Hon Kwok Land Investment : 2019-20 INTERIM RESULTS ANNOUNCEMENT

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(Incorporated in Hong Kong with limited liability)

(Stock Code: 160)

2019-20 INTERIM RESULTS ANNOUNCEMENT

FINANCIAL RESULTS

For the six months ended 30 September 2019, the Group's unaudited consolidated revenue was HK$375 million (2018: HK$1,184 million) and net profit attributable to shareholders was HK$224 million (2018: HK$576 million), including an increase in fair value of investment properties net of deferred taxation of HK$105 million (2018: HK$281 million). The drop in revenue was mainly due to the decrease in property sales from the Group's development projects in Mainland China of which the project in Guangzhou, namely The Botanica, was completed with nearly all units being delivered to customers in prior years. Whereas the drop in profit was mainly attributable to the decrease in profit contributions from property sales and the decrease in fair value gains on investment properties upon revaluation at 30 September 2019.

Basic earnings per share was HK$0.31 (2018: HK$0.80). As at 30 September 2019, the

shareholders' equity amounted to HK$11,468 million (as at 31 March 2019: HK$11,874 million) and net assets per share attributable to shareholders was HK$15.92 (as at 31 March 2019: HK$16.48). Owing to the depreciation of Renminbi against Hong Kong Dollars during the six months ended 30 September 2019, the Group recorded an exchange loss upon translating the assets and liabilities in the financial statements of the subsidiaries and an associated company incorporated in Mainland China into Hong Kong Dollars at the exchange rate prevailing at 30 September 2019. The translation difference caused by the depreciation of Renminbi against Hong Kong Dollars and the dividends paid were larger than the increase in net profit attributable to shareholders during the period and resulted in a net decrease in shareholders' equity at period end.

INTERIM DIVIDEND

The Directors do not recommend the payment of an interim dividend for the six months ended 30 September 2019 (2018: Nil).

BUSINESS REVIEW

1. Property Development
   For the six months ended 30 September 2019, the property development segment revenue was HK$218 million compared with HK$1,067 million in 2018. Segment profit before taxation was HK$163 million compared with HK$568 million in 2018. The revenue and profit were attributable to delivery of the sold units in Botanica and Metropolitan Oasis.
2. • 1 -

The Group's property development projects are located in Mainland China comprising mainly (i) The Botanica in the Tian He District of Guangzhou in which the Group owns 60% interest; (ii) Metropolitan Oasis, the Group's wholly owned project in the Da Li District of Nanhai; (iii) 45-107 Beijing Nan Road, the Group's wholly owned project in the Yue Xiu District of Guangzhou and (iv) Enterprise Square in the Nanshan District of Shenzhen in which the Group owns 20% interest.

The Botanica with a total gross floor area of approximately 229,000 square meters was developed in phases. The final phase of the development was completed in December 2016 with all residential units already sold out in prior years. For the six months ended 30 September 2019, the Group booked revenue of HK$97 million (2018: HK$945 million) from the units delivered during the period. As at 30 September 2019, the contracted property sales of the remaining units but not yet booked amounted to RMB34 million.

Metropolitan Oasis with a total gross floor area of approximately 273,000 square meters was also developed in phases. Phase 3 of the project, comprising 19 blocks of high rise apartments of approximately 550 units, is scheduled for completion next year. For the six months ended 30 September 2019, the Group booked revenue of HK$121 million (2018: HK$122 million) from the units of phase 1 and phase 2 delivered during the period. In September 2018, the Group launched part of the units in phase 3 to the market for pre-sale and achieved satisfactory results. As at 30 September 2019, the contracted property sales but not yet booked amounted to RMB749 million.

The site at 45-107 Beijing Nan Road, which is adjacent to the pedestrian street and the Pearl River, will be developed into a 30-storey residential building and a 32-storey commercial/office building. Foundation works for the project are in progress.

Enterprise Square, situated at Qiaoxiang Road North, Nanshan District, covers a site area of approximately 49,000 square meters and a total gross floor area of approximately 224,500 square meters. It has been developed into a commercial complex composed of office towers, a residential apartment tower and a commercial mall offering dining and entertainment facilities to the tenants. Development for the entire project was completed in June 2018. The office portion and the residential apartment have been launched to the market for sale. For the six months ended 30 September 2019, the project realized revenue of RMB1,394 million (2018: RMB1,751 million). As at 30 September 2019, the contracted property sales but not yet booked amounted to RMB121 million. Net profit attributable to the Group in respect of Enterprise Square, including an increase in fair value of an office tower, the residential apartment tower and the commercial mall which are classified as investment properties, amounted to HK$88 million (2018: HK$149 million) for the six months ended 30 September 2019.

- 2 -

1. Property Investment
   For the six months ended 30 September 2019, the property investment segment revenue was HK$140 million compared with HK$103 million in 2018. Segment profit before taxation was HK$191 million compared with HK$405 million in 2018. Excluding the change in fair value of investment properties, segment profit before taxation was HK$78 million compared with HK$56 million in 2018, such increase in revenue and profit was mainly attributable to the commencement of leasing activities of Hon Kwok City Commercial Centre in Shenzhen and the opening of the hotel at Chongqing Jinshan Shangye Zhongxin after its refurbishment works finished in the fourth quarter of 2018. Leasing of Hon Kwok City Commercial Centre is progressing well and it is expected that the recurrent income base of the Group will be significantly improved.
   Property Investment - Hong Kong
   The Group's completed investment property portfolio in Hong Kong with a total gross floor area of approximately 246,000 square feet comprises (i) Hon Kwok Jordan Centre, a commercial/office building at Hillwood Road, Tsim Sha Tsui; (ii) The Bauhinia, a hotel cum serviced apartment property at Connaught Road Central and Des Voeux Road Central; and (iii) The Bauhinia Hotel (TST), a hotel property at Observatory Court, Tsim Sha Tsui. Average occupancy of the properties reached 85% for the six months ended 30 September 2019 (2018: 95%) amid the deteriorating business environment caused by the recent social incidents. Occupancy of our hotel properties has dropped due to the decline in tourists arrivals to Hong Kong since July 2019.
   The Group's investment property under development in Hong Kong comprises a construction site at Kin Chuen Street, Kwai Chung, New Territories, providing a gross floor area of approximately 228,000 square feet. It is being developed into a data centre for rental purpose. Superstructure works are progressing smoothly and the project is scheduled for completion in the first quarter of 2020. Pre-leasing discussions of the building are currently underway.
   Property Investment - Mainland China
   The Group's completed investment property portfolio in Mainland China with a total gross floor area of approximately 446,000 square meters comprises (i) Hon Kwok City Commercial Centre, a commercial/office building at the Futian District of Shenzhen (ii) City Square/The Bauhinia Hotel (Shenzhen), a commercial podium comprising shops and hotel rooms at the Luo Hu District of Shenzhen, (iii) City Suites, serviced apartment units atop of City Square at the Luo Hu District of Shenzhen, (iv) Ganghui Dasha, a commercial/office building at the Yue Xiu District of Guangzhou, (v) Chongqing Hon Kwok Centre, a twin-tower office building atop of a commercial podium at the Bei Bu Xin Qu of Chongqing and (vi) Chongqing Jinshan Shangye Zhongxin, an office tower and a hotel/office tower each with a commercial podium at the Bei Bu Xin Qu of Chongqing. The properties, excluding Hon Kwok City Commercial Centre which has been completed recently and was at the stage of renovation by the tenants during the period, achieved an average occupancy of 74% for the six months ended 30 September 2019 (2018: 74%).

- 3 -

Property Investment - Valuation

The Group's investment properties, including the data centre project which is at its final stage of development, were fair valued at HK$14,099 million as at 30 September 2019 (as at 31 March 2019: HK$14,297 million, including the data centre project stated at cost). After netting off the additions to investment properties and the exchange loss arising from depreciation in Renminbi during the period, the increase in fair value of the Group's investment properties amounted to HK$113 million (2018: HK$349 million) for the six months ended 30 September 2019.

1. Property and carpark management
   For the six months ended 30 September 2019, the property and carpark management segment revenue was HK$17 million compared with HK$14 million in 2018. Segment profit before taxation was HK$0.3 million compared with HK$0.9 million in 2018. The profit contributions were adversely affected under the recent social unrest. As at 30 September 2019, the Group managed 10 car parks (31 March 2019: 11 car parks) with 1,980 parking spaces (31 March 2019: 2,000 parking spaces).

- 4 -

OUTLOOK

Looking ahead, substantial uncertainties are clouding the global economic growth which continues to be fragile. The re-escalation of trade conflicts arose from the imposition of increased tariff by the United States, followed by the retaliatory actions of China. The lingering trade disputes posed substantial downside risks and weighed on export trades in the two largest economies in the world. Nevertheless, it showed some signs of reaching an initial trade agreement to remove the additional tariff in phases in the near future. On the other hand, it is expected that the Federal Reserve will continue its monetary easing policies vigilantly to alleviate the downward risk in tandem with maintaining a strong labour market and an inflation rate of around 2% target. In view of the prevailing challenges, including the protracted trade disputes, geopolitical tensions and the possibility of agreeing a Brexit deal within the three-month extension granted, it is likely that the erratic business environment will continue in the near term.

In Mainland China, economic growth weakened to 6% (bottom end of government's target) in the third quarter of 2019 amid the ongoing US-China trade conflicts and lacklustre domestic market. Under the city-specific housing policies adopted in prior years, the real estate market has been stabilised and recovering. Nevertheless, the expected economic slowdown has dampened buyers' confidence and investment sentiment. Confronting the mounting headwinds, it is expected that the Central Government will implement fiscal stimulus and monetary easing measures to bolster economic growth while maintaining supervision over financing activities in the real estate market to control financial risks with an aim to striving for a stable and healthy real estate market.

Hong Kong, being a small economic entity, is highly susceptible to external uncertainties including the trade protectionism and the US monetary policy, has been adversely affected by the global economic downturn. Furthermore, impacting by the recent prolonged social incidents, Hong Kong economy has experienced a sharp contraction, particularly, the inbound tourism, retailing and catering sectors were seriously hit. Consequently, shrinkage in GDP of 2.9% year-on-year was recorded in the third quarter of 2019. Under the local Government's easing measures introduced recently to boost economic growth, it is anticipated that the residential properties will remain resilient as supported by solid demand and the relaxation of mortgage ceiling, whilst the office and retail property markets will continue to be influenced by the economic sentiment.

Finally, I wish to express my sincere thanks to my fellow directors for their contributions and all staff members for their hard work during the period under review.

James Sai-Wing Wong

Chairman

Hong Kong, 27 November 2019

- 5 -

UNAUDITED CONSOLIDATED RESULTS

The unaudited consolidated results of the Company and its subsidiaries (the "Group") for the six months ended 30 September 2019 together with comparative figures for the corresponding period in the prior year are as follows:

Condensed Consolidated Statement of Profit or Loss
			Six months ended
			30 September
			2019	2018
			(Unaudited)		(Unaudited)
	Notes	HK$'000		HK$'000
Revenue	3		374,724	1,183,878
Cost of sales			(110,896)		(540,630)
Gross profit			263,828	643,248
Other income	3		12,652	9,229
Fair value gains on investment properties, net			112,623	348,583
Administrative expenses			(38,101)	(44,788)
Other operating expenses, net			(13,347)	(8,323)
Finance costs	4		(94,992)	(53,372)
Share of profit of an associate			88,415		148,905
Profit before tax	5		331,078	1,043,482
Income tax expense	6		(91,647)		(349,006)
Profit for the period			239,431	694,476
Attributable to:
Owners of the Company			224,377	575,746
Non-controlling interests			15,054		118,730
			239,431	694,476
Earnings per share attributable to ordinary
equity holders of the Company	7
Basic and diluted			HK$0.31		HK$0.80

- 6 -

Condensed Consolidated Statement of Comprehensive Income
	Six months ended
	30 September
	2019	2018
	(Unaudited)		(Unaudited)
	HK$'000		HK$'000
Profit for the period	239,431	694,476
Other comprehensive loss
Other comprehensive loss to be reclassified to profit or
loss in subsequent periods:
Share of other comprehensive loss of an associate	(30,357)	(24,996)
Exchange differences on translation of foreign
operations	(541,565)		(731,949)
Other comprehensive loss for the period, net of tax	(571,922)		(756,945)
Total comprehensive loss for the period	(332,491)	(62,469)
Attributable to:
Owners of the Company	(316,075)	(141,538)
Non-controlling interests	(16,416)		79,069
	(332,491)		(62,469)

- 7 -

Condensed Consolidated Statement of Financial Position
		At		At
		30 September		31 March
		2019	2019
		(Unaudited)		(Audited)
	Notes	HK$'000		HK$'000
NON-CURRENT ASSETS
Property, plant and equipment		247,513	266,766
Right-of-use assets		41,875	-
Investment properties		14,099,104	14,296,837
Investment in a joint venture		199	199
Investment in an associate		746,330		789,271
Total non-current assets		15,135,021	15,353,073
CURRENT ASSETS
Tax recoverable		1,258	5,895
Properties held for sale under development and
completed properties held for sale		1,904,933	2,051,599
Trade receivables	9	19,471	21,561
Contract costs		21,330	5,547
Prepayments, deposits and other receivables		158,013	136,159
Cash and bank balances		1,731,999		1,963,000
Total current assets		3,837,004	4,183,761
CURRENT LIABILITIES
Trade payables and accrued liabilities	10	164,572	415,741
Lease liabilities		24,326	-
Contract liabilities		500,471	286,193
Customer deposits		45,182	47,582
Due to an associate		-	15,950
Interest-bearing bank borrowings		715,607	1,107,931
Tax payable		151,989		122,549
Total current liabilities		1,602,147		1,995,946
NET CURRENT ASSETS		2,234,857		2,187,815
TOTAL ASSETS LESS CURRENT LIABILITIES		17,369,878	17,540,888
NON-CURRENT LIABILITIES
Lease liabilities		17,866	-
Interest-bearing bank borrowings		4,221,013	3,920,286
Deferred tax liabilities		1,484,987		1,552,045
Total non-current liabilities		5,723,866		5,472,331
Net assets		11,646,012		12,068,557

- 8 -

Condensed Consolidated Statement of Financial Position (Continued)

	At	At
	30 September	31 March
	2019	2019
	(Unaudited)	(Audited)
	HK$'000	HK$'000
EQUITY
Equity attributable to owners of the Company
Share capital	1,519,301		1,519,301
Reserves	9,948,774		10,354,903
	11,468,075		11,874,204
Non-controlling interests	177,937		194,353
Total equity	11,646,012		12,068,557

- 9 -

Notes:

1. Basis of preparation and changes in accounting policies and disclosures Basis of preparation

The unaudited condensed interim consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard ("HKAS") 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") and with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules").

The unaudited condensed interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the

Group's annual financial statements for the year ended 31 March 2019.

The financial information relating to the year ended 31 March 2019 that is included in these unaudited condensed consolidated financial statements for the six months ended 30 September 2019 as comparative information does not constitute the statutory annual consolidated financial statements of the Company for that year but is derived from those consolidated financial statements. Further information relating to these statutory financial statements required to be disclosed in accordance with section 436 of the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) (the "Companies Ordinance") is as follows:

The Company has delivered the consolidated financial statements for the year ended 31 March 2019 to the Registrar of Companies as required by section 662(3) of, and Part 3 of Schedule 6 to, the Companies Ordinance.

The Company's auditor has reported on those consolidated financial statements. The auditor's report was unqualified; did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its report; and did not contain a statement under sections 406(2), 407(2) or

(3) of the Companies Ordinance.

Changes in accounting policies and disclosures

The unaudited condensed interim consolidated financial statements have been prepared under the historical cost convention, except for investment properties which have been measured at fair value. The accounting policies adopted in the preparation of the unaudited condensed interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 March 2019, except as described below. In the current period, the Group has applied, for the first time, the following new and revised Hong Kong Financial Reporting Standards ("HKFRSs", which include all HKFRSs, HKASs and Interpretations) issued by the HKICPA which are effective for the Group's financial year beginning on 1 April 2019.

Amendments to HKFRS 9	Prepayment Features with Negative Compensation
HKFRS 16	Leases
Amendments to HKAS 19	Plan Amendment, Curtailment or Settlement
Amendments to HKAS 28	Long-term Interests in Associates and Joint Ventures
HK(IFRIC)-Int 23	Uncertainty over Income Tax Treatments
Annual Improvements 2015-2017 Cycle	Amendments to HKFRS 3, HKFRS 11, HKAS 12 and
	HKAS 23

Other than as explained below regarding the impact of HKFRS 16 Leases, the new and revised standards are not relevant to the preparation of the Group's unaudited condensed consolidated interim financial information.

- 10 -

1. Basis of preparation and changes in accounting policies and disclosures (Continued)

HKFRS 16 replaces HKAS 17 Leases, HK(IFRIC)-Int4 Determining whether an Arrangement contains a Lease, HK(SIC)-Int15 Operating Leases - Incentives and HK(SIC)-Int27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balancesheet model. Lessor accounting under HKFRS 16 is substantially unchanged from HKAS 17. Lessors will continue to classify leases as either operating or finance leases using similar principles as in HKAS 17. Therefore, HKFRS 16 did not have any financial impact on leases where the Group is the lessor.

The Group adopted HKFRS 16 using the modified retrospective method of adoption with the date of initial application of 1 April 2019. Under this method, the comparative information as at 31 March 2019 and for the six months ended 30 September 2018 was not restated and continues to be reported under HKAS 17.

New definition of a lease

Under HKFRS 16, a contract is, or contains a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. Control is conveyed where the customer has both the right to obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset. The Group elected to use the transition practical expedient allowing the standard to be applied only to contracts that were previously identified as leases applying HKAS 17 and HK(IFRIC)-Int 4 at the date of initial application. Contracts that were not identified as leases under HKAS 17 and HK(IFRIC)-Int 4 were not reassessed. Therefore, the definition of a lease under HKFRS 16 has been applied only to contracts entered into or changed on or after 1 April 2019.

At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease and non-lease component on the basis of their standard-alone prices. A practical expedient is available to a lessee, which the Group has adopted, not to separate non-lease components and to account for the lease and the associated non-lease components (e.g., property management services for leases of properties) as a single lease component.

As a lessee - Leases previously classified as operating leases Nature of the effect of adoption of HKFRS 16

The Group has lease contracts for various items of properties. As a lessee, the Group previously classified leases as either finance leases or operating leases based on the assessment of whether the lease transferred substantially all the rewards and risks of ownership of assets to the Group. Under HKFRS 16, the Group applies a single approach to recognise and measure right-of-use assets and lease liabilities for all leases, except for two elective exemptions for leases of low value assets (elected on a lease by lease basis) and short-term leases (elected by class of underlying asset). The Group has elected not to recognise right-of-use assets and lease liabilities for (i) leases of low-value assets; and (ii) leases, that at the commencement date, have a lease term of 12 months or less. Instead, the Group recognises the lease payments associated with those leases as an expense on a straight-line basis over the lease term.

Impacts on transition

Lease liabilities at 1 April 2019 were recognised based on the present value of the remaining lease payments, discounted using the incremental borrowing rate at 1 April 2019 and included in lease liabilities.

The right-of-use assets were measured at the amount of the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to the lease recognised in the consolidated statement of financial position immediately before 1 April 2019. All these assets were assessed for any impairment based on HKAS 36 on that date. The Group elected to present the right-of-use assets separately in the consolidated statement of financial position.

- 11 -

1. Basis of preparation and changes in accounting policies and disclosures (Continued)

The Group has used the following elective practical expedients when applying HKFRS 16 at 1 April 2019:

• Applied the short-term lease exemptions to leases with a lease term that ends within 12 months from the date of initial application
• Used hindsight in determining the lease term where the contract contains options to extend/terminate the lease

The impacts arising from the adoption of HKFRS 16 as at 1 April 2019 are as follows:
		Increase
		HK$'000
		(Unaudited)
Assets
Increase in right-of-use assets and total assets	55,829
Liabilities
Increase in lease liabilities and total liabilities		55,829

- 12 -

2. Operating segment information

The Group is principally engaged in property development, property investment and property related activities. The Group's operating businesses are structured and managed separately according to the nature of their operations and the products and services they provide. Operating segments are reported in a manner consistent with the internal reporting provided to key management personnel.

	Six months ended 30 September 2019 (Unaudited)
					Property
	Property	Property	and carpark
	development	investment	management	Total
	HK$'000	HK$'000	HK$'000	HK$'000
Segment revenue:
Sales to external customers	218,064		139,581		17,079	374,724
Segment results	163,152		190,701		304	354,157
Reconciliation:
Interest income							9,717
Unallocated expenses							(26,219)
Finance costs							(94,992)
Share of profit of an associate							88,415
Profit before tax							331,078
	Six months ended 30 September 2018 (Unaudited)
					Property
	Property	Property	and carpark
	development	investment	management	Total
	HK$'000	HK$'000	HK$'000	HK$'000
Segment revenue:
Sales to external customers	1,066,725		102,668		14,485	1,183,878
Segment results	567,932		405,073		864	973,869
Reconciliation:
Interest income							6,867
Unallocated expenses							(32,787)
Finance costs							(53,372)
Share of profit of an associate							148,905
Profit before tax							1,043,482

- 13 -

2. Operating segment information (Continued)

	At 30 September 2019 (Unaudited)
			Property
	Property	Property	and carpark
	development	investment	management	Total
	HK$'000	HK$'000	HK$'000	HK$'000
Segment assets	2,124,235	14,596,698	2,383,771		19,104,704
Reconciliation:
Elimination of intersegment receivables					(2,612,465)
Investment in a joint venture					199
Investment in an associate					746,330
Corporate and other unallocated assets					1,733,257
Total assets					18,972,025
Segment liabilities	1,699,697	1,025,428	639,757		3,364,882
Reconciliation:
Elimination of intersegment payables					(2,612,465)
Corporate and other unallocated liabilities					6,573,596
Total liabilities					7,326,013
		At 31 March 2019 (Audited)
			Property
	Property	Property	and carpark
	development	investment	management	Total
	HK$'000	HK$'000	HK$'000	HK$'000
Segment assets	2,241,050	14,639,264	2,070,899		18,951,213
Reconciliation:
Elimination of intersegment receivables					(2,172,744)
Investment in a joint venture					199
Investment in an associate					789,271
Corporate and other unallocated assets					1,968,895
Total assets					19,536,834
Segment liabilities	1,481,445	1,009,820	446,945		2,938,210
Reconciliation:
Elimination of intersegment payables					(2,172,744)
Corporate and other unallocated liabilities					6,702,811
Total liabilities					7,468,277

- 14 -

3. Revenue and other income Disaggregation of revenue

Set out below is the disaggregation of the Group's revenue from contracts with customers and the reconciliation of the revenue from contracts with customers with the amounts disclosed in the segment information:

Segment

Type of goods or services Sales of properties Property management income

Total revenue from contracts with customers

Revenue from other sources Gross rental income

Total revenue from other sources

Revenue disclosed in the segment information

Timing of revenue recognition Goods transferred at a point in time Services transferred over time

Total revenue from contracts with customers

Six months ended 30 September 2019 (Unaudited)

				Property
Property		Property		and carpark
development		investment		management		Total
HK$'000		HK$'000		HK$'000		HK$'000
218,064	-	-	218,064
-		15,774		804		16,578
218,064	15,774	804	234,642
-		123,807		16,275		140,082
-		123,807		16,275		140,082
218,064	139,581	17,079	374,724
218,064	-	-	218,064
-		15,774		804		16,578
218,064	15,774	804	234,642
Six months ended 30 September 2018 (Unaudited)
				Property
Property		Property		and carpark
development		investment		management		Total
HK$'000		HK$'000		HK$'000		HK$'000

Segment

Type of goods or services Sales of properties Property management income

Total revenue from contracts with customers

Revenue from other sources Gross rental income

Total revenue from other sources

Revenue disclosed in the segment information

Timing of revenue recognition Goods transferred at a point in time Services transferred over time

Total revenue from contracts with customers

1,066,725	-	-	1,066,725
-		15,348		785		16,133
1,066,725	15,348	785	1,082,858
-		87,320		13,700		101,020
-		87,320		13,700		101,020
1,066,725	102,668	14,485	1,183,878
1,066,725	-	-	1,066,725
-		15,348		785		16,133
1,066,725	15,348	785	1,082,858

- 15 -

3. Revenue and other income (Continued)

	Other income
			Six months ended
			30 September
		2019			2018
			(Unaudited)		(Unaudited)
			HK$'000		HK$'000
	Bank interest income	9,717			6,867
	Others	2,935			2,362
		12,652			9,229
4.	Finance costs
			Six months ended
			30 September
		2019		2018
			(Unaudited)		(Unaudited)
			HK$'000		HK$'000
	Interest on bank loans	115,961		97,064
	Interest on lease liabilities	438		-
	Less: Interest capitalised under properties under
	development/construction		(21,407)			(43,692)
		94,992		53,372
5.	Profit before tax
	The Group's profit before tax is arrived at after charging:
			Six months ended
			30 September
		2019		2018
			(Unaudited)		(Unaudited)
			HK$'000		HK$'000
	Depreciation of property, plant and equipments	4,712		2,679
	Depreciation on right-of-use assets*	13,954		-
	Employee benefit expenses (including directors' remuneration)	23,496		28,884
	Less: Amounts capitalised under properties under	(8,150)		(8,700)
	development/construction
			15,346			20,184

• Included in the amount are the rental expenses for carpark operations of HK$10,226,000 which are included in "Cost of sales" in the condensed consolidated statement of profit or loss.

- 16 -

6. Income tax

Six months ended

30 September

20192018

(Unaudited) (Unaudited)

HK$'000 HK$'000

Current - Elsewhere	83,847	281,100
Deferred	7,800		67,906
Total tax charge for the period	91,647		349,006

No Hong Kong profits tax has been provided as the Group has available tax losses brought forward from prior years to offset the assessable profits generated during the period. Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the jurisdictions in which the Group operates.

1. Earnings per share attributable to ordinary equity holders of the Company
   The calculation of the basic earnings per share amount is based on the profit for the period attributable to ordinary equity holders of the Company of HK$224,377,000 (2018: HK$575,746,000) and the number of 720,429,301 ordinary shares in issue during both periods.
   No adjustment has been made to the basic earnings per share amounts presented for the periods ended 30 September 2019 and 2018 in respect of a dilution as the Group has no potential dilutive ordinary shares in issue during both periods.
2. Dividend
   The Board does not recommend the payment of an interim dividend for the six months ended 30 September 2019 (2018: Nil).
   The final dividend of HK 12.5 cents per ordinary share for the year ended 31 March 2019 was approved by the Company's shareholders at the annual general meeting of the Company held on 29 August 2019 and paid on 23 September 2019.
3. Trade receivables
   An ageing analysis of the trade receivables as at the end of the reporting period, based on the invoice/contract date, is as follows:

	At		At
	30 September		31 March
	2019	2019
	(Unaudited)		(Audited)
	HK$'000		HK$'000
Within 30 days	1,513	1,900
31 to 60 days	550	1,347
61 to 90 days	165	1,370
Over 90 days	17,243		16,944
Total	19,471		21,561

Monthly rent in respect of leased properties is payable in advance by the tenants pursuant to the terms of the tenancy agreements. The balance of the consideration in respect of sold properties is payable by the purchasers pursuant to the terms of the sale and purchase agreements. Overdue trade debts are closely monitored by management and are provided for in full in case of non-recoverability. In view of the aforementioned and the fact that the Group's trade receivables relate to a large number of diversified customers, there is no significant concentration of credit risk. The Group does not hold any collateral or other credit enhancements over its trade receivable balances. Trade receivables are non-interest-bearing. The carrying amounts of the trade receivables approximate to their fair values.

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10. Trade payables and accrued liabilities

Included in the trade payables and accrued liabilities are trade payables of HK$17,773,000 (as at 31 March 2019: HK$28,088,000). An ageing analysis of the trade payables as at the end of the reporting period, based on the invoice date, is as follows:

	At		At
	30 September		31 March
	2019	2019
	(Unaudited)		(Audited)
	HK$'000		HK$'000
Within 30 days	17,773		28,088

11. Contingent liabilities

1. As at 31 March 2019, the Group has given a guarantee of HK$24,000,000 to a bank in connection with a facility granted to an associate and such banking facility guaranteed by the Group to the associate was utilized to the extent of HK$24,000,000 as at 31 March 2019.
   The bank loan was fully repaid by the associate during the six months ended 30 September 2019.
2. As at 30 September 2019, the Group has given guarantees of HK$230,418,000 (as at 31 March 2019 (audited): HK$198,487,000) to banks for housing loans extended by the banks to the purchasers of the Group's properties for a period from the date the loans are granted to the purchasers up to the date of issuance of property ownership certificates to the purchasers.

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FINANCIAL REVIEW

Liquidity and financial resources

The total interest-bearing debts of the Group amounted to approximately HK$4,937 million as at 30 September 2019 (as at 31 March 2019: HK$5,028 million), of which approximately 14% (as at 31 March 2019: 22%) of the debts were classified as current liabilities. Included therein were debts of HK$87 million related to bank loans with repayable on demand clause and HK$469 million related to project or term loans which will be refinanced during the forthcoming twelve months. Based on the repayment schedules pursuant to the related loan agreements and assuming that the aforesaid refinancing will be completed on schedule, the current portion of the total interest-bearing debts would be approximately 3%.

Total cash and bank balances including time deposits were approximately HK$1,732 million as at 30 September 2019 (as at 31 March 2019: HK$1,963 million) and the decrease was mainly due to the repayment of bank loans and the exchange loss arising from the depreciation in Renminbi during the period. Included in cash and bank balances are restricted bank deposits of HK$95 million (as at 31 March 2019: HK$77 million) which can only be applied in the designated property development projects prior to their completion of construction. The Group had committed but undrawn banking facilities of a total of approximately HK$2,088 million at period end available for its working capital purpose.

Total shareholders' funds as at 30 September 2019 were approximately HK$11,468 million (as at 31 March 2019: HK$11,874 million). An exchange loss was recorded upon translating the financial statements of the foreign operations denominated in Renminbi to Hong Kong Dollars, which has offset the increase in net profit attributable to shareholders during the period, and resulted in a decrease in shareholders' equity at period end.

The gearing ratio of the Group, as measured by the net interest-bearing debts of approximately HK$3,205 million (as at 31 March 2019: HK$3,065 million) over the shareholders' funds plus non-controlling interests totalling of approximately HK$11,646 million (as at 31 March 2019: HK$12,069 million), was 28% as at 30 September 2019 (as at 31 March 2019: 25%).

Funding and treasury policies

There are no significant changes in the Group's funding and treasury policies. As at 30 September 2019, the Group had no material exposure under foreign exchange contracts or any other hedging instruments.

Pledge of assets

Properties with an aggregate carrying value of approximately HK$14,622 million as at 30 September 2019 were pledged to secure certain banking facilities of the Group.

Employees and remuneration policies

The Group, not including its joint venture and associate, employed approximately 320 employees as at 30 September 2019. There have been no significant changes in the remuneration policies and benefits to the employees of the Group.

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CONNECTED TRANSACTIONS

1. On 20 September 2016, Gold Famous Development Limited ("Gold Famous"), an indirect wholly-owned subsidiary of the Company, entered into a framework agreement with Kin Wing Foundations Limited ("Kin Wing Foundations"), an indirect wholly-owned subsidiary of Chinney Kin Wing Holdings Limited ("Chinney Kin Wing") (Stock Code: 1556) and an indirect non wholly-owned subsidiary of Chinney Alliance Group Limited ("Chinney Alliance") (Stock Code: 385), pursuant to which, Kin Wing Foundations was appointed by Gold Famous as a contractor for the foundation construction works at K.C.T.L 495, Kin Chuen Street, Kwai Chung, New Territories, Hong Kong for a contract sum of HK$210,000,000. As Dr. James Sai-Wing Wong is the controlling shareholder of each of Chinney Investments, Limited ("Chinney Investments") (Stock Code: 216), the Company, Chinney Alliance and Chinney Kin Wing, the transaction constituted a connected transaction under the Listing Rules. The transaction was approved by the independent shareholders of Chinney Investments, the Company, Chinney Alliance and Chinney Kin Wing at the respective general meetings held by each of the companies on 7 November 2016.
   During the six months ended 30 September 2019, total development cost paid to Kin Wing Foundations amounted to HK$5,250,000.
2. On 12 June 2018, Gold Famous, an indirect wholly-owned subsidiary of the Company, entered into a consultancy agreement with Shun Cheong Data Centre Solutions Company Limited ("Shun Cheong Data Centre Solutions"), an indirect wholly-owned subsidiary of Chinney Alliance, pursuant to which Shun Cheong Data Centre Solutions was appointed by Gold Famous as a consultant to provide consultancy services in respect of the construction and development of a data centre on a parcel of land owned by Gold Famous in Kwai Chung, Hong Kong (the "Data Centre Project") at a fixed fee of HK$16,200,000 (the "Consultancy Agreement"). As Chinney Investments is interested in approximately 68.09% of the issued shares of the Company and approximately 29.10% of the issued shares of Chinney Alliance and Dr. James Sai-Wing Wong is the chairman, executive director and a controlling shareholder of each of Chinney Investments, the Company and Chinney Alliance, the transaction constituted a connected transaction for each of Chinney Investments, the Company and Chinney Alliance under the Listing Rules and is subject to the reporting and announcement requirements.
   During the six months ended 30 September 2019, the consultancy fee paid to Shun Cheong Data Centre Solutions amounted to HK$2,430,000 in respect of the transaction.

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3. On 12 July 2018, Gold Famous, an indirect wholly-owned subsidiary of the Company, entered into a framework agreement with Chinney Construction Company, Limited ("Chinney Construction"), an indirect wholly-owned subsidiary of Chinney Alliance, pursuant to which Gold Famous engaged Chinney Construction to act as the main contractor to carry out construction works for the Data Centre Project at a total contract sum not exceeding HK$757,800,000 (the "Framework Agreement"). As Chinney Investments is interested in approximately 68.09% of the issued shares of the Company and approximately 29.10% of the issued shares of Chinney Alliance and Dr. James Sai-Wing Wong is the chairman, executive director and a controlling shareholder of each of Chinney Investments, the Company and Chinney Alliance, the related transaction constituted a connected transaction for each of Chinney Investments, the Company and Chinney Alliance under the Listing Rules. Since the entering into of the Consultancy Agreement dated 12 June 2018 also constituted a connected transaction and pursuant to Rules 14A.81 and 14A.82 of the Listing Rules, the Consultancy Agreement and the Framework Agreement should be aggregated as a series of transactions as they were entered into within a 12-month period and involved parties which are connected with one another. The applicable percentage ratios of the Framework Agreement on both stand-alone and the basis when aggregated with the Consultancy Agreement, are more than 5% and contract sum was more than HK$10 million, the transaction is subject to the reporting, announcement and independent shareholders' approval requirements. The transaction was approved by the independent shareholders of Chinney Investments, the Company and Chinney Alliance at the respective general meetings held by each of the companies on 24 August 2018.

During the six months ended 30 September 2019, total development cost paid to Chinney Construction amounted to HK$194,085,000 in respect of the transaction.

CORPORATE GOVERNANCE

Compliance with Model Code for Securities Transactions by Directors

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") as set out in Appendix 10 to the Listing Rules as its own code of conduct for directors' securities transactions. Having made specific enquiry, all the directors have confirmed that they have complied with the required standard as set out in the Model Code during the six months ended 30 September 2019.

Compliance with the Corporate Governance Code

In the opinion of the Directors, the Company has complied with the applicable code provisions of the Corporate Governance Code (the "CG Code") as set out in Appendix 14 to the Listing Rules for the six months ended 30 September 2019, except for the following deviations:

1. CG Code provision A.2.1 stipulates that the roles of chairman and chief executive officer should be separate and should not be performed by the same individual.

Currently, Dr. James Sai-Wing Wong is the Chairman of the Company and assumes the role of the Chairman and also the chief executive officer. Given the nature of the

Group's businesses which require considerable market expertise, the Board believes that the vesting of the two roles for the time being provides the Group with stable and consistent leadership and allows for more effective planning and implementation of long term business strategies. The Board will continuously review the effectiveness of the structure to balance the power and authority of the Board and the management.

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1. CG Code provision A.4.1 stipulates that non-executive directors should be appointed for a specific term, subject to re-election and CG Code provision A.4.2 stipulates that all directors appointed to fill a casual vacancy should be subject to election by shareholders at the first general meeting after their appointment and every director, including those appointed for a specific term, should be subject to retirement by rotation at least once every three years.
   The non-executive directors of the Company are not appointed for a specific term but are subject to retirement by rotation and re-election in accordance with the articles of association of the Company (the "Articles of Association"). The Articles of Association do not require the directors to retire by rotation at least once every three years. However, in accordance with article 104 of the Articles of Association, at each annual general meeting of the Company, one-third of the directors for the time being (or, if their number is not three or a multiple of three, then the number nearest one-third), other than the one who holds the office as executive chairman or managing director, shall retire from office by rotation. The Board will ensure the retirement of each director, other than the one who holds the office as executive chairman or managing director, by rotation at least once every three years in order to comply with the CG Code provisions.
   The Chairman will not be subject to retirement by rotation; which deviates from CG Code provision A.4.2 as the Board considers that the continuity of office of the Chairman provides the Group with a strong and consistent leadership and is of great importance to the smooth operations of the Group.
   All directors appointed to fill a casual vacancy is subject to re-election by shareholders at the next following annual general meeting of the Company instead of at the first general meeting after their appointment as stipulated in CG Code provision A.4.2.
2. CG Code provision A.5.1 stipulates that the Company should establish a nomination committee which should be chaired by the Chairman of the Board or an independent non-executive director.
   The Company has not established a nomination committee. The Board is responsible for considering the suitability of a candidate to act as a director, and collectively approving and terminating the appointment of a director as this allows a more informed and balanced decision to be made. The Chairman is mainly responsible for identifying suitable candidates for members of the Board when there is a vacancy or an additional director is considered necessary. The Chairman will propose the appointment of such candidates to the Board for consideration and the Board will determine the suitability of the relevant candidates having due regard to the Nomination Policy and the Board Diversity Policy adopted by the Company and assess the independence of the proposed independent non-executive director(s) as appropriate.
3. CG Code provision B.1.2 stipulates that the terms of reference of the remuneration committee should include, as a minimum, those specific duties as set out in the CG Code provisions.
   The Company has adopted the revised terms of reference of the Remuneration Committee on 30 March 2012 with certain deviations from the CG Code provisions. Pursuant to the revised terms of reference, the Remuneration Committee reviews and makes recommendations to the Board on the remuneration packages of directors (as opposed to directors and senior management).

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Audit Committee

Regular meetings have been held by the Audit Committee of the Company since its establishment and it meets at least twice each year to review and supervise the Group's financial reporting process and internal control. The Company's interim results for the six months ended 30 September 2019 have not been audited, but have been reviewed by the Audit Committee.

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES OF THE COMPANY

Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities during the six months ended 30 September 2019.

By Order of the Board

James Sai-Wing Wong

Chairman

Hong Kong, 27 November 2019

At the date of this announcement, the directors of the Company are Dr. James Sai-Wing Wong (Chairman), Mr. James Sing-Wai Wong, Mr. Xiao-Ping Li and Mr. Philip Bing-Lun Lam as executive directors; and Mr. Zuo Xiang, Ms. Janie Fong and Mr. David Tak-Wai Ma as independent non-executive directors.

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