Well, thank you very much for coming to our results briefing. Let's get right to it. How did we do last year? 2017 revenue, HKD 64 billion, down 9% from 2016. Profit before IP reval, HKD 20.32 billion, up 13% compared to 2016. Investment property revaluation, HKD 9.8 billion. Net profit, HKD 30.1 billion, up 55%. The effects of buying back shares, I think 126.5 million shares in 2017, can be seen or reflected in the earnings per share calculation. If you look at earnings per share before reval, HKD 5.44, up 16%. Net earnings per share, up 60%. This is what we would like you to focus on, HKD 8.07. Net book value per share, almost HKD 79. Full-year dividend per share, HKD 1.70, up 11.1%. Payout ratio before reval, 31%. Principal activities diversification. Let's look at revenue first.
In 2016, HKD 13 billion or 19% of our revenue could be considered as recurrent in nature. In 2017, now it's up to 33% or almost HKD 21 billion. From an EBIT or profit contribution perspective, in 2016, 33% or HKD 8.6 billion. In 2017, 42%, almost HKD 12 billion. That number excludes the profit or cash contribution from all the REITs. If you include them, from a profit perspective, it's over HKD 13 billion. From a cash perspective, then it's over HKD 12 billion. In 2016, 1% of our revenue was derived from outside Hong Kong and the Mainland. 2017, it's up to 13%. From a contribution perspective, in 2016 was just a rounding figure, and 2017 is now 12%. A bit more color on each division.
Continue, please.
Property sales. Because of timing of completion, 2017 revenue figure, HKD 42.8 billion, down 25% compared to 2016. Profit contribution only down 8% because of the very encouraging margin of 37.9%.
The revenue basically is December versus January for OP.
Compared to 2016, 31.1%. Looking at the revenue contribution, if you focus on the margins, in Hong Kong in 2017, 38.2% versus 34%. On the Mainland, very healthy, 37.6% versus 29.6% in 2016. Overseas, mainly from the Chelsea Waterfront U.K. projects, almost 51%. Most of the contribution to our revenue and profit on the property sales in Hong Kong was from Stars by the Harbour, about HKD 1.6 billion of contribution. Yuccie Square, about HKD 1.9 billion, and Suma Route, about HKD 550 million. We also sold three houses on Peak Road that gave us HKD 763 million of contribution. From the Mainland, Laguna Verona, HKD 4.6 billion. The Harbourfront in Qingdao, HKD 1.2 billion. Dongguan Laguna Verona Foreign Language School, HKD 1.3 billion. Cape Coral, HKD 1.4 billion. Contracted sales not yet recognized, a total of HKD 73 billion.
Based on current completion estimates, I think slightly less than half of this number will be booked in 2018. However, the sale of the 50% interest of Century Link in Shanghai was completed in January 2018, and profit will be recognized in the first half of 2018. That is roughly HKD 11.4 billion of revenue and over HKD 6 billion of profit. That number is not here, not included here. This is only resi development, not yet recognized. The Center, if and when it closes, the revenue number, HKD 40.2 billion, and profit of roughly HKD 11.6 billion is also not included in this number.
For your information, contracted sales in calendar year 2017 total just shy of HKD 80 billion, just shy of HKD 55 billion Mainland, just shy of HKD 23 billion, HKD 1.4 billion for Singapore, and just shy of HKD 400 million from the U.K. Property rental, HKD 7.8 billion revenue, HKD 7.1 billion EBIT contribution.
Still very impressive EBIT margin of 91%. Key contribution from Cheung Kong Center, HKD 1.4 billion, 1881 Heritage, HKD 815 million, to HKD 910 million from The Center. Whampoa Garden, HKD 823 million, and Shanghai Westgate, HKD 371 million. Most of our profit contribution from this division is from Hong Kong and pretty evenly spread between office and retail properties. HKD 9.5 billion of reval surplus from subsidiaries. Mainly the offices in Central. So CKC, we recorded a HKD 6.5 billion reval gain, and The Center, a HKD 3.5 billion reval gain. Cap rates still 4.75% that we used. The value is, in addition to cap rates based on current rental, they would use expected rental in their formula as well, and that of-
I think within reasonable range, our valuation methodology must be one of the most conservative in the city, if not the most conservative. That has always been our tradition. 4.75 cap rate on existing portfolio. Yes.
14 million sq ft of investment property, mostly in Hong Kong. Turning to the hotel and service suite division. The 1% drop in top-line revenue, mainly because of the sale of two mainland hotels in the first half and generally weaker performance of our mainland hotels and the hotel in the Bahamas. The performance of the Hong Kong division was actually quite good compared to 2016. Hence, the overall EBIT margin improvement from 31.1%- 32.8%. Most of you are interested, the EBITDA margin, if you add back the 395 depreciation charge that you see in the notes there, then the EBITDA margin is actually 41%. The property and project management division, solid as ever, 43.9% EBIT margin, and 269 million sq ft under management as of the end of year 2017. Aircraft leasing, first full-year contribution from this division of 45% EBIT margin.
86 aircraft that we own now, up from 73 in 2016. Attributable metal value from this 86 aircraft, roughly HKD 21 billion. Average age, 5.1 years. Remaining lease term, 5.6. We had further committed to another 59 aircraft in the coming years. If we add back depreciation, because the aircraft leasing division has a pretty heavy depreciation charge every year, HKD 1.1 billion, if you look at the note, then the EBITDA margin is about 94%. The cash yield, so EBITDA minus interest, would be about 21%. Infrastructure and utility asset division or joint ventures with our sister companies. Seven months of contribution from DUET, five months from Reliance, two months from ista. If you want to annualize, you just multiply by 12 and divide it by the current number of months. The average margin, EBIT margin, roughly 36%.
I think it's correct to say that we expect, in 2018, with the full-year contribution, you should see pretty solid growth in absolute number terms and also the benefits of synergies and integration. It's not recorded yet.
A lot of early expense and closing matters has all been booked in.
A lot of one-off expenses.
One-off expenses all booked in.
Booked in 2017. If you look at this, there's a bias or skewed towards Australia. But if you pro forma or annualize the effect, actually roughly 40% would be from Australia, 36% from Europe, and about 24% from North America.
I will invite Simon to help us go through the rest of the presentation.
The group continued to hold interest in three real estate investment trusts listed in Hong Kong. The 32.1% interest in Hui Xian REIT, which hosts 11.8 million sq ft of hotels and service suites, office and retail properties on the mainland. A 27.5% interest in the Fortune REIT, which hosts 3.2 million sq ft of retail properties in Hong Kong, and an 18.7% interest in the Prosperity REIT, which hosts 1.3 million sq ft of office, retail, and industrial properties in Hong Kong. For the Hui Xian REIT, it is an associate of the group, and we take a share of their profit, HKD 549 million for the year. For Fortune REIT and Prosperity REIT, we take the cash distribution received during the year, HKD 312 million as income.
Also because of the adoption of the new IFRS financial instruments, the change in market fair value of our holding in these two REITs, HKD 529 million was also recognized as income during the year. The total return from Fortune REIT and Prosperity REIT add up to HKD 841 million. For the gearing and maturity profile, during the year, the group had issued three fixed rate notes. One with a five-year term, HKD 1.4 billion, and two with 10 years term, total HKD 2 billion under the Euro Medium Term Note Programme. Also, the group has issued US dollar 1.5 billion perpetual capital securities with a coupon of 4.6%, which has been taken as equity in the accounts. At the year-end date, the group has a gross debt of HKD 72 billion and cash on hand, HKD 54.9 billion, which give us a net debt of HKD 17.1 billion.
If we take the net debt to shareholders fund ratio is 5.9%, and if we take the net debt to net total capital ratio, it give us 5.2%. For the debt maturity profile, HKD 14.3 billion would fall due within one year, HKD 47.7 billion would fall due within two to five years, and HKD 10 billion would fall due beyond five years. Moody's has assigned an A2 stable credit rating for us, and Standard & Poor's assigned a single A with stable credit rating for us. For our land bank at the year-end date, we have 6 million sq ft land bank in Hong Kong, 107 million sq ft on the mainland, and 4 million sq ft overseas. Our land bank has not included any agricultural land, completed properties, or projects under planning. The land bank are all developable.
No need to do any modification or additional premium payment.
Example would be the new deal we have done with, in Ap Lei Chau on the new hotel. That would not fall under the land bank category because it is an agreement to share future profits. We adopt the most conservative accounting standard for land bank calculation. Plus, you have not included the REITs.
Well, to give you a more complete picture, this is development land bank that is under development, 117 million sq ft. If you look at, then we go to investment property. If you CKA's own balance sheet investment property, adding Fortune REIT, Prosperity REIT, Hui Xian REIT's investment property, that is 31 million sq ft of investment property. Hotels and service suites, if we add all of them up, that is about 12.6 million sq ft of hotel and service suites properties. If you add all that together, it is 160.6 million sq ft of asset base, excluding project under planning, agricultural land, and others.
That comes to the end of our presentation, and welcome for any questions.
Questions.
Sorry, I was five minutes late because the press con was quite heated.
Lively.
Lively. Yes, please. Do we have mic?
There.
Congratulations on your appointment as chairman.
Thank you.
I guess now you cannot say you have to ask the chairman.
Oops.
I just wonder.
It is not like that my job has changed a lot. Remember, I have been here 33 years, and it has been a long father and son partnership. I do not think I want that to stop, though. Okay? I would
Sincerely hope the HKD 5,000 salary he is getting is wonderful advisor, good value for money for the company.
Indeed.
It is annual. We actually have to struggle whether we have violated minimum wage legally.
Your buyback has obviously yielded great results when we see your EPS growth. Given your
It is a 60% increase in earnings per share growth.
Given your leverage is still so low, do you think we will see you undertaking more buybacks in the coming 12 months?
I don't expect to lose my job so quickly if I answer buybacks ahead of what we do. I think a couple
Maybe can I rephrase it then?
Yeah. Sorry.
When you look at opportunities for returns, do you see other opportunities at the moment that are going to generate the same kind of earnings growth that the buyback has?
Maybe see if I can answer in another way. First, we like property. We have property in our blood. I don't think that's going to change. Having said that, if we don't try to read the property market, basically, whatever money we get off property, we'll put it all back into property. It's an easy job for us. Basically, we've stopped trying to read what the market's going to do. The good thing about the CK Group is that we got choices. I keep saying that we've got choices. Right now, we're not making a painful decision because the recurrent income that we are getting is giving us reasonable yield. We're not paying for that flexibility. In the meantime, we got income to support things that should have been originally property.
On the other hand, if at any time we decided to do more in property, those are very liquid investments that we can convert back into property very easily. That has always been the CK history, and I don't think it's been a winning formula. The last thing I want to do is change that formula. Just to fill you up to date, there was a pretty good question earlier asked in the press con as to if somebody spent HKD 3 in investing in, at that time, just Cheung Kong Holdings shares. If they reinvest the dividend today, how much would they get today when we value the shares as of closing today? I think Simon gave a good, correct me if I'm wrong, it's about 5,000 times. So HKD 3 become HKD 15,000 today, if they reinvest the dividends that they get during in that interim period.
I'm not going to change that formula.
Buying your shares gives you that growth. You are buying more of your-
I have done so. We have done so. Okay. You cannot read from here whether I am going to do more or less. Okay. Other questions? Other questions again?
Shiu.
No.
No?
No.
It is you.
Again.
Can you just remind us, you have taken the 10% deposit for The Center. When would you expect to have an understanding of settlement?
A lot of rumors around town about shareholder structure and the financing, all those things. At the end of the day, I look at the company, not the shareholders as governance. I just look at the company. Whatever shares that change hands, that is among them, not our business to comment. Of course, the transaction will save them some stamp duty. But then they have the risk of accepting private company shares, which is another area. For us, all I know is I receive 10% money, which is not a small amount, and we are comfortable with the transaction price as well as the deposit we received.
We will see what happens. The valuation that we carry continues to be conservative. It is quite a distance from the contracted price on The Center. So again, we are following our super conservative accounting standard. We have not adopted the contracted price as our valuation policy.
It is still at the, what Gerald said earlier, 4.75 cap rates on old rental.
But so will we know by, is it April or June?
I think it is I don't-
Six months.
No. From the attach, I think it is April.
They pay you up to 50% by that time.
Either way, we are fine. You cannot grow poor by taking profit. Other questions?
One more.
Sorry. Yes.
Can I ask if you are happy still with your ARA investment? The structure of ARA?
ARA.
ARA. ARA is tiny.
7%.
Yeah. Please stop calling ARA our company. It is not our company.
We have made pretty good money out of it anyway.
But it is not our company.
So your investment.
Yep. We are now a passive investor.
We are tiny.
Yes.
Okay.
Congratulations once again. My question is related to the recurrent income base, which you said was 42% contribution in 2017. I suppose if you do the annualization of those investment, it probably will reach 50%. Did I hear correctly last time that you wanted to get to that 50%, and from here onwards, the focus will be staying at that ratio, or it does not matter where you go?
That was a comment the chairman made during the press conference, I think a year and a half ago, to grow 50%. That
Considering that you have reached there, I wanted to understand how you see going forward?
We have grown from Let me understand your question, but from 2016 to 2018, we've roughly grown already by 50.
That's the question. You've already done that.
We've already done that.
That is done.
Yeah.
I am trying to understand renewed focus going forward between non-property or infrastructure versus development business.
We are going to be very opportunistic. For example, if I can get very inexpensive land, of course, I am going to get some land also. On the other hand, if there is a high yield recurring income, I am not going to say no to it. It depends on the opportunity, of course. The last thing I want to do is having a strategic meeting and decide irrelevant of what are the numbers. Do what we have decided.
That is just stupid. Okay? We are going to base on the numbers. Today, it is very difficult to tell when you can get inexpensive land. What I know is that there are going to be fewer mainland, I think, investors. That is already market expectation. On the other hand, because of relationships with various governments and sister companies within the group, we are seeing more opportunities in two areas. One is the traditional infrastructure.
The other one is what I call building infrastructure. Building infrastructure is something very unique to our group in the sense that it is not the traditional infrastructure that CKI has the expertise. It is like half of the expertise is in the infrastructure group, half of it is in the building group. If you look at ista, I think very few people in the world appreciate the quality of the ista investment. You have to be building service engineer to understand the way the wires are wired in continental Europe to appreciate the quality of the income. Rather than adopting on quantity, one thing maybe I follow up a comment on is, our job is to return in two ways value to shareholders. One is by earnings growth, the other one is by share price. In share price, we look at a lot of our sister companies.
Sometimes share price move up because of earnings growth. Sometimes share price move up because the quality has improved. We are going to work both on quantity as well as quality. In a world when you see a lot of challenges in the political arena, I think more and more investors will appreciate quality also. We are not sacrificing quantity. That is how we are paid. But quality is something that I would look at very dearly. Sometimes people forget quality.
Can I ask one more question?
Please.
In terms of your quality, that is what we were trying to understand. This recurring income tend to get a higher multiple in the market, and we wanted to understand if it is now that reached 50%, would you like to go to 70% or 80%? But you will be opportunistic, so I understand.
I have answered you in what my company secretary will allow me to answer. Quality is something that I will look at, and quality is something close to our heart. Something that is of double the quality, but 90% of the income, maybe I will choose the first one. Because if it is double the quality and 90% of income, I think it is a good deal. Yeah.
The question you already answered. The question I wanted to ask was related to the return on investment or return on equity that your competitors or peers in the last 2.5 years generated by investing in Hong Kong property market. The land that someone bought 2.5 years ago, they are selling at a very good price because we have been an upcycle. With the leverage that you get, you tend to get a very, very high ROE. The fact that you did not buy land in the last 2.5 years, do you think that you missed out on some of the very nice ROE businesses?
Well, the market is already answered in a way that property companies in Hong Kong, if you just chase after that game. The market is giving a heavy discount on property. So the market is answered us as to what my shareholders want us to do. They are saying that, "I also like quality, and will pay for quality." I think the world also, if you look at the investor profile, more and more money is concentrated in investors' hands who appreciate quality more. Age, investor profile, where they come from. The quality expected is getting higher and higher.
More and more people are aware of different political risks around the world and things that is beyond any one person. The smartest person in the world sometimes cannot estimate accurately as to what is going to happen in the political arena. So what we are doing is, we want to do the quality stuff.
At the same time, when we want to, we have the knowhow, the muscle to move into property in a grand big way very quickly. Maybe I use another example in the company. Maybe you are familiar with CKI. There is one period when we invested rather conservatively in infrastructure. There is a two year period in CKI when we invested not too much. I am getting a bit of pressure on that one. But I think looking back, we did the right thing. At certain times, you run slower, certain times you run faster. You run fast all the time does not mean you are doing the best job for the shareholder. Big temptation. We have to resist a lot of temptation. But I think the quality part is part of our history. It is our tradition. We have got the luxury of choice.
If we do not have that luxury of choice, I cannot say that.
Karl Choi from Merrill Lynch. A couple questions. First, can you update us on your latest thinking regarding the redevelopment potential for Hutchison House? Second is, the three infrastructure acquisitions you did last year, can you update us on any major surprises one way or the other, especially from a performance standpoint since it was partial year acquisition?
What is that?
The infrastructure, like in the performance.
Maybe answer your first question first, and then you say again, I do not quite get your second question. Hutchison House. It is public knowledge about the plans that is already applied and approved. The reason we do so is because at one point in time, the building codes were rather more favorable than today. Applying early, we have frozen in Hong Kong has a good rule of law, so it fixed on the time of approval. That property cannot be approved again on that. But ratio, building scope, height, a lot of detailed things. I am glad we got that done. Example, the car parks above grade. Today, you cannot do it. That one we have done.
Now, as for the exact timing, I cannot tell to you, but all I can say is that today's valuation has not taken into account the upswing in valuation on the day it is to be developed. We have not fixed a timetable yet. We have not decided yet. It is a major property for us. We are using it. The last thing I want to do is to disrupt the operation. But the plans are in place. It has been there for, I think, four or five years already or more. But even when it happens, there will be an accounting gain on valuation. But actually, the value is already there.
If you look at the property between Hutchison House and here, and the price paid for it, all I know is the new Hutchison House will have full sea view on every single floor, which means the building behind it will have zero sea view on every single floor. Including us. Including my floor. I am on ninth floor. But we reserved the high-paying floor for Goldman Sachs.
Just so you know, on the books, the valuation per square foot is still below HKD 20,000 per square foot.
This is CK Asset Holdings. I know. Everything. You look at our hotel portfolio, because we do not have to revaluation. So I take several property, for example. Some hotel property is now carried at HKD 200, HKD 300 per square foot. Okay. So you know how much we Because with hotels, accounting-wise, you do not need to do revaluation. And according to the accounting policy, I have to keep continually depreciating them. So some of them are in three digits, some of them are in four digits, some of them I think, the new ones, already below HKD 1,000 already on millions of square feet.
So those would be another swing of upside. But again, we never look at revaluation profit as something that is a cash flow. I am the old school. Cash flow is profit. Over time, cash flow is most important. So we look at the cash flow.
Reluctantly, we have to do revaluation profits.
The infrastructure acquisitions, any major surprises one way or the other, positive or negative?
From an operational perspective.
Quality earnings never give you surprises. I don't take pride in giving people surprises, but we'll continue to make acquisitions. That I know. Because we can leverage of the mutual strength within group companies. Certainly, we can work in arena that our competitors have difficulty working in, both on size, scale, and technology. ista, for example, I use that as example, is on a major growth scale because European Union has decided that condominium owners cannot have group metering. So basically, all of Europe has to be individually metered. If all of Europe has to be individually metered for the next It's a 20, 30-year project. Imagine how much metering we have to install outside of the current area. So it's not just a recurring kind of business. This can be a major growth area.
Now that we have a base, from that base to grow is a lot easier than starting from new. These businesses, once you fall below a certain minimum critical mass, it is very difficult. That is why it is good for us. In a way, scale helps us. Use property as example. If it is 100,000, 200,000 sq ft, it is not exactly rocket science to build a condominium tower. But if you do urban planning for 10 million sq ft, now that is different. If you are doing metering for all of Europe, that is different. So we focus on what we can do best rather than pretending to be good at everything. Scale helps us.
Thank you management. I am Evelyn from UBS. I have a question regarding dividend. You put a lot of emphasis on recurrent income, step up a lot in the last two years. But I look at the dividend payout ratio, more or less unchanged. I understand that your recurring business is going to grow really fast in the future.
I did not say that. I did not exactly say that.
Well, we expect that might be happening. How should we think about the payout ratio going forward? Would that be a turning point sometime in two to three years?
I'm looking at my company secretary. She's staring at me. She has a good stare. Put it this way, as Edmond said, I cannot say I have to talk to the chairman.
Blame it on me.
What your gut feeling is thinking.
I think two things. One, I think that we just announced a rather healthy growth in dividend already. So that's not going to change. On the other hand, if you want us to be doing our job, CK generally fare better if we keep a good war chest. Our war chest has rewarded shareholders better than a simple dividend policy. This is the same for CKI. This is the same for CK Hutch. A dividend policy is not a secretive thing. But if you look at the history of CKI, we've done quite okay. But then we're not exactly distributing all cash immediately. We like a war chest too. So we're going to follow that.
I think it's fair to say we should have a balance. I mean, balancing it between sort of paying out dividend or making acquisitions or perhaps share buyback. These things we all have to consider at the time.
But we're very focused on return to shareholders. So in all these, what Edmond mentioned, we haven't left the view on return to shareholders. But both in quality as well as quantity. So we believe that improving quality is also important. And more important now than I'm not talking couple of years. We're talking decades. More important this decade than possibly than in history, in terms of quality.
Okay. Have we answered all questions?
Thank you.
Thank you.
Thank you very much.
There is one more.
Oh, one more. Mr. Upton.
I encourage you to take advantage of this opportunity to speak with our soon-to-be chairman.
Thank you. Alfred Lau from Bank of Communications. Since we are talking about war chests, I think we are having a very big war chest, especially considering the proceeds from The Center. So, I think that will be interesting how to look at your luxury of choices, how the return looks like, and how does it compare to our previous project or-
The bigger the acquisition-
The return aspect-
the bigger the target, the safer the margin and the better the quality because we're fewer competitors. That's why the bigger the war chest, in a way, the better the acquisition because I'm still looking at a competitive landscape. You look at in the past, in all our group companies, the size of acquisition targets generally is on an increasing trend. We focus on larger and larger deals, be it mergers, acquisitions, whatever. Scale helps us. I keep going back to this. Scale helps us.
Should we expect this kind of opportunity arising in near term, or at least this year?
You're asking me to make predictions about what we can-
Well, maybe I say we're all working very hard, and I think the cities or the major merchant banks or investment banks are coming to us with deals anyways.
Talk to us.
Yeah.
Yeah. I keep going back. We're not going to forget about Hong Kong property or mainland property. As a matter of fact, I do spend a bit of time on mainland property also. We're not doing the ordinary deals.
Okay. Thank you. David from Macquarie. While you're talking about China, you do have some sizable land bank. Some of them slower moving, some of them faster moving in terms of the sales. We do hear from time to time in the news that some may be for sale. How do you see that? Do you see more opportunities now to sell at a very good price?
We're not trying to sell them. Don't get me wrong. When people approach us It's like a few years ago, remember when people ask me any property that you would like to sell or buy? My job is not to fall in love with one property and say, "Sir, I will never sell." That doesn't mean I want to sell something. It's just my job. If I tell my shareholders I love a certain building and therefore for whatever price, I wouldn't talk about it. I think I'm just being irresponsible management. The only few building we can say that are buildings that we're using and has an image related with it. So this building, Hutchison House, China Building, or core central property that we're using. We need space ourselves also. So those I can say, I want to keep them.
But other than that, the fact that people give us offers, my job to read it, study it, doesn't mean that I want to sell it. I've got agents who actually bring an offer on my house. Okay? And we looked at it, have a good laugh, show it to my father, and then give it to the kids as scrap paper. That's okay. You can write on the other side. But people put into the mailbox and say, "I want to buy your house." What's wrong with that? It's good to know that the storeroom, it's worth that much.
Another question regarding, I think may be similar to some earlier question about the future breakdown or the desired breakdown of the assets. Some of your peers have set a limit in terms of how much of the equity, what's the percentage will go to China, what goes to Hong Kong. If I remember correctly, I think Gerald mentioned aircraft attributable value of about 21.
HKD 21 billion.
21. And then the new infrastructure business, if you combine the two, aircraft and the infrastructure, we're talking about HKD 70 billion roughly on the equities.
I don't think I'm assigning a specific number on geography. Because once you do that, you're making yourself into a dinosaur. You're moving slowly because of a strategic decision in Central. It doesn't make sense. This one I'm not going to tell you, but there's a number on our executive team's mind that balance between quality and quantity. So in some areas, some businesses, the inherent risk is higher. Some business, some geography area, the inherent risk is lower. If the lower risk area is giving you the similar return as a higher risk area, the answer is very obvious. The balancing is sometimes how much you give up in quality to get quantity or vice versa. That is our job. That's what we're doing day to day. And we have an ExCo that does that. And in that ExCo, you see members around here.
I have a very good habit, and we intend to keep it, that I don't have a bigger vote nor a smaller vote. If we have a major disagreement, no deal. Okay, so it's quite a system that has I call it extremely good feng shui. Today, I was just talking with HL Kam. The whole infrastructure team was started exactly 25 years ago between Edmond, HL, myself. Three people. We share one large table, and that's everything started from an empty office next to my office exactly 25 years ago. And that formula has not changed, and is not going to change. We've added more people into it. But still, not unanimous, but the decision process is risk versus return profile. And that team has done extremely well in several discipline. It is different areas. It would involve Kenny, it would involve Frank, depending on the area.
Infrastructure is mainly Edmond, HL, myself. In aircraft, of course, Gerald's decision's extremely important. But all those things is a balancing. The last thing I want is to set a guideline that, in a way, suffocates this ExCo.
There's no such thing as if there are lots of opportunity in infrastructure or aircraft, and you buy more, and you hit, let's say, 50% of your equity. That won't be an issue. There's no such thing like-
It would be a happy problem. If you suddenly have so many opportunities, I don't know what to do, and all of them are yielding extremely high return, then we should issue more shares and grab them all.
Okay.
Not that we want to issue any shares.
If I may, last question on maybe your interpretation of the macro environment. Some of the developers have been talking about this is a good time to raise money because credits remain cheap, but that may not remain so for the upcoming second half or into the next few years. In that regard, do you see that actually whether for expediting some property sale in Hong Kong or China or kind of raising more cheaper?
I don't think we need to sell things to do deals at the moment. Two reasons. One, we've got a good size war chest today. Second thing, Edmond can deliver perpetuals.
Subject to price.
Subject to price. Because of the nature of the quality of the company and the quality of the investments, I think we have a better likelihood than some other companies on raising perpetuals. That has given us, not only within CKA but other sister companies too. That has given us another ammunition to go forward. In a way, we are quite blessed on that. I keep going back. We have the luxury of choice. Happy problem.
Just so you get the numbers right, HKD 56 billion is the equity spent on the three joint venture. With our sister companies for aircraft, HKD 21 billion is the metal value. Equity is half of that. If there is no more question-
I need to go.
CK Hutchison's briefing will be on the ninth floor.
Some of you are going there too.
If you're going down, then we'll see you there.
Thank you