting the traditional ones. Finally, the consumer markets are also evolving quickly, requiring retailers to adapt their strategies to demographic shifts and the rapid expansion of e-commerce. In this volatile environment, navigating instability and transformation becomes a primary challenge. For Hong Kong, even though Hong Kong's economic recovery is gaining momentum, the outlook remains mixed. Global risks and external disruptions could slow the recovery pace. In addition, the broad challenges facing the local investment properties sector continue to put pressure on asset productivity. Amid this ongoing disruption, the group will maintain low leverage and healthy financial position and remained prepared to navigate the headwinds ahead. 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. 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. Okay. Now, may I invite the first question, maybe from Cindy from Citi. Thank you. This is Cindy from Citi. Two questions from me. The first is on retail sales sentiment. I heard just now we've mentioned footfall was at growth. Wondering what was retail sales been in the second half last year and how that was in the first two months this year? Would you expect the strong retail sentiment to translate into better reversions later for 2026? The second question is on your asset enhancement. I noticed there's some HKD 1 billion capital commitment for Hong Kong IP in your result announcement. Do we have any details behind the usage of that HKD 1 billion? And also, the hotel performance was quite good, just mentioned, so is there any change to your thinking about the urgency to renovate the Marco Polo Hotel? Thank you. Thank you. Our retail sales, Hong Kong retail sales, first of all, starting with that, started to pick up in the middle of last year and apparently was gaining strength towards the end of the year. January this year opened quite well. A bit of a pleasant surprise considering that, January this year was pre-Chinese New Year, whereas January last year was Chinese New Year. We have some early numbers ourselves from February sales. We don't have all the numbers yet. It indicates the continuation of some strength in February. But I can't confirm it yet, not until we've done the remaining data. That was all very encouraging. Again, of course, Iran happened and oil prices, possible economic downturn, inflation, interest rate may not be coming down as quickly as people had hoped and all of those things. If you ask 10 people, you would probably get 10 answers. I certainly am not the guru here. Assuming Iran does not create lasting negative impact to the gentle momentum that we were seeing, I would hope that Hong Kong retail sales would continue to creep up. I use the term creep rather than jump. In most of last year, most of the second half of last year was a minor increase year-on-year. Within the overall retail pie, some sectors were actually doing not very well. The outperformers were, for instance, jewelry, gold included in particular, and electronics was also doing very well, in some months. Whether or not gold will continue, we don't know. Gold price is, of course, also going crazy. Some of the other things are not as strong as people would have liked. That's why we see the recovery being rather uneven. As far as rent is concerned, we're still digesting the lagging effect from the fairly persistent sales decline since 2023. As you know, there is ordinarily a lag between sales or between, well, I guess sales and rent. We're still digesting that. I don't expect that digestion to have completed in the year 2026. Again, just assuming Iran doesn't happen or doesn't leave lasting negative impressions. What we can hope for, however, is although there is negative base rent reversion, we're hoping if sales continues to creep up, then at least we can recoup some of it in the form of turnover rent. But that's it. I'm not guaranteeing it. I cannot. That is that situation. What was the question? HKD 1 billion, your CapEx. A lot of the CapEx goes into actually the office. Some of our offices are becoming older, and in order to regain competitiveness, we're redoing the public areas like bathrooms and corridors, in some cases the lifts, escalators and so on. As you know, both Harbour City and Times Square are facing significant increase in new supply. New supply will be newer buildings, better designed, and so on. Now, there are a lot of things we can't change with old buildings. We can't change the structure, we can't change the heights and so on, but there are other things that we can do. Whatever we can do, we will incur CapEx intelligently to make them more competitive. So far, we've been able to maintain reasonable occupancy in our offices, and we will remain flexible in terms of lease terms to maintain as practically high an occupancy as possible. In terms of the Marco Polo Hongkong Hotel, we're still reviewing different schemes about renovation versus redevelopment. No decision has been taken yet. In the meantime, what we're doing is we're spending what is practically required to keep the hotel running as a viable hotel for competition purposes. Thank you. May I have the next question from Karl Chan, JP Morgan? Thank you very much everyone, management. I have two questions. My first question is a follow-up question on retail. Just curious if you can share a bit on the magnitude of the negative rental reversion in the second half. Looking forward to 2026, do you expect that the negative rental reversion will narrow or roughly the same as last year? In your base case, assuming that the Iran thing would not drag for too long, when do you expect the rental reversion may turn stable? That would be my first question. The second question is on Times Square, because Times Square has still been a big drag to our profitability. Just curious, what's our plan for Times Square, especially now we are facing increasing competition from Hysan, right? Yeah, do we have some like medium to long- term plan on how to revive Times Square as a shopping destination in Causeway Bay? That would be my second question. Thank you. Okay. Thank you. Retail rent, negative reversion, negative rental reversion. Obviously every tenancy is different. Overall, I'd say we are seeing single- digit negative rental reversion overall. Obviously it depends on location, but it also importantly depends on when the last lease was signed. During COVID, it was necessary to be flexible. Some of the leases were longer and others are shorter. The last renewal came at different times. We don't see that negative rental reversion, the scale of it, improving too much this year. We'll need to rely on occupancy, maintaining occupancy and hopefully improving it, and turnover rent to maintain retail revenue income. Times Square is in a very competitive part of town. Unlike Harbour City, Harbour City has enough scale to be a market leader in Tsim Sha Tsui. Times Square does not. Also, the design of Times Square is different from that of, let's say, the Hysan portfolio. We don't, for instance, have a lot of street front. Most of the retail is inside the mall. We need to compete differently. We don't have a grand plan, so to speak, to expend billions of dollars to redo the place. No. We'll be doing it incrementally, which is why you don't see CapEx reserves of the scale that some of our peers talk about HKD 10 billion, HKD 100 billion, or whatever. We don't have that kind of expenditure in our plan. We'll be spending incrementally. We'll also be spending on OpEx, marketing, and so on. Not necessarily spending more on marketing, but spending more intelligently within the marketing budget, the allocation of where we spend and how to spend it. At the moment, we don't have a grand plan. On the other hand, having said that, as Angela's presentation indicated, Harbour City is 80% of the company. Thank you. May we have the next question from Mark, UBS? Thank you, management. It's Mark from UBS. I have a follow-up question regarding the competition as well. I think we discussed about the office as well as maybe in Causeway Bay, Times Square. Just want to check, maybe for Harbour City, we also have a nearby mall ramping up. Maybe LV is expanding their Asia's one of Asia's largest luxury store, and they'll open a pop-up there. And on the right- and left-hand side, we also got a new office building maybe from Sun Hung Kai Properties. So just want to check what is our strategy for both leasing and asset preservation for Harbour City as well? I think that's the first question. Second question, I think is regarding your statement. You mentioned a few things, right? About the online retail threat, fading luxury goods glory. What is our strategy behind if this is a under this kind of challenge we are facing for our near-term or long-term leasing strategy? The last one is regarding on AI. You mentioned a lot of things in AI. We're looking at our HKD 7 billion equity investment portfolio. Most of them is property. Just want to check if you want to switch some to AI stocks. Thank you. Okay. There are two parts to your property question. There's the office part and there's the retail part. The Sun Hung Kai Properties new supply is in the office mainly. As I was saying, we do expect keen competition for tenants both in Tsim Sha Tsui and in Causeway Bay. One of the things we'll be doing is we need to be flexible with tenants to retain them and to attract them, and hopefully to encourage them to grow as well. Leasing flexibility is important to maintain a respectable occupancy rate. Good news is, with a higher occupancy rate, we get more contribution to management fees and air conditioning and footfall and everything else. That's an important part of our office strategy or overall strategy. In retail, most of the brands that have their flagships in Harbour City have other stores not too far from where Harbour City is. Obviously, they will look at their bottom line, too. In having to run two stores, they incur twice the running cost. They would have done the numbers. They would need to be satisfied that at the end of the day, the total return to them would not be diluted. We believe we still have the main flagship in Hong Kong for our Canton Road stores. LV as an example. It's not a short lease either, so we're not concerned that there would be significant erosion. We will of course need to continue to help our tenants to trade better. That will be done through marketing. We're not certainly not complacent about retail competition either. In the immediate year, the office supply is quite significant. There are newer products, as I said. In retail at least, it's not necessarily the condition of the product that determines who wins, it's who trades better. In office, it's a slightly different scenario. That's where we need to work harder. The other question was, Online threat Yes, online threat, AI and so on. AI, I have to admit I'm still learning. I don't have [Lobster] yet, but I'm trying to figure out what [Lobster] is about, by the way. If somebody can help me, I would appreciate it. We're definitely still learning how to use AI. We're in the property business and therefore we're not considering switching our listed investments from properties into tech. The other factor is actually the property stocks that we hold are a good and fairly stable source of dividend income, which we don't think tech stocks would give us. We're not in the business of trading them anyway, so I don't think we'd be in a hurry to switch into tech stocks. Online, my personal view is online retail in Hong Kong, while it's still growing, would probably not be reaching or be increased from the current 18% market share to, let's say, 25% anytime soon. In particular, that part of retail which is more vulnerable to online would not be our main business. That will obviously have a possibly an ancillary impact on the ecosystem. That is something that we remind ourselves about all the time. Thank you. May we have the next question from Jeff, DBS. Hi, management. I have two question. The first question regarding the rental reversion, also the turnover rent. When we look at the number of the average rent of Harbour City, we still 3% higher than in 2024. Does this mean that the turnover rent increase is more than offset the impact of the negative rental reversion? On the other hand, the Times Square average rent is substantially below the levels in 2024. Given that the overall turnover rent is 7% lower than in the previous year, what is the major reason behind? It's because of the turnover rent decline or negative rental reversion? The second question is about the contribution of the turnover rent. What% of the total retail income came from turnover rent in 2024, and also the occupancy cost were so last year? Okay. It's sometimes misleading, even dangerous to look at turnover rent in isolation. If we want high turnover rent, it's very easy. We just cancel the base rent. Everything is turnover rent. But obviously that is not the way to run our business. It is sometimes, as I said, misleading and possibly dangerous to look at turnover rent in isolation without looking at the bigger picture. The turnover rent in 2025 overall was lower than in 2024. If you're referring to the increase in total retail rent over 2024, that was in relation to the second half. Mm-hmm. Second half. You need to be careful to look at six months. It's a lot more informative to look at 12, because sometimes cut-offs affect half-on-half performance. For the year as a whole, retail rent was rather flat, my recollection. Yes. Yeah. Turnover rent fell. Base rent actually held up reasonably well last year as a whole. The effect will probably start to show in 2026. I think that is probably the best way to describe the picture to you. Occupancy cost? Mm. In Harbour City, we're running at about 20%. Okay. Then may we have the next question, if there is any, maybe, from Alpha Wang, Goldman Sachs. Thank you for taking my question. I have two questions. The first one is, could you share a little bit more color on your tenant sales performance compared to the overall market in the second half or year to date? The second question is on the balance sheet management. We have been de-gearing in the past few years, and now gearing has come to a relatively low level at 17.2%. What's management's intention in the next few years? Or do you plan to de-gear further in light of the macro uncertainties, or are you comfortable with the current gearing level? Thank you. Our immediate plan is to continue to de-gear. A, to be better prepared in case of economic downturn. B, in case there are new investment opportunities, then at least we'd be in a position to take advantage of them. It's both defensive and possibly offensive. Defense above offense. Retail rent, right? The other question was? Uh, gearing- Okay. from the tenant sales. Oh, tenant sales. Tenant sales last year, particularly second half, we were slightly below Hong Kong market. One of the main reasons is our share of the sectors that outperformed. Take as an example, gold. Our share of the gold market is smaller than our share of, let's say, the leather market. Gold played a big part in total retail sales in Hong Kong last year and into the first part of this year. Having said that, I should add that in January we exceeded the Hong Kong average rather well. That's one month, all right? That's one month. I'd be very quick to say that. All right? We need to wait for February and other months. To answer your question, last year, particularly second half, we trailed the Hong Kong average by a little bit. Thank you. We will take the question from Karl Choi, Bank of America. Yes, two questions. First, just wanna go back to the Marco Polo Hotel renovation. I think a lot of investors were quite concerned about the potential disruptions to tenant sales and traffic, foot traffic. Any sort of further thinking about, you know, your latest plan, how that can be minimized? Second is, going back to the question about AI. I think a lot of investors are now every sector, you know, is dealing with potential disruptions from AI. What's your latest thinking about how AI could impact demand for, you know, our services or our property? Okay. First of all, disruption. We are concerned too, which is why it's taken us so much time to try to work out a scheme. If you look at it more clinically, the current Marco Polo Hongkong Hotel, first of all, there's the hotel on top. If we were to close the hotel itself, it probably would not cause too much disruption. There is the retail underneath. The retail comprises primarily a Lane Crawford, a very large Lane Crawford, a large cinema which has been closed for a year, and we're not in a hurry to reopen that because it actually is not a competitive product and we need to incur significant expenditure to redo it to make it leasable. We have some more retail on the third level. If we were to close it tomorrow, actually it wouldn't affect the pedestrian flow that much. There's little or no pedestrian flow impact. Yes, on the one hand, in a sensitive market, any change can lead to unforeseen risks. On the other hand, we try to quantify the risk. It's not that significant. Having said that, the important thing about either renovation or redevelopment, in particular about redevelopment, is if we redevelop, we would be investing billions of HKD, and we would be getting a building which we will need to work with for the next 50 years. What are we going to build? I think that's a more important question, because if we don't come up with the right scheme, the capital expenditure may not be well incurred. If it's not a redevelopment, if it's an overhaul, a renovation overhaul, the CapEx will be much smaller. On the other hand, we would not be getting a new building, and it would still be an aged building. That is the choice we're having to make. AI impact on property. AI's impact on property? Initially, it helps on the property management side. It helps to manage the properties more efficiently, providing better service and reducing costs. That's already gradually been introduced into the property management stream. Of course, the other aspect is marketing. At the back end, obviously a lot of administrative work can benefit from it too. Bits and pieces here and there. Whether or not we can pull all of it together to quantify the benefit of it, we don't know yet. Thank you. In the interest of time, we will now receive the last question from Raymond, HSBC. Thank you management. This is Raymond from HSBC. I got two questions. Number one is about, like balance sheet management, in particular to the interest cost related question, because one of the, like, big improvement in terms of the profitability is related to the interest savings. Can management share with us more about your hedging policy and the way that we should think about, how Wharf is going to improve the interest saving or net interest expense in the next 12 months time? That's the first questions. The second question is actually about the repositioning of the high-end retailers in Hong Kong. It seems that, like, over the past, like 12-18 months, a lot of high-end retailers have started to reposition or actually increasing the exposures in the Greater China region, in particular Hong Kong. Can you share a bit more about, like, what's happening here and can you share a bit more color based on the observation as well as your conversation with them? Thank you. Okay. Thank you. Interest rate. What you said, balance sheet management. Actually, interest rate management. We still believe in floating versus fixed. We did a little bit of hedging into fixed a couple years ago. We don't have any current plans to switch more into fixed. We were tempted by the lower- cost renminbi, but of course we don't have renminbi assets, which is why we didn't go into it, although our sister company does and did, and still does to hedge against their renminbi assets. In the foreseeable future, 2026 in particular, we expect to stay in Hong Kong dollars, and we expect to be substantially in floating. Repositioning of high-end retailers. Oh, repositioning of high-end retailers. I'm not sure I understand what you mean by repositioning. Say for example, the expansion of LV. Oh. There were two more flagship malls in Tsim Sha Tsui. We are seeing a lot more phenomenon within three or four major areas in Hong Kong. No, geographically, the market in, let's say, Tsim Sha Tsui is quite different from the market in Central. You get different customers. On the other hand, most brands, as far as we know, would still rather have fewer rather than more flagships, and that is why it's important for us to keep the flagship in Harbour City as much as possible. We work collaboratively with them. When LV was looking for additional space, we created it for them, and if other brands have the same requirement, we would be very happy to work with them too. The idea is to retain them as much as possible in Harbour City. In Tsim Sha Tsui, I think I am correct in saying that we still have a good bargaining position, but obviously we need to look over our shoulders all the time. I'm not sure whether I answered your question. Thank you, Chairman, and thank you all for the questions. The webcast of this event will be uploaded to our official website tonight. Thank you very much for joining our event, and we wish you a nice evening. Thank you. Thank you.