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

Good morning, ladies and gentlemen. Welcome to the Far East Consortium International Limited 2024 annual results presentation. Before we begin, let me introduce the management representatives. They are Joint Managing Director and Executive Director, Ms. Wendy Chiu, Chief Financial Officer and Company Secretary, Mr. Boswell Cheung. Now may I invite Mr. Cheung to start the presentation. Mr. Cheung, please?

Thank you. Thank you very much. Thanks to -- thanks for coming, financial year 2024 annual results briefing today. Yesterday night, we have announced our results. So welcome, welcome, and thanks for your all support. The key theme of this financial year is talking about the revenue, also the strong performance in the property development and also the recurring income business as well. The revenue growth by 57% to HKD 10.2 billion. In terms of the adjusted cash profit increased by 35% to HKD 780 million. Property development, which is a great growth. The revenue for the property development was talking about of HKD 6.8 billion, an increase almost double of 91% compared with last year. The cumulative presale value and also the unbooked contracted sales reached HKD 11.5 billion, which is some project we have resold and [indiscernible]. All this, 11.5% as of end of March, will be coming into our pockets as well as the settlement of the bank loan as well. So again, we believe that will be -- further enhance our gearing ratio and also debt level as well. Hotel, with 2 new hotel openings, which is talking about the Ritz-Carlton Melbourne and also Dorsett Melbourne, almost a year ago, yes. And it gives very strong support to the revenue as well. So well, the revenue growth to HKD 2 billion for the financial year. And well, last year, it was HKD 1.5 billion. Car park, gaming, very stable, steady growth. Car park, on the face of the P&L, well, slightly decreased 3% to HKD 732 million. But in fact, if you look at the original currency, which is a slightly growth. The reason of this kind of decrease is actually due to the exchange movement, right? So it's -- from my point of view, it's actually a steady growth. It's just the exchange movement, which we cannot control, right? The gaming as well, well, steady growth and in particular, Palasino was listed in Hong Kong Stock Exchange at the end March. Strong performance in the property business -- property development business. Gross profit margin increased to 25% compared with last year 19%. Strong settlement in this financial year, major contribution from the West Side Place Stage 2 in Melbourne. In fact, other than Melbourne, also we have the very good revenue recognition in Singapore as well, which is talking about HKD 1.8 billion in -- from one project, Hyll on Holland, Singapore in the village -- I mean, the Holland Village, which is a very good region, so. Other than that, also, we have Hornsey Town Hall in London, New Cross Central and MeadowSide in Manchester. Also help us, yes, for -- as well as Hong Kong, honestly, for the increase of the revenue in this profit development. Like I said, well, Hyll on Holland and also Waterfront Subang joint venture in Malaysia, which give us the recognized revenue over time as well. Performing very well in the recurring business. Recurring income -- I mean, recurring revenue growth, 17% to 3.2%, like I said, of which HKD 2 billion is actually from hotel business. Hotel performed well with the improvement in overall occupancy as well as the RevPAR. In fact, the revenue as well. New opening, like I said, well, Ritz-Carlton Melbourne and also Dorsett Melbourne all together is talking about almost 600 new rooms. Maybe we talk about that later on. Well, although once -- well, everyone tell me, the same is that, well, we need about 6 or a few months to ramp up. So that will be the norm. And almost in terms of the financial year, almost end of the last 2 quarters or the last quarter, actually, the new hotel picking up a lot as well in terms of the revenue and also the RevPAR. Car park business, we try to phase out some underperforming car parks and also secure some additional management contracts. Palasino, like I said, was -- delivered very stable and resilient performance. BC, the total AUM maintained at AUD 5.4 billion as at the end of March. This is not a small business, but this is not our core business. So we are considering to look for some fundraising or this kind of realization of the value exercise. On the other hand, it successfully issued 3 RMBS during the year, totaling AUD 1.5 billion in aggregate. After year-end, we also have 1 RMBS issue. The net -- the NIM, the net interest margin was talking about HKD 1.2 billion -- 1.2%, slightly decreased, well, because of the increase in the interest rate and also some time lag in effect on customer borrowing rates. Implemented some initiatives to lower gearing and interest. Well, I think this is the main theme as well since last interim -- yes, interim, during this financial year 2024. Approximately -- well, in May, approximately HKD 1 billion paid, I mean, this -- one of the bond at the moment. And then in January this year, we also paid down the -- another bond, which is talking about HKD [ 2.8 ] billion. Completion of some -- completion of the disposal of the office component Kai Tak development. Well, I think back to 2019, we acquired -- we won a tender from Hong Kong government for a piece of land that, well, we build up the office building and also another building for the hotel. This office building we sold out -- we completed the transaction end of March this year. So we booked a gain, get the cash, reduce the bank balance, I mean, the bank debt as well. So you have a lot on the gearing as well. Also, we completed -- like I said before, we completed the West Side Place Stage 2 in Melbourne recognized the HKD 3.5 billion revenue and that will, again, help the gearing as well. That is the Stage 2. But in fact, we also completed, during the financial year, Stage 1 as well, which is talking about HKD 500 million. On and off, I think from Australia, we paid down a lot of debt since a lot of projects coming up. Continued sales of some noncore assets, like in November last year, we sold the -- which is a JV, honestly. Well, we sold Sheraton Mirage in Gold Coast and also we sold a car park in New Zealand and the remaining units in Bukit Bintang, KL with a sales proceeds in aggregate talking about HKD 1.2 billion. Unlocking some values through strategic long-term planning. I think before we have touched on the spinning of the hotel REITs, I think it's time to reinstate and reexplore the opportunity, yes. Also, for the BC, we are reviewing the capital raise option at BC Invest. Top line, I think we covered some of them. Some one-off expenses like the listing fee -- listing expenses of the Palasino, we booked it, and also some -- well, the hotel preopening expenses. But from our book, it's actually not a big amount. But on the other hand, one-off compensation of last year -- one-off compensation income of last year, which will not be happening again, right, for this financial year. Interest rate rise, increasing of the commission, marketing expenses hit a lot of our P&L. In fact, well, I just also highlight in this page, the finance costs, HKD 1.2 billion, almost double, hitting a lot of our profit. So we are trying hard to sell down some ongoing in particular, in order to reduce our debt level. I think it shows that -- well, later on, we have a page talking about the gearing rate as well. I think we spent a lot of effort -- spent a lot of resources in this -- for this target. I think it's successful, which we may talk about later on. The selling expenses jumped more than double even. The reason is that, well, from the revenue, HKD 10.2 billion, in which HKD 6.8 billion was the sales of property, of course, sell more pay more in commission. I think that is in line, actually, yes. The dividend. Yesterday, we had the Board meeting and proposed that HKD 0.10 for the final dividend, together with the interim of HKD 0.04 altogether for the whole year, which is HKD 0.14 and same as last year. And we also want to thank to the shareholders for the support and show that, well, we are -- we want to maintain the dividend policy. And we look forward -- well, the dividend ratio will be favorable, yes. Cumulative presale value and unbooked contracted sales, HKD 11.5 billion, and that's attributable to shareholders HKD 30 billion, per share HKD 10 -- almost $11. I think that's, in particular, on the presale and unbooked contracted sales, that will be helping a lot on our -- the visibility of our cash flow. This page, I would like to show that, in fact, we have -- well, in our pipeline, we have HKD 65 billion on our pipeline, including the HKD 11.5 billion, which I just mentioned, the presale value and also the unbooked contracted sales. On the left-hand side of this box, I think in financial year 2025, we are -- well, our financial year-end is the end of March. So today, it's actually financial year 2025, right? So during the year, the -- well, in terms of the project completion, the GDV is talking about HKD 9.2 billion, of which HKD 6 billion has been presold as at the end of March. Of course, April, May, June, we keep on selling, right? So HKD 6 billion is expected to be completed this year. So that will be helping a lot on our -- the booking, the revenue recognition and the cash flow as well for this financial year. Another page, which is talking about the cash flow as well. Gross profit, we looked at that -- well, for the current financial year -- I mean, the -- not current, the financial year 2024. The overall gross profit margin talking about 31% compared with last year, almost the same, in which you can note that the property development increased a lot from 19% last year to 25% this year. And overall, in terms of the gross profit margin and -- well, because of the increase in the revenue, last year, -- I mean, the gross profit amount was talking about almost HKD 2 billion, but this year, 2024, increased about HKD 1.2 billion to HKD 3.2 billion. I think it shows that, well, we -- FEC has built up a foundation or infrastructure that we are able to deliver sales of property and also the recurring business to reach obviously HKD 10 billion revenue company. This page -- well, we are quite diversified in terms of the location -- well, but we are focused on our business. The business is talking about the sales of property, hotel mainly and recurring business. Also, we have car park, gaming, entertainment business. A lot of bondholder, equity holder are worried about our -- the impact on the forex. This page, I want to show that, well, yes, of course, we are diversified. Of course, we have the impact. But let's say, assuming the exchange rate remained constant and changed, net asset value, what is the impact. If everything unchanged, I mean, the exchange rate unchanged, the net asset value will increase HKD 452 million. In terms of the P&L, profit will increase HKD 47 million. I think, well, this is -- well, personal point of view, this is not a big impact. So I think the reason is that we are quite diversified. So we established our cushion to absorb any impact from that end, but we have another end in terms of the favorable. This page, a lot of people are asking this page. So we disposed some noncore development coming into completion, it shows the liquidity and balance sheet position as well. Last financial year, 2023, the current liability within a year, talking about HKD 21 billion. But this year, 2024, we improved a lot and reached almost HKD 13 billion [Foreign Language]. I think it's -- well, in particular, we have a page talking about this current liability. So let's talk about it later on. So in terms of the total bank loan, we improved about HKD 4.5 billion in a year to HKD 27 billion. The net debt, we decreased about HKD 3 billion to HKD 22 billion. The total equity reached HKD 33 billion, mainly due to 2 reasons: the exchange movement and also the -- some of the hotel revaluation change. So you can see, well, from an adjusted net gearing rate perspective, last year, it was 74%. This year, we looked at 68%. So it dropped about 6%. Net leverage rate, which is talking about the net debt over the adjusted total assets, 35% around, very stable, yes. And due to this year, we have -- I mean, we have Palasino listed in Hong Kong. So as at end of March, the market value of the Palasino of our own shares, right, compared with the cost that we own, we have -- we noted a premium. So when we put back to the balance sheet, we note that the net gearing ratio will further increase -- I mean, will further reduced to about 63% as well. So I think it help a lot on our -- I mean, the -- demonstrating, well, the shareholder value and also the strong balance sheet in terms of the gearing ratio. Just like I said, we would like to have a page talking about this short-term liability, current liability. During -- well, as at the end of March, we still have a turn at HKD 12 billion short-term liability, in which we show a breakdown, corporate, secured mainly on the corporate hotel car park, which is talking about HKD 4.4 billion. I think we are looking for -- some of them will be paid down, and most of them, I think, will be looking for refinancing. Honestly, in particular for the hotel and also car park assets. I think the hard time has been over. Nowadays, in particular, well, there are a lot of merchant banks here, right? So I think your advertising actually improved a lot on the hotel asset in particular. So I think when I come to you talking about this refinancing, don't say any hard time or a difficult time, okay, please help and support. Property development, which is talking about the project loan. Once we completed, pay down the loan, get the cash back, so this is -- depends on the completion, right? So it's, of course, very, very much manageable. Corporate loan, a lot of banks worry about this because this is unsecured, which is talking about HKD 4 billion -- HKD 4.3 billion. In fact, this HKD 4.3 billion is as at end of March, April, May, June, now almost 3 months. We have paid down HKD 1.1 billion already. So the remaining HKD 3 billion will be coming to be refinance it or will be paid down. Loans with repayment schedule, I think is ongoing payment. Demand clause is academic. Some of the bank loan in particular for some old bank loan, they have -- well, for example, 3 years bank loan, 5 years bank loan, but they have a clause saying that, well, this is the demand clause. So well, according to the accounting standard, we have to pay because there is -- even though this is 3 years bank loan, more than a year bank loan, but there is a clause -- demand clause anytime. So we have to classify it as a current liability. In fact, we never encountered a demand clause for the -- I mean, the call from this amount -- I mean, from this classification. 13 -- Page 13. This is what we are going to do in order to reduce the debt level. We're, of course, focused on monetizing the existing development. Like I said, well, the inventory talking about HKD 6.1 billion as at end of March. In fact, only as at end of March, well, during this financial year 2025, we have noted, well, the presale -- the contracted sales, I should say, because this is all completed stock. Mount Arcadia in Hong Kong, Manor Parc in Hong Kong, in aggregate HKD 1.3 billion will be scheduled to complete this year -- this current financial year. And some other several major projects reaching completion and also settlement stage. Aspen, this project is a mixed-use development, consists of 502 apartments in which we sold a half already. So we are -- I think we are -- during the year, we will be receiving almost HKD 2 billion plus. Hyll on Holland, in fact, we have issued the handover notice June, 2, 3 weeks ago. And in fact, it's starting to be hand over as well. The bank loan has been paid off already a few days ago. In fact, the cash flow coming back on our pocket. So we'll keep on selling this -- I mean, completing this property development. Actively selling the noncore assets, car park, hotel earmarked. And also, we have -- well, this is -- I think we have the announcement as well in May. We entered into a contract to sell the car park in Boundary Farm in Manchester, which is talking about GBP 17 million, and we are expecting to be completed in end of August, hopefully, hopefully. And we also consider to dispose our long-lease residential development in Baoshan, Shanghai and -- yes. Upcoming launch, there will be Falcon. Falcon, we launched the project, which is talking about 189 units in late March. Around 3 months now, we sold out 50% already -- presold 50% already. I think we will be keeping on this kind of launch. In fact, overseas sales of -- I mean, in terms of the sales of property, everywhere booming, honestly, except Hong Kong and China. But in fact, we don't have much in China. Expected to launch as well, The Pavilia Forest in Hong Kong [Foreign Language]. And also 640 Bourke Street in Melbourne. I think we will be launching these 2 projects soon in the coming 2 months. The GDV as a whole, talking about HKD 10.4 billion. And also, we are expecting the completion, and we'll be opening the Queen's Wharf integrated resort in Brisbane, second half of this year, which will be giving us more further stable income and cash flow as well. Page 14, well, that is what we have in our pocket. Liquidity level, which is talking about HKD 4.9 billion, including cash, bank -- investment securities and all the undrawn facility for corporate use and also the construction development, which is talking about HKD 5 billion. So altogether, around HKD 10 billion. And unencumbered asset -- hotel asset, 4, and the market value is talking about HKD 500 million plus and unsold inventory, HKD 6 billion. And also, we have some capital commitment, which is talking about hotel and some other investment property, which is talking about HKD 1 billion. In fact, most of the projects are coming into quite a final stage. So we are -- I think we are -- in terms of the capital CapEx, I think it's actually coming down a lot even this year and so on. The following section, which is the overview of the operation, property development, may I pass to Wendy to talk about it?

Yes. Thank you, Boswell. Good morning, everyone, and thank you for all your continued support. I will now take you through our property developments updates. Our 3 key strategies for property developments are focused on project execution and early completion to enable early revenue recognition, strategic debt reduction and cash flow optimization; and finally, leveraging a robust pipeline for sustainable growth. By implementing these strategies globally, we have successfully navigated challenging markets conditions and achieved a remarkable achievement in our property development. Our revenue was grown by over 91% year-on-year, reaching HKD 6.8 billion. FEC has a very healthy pipeline of over $65 billion. This ensures long-term growth and stability of the next 6 to 8 years. We have accumulated strong presales, securing a strong revenue stream of over HKD 11 billion. We are devoted to prioritizing early completion of projects to ensure early revenue recognition and to strategically reduce our debts. This commitment is evidenced by our significant debt reduction of $4.5 billion. Australia is one of our principal revenue streams characterized by a shortage of housing supply and strong rental yields. Despite the challenges posed by COVID-19, we successfully launched and presold projects in Melbourne, Gold Coast and Brisbane. We regard Australia as a long-term revenue stream for our FEC group. One of our main revenue stream this year is West Side Place. Our recent completion West Side Place Tower 3 and 4 consists of 1,500 apartments located within the Ritz-Carlton and Dorsett Melbourne precinct. This development features a GDV value of $5.6 billion. We have already settled over HKD 3.5 billion inventory. In fact, this financial year, with combined Tower 1, 2, 3 and 4, we have already settled over HKD 4 billion and have used the proceeding to pay off bank loans. Our next project, Perth Hub and Dorsett Perth. This is actually the first project built by FEC Construction Australia, which we established last year by utilizing our in-house construction capabilities and our global supply chain. We are very proud of our team for delivering this project on time and under budget. With this significant achievement, we will be rolling out across Australia nationally. Perth Hub has presold 88% of its units and will be completing 314 apartments by the end of this calendar year with an expected GDV of HKD 803 million. Brisbane. Queen's Wharf Brisbane is a luxury integrated resort in Queensland, occupying 10% of the Brisbane CBD. We are very excited to announce the soft opening of this AUD 3.6 billion project, which is scheduled to be opened September this year. The opening will include the casino floors, retail spaces and The Darling Hotel. And our residential Queen's Wharf Residences Tower 4, very strategically located on top of this integrated resort in which we hold a 50% stake. Queen's Wharf Residence comprises of over 600 apartments with an attributable GDV of $1.5 billion. The apartments are 100% presold and will be completed early next calendar year. Aspen in London, this project is situated in the heart of Canary Wharf. It is the third tallest residential building in the U.K. with 65 levels. Aspen offers a breathtaking and magnificent view of the Greenwich Park and the City of Canary Wharf. Consistent with our strategy on early revenue recognition, we have accelerated completion and initiated the early handover of the first phase in May last month, which consists of the first 20 floors and is 95% presold. Aspen includes over 500 apartments and a 235-room Dorsett hotel set to open early next calendar year with a GDV of HKD 4.3 billion. This is yet another testament to our ongoing strategy of excellence in project execution and early completion. We will also be anticipating to fully discharge the construction loan of over HKD 2 billion by the end of this calendar year. Victoria North, as many of you may know, is a mega-scale regeneration development project in Manchester and one of the largest regeneration projects in the U.K., spanning an area of more than 390 acres, which is equivalent to 17 million square feet. This project will deliver 20,000 apartments over the next decade. For Victoria North up to today, we have completed and are on track to complete within the next 12 months, a total of 1,500 apartments, which is ahead of our scheduled planning. This achievement demonstrates our capability in delivering large-scale regeneration developments, which also opened doors to many, many more opportunities with joint ventures with the councils and enable us to recently win the attractive deals like the Old Trafford, which is right next to the Manchester United Stadium. Victoria Riverside, within the Victoria North. This project consists of 3 towers with a total of 634 apartments. Phase 1, which includes Tower B and C with 340 apartments, is 100% presold and is expected to be completed early next calendar year with a GDV for this phase of HKD 826 million. Over the past 3 years, Manchester had witnessed consistently high demand for homes and with price soaring by around 15% to 20% since the end of 2019. Numerous studies have indicated that Manchester is one of the fastest-growing city in the U.K., outpacing many other parts of the country. In March this year, we launched the Falcon project in Victoria North. And within 3 months, we have already presold and reserved 80%. The project has an expected GDV of HKD 653 million. Singapore, as Boswell have mentioned, early this month, we have initiated the handover process of Hyll on Holland, which is 100% sold out with an expected attributable GDV of HKD 526 million. Within the next 2 months, we will fully hand over all apartments. Like what Boswell have mentioned, in fact, just 2 days ago, we have fully discharged the bank loan for this project. Going to Hong Kong, Kai Tak. We have once again implemented the same strategy and expedited the early completion of the sales of Kai Tak office, which has enabled us to crystallize early revenue recognition of HKD 3.38 billion in March this year. This development also includes our Dorsett flagship hotel in Hong Kong, featuring 373 rooms and retail spaces with excellent connectivity located right adjacent to the sports park. The entire development is set to be completed in the next few months. Finally, riding on the government's role back on cooling measures to spur sales and Hong Kong properties, we have expedited the launch of Pavilia Forest on the Kai Tak runway, which consists of 1,300 apartments. We will be launching very, very soon to the market at an unbelievable price. So if you are thinking of buying a beautiful apartment in Hong Kong, please keep an eye on this. [indiscernible] but it's very soon. So please wait for that. And like Boswell have mentioned [indiscernible] in Shanghai, right opposite Shanghai [ Dorsett ]. We have over 4,500 apartments. We are in our final stage talk with a very well-established company in China. This will be a large revenue income for FEC in the near future. To conclude, our projects across Australia, London, Singapore, Malaysia, Manchester and Hong Kong demonstrate our global reach and our ability to deliver high-quality developments on time and within budget. The successful launches and early completions across these regions are a testament to our team's dedication and expertise. We are confident that our strategic focus on early project completion, debt reduction and leveraging on our robust pipeline will continue to drive sustainable growth and stability for FEC in the years to come. Thank you all for your time and attention. We look forward to sharing more successes with you in the future. I'll pass it back to Boswell.

Yes. Well, let me talk about the hotel as well on the following pages. On 27, which is Page 27, yes, Page 27, which is talking about the overview of the operating data of the financial year 2024. Well, the overall occupancy, RevPAR, actually, we noted a growth, except Australia, I think, obviously, due to the reason of the new opening of Ritz-Carlton Melbourne and also Dorsett Melbourne. They -- well, these 2 hotels were opened in March last year and also April last year. So in the first few months, we are actually picking up the ramp-up period. To be frank, in the last quarter of this -- of the financial year 2024, we noted a great improvement already. I think -- well, we believe that there will be a lot of improvement as well as this is going to be 1-year impact, right, the full year impact, I mean, in the financial year 2025, that will be having a lot on the revenue as well. So due to this growth of the expecting performance in Australia as well as the rest of the places, in particular, Hong Kong because Hong Kong always -- in terms of the hotel operation, Hong Kong is always the major revenue contributor. So I think in the coming year, it will contribute a lot on this recurring business, cash flow stream. And in fact -- well, during the financial year 2024, in terms of the revenue, [ it's grown ] a lot to HKD 2 billion already, yes. Wendy also talked -- mentioned about this, we have the commercial office sold out end of March. Also, on the other hand -- well, on the same piece of land, we have Kai Tak -- Dorsett Kai Tak to be open as well. 373 rooms, that will be our flagship hotel in Hong Kong, and we're expecting to open in the second half of this current financial year, 2025. Upcoming hotel completion also we have Dao by Dorsett North, London, which is actually located with our Hornsey Town Hall development, which is also the residential development. Small hotel, well, 67 rooms. Again, this is Dao, and this is the second Dao hotel in U.K. The first one, it is -- it was opened 2 years ago, maybe in Shepherds Bush. Another hotel in London, Dorsett Alpha Square Canary Wharf, which is 231 rooms. Again, this is a mixed-use development. Like I said, well, we have the Aspen residential. Within this development, we also have a commercial -- very little portion of commercial. And also, we have the -- this hotel in the Canary Wharf. So we're expecting to be opened in the second half as well. Recent open, Ritz-Carlton Melbourne, well, I don't want to talk about this. I've mentioned quite a few times. Dorsett Melbourne as well. Altogether, these 2 hotels located in the heart of the -- I mean, the CBD of the Melbourne City, talking about 600 rooms altogether. On this Page 33 and as at end of March, we have 800 -- 8,000 rooms in operation, and we are expecting to increase by 2,000 room by -- well, in 2 years' time. I think FEC Dorsett are actually quite expertise, if you don't mind, I say that, in hotel operation, hotel management. We are able to time promptly in a good way, yes, for the opening. 2 years ago, while we opened the Dao hotel, obviously, the U.K. performance picking up, I mean, in terms of the hotel. Hong Kong is picking up as well. So we are having another flagship hotel opening in Hong Kong later this year. Australia, also U.K., Hong Kong, we looked at, well, this is a good trend in terms of the hotel performance. So we are time -- we timed the schedule and open -- of course, we have the construction planning a lot behind, but we time quite smartly in order to build up our recurring business portfolio. Car park. Car park, well, this is a light business -- light asset business model. As at end of March, we have almost 120,000 car park space and our management -- in which, almost 90% managing the third-party contract -- third-party management contract. So it's across Australia, which is our major jurisdiction that producing this kind of revenue, also New Zealand, U.K., Malaysia and also Hungary as well. Gaming...

Sorry for the car park, just to add. The car park at Manchester Airport is under contract, which Boswell have mentioned. And we have 2 Australian properties that we have sold in the last 12 months. All properties were sold at above current value. So -- and for our overall strategy for the Care Park continues to focus on disposing of assets that have maximized in value in order to recycle our working capital, like what Boswell have mentioned. So we want to be more asset-light and reduction of overhead and also the technology platform. So the new Care Park app is actually in its final stage of testing and will be launched in the second quarter next year. This will empower Care Park to be a market leader in the technology landscape within the industry. It is expected that the new app will be the backbone of the continued growth and the profitability of the group. Yes, please.

Yes. Gaming. Palasino listed at the end of -- listed in Hong Kong Stock Exchange end of March, very steadily revenue growth noted for the financial year around HKD 400 million. Well, as of now, after year-end, we are holding Palasino 72%. So we obviously will control both -- I mean, under our consolidation, right? And we also reinstated the gaming license in Malta and delineated the plan to soft launch its services during this financial year. Queen's Wharf Brisbane, well, I think that will be opening in the second half. It's a mega project, not only the entertainment and also the hotel retail F&B. We also have 3 hotels, Rosewood because of one of our partner is Chow Tai Fook, and also, The Star Grand and also our hotel, Dorsett, altogether it's talking about around 900 rooms. And FEC with a holding stake, 25%. And Wendy, do you want to add anything?

Yes. I think regarding Palasino, we are positioning Palasino as a gaming platform and grow through organic means and acquisition. We are looking at a 2-pronged approach, land-based operations and online. And also, I think what Boswell just said, there are some one-off expenses on the listing and restructuring prior to IPO. For Queen's Wharf Brisbane, actually, I just went 2 weeks ago. It took me 3 days to walk the whole site. So it is a really humongous project, but it's looking very good. The casino floors, all the casino tables, slot machines are all in place, and they are all -- I've never seen something so modern, so high tech and sleek. So you have to go and see it. Within the casino floors, there are 7 F&B outlets and also within the retail areas, we are opening another 7 restaurants this time. And we are also opening the -- just what we said The Darling Hotel of the casino.

BC. BC holds a 55% -- 53% stake. During the year, we issued -- I mean, BC issued RMBS reaching AUD 1.5 billion. There is strong support from the blue-chip shareholder. And post year-end, we also issued in June -- actually 2 weeks ago, we also -- BC also issued another RMBS, which is talking about AUD 530 million as well. Prospect, I think that is a very important page. Balance sheet management, like I said -- like we said, we continue to reduce the debt level, finance cost during this high interest environment. And hopefully, the interest rate will be coming down this year. And also, obviously, due to our visibility of the presale value, I think a lot of projects is going to be completed and that will be helping our cash flow as well further. Focusing on the monetizing and completing existing development, earmarked it noncore. New launch opening of the property development projects, I think, is a lot of helping the -- managing the balance sheet. Property development business, strong unbooked presale and pipeline shows a good visibility. Well, we mentioned it quite a lot. Also, we are expecting to launch Pavilia Forest and 640 Bourke Street in Melbourne. Actively pursuing next phase of the Victoria North masterplan in Manchester. And the sterling GBP 300 million mixed-use development in Trafford, that will be helping us as a medium-term cash flow and the revenue regulation. Launch of the Falcon in Manchester in end of -- I mean, late March, which is not a big project, honestly, well, it's talking about 189 units up to 3 -- these 3 months, end of June, 2, 3 days earlier, it sold out -- I mean, presold 50% already. I think that's just the benefit of the diversification. I think in Australia, in particular, Perth, Brisbane, Gold Coast, Singapore, while very hot, Manchester, we almost all sold out, almost all sold out in terms of our property development. We also will be actively selling our existing stock of HKD 6.1 billion, which -- well, we just mentioned in previous page, HKD 1.3 million -- HKD 1.3 billion has been scheduled to be completed. Well, this is contracted sales, right? Hotel operation and management, new hotel will be attributable to the upcoming year in terms of the cash flow, revenue recognition and all that. Also, we will be launching Dorsett Kai Tak, that will be adding to the -- well, the hotel -- I mean, the revenue contribution. Car park continue to phase-out some underperforming and mature cark park assets, recycle the asset as well. Secure additional management contract. Palasino, well, entered into an MOU with a strategic partner to explore operating prospects in May, just. Malta online gaming license reinstated and the soft launch will be happening this year. Just mentioned the opening of the entertainment investment in Brisbane in the second half will be -- that will be another source of the recurring business and cash flow. Sustainability, we did a lot of these ESG environment -- well, I mean, ESG topic, environment footprint, employer of the choice, placemaking, contributing to the community. I think we also have 2 sustainability linked loan and also the green loan altogether is talking about HKD 1.6 billion. We will continue to build up the ESG and spend an effort to create a long-term value on Page 44, yes. And 45, which is talking about some awards that we have achieved. And we are quite pleased to have this recognition from the market and from the -- from some organizations as well. I think that's just the end of the presentation.

[Operator Instructions]

In fact, well, we have the box -- how would you call that? The question box on the computer, online. Some questions. [Foreign Language] That means the U.S. perpetual bond. [Foreign Language] Okay. I think this is a very good question. I think a lot of banks, bondholder will ask. I think the perpetual bond is actually considered as equity. So we have to calculate. We have to balance the bank covenants and also the balance sheet structure as well. I think we have -- our intention is to call, but may not be the whole [ chunk ] because this is -- well, when you calculate, put back the perpetual bond back to the bond issuance or reduce our -- I mean, increase our debt level, that will be the impact on the bank [ covenants ]. So we have to calculate. But the intention is, yes, we will do that partially. So...

I think Boswell, we'll wait until we look at the numbers.

Yes. But the answer is, it cannot be finalized because we need to wait and see in the coming few months and a lot of assumption of what I'm just saying just now, yes. Another question from the box. Just curious if the group will increase -- will invest in data center, storage, warehouse, student accommodation, how does the group see Hong Kong future development? I think I answered partly. And I leave the [ other part ], yes. Data center, storage, warehouse, sorry, we don't have. I think we are quite diversified in terms of the location. But in terms of the business, we are quite focused. Property development anyway, in the medium term, long term is talking about 60%, 70% of our revenue. That is for sure. And the remaining 30%, 40% will be recurring income business, in which hotel will be the [ big half ], yes. So we were focusing on this. But for the student accommodation, I think we are exploring the opportunity. This is -- we have the hotel, we have the Dao, we have the professional team, we may consider to explore some further -- explore the market of this student accommodation in U.K., in Hong Kong and so on.

Yes. I think we're more focused on what we are good at, at the moment. And there are a lot -- many opportunities abroad. If you ask me on Hong Kong properties, of course, we have [ probably ] some 1,300 apartments to go. So we have more than enough inventory. Looking at all the numbers recently, the margin we get from overseas are much higher. So of course, I mean, Hong Kong is our base, we'll come back to Hong Kong. But at the moment, I think we are probably much stronger in Australia and the U.K. And we are looking at other large regeneration projects where we work with the councils, and they will give us grants. And it just makes a bit more sense at the moment, yes.

The other question from the box. [Foreign Language] Well, let me answer first, right?

Sure.

And in case you have some...

Of course.

Add up. I think we stick to the -- our dividend policy, which is talking about 30%, 40%. In fact, compared with our adjusted profits, what we are proposed now HKD 0.14 for the year is actually more than that. So hopefully, once we are having our project completed more and more in the future, actually since 2024, which is over HKD 10 billion already. I think the chance is, yes, of course. But yes, we stick to our dividend policy, yes.

Yes. I think a lot of our shareholders look at yield. So to us, of course, we want -- we value our shareholders and we want to keep it consistent, right? I'm very hopeful with all the presales that we have and all the contracted sales and our future developments that we would always at least be consistent of what we are giving, which is this year is 14%. Is that right, Boswell? [Foreign Language] it's 14% yield, right?

HKD 0.14.

[indiscernible] is 14%. Yes.

I think it's good yield as well, right?

Yes.

Okay. Another question from the floor -- I mean, from the box. [Foreign Language] Well, I think we mentioned this in the last interim results. We targeted to reduce the debt level, HKD 6 billion, of which -- I mean, the HKD 6 billion, HKD 4.5 billion has been achieved with our effort of the whole team of FEC. I think we keep on reducing the debt level. We can't promise exact number in the coming half year and then 1 year later. But obviously, I think during the almost an hour presentation, I think, obviously, we have a lot of projects coming up and also the recurring business are actually showing the growth already. I believe that, well, the debt level will be coming down, yes. Another question, will you call the perpetual bond? I think we answered it already. What is the average interest rate -- interest cost, interest rates? Very sensitive question.

Yes.

A lot of bankers here. But we also mentioned this in our -- I mean, in the final result, if you have time to read, all right? But I think thanks. A lot of the support from the banks. I mean, thanks -- support from a lot of banks. I think in terms of the -- even unsecured, we were talking about LIBOR plus, maybe -- LIBOR is quite high now, right? Maybe 1-point something, but almost closer to 1.8%, 1.9%, but I think it's still a good rate, yes, to company. Some other question also talking about the -- I think it's a duplicate, yes. And any questions from the floor?

Okay. This comes to the end of our investors' presentation. And thank you again for joining us. See you next time.

Thank you.

Thank you. Thank you very much.