Far East Consortium International Limited (35) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the Far East Consortium International Limited 2022 to 2023 Interim Results Presentation. Before we begin, let me introduce the management representatives. They are: Executive Director and Managing Director, Mr. Chris Hoong.

Good morning, ladies and gentlemen. My name is Chris Hoong. I'm the Managing Director.

Chief Financial Officer and Company Secretary, Mr. Boswell Cheung. Head of Corporate Development and M&A, Mr. Alexis Adamczyk.

Good morning.

Now may I invite Mr. Hoong to start the presentation. Mr. Hoong, please.

Good morning. What I'd like to do is to run through the PowerPoint presentation, which I hope you have a copy. If you don't, please refer to our website, which is www.fecil.com.hk. Now if I may start with Page 5 of the presentation, I'd like to give you a number of highlights so far as our first half numbers are concerned. The first key highlight is that we experienced growth in our core businesses. On an adjusted revenue basis, this is adjusting for the Gold Coast joint venture, which was accounted for as an associate. The total adjusted revenue was up 13% to $3.5 billion. And adjusted cash profit attributable to shareholders was up about 7.3% to almost $900 million for the first half. So as far as property development business is concerned, the adjusted revenue for property development was up 3.3% to $1.9 billion. The cumulative presales and unbooked contracted sales figure reached a record high of $18 billion as at 30th of September 2022. So far as hotel is concerned, the demand for hotel rooms increased steadily, resulting in strong revenue growth of 36.2% in the first half. And so far as car park is concerned, we also saw a consistent organic growth of about 18% following the lifting of the COVID-19 restrictions in many of the cities that we operate in. And gaming operations, the revenue was up about 70.5% year-on-year. And we also recently received approval for an online gaming license, which is very good news. The second key theme for the first half of 2023 is that we continue to recycle the noncore assets, and we do have a plan to continue with the disposal of a number of noncore assets. The target size for disposal is about $2.5 billion to $3.5 billion. The noncore assets will include minority stakes in hotel and also, there is also 1 site that we have in Sydney, which is under a joint venture with Star Entertainment. That site is being acquired by Metro in Sydney for the construction of the new rail line and schema for basically completion hopefully in the next -- in the first half of -- in the second half of the year. We have also completed the sale of Vauxhall Square in the U.K., realizing about $1 billion in proceeds. And we have also recently been taking a very active stance in disposing some of the mature car parks that we currently own. The idea is that we will use the proceeds to pay down some debt. And also we have used part of the proceeds to also acquire a very prime piece of land on the Hong Kong Island, which is in Sai Ying Pun, which is 2 stops away from central. Very rare piece of land and we are very excited about the development opportunity there. And it's part of our, I guess, replenishing of land bank as we sell down of other projects. The third theme that I can -- I would like to highlight for the first half is that we have continued to see a very strong recovery in the recurring income business. The total recurring revenue was up about 33.5% to $1.4 billion. Hotel business is well positioned for reopening. We have seen basically across almost all geographies except for China recovery in the first half. I will comment about Hong Kong a bit later on, given the change in quarantine requirement here. We will be earmarking to open 2 new hotels in the second half, the Ritz-Carlton in Melbourne as well as the Dorsett in Melbourne. So this will -- when this will open contribute to future cash flow stream for the hotels. And the organic growth in car park, as you can see, is continuing as the recovery process continues. And PALASINO, which is the brand that we have adopted, following the acquisition of TWC for our casino business in Czech Republic delivered very strong and resilient performance. And as I mentioned, just now we obtained an online license in November. The fourth theme that I would like to mention for the first half result is the rapid growth of our mortgage lending base business, BC Invest. We issued 2 RMBS in the first half, raising about AUD 824 million in aggregate. We began really shifting more to RMBS program that has a mix with a large proportion of Australian domestic mortgages as well as SMSF prime borrowers. And this RMBS program actually allow us to raise capital to fund the ongoing growth of the business. The loans and advances, including Mortgageport stood at about AUD 3.5 billion as at the 30th of September including third-party AUM, we have now a total AUM of about AUD 4.5 billion as of 30th of September. The fifth item that I'd like to mention is our efforts to reduce gearing as of the 30th of September because of basically a significant reduction in ForEx exchange rate versus Hong Kong dollar in almost a lot of our overseas operations, including U.K., Australia, Malaysia, Singapore as well as Mainland China. The exchange rate movement has resulted in basically a reduction in Hong Kong dollar equity as reported and that has resulted in an increase in gearing ratio. But having said that, we have seen basically a recovery of this ForEx post 30th of September, and we're expecting significant settlements coming through in the second half from West Side Place, which will be used -- the proceeds will be used to settle the construction loan, that is a very big project. So the reduction in that will help overall reduction in overall gearing level. The active sell-down of inventory, the $5.7 billion that we have as well as the sale of noncore business will actually help the -- help us to reduce overall liability and therefore, hopefully reduce the gearing level as well. In terms of basically looking forward, we are expecting -- we have seen recent completions, including Mount Arcadia, West Side Place Tower 1 and 2, MeadowSide, 2, 3 and 5. The Star Residences in Tower 1 and also Dao by Dorsett West London, which is a new brand that we have launched to -- for long-stay product. The upcoming launches, this include the Victoria Riverside Tower A, which we launched recently and has received a pretty strong feedback. Collyhurst Village is -- we have also -- this is also a project in Manchester, which we launched recently, the Kai Tak Residential as well as Sai Ying Pun, these are all projects that we are earmarking to launch in the next 12 to 18 months or so. In terms of upcoming completions, West Side Place Tower 3 and 4, New Cross Central, Hornsey Town Hall; Ritz-Carlton Melbourne, the Dorsett Melbourne, Dao by Dorsett Hornsey, the Dorsett Kai Tak as well as the casino in Queen's Wharf, Brisbane are all earmarking to be completed in the next 12 months or so. So we are expecting actually quite significant big completions coming up very soon. I'm not going to go through in detail, Page 8, there is a very detailed slide setting out the status of our various projects in a later section, but the message there is that we are coming into a stage where there is going to be actually quite significant completions of a number of very large sized projects. Turning on to Page 9 of the presentation. This is a summary of the financials on a statutory accounting basis, the revenue was $3 billion, a slight drop compared to last year. But as I mentioned just now, we did not account the contribution of Gold Coast Residence in the top line revenue. It was accounted as an associate contribution. But if you adjust for that, our total adjusted revenue was $3.5 billion, so it was up about 13% compared to last year. The gross margin of the various businesses was up to 35.4% versus 31.6% last in the same corresponding period last year. The profit before tax was $860 million compared to $1.4 billion last year. If I may just explain that in the last corresponding period, we did have 2 transactions that was not repeated in the first half. One is the disposal of a hotel in London, and that contributed, I think, about $500-plus million and also there was a revaluation gain on the investment property last year, which wasn't repeated in the first half of this year. And then the net profit figure was $571 million. But if you adjust for the noncash items in terms of the P&L, including the revaluations across the depreciation in particular and as well as some movement in our treasury position, the adjusted cash profit was up about 7.3%. And the Board yesterday discussed the dividend, and we've decided to actually declare a dividend of $0.04 per share. Now it's worth noting that we had a bonus issue of share recently, it's a 1:10 issues. So if you adjust for that, in fact, the dividend figure is up about 10% because the dividend that we declared $0.04 per share is on basically a large share capital basis. The cumulative presales and unbooked contracted sales, we reached about $18 billion, which was up about 7.4% compared to the year-end figure at the 31st of March 2022. The NAV per share, given the ForEx differences, we experienced basically a reduction in NAV per share to about 11.53% -- sorry, HKD 11.53 per share and this is adjusted for the hotel revaluation surplus as of 31st of March 2022. Going to Page 10 of the presentation, we basically set out the gross profit margin of the various businesses. You'll see that in terms of contribution from various division, with the exception of, I think, property development where our margin was at about 29%. We experienced growth in margin for almost all other divisions, including hotel, car park, gaming as well as others was down a little, but the core businesses for recurring income were all up. As a result, the overall gross margin before depreciation was at 40.6%, which was up from 37.8% in the same period last year. And this is all attributable, I guess, to the stronger performance across the recurring income businesses. And if you turn to Page 11, I think we also analyzed the impact of the ForEx position against Hong Kong dollar. You will see that across almost all the key local currencies that -- where we have operations in almost -- well, in fact, all of the all of the currencies depreciated against Hong Kong dollar and because, that's because Hong Kong dollar is back to U.S. dollar. To give you an example, for example, the Aussie dollar was marked down to 5.09. The pound was marked down to 8.74 as of today. I think we have seen some recovery of that versus the period end exchange rate. So because of this, right, we -- because of a lot of our equity investment in overseas currencies are denominated in overseas currencies. When we mark that down -- when we mark the assets or the equity to Hong Kong dollar as of 30th of September, we had to also mark down the value of this equity that we have invested in. And if the exchange rate were to remain constant, in fact, the NAV of the company would have been $2.8 billion high as of 30th of September 2022. So these are more an accounting impact rather than a real financial impact, yes. And if you look at Page 12 of the presentation, you'll see that in terms of the long-term NAV growth of the business is on an upward trend. And the dividend figure that we displayed on this slide is before adjusting for the bonus issue, 1:10 bonus issue. And if you can see that the longer-term trend is also on the rise. And we're quite keen to want to protect the trend as we progress our business. If you turn to Page 13 of the presentation, it's worth noting that because of the impact of ForEx against the equity, that has resulted in basically adjustment on the both the net gearing ratio as well as a net leverage ratio. But despite that, I think on a net leverage ratio of 32.4% and this is measured on the basis of net debt over total adjusted assets. I think is still at a pretty healthy level as a whole. We think that this level will -- should drop as there is a recovery in the ForEx against Hong Kong dollar, which means that the equity in -- that is denominated in overseas currency, which we invested in, in terms of our various overseas operation should recover. Yes. And on Page 14 is an analysis of our short-term debt position. We had short-term debt of about $15.4 billion of which $1 billion relates to the 4.5% 2023 notes, which we will be repaying in May 2023. There is about $5.4 billion of corporate hospitality and car park loan facility, which is on secured basis. A number of them has been refinanced or to a longer date or to be refinanced to a longer majority -- maturity. Project development loans, a lot of those basically construction loan, and they are mostly backed by presales. We have $18 billion of presales as we build the development we draw on the construction loan and this loan will be repaid upon settlement. So a big chunk of it is development loans such as the one for West Side Place Stage 3 and 4 in Melbourne. Other corporate loans are being rolled over. This is about $1.8 billion or being refinanced and the loans with -- there's also loans with partial repayment loss. So these are really not repayable, but has they have a partial repayment clause, and this will be repaid, and it's about $844 million. And there's also basically loan with repayment demand cost in which we classify as short term and that -- but they are really not due for repayment. And this is about $731 million. Now if you look at the liquidity position of the company, we -- and this is more, I think, highlighted on the next page. We have basically about $8.3 billion of liquidity position, of which -- sorry, and there is also basically undrawn banking line of about $3.2 billion and undrawn banking facility for construction, which is about $3.4 billion. So we have about total liquidity and facility of about $15 billion in total. Of course, we do have some unencumbered hotel assets and also unsold inventory amounting to about $7.3 -- $7.4 billion in total and that versus actually the short-term liability is a very comfortable position. The short-term liability being the one that is actually deal for repayment is actually a very comfortable level, including actually to cover the CapEx commitment that we have currently. And actually, it's also worth highlighting on the bottom of Page 24 -- sorry, Page 14 that we've completed the Vauxhall Square disposal that basically raised about $1 billion in cash. This is all post year-end number and the completion of West Side Place will be in the region of about $2.5 billion. The disposal of car park assets, we are earmarking about $300 million to $500 million and some disposal of noncore hotel assets and minority stakes of about $1 billion to $2 billion. So in total, we are expecting on the disposal side, about $4.8 billion to $6 billion of asset disposal coming. So that compared to actually the liability, which is due for repayment is at a very comfortable level. If I may just turn to page just moving on the review of operations. Page 17. This is just to give you some update on basically a number of completions and a number of projects which are due to be completed. On Page 17 is a picture of MeadoSide Plot 5 as well as on the bottom left-hand corner picture of Plot 2 and 3. It's a beautiful project, and we are trying to get some awards for these 2 new completion. The total GDP of this project is about $1.2 billion and we are basically -- we have settled a significant portion already as of 30th of September. There will be more new earmarked for completion as well post the period end. Star Residences. This is a joint venture that we do with Star Entertainment as well as Chow Tai Fook, 422 apartments in total, which completed along with the Dorsett Gold Coast and the attributable GDV was about $458 million or $500 million. So this was accounted for as an associate income. The upcoming completion, you can see from the picture on Page 19, Westside Place Tower 3 and 4, there are almost done now and is earmarked for basically settlement in the second half of the current financial year. It's quite a big project with GDV of about $5 billion, I think we have budgeted for maybe 50% to be settled in the first -- in the second half and then the rest basically in the coming -- in the following months. Hornsey Town Hall, there are actually 2 blocks, which we have started the settlement of 1 of the 2 blocks. We are earmarking basically to complete this project soon. And the interesting thing is there is actually a town hall in the development, where we'll be having a long-stay product in there as well. And the town hall will be used for co-working space and should add to, hopefully, the revenue stream of the business. New Cross Central, on Page 21, this project is another interesting small project within the Northern gateway development in Manchester is also a joint venture project that we have with MCC, but we have 100% control of this. It's only about 80 apartments, and we are earmarking to start handover in January of next year. So it gives you basically a summary of the -- all the projects, unfortunately, we don't have the time to go through every single 1 of them. But on Page 22, you'll see that in terms of the total cumulative attributable presales for all our projects is about $18 billion. And in terms of the expected GDV for the entire pipeline projects, including the 1 that we will be launching in the coming years is about $60.5 billion. And it's quite a significant pipeline, and it should be sufficient for us for the next at least 8 years or so. So this is we are in a very comfortable position. Even if we do not replenish any land bank anymore, we can basically sustain the pipeline of residential development for, I think, 8 years without having to replenish any land at all. But this is, of course, a big pipeline that we currently have in hand. The recent launches, Page 23, Victoria Riverside Tower A. This is a piece of land that is within the Victoria North development, it was previously called Victoria -- Northern Gateway is now named Victoria North. You can see that there are a few towers there. We have sold 1 of the tower to a fund. The other 2 residential towers, we have now officially launched its GDP of about $900 million or so, it's expected to be completed in the financial year 2025. The Collyhurst as stated on Page 24. It is -- this is one of the sort of housing projects that we have with Manchester City Council they have actually assigned the land to us at nominal value. In return, we are responsible to basically deliver some affordable housing to them. We have signed a contract with them to deliver the affordable housing for $306 million. This is at a very low margin to basically compensate them for basically the land contribution that they make, but we can freely sell the private residential, which has a GDV of over $350 million. And these sort of products is actually quite popular nowadays in Manchester. The Kai Tak development, it is a JV that we have with the New World development. Our attributable GDV is about $6.6 billion. At the moment, we are -- I think so far as competitiveness is so there are a few projects in this area. And this project should have one of the lowest costs compared to the others, which is, I guess, water facing. So we bought this from Kaisa a year ago. And we've basically almost finalized the planning now and construction started on the basically what I call the yellow area, which is the public amenities and this is earmarked to be launched in the next 12 months or so. So far as hotel operations are concerned on Page 26 -- sorry 27, you see that, in fact, across the different market segment with the exception of China, which is -- I think the operations are being affected by -- very much by the COVID lockdown. All other regions of experience, actually strong recovery in RevPAR, for example, Hong Kong RevPAR recovery was about 49%. Malaysia was up about 52%; Singapore -- and this is not accounting for the Dao by Dorsett, which is a JV, which has actually doubled in revenue. The Dorsett in Singapore experienced about 10% recovery in terms of RevPAR, U.K. was up about 100%. And Australia was up about 33%. So generally speaking, we have experienced basically a rebound in hospitality across different geographies. Now TWC, actually, you see that there's also a rebound of RevPAR of about 88%. These are basically -- we haven't grouped this as a Dorsett hotel because it's operated actually by Trans World Corporation, which is our subsidiary, a separate entity separately. And they have also in Continental Europe experienced 88% increase in RevPAR. Specifically commenting on Hong Kong, as I think there was a question about from one of the investor that we came across asking about hotel in Hong Kong. I'd like to just say that, look, following, of course, the change in the quarantine requirement in Hong Kong. We've seen, of course, the quarantine stay business dropping. However, having said that, I think it's a path to hopefully, going back to the normality in the Hong Kong space. October number was down compared to the same period last year, but as we progress into the months we have seen gradual recovery and some encouraging sign that actually tourists are beginning to come back to Hong Kong. I think we're still -- there's still some way to go. I think it will take maybe a few months to get back to the normal level, but we are seeing actually a positive sign that actually the Hong Kong numbers is following the significant drop following the change in the quarantine rule in Hong Kong gradual actually recovery of the business. So this will, I think, impact on the second half, but it will be gradually seeing recovery as we go into the later part of the second half. But the overall hotel numbers, I think overseas, we continue to see actually recovery on sort of same period comparison, we're seeing basically still double-digit growth across the other regions. So fingers crossed, we hope to see basically as flights are being added, the recovery trend will continue, and it will be supported by the opening of some new hotels as well. For example, the Dorsett West London, we're still not optimal yet, but with the addition of the -- of this hotel in the -- I think it was in June that we opened. The full contribution will come through in the second half of the financial year. Dao by Dorsett, Singapore, I mentioned just now, we've seen actually a very, very strong business growth. We have taken over the management of this particular hotel from Oakwood. So there will be, in addition to our share of profit for this operation, we will also be entitled to a management fee as well from this property. And so far as the number of pipeline hotels, we are expecting that the new hotels will increase by about 2,000 rooms or so up to 31st of March 2025. So these additions of rooms should add to the recurring income stream of the business. Two hotels in particular, is a earmarked open in the second half, which is the Dorsett Melbourne as well as the Ritz-Carlton Melbourne. The Dorsett Melbourne, you can see on Page 31 is almost complete now. I think they are in a race with the Ritz-Carlton to see which one will open first. The Dorsett Melbourne will have 316 rooms and it's our first Dorsett in Melbourne. We have opened a Dorsett in Gold Coast, which has performed very well, and in fact, better than expected. So hopefully, the Dorsett in Melbourne will also do well. It occupies Level 3 to Level 8 of West Side Place Tower 3. The Ritz-Carlton Melbourne on Page 32, this is a -- it's going to be the tallest hotel in Australia and it's 18 floors -- occupying 18 floors in West Side Place Tower 1 and it will be surrounded by the very best of entertainment, education, F&B in the area. And if you guys are visiting Melbourne any days. Just let us know and we will arrange a site visit for you. The other upcoming hotel completion is the Dao by Dorsett Hornsey. This is a service apartment development. We actually obtained the development right from the council a few years ago, and they've also given us basically the development right for the residential around it. If you can see actually is actually going to be a remarkable Grade II listed Town Hall complex, and we're very excited to actually be adding value to the development. We obtained this site for GBP 3 million a few years ago, together with the development side. So this should give us a pretty good profit margin overall. The Kai Tak Development. This project is going to be the first hotel that will be completed on the Kai Tak development. As we all know, there is a very big sports complex being built in the area. And this hotel is progressing very well in terms of construction. And we have sold basically the office tower, which is across from this hotel to China Light and Power. So the completion of that will add to basically the cash flow that will be coming back to us. And this will be a landmark hotel for us in Hong Kong, and we are very excited to actually see that, this is -- the construction is progressing onetime, on schedule. So far as car park is concerned, I'd just like to say that the growth of the business is primarily driven by organic growth. We are reviewing a number of our own car parks, given the rise in interest rates, we have taken the decision that we want to basically reduce some ownership in some of this car park, and we are actively selling down some of these assets. And as a result, you will see that actually, going forward, the contribution from owned car parks will come down, but the managed car park should be really where hopefully, the organic growth will be coming from. Turning to Page 38, which is the gaming operations. And I think the key highlight there is really the construction of Queen’s Wharf. You can see on Page 38 is progressing to a very advanced level now. I think for people who have visited Brisbane recently, you'll see that this is a very big landmark development in the city. There is a bridge that links one side of the river to the other, and that's almost completed now. There is some issues with The Star Entertainment. I think it's very well publicized. I won't go into detail, but I'd like to say that the issues that have been highlighted by the authority has been actively addressed. And hopefully, we will overcome that issue shortly and Star will resume back to normal and this is what we expect to see and there will be also 849 rooms added to this development, of which we own 25%. The casino part will be open. I think is earmarked currently to open end of the next calendar year. So that will also add to income stream coming back to FEC. PALASINO, which is our Trans World casino operation. This is on Page 39. We have seen actually a strong rebound in the business across actually all the 3 casinos that we own. We obtained the online gaming license, which was issued by the Malta Authority in November 2022. We plan to launch the operations next year, we're still going through some technical adjustment to the product offerings. We will selectively target certain market initially and hopefully that will give our customers a more product offering. And we are also in -- I mean, given the strong business performance, we also exploring ways where we can actually monetize, I guess, the strong results from these operations. The Star relationship, I think this is an old slide that we cap. There's been a lot of joint ventures that are very strong in terms of the development on their sites, including the one in Gold Coast. I think Sydney, there is also an opportunity to develop on their site. And there's one point to note there is that Star Entertainment also has a big portfolio of hotel assets, and we are reviewing that along with our hotel portfolios in Australia, and there may be some opportunity there to create some interesting portfolio together. And at the right time, we will be making further announcements so far as this portfolio is concerned. In terms of other businesses, I think the key really is the BC business, I think we -- as you can see from the bottom right-hand corner, the AUM growth of the business has been very, very strong, and we continue to see actually good momentum being maintain in that platform. Of course, the interest rate is an issue. I think with higher interest rate, maybe people want to delay their purchase of property, but the underlying substance of this business is remaining sound. It is an asset-light business where we source the body capital to finance the growth in the loan and we take the net interest margin as our income. And this could be at the right time, also a potential spin-off opportunity for FEC Group. So coming up to basically the final section of the presentation. I think so far as outlook is concerned, we have very strong presales and unbooked sales figure of about $18 billion. So that gives a lot of visibility for our cash flow stream in the coming years. There will be a number of new launches, including the Collyhurst Village as well as Kai Tak and also the Sai Ying Pun that we bought the settlement of West Side Place Tower 3 and 4 in Melbourne, Hornsey Town Hall, New Cross Central. This will all be making contributions to the second half of the financial year. The Tower 2 of Star Residences called Epsilon and Queen’s Wharf Tower 4, the construction is progressing well. and is expected to be completed in the next couple of years. All these will provide actually cash flow stream to the group as well. So far as land bank acquisition is concerned, honestly, we are taking an approach where we want to digest some of the land bank that we have currently. We do not rule out any opportunities, but it has to be very, very attractive to us before we make any move. The priority for us currently is to more focus on perhaps in this interest rate environment, right, not to be too aggressive in terms of CapEx. So we will be toning down a little in terms of land bank acquisitions and use the capital more carefully in terms of reducing that -- we still have an inventory of about $5.7 billion. So the active sell-down of debt will contribute to additional cash flow as well as profit. So far as hotel is concerned, we think that Hong Kong -- the going back to normality, there will be some short-term impact, but longer term, it's good news for us because Hong Kong, the normal occupancy rate should be around 90-plus percent. But it will take time to get back to that level. We have seen actually airlines adding flights, which is good news for Hong Kong. This includes a significant announcement by Cathay to add a lot of new flights coming into Hong Kong as well as British Airway resuming their flights and also along with other airlines. Hopefully, that will contribute to the recovery of Hong Kong as to other regions. I think we have seen actually the recovery momentum continuing. So that's good news. The addition of new hotels such as the Ritz-Carlton Melbourne as well as Dorsett Melbourne will contribute to our operation in the coming years. And we are actually quite excited at the moment to see the recovery. So whereas car parking business is concerned, as I mentioned just now, we'll be focusing more on third-party management business and recycle some of the capital that we have in the ownership business and try to reduce our gearing level as well, especially in the rising interest rate environment. And so as far as gaming operations is concerned, the key growth driver will be Queen’s Wharf. The organic growth of PALASINO is good and Malta online gaming license, hopefully longer term, it will take -- I would want to say that it won't immediately add to the EBITDA of the business. I think it will take maybe 2 years for it to be EBITDA positive. But once it's EBITDA positive, that business is a very asset-light business and is -- it should improve the overall return on equity in the business for us. BC is a promising new business, and we have also launched some asset management business, a green mortgage fund that we have established. Longer term, this could be, I mentioned just now a good spin-off opportunity. Now last but not least, I just want to just comment on a couple of slides on ESG. We have taken very active steps in actually strengthening our governance to improve the ESG performance. We have formed key internal committees within the ESG working group to support the ESG Committee. So we will be continuing to make, I think, fine-tuning to how we actually measure ourself developing new KPIs from -- for various businesses, setting long-term goals in terms of, I guess, improving our ESG standard. The new buildings that we're building, for example, now are all of Green standard meeting very high requirement for our stakeholders. So far as awards are concerned, I'm very proud to say that we have continued to win many new awards in the first half of the financial year including the Finance Asia's Best companies 2022. We won the best small company -- Small Cap Company award in Hong Kong in terms of Investor Relations as well, Best IR Company, Best Investor Meeting, Best Annual Report. Very proud to say that if you read our result announcement or our annual report, we actually give a lot more disclosures compared to our peer group, and we will maintain a very high standard of transparencies with the investment community. I think with that, I would like to conclude my presentation and happy to take any questions. Thank you.

[Operator Instructions]

So on the panel, we have -- we've got some questions. The first question is on the -- any plan on the reduction of the gearing ratio.

Yes. As I mentioned in the presentation, right, we have earmarked for some disposal in the second half in the sum of about $2.5 billion to $3.5 billion, of which $1 billion relates to Vauxhall Square, which has been completed. The Union Street land in Sydney, which is a joint venture land. I think we already have basically a notice for -- basically for the government to take possession. So we will be paid. We're still finalizing the valuation for that piece of land, but we expect that this should be done in the next couple of months or so. So that will add to basically the cash -- disposal of the minority stake assets. We have actually signed 1 contract to sell a car park and 1 smaller has also been signed. So there will be more actually disposal of some of these assets. So all that will be more earmarked for debt reduction. Also, I think with the completion of some large-scale projects, such as West Side place, Tower 3 and 4. The proceeds from that will be used to repay down construction loan, which should help reduce the overall debt level as well.

Okay. I guess -- well, there are a few questions I summarize and followed by the reduction of the gearing, right? Then another question is on the -- how much the exact number of debt to be repaid or refinanced within a year. I guess this one I answer it. Yes. Actually, on Page 41, we have got slide telling -- I mean, showing the breakdown of the debt outstanding within a year, how should we do for the refinancing or the repayment or some other activity is a repayment repayable on demand clauses. So well, in this page, you can see that the notes that will be mature in May next year, that is talking about HKD 1 billion. The other payment repayment terms, which will be -- well, on the payment schedule is about HKD 800 million. So added up altogether, it's talking about HKD 2 billion. That is the exact amount, I guess, we will be repaid within a year. The remaining is actually like what Chris just mentioned, well, this is a project related once we hand over our project the loan is actually reduced. The other loans are actually on the secured or unsecured basis that will be refinanced and roll over as well. Another question is, any update on the plan of listing our hotel assets.

Well, I think the timing is important. We have not push on the listing of hotel assets. On the other hand, we have started basically exploring together with Star Entertainment to combine actually the Australian portfolio together, I think we have a very big portfolio in prominent locations across Australia. It is -- I must qualify that by saying it is at a very early stage of the discussion. But the direction is clear. I think there is definitely synergies as well as common interest in creating actually an interesting pool of assets in Australia in hospitality. And given the recovery of the business, we actually see that this could be an interesting proposition for the market. And that's all I can say. Unfortunately, I can't say too much about it at this stage. But that's something which is definitely worth watching in the coming months.

In the past -- in the last 18 months, FEC acquired a lot of projects. So are we still looking for some other acquisitions?

Well, I mentioned, I think in the presentation just now, I think we do have a very strong pipeline at the moment. We -- I think the priority for us is to digest the pipeline. We will be very, very highly selective in terms of acquiring more development land. But we are a developer, so we do need to selectively replenish, but we have done -- I think we now have a pipeline of 8 years on our balance sheet. And we can stop buying land for the next 3 years and still have a very healthy pipeline should we wish to do that. But I think given the rising interest rate environment and all that, we'll be very cautious in adding new land bank unless we see something really, really attractive. The focus for us is to raise the cash through the completion of the assets and disposal of the completed products and then reduce the gearing level.

Well, some investor is asking for the Brisbane casino. "Any update on the completion and when will it be open?"

Again, I think I mentioned this in our presentation just now, we are earmarking to open the first phase towards the end of the next calendar year.

Any plan regarding the perpetual bonds?

Any plan regarding the perpetual bond. We -- this is, I think, still more than 12 months ahead. I think the idea is that we will be reviewing and repaying the perps given the step-up in interest rate, it makes more sense to repay it than to keep it, yes.

Okay. This comes to the end of our investor presentation. Thanks again for joining us.

Okay. Thank you, bye-bye.

Thank you. Bye, thanks.