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Public company info - Hopewell Holdings Ltd. , 00054.HK
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Hopewell Holdings Ltd., 00054.HK - Company Profile
Chairman WU Ying Sheung Gordon
Share Issued (share) 869,000,000
Par Currency
Par Value 0.0
Industry Conglomerates
Corporate Profile Business Summary: The principal activity of the group is property letting, agency and management, property development and service fee income from hotel ownership and management, restaurant operations and food catering. Performance for the year: The profit attributable to owners of the Company before fair value gain of completed investment properties for the year ended 30 June 2018 (“the year under review”) significantly increased to HK$6,405 million from HK$1,334 million for the previous year. The Group’s revenue for the year under review totalled HK$5,602 million, a 15% decrease from the HK$6,590 million recorded for the previous year. The Group’s EBIT (before gain on disposal of HHI) for the year under review decreased 7% yoy to HK$1,850 million from HK$1,994 million for the previous year. The core profit attributable to owners of the Company for the year under review decreased 4% yoy to HK$1,285 million or HK$1.48 per share from HK$1,334 million for the previous year . Business Review: During the year under review, while acknowledging the global economy is finally strengthening after a long period of stagnation, the rise of trade protectionism, political uncertainties and the imminent US interest rate hike are not to be ignored and may cast doubt on global economic recovery. On the bright side, PRC economy continued to grow healthily and has achieved GDP growth of 6.9% in 2017, reversing a downward growth trend since 2010. Such growth momentum carried over to the first and second quarters of 2018, with GDP growth rates reaching 6.8% and 6.7% year-on-year respectively. In order to counteract the potential fallout from the trade conflict with the United States, monetary policies such as PBOC’s reserve requirement ratio cut and medium-term lending facility injection were implemented, these measures are expected to provide support to the continuous growth of the economy. Meanwhile, the Hong Kong economy stayed vibrant under the backdrop of low unemployment rate, strengthening tourism industry and active financial market activities. On the other hand, with the implementation of belt-and-road initiative, Guangdong-Hong Kong-Macao Bay Area (“Bay Area”) and RMB internationalization, the demand for Hong Kong’s financial and business services are likely to increase. More PRC companies continue to set up offices in Hong Kong which create stable demand for offices located in prime area. The aforementioned factors are expected to provide support to the office market in Hong Kong. Reasons and Benefits of the Disposal of issued shares of HHI Disposal of approximately 66.69% of the issued shares of Hopewell Highway Infrastructure Limited was completed on 4 April 2018. HHL has received net cash proceeds of approximately HK$9 billion and recognised post-tax net gain of approximately HK$5.1 billion. The Group believed it was a good opportunity for HHL to realise its investment in the two highway projects so that HHL may re-deploy a substantial part of the proceeds (a) to fund the development of Hopewell Centre II and the redevelopment of the Hill Side Terrace Cluster and 153-167 QRE; (b) to further strengthen its general working capital and cash position; and (c) to enable HHL to explore new investment opportunities in both Hong Kong and the PRC, in particular the Bay Area. Investment Properties and Hospitality Total revenue from investment properties and hospitality businesses grew 6% yoy to HK$1,710 million during the year under review, recording a 6% five-year compound annual growth rate during FY14 to FY18. The Group’s investment properties business maintained a mild growth which was mainly driven by the office assets. The hospitality business uplifted with overall revenue increasing as room revenue and F&B revenue of Panda Hotel grew 7% and 17% yoy respectively. Wanchai projects Site formation and foundation works of Hopewell Centre II are in progress and construction of the hotel, which is advancing at full steam, is targeted to complete by the end of 2021. After completion, it will form one of the largest retail clusters in Wan Chai together with the Group’s other retail properties. The ongoing redevelopment in the district is expected to bring significant changes to Wan Chai. The Group has expanded the 155-167 QRE project into 153-167 QRE project by acquiring two lots adjacent to the existing site through a public auction in January 2018. A planning application to build a commercial property was submitted in May 2018. The 153-167 QRE project will increase the interface for the Group’s property portfolio on Queen’s Road East and it is expected to commence operation in 2022. In order to realise the redevelopment potential of Hill Side Terrace Cluster and to preserve Nam Koo Terrace, the Group proposed that the Grade l historical building at Nam Koo Terrace will be restored and preserved and a residential building with open space provision will be developed. Approval from Town Planning Board on the preservation cum development plan is pending. The Group believes the assembly of such amalgamation properties into sites has the potential to generate attractive investment returns and the Group will continue to seek strategic investments in the district in order to create synergy between its existing and future development in the area. Corporate Sustainability The Group believes that promoting sustainability is as important as achieving long-term business growth. It has therefore made continuous efforts to maintain a high degree of sustainability in its operations in Hong Kong and the PRC. Moreover, it values opportunities to learn more about the needs and expectations of the communities in which it operates, as well as those of other stakeholders. The Group has established a formal stakeholder engagement process and a Sustainability Steering Committee to strengthen its management’s efforts to promote sustainability through good corporate governance, environmental protection, community investment and workplace practices. To demonstrate its commitment to transparency and accountability to its stakeholders, the Company will continue to issue an independently verified Sustainability Report under the Global Reporting Initiative (GRI) Sustainability Reporting Standard and the Environmental, Social and Governance (ESG) Reporting Guide of the Stock Exchange. The report will present its company-wide commitment to sustainable development during the year under review, and it will cover the significant economic, environmental and social achievements and impact arising from the activities of the Group and its JVs. Prospects: As recovery of global economies picked up momentum, the rebound in world trade could face a setback if increasingly restrictive trade environment emerges which may hinder growth prospects. The Group will closely monitor the evolving market environment and be prepared to face various challenges ahead. Meanwhile, China’s “new normal” economy is gradually taking shape and continues to transform structurally to a consumption-driven, innovative, technology-advanced and environmentally- sustainable growth economy. Amid a multi-year effort to cut financial risk and curb credit growth, PBOC has been striking a balance to carefully adjusting liquidity conditions and guiding market rates higher without raising broader borrowing costs. The government’s continuous efforts towards deepening supply-side structural reform, liberalizing financial services and internationalizing RMB will altogether provide a healthy and steady growth driver to the PRC economic development. The Belt and Road initiative strategically connects PRC, ASEAN, Middle East, as well as Central and Eastern European countries through international co-operation and infrastructure projects. It encourages free flows of information, finance and goods by gradually removing investment and trade barriers. In the long run, it will promote mutual trust and co-development in the areas of economic, finance, transport, tourism, technology and academy which will ultimately result in prosperity of the nations along the regions. Furthermore, the strategic regional development scheme Bay Area, which was tailor-made by the PRC government as part of the 13th Five-Year Plan, is designed to stimulate economic cooperation among Guangdong-Hong Kong-Macao region. Hong Kong can leverage on its unique position as, not only an international financial hub, but also an important conduit in and out of China. Meanwhile, the Group is well-positioned in the prime area of Hong Kong, including Wan Chai and the future CBD2 – Kai Tak, and is now exploring new investment opportunities in both Hong Kong and the PRC, in particular the Bay Area to benefit from the PRC key development projects. The Group will continue to pursue proactive enhancement and management of its existing portfolio. The upmarket fashion outlet on G/F of E-Max is expanding to B1/F and has opened by phase since July 2018. Besides, the Group opened a gym room for tenants and baby care room in KITEC during the year under review which were well-received by tenants. In the long run, KITEC is expected to benefit from the transformation of Kai Tak into a prime area in Kowloon East and CBD2 with relocation of government offices to Kai Tak, increasing population brought by the development of public and private housing, construction of tourism facilities and enhancement of pedestrian access networks. Being one of Hong Kong’s largest hotels once completed, Hopewell Centre II is set to take advantage of Hong Kong’s limited supply of large-scale premium conference hotels in prime locations. With its comprehensive conference facilities, it is well-positioned to benefit from the lack of one-stop conference venues in Hong Kong. Together with the Group’s other major pipeline projects, namely Hill Side Terrace Cluster and 153–167 QRE project, enormous synergies will be created, forming an attractive lifestyle hub drawing in visitation, spending and business by combining with “The East” and Lee Tung Avenue. The Group, with its well-established image as a landlord of premium properties, will continue to enhance the brand value with the unrelenting effort in asset optimization and synergy maximization, and to bring sustainable growth and create the best value for the stakeholders.

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