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Edited Transcript of 1113.HK earnings conference call or presentation 19-Mar-20 9:30am GMT

Full Year 2019 CK Asset Holdings Ltd Earnings Presentation

Mar 31, 2020 (Thomson StreetEvents) -- Edited Transcript of CK Asset Holdings Ltd earnings conference call or presentation Thursday, March 19, 2020 at 9:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Ka Keung Man

CK Asset Holdings Limited - General Manager of Accounts Department

* Lai Chee Ma

CK Asset Holdings Limited - General Manager of Corporate Business Development Department

* Tak Chuen Ip

CK Asset Holdings Limited - Deputy MD & Executive Director

* Tzar Kuoi Li

CK Asset Holdings Limited - Chairman & MD

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Presentation

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [1]

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Hello, everyone. Thank you for joining the 2019 annual results webcast presentation for CK Asset Holdings. My name is Gerald Ma. I will be going through the highlights of our results from last year. Afterwards, Mr. Victor Li, Mr. Edmond Ip and Mr. Simon Man and myself will be more than happy to answer a few of your questions. I would also invite you to start posting your questions online, so we can efficiently answer them as soon as the presentation is finished. So let's get right to it.

Underlying profit for 2019 increased by 19% over same period last year. Earnings per share reached HKD 7.78. Dividend per share came to HKD 2.10, up 10.5%. Net book value per share, up 6% to $93.21. If you focus your attention on the bar chart below, you can see that since our restructuring or the listing of CK Asset in 2015, our dividend per share has been steadily increasing.

A little bit more details on this slide. Revenue reached $96 billion, up 49%; underlying profit, almost $29 billion. We recorded $405 million of property revaluation. Reported earnings was roughly $29.1 billion. Reported EPS, HKD 7.89.

Our -- the quality and resilience of our earnings has begun to take shape since 2015. As you can see by the 2 charts, revenue on the left, recurring revenue has gone up from $9.7 billion to $32 billion, while recurring profit contribution or EBIT has gone from $6 billion to over $15 billion.

In 2019, we had a surge in Hong Kong bookings, property sales bookings. Hence, 80% of the contribution last year was from Hong Kong and Mainland and 20% from mainly the U.K. and Singapore.

Turning our attention to each of the division. Property sales revenue reached 64 -- over HKD 64 billion, up 84%; profit contribution, $21.3 billion, up 78%. Margin -- sales margin was at a healthy 33%.

Hong Kong was, by far, the main -- gave us the main contribution in terms of revenue, over $50 billion; profit contribution, almost $19 billion; and margin almost reached 38%. Overseas margin, roughly 30.7%. The Mainland margin was 15.9% mainly because we -- of the situation on Mainland China, we took the opportunity to make provisions for various projects. Pre-provision margin was roughly 29%.

In terms of the big contribution in property sales was from Ocean Pride and Ocean Supreme, over HKD 11 billion. Harbour Glory gave us over $4.5 billion. And in Shanghai, Hupan Mingdi gave us over $1 billion. We still have 29 -- over $29 billion of contracted sales which we have not yet recognized, mainly from the Mainland, over $18 billion, $8.7 billion from Hong Kong and $2.3 billion from overseas.

Property rental, holding steady, $7.5 billion of revenue, $6.9 billion of profit contribution and margin at a very healthy 92.6% despite not having any contribution from Hutchison House, which is under redevelopment as well as The Center in 2019.

We have 16 million square feet of investment properties, 13 million in Hong Kong, 2 million on Mainland China and 1 million overseas. Rental contribution mainly came from CK Center, Cheung Kong Center, $1.6 billion; Whampoa Garden retail shopping center, $867 million; 1881 Heritage gave us $622 million.

Increase in fair value was $228 million. You would note that in the first half, when we reported our first half results, the number was over $1 billion in this category, which means in the second half, we made some provision for some properties, and that's why the full year fair value profit has dropped. That -- the provision was mainly for 1881 Heritage based on the expected rental income.

Hotels and serviced suite division, $4.1 billion of revenue, $1.3 billion profit contribution and still a pretty healthy margin of 32%, predominantly from Hong Kong. Approximately 15,000 rooms and serviced suites. In the first half, occupancy was at close to 90%; in the second half, dropped to 71.3%. And the -- we're expecting the soft opening for Hotel Alexandra to take place soon. Property and project management was as steady as has always been, gave us $362 million of profit contribution and almost 42% margin.

Aircraft leasing, $3.1 billion revenue, $1.5 billion profit contribution and margin at 47.5%. Mainly because we had some disposal gain last year, as I said before, the usual margin should be around 40%. A pretty good mix of lessees across the globe, 134 aircraft, mainly narrow-body aircraft, age -- average age, 6 years of age, and average remaining term is almost 5 years.

We acquired Greene King, the brewer and pub retailer, on October 30, 2019. It's one of the largest integrated pub operator in the U.K. for a total consideration at GBP 2.6 billion. 2 months of contribution gave us $3.6 billion of revenue and $555 million of profit contribution.

Infrastructure and utility assets gave us a total revenue contribution of $12.9 billion and $4.5 billion of profit contribution.

I'll turn the next few pages to our Chief Accountant, Mr. Simon Man.

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Ka Keung Man, CK Asset Holdings Limited - General Manager of Accounts Department [2]

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Thanks, Gerald. The group's equity interest in 3 listed REITs comprised of 32.2% of the Hui Xian REIT, 27.1% of Fortune REIT, 18.3% of Prosperity REIT. We take a share of profit of $175 million of Hui Xian REIT based on results reported by them. And distributions received from Hui Xian REIT amounted to $517 million. For Fortune REIT and Prosperity REIT, cash distributions received amounted to $319 million, and that was recognized as investment income.

For the 3 listed REITS, they have a total of 16.1 million square feet of retail and commercial properties in Hong Kong and on the Mainland under their management, and this probably has not been included in our land bank calculation. During the year also, there was an increase in fair value of the Fortune REIT and Prosperity REIT, amounted to $85 million, which was accounted for as gain on financial instruments.

For the -- turn to the next page for the group's gearing and maturity profile. We have a total gross debt of $80.1 billion, which is an increase of $10.6 billion from last year. And including in the $80.1 billion, there was a $19.7 billion gross debt, which was borrowed by Greene King. And our cash on hand at the year-end is $60.3 billion, and that gave us a net debt of $19.8 billion.

For the debt ratio, if we take the net debt to net total capital, we have a 5.2%. And if we take the net debt to shareholders' fund, slightly higher, 5.7%. And currently, the group's corporate rating assigned by Moody's is A2 Stable and rating assigned by S&P, A/Stable.

For the group's current land bank, we have a total of 92 million square feet for property development, of which 4 million is in Hong Kong, 84 million on the Mainland and 4 million overseas, mainly in Singapore and the United Kingdom. We have a 16 million square feet of investment properties and 9 million square feet of hotel and serviced suites.

And the land bank has not taken into account the 16.1 million square, I said earlier, under the management of the -- asset under management of the 3 listed REITs. And we also have not included any completed properties just like the Borrett Road Phase 1, which has been completed, agriculture land and some of the projects that is under planning.

For new property acquisition during the year, in March last year, we reached a land exchange agreement with the government, and we have already paid the land premium for the project at Yau Tong. So that increased our land bank during the year 2019.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [3]

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With our presentation, we'll go straight to Q&A. As I said before at the very beginning, I invite you to start sending us your questions so we can take them one by one. I'll read out the questions, after which Mr. Victor Li, Mr. Edmond Ip and Simon and myself will be providing the answers to your questions.

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Questions and Answers

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [1]

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The first question comes from John Lam of UBS. With the COVID-19, how does that affect your aircraft leasing business? I understand you have 4.7 years of average lease remaining. How much of your lease is going to -- or your leases are going to expire in 2020?

Well, the quick answer is all of the leases in 2020 that would be expiring have been taken care of.

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Tak Chuen Ip, CK Asset Holdings Limited - Deputy MD & Executive Director [2]

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[Taking care of meeting] lease to other people. Yes.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [3]

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Yes. How does COVID-19 affect your top business in the U.K.? And with the falling share price and strong cash position, would you consider share buyback?

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [4]

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Whatever we operate on shares, if I say it now, I think I should lose my job. That, we cannot say openly. But the Cheung Kong is very strong in our cash flow and also in our balance sheet. So I think this virus gives us opportunities to look at new acquisitions. And as in previous cycles, Hong Kong has seen many cycles before, the CK group has a good tradition of actually faring better and stronger after each stressful event. Gerald?

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [5]

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So the questions on aircraft leasing and pub, yes, and the pub business.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [6]

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Pub business would be a challenge because, I think, U.K. is adopting a completely different strategy compared to Hong Kong. But on the other hand, it's a property. So it's no different because we're not offering pub as much as with owner of the property that's currently operated as pubs. So it's no different from a Hong Kong shopping mall, which has very bad business today.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [7]

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I would add that because the gearing is not very high, at the same time, like Mr. Li said, that we own most of our pubs. So if you don't have to pay much rent and you don't have to pay much interest, we would like to say we are a bit more resilient than some of the other competitors. And also Greene King has just announced or is announcing expansion of its take-out service to help the community hopefully deal with the virus in a better situation.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [8]

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And most of the staff are on...

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [9]

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A lot of our expenses are variable. And so hopefully, if we have to reduce operation, the cost will be reduced as well.

Another question is on -- from Ken Yeung of Citi. Dividend is very generous, rising 10% year-over-year. But in view of the falling home sales and weakening outlook on multiple segments, how do we see future dividend per share, the trend?

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [10]

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Well, we're going to have more dividends when profit increase and also the quality of the profit gets better. I keep using the word quality because a lot more of our income would be in recurrent basis, steadier income. And you'll see in a few years' time that the portion of our recurrent income, whether it's infrastructure or whether it's aircraft or whether it's property, will continue to increase. That is a base for our increasing dividends.

And this year, looking at total profit is a bit meaningless because last year, we have sold The Center and did some spectacular revaluation. That's about $16 billion of one-off profit. Whereas this year, there's only $400 million that we booked on valuation or sale of major properties. So if you compare on that basis, underlying profit would have increased 19%. So a 19% increase in underlying profit would support at least a 10% increase in dividends. And I think that policy of increasing dividends when underlying profit is increasing or recurring income is increasing would be here to stay.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [11]

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Second question from Ken. In the current environment, what is your strategy for the launch of Borrett Road?

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [12]

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I'll keep that to myself for the moment. But it's a -- all I can say is that -- I mean part of my personal experience is working on property sales during SARS. It's a very challenging one. I was actually in sales office at that time, working on sales of property during SARS. So it's not like we haven't seen this before. When we're looking at Borrett Road, it's one of a kind. It's high enough, so they got a spectacular view of Hong Kong, but then it just misses the fault line. I mean if you are any higher up, then the -- you'll be literally in the clouds. So that is the highest property that is below the fault line in Hong Kong, which is very unique. So I'm not worried about the property value. The value will be there in this type of property. We can't create them anymore. Every single unit has a perfect view of Central from ground floor to the top floor.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [13]

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Specifically from Ken is the virus impact on 2020 aircraft leasing business. I would say, if many airlines are having difficulty and the governments are saying that they would be helping the airlines, but the -- under the -- in terms of contractual obligation, the lease -- payment obligation is absolute. So we will, just like any other tenant, help out when we can but in an amicable and cooperative manner.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [14]

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I mean our quest on not only on aircraft but on many different industries, my personal wish, of course, is that the virus will disappear tomorrow and then life goes back to normal. Having said that, CKA has the resources to look at new opportunities and look at deals if that doesn't happen too quickly. So I can't say we hope for a bad situation. This is not -- I cannot say that. But if things goes bad, we have the resources to look at opportunities.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [15]

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You guys seem to be asking more questions than what you appear in person, so I thank you.

Justin Kwok from Goldman Sachs. Given your much bigger size of recurring earnings of over $15 billion, what is the management thinking? Will you revisit the dividend policy to pack the dividend policy against recurring earnings?

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [16]

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I think I will look at dividend policy as compared to underlying profits. That's the way I look at it. And the quality, I keep going to this point from last year, and we're quite insistent on this, is that quality earning is more important than just total earnings. So I mean virus apart, I mean, no matter what virus, is going to go away one day, but quality assets having basic recurring income will be here to stay.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [17]

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I think Justin is suggesting for us to consider a total return target in terms of share buyback plus dividend from a -- which is what they look at.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [18]

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I think I'll continue to receive recommendations.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [19]

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Another question from Justin, which we answered already, on the property and aircraft leasing. And a third question from Justin is, what is our see-through gearing? And what would we be comfortable with in terms of see-through gearing?

I know the number, but I think, Simon, do you want to take that?

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Ka Keung Man, CK Asset Holdings Limited - General Manager of Accounts Department [20]

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Our see-through gearing, if we take the see-through gearing to shareholders' fund, is 16%. If we take the see-through gearing to our debt total capital, it's 13%.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [21]

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So what level will we be comfortable at?

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [22]

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It depends on the business. I mean if you look at infrastructure, a bit of our business is infrastructure. I think some of the gearing comes from that. It'd be crazy if people don't do at least 60% gearing on infrastructure. On the other hand, if you're looking at some Hong Kong property, I wouldn't put a lot of gearing on Hong Kong properties. So it's really different from industry to industry. On the other hand, if -- let's say, the new acquisition in London when we lease to UBS, a bit of high gearing on that one is a no-brainer because it's got a, what, 16-, 17-year lease by a major bank. So it really depends on the quality of the assets.

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Tak Chuen Ip, CK Asset Holdings Limited - Deputy MD & Executive Director [23]

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I think -- I think we'll go by the credit rating. We want to maintain a single-A rating. So that is going to be our guiding principle as well.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [24]

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I think our guiding principle now is that our debt is too low, way too low. And then give us the -- I keep repeating, it's the opportunity to acquire new acquisitions.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [25]

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Jevon Jim from JPMorgan. Percentage of our order book with Airbus that will be delivered in 2020.

The answer is none. The first delivery is 2024. Hopefully, the sky will be blue by then.

From Mark Leung of UBS. Are we going to see a steady DPS increase in 2020 even if the recurrent income may decline because of certain issues?

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [26]

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Again, our dividend policy really revolves around underlying profit and the quality of the income. And the quality is derived by not only recurrent but the strength of the asset base.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [27]

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Should we expect more large-scale M&A activities from CKA because now it's maybe the best time for acquisitions?

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [28]

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Thank you.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [29]

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They would like us to remind them of our target IRR for acquisitions.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [30]

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I presume they can see me.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [31]

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Yes. Sarah Cooper of BoA. Given you have one of the best balance sheets in global property, what can you say about your plans for payout ratio going forward?

I think that question has been answered already.

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Ka Keung Man, CK Asset Holdings Limited - General Manager of Accounts Department [32]

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Look at the dividend policy. Yes.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [33]

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Eugene Tham of Barclays. What is management thinking about redeeming the 4.6% perpetual? Is it callable in May this year?

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Tak Chuen Ip, CK Asset Holdings Limited - Deputy MD & Executive Director [34]

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Well, it's callable in May. But if we don't call it in May, we still can call it a little bit later on. So why don't we wait and see how the situation goes. If the virus continues to plague the economy, liquidity is tight, we may wait a little while. If not, we can always refinance it at cheaper rate, we'll do it, too.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [35]

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It's our choice.

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Tak Chuen Ip, CK Asset Holdings Limited - Deputy MD & Executive Director [36]

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Yes, our option. Exactly, yes.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [37]

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From Sarah Cooper again. I think this is more a comment than a question. I understand you cannot -- we cannot comment on buyback, but she just wanted to point out that it's impossible to find another opportunity better than our own shares, which is 70% discount to our NAV.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [38]

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You can see that yesterday, too.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [39]

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From Man, Samson of CMB International. Our property sales strategy in light of the current environment in Hong Kong and Mainland China.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [40]

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We really look at deal to deal, but I wish I can say that we had a crystal ball for the last couple of years because we've been erring on the conservative side in property purchase in Hong Kong and in Mainland. And today, looking back, of course, it looks as if we have a crystal ball. But in -- now it's a time when we'll be busier, let's put it this way. We should be busier going through or analyzing opportunities. But there's a very good Chinese saying (foreign language), and that's something that we never ever do. We never bid or have an asset that we fall in love with and said, we must, at any price, want that piece of asset. That's not in our vocabulary. So going forward, that will be our guiding principle.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [41]

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Sarah Cooper wants to know the vacancy rate any differ at Cheung Kong Center.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [42]

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It's quite low.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [43]

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Well, I can say it's over 95% occupied.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [44]

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Yes. It all depends on the rate we want to charge. There's always people want to come in, but it depends on the price.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [45]

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Karena Fung of Heitman understands that we've made some provisions for China property this year. She wanted to know why.

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Tak Chuen Ip, CK Asset Holdings Limited - Deputy MD & Executive Director [46]

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Well, we're always on the conservative side. Provisions are noncash. And when the profit comes through, it will be reflected back into our earnings. And that's been our guiding principle for a long time. If you look at some of our property valuations, that is in a box. The price, even at today's market, it's very much on the conservative side and value at a relatively higher yield. So the same with this principle. But given the situation and virus and everything, we're taking a more conservative angle.

Simon, it's at...

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Ka Keung Man, CK Asset Holdings Limited - General Manager of Accounts Department [47]

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Yes.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [48]

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Yes, okay.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [49]

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Will we have to make provision if the sterling continue to depreciate such as for investments like 5 Broadgate?

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Tak Chuen Ip, CK Asset Holdings Limited - Deputy MD & Executive Director [50]

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Well, we have the good tradition of at least hedging the principal that we put in into our foreign investments. So in other words, apart from the local currency borrowing domestically, the equity we put in, we always have forward contracts to hedge the currency. So to answer your question, we're not too concerned whether or not it will affect our principle. Of course, the income from those countries, we don't hedge. So whatever the income -- yes, well, you can hedge your principal, you can hedge your gearing and everything. If you hedge your income, you're speculating.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [51]

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So we've done as -- the financial angle of our looking at international acquisition is as conservative as can be.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [52]

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Will Lam from INVESCO. Any hints on particular geographies and sectors on M&A that we may be interested in? Any hint at all?

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [53]

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What I try to do is not let my potential vendors know that we really like his deal. So excuse me if I try to keep that to ourselves. We are rather -- put it this way, let me try to answer it in another angle, is that it's a quality I focus on, not just the P&L because the world is getting more volatile, uncertain, so we like income that is more shockproof, that is more resilient in bad times. And also, in terms of countries, we like countries where the law and order is good, where the judiciary system is well developed. That is very important to us.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [54]

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Will Lam of INVESCO again. Whether we would cut dividend per share if recurring income falls in 2020. I think...

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [55]

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I'm not -- I can't make too many predictions -- projections, I should say.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [56]

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From BoA, Sarah, current occupancy at our hotels and serviced apartments.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [57]

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Actually, our hotel and serviced apartments, I think, would fare better than other operators because we have a very high portion of our hotel leased to long-term guests. And if you look at the long-term guests occupancy, they are very high. They are now still at 85 plus, some of them 90s in the long-term lease hotels. The short-term one, we're exactly like everybody else. Today, around the world, I think hotels are quite low in occupancy. Now the -- if there's any -- feeling is that a lot of our hotels have very high ratio of return guests, which means that if things get better, a lot of customers come back to use our hotels. The ratio of return guest is extremely high. I think we must be one of the highest in Hong Kong.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [58]

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Desmond of Morgan Stanley is concerned about the space that SFC is going to vacate in CK Center. Whether we are, well, actively marketing it and whether there are any tenants that have signed up.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [59]

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I don't want to look on one particular deal, but CKC is a very sought-after address. And it's at what price do we want to lease it out. Now today, nobody is actively doing anything. It's very difficult to actively have an analyst meeting also. So I think that's -- it's not because of market or anything, it's just that the people and people interaction is slowing down all over the world. So I think that will be slower, but I'm not too concerned about CKC leasing our offices out.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [60]

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[Joe Ho] of [Rendel Investment]. On Borrett Road, understand that it's not the easiest time to launch the project. Will we release part of the units as rental property?

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [61]

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I think there will be bias for trophy properties. Actually, the last couple of days, there are people looking at some of our other -- not Borrett Road, but other trophy properties, and there may be a large dollar amount sale of trophy properties that we can quote in the next couple of days.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [62]

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Frank Wu of Citi would like Edmond to clarify on the perpetual. He's saying, are you saying we're not going to call the perpetual and...

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Tak Chuen Ip, CK Asset Holdings Limited - Deputy MD & Executive Director [63]

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Well, it's maybe where they may have purchased. Yes, I think they have put it that way. The answer is even I want to call it today, I cannot. I can only call 1 month before the May time. So let's watch, see what happens...

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [64]

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So April would be the earliest day to send out a notice. But...

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [65]

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No one can trick Edmond to answering prematurely.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [66]

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But just you know, in history, perpetual has been called on the first call date and also sometimes the subsequent call date. Not all of them would be called...

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [67]

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Gerald, I have to go to the CKHH analyst meeting. Are there any pressing questions that you want me? Or else, Edmond and the rest of team can continue to be here.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [68]

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Just last 2 questions. One, Hutchison House redevelopment, any more redevelopment of investment properties in Hong Kong?

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [69]

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There will be. There will be, but some of them, we have submitted plans. Remember, even you look at the old Hutchison House, the redevelopment plan was submitted, I think, 5, 6 years ago, if I remember correctly. So the fact that there are redevelopment plan, doesn't mean we have to do it immediately. And if there's any better time to do redevelopment, it should be now. We're renovating our hotels now, for example. So because in good times, you renovate your hotel, you have to close it down. Now with your guests, perfect time to do -- to upgrade the hotels.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [70]

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The last question is an interesting one. Would CKA ever undertake an infrastructure investment without CKI? Would CKI ever undertake a major acquisition without CKA?

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [71]

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This is family. You're asking whether you save your mother or your wife first. This is -- if they fall into water, that doesn't make sense. We try to do it together because there is a synergy there. And unless there is a particular reason, there is -- how shall I put it, there is an upside, a synergy in mega deals, and we can share the risk.

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Lai Chee Ma, CK Asset Holdings Limited - General Manager of Corporate Business Development Department [72]

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I believe we've answered most of the questions. Thank you for joining us. Take care.

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Tzar Kuoi Li, CK Asset Holdings Limited - Chairman & MD [73]

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Thank you. Good health.