Swire Pacific Limited (19) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Welcome to a live webcast of the Swire Pacific 2021 final results analyst briefing. Joining us at the briefing today, we have Mr. Guy Bradley, Chairman of Swire Pacific; Mr. Martin Murray, Finance Director of Swire Pacific; and Ms. Karen So, Managing Director of Swire Coca-Cola. Before we go through a detailed look at our results for 2021, we'd like to show you a short video highlighting Swire Pacific's key developments and achievements in 2021. [Operator Instructions] Hope you enjoy the video. [Presentation]

May I now invite Guy, Martin and Karen to take us through a detailed look at our results for 2021. Over to you, Guy, please.

Thank you, [ Donna ]. And thank you, everybody, for joining us on a Thursday evening as we try to put a bit more color here on the annual results that came out today and the media and press announcements. And let me dive straight into the presentation. Hopefully, we'll share the workload here between myself, Martin and Karen. We'll get through the charts and then we'll look forward to some questions and answers at the end in the usual format. The highlights of 2021 are here. I will touch on all of them as we go through, essentially focusing on 3 core businesses of Property, Beverages and Aviation; exiting Marine Services; and starting to invest in health care in the Chinese mainland. So the key thing here is focus for us. In terms of the profit, you can see the turnaround versus the prior year both on the underlying profit basis and the recurring underlying profit. The numbers swing versus 2020 has been quite good, just demonstrating the resilience, I think, of the businesses that we're in. The highlights between the 3 core divisions here, you can see Property holding its own year-on-year. Beverages had a remarkable year in 2021, growing their profits by 23% to $2.5 billion, an all-time record for Beverages. And Aviation had a very good second half, as you can see here, which meant that the overall year result was 70% better than the prior year. So all 3 core divisions delivering for us in 2021. Balance sheet is very strong. Martin will cover that in a few minutes time. I would just like to point out a couple of things here, the gearing ratio at 11.9%. If we were to -- it's pretty low. If we were to gear up to a level of 30%, that would free up about HKD 59 billion worth of capital for us to deploy in some of these growth areas. So I think there's plenty of room on the balance sheet for increased investment. The dividends are, again, $2.60 a share versus $1.70 the year before. It's 53% increase. And I think Martin will get into a bit more detail there with the new policy. Turning to the actual strategy here. Of course, you heard when we spoke to the media that the corporate strategy that we've been on now for a while is to drive investments in the 3 core divisions. In the Property Division, we aim to invest HKD 100 billion over the next 10 years, which is a large amount of commitment towards property. Swire Coca-Cola will continue to invest and will seek to expand territories to increase the growth rate there in what's been a really successful business for us. HAECO investing HKD 5.5 billion in relocating their facility in Xiamen to somewhere near the new airport. And as you probably know by now, in health care, we've allocated HKD 20 billion to invest in this new sector in the Chinese mainland over the next 10 years. I just thought you'd be interested, at the bottom there, to see what we've already committed to in terms of capital. And you can see the number there. HKD 55 billion is not a small number, so in terms of major projects that are underway, there's quite a lot going on not just in Property but also in the beverage business, in Aviation and in the new businesses that we're trying to target to go after consumer spending in the Chinese mainland. In order to do a lot of this new investment, of course, we -- also the other part of the strategy is to divest our noncore businesses and to recycle some of that capital through to fund some of the growth that we want to do in areas that we want to be in. So you can see here the list of divestments for 2021 is pretty good list continuing on the previous year or 2, where we've been doing larger office building divestments where they were noncore. What we've done in 2021, we've disposed the equity interest in Cadeler, our renewable energy business. We sold our interest in Hongkong United Dockyards; and SPO, down at the bottom there, meaning that we're now out of marine. And then in the Property side, we've continued to dispose of noncore assets, like the Taikoo Shing car parks, the EAST Miami hotel and some land that we've been sitting on in Fort Lauderdale. In terms of sustainability and ESG, the key message here is that we want you to know that we take this subject very seriously. Our biggest imprint on the world is through -- is on climate. And then we set a target, which is quite aggressive, of 50% reduction in greenhouse gas emissions by 2030. The baseline being 2018, we're already 12% decreased in terms of scope 1 and scope 2, so we're on the way to that target and we're pushing it very hard. Some of the other targets are on there, involving waste, water. I'd like to also flag the people target in terms of diversity. We want to have 30% of our senior managers as women in -- by 2024. And we're already 1/4 female in that [ charter ], so I think we're nearly there. It would be nice to push that a bit harder, and I think we will. In terms of the communities, we -- it's a big part of what we do as a responsible member of the community is support that community. And you can see, with the launch of Trust Tomorrow, in the last couple of years, we've put HKD 150 million behind the campaign to support in the form of 50 grants and -- 1.6 million beneficiaries mostly in Hong Kong. So tremendous support there, and this campaign is ongoing. I'm now going to do what I said I'd do, which is hand over to Martin Murray for some detailed financial performance slides. And then I'll come back with Karen and talk about the business review. Martin, please.

Thank you, Chairman. Swire Pacific performed well during 2021 despite the continuing impact of COVID-19. An improved performance from most of the divisions ended up with recurring underlying profit showing there of $4.9 billion against a loss last year of $609 million. The consolidated profit attributable to shareholders was $3.4 billion versus last year's loss of $11 billion. And the underlying profit, which principally adjusts for the value of the investment properties, was $5.3 billion versus a loss of $4 billion. That will be -- more on those slides -- in a later slide. I just want to highlight the 15% increase in revenue, driven by the strong Swire Properties and Swire Coca-Cola performance; a cash -- strong cash from operations of $15 billion; and a 53% increase in the dividend to $2.6 per A share. Next slide, please. Our stated aim is to deliver sustainable growth through sound return on equity over time. And you can see the graph on the left here. We're still with -- given COVID, we've still got a way to go to get back to where we want to be, yes. And the slide, on the right, the step graph shows the change in equity over the year, solid results from Swire Properties, record profit from Swire Coca-Cola and reduced losses from SPO and Cathay Pacific and the remeasurement loss of $1.6 billion on the sale of SPO, the gain on the investment property sales, the Hong Kong investment valuation. And then we have various others and translation in terms of the movement. Next slide, please. On the right-hand side there, it shows you the recurring underlying profit; and again, to just repeat the resilient performance there you can see of Swire Properties, the record $2.5 billion compared to the $2 billion from Swire Beverages and the reduction you can see there from the Cathay Pacific and Marine Services. The differences between the recurring and the underlying is in the nonrecurring items. And you can see there a big one at the top with Swire Properties. The Chairman mentioned recycling of the Taikoo Shing car parks and the sale of EAST Miami and also the smaller impairment charges in both Cathay Pacific and SPO. Next slide, please. This again just repeats the step change, again pointing out the substantial reduction in losses from the -- from Cathay Pacific and also the big reduction in impairments from SPO and Cathay Pacific, partially offset by the decrease in gain because we sold Cityplaza in 2020. Next slide, please, again just to emphasize a strong financial position. I mentioned the strong cash from operations of $15 billion. The net debt remains at $38 billion. Gearing is low at 11.9%, and weighted average cost of debt at 3.2%. And 84% of our borrowing is fixed. Thank you. Next slide. And we also have a very healthy liquidity position which will enable us to execute on those pipeline projects. We built up our liquidity in 2020 given the uncertainty of COVID, because [indiscernible] financing was actually cheap, to $70 billion. And we've now reduced it to $55 billion, yes. And we have a very prudent maturity profile. Next slide. Chairman mentioned we did revise our dividend policy at the interims. So our new policy is to deliver sustainable growth in dividends and to pay out not less than half of our recurring underlying profit, excluding the shares of Cathay Pacific -- results of Cathay Pacific but including all dividends received from that company, by way of the ordinary dividend over time. And on the next slide, we can see that, that again has improved our dividend to $2.6, a 53% increase and something that we want to continue to increase over time. Thank you. [ I'll pass it back to ]...

Thank you, Martin, yes. Thank you very much. Now the business review, starting with Property. And apologies, for any of you on the call who sat through the properties presentation. I'll try to make the duplication as little as possible, but there are some things here that are really important, so I don't really apologize for saying them again. And so look. Stable performance year-on-year, but I think the key highlights here in terms of Swire Properties and what they've got doing -- going on in the Chinese mainland, 2 successful openings in 2021, Taikoo Li Qiantan, in the picture there on the top left; and the extension to Taikoo Li Sanlitun in Beijing. And those openings have set the company off in good stead. Taikoo Li Qiantan was probably a record-breaking opening for us. Really interesting strategic investments. We told you about the second phase of INDIGO in Beijing, which is about an RMB 8 billion commitment from Swire Properties up in Beijing to build a decentralized office location to add onto the retail mall that is INDIGO 1. And that's now underway. Ground has been broken. And we're very excited about the potential that has for being a decentralized office location as you've seen us do down here in Hong Kong. And then the recent news, of course, which is tremendous, is the next, fourth, Taikoo Li project, which is going to be in Xi'an. And the team are very excited about having another project where we can work with some heritage design and a really collaborative district government to help us to bring something really special to a very special city, so great news there for Swire Properties. Also exciting is actually the ability to revitalize the Zhangyuan compound right across from HKRI Taikoo Hui in Shanghai. When that gets finished, and it will be developed in phases, that's going to be a superb complement to Taikoo Hui across the road; and make for a really, really powerful retail district in that part of Zhangyuan. And not to forget that we're actually trying to now promote the excellent Swire residential trading brand. And we've probably done -- not done enough of that in the last few years, but we now currently have about 10 projects in our core markets underway. And the picture there shows the Chai Wan residential project that's already broken ground. So some exciting things going on, on the Property side. I will skip this slide with the numbers because I think they've all been seen, but the point on here, for Chinese mainland, I'd just like to flag again that, if you look at the chart on the right, our biggest business with Swire Properties is Hong Kong office. And that's a 42% contributor to gross rental income, but if you go to the left of that, you can see the next biggest contributor in terms of gross rental income is the Chinese mainland retail, which is 30% now of our total. So our 2 biggest contributors there are Hong Kong office and Chinese mainland retail, both of which have performed really well in difficult situations in the last year or 2 and we think will continue to perform well going forward. This is some pictures, some images of some of the developments that I've mentioned. So I'd just like to finish on Property by showing you this. We talked about the $100 billion of capital that we're going to allocate over the next 10 years. This gives you a breakdown of the rough allocation split by geography and by sector. Half of the $100 billion, we want to put towards the Chinese mainland, primarily to develop the exciting and retail-led mixed-use projects that we've become famous for under the 2 brand names Taikoo Li and Taikoo Hui. On the right-hand side, for Hong Kong, we want to allocate about 30% of that money to continuing the expansion and reinvestment of our core asset locations, which are obviously in Taikoo Place and in Pacific Place. And there's a lot more work that we can do to make sure those centers become "best in the world" and -- financial hubs. Interestingly, the last bit here is the residential brand that I mentioned, where we think we can command a premium in many cases through our design and through our reputation for quality. And we want to allocate about 20% of our future 10-year capital allocation to doing more of that. And we want to do more of it not just in our home base of Hong Kong but also in the Chinese mainland and increasingly in Southeast Asia. At this point, I'd like to invite Karen So to talk about the beverage story. Thank you.

Thank you, Guy. So I would like to share with you the story in Swire Coca-Cola. We are very pleased to see the strong growth of our business in Swire Coca-Cola. In 2021, we hit a record profit of HKD 2.5 billion in 2021, which is increase of 23% over last year. The growth was built on a strong foundation of continuous profit growth over last 4 years. Our profit growth over last 4 years was CAGR of 28%. In 2021, Chinese mainland profit growth -- increased by 36%. The revenue in local currency increased by 15%, which was mainly driven by the relentless effort of our team in building distribution infrastructure, execution capability and also our effective revenue management initiative. Over to the U.S.A., which is our second largest market. Our profit in U.S. increased by 24%. The revenue is increased, reflecting our effort in price increase and also our strengthening of execution capability and also improve of our product mix. Taiwan increased by 15%. And Hong Kong reduced slightly by 1%. So our overall revenue growth and operation efficiency is fueled by our digital innovation. And we continue to leverage on the successful integration of our franchise in the Chinese mainland and U.S.A. So next slide, please. So the total attributable profit in 2021 was HKD 2.549 billion; is mainly contributed by our 2 largest market, the Chinese mainland and U.S.A., which have respectively grown their profit by 36% and 24%. If you look at the circle chart on the right-hand side which shows you our split of revenue by category: We have a full portfolio spreading across sparkling, juice, energy, water, tea and a few others, category, which is relevant to our market. In terms of our market mix, Chinese mainland and U.S.A. contribute majority of our revenue. Chinese mainland contribute 57% and the U.S.A. contribute 35%. Down at the bottom of the slide, you can see our financial data, and they are all very healthy. Revenue grew by 20% in Hong Kong dollar term, attributable profit by 23%. And our margin has improved. Next slide, please. So we're seeing strong revenue growth and volume growth across all our key market. If you look at Chinese mainland, our revenue grew by 15% in local currency term. Hong Kong did a very good turnaround last year over the big hit in 2020 by COVID. Hong Kong grew revenue by 9%. Taiwan was slightly impacted by COVID at -- in the second half of the year, so our revenue growth was 2%. U.S. has really, really good, strong consumer demand; and the revenue grew by 15%. Our margin improved in all our key market Chinese mainland, Taiwan and U.S.A. Next slide, please. We remain very optimistic on the business outlook. Our revenue is expected to grow strongly in Chinese mainland and U.S.A. Taiwan is expected to continue to improve. However, we expect Hong Kong will continue to be challenged by the current COVID-19 outbreak. We will continue to invest for the future with significant investment in our digital tools, capability, infrastructure, manufacturing facility and capability of our team. And we will work close with The Coca-Cola Company to continue to drive our portfolio and product innovation. We will drive profit growth with our focus on our margin management and also balancing the cost pressure with our revenue growth initiative. So with that, I would like to hand over to Guy to continue to talk about our Aviation business.

Right, Aviation. I'm not going to again spend long on this and specifically relating to Cathay as you will have heard all this yesterday, but there you can see on the chart the numbers show what a great second half Cathay had and the improvement of 74% year-on-year in terms of their profitability. And what I would like to single out on there, there actually is the HAECO performance where, if you can see, in terms of attributable profit, they grew 310% versus prior year, which I think is a very laudable performance given the fact that the aviation industry here has been in such a difficult situation for that time. So well done, HAECO. On this chart here, I think we really just wanted to show you the impact on flying and aviation here of the COVID situation. You can just see for yourselves that the difference of pre pandemic, post -- during pandemic is absolutely staggering. And it's been very, very difficult to keep the numbers [ going ] under these sorts of conditions, but we expect those to not be for too much longer. In terms of Cathay Pacific, you heard that the capacity remains quite limited for various COVID-related restrictions imposed on the ability to fly cargo and passengers. In terms of the outlook, we expect an increase in monthly cash burn versus what we saw in the last half of 2021. And the good news is the liquidity remains at a healthy level to be able to keep us going. I think the start of 2022 has been extremely challenging. Our capacity was constrained when quarantine requirements got tighter. And travel restrictions are still pretty much endemic here, and we're looking forward to those being lifted at some point this year. On the HAECO front, you can see that we've -- I mentioned that HAECO has remained profitable despite the impact of COVID. The Hong Kong business did incur a loss given the fact that the demand for line maintenance had dropped. And that's all linked with the ability to fly in and out of Hong Kong, but in the Americas they managed to record an increase in profit. And the profit of HAECO Xiamen increased when demand for its base maintenance recovered gradually in the second half as some of the global travel started to pick up. So overall, HAECO has had a profitable year in 2021. Just quickly on health care. It's the new business that we want to do more of. I mentioned that we want to allocate about $20 billion by 2030 into this. This just reminds everybody what the strategy is. We're focused on premium and private health care services in the 3 big clusters of Jing-Jin-Ji, Yangtze River Delta and the GBA. That's our core geography target. We're looking at asset-based businesses which fit property development, but they also fit our management expertise in terms of services and service management. And we are very, very keen on finding strong strategic partnerships with local expertise. So that's the strategy. And we've got off to a reasonable start. We own shares in 5 hospitals. We have 6 clinics and 6 elderly care homes. And that's not too bad for first 12 months or so of getting into this, but we fully expect to do a lot more in this sector as it continues to grow. I'll just finish now in terms of the outlook. And I'll cut that both in terms of short term and medium term. In the short term, for Swire Properties, we think there are still good growth prospects coming out of the Chinese mainland driven by retail. Hong Kong will continue to be impact here, as we know, by the fifth wave of the pandemic. And we hope that impact is not too many more months, but it's currently a difficult place to be in retail at the moment. Swire Coca-Cola, we -- as Karen just said, strong growth is expected to continue from the Chinese mainland and the U.S.A. However, we do want to point to rising commodity prices which may impact performance. On the Aviation side, Cathay Pacific remains impacted by COVID-19 restrictions, and -- but we do expect a recovery from the second half of 2022. And HAECO ought to recover at some rate that's very similar with that given that there's a link there with the line maintenance. And lastly, medium term-wise, we're confident that our future and our -- is good and that we're firmly committed to both Hong Kong and the Chinese mainland. And we've talked about the exciting investment opportunity pipeline in Greater China for properties further leveraging the 2 brands Taikoo Li and Taikoo Hui. And we also want to increase the investment in Pacific Place and Taikoo Place. Swire Coca-Cola expects continued strong growth over the long -- medium to long term in the Chinese mainland and the U.S.A. And in Aviation, we are confident of the industry recovery and the return of Hong Kong airport as a leading international aviation hub. Finally, with health care, we will continue to tap into this sector, which we see good growth in the Chinese mainland. And as I say, we're focusing on premium specialty hospitals, clinics and elderly care homes in those major cities. And at that point, I think we'll pause and take some questions and answers, [ please ]...

[Operator Instructions] The first question is from Simon Cheung of Goldman Sachs. There are 2 parts to the questions. Firstly, the group has been very active in recycling capital by divesting noncore assets over the last 2 years. "Where else do you see opportunities for further divestments? And are you feeling comfortable with the overall portfolio mix?"

Martin, do you want to take that?

Sure, yes. Well, we have been very active over the -- I mean Swire Properties has recycled 43 billion. And we have, as we just mentioned, exited the Marine Services Division, which does give us very low gearing. And it's good to be seeing us investing in Xi'an and other big projects. And so there will be significantly lower recycling of noncore assets. There's not much left in the portfolio that is at all material, so it will be more an investment outlook going forward.

The follow-up question, it's for beverage business. "We noticed quite a bit of a margin squeeze in the second half of 2021 perhaps due to higher raw material costs. Can you comment about the margin trends and your expectation in 2021 -- or 2022 given the costs of inflationary pressure?"

Karen, please.

Sure. Thank you for the question. So we are seeing a rising trend on our raw material. We have established a procurement policy and a steering committee to manage our fluctuation in our raw material costs. And we do use our prebuy and hedging policy to minimize the risks as much as possible. And we will continue to balance the impact of the raw material with our revenue growth initiative and which -- including price increase whenever and -- whenever appropriate.

One more follow-up question from Simon, about the HKD 20 billion investment budgeted for China health care industry. What would be roughly the speed to which the HKD 20 billion be deployed? And when would you anticipate these businesses to gain more meaningful scale?

Well, the answer goes hand in hand, I think, to the 2 questions there. I mean the -- in terms of the speed, we don't know at this point. What I can say is that we're trying to build a scaled platform for the health care business, which [ argues for ] sooner rather than later, but we need to find the right kind of platform. And as and when we do, we will allocate the amount of capital that we need to get into that platform, if not to buy it completely. So it's difficult to say at this point. We started off with some fairly small investments. I think we've ended up putting just under HKD 2 billion into the sector, so far, but the aim is to scale that out as fast as we possibly can.

Next question. It's from Karl Choi of Bank of America. There are 2 parts to the question. Firstly, Swire Properties, it's targeting a mid-single-digit percentage per-year growth in dividend per share. Does management have any target for annual DPS growth for Swire Pacific? Or how long would it take to return DPS to peak level of over HKD 3 per share?

Martin?

[ Yes. Well ], I think you mentioned the target of $3 per share, and hopefully, we will get there as soon as possible. So it's -- so we've taken out the volatility of the aviation business of Cathay Pacific into that dividend. And we no longer have the Marine Services Division, which has been very volatile, so we do hope that our core businesses, with the strong outlook that Guy mentioned, will get us to that very quickly.

A quick addition from Karl. What's the expected impact of raw material cost increase on beverage division in 2020?

In...

For 2022, sorry.

2022. Karen?

Yes. Thank you. I guess the question is similar to the first one. Well, currently we are seeing the increasing trend of the raw material; and particularly the key raw material that we're using, which is the PET, aluminum can and also corn. So we have established our procurement policy, and we do have a designated committee to manage the fluctuation of raw material. And we have quite [ a mature ] system to manage that. And we use prebuy financial hedges to minimize the fluctuation. And we continue in our system to use revenue growth management initiative to -- which is through a better product mix, better packaging mix, to manage our revenue and margin to balance out the cost increase. And we also -- which is also including price rises where appropriate.

And the next question, it's from [ Evan Loh ] of DBS Bank. Can we expect parental support to Cathay in case of further business decline?

Well, as we said at the press briefing, we are a long-term committed shareholder for Cathay Pacific. At the moment, their liquidity levels look pretty good, but our commitment is long term. We like the business. We like the brands, the dual-brand strategy that they've got. And we think that Hong Kong International Airport as a hub for Southern China has some great future prospects ahead.

The next question. It's from Thomas Naughton from Prusik. "What do you think the impact on profits would be from the planned HKD 54 billion in investments that you've outlined?"

Martin, [ will you do that ]?

Well, we obviously have our hurdle rates. And as you say, the targets that we've set for properties is over 10 years and for the health care business is over 5. So as we continue to recycle, we expect our return on equity to improve back to historical levels, yes. And we expect to hit our target dividend rate.

The next question. It's from [ Tom Tang from Greenwood ]. The Swire beverage division performs very well. Do you consider taking it to IPO and allow division with greater independent financing for the long-term expansion?

Karen, do you want to have a go at that?

Martin, want to go for that?

[ Yes, it's ] -- well, we look at -- obviously everything is open book when we talk strategically, but there's absolutely no plans to list any of our businesses currently. It's a difficult time in Hong Kong. And so we'll continue to explore on an annual basis or continually look at the structure of the business, but there's absolutely no plans at the moment for listing Beverages.

We continue to think that there's a lot of growth, good growth, to be had in all our key markets for Beverages, so we'd like to try and realize some of that growth before we were thinking of things like that. We're interested in exploring new territories if The Coca-Cola Company brought those to us as well. So there's 2 ways to grow. We can -- we'll grow our existing territories and business and we'll -- we're happy to look at expansive growth.

Next question. It's from Thomas Naughton again from Prusik. "Given that your share price is trading at HKD 45 compared to your book value of around HKD 175, you can buy your current investment portfolio at around a 75% discount to their value with no cost or due diligence required. Why would you not buy back shares at these levels?"

Martin?

Yes. Well, we do have a general mandate to buy back shares. We do consider it at various points in time. Obviously, at the current share price, yes, it is something that we can consider. At the moment, there's a lot of investment opportunities, a lot of projects on the table. So again, it's part of the capital allocation strategy and we will consider it...

Another question, from [ Chi Hin Cheung ] from Citigroup. Can you tell us the expected time line for the completion of SPO's disposal?

Martin, do you have a handle on that?

Yes. Well, the agreement, [ we were saying last night ] and -- to completion, it will be done over next 2, 3 months.

Okay. Next question. It's from [ Yee Yu from Sinabank ]. From a 3-year perspective, is the company's growth still mainly from real estate? And what is the biggest challenge?

What is the biggest challenge in real estate, is it?

Yes, mainly from real estate.

Well, I think, from a 3-year forward-looking perspective, there's good growth coming out of Swire Coca-Cola as well as Swire Properties. And inasmuch as we can get the pandemic behind us, I think you're going to see some very good growth coming out of Aviation, so it isn't all going to be a Swire Properties growth story over the next 3 years. I'm hopeful that we'll -- our 3 core divisions will show -- will benefit from that growth. And what are the biggest challenges in growing Swire Properties? Well, some of these projects are extremely big. They're big lump-sum investments. And there's a lot of moving parts in terms of pulling them all together and making them world class, and sometimes that takes time. And so the biggest challenge is to try and take less time than they might, but we have a great team on the ground in the Chinese mainland. We've got a great team here in Hong Kong, and they've got lots of experience. So we're getting better at that all the time.

A follow-up question from [ Yee Yu ]. The capital expenditure plan is to invest RMB 120 billion in Mainland China in 10 years. Is it difficult to increase the dividend ratio in the future?

Well, I'll let Martin talk about the dividend ratio, but that 120 billion isn't all in the Chinese mainland. I think, if you refer back to some of the charts, you'll see that, at least 30% of the $100 billion, we will be allocating towards Hong Kong; and about 20% to a range of markets across our residential trading brand. Martin?

Yes. To answer the question: no. We say we have a very low gearing, just over 10% at the moment. We can keep gearing up to the slide of -- we mentioned it was 30%. That gives us an immediate cash ability of over $50 billion. And so we've got plenty headroom in terms of our [ Hong Kong ] result. The cash we generate is very healthy, and so no. We think we can make all those investments. We will continue over that period to recycle some of the noncore assets. And that is an ongoing part of the strategy too, but we see no impact on our target dividend outlook because of those investment targets.

In interest of time, we will take one more question before we wrap up. And the last question is from Praveen of MS. "What kind of return would you be looking for from the health care business? Say, in 5 years, if you expand $10 billion, would you be making 10% return or net profit of 1 billion of net income or lower?"

This looks like Martin again.

Yes. Well, yes, look. We have our hurdle rates. We will be expecting those returns over time. The investment in health care is going to be -- is staggered, as Guy mentioned. It takes 5 to 8 years to build it from scratch. Or we invest in a mature business already. So that strategy is still to be determined, though. It will meet all our hurdle rates that we currently have.

Thank you, Martin, Guy and Karen. That concludes our analysts briefing. Thank you once again for joining us. Hope you have a good day. Thank you.