Chief Executive’s Statement Dear shareholders, Underlying profit decreased by HK$268 million to HK$3,901 million in the first half of 2023, principally The first six months of 2023 has marked a period of reflecting a short-term delay in the sale of non-core recovery. We were pleased to see a strong rebound for assets in Hong Kong. our retail business, in both Hong Kong and the Chinese Mainland, as consumer confidence improved following Our Hong Kong retail portfolio has recovered remarkably the reopening of the border with the Chinese Mainland well, with an improvement in consumer sentiment, and the lifting of pandemic-related restrictions in thanks to the lifting of all travel restrictions and COVID-19 Hong Kong. related measures. Our investment in marketing and loyalty initiatives, together with digitally-advanced We have made significant progress with our HK$100 campaigns to interact with customers, have all driven billion investment plan, and we are focused on building significant business recovery in our malls in Hong Kong out our pipelines of new projects across our core markets over the past few months. Sales have improved and and in new cities. returned to pre-pandemic levels in some of our malls. We are delighted to be working side by side with the In Hong Kong, the office market is weak, given increased HKSAR Government as it welcomes a new era for the city. availability (due to vacancy and new supply), and We have every confidence in the Government’s various demand for office space remains subdued, reflecting initiatives to strengthen Hong Kong’s competitiveness as continued economic uncertainty. Nevertheless, our office a world-class international destination, and we are portfolio has been resilient, with solid occupancy rates. determined to support Hong Kong’s strategic role in the Leasing activity has picked up since the reopening of the development of the Greater Bay Area. border, with increased requests for viewing. We remain focused on the future. As we grow our In the Chinese Mainland, foot traffic has improved business, we will continue to demonstrate leadership in significantly and retail sales have exceeded sustainable development, as well as leveraging innovative pre-pandemic levels for many of our malls, since new technologies to ensure that we are ready for new pandemic-related restrictions were lifted. Our office challenges ahead. portfolio has been resilient despite a weak office market. We recorded a small underlying loss from our property Financial Results at a Glance trading activities in the first half of 2023 as a result of sales and marketing expenses incurred for several Our recurring underlying profit increased by HK$220 residential trading projects. million to HK$3,892 million in the first half of 2023. This mainly reflected higher retail rental income and higher Our hotel businesses in Hong Kong and the Chinese operating profit before depreciation from our hotels in Mainland recovered strongly following the lifting of Hong Kong and the Chinese Mainland, partly offset by COVID-19 restrictions and the reopening of the border. lower office rental income from Hong Kong. 13