Hello, good afternoon. This is Sophia Wong. On behalf of Champion REIT, welcome you all to our 2023 interim results analyst briefing. Today, our CEO, Ms. Christina Hau, and Investment and Investor Relations Director, Ms. Amy Luk, will present our interim results with you all. May I pass the time to Christina, please? Hi. Hi, good afternoon, everyone. together with Amy, today, we welcome you all to today's interim results announcement. first of all, Amy will go through the 2023 interim results with you, and I will talk about the performance of the properties and also the outlook. Pass to you, Amy. Okay. Thanks, Christina, and good afternoon, everyone. In the first half of 2023, the full border reopening with Mainland China, together with the new round of the government's Consumption Voucher Scheme, have brought significant positive impacts to the local retail market. Tenant sales at Langham Place Mall recorded remarkable growth that outperformed the market in a large extent, yet the soft office market and the high interest rate environment impacted our results. For the first half of 2023, total rental income of the trust dropped by 2.4% to HKD 1,168 million. Net property income recorded a drop of 4.7% to HKD 995 million. The growth in rental income of Langham Place Mall was not sufficient to offset the subdued leasing momentum of the office market. Distributable income decreased by 12.3% year-on-year to HKD 617 million, and DPU dropped by 12.6% to HKD 0.0927. The solid rebound in tenant sales at Langham Place Mall has driven up the rental income of the mall by 12.3% year-on-year. Turnover rent surged to HKD 114 million, accounting for 10% of rental income in the first half. Both of our office properties recorded negative rental reversion. Rental income of Three Garden Road recorded a 9% year-on-year drop, where Langham Place office saw a 3.9% drop year-on-year. For the property valuation, there was a mild drop of 0.7% to HKD 63.1 billion. Cap rate maintained unchanged for all our properties, where Three Garden Road office was at 3.7%, Langham Place office at 4.1%, and Langham Place Mall at 4%. NAV per unit as at 30 of June, 2023, was HKD 7.81. For the financial position, it remains solid with gearing ratio staying at comfortable level of 22.7%, and all the debts maturing in 2023 has been refinanced. For the refinancing of debt maturing next year, we have initiated the discussion with various banks. As at the 30th of June, we had around HKD 2.8 billion of undrawn committed credit facilities on hand. The fixed-rate debt portion was at 54.5% at the end of June, which is a balanced position. Under the rising interest rate environment, average interest rate went up to 3.6% for the first half of 2023, comparing with 2.8% in 2022. Our cash finance costs increased by 46.1% to HKD 268 million in lieu of the higher average HIBOR. Christina will go over the performance of each of our properties with you. Hmm. Thanks, Amy. Let's go into the performance of Three Garden Road first. After border reopen, we have received more inquiries for our Central office. However, in general, occupiers remained cost cautious. Nonetheless, an anchor tenant in the finance sector expanded its operations in Three Garden Road, largely offsetting the spaces vacated by departing tenants. Occupancy was quite stable at 82.2%. Banking and asset management sectors continue to account for a significant portion of the property. While occupancy was relatively stable, the competitive landscape in Grade A Central office market remained because of the available stocks and upcoming supply. Market rent remained under pressure, and the passing rent of the property went down to HKD 95.3 per sq ft. For the lease expiry, only a handful of expiries in 2023 needs to be handled, and 18% of rent review will expiry in later years. Given the rising expectation of office occupiers for better amenities and sustainable features, we maintained our effort on asset enhancement and completed the lift modernization project at Three Garden Road to improve efficiency. For Langham Place Office. Since the lifestyle operators have returned to normal operations, we saw a stable demand for our office space from the healthcare and beauty sectors. Occupancy remains steady at 93.2%. Lifestyle-related tenants were still the major segment of the properties, representing 73% of the tenant mix. The passing rent record a mild drop to HKD 45.4 per sq ft. For the lease expiry, there is a total of 39% expiring this year. Many of them had already been concluded in the first half. We have around 11.5% to handle in the second half. While for Langham Place Mall, the mall recorded a remarkable growth of 66.3% of tenant sales in the first half, substantially outperformed the general market, which went up by 20.7%. The strong growth was largely due to considerable growth in the beauty sector. The turnover rent portion increased by 129% year-on-year to HKD 114 million as a result, which was more than sufficient to cover the decline in base rent portion. With the improvement in market sentiment, more tenants were willing to resume the payment of base rent. The proportion of tenants paying turnover rent only lowered to 4% as at 30th June, 2023. Average passing rent increased to HKD 192 per sq ft as at 30th June, 2023. During the pandemic, we have been maintaining flexible leasing strategies and entering into short-term leases. The lease expiry in this year, allowing us to capture the improving retail momentum during negotiation for renewal. The return of tourists, together with our proactive marketing efforts for the beauty segment, resulted in the promising sales growth in the first half. To lean on the full border reopening with Mainland China, our LANGHAM BEAUTY offered exclusive shopping coupons for tourists to stimulate consumption for beauty products. In April this year, LANGHAM BEAUTY launched the official Xiaohongshu account to blast our promotion to mainland Chinese customers. Two mega beauty campaigns were held, which had effectively boost traffic and sales. Various promotional campaigns and marketing activities were launched to enhance more sales and footfall. For example, a joint promotion with a local bank to stimulate sales for the mall. Riding on the last year's success, the International Fan Club of Anson Lo, a Hong Kong famous artist, once again hosted a charity pop-up store at our mall. Through the partnership, the event successfully brought new traffic to the mall. Recently, we have launched the Summer Lucky Draw campaign for boosting sales with a sport utility vehicle as the grand prize. Occupancy as at 30th June, 2023, reduced slightly to 95% due to the time gap in turnover of tenancy. All the unoccupied areas have been committed and renovations of new entrants are underway. We continue to introduce new tenants, ranging from F&B, lifestyle, and fashion category to the mall. In first half of 2023, 15 new brands were introduced, including the Hokkaido number one soup curry, Suage, Hong Kong's first and largest pet gymnasium superstore, tonkatsu seafood restaurant, Tonkichi, and Happy Glaze Cookies. Amy will now update our sustainability part with you. On sustainability, we continue to use the collaborative power to foster a sustainable ecosystem in all aspects. Last month, we hosted our first-ever Champion REIT ESG Forum to facilitate a knowledge exchange on the topic of climate resilience and social inclusion for over 150 participants. At the event, we also announced the debut of Green Champion Challenge, which is an innovative competition to motivate our office tenants to actively reduce energy consumption and waste. On the social aspect, we continue to leverage our resources to enhance the wellness of our stakeholders. Among the highlights were the tree planting day to engage our tenants and staff for offsetting carbon footprints. We also hosted Go Green Organic Farm butter workshop to promote the ways to farm-to-table concepts. In addition, our regular Musica del Cuore music concerts keep bringing a relaxing experience for our tenants and the community. Last but not least, we have arranged a total of HKD one billion of sustainability-linked credit facilities in the first half of 2023 to further strengthen our commitment on sustainability. I'll pass back the time to Christina to go over the outlook review. Looking forward, the overall operating environment of Champion REIT will remain challenging. The outlook for Central office market remains uncertain, given the abundant supply and uncertainties in the global economy. Negative rental reversion is expected to continue. For Langham Place Office Tower, while the property is expected to continue to attract tenants from the healthcare and beauty sectors, occupancy and rental income may soften due to non-renewal of some tenants. For the retail side, we stay cautiously optimistic about the retail outlook, as the number of mainland visitors arrival has been on a rising trend since border reopening. Yet, tenant sales growth is expected to moderate, given relatively higher base in the second half of last year. Regarding liabilities management, under the high interest rate environment, we look forward for optimal market window to increase fixed rate debt portion in order to reduce interest rate volatility upon the maturity of fixed rate debt in 2024. For M&A, we'll remained a prudent approach to explore accretive investment opportunities. Overall, downside pressure on rental income and DPU is expected to continue for the full year of 2023. We'll end our presentation here and start the Q&A now. Thank you. Thank you, Christina and Amy. If you would like to ask a question, please feel free to raise your hand and state your name and company. Thank you, managements. My name is Juntao from Citigroup. I have two questions. First question is, first of all, congratulations on the sales performance, which is quite remarkable. Do you have any colors that can share with us on the July and August sales by far? Looking forward, do you see the strong sales performance likely to continue in the second half and the first half of next year? Secondly, we understand the overall the office market is quite challenging and coupled with the soft economy. My question is, do you have any specific measures and moves that can lift up the occupancy rates? Thank you. Thanks for the question. Regarding the performance in July, August, we're closely monitor. Luckily, that, though the Hong Kong people are going out for a summer vacation, but we do see the increasing number of visitors visiting the mall. Still, there's a strong momentum, in particular, at the beauty sectors of the mall. Regarding the sales projection in second half, as we have mentioned, we are optimistically cautious about this growth, sales growth. Because, you know, the macro environment, the economy is quite gloomy, and it may have impact on the spending behavior of the customers. Therefore, we are again, we optimistically be cautious about, and we'll closely monitor, as well as we'll put efforts in attracting customers to the mall and boost the sales. Regarding the measures of the softened office market, I would say, we have been working very hard in terms of different aspects to increase our occupancy, such as keeping our building a high standard by doing asset enhancement work, such as we have completed the lift modernization this year. Also, we are undergoing some toilet renovation at Three Garden Road, and also putting more EV chargers to our properties has been carried out in this year, and we'll continue to improve our hardware. Apart from that, I think work closely with our tenant, just Amy had mentioned, we work closely with our tenant on ESG to promote the well-being, and also we are injecting resources to build the community. The place that you are in, today, is one of the amenities that we inject into our buildings, that musical performance, tenants events, well-being events could be held. I think, a lot of efforts has been put into building the stickiness between landlord and tenants, so in order to promote the concept of our ecosystem. We'll continue to do that. Of course, flexible leasing terms, a tailor-made solution will also, enable us to capture new opportunities. Thank you. Hi, Karl Choi from Bank of America. First question is, you know, we just sort of ask the key question here. Have the media reports that one of your key anchor tenants could be moving out? Just curious about, you know, any comments you can make regarding that particular news. If indeed a tenant, a key tenant moves out, what will be the operating strategy beyond that? You know, would it be more of a focus on occupancy, as a result, may actually, you know, try to cut down the spot rents even more, or, you know, because of the difficult environment, would you actually try to maintain, you know, maybe spot rent at relatively similar levels to where, you know, things are and just let the occupancy slip? Just curious about your response on that. Second, related to Langham Place Mall, just want to ask, you know, about the... You mentioned that you're cautiously optimistic, but, you know, given the currency moves, the renminbi depreciation, how, how, you know, if, let's say, renminbi depreciates a lot more significantly compared to here, how would that impact the tenant sales or IE? I suppose going back to why the tourists go, go to the beauty session, is it just the pricing or is it product selection? Anything you, you can, anything more you can talk about that, that would be great. Thanks. ... Regarding the recent media report, as usual, we will not respond to that. As I mentioned in earlier questions, in fact, boosting occupancy is always our top priority. We maintain flexible and aggressive in recruiting new tenants to our properties, as well as retaining tenants. Regarding the mall, yeah, the RMB depreciation may have impact on tourist spending, but we don't see that much happening in our Langham Place Mall yet. For example, on the beauty segments, I would like to share that the choice, since LANGHAM BEAUTY is offering 90 brands, including the other standalone store in Langham Place Mall. We're offering 120 brands cosmetic and beauty brands to our customers. The choice, varieties is, the range is huge. Also, since LANGHAM BEAUTY is operated by the, Champion REIT, so aggressive marketing campaigns has been launched, and really, we have built up the momentum. There are repeated customers, there are loyal customers, as well as, tourists. They, like to, spend on beauty products. They will come to Langham Place Mall. We have built a destination for on that aspect. Thank you. Thank you very management. This is Raymond from HSBC. I got three questions. The first question is related to the Langham Place Mall. The tenant sales performance have been very good for the first half of this year, over 60%. But you also mentioned that the tenant sales is yet to back to the pre-COVID level. Can you mention that roughly, what's the rough percentage that in terms of tenant sales versus the previous pre-COVID level? How should we gauge that? Like, should we anticipate that the tenant sales performance in second half will exceed the pre-COVID level, or we should look at 2024? This is the first question. The second question is, can management provide us some idea about the latest spot rent of the Three Garden Road? Should we anticipate a negative rental reversion to narrow in the next six to 12 months' time? The third question is about the lease expiry of Three Garden Road office. In 2024, there will be around 16% of the floor space to be expired. Will be in a mainly concentrate towards one particular segment, like financials or particular, one to two anchor tenants? Thank you. Okay, that's three question in total. I'll answer the first one first, and then Amy to proceed to the rest of the questions. Yeah, yes, tenant sales are not yet recovered back to the pre-COVID level, and we don't see the second half will be able for us to catch up, to a certain extent, back to 2019. Of course, tenant sales has been improved, and the rental sales also is improving. We don't have a crystal ball, but it's still a little bit that we need to achieve more. On the second and third question, Amy, please. Yeah, sure. Maybe I'll supplement a little bit on Christina's comment about the retail sales of Langham Place Mall is roughly about 70% of the pre-COVID level in the first half that we have achieved. Spot rent for Three Garden Road is around at the 80s for those that we have for transactions that we have completed like recently. Whether the negative rental reversion will narrow, we will monitor the market situation. Say, you, you can see that the passing rent right now is at the mid-90s, and say, spot rent is at the 80s. Yeah, we, we see that the trend will be continuing. Like, as we also touch on, like, the operating environment is still challenging for the entire Hong Kong office market and also for Central as well. Yeah, we will keep monitoring the situation. For next year's expiry, actually, is quite diverse and, yeah, includes some big tenants, but not the very, very big one. Yeah. Thank you, management, for taking my question. This is Mark Leung from UBS. I have a few questions. I think first of all, it's regarding on Christina, your comment that probably second half, we won't be able to catch up to 2019. Just want to make sure, just want to be clear, because my understanding is second half of 2019, we got so some rest, so the base is a bit low. Are you basically more cautious on our retail sales outlook in second half? I think that's the first question. Second question is regarding on the cap rate. Currently, we still value the Three Garden Road at 3.7%. I think for most of the investor benchmark in U.S. Ten-year Treasury, we are now, like, valuating at 4.0%. Under what condition you see that we may need to adjust our, cap rate assumption? I think that's the second question. Lastly is, can you also give us the expectation on how should we look at the effective funding costs in second half? Thank you. On the first question, as Amy just mentioned, our first half of tenant sales is around 70% of 2019. Although 2019 first half is a little bit at a higher base, so we're only up to 70%. And the second half of the 2019 will be moderate, is a lower base as compared. We do see there is, we are able to achieve more than 70% at the year-end for 2023, as compared with pre-COVID. About the cap rate, the valuation is done by a professional valuers, in their opinion, all the property valuation in Hong Kong remains quite stable, although the U.S. and all the treasury yield has been changed a bit. That's in the valuer's opinion, that cap rate for property, which is quite stable, will remained unchanged. On the first third question, Amy, please? Yeah. Regarding the funding cost for second half, it will be really depending on the HIBOR for, for the floating rate portion. We got 54.5% being fixed, then the remaining is on the floating rate basis. From what we are seeing so far, say, in the second half, in July especially, like most of the time, that 1-month HIBOR is staying at about 5%, comparing to what you were seeing in the first half. Effectively, say, if we are using today's HIBOR, our, say, effective interest cost today, based on today's HIBOR, is already exceeding 4%. If this kind of high interest rate environment continues, then, yeah, we should be seeing a higher average effective interest rate for the second half. Thanks. Thank you, management. This is Peter from Goldman. I have also three questions. The first is on the office market. You just mentioned the spot rent currently is around HKD 80 at Three Garden Road. Maybe could you share what's the expiry rent for the leases expiring next year and going forward? Just want to gauge how, like, how long this negative rental reversion will persist. Also, do you see any stabilization of the spot rent in recent months? That's the first question. Secondly is on retail. It's also on the rental reversion side. We see the turnover rent improved a lot first half, base rent still declined. Could you share what's the rent reversion for Langham Place Mall in the first half? How should we look at it in the second half next year? Can we expect the base rent, rent reversion to turn positive sometime in the next six to twelve months? The last question is on dividend payout. We see in the first half is still 90%, but we recall back in 2020 and previously, the full year payout was 95%. Can we expect this year for the full year, or under what condition would you consider recovering the dividend payout for the full year to be back to 95%? Thank you. Okay. For the expiring rents for 2023, for Three Garden Road, overall is around 120, and for next year is close to, close to 100, 90-something. For the Langham Place Mall, I pass to Christina. Yeah, for the Langham Place Mall, the negative rental reversion on the base rent was mainly due to some of the leases were signed at during the COVID period. On the asset, on the lease renew re- negotiation or recruiting new tenants, we are able, at certain extent, to increase the base rent. More and more tenants are willing to pay base rent, a change from pure turnover to, to, to base rent as well. That said, the increment on the turnover rent portion, it's substantially increased, and which is able to cover some of the base rent, lower base rent, that was signed back in the COVID period. Regarding the paid out ratio for the interim, it's used to be 90% in the past, and it supports decisions on the payout ratio, and the payout ratio will be reviewed from time to time, and taking into account the factors as market situation, et cetera. Yeah, that we'll keep monitoring the situation and will reviewed. Thank you. Hi, management. This is Jeff Yau from DBS. Can you share with us the spot rent of Langham Place Office? If the spot rent remain unchanged from now on, by when we could expect the rent to be reversion to turn neutral? The second question is about the tenant mix. Now, around 73% of the tenant are from the lifestyle sector. We expect this ratio to go up further in the coming few years. Final question regarding the interest hedging. As of June 2023, the hedging ratio is 55%. Is there any expiry of IRS for the rest of this year? Okay. Regarding the spot rent at Langham Place Office, is about mid to high forties. Some of the negative rental reversion was due to the renewal of some major tenants that they, they are large occupiers that have impact on the rent reversion. However, during some of the lease, new lease, we are able to achieve a higher rent. We for the time being, there are still some leases to be renewed in this year and for next year. We don't see the rent will be very volatile for Langham Place Office. Regarding the percentage of the lifestyle tenants, yes, we are since the demand in medical and beauty are still quite strong indeed, so we will keep at this amount of proportion because these beauty and medical tenants are willing to pay a very decent rent at our Langham Place Mall. There will be more or less the same proportion. Including the interest hedging, the we don't have any more IRS expire this year, so we have paid out all our debt this year. Hi, management, it's Jeffrey Mak from Morgan Stanley. I have a couple of question. Could you give us some color on the recent inspection or inquiry level at the Three Garden Road? The second question is on retail. Can you share with us the latest occupancy costs, and how does it compare to pre-COVID? Thank you. As said in the, our presentation, after border reopen, we do see more inquiries. The inquiries from different sectors. Asset management, and also banking and other industry are also being more active. Having said that, the tenants remained cost-cautious on, on whether relocation or whether making their decision. The amount of inquiries has increased, but yet, the new leases we've signed, we do see not many major demand in the big size takers, apart from the one that I mentioned, is an expansion in the banking industry at the Three Garden Road. At latest, occupancy costs at our Langham Place Mall is much more healthier than the... It's close to pre-COVID level, I would say. Okay, if there is no more question, we will conclude our briefing today. Thank you, management, and thank you all for joining us today. See you next time. Thank you.