Earnings Call: H1 2020

Jul 30, 2020

Good afternoon, ladies and gentlemen. Welcome to the interim result announcement of HanLiong Properties and HanLiong Group. As you can understand, we turned the presentation online this time, including a sales eye analyst. They actually now attend the webcast. Now we have over 100 investors now joining online. Despite the social distancing, we always strive to maintain very high accessibility and also transparency. So our management team are out to talk to you and also interact with you later on. Let me introduce our speakers today, Mr. Ronnie Chen, Chairman of Heng Lung Group and Heng Lung Prop Mr. Weber Lo, Chief Executive Officer Mr. Ex CEO, Chief Financial Officer and Mr. Ejio Chan, Executive Director. Let me first invite Huaba to highlight the interim results. Again, thank you for over 100 participants joining in for the session. Sorry that we could not see you face to face, but we're trying our very best to keep you informed. I think the numbers I will not repeat again, but I just want to highlight a few key takeaway. First of all, our core business, our rental business, our revenue actually more or less flat to last year versus the first half of twenty nineteen. If you break down into the business, Hong Kong down by 5%. However, Mainland was very good that can grow by 4%. If you look at the renminbi terms, actually they grew by 9%. Lead by, of course, those properties, we have strong luxury content. So if you look at Shanghai, we grew by 8% and then and also some others properties that we have better luxury contents. The V shape rebound starting from April. Basically, we're seeing from one place to the others and then they are strong consistently. And then we hope that with luxury content, this trend will continue. At the same time, for those lifestyle malls without the luxury content, we see the V shape is still there, but the recovery is more gradual than those shopping mall with luxury. Office in Mainland, I would like to highlight, we see some pressure, especially I'm sure you heard that vacancy both in the Tier 1 and Tier 2 actually are quite high. However, if you look at our own business results, our occupancy, I would say, all of them except the new openings, they are all over 90%. And then because of our new opening of Wuxi OT2, and then we got 2% increase on revenue. And overall, I would say, in a very tough situation, I mentioned 3, of course, in the last 6 months. First, because of the COVID-nineteen outbreak, which start in Mainland, and then we feel basically the same impact across the world. The second one, of course, the social unrest starting in the second half of last year, And we still need to continue to manage and help our tenant and at the same time trying to make sure that they can, on one hand, lower down their burden, but at the same time trying to make sure that they can stand on their own feet. The third, of course, is the U. S.-Sino China relationship, which may hurt not only from the political perspective, but also in terms of the renminbi depreciation. It depreciated by 4.5% versus first half of twenty nineteen. So with all the headwinds I just mentioned, I would say the numbers that we just report is respectable. At the same time, I would like to also highlight the valuation loss in this first half, which talking about $4,500,000,000 $4,600,000,000 which account for on average about 2.5% of our total asset. And of course, you can see that in Hong Kong, the numbers is higher when compared to Mainland. And if you zoom in, in Hong Kong, the drop is more in those touristic areas such as Mong Kok and Causeway Bay. In China, most of those are coming from the area that we see softening of the rental. But at the same time, most of those are actually at the north part of China. At the same time, we also recognize the pressure of the office sector and therefore some of those valuation laws are happening in that particular sector. So I would say the 2.5% overall of our total asset is not a dramatic numbers, but because of our asset size, the $4,500,000,000 basically incur a loss together with the valuation. But that will not affect our cash flow and that will not affect our dividend ability to pay. So I think I just want to stop here. And then of course, I welcome any questions. Perhaps any remarks by our Chairman, Ronny? Well, good thing everybody online. This morning we're at the Board meeting and I told the board members, I said, the outward environment could not have been worse. The 3 issues that Weber just described, any one of them is enough to knock anybody off the horse. And we got 3 of them all together at the same time. And yet the reality is on the ground in the mainland of China, it's like a fairy tale that how can you have such very positive numbers? I just cite you one or two examples to supplement what we have just said. Some shopping centers have been closed for anywhere from half a month to over a month. And yet, the April, May, June numbers were so strong that the total 6 month revenue could not only be caught up, but actually record a very, very decent advancement. That shows you that the luxury sector is really, really strong. Looking another way, all the major brands, the LVMH, the Kering, the Richemont and so forth, all those companies are rushing to open new shopping centers to open in new shopping centers to open in shopping centers. And that tells you something. And as I told my colleagues that the report that came out a couple of years ago that says that I reread the report recently that they expect by 2020 5 that 50% to 55% of the sales will be from of the total Chinese sales will be transacted inside Mainland China, whereas right now, it may be 26, 27, 28. So that means a lot of repatriation of sales that were taking place outside of Mainland China. Well, ladies and gentlemen, I've got news for you. That number is not 55%. That number for the last period of time is 100%. And the reason is because nobody can travel. You can't get out of the country anymore. And so all the sales have repatriated, of course, together with the fact that the Chinese government has done a lot in the last year or 2 to lower import duties and the like. And then a lot of brands have also lower prices equalized them with the rest of the world, in particular with Europe. And all these things put together has caused the high end luxury mall very, very thriving in the last 3 months to 4 months. Here, I would add a couple of points. One is people don't recognize this and that is shopping for luxury goods is not shopping per se. It is pleasure. Whereas you go buy in a grocery store or the regular shopping malls, that is of necessity. 1 is a pleasure, an entertainment even. The other is just a necessity. And so the nature, the psychological condition of the shopper is very, very different. As I tell people, I said, a 5,000 square feet luxury home and a 500 square feet regular home in Hong Kong, they are both residential, but they're extraordinarily different. The one who buy the 5,000 square feet versus the one who buy the 500 have totally different needs and considerations. And so the shopping for luxury versus the shopping for regular, say, a 3 star mall, that's psychological condition of the person is extremely different. And so as a result, you may even say that it is a different subspecies. And so it is not surprising that the luxury mall should perform very differently. Of course, there can be a time when the reverse is also true, but not right now. Look at it another way. The footfall of the regular malls and the high end malls, both of them have not recovered to the level of the pre COVID in the mainland of China. I think most of them are probably still at 60%, 70%. And yet, the ones who go to the luxury malls, they buy a lot more. And of course, the unit cost is also higher. It's not just the volume, but it's the value. But it also tells you that although footfall has not recovered as much yet sales have been gangbusters and some of our brands are really doing great business. And so let me sorry, I'm being a little long winded, I in the last year, this year and next year, we are signing probably around 70 lease contracts with the top 20 luxury international brands in our shopping centers, and most of it is outside of Shanghai. And if you were to extend it to another year, you're talking about 80 some leases that will likely be signed. And of the 70 for last year, this year and next year, most of them have already moved in. It's not like dream pipe dreams. These are shops that have not just signed but have already moved in and are doing business. And so that you can see that the luxury market is very, very strong for which we are very, very happy. And a lot of our shopping centers have already successfully migrated from being a subluxury mall to a luxury mall. So it's Saichu 3. Grand Gateway is 1. Wuxi 76 is another. Dalian, Olympia 66 is another. And then of course, Spring City in Kunming 66 was born to be such a luxury home to luxury as we call it. And I foresee that Wuhan Heartland 66 when it opens it will be ready end of this year, but open probably early next year. It will again be another luxury product. And so I think that in spite of the very, very difficult situation and none of us are underestimating the force of those 3 serious negative things. And for Mainland China, 2 of them, COVID and the U. S.-China relations. And yet, we're doing very, very well on the mainland. Thank you, Chairman. There are obviously very strong interest about our China story for Han Long. A few questions regarding the momentum of the retail sales in China. How does this sound for July, the retail sales trend so far? And whether we expect second half for 2020 this year will be better than first half, particularly whether it will be better than 2Q of the first half. Just give a little bit of, I would say, the sentiment so far, except I would say, out of all our cities, we operate now in 9 cities. But except Danyan, I'm sure if you read some news, there's some surge of cases in Danyan. Other than that, believe it or not, our July sales number continued to be strong. Some of our luxury shopping center, the sales number actually is even stronger than what we saw in June May. So we are convicted and believe the trend will continue. Whether it will continue to be going up and up every single month, I can't tell, but I believe that it will maintain at a very high level. I just want to highlight again, even though Ronny just mentioned, the footfall is still not yet fully recovered. But if you look at our numbers and which we disclose all the information, our Grand Gateway 66 in 2nd quarter and in June, the footfall already recovered into the positive arena. Similar thing in Plaza 66. Those outside Shanghai, Some of those are still actually coming up. But in terms of trajectory, actually it's coming up nicely. But again, why I need to have a disclaimer because we still do not know the evolution or the COVID-nineteen situation in each of the city. This is all subject to any government measures. For example, in Danyan, as we all know, we keep in touch with all our teams members. Some of the districts, they now classify as high risk and medium risk, and that will have some impact to our footfall. But this is all we are working very closely with our local team, and making sure that we will do the right thing for the customers and for our tenant and making sure that we will get the best for our stakeholders as well. So I would say overall, second half, we are very confident based on what we see, both from the luxury content mall as well as from the lifestyle mall. But of course, in terms of the recovery pace, really subject to the COVID-nineteen situation. That is what I can say. Okay. There's a follow-up question. Do you expect to see a sharp I don't think so. First of all, the reason why I would say based on we are all human beings and when we actually get a good experience, you will repeat your purchase again. Our whole objective, our belief is that if we can provide the best service and the best customer experience to our customers when they come in into our shopping center. And the chance of us having a repeat purchase is higher. So say for example, we launched our House 66, our CRM program 2 years ago. Now basically we launched in all shopping centers except Forum 66, which we will open we will launch in August this year as well. So by August, we launched the CRM program for all our shopping malls in mainland. And now we have a lot more data. Basically, we're based on the data. We know exactly the customers, what kind of spending pattern and experience and brands that they have purchased before. And then we can actually target them and working together with the brands and try to make sure that we can increase their propensity of buy, right? And there's a lot of data crunching and working together with the team and therefore we can target them with much better marketing. And therefore, we can reactivate or actually rejuvenate the sales momentum. The April numbers and June numbers, basically we can tell you exactly this period. Without the CRM, we have to wait for the brands to tell us how many customers they can bring in. But with a strong CRM database now, we can proactively call out those customers, and therefore, we can tell them exactly what kind of new products they have launched, and therefore, we can bring them in. And therefore, their purchase amount and the ticket size is a lot higher because they have a well planned journey when they come into our shopping mall. So this I think is a very powerful software, which we would love to talk about because at the end of the day, yes, the global international travel when they resume, yes, some people will still go out and buy. But really the job is on us, how we can impress them and make sure that when they come, they have a good experience. And also based on what Ronnie just mentioned, because now the price between the international market and domestic market is much closer now. If our experience and we have loyalty points, we have experienced that money cannot buy, which we can bring to them, I think the chance of us retaining a lot more of those customers they used to travel to buy instead of staying to buy, to buy more from us, I think the chance will be a lot higher. Just one good information I want to share. The last 4 months when everything resumed, we acquired a lot more new customers which we have never met before. Those customers, they used to travel internationally to buy luxury products. And this time around, we have basically welcomed them with open arms because once we can acquire them, they stay with us and then they can purchase with us, we would know more and therefore we can satisfy them with a much better experience. So I think to answer your question, I'm confident that even though when the border is open, the momentum can continue. I'll add 2 points. One is because all the major luxury brands realize that China is by far the biggest market, they begin to stock up the latest, the most complete line of products. So in the old days, you go to Paris, London, you may have a more complete line of products, now no longer. Shanghai and other major cities in China are among the most sophisticated of all shops within those brands. That's one. And then another one is U. S.-China relations, as we all know, is not in the best of shape. And America is lining up its friends, at least temporary friends to be against not just China, but the Chinese people. And so if the Chinese people go to Paris, London or New York, wherever, Los Angeles, they don't feel welcome anymore. Then do you think that they still like to go there as much as they otherwise would? And so the lack of travel because they don't feel good, they don't feel safe traveling into some of those cities may also be another reason why once those sales are repatriated, domesticated that it is unlikely that they will leave. So I think that I don't like to see U. S.-China relations become so bad today. I really don't like to see that. I've worked very hard for the last 30 some years to better that relationship, but I failed. Well, if you fail, you have to accept the fact and do the best. Well, what can you do? One is make money out of it. Chinese citizens don't want to go out anymore, come to my shopping centers, stay with us. And as Weber says, all of us are creatures of habit. And once you have a good experience and today, the shopping experience inside mainland China in the top mall such as ours is as good as anywhere in the world. The sales people are really, really sophisticated. And so once you have a good experience and then you got all the points and this and that, House 66 that Hang Nong has instituted recently, then I think that the chances are very good that that number of 100, meaning almost all purchases right now because of COVID are domestically spent those money that it will not drop by too much. Okay. A question like this. There was a big divergence of sales performance between malls with heavier luxury contents and those with lighter. Do you think e commerce will take away a bigger share of sales of your malls with lighter luxury contents after the COVID? And what will Han Long do to help accelerate the sales recovery in second half, especially for those malls like Palace, Park and Riverside and Olympia? First of all, I would say we look at our vacancy drop in those centers in a positive way because it will be a golden opportunities for us to replace those weaker tenant and replace them with a stronger one. Some of those, I'm sure this e commerce question will come in years to come. But I can tell you that today, some of those trade, for example, F and B, yes, you can do take away, but actually you take out the joy and the pressure, the social animal like human being get it together. So I think today the reason why it hit us, especially those lifestyle shopping more because basically the measure and the scale of all our people around different cities stop them to travel or to go even out of their home. So I think this hopefully I think will be temporary. But at the same time, if our numbers and also Ronnie just mentioned the number of leads that we are going to sign with the luxury brands. We are very confident to make today, we have 4 luxury content or maybe 5, actually 5, including Forum. We have 5 luxury content driven more to more, right? So we would love to have to improve Olympia 66, Kunming born with Luxury Content, and we believe that we can do the same for Heartland 66. So more and more, hopefully, the next 1 year or 2, we can prove to you that out of our today 9 cities, including Hangzhou, more and more of our mall will be led by luxury content. So this on one hand because of what we just mentioned about the experience, repatriation of purchase, the price almost equalized globally for those products. That will be one of the drivers for us to continue to drive sales. But at the same time, hopefully, the pandemic will not be here forever. And therefore, of course, we will work with our tenant to bring unit experience to our customers and therefore to have a reason for them to come to our shopping center. And therefore, they will find something different, not only at points, but also experience, tray mix, pressure of shopping and all that will come. So I think, yes, today, the recovery is more gradual than those with stronger luxury content. But I truly believe that hopefully when the pandemic settle, everything will be back to normal. Thank you. Can you give an update on the project in Wuhan, Heartland 66, the completion schedule and also the latest releasing status please? So the construction is back on track. We had roughly a 4 month delay, but we intend to complete construction by the end of this year and opening first half of next year. So that represents roughly 4 months delay. I'm pleased that on-site the construction is back to full speed. We've done testing for all of the on-site staff, including contractors. And so we're confident that it's a safe environment for the workers and our staff alike. So leasing is going well. We have, I think, what will be a very strong trade mix. I can't go into too much detail, but we're close to 60% leased at this point. There was a little bit of a dip during COVID, but that's to be expected. And frankly, it wasn't people that we were too sad to see go. So I think that this will still be one of the best projects when we open it perhaps even stronger than Kunming last year which was already a very strong opening. Thank you, Andrew. This question must interest many investors. Your dividend has raised $0.01 last year. How do you see the dividend outlook with a strong China luxury rebound but weak Hong Kong performance? You did mention in the announcement that you will expect a full recovery for Minglan Malls by end of 3Q. So how does it look like for dividends? Should I ask Chairman? Why don't I first? I'm sure you all know, we always mention our policy, the dividend according to our earnings ability to pay. Yes, we are confident about our China recovery, but today we are still 5.5 to 6 months away from the completion of the year. So we will not know about the situation and also subject to the Board approval on the dividend payment. But I want to go back to our way of doing things. When we plan about dividend, we always plan for a long term. Of course, we do not want to change, but hopefully, if we change, we change for the upside on the positive way. So I think I know that you always ask this question, but I hope our China story will be strong enough to offset any slowdown or any uncertainty in the Hong Kong business. But so far as of today, I can't tell you more than our policy. And then again, we don't have crystal ball. If this continue to be strong and much stronger than what we see and offset whatever uncertainty in Hong Kong, of course, we love to continue. All right. Thank you. Actually a follow-up question of whether investor can benchmark DPS absolute dollar term rather than a payout ratio. Yes, we basically while we don't have a payout ratio, you can benchmark absolute dollar. We want to make it a stable and steady dividend. Okay. Another question is about our operating margin. They have seen a margin contraction for Mainland and also Hong Kong. Was it due to promotional expenses? How do we see the margin outlook in second half? First of all, in Hong Kong, I think it's very easy to look at it. When you are enjoying 80 5% or 86% margin used to be, any drop in the top line, even though you cut as much as expense as possible, those top line drop will go straight into the bottom line. So I think this is so clear that because our margin in the Hong Kong business is so high, top line will be the source of the changes in the bottom line, and they are very sensitive. In Mainland, actually if you break down our numbers, yes, you see a drop, but mainly it's not because of our existing project. Actually all our existing projects, our margin actually improved. The only reason why the overall is dropping because a lot of the new projects, they just have been launched in Q3 of last year. And when you just launch, you don't even have a full year impact and there will be a loss incurred. So and that's why the margin decrease in Mainland basically are all because of the new project. But the existing project, all the margin actually improved. Could you comment on the rental reversion for different types of malls in China, for example, luxury malls and also the lifestyle mall? On average, what did you see so far? And what the outlook for second half this year? Okay. Again, rental reversion subject to case by case and also depends on location. In general, I would say, if you look at some of our shopping centers, they are having 80 plus vacancy. Now if I tell you every renewal are positive, I'm lying to you because the scenario and situation is tough. But at the same time, that cannot have a one size fits all answer because some of the location, if we could find a better tenant and improve the trade mix and all that, some are actually positive and some are negatives. I would say, more generally speaking, Hong Kong is facing much more headwinds than in Mainland. And in Mainland Luxury sector, I would say, if you are the strongest shopping center in that particular city, I don't see any reason why we will have a rental reversion negative. Actually, we will see positive one. And the sales continue to improve and then we will actually earn even more effective rent. However, for F and B, for cinema, for some of the trade like kids education and all that, is tough because some of those measures are still on and then they could not open and then we have to help them. And if those could not survive and then it will be replaced by the same trade, you will see a negative reversion. But if you replace them by those trade that they are still in demand, that will be positive. So I can't there's no strict formula on all, but I hope you can understand that everything is still very fluid. But we will not just fill up the vacancy for the sake of doing it because we know that we have a good base and we want to maintain our positioning. We want to maintain the highest quality trade mix. And therefore, we will do the right thing for the stakeholders and also for the company. Thank you, Baba. There has been some concerns regarding duty free, particularly in Hainan province. How do you see the possible impacts to your business from duty free segment? First of all, actually we put a lot of time to understand and discuss among the senior executives in the company. First of all, I would say, I'm sure you all know duty 3, what kind of product they are selling. They may not be the highest luxury sector, even though some of the brands in Hainan today, not all the top, top luxuries are having outlet over there. At the same time, I know that in Hainan today, they have limitation. For example, $30,000 RMB spend and they may increase to 100,000 I was told and all that. But think about it, if you go to a Hermes, dollars 100,000 I'm not saying that is too arrogant, but $100,000 you can't buy anything. And therefore for duty free business, they focus on the low ticket items of the luxury. And that may not have much impact to the luxury spending domestically. But at the same time, we look at this closely. We also have some other duty free concept today. For example, we have a duty free shop in the city in our Dhanian shopping mall, which the government allowed those people travel in the last 6 months. They can come to our shopping malls to buy some products for duty free. At the same time, now a lot of our shopping malls, the custom put tax free redemption center in our shopping mall, for example, Plaza 66, in May, they set up the tax free redemption center in our mall. That means, hopefully, when more tourists come into Shanghai, if they buy luxury products in Plaza 66, you can reclaim the 9% VAT test at the shopping center. And therefore hopefully can encourage more tourists when they come to China to buy luxury products. So I think all this, I think we all welcome this kind of new initiative. But at the same time, I do see a significant impact of so called Hainan Duty 3 at the very beginning. But again, we will closely look at it, and then we will try to make sure that at least we are on top of the evolution and also the development. Okay. Investors noticed that a few more have a little bit of drop in terms of occupancy rates, particularly for the 2 Shenyang malls, Palace and also Forum. Is it due to the tenants mix reshuffle or any other specific reason for that? No. Again, the pandemic is the main reason. And especially, I think, in North China, this time, I will say not because we want to highlight North China, but so far the government measures in the North are not prudent than the other cities, maybe because of the case, maybe because some of those, they don't want to commit any mistake. They are very harsh on a lot of measures. For Palace, I can say there's one more bad news for us because the road outside our shopping mall, they are under construction. So not only because of the pandemic, even though without the pandemic, the condition outside our shopping malls are really not very nice for people to walk in easily. That actually have some impact on our footfall. At the same time, in general, I would say, the city is less resilient than those stronger cities, I would say. So overall, they are consistent. They all dropped by 14%, around 14%, 15%. The footfall, if you look at the footfall, they all dropped by 30% to 40%. So I hope the good news is when I look at the May number, June numbers, it's coming up nicely. Of course, it's not as strong as the other shopping mall that I just mentioned with the luxury content. But at least they are gradually coming back. And then I hope the recent Danyan issues will not contagious to Shenyang. And hopefully because of that, we can continue to recover our trajectory. Okay. A few concerns regarding Hong Kong as expected. Will Hong Kong become a material drag on our overall performance in the next 1, 2 years given that Hong Kong still account for over 50% of the core profits? Okay. This is really hard to tell. The only thing the good news again, if you look at our results, we dropped by 5%, partly because of our portfolio mix. We have neighborhood more, example, Conhill and Amoy. Those hardly hit it will be like Causeway Bay and Mong Kok. Really that's subject to when the border will be open, when the tourists will come back and when things will be normalized. I don't want to call this as a material trap. I would rather look at the bright side that Hang Lung in the future, really a China story. And I want we want to over deliver and continue to deliver in Mangnan to offset any uncertainty in Hong Kong. So if Hong Kong continue to be challenging, so we will manage it, but at the same time, hopefully, our China will continue to grow to offset it. Okay. Given the sharp drop of mainland visitors into Hong Kong, would you adjust your marketing and leasing strategy in Causeway Bay and Mong Kok so as different kinds of shoppers in Hong Kong and to give a new prospect for these two portfolio? Yes. We are doing it already on a daily basis. I'll just pick a very classic example, Peak Galleria. When we relaunched Peak Galleria, we build some of the train mix for the tourists. And after we opened, the tourists didn't come not because of our content, it's because of social unrest starting from June 2nd week of June last year and followed by the COVID-nineteen. And therefore, we focus a lot on our train mix and try to not only serve the tourists, but also serve the Hong Kong citizen. So I will say, if you recall, during the social unrest time, a lot of people actually spending a lot of time at the peak, in our F and B, in some of our outdoor area. We organized even some of the events which some of the top chef spending the 3 days weekend and then serving some of the best food in town. In Causeway Bay today, if you look at some of our F and P, we actually make it even more, I would say, exciting and hopefully to attract more local residents to spend their time with us. So I think we will adjust accordingly. And this is really customer centric and tenant centric. When we see there is business opportunities, we will adjust accordingly. But we don't want to set it very rigid saying that this is not for tourists anymore because at the end of the day, Hong Kong is an international city. So we believe that we should serve both at the same time. Thank you, Papa. Perhaps this question could be for H. C. Regarding the Hong Kong leasing, has the rental relief been included or amortized in the revenue or the operating expense line? The rental relief have been amortized against the revenue line rather than the OpEx line. Okay. Thank you. There's a question regarding peakcarrier contribution. What would be the Hong Kong rental look like ex PG's rental income? And that's only account for a very small number against our overall Hong Kong portfolio close to over HKD2 1,000,000,000. So I would describe that no material kind of impact from even ex or include peak Galleria. Thank you. Okay. There's also a question regarding the IP value. With declining IP value, net gearing will go up further with continued CapEx. Is the management comfortable with higher gearing for 1 to 3 years? Despite the revaluation loss, this impact on our gearing situation is only 2 to 3 points. Moving forward, with our continued constructions and completion of the Wuhan project and the Hangzhou project, the gearing level will go up further, but it will be very progressive. Okay. Any change in the cap rates for Hong Kong and Mainland China? None. They all remain the same for the interim. Okay. One question regarding the service apartments. Any updates on the timeline of the launch and whether we would even further speed it up? So most of our projects outside of Wuhan have been delayed by roughly 1 to 2 months, But the construction of the surface apartments, we think we can absorb most of that. So there's no there should be no impact on the sales dates and everything will be sold as planned. The first ones will be Wuhan, which if I'm not mistaken will be available for sale in 2021. Okay. Probably the last few questions here. How do you view the future of listing of Heng Nong Group on the stock exchange, whether you have any plans to do a major reorganization for the group? He even put it really specific whether a possibility of delisting HLG? Answer is no plans. Okay. Quickly sharp. All right, that's nearly more about it. Lastly, a question regarding whether we have the capability or we have the interest to help manage shopping malls owned by 3rd party developers in China so that your business will not be limited by your balance sheet? I think we welcome all possibility. And also, I think currently, we will look at how to make our all our own babies up and running and race and running very fast. So I think today, I think we are happy with what we have, but we welcome ideas. We will look at all the possibility. But today, I think we want to maintain the highest quality and standard and want to execute well. As I mentioned, our strategy is very clear. We want to be sustainable. How to be sustainable is to be customer centric, to create unique experience for the customers, to embrace technology, to make sure that we execute on time and well and also to uphold our values. So I think that is a possibility, but today, we want to execute all our projects on hand well first. Okay. That will be the final question, whether we see any buying opportunities in Hong Kong. And yes, very much in Hong Kong and also in Mainland China as well, given that our balance sheet is only around like percent gearing? I mean we're always looking for opportunities both in Hong Kong and in the Mainland of China. So we'll continue to look for these opportunities, but of course we'll only buy when we feel like the location and the price are right and when the time comes the market will know. So we continue to look and if we find something then we would love to buy both in Hong Kong and in Mainland China. Since Eiju is speaking perhaps I'll let Eiju to also update the 2 redevelopment projects in Hong Kong. So the 2 projects continue. Thankfully the Hong Kong construction progress has not been impacted much at all by COVID at most we're talking about a period of a week or 2. So the Hong Kong projects are expected to be completed. We have the Amoy, the one next to Amoy Plaza, which is going to be a residential project. And we have the electric road in North Point which will be an office tower which may be DP or IP depending on the market when it comes out. Okay. With that, we conclude today's presentation. And thank you very much for joining us. And stay safe and wish you all good health. Thank you very much.