Dear Shareholder,

KWIH’s premium residential projects in Hong Kong and the Mainland continued to be well-supported by the market as sales was launched in a steady manner according to prudent strategies in persistent adherence to the principles of “impeccable quality” and “K. Wah Plus”. For the financial year ended 31 December 2023, the Group reported attributable contracted sales of approximately HK$5.9 billion and attributable revenue of approximately HK$12 billion. Profit attributable to equity holders amounted to approximately HK$800 million, with underlying profit amounted to approximately HK$770 million. Having considered the amount of contracted sales yet to be recognised and the development progress of various projects, the Board remains confident in maintaining the Group’s long-term business growth. However, there are still many uncertainties. The Group adheres to the principle of prudent financial management and, therefore, decided to adjust the dividend in order to build for the future. The Board has recommended a final dividend of 9 HK cents per share for the year ended 31 December 2023. Together with the interim dividend of 7 HK cents per share, the dividend for the full year amounted to 16 HK cents per share.

While the economy worldwide gradually shrugged off the impact of COVID-19 in 2023, the business environment remained challenging, as macro-economic factors such as hiking interest rates and geopolitical developments continued to prevail. Economic activities in Hong Kong gradually resumed after borders with the Mainland were fully reopened at the beginning of the year. However, the overall recovery was slow. In the high-interest-rate environment, the property market sentiment was affected, and investors mostly adopted a wait-and-see attitude.

Despite uncertainties in the Hong Kong economy, the Group launched premium residential projects at opportune timing according to a prudent strategy, taking into account changes in overall market conditions. KT Marina, the joint venture project located in the Kai Tak runway area, was launched for sale in November, while a number of solely-owned and joint venture projects, such as the Hospital Road project, King’s Road project, Kai Tak Area 4A Site 2 and LOHAS Park package 13, will be launched for sale subject to market conditions. In the Mainland, the Central Government implemented supportive measures for the property market, such as the relaxing of regulatory measures in various cities and support for financing for property developers, among others, to stabilise the market and boost investors’ confidence. In Shanghai, construction of the residential portion of the Group’s large-scale comprehensive development project in Huajing Town, Xuhui District commenced during the year and sales started recently towards the end of February 2024 with an encouraging market response. The Group will continue to focus on Hong Kong and tier-1 or 2 cities in the Mainland targeting upgraders, whilst closely monitoring market changes as it makes plans to launch further premium projects.

During the year under review, KWIH continued to acquire quality land parcels based on its prudent land-bidding strategy. In June, the Group solely acquired a project on King’s Road in Tin Hau, Hong Kong Island with plans to redevelop the plot into a residential development for sale. At present, the Group holds a landbank with a total attributable gross floor area of approximately 1.5 million square metres in Hong Kong and the Mainland for development. In 2024, the Group will continue to pursue opportunities for development in a prudent and disciplined manner.

Outlook

While the direction in which the global economy is heading in 2024 remains unclear, overall market condition will hinge on the timing and scale of anticipated interest rate cuts throughout the year. Nevertheless, the Mainland and Hong Kong are expected to sustain resilient economic growth. The presence of numerous stimulus measures and factors, including the Central Government’s recent move to step up with its measures to support the property market and the Hong Kong Government’s announcement of measures to stabilise the property market, in the context of considerable resilient underlying demand, will be conducive to the improvement of the overall sentiments in the property market and gradually restore the confidence of more cautious buyers. With a cautiously optimistic outlook on the medium- to long-term development of the property markets in Hong Kong and the Mainland, KWIH will continue to maintain a stable cash flow and financial position, as well as develop unique, premium properties according to flexible development strategies on the back of its proven experience.

On behalf of the Board, I wish to take this opportunity to thank all our staff who have worked relentlessly to make contributions to the Group and fulfilled their duties with steadfast effort during difficult times, overcoming various challenges with utmost dedication. I look forward to their continued collaboration with the Group to seize future opportunities for development and realise the Group’s vision for long-term and sustained business growth.

Dr Lui Che-woo

Chairman & Managing Director

28 March 2024