Everyone, a very warm welcome to Wharf interim results presentation. You may download the PowerPoint presentation from this QR code on the LED wall, and the recording of the event will be uploaded to our corporate website afterwards. We kindly request that attendees refrain from taking photos or videos during the event. Our management today include Mr. Stephen Ng, Chairman and Managing Director, Mr. Stephen Fu, Financial Controller, and I'm Angela Ng, Investor Relations Manager. Same as before, I will start with the PowerPoint presentation, followed by the Q and A section with our management. The theme for the presentation this time is Feeble Recovery from COVID. Mainland property market is still a big challenge after the prolonged pandemic situation. Market sentiment remains weak as contracted sales continue to decline, exerting downward pressure on the average selling price.
The office market is even more sluggish, with limited interest in office stock and en bloc sales. As a result, it has become necessary to make impairment provision for the slow-moving stock. On the IP front, retail sentiment is not bullish, and the recovery momentum for retail rental markets was generally below strength. Looking at the segmental breakdown. As a company focusing on premium property, Mainland and Hong Kong properties account for around 60% of total assets, group revenue, and operating profit. Contributions from hotels rebounded from a low base, while Logistics and Investment are the other key contributors to the group. The Mainland and Hong Kong economic recovery lost momentum as the mixed economic indicators underscoring the ongoing challenges. Currency translation also tends to understate year-on-year comparison for Mainland businesses when expressed in Hong Kong dollars. In the first half, group revenue decreased by 1% to HKD 8.1 billion.
Underlying net profit surged three times to HKD 1.8 billion, inclusive of a DP impairment of HKD 1 billion for the slow-moving stocks. Total dividend was steady at HKD 0.20 per share for the first half. We maintain a strong financial position to navigate the global headwinds. Net debt remained a low level at HKD 15 billion, representing a gearing ratio of 10.1%. The group's long-term investment continued to provide strong liquidity and dividend income. Market value of the listed equity was HKD 45.1 billion at the period end, and HKD 1.2 billion dividend income was booked to P&L. Our total debt was capped at a low level of HKD 23.9 billion, with onshore debt accounting for around 40% of the total. Average interest cost was 4.9%, mainly due to the floating rate debt. The average interest cost was 6x .
We will walk through our business segments in the order of Hong Kong properties, Mainland DP, Mainland IP, Hotel, and Logistics Infrastructures. The group's Hong Kong properties on the market are all in ultra-luxury class. Therefore, the generally quiet market has low impact to the group. The exclusive Peak Portfolio comprises a rare collection of highly unique properties. The sales tempo typically differs from that of the mass market, and the border reopening also helped to expand the market catchment. Our land bank in Hong Kong also consists of a healthy pipeline of projects at some key locations in Kowloon. Total land bank amount to 2.8 million square feet. All projects under development are proceeding according to plan. A house in Mount Nicholson was sold in the first half, with attributable contracted sales of HKD 289 million, equivalent to HKD 82,000 per square foot.
Recognition was HKD 311 million, net order book at period end was HKD 787 million. Moving on to the mainland development properties. As the market awaited policy incentives, the housing market remained sluggish, and office sales were even worse. Our contracted sales was RMB 1.4 billion, average selling price stumbled. On attributable basis, mainland DP revenue decreased to HKD 3.3 billion, with recognitions mainly from Hangzhou and Suzhou. Land bank decreased to 1.6 million square meters with no new addition during the period. Target completion for this year is 0.2 million square meters, net order book was RMB 6.6 billion. Moving on to mainland Investment Properties. Our mainland IP revenue was stable in a weak market with 2% growth in the renminbi terms. Retail sentiment is not bullish, with sales and rent recovery lack momentum due to the weak employment market and macro uncertainties.
In addition, office oversupply situation worsened. Despite the weak market, our flagship IFS series in Chengdu and Changsha remain the top choice for the top-tier brands, underpinned by their proven productivity. Both malls achieved double-digit positive rental reversion and occupancy stood firm at 97%. Meanwhile, Chengdu IFS office rental is still among the city's highest. Moving on to Hotels performance. The group manages or owns 16 hotels in mainland China, Hong Kong, and the Philippines under Niccolo brand and Marco Polo brand. It is worth mentioning that our third hotel brand will be launched with a new vibrant and lifestyle hotel opening in Changsha IFS in the fourth quarter. Overall speaking, revenue and occupancies rebounded in our hotel portfolio. Notably, the hotels in mainland China achieved decent growth and room rates reaching new peak.
The Niccolo hotels consistently outperform among the competitive set and reported record-breaking revenue and gross operating profit. Meanwhile, the hotels in Hong Kong has a relatively modest recovery due to the slow resumption of traveling logistics and manpower challenges. Turning to our Logistic Infrastructure. Global demand remained weak, affected by the weak global economy and trade tension. Hong Kong port is still struggling to recover the volumes lost during the COVID, while Da Chan Bay reported a moderate decline. In the next slides, we will take a look at our project pipeline, outlook, and sustainability efforts. For project pipeline, our upcoming sales pipeline in Hong Kong includes 1 Plantation Road, Kowloon Tong Project, Kai Tak JV Project, and Kowloon Godown Redevelopment Project.
In mainland China, Changsha IFS Tower 2 will be completed in phases, comprising a new hotel under our own new brand to be opened in the fourth quarter, and also Park Hyatt in the mid of next year. The development also comprises high-rise apartments. Looking ahead, while the businesses are still readjusting to the post-pandemic changes, recovery is still under pressure amid macro challenges and multiple headwinds. The mainland government is unveiling policies to support the economy and consumer confidence, the benefits would take some time to be revealed. In the last part of my presentation, I will walk through our efforts in sustainability. Wharf Holdings is a constituent of Hang Seng Corporate Sustainability Index series with AA+ rating. Our projects are awarded with green building certifications. Chengdu IFS, Changsha IFS, and Shanghai Wheelock Square even achieve LEED platinum certification.
We also established the 2030 environmental targets to reduce environmental footprint. We also support the use of renewable energy. For example, Chengdu IFS has sourced electricity from hydroelectric power. Moreover, solar panels were installed at the warehouse building of our Modern Terminals in Hong Kong. In regard to the community contributions and youth development, our flagship program, Project WeCan, partner with 82 schools and benefit over 87,000 students. We also have a set of robust measures for occupational safety and health to safeguard employee wellbeing. In addition, we are committed to uphold the standard of business ethics and corporate governance. That concludes my presentation. Next, we will come to the Q and A section. A quick housekeeping note before we begin. If you have any questions, please raise your hand and our hotel staff will pass you the microphone. Please identify yourself and state the organization you represent before asking the question.
You may feel free to ask no more than two question each time. May I invite Mr. Ng and Mr. Fu to come to the stage, please?
Thank you.
Now, may we take the first question from the floor from Karl Choi, Bank of America.
Thanks. I have two questions. First, just want to ask about the tenant sales performance for your mainland Chinese malls in the first half, and was there any difference in the first quarter versus second quarter, i.e., initial after the reopening, or did we see any slowdown in the second quarter? Also any big differences between Changsha's performance versus Chengdu's performance. Second question is about the Investment portfolio. Looks like we added to it, and raised some debt to fund it, versus last year when we actually sold down the portfolio to pay down some debt. Just curious about the thinking behind it and how are we thinking about the second half in terms of adding or reducing or just keeping it relatively stable? Thanks.
Okay, thank you. Comparing this year to last year, we need to start with last year. First quarter of last year, that was when retail sales were relatively better than in the second quarter. For our portfolio, the retail income on a year-on-year basis started to decline in the second quarter of last year, and it continued for about one whole year before recovering towards the end of the first quarter of this year. On that basis, there was not a great deal of significant difference between the two quarters this year. Very similar growth rates as such. Having said that, I should quickly add that while we do not have a good deal of data post the reported period, there is indication that retail sales in our respective properties, and possibly reflecting the general market of slowing down in the month of July.
That is something we still need to look at. We're not sure yet. There are early signs of a possibility, which we can't confirm at this moment in time. Therefore, if you look at the entire portfolio in renminbi terms, total turnover in the first half was slightly ahead of the same half last year. Operating profit was about flat. Of course, because of the strength of the Hong Kong dollar, we reported in Hong Kong dollars. Once converted to Hong Kong dollars, we actually reported a decline both in revenue and in operating profit, by some number in the mid-single digit. That's the IP situation. Concerning listed investments, yes, we did increase our investment in the first half of this year. You will remember, and I think you did mention this too last year, we sold down that portfolio quite a bit.
We saw the market turning against the portfolio and sold down. This year, we took advantage of generally better prices to replenish some of what we had sold. In doing so, we effectively made a turn. We didn't buy back everything. We bought back those stocks which we feel have the most potential between when we sold and when we bought again. In spite of that, our gearing is comfortable at about 10% currently. I hope I've answered your two questions so far.
Any difference between Chengdu versus Changsha?
I am sorry.
Chengdu versus Changsha.
Oh. Chengdu is still a bigger revenue and profit center for us today, partly because it is more established. Chengdu is facing more competition in that city than Changsha. New competition is coming up in all cities, but the threat that we see in Chengdu today is a little bit greater than that in Changsha. I hope we can continue to keep up. We have been doing well in the past seven or eight years. We have established a good market position, and we will do more to try to defend our market position. There is competition.
Thank you. May we have the second question from Mark Leung, UBS.
Thank you, management, for taking my questions. I have a follow-up regarding on the mainland retail sales. You guided we obviously a pretty strong YoY growth because of last year low base. How about for the first half retail sales compared to two years ago? What's the retail sales look like? I think that's the first questions. The second question is, I think, two days ago, you also mentioned that we have a pretty cautious outlook for Hong Kong retail. Today, you are also mentioning we are maybe cautious on the Chinese retail. From your perspective, going forward in second half, which region do you think that it will perform better? Thank you.
It's a very difficult question to answer. A lot depends on many factors. First of all, the economic performance in the mainland. Secondly, how much of the domestic consumption power is released for traveling abroad. Up to now, we understand the speed at which exit visas are granted or renewed is relatively slow, and therefore, that's helped to retain the consumption power within the borders. If that changes, it's quite possible that some of the consumption will leak to external places, both short-haul and long-haul. We understand short-haul, Japan, Korea, and longer haul, Europe and North America. The visa situation is still not as favorable as it was previously. That has helped to retain the consumption power domestically. If that changes, obviously, it would become a very different scenario. In any case, the mainland China economy is much bigger than the Hong Kong economy.
They've probably got more levers than we do in Hong Kong. I think if I have to put my personal money on it, I think I would put it on the mainland. I've lost many bets before. Personal bets. Be warned. Second half, it's really difficult. Consumption sentiment is also an important part. Confidence and consumption sentiment. For instance, in the housing market, central government has issued directives to relax mortgage rates and mortgage amounts. That has so far not yet resulted in definitive action at the local level. In turn, the confidence of buyers is still far from what is needed to rebuild a market base. Understandably, buyers are waiting on the sidelines. They want to see what the real incentives are and how they can benefit from it.
At the moment, the general expectation is that prices are not about to surge and there is no hurry to buy. That is, of course, as you know, a self-fulfilling prophecy. Unless somehow there is the urge to start to buy, the market will not go up again. Generally, we take a positive but cautious, very cautious approach to the second half of this year.
Thank you. May we have the next question from Raymond, HSBC.
Thank you, management. I got two questions. The first one is about Hong Kong DP. As you mentioned, the current development is actually well under your plan. Can you elaborate further, say, for example, the sales plan of your upcoming project in the next 12 months time? This is the first question. The second question is about the Investment in China. The management has, I'll say, very successfully slowed down your investment in China over the past few years. Given the current situation, can you share with us your crystal ball in the next five years? Is it the right time to allocate more resources to invest in Mainland China for your future growth in the next three to five years time? Thank you.
Okay. Let me try to answer the second question first. If you have been analyzing our numbers closely, you may have noticed that for a number of years, we as a group were net long in onshore renminbi. There was a time of expansion for us, and a lot of cash was generated onshore, so to speak, onshore Mainland China, and that was trapped onshore. What we reported today, reveals that that net long position has become net short for the first time in quite a few years, 10 or more years. That's because we have been repatriating capital to Hong Kong over that period, particularly in the last five years or so.
On completion of projects, we have not found it commercially attractive to reinvest onshore, and at the same time, some of our completed projects, we were able to refinance them, borrow onshore in renminbi to repay the capital which we had previously injected from Hong Kong. When we were building up that portfolio, we borrowed in Hong Kong dollars or U.S. dollars and converted that into renminbi to invest onshore. When we bring the capital back, we bring it back in renminbi, and we sell it, and convert it back into Hong Kong dollars . The structure composition of our debt has steadily changed over the last five, 10 years. A lot of the trapped cash has been released. That's quite good timing as well because we're now able to borrow renminbi onshore a lot more than we previously were.
As you know, by policy, land for property projects in the mainland need to be invested through equity and not debt. We couldn't borrow against land previously. All we could borrow previously was against construction cost. That's changed when the properties are completed. They become investment properties, and we can borrow against the entire project. When we were borrowing Hong Kong dollars , when Hong Kong dollars were cheap, that was okay. It was cheaper to borrow Hong Kong dollars than renminbi . The disadvantage of borrowing Hong Kong dollars offshore was that we were not able to claim tax deduction because it's borrowed offshore. Now we borrow onshore renminbi . We benefit from a cheaper interest cost, and we also benefit from interest deduction, tax deduction rather. The effective borrowing cost for our renminbi assets is much lower than if we hadn't been doing the repatriation.
That, in a way, has helped us to mitigate the rising cost of Hong Kong dollars . Let me see. That's Hong Kong DP. Hong Kong DP sales pipeline. The only other project other than what we have already been selling, the only other project which is likely to be launched for sale within the next 6- 12 months would be 1 Peak Road. It's again another ultra-luxury project. The general Hong Kong DP market has been quiet. Fortunately for us, we don't have too many projects on the market, and the projects that we do have on the market tend to be ultra-luxury, which is a different segment of its own. The reopening of borders has actually helped to bring buyers back to that ultra-luxury segment. In a way, it's helped to broaden our catchment.
Hopefully we'll be able to benefit from that, which is why we're monitoring the market closely to see what will be a good time to roll out the 1 Peak Road project.
Thank you. May we have the next question from Ken Yeung, Citi.
Hi, Stephen.
Hi.
I think this is a question for Stephen because he's heading both Wharf REIC and Wharf (Holdings). I am just curious on your long-term investment in securities portfolio. In the same six months, just a rough calculation, you have been buying HKD 9 billion in Wharf (Holdings), but in Wharf REIC, you are selling HKD 5 billion. Both of the vehicles are facing the same interest rate increase 5%, but the decision that you have made is totally different. One is selling down, one is buying. Can we understand why this shuts a different direction, given that the interest rate is going up, but you are still buying the stocks on one but not the other? This is the first one. Probably, I finish this and ask the second one.
Yeah, sure. In deciding whether to buy or to sell, you don't just look at the market, you also look at how much money you've got. How much money you need. In the case of REIC, our debt level was higher, and because it doesn't borrow renminbi , it was vulnerable to the rising Hong Kong dollar interest rate. Entirely vulnerable. We saw tripling of interest cost, borrowing cost in the first half. Somewhere around the middle of the second quarter, we reexamined our portfolio and realized some of the investments in there were suffering from negative carry. When interest rate was low, they were positive carry. But as interest rate rose higher and higher, they became negative carry. It would not have made sense for us to keep those. That's what we sold. That helped us to bring the gearing down to 20%.
The other situation here today is at the beginning of the year, our net gearing was somewhere around 3%, I think. 2%? 3%?
2.9%.
Okay. Well, low single digit. Even after the additional investment, our gearing is 10%. We have more money in our pocket today than we had money in the pocket two days ago with a different company. I hope that explains why we seem to be going in different directions.
Okay, thanks. The second question is actually I asked similar last year, in March. From the Chairman's statement, from all the things, seems that every segment that we are working on, actually, we don't have a positive view. I'm sure that, again, I mentioned about you must have five-year strategy, six-year strategy. If you are bearish on everything, where should we bring What is our target of Wharf become in the next three years if we continue to go into this business? Should we be buying more stocks or doing other stuff, or even doing other business if we are not good on Hong Kong property, China properties?
Well, a lot depends on what your options are. Obviously, you have many options. If you have the view that an aggressive company is what you should be investing in, that's one view. You may be holding a very positive view about the next two years. If, on the other hand, you're looking for a more defensive situation, that's another option. As we sit here today, we're cautious. We're definitely not aggressive at all. I don't think I've ever given you the impression that we're aggressive, not in the last few years. All right. In a way, we were lucky that we didn't buy more land the other side of the border the last few years. Whether or not there will come a time when we should reverse that direction, quite possibly. Not in the next six months.
We don't think we should be doing that in the next six months. In the meantime, the new projects that we entered into in Hong Kong, on the Peak, and Kowloon Godown redevelopment, and so on, a good deal of capital will be required to complete those. It's timely that we were able to bring capital back from the mainland to Hong Kong. That is not to say we would definitely keep that mix in two years' time or three years' time, because markets do change. In terms of SUF, sources and uses of funds, I definitely see our funds being deployed in Hong Kong the next two, three years at the moment.
Thank you. May we have the next question from Jeff DBS?
Hi, management. Thank you for taking my questions. I got two question. The first question is related to the provision. You make HKD 1 billion provision in the first half.
Yes.
Can I have more color on the provisioning? Is this mainly for the office properties? Are they all completed stock that are slow-moving, so you make the provision and also the location, whether in Shenzhen or Hangzhou. If you can give more color, it would be much better for us to understand the reason behind. The second question is regarding the long-term investment. I still remember two days ago you mentioned that you tried to sell those listed investment with negative carry. Now you are the lead buyer of the long-term investment. Can you assume that you were focusing on buying those with positive carry for Wharf (Holdings) in the first half?
Right. Okay. Provision. The vast majority of the provision relates to office stock. It's no secret that the office market in mainland China, including even in Beijing and Shanghai, are oversupplied. Very oversupplied. New supply keeps on entering the market and demand has been quite flat. In some cases, under the land sale agreement, the office stock needs to be held for en bloc sale rather than strata sale by floor. You may remember, that actually applies not only to office but also to residential, that restriction. A few years ago, when land sales became too hot, the various local governments introduced terms which required the buyer, the developer, i.e., who succeeds in buying.
First, they bid based on how much to pay for the land, once they have reached the limit that that government sets, because they don't want to see land price going too high, you start bidding on something else. You bid based on what proportion of the GFA the developer's prepared to hold for rental income. That's one of them. There were other variations. There were other situations where you end up drawing lottery. Depends on how many people bid up to the top, then if there are five of them, then you draw a lottery. Whoever's lucky, wins. Which still happens today, by the way. Another variation is dedication to low-cost housing. You build and you give back how many units to government. All kinds of variations in order to keep the headline land cost down.
We, either by ourselves or through some of the joint ventures, have bought some of those sites. The developers in those respective cases end up holding stock, which we are not allowed to sell unit by unit because of this so-called self-hold restriction. What developers have been doing is whatever they are not entitled to sell on a unit-by-unit basis, they aggregate at the end of the project. After everything else has been sold, they sell the company. At least they get their capital back that way by selling the company. In a bullish market, this kind of en bloc sale would probably not command too much of a discount. In a market which is far from being bullish, there are not that many buyers of size. Far fewer buyers of size. They typically would negotiate for a much deeper discount.
That's another reason why we, in assessing the market, decided it was appropriate to mark down, A, the office stock and B, the en bloc stock according to the current market price. Now, whether or not in the second half of this year then next year, additional provisions will be required is a function of where the market is going. I don't have a crystal ball. Hopefully, the market will stabilize, hopefully some buyers will come back to the market. En bloc buyers will come back to the market. Today, because it's a buyer's market, if I had capital, I would command a big discount. That's basically what that is. To your second question about investment. Again, this company is different from the company I was talking to you about two days ago. This company does not invest solely in yield.
We also invest in growth. In some cases, we do carry stock, which is a negative carry, but has good growth potential. We're looking at total return. Unlike REIC, which because of its debt level and because of the nature of its main IP business, is primarily yield driven.
Thank you. May we have the next question from Simon Cheung, Goldman Sachs?
Yeah. Thanks for the presentation. I've got two questions. Back to the IP portfolio. Given that we just have a reopening in China, one would have thought that the sales or the rent performance would be stronger, because you reported only up 2 percentage points. Particularly, I think given that, I saw the turnover rent proportion is like what, 32%?
Of your total rent.
I think you must have some leeway that you can adjust your rent a bit. Can you comment a bit, why is it so weak?
Okay.
Also the competitive environment on that.
Okay.
I've got a second follow-up.
Sure. Now, I think it's important to put things in context. If our portfolio were primarily Shanghai based, I would expect our year-on-year growth to be phenomenal, because Shanghai was shut down for two months in the first half of last year. We actually have very little Shanghai exposure, and the COVID impact on our portfolio last year was fairly evenly distributed throughout the year. There was no distortion, unlike some of our peers with high Shanghai exposure. It's not comparing apples and apples in those cases. The point about turnover rent as a proportion of total rent, it's sometimes misleading to look at it in isolation, because base rent is not static. If base rent goes up, the room for turnover rent goes down. Other things being equal. That's precisely what is happening to some of our properties, in particular, Changsha.
Changsha opened in late 2018. Call it 2019. Late 2018. The first rental cycle finished in early 2022. We started to enter the second lease cycle for a good number of our tenants. When Changsha first opened, or before it opened, there was relatively little interest in Changsha. We had to offer very attractive base rent to attract tenants. Having traded there for three years, they know the potential of the market, and they realize that the first cycle base rent was well below market. We were able to bring up the base rent considerably in the second cycle. In doing so, that obviously squeezed the room for turnover rent. You need to look at that in that context.
You can't just look at one number and say, "Well, can be more." Of course, we'd like it to be more. There is this other factor as well.
One more follow-up on China DP. I think the margin for the net margin for this half was, I think down to about 5 percentage point.
Yes
Look at the number correctly. Again, I remember last time when we discussed about your provision, how you make your provisions. We get the sense that maybe the remaining stock of the properties, the net margin will be hovering at about closer to eight to ten percentage point. I don't know how we are thinking about, going forward, what sort of net margin are we talking about for the portfolio?
Sure. A good deal depends on what projects are completed during the period. In this particular case, we have one or two large projects which were not very profitable. Very low margins. In fact, we had made provisions against those projects already. Nevertheless, they were completed during this period. We have to report the turnover, although we were not able to report any profit or hardly any profit from those. These very thin margins from these projects diluted the overall margin. It's a matter of timing. In the next period, I'm not predicting the second half, in one of the next periods, let me be clearer, it is possible we may be completing some projects with higher margin. The overall margin may not be that high, but it may fluctuate from period to period.
Thank you. In the interest of time, maybe we will receive the one last question, if there is any. Gentleman on the fourth row.
Hi, management. This is Will Chu from CGS-CIMB. I would like to follow up your investment in China. As Chairman mentioned that you lost quite a bit of your bets in China. How you see your investment in, or deep investment in China going forward? Also, how would you see your partnership or your strategic operation with one of your investees, which is Greentown China, going forward? Thank you.
First of all, let's talk about Greentown. Okay. We own 22% of Greentown. We're not the largest shareholder. We're the second-largest shareholder. An SOE, CCCG, is the largest shareholder. They have about 28%. We have one Director on its Board of 12. We currently account for that company, our investment in that company as listed investment rather than associated company because we don't believe with one director on the board we exercise enough influence on the company to classify it as an associated company. Greentown China happens to be one of the stronger non-SOE developers, during this cycle. It is financially sound. It is performing well. I cannot speak on behalf of Greentown, although I'm a Director. I'm not the spokesperson on behalf of that company, which will be announcing in two weeks' time? Today isn't it. Two weeks' time. They'll be announcing in two weeks' time.
Generally, Greentown is held up as one of the better-performing private developers, and we're quite happy with our investment in that company. It is classified currently as long-term investment, and we do intend to hold it as a long-term investment. If there comes a time when we are considered to be able to exercise sufficient influence over that company to have to reclassify it as an associated company due to our 22% stake, we will do so. We'll just comply with the accounting standards. Either way, it is a long-term investment with which we're very happy. The general outlook in mainland China is uncertain. I'm not the outlier, I don't think, in this room. I think the uncertainty stems from a number of things, obviously one of them is the geopolitical tension between the U.S. and China.
That's a source of a great deal of concern to many people, including us. We can't change it. We happen to think that these de-risking, decoupling, or national security issues are irrational economically. It's not economics that come first when it comes to these matters, and I don't think we have control over that. The next six months at least will not be easy six months for mainland China investments. The only bright spot as I sit here today is our very small hotel exposure. Apparently, there's a flight to quality among consumers, partly because maybe they can't spend EUR 1,000 on a European hotel a night, so they don't mind spending EUR 250 on a Changsha luxury hotel. Our Niccolo hotels on the mainland are doing extremely well. Record revenue and record GOP in the first half of this year.
At this point in time, we think that trend would continue in the second half, that's a tiny piece of our business. I would not recommend anybody to buy or sell on the basis of that tiny piece of business. We have to look at the bigger picture. The IP business is stable but not exciting right now. Let me use that term. I'll be perfectly honest with you. The DP business is uncertain. We haven't talked about this other segment, i.e., Logistics. Container throughput and air cargo throughput are both down and not looking good. Unfortunately, I don't have a lot of good news for the audience here, I have to tell you the truth. Whether or not you consider we are too defensive or not defensive enough, that's a view you have to take at the end of the day.
We just need to be honest with you about how we look at the coming months. Thank you.
Thank you. We will now conclude the presentation. Thanks a lot for joining us today, and we look forward to seeing you again next year. Thank you.
Thank you.