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

Good morning, ladies and gentlemen. Welcome to Far East Consortium International Limited's 2025 Annual Results Investor Presentation. Before we begin, let me introduce the management with us today. They are Ms. Wendy Chiu, Joint Managing Director and Executive Director; and Mr. Boswell Cheung, Chief Financial Officer and Company Secretary. Ms. Wendy Chiu is in an urgent engagement now and not able to join the presentation today. Now may I invite Mr. Cheung to start the presentation. Mr. Cheung, please.

Thank you. Thanks for coming. This is the presentation for the result briefing for the financial year ended 31st March 2025. Yesterday night, we have announced our results and also posted on the website. So for details, actually, you can go up to the -- our company website for the details as well. Today, that is a highlight extract, yes. So the main theme, the key theme for this financial year, the last financial year, I would say, adjusted revenue increased by 3.8% to [ $110 ] billion, and the adjusted cash profit was $266 million. Mainly, well, I would say, about 60%, 70% is actually coming from the property development. Adjusted revenue grew up by 5.3% to approximately HKD 7.2 billion versus last year, HKD 6.8 billion. Main handover, meaning that the new development and well during this financial year, we handed over Aspen in Canary Wharf and also Hyll on Holland in Singapore and Perth Hub in Australia. Also, we've got some inventory settlement. Mount Arcadia in Hong Kong [indiscernible] and also Manor Parc in Hong Kong as well, West Side Place in Melbourne. In particular, we've got Tower 4, which is the joint venture. We own 50%. The attributable, that means the 50% of the revenue contribution from this JV project, Queen's Wharf Residences Tower 4 in Brisbane as well. Total accumulated attributable presale value and unbooked contracted sales approximately HKD 8.9 billion. Increasing price for the Queen's Wharf Residences Tower 5 with more than 60% of the regional buyers accepted. Hotel. Basically, this is HKD 2 billion revenue, grew by 2.3% versus last year. Kai Tak, this is where we are now. Dorsett Kai Tak consists of 373 rooms. That is our Hong Kong flagship just opened last year, calendar year, soft-opened end of September 2024. Dorsett Melbourne, Ritz-Carlton Melbourne, they all opened last year. So full year ramp-up period contributing to the financial year. Also, we've got the first franchise hotel contract, Dorsett by Agora Osaka, Sakai in Japan on the end of March 2025. Car park, gaming, the revenue, well, remained at a similar level. Revenue down by 2.6%. Well, later on, I will explain why we have this decrease in the revenue to HKD 713 million. Gaming, up a little bit, 1.6% to about HKD 400 million, which is very stable. I would say the recurring income, hotel, car park and gaming are actually not only this year and actually in the previous years are very stable, very recurring in nature. Well, just now we mentioned about the adjusted cash profit, $266 million for the whole year. But in fact, in the first half, we noted $33 million. In fact, well, comparatively, in the second half, we increased by about -- I mean, well, the second half noted $233 million. Adjusted revenue, like I said, this is almost first half, second half, almost the same, meaning that we are managing the completion schedule quite effective this year. Total bank loan and notes dropped by HKD 2.2 billion. And the adjusted net gearing ratio dropped a little bit, 1.2 points to 67.6%. Also, we...

Sorry, to note that, I mean, that's after impairment, right? Before impairment, our gearing ratio go down to 65.8%.

Yes, yes, yes. Later on, we have this -- we have another slide talking about this in details as well. Page 6, you can see, well, this is the -- we have -- well, for this year, for the financial year 2025, we noted net loss attributable to shareholders about HKD 1.2 billion, impacted by a few reasons. Of course, this year, previous 1 year or 2 years, finance costs maintained at a high level, honestly, HKD 1 billion. Impairment loss on some property for sale, well, $311 million, mainly on the URA -- I mean, mainly on one of the projects in Hong Kong. Share of the impairment losses recognized by JV and associate, well, this is -- I think in the first half, we have mentioned about this as well. Again, one of the project is our JV project in Hong Kong as well. Continuous progress in the debt reduction with some noncore asset or business disposals. Most of them are actually, you can refer to our announcement, which we have announced, in particular, in April last year and September, we've got this disposal announcement. Adjusted net gearing ratio increased to 67.6% versus last year end of March 2024, 61%. Again, well, before impairment is talking about 65%. So I would say this is healthily improved. Total bank loan and notes dropped, $2.4 billion. During the financial year, we have signed a few contracts and also completed some of them for disposal of the noncore asset and business, completed the disposal in car park, which is in Manchester, talking about GBP 17 million. Entered into a contract to sell of one of our hotel asset and property in North London, which is talking about GBP 47 million. Entered another contract to sell our BC stake. If you remember, BC Invest is our mortgage platform, taking care of our customer in Australia and the U.K. as well. We entered into a contract to sell it in February, which is talking about -- we can cash it out more than HKD 600 million. Entered into another contract, but this is post year-end to sell our Hong Kong mortgage book. We cashed out for HKD 344 million. Also, well, this is one of the highlights as well, restructuring of the investment in our QWB projects, entered into the head of agreement to increase the group interest in this project. Swapping minority stake in the Gold Coast asset for the larger stake in the QWB project and certain hotel, and another car park asset in Brisbane as well. This page, I'm not going to highlight -- I'm not going to talk about line by line, but you can see well, this is the extract of the P&L and also the balance sheet. One of the point I want to highlight is that, well, the adjusted cash flow -- I mean, adjusted cash profit, HKD 266 million versus last year, we dropped a little bit because of the few reasons, some impairments, some margin and so on. Later on, we can discuss this in more detail. And also, we've got some one-off item impairment. In previous page, we talked about the impairment loss on the property for sales on the ECL model, which is coming from a Singapore JV and also share of the impairment loss recognized by associate and also our JV, which is altogether talking about $900 million or $1 billion already. Total bank loans and notes, you can see this is a drop a little bit net balance. I mean, net debt dropped about $2 billion already and hopefully, we can improve it in the coming financial year, as we have some other noncore asset business to sell and recognized and also the core business, in particular on the property development. Accumulated presale and unbooked contracted sales talking about $8.9 billion. On this page, you can see the overall gross margin maintained at a very stable margin. You're talking about increased to 31.8% from last year, 31%. Overall, well, in particular, in the car park business, which shows a great improvement in the adjusted gross profit margin due to the termination of the underperforming some car park contracts. Balance sheet, I think this is one of the pages a lot of investor is like to talk about. You can see, well, this is the result of what we have done for some monetization on the -- of the noncore assets and business. Net debt reduced by $1.3 billion. On the other hand, the adjusted total equity impacted by fuel by several impairment losses I just mentioned in the previous pages. Adjusted net gearing ratio dropped 67.6%. The net gearing ratio before impairment, which Wendy just talked about 65% -- 65.8%, it shows that from last year, well, versus last year end of March 2024, which is talked about 68.1%. Obviously, it dropped a little bit healthily as well. In the coming days, in particular, in this financial year, we expect it to improve further due to some completion of the noncore and core business. Within 1 year, is the current liability, divided into a few category. I think it's a health improvement -- healthy improvement on some short-term bank loan, so about $1.1 billion, in particular -- well, honestly, some -- in particular, some project development loans, which is covered by the sales proceed when -- once we complete the project, actually, we collect the sales proceeds, we directly pay down to the loan settlement. Some strategic initiative, which we have done to reduce the debt level and improve the gearing during the year. And in fact, we keep on going, accelerating the completion of some property development projects. This year, I mean, financial year 2025, we have accelerated Perth Hub and also the Queen's Wharf Tower 4, in particular, Queen's Wharf Tower 4, so that we can book and collect the money as well. Actively monetizing inventory. I think, in particular in Hong Kong, I think if you know BC well, I think during this year, we noted the revenue from Hong Kong sales of property, which is talking about almost $1 billion. It's a big amount because during the year, we got quite a few projects completed and sell. So Mount Arcadia in Hong Kong and also the Manor Parc in Hong Kong. Other than that, we also noted the West Side Place Stage 2, in particular, in Melbourne for good sales of the property development completed stock. Other than that, that is the core business. And other than that, also, we have digested some noncore SM business, well, this is -- I just highlighted in the previous page. On the other hand, on the recurring business perspective, we have optimizing the hotel portfolio for sustainable growth. Ritz-Carlton Melbourne, Dorsett Melbourne, which was opened last -- about 2 weeks ago, March and April 2023. But this year, financial year 2025, we've got a full year stabilization phase. So in fact, it contribute a lot on the hotel portfolio, in particular this year because the ramp-up period, I would say, finished, stability phase ongoing. In fact, the contribution from Australia hotel portfolio grew a lot. Dorsett Kai Tak, this is where we are. The flagship opened last year, yes. And looking forward, we still have another 2 hotels to open in the coming 12 months. They are all in London -- I mean, the Dorsett Canary Wharf London and also by -- Dao by Dorsett North London. We've got available existing liquidity of approximately $7.3 billion cash and undrawn facility, which is obviously exceeding the CapEx of HKD 1.4 billion. Like I said, well, the total cumulative presale and book contracted sales talking about HKD 8.9 billion, which provides very good visibility on the income -- I mean, on the cash inflow in the coming 12 months, 18 months. And unencumbered hotel and also completed stock can be used for increasing the liquidity. The property development, I would like to pass to Wendy to talk about this.

Thank you, Boswell. Good morning, everyone. I will now take you through our property development updates. In this challenging environment, we continue to accelerate project completion to enable early revenue recognition, optimize cash flow, strategically reduce debt levels and finance costs. We have a robust development pipeline of around $61 billion to support sustainable growth in the next 6 to 8 years. Hence on my heart, I really want to say thank you to all my colleagues for their dedication and teamwork to achieve this year's result. Actually, just a few weeks ago, our Head of Australia, Craig called me, "Wendy, I'm going to be on the holiday." Just to let you know, I know you call me anyway. So here you go. That is our work-life balance. But at the end, we're all one happy family. And I just want to say thank you for all the dedication. So like I said, despite the ongoing challenging environment in the property market in this financial year, our adjusted property development revenue has recorded $7.2 billion, which is a 5.3% increase compared to year-on-year. Another note, I think, to look at is really, I mean, looking at before depreciation, we can maintain our profit margin at 26% higher than last year. This year, of course, again, because of depreciation and impairment, it's down to 21%. Our mainly contributed by like what Boswell has said, Aspen in London, Hyll on Holland in Singapore, Perth Hub, West Side Place Melbourne, Mount Arcadia and Manor Parc in Hong Kong, our joint venture project in Queen's Wharf Tower 4, Projects are expected to complete in FY 2026 with an expected attributable GDV of approximately HKD 12 billion, of which approximately $5.1 billion was presold. As of 31st of March 2025, we have secured approximately $8.9 billion in presales and contracted sales as our future revenue stream. Aspen at Canary Wharf, Consort Place is one of the key property development revenue contribution this year. It is the third tallest residential building in U.K. and Europe. It has a magnificent view and has a GDV of HKD 4.3 billion. It has commenced completion a year early in phases and started the handover process in May 2024. Approximately HKD 2.1 billion have been settled in FY 2025. Completed and settled over 50%, the remaining GDV is approximately HKD $2.2 billion. This is an example of how we've accelerated revenue recognition a year earlier and allowing us to recover cash flow earlier to repay the construction loan, reduce finance costs and help lowering the gearing ratio. Another revenue contribution, Hyll on Holland in Singapore was completed and initiated the handover process in June 2024, with a total attributable GDV of HKD 3 billion. We own 80% stake in this project. And as of 31st of March 2025, all units have been settled. We have now fully sold all our residential projects in Singapore. Unfortunately, as many of you may know, with the 60% stamp duty and the vacant tax, unless we find very, very attractive opportunities, we will be focusing on other areas. Perth Hub is completed and commenced handover process in December 2024. It's well located adjacent to the arena. It is a mixed-use development. It consists of 314 residential apartments, with a total expected GDV of approximately $759 million. This is actually a showcase of our first project completed by our FEC construction team. We have completed under budget and not only on time, but a quarter of a year early. This is a great testimony for our FEC construction team's capability and also another example of our early revenue recognition. Approximately $713 million have been settled in FY 2025. All remaining units have been subsequently sold out post FY 2025. Next one is Brisbane. In Brisbane, Australia, Queen's Wharf Residences Tower 4 is actually on top of our integrated resort. We hold a 50% stake in the residential component. It comprises of 667 apartments with an attributable GDV of HKD 1.4 billion. The development has been completed and handover process commenced in March 2025. Notably, Queen's Wharf Residences actually set a record in Australia with over 321 apartments of GDV value, $1.3 billion settled in 1 day and the construction loan fully settled within a week. This is another success story we have in Australia. The remaining attributable GDV for sales was approximately $432 million, of which 92% was secured as contracted sales and are expected to be settled in FY 2026. In response to the rising costs and strong demand in Brisbane, Australia, we have revised our agreements with a price increment of Queen's Wharf Tower 5 to enhance our project value. Actually, before we did that, we have full confidence we have done a lot of market research, and we know that with the ongoing demand and of course, the shortage of supply, this will be a good -- it will be very good value. We have, at the end, increased 12.5% on our selling price and over 60% of our original buyers have accepted our revised pricing. We intend -- actually, in fact, I think we've increased 15% now and further increase the selling price for the remaining apartments. In addition, our project department has secured planning approval for increasing 4 levels with 28 additional units. Along with the increase of the pricing, we have increased the total GDV from HKD 4.6 billion to HKD 5.3 billion. This adjustment strengthened the project's long-term value, in particular, for the upcoming launch for our Queens Wharf Tower 6 while ensuring its alignment with market condition, allowing us to maintain a healthy margin of over 20%. In fact, up to now, it's around 25% to 26% profit margin. We are very confident by completion of this project in 4 to 5 years, we will fully presell. Tower 5 and 6 is built by FEC Construction. And up to today, we have saved over HKD 120 million of construction costs. West Side Place Melbourne, I'm sure everyone is very familiar with this project. We continue with our existing strategy by actively selling our completed inventory. West Side Place in Melbourne, Australia is another key revenue contributor. Over the past 2 years, we have successfully relaunched and settled over 1,000 apartments in this development. As of 31st March 2025, the remaining GDV available for sale was HKD 1.3 billion. We are consistently settling over 40 apartments a month and expected to sell out this year -- in a year. I also mentioned about our Hong Kong projects. This is another example of our execution and actively selling our completed inventory to recycle cash and lower gearing ratio. It's important to note, I mean, previously, our profit margin in the previous years in Hong Kong is fairly high. So we do have a quite a big buffer to maintain a healthy margin even if we initiate sales incentives. So despite the challenging market condition in Hong Kong, our sales and marketing team has pushed through and able to achieve and recognize over $950 million for 2 Hong Kong projects, namely Mount Arcadia and Manor Parc. We will continue our execution to monetize our existing inventory in the coming years. Upcoming, we have several projects which are reaching to completion. In Manchester, we have successfully delivered 2 projects, New Cross Central and Meadowside, and we have fully sold all inventories this year. Our average selling price has actually went from below GBP 400 per square feet to our latest launch at GBP 540 per square feet with a 35% increase. We are continued bullish with the Manchester market with the increased rental yield plus our track record of our increase on our average selling price. We are hopeful the remaining 17,000 units will be a cash cow for FEC. Given our track record, government has continuously support our schemes and infrastructure and have just announced a GBP 95 million grant package for a new tram stop within our development. And we have also secured another GBP 6.9 million to develop the park opposite Victoria Riverside, which will be very beneficial to the community. Victoria Riverside situated within the Red Bank neighborhood in Victoria North development. Our first phase is expected to be completed in the next couple of days with a total GDV of approximately HKD 1 billion, approximately 91% presold. Upon completion of the first phase, we expected to fully repay the construction loan and for the whole development, while the second phase, which is expected to be completed in late 2025, will be debt-free with a GDV of HKD 1 billion and already approximately 98% presold. In Hong Kong, the Pavilia Forest, the site in front of our development will be turned into a depot for the smart and green mass transit system in Kai Tak. It is expected that the [ GMTS ] vertical alignment will be no more than 20 meters. Although the government will explore granting property development rights at the proposed depot site, it is expected that our development above the 10th floor can enjoy the beautiful Victoria Harbour sea view for a very, very long period of time. Our development consists of 1,300 apartments with a total GDV of approximately HKD 12 billion, in which we own a 50% stake. To date, we have presold approximately 45% of our units. I think we are definitely one of the fastest-selling development in Kai Tak as of 31st March 2025 with a GDV of HKD 4 billion, of which around 84% is under the cash payment scheme. The first launch selling price is average of around over $18,000 per square feet, as we have only launched the lower levels. We are confident that our pricing will increase as we go up each levels with a panoramic view. To increase our overall average selling price, as shown in our new launch with our recent transaction reaching up to HKD 25,000 per square feet. The development is expected to be completed on or before August 31, 2025, which is in the next 2 months. In FY 2025, we have also launched a few projects in Manchester and Melbourne. In Manchester, Red Bank Riverside consists of 7 buildings adjacent to Victoria Riverside, we launched 1 of the 2 towers, Falcon in the late March 2024 with 189 units and a GDV of $682 million. We have received an overwhelming positive responses, with over 84% presold or reserved within 3 months. The remaining units will be launched upon Falcon completion with a higher price. With the success of the launch, we have held the remaining units and targets to relaunch with a higher price for the -- upon Falcon's completion. So instead, in view of this hot market, we have quickly scrambled around, come up and launched another new tower, Red Bank, the Kingfisher with 322 units and a GDV of HKD 1.2 billion. We have already presold around 50% of units as of March 31, 2025. As mentioned previously, we have increased our average selling price to over GBP 500 per square feet within the Manchester recent launch. For Australia -- in Melbourne, Australia, again, given the high demand on residential and the shortages, we have decided to launch in February 2025, a super high-end luxurious residential tower in Melbourne. This is the highest per square meter project in whole of Melbourne at a roughly AUD 17,600 per square meter. This is a mixed-use development project at 640 Bourke Street located in the heart of the CBD, adjacent to West Side Place and Upper West Side development. It will consist of 68 levels with over 600 apartments units. The total expected GDV for this project is around $3.8 billion. As of today, we have already reserved and presold over 40% of units. The development is expected to be completed in FY 2029. With this weight, we are confident that we will be fully sold out prior to completion. All in all, on an overall basis, summing up, we at FEC are fully confident that our strategies and property plans and project plans will continue to drive and drive sustainable growth and support stability for our company in the years to come. Up to now, we have around HKD 61 billion in development pipeline. As we continue to drive and achieve more and more early project completion, it is expected that there will be continued success in our liability management and debt reduction. Thank you all for your time and attention. We look forward to sharing more successes with all of our investors in the near future. I'll pass it back to Boswell.

Yes. Let me go through the Hotel division. On Page 27. Our Hotel division actually consists of Dorsett, which is the big portfolio and also our Palasino. Palasino holding about 5 hotels and the whole portfolio of what FEC hold actually 43 hotels, in which you can see the performance of the -- our major contributor, which is Hong Kong. I think Hong Kong, Malaysia -- Hong Kong, Mainland China and also Singapore, we noted a drop in terms of the RevPAR. But on the other hand, we also have some new hotel, for example, the Dorsett Kai Tak is one. I'm sure and I hope that -- well, the ramp-up period has finished, and we are actually in the stability phase already. And hopefully, on a full year basis of coming financial year 2026 are actually providing help a lot on the performance in Hong Kong as well. I was told this morning, the occupancy tonight is 100% because of -- I think it's because of [ Kai Tak ]. And this few day coming up is also a very, very high, more than 99%, 98% occupancy as well. I think this hotel definitely is our flagship and hopefully reflected in the numbers. And hopefully, we can present in the next year, Hotel Hong Kong, actually another big new page, all right? So -- but on the other hand, we noticed Malaysia and also Australia looked at a very good improvement, in particular in the Australia. Like I said in the previous page, Dorsett Melbourne, Ritz-Carlton Melbourne are actually, again, well in the stability -- stabilization phases already. The business are coming stabilized. And so year-on-year increase -- in terms of the RevPAR increased by almost 20%. That is a great improvement and hopefully, we can maintain. But overall, I think the FEC Hotel division noted at $2 billion revenue, which has increased about $2.3 billion versus last -- 2.3%, which is very stable. In the coming -- well, on the next page, you can see this is the Dorsett Kai Tak, consists of 373 rooms, very convenient next to the stadium. I think in particular, the guests on the floor know about it because I'm sure you just now you have seen the stadium next to it. So the impact from the performance constant actually helping a lot on the contribution on the result of this hotel as well. And that also, we have the -- this is the first franchise hotel in Japan. We have signed a contract at the end of March this year, the Dorsett by Agora Osaka Sakai. The room number, we're talking about 321 rooms. So again, this is once again demonstrate the light asset business model. And we are glad that we -- I mean, we've got the dolphin, that's very cute. You can see it in picture. Again, also in the first half of this financial year 2025, we have entered into a contract and acquired a 10% stake in the hotel in Singapore, which is talking about 313 rooms. And we also -- we have a plan, our intention to increase by 100 rooms as well. And also, we've got a contract in Fiji, Dorsett Fiji talking about 216 rooms. We have signed the hotel management contract and target to open in a few -- 3 years later on. In the coming year, financial year 2026, we've got 2 hotels to open, the Canary Wharf and also the North London, which we have talked about as -- previous page. At the end of March 2025, we've got more than 9,000 rooms in our portfolio, while 2 years down the road, we will increase 1,300 rooms by end of March 2027, mainly it's actually coming from Australia and also U.K. For car park, well, again, this is one of the key recurring income, which is very stable as well. The revenue talking about around $700 million, decreased by 2.6%, but I want to highlight is that we are going to phase out some of the underperforming car park space. So you can see at the end of March 2024, we have managed the third-party management contract is talking about 115,000 car park base. But 1 year after, well, end of March 2025, we are down by 10,000 contracts. But in fact, the revenue dropped a little bit. Well, honestly, we cut off some underperforming contract. On the other hand, we increased some contract with which is meaningful to us. So net-net, we look at the adjusted gross profit margin increased to 28%. That is the -- still in the process, yes. And hopefully, in the coming year 2026 is stabilized this phasing out the underperforming contract process as well. On the other hand, some noncore asset, well, the car park in Manchester, like I said, we previously talked about the GBP 17 million, which we have sold and we completed the contract, I mean, complete the disposal already. We continue to divest some mature car park to unlock the capital value and hopefully, we can reduce the debt level as well. Gaming park, Palasino. Last year, still remember, 26th of March last year, we spin it off and this is in Hong Kong. Now we hold the company -- I mean, the Palasino talking about 71%. In fact, the revenue very stable, HKD 400-plus a little bit million. Yes, this is the reason why we put it in from a recurring business perspective. On the other hand, on Page 36, we have the investment in the QWB projects. We opened this hotel by phases. The first phase that we opened was last year end of August 2024. Star Grand, some gaming facility open receiving positive responses. Remaining, F&B, retail, dining spaces and some other 2 hotels. One of them -- one of the 2 hotels is Dorsett. We hopefully opening in the next phase. On this year, on 7th of March this year, we have entered into a head of agreement in respect of the strategic asset swap. I think for details, I think we can refer to the announcement that we have published on that day. So there will be more details. In fact, well, let's talk about this JV. This JV consists of the gaming license. That is very important. The JV consists of this gaming license. Also consists of the 3 hotels, One of the hotels opened last year as well. Gaming floor, mass market is the major focus. Also, we've got some entertainment facility, the F&B and all that right.

Yes. I think also one thing important to note that I think in the global world, it is very rare to see a 99 years gaming license. So that is something we see very valuable. And of course, with the 25 years monopoly, right, within the Brisbane radius, this project actually spans of 10% of the CBD. So we see a huge potential in this.

Yes. And another point to add, the beauty thing is other than this, I would say, the entertainment investment, along with this, we have got a Tower 4, 5 and 6, which is talking about the residential. We can start the title and sell it. So it's helped on the investment as a whole from a return perspective.

Yes. And we have 1 million foot traffic a month, and we expect once we complete all the residential and hold over 1,000 hotels, there will be a lot more.

Yes. Prospects. Prudent financial management. Gearing is expected to improve. In fact, well, this year compared -- I mean, versus last year financial year, we improved a little bit. But of course, on the other hand, you can see we have got some impairment loss. And hopefully, in the coming financial year 2026, we can manage better on the potential impairment, which will be having some impact on the gearing. But on the other hand, like I said, well, a lot of project core business, noncore business assets we have sold. So hopefully, we can still maintain -- we are confident to maintain the further down the net gearing ratio. Accelerating some completion of the property development. Disposal of noncore asset business. Perpetual bond will be redeemed at a good time, yes. I think, yes, as the capital structure and gearing level improve. Visible cash flow from both property development projects and recurring income business. That's all repeat honestly. Property development, we've got $8.9 billion presales. Attributable about GDV $12 billion in aggregate to be completed in this financial year 2026, which, yes, is a good -- I think we can maintain the -- in the previous 2 years, including the recurring business, we are talking about more than $10 billion revenue or adjusted revenue noted. Hopefully, we can maintain this trend. Hotel, recurring cash flow expected to grow, in particular, with some new hotels establishing 2 new hotels coming up. Car park, like I said, the outperform -- I mean, the underperforming contract has been out. Hopefully, we can maintain a good profit margin as well. Gaming, again, very stable. But honestly, the contribution from the Palasino is not now major, to be frank. So anyway, yes, this is part of our recurring business. The last page, that is the awards that we have achieved. Thanks for the management, our Chairman, David Chiu -- Mr. David Chiu and also Wendy, Winnie. We've got some awards during the year. I'm not going through one by one. I think this is part of our achievement during last year. Thank you.

Thank you for the presentation. And we will take questions now. [Operator Instructions]

I have a question about the group strategy. Over the past few years, there have been a lot of focus on deleverage, inventory monetization, asset disposal. But hopefully, we start to see some light at the end of the tunnel. When do you think there will be an opportune time for you to probably go offensive instead of defensive like in terms of acquisition of land banks or looking at new projects, especially in the Australian market, given the shortage of supply?

Thank you. Given the environment, we are getting a bit more conservative. But having said that, we, of course, also have launched a few new projects. We are, in fact, actually extensively looking at a lot of properties in U.K., especially in London. We are seeing a lot of joint venture properties where we come in as an equity to do construction where we are good at value add instead. And normally, you won't see it in this kind of financial downturn. So we are definitely extensively looking at this, and there are a few that we are actually in conversation with.

I think I can add a little bit as well. As you may see, our property pipeline, which is talking about HKD 61 billion. I think in the past 2 years, we have noted from the adjusted revenue, talking about $10 billion, in which you can see $6 billion or $7 billion coming from the property side, I mean, the sales of property. So honestly, from our pipeline, which is talking about $61 billion, which -- I mean, are big enough for us to develop for like another coming 6 or 7 years or 8 years even, even though we haven't got any additional land acquisition or replenishment. That's fair enough. So we are not in a rush. Our land bank is okay. It's big enough for us to another at least 3, 4 years at least. And the presale value, that gives you a visibility as well. So I think it's not in a hurry.

This is [ Manoj from Satara ]. So I saw that there is no dividend announced for this second half. When will the dividend be restored? And the question is really, are you going to pay cash coupons on your perpetuals going forward, given that you switched out the dividend, you have the option not to pay the coupons?

Given the markets and looking at the impairments that we are getting, especially for Hong Kong, there's quite a lot of uncertainty. Although we believe that hopefully, it has bottomed up and looking at our Kai Tak sales, I think it will go up. But I think for this time around, we just want to be a bit more conservative to lower our gearing ratio. And of course, like what we said, we have our [ PEP ] bond. We are yet to discuss on what to do with [ PE ] bond, yes.

I'm not sure this is a price-sensitive question. I may answer you privately, right? But what I mean is we know the feedback from the bondholder. We know the feedback from the market as well. Honestly, while we haven't yet to discuss internally, but I think, yes, by the time we will -- you will know and we may have some action, hopefully, and we actually know that the market price of the bond from our perspective is very attractive. So yes, we've got some -- quite a few options in front of us.

Any questions from the floor, please? There may be some online questions. Mr. Cheung, please.

Okay. For the $8.9 billion presale, how much is to be recognized in financial year '26 and how much will be recognized in the financial '27? I think you can refer to Page 14, which demonstrate more than these 2 years, frankly. But in short, the project with GDV about HKD 12 billion will be completed this financial year 2026, in which at the end of March, about 40-plus something has been presold, meaning that well, that will be completed in this financial year at least. But up today, I think it's around 50% already. So from now on, at least $6 billion, right? So hopefully and honestly, we're confident of some of the projects actually on the good sales. To be frank, I think Manchester, all cities in Australia, Singapore, they are a very good market. It's a very hot market for sales -- from a sales perspective. So -- and that's the country or the cities we have operation, and we have some projects to launch as well. So hopefully, we can do better. And yes, so the -- at least $5 billion, $6 billion has been booked -- I mean, has been resolved and for this financial year 2026. But for the financial year '27, you can refer to Page 14.

And any questions from floor?

I guess I want to know what do you guys think about just recently, one of your trouble peers missed their perpetual cash -- perpetual bonds coupon. Do you guys have a stand on the high coupon of the perpetual bonds that you guys currently have?

I think for bond question, we will need to hold. We haven't had an internal discussion yet. So we have a couple of thinkings, but we need to work internally with our Board as well. Sorry...

And now it's end of March -- I mean, end of June, I think it's a few months. Yes, I'll come to you. And a few questions on the online -- sorry, actually similar. So I will skip just let the guests on the online know about it, yes. I mean I'm not going to answer it line by line -- I mean question by question, but actually, just now we have mentioned a few questions actually covered already.

About your hotel development strategy, right, like now you have a single brand. And what's the biggest challenge when you go asset-light to expand by this kind of franchising model. There is a lot of competition from those global hotel groups. And what's your geographical focus like beyond Asia? A lot of people are looking at Middle East or Europe, given the fragmented market, right? A lot of door set hotels are mid-scale -- sorry, upper mid-scale or upscale. Are you guys considering a kind of multi-brand strategy to branch out into probably mid-scale or select service sectors? Just out of curiosity about your future hotel development strategy.

This is a question to my sister actually. But just one -- I mean, we have a Dorsett brand. I think that's our main brand. But Dao, looking at the market trend previously, she, of course, is very close to the market and that we believe larger rooms with service facilities would be the next upcoming trend. So I think she's adjusting according to the trend, right? I mean, Boswell, do you want to add?

Yes. In fact, we are more than a single brand. Dorsett talking about 4-star main focus, like this Dorsett Kai Tak, I'm sure it's actually at a 4-star premium, if you say this is 4-star. Also, we have 3-star Silka, right? And the Dao is our service apartment hotel, service [ parts ] hotel. So we're actually expanding this as well, in particular for Dao. Also, we have some light-asset business model. I was just talking about the contract -- I mean, the hotel contract like Fiji just signed. But on the other hand, well, there will be another 2 or 3 years coming up for the hotel contract contribution.

And I think just looking around 4-star hotel globally, it's very not consistent, to be honest. So I think what Dorsett offers is consistency and I think up to market trendy and of course, they are just the service and everything. And of course, the location, I mean, looking at Australia and all that, right? I think it's going to be very hard for 4 star to come into like a Brisbane integrated resort, right? And of course, also next to a Ritz-Carlton Melbourne. I think it's really -- if you go to a 4 star in Australia, I mean, good luck to you because I've been to quite a few. So I think what Australia or what -- I mean, sorry, Dorsett offers is the consistency of the brand.

Yes. And I think we are quite smart in timing the hotel cycle. And as you can see in the past, we opened the Dao in London. We opened the Ritz-Carlton Melbourne and Dorsett Melbourne 2 weeks ago. You can see where the business -- I mean, the pandemic impact are just gone, and then we opened the hotel. Of course, we need to ramp up period, which is normal, right? In Hong Kong, you can see this hotel as well. We opened last year. And obviously -- refresh our memory. Last year, when we opened Hong Kong in terms of the F&B, the Mainland Chinese travelers, over travelers are still a big difference from what we can see now, right? You go out at nighttime for dinner, you will know, right? So in particular, for the stadium opened 1st of March this year, I think we time the cycle, good enough. So hopefully, the contribution from, in particular, some new hotels are helping the contribution as a whole, yes.

Thank you. And if there's no questions from floor, maybe from the online platform. Any questions online?

I think we have answered the questions.

Okay. And any more questions from the floor, please?

Just to get a color on the asset swap with Stars, I think you guys have already assumed all the -- the JV partners have already assumed all the equity in the project as of date, right?

No, we've just signed the heads of agreement. We are yet to go into long-form dock. There are some different interpretation between the Star and FEC, of course, we are collective, on how we see the details of the heads of agreement. So at the moment, no, we haven't done the swap yet.

What are we expecting from the swap?

Well, the commercial -- well, honestly, the commercial terms have to add up, especially given this environment. So I guess the detail is actually in the PowerPoint, but basically, they want to carve out Brisbane and Gold Coast, where we are actually swapping -- we're taking the treasury Brisbane. They are taking the 1/3 of the hotel and us. And then we are taking the receivable of all the residentials. And then we are paying around $50 million upfront cash to them as well. So yes, but it hasn't been finalized and that there are some risks. So we are taking our time. And if it doesn't work, we'll go back to our original and it's still good for us.

Yes. We still own anyway 25%.

Yes. Thank you. Any more questions? If no more questions from the floor, and this is the end of the Q&A session, and this is the end of the investor presentation. Thanks again for joining.

Thank you.

Thank you.

Thank you so much.