I am pleased to present my report to shareholders in respect of the audited final results of the Company and its subsidiaries (the "Group") for the year ended 30 June 2011.

Final Results

For the year ended 30 June 2011, the turnover of the Group amounted to HK$100,096,000 (2010: HK$126,437,000) and the gross profit for the year totalled HK$67,101,000 (2010: HK$75,535,000). As compared with the last year, the turnover and gross profit of the Group decreased to 21% and 11% respectively whereas the gross profit margin accelerated to 67% from 60%. These results are primarily attributable to the proceeds of rental income derived from investment properties and reduced sales proceeds of properties of the Group as further explained below.

Furthermore, the Group recorded other income in the sum of HK$28,661,000 (2010: HK$22,763,000) that had arisen mainly from the imputed interest income and exchange gain of Renminbi in the year.

In light of sustained positive sentiment in the property sectors of office and retail in the mainland China, the aggregate fair value of investment properties of the Group increased by HK$34,176,000 (2010: HK$1,706,000) in the year.

Overall, the profit for the year attributable to owners of the Company markedly surged by 104% summing to HK$74,588,000 (2010: HK$36,521,000) with earnings per share of HK$0.34 (2010: HK$0.167). Excluding the impact of revaluation and related tax effect on investment properties of the Group, the underlying profit for the year attributable to the owners of the Company rose by 32%.

In consideration of other comprehensive income of exchange difference on translation to presentation currency, the total comprehensive income attributable to owners of the Company amounted to HK$148,553,000 (2010: HK$52,393,000) for the year, showing a significant boost of 184% as compared with that of the previous year.

Dividends

The Directors recommend the payment of a final dividend of 2 Hong Kong cents (2010: 2 Hong Kong cents) per share to the shareholders of the Company whose names appear on the register of members on 21 December 2011 (as amended). An interim dividend of 2 Hong Kong cents per share were paid to the shareholders of the Company during the year which, in aggregate, gives total dividends for the year of 4 Hong Kong cents per share. Subject to approval of shareholders at the forthcoming annual general meeting of the Company, the warrants for the final dividend are expected to be despatched to those entitled on or about 29 December 2011.

Business Review

In the year under review, the Group continued its operating segments of property rental and property sales in the mainland China. The segment of property rental in Beijing and Shanghai was the major contributor of turnover and results of the Group, which was in addition to strengthened capital value of investment properties of the Group. On the other hand, the segment of property sales dropped due to reduced number of unsold units held by the Group for sale and depressed residential market after a raft of official policies to curb property market in mainland China in the year.

The investment properties of the Group, comprising quality offices in Pudong in Shanghai and well-established shopping mall together with carparks in Chaoyang District in Beijing, generated an aggregate rental income of HK$71,714,000 (2010: HK$72,448,000), which contributed 72% (2010: 57%) to the total turnover of the Group in the year. Such segment results of property rental recorded a profit of HK$81,856,000 (2010: HK$55,206,000), of which HK$34,176,000 (2010: HK$1,706,000) had arisen from increase in fair value of investment properties.

Meanwhile, the Group accounted for sales proceeds of residential units in the sum of HK$28,382,000 (2010: HK$53,989,000), which contributed 28% (2010: 43%) to the total turnover of the Group in the year. And such segment results of property sales recorded a profit of HK$19,197,000 (2010: HK$24,817,000). The fall in sales and results was due to the fact of few residential units held by the Group for sale along with notable decline in sales volume in Beijing after official ongoing demand-suppression policies and credit-control measures in the year.

In Beijing, sustained strong performance in retail sector reinforced retail demand, which in turn drove down vacancy rate and allowed stable growth of rental and asset performance of shopping mall. The "Uptown Mall" of the Group attained virtually full level of occupancy, with improved rental in the sum of HK$25,634,000 (2010: HK$24,275,000) and appreciated capital value in the sum of HK$25,368,000 (2010: HK$11,259,000), achieving the results of a profit of HK$41,578,000 (2010: HK$24,809,000) in the segment of property rental in Beijing in the year.

In Shanghai, rental was competitive in view of a supply glut in office market in Pudong in the year. However, active office upgrades and expansion together with renewal of lease sustained high occupancy rate of the quality offices of the Group at "Eton Place" in Little Lujiazui, with mildly reduced rental income in an aggregate of HK$46,080,000 (2010: HK$48,173,000) and moderate appreciated capital value of HK$8,808,000 (2010: devalued HK$9,553,000), achieving the results of a profit of HK$40,278,000 (2010: HK$30,397,000) in the segment of property rental in Shanghai in the year.

In Shenzhen, the jointly controlled entity known as Shenzhen Zhen Wah Harbour Enterprises Ltd. ("Zhen Wah"), which entitles to land use right of a piece of land situated in Tung Kok Tau in Nanshan District, has advantaged in terms of asset value from improved infrastructure and city planning in the region pursuant to 2011 Universiade (World University Games). With an aim to optimize redevelopment plan and economic value of Tung Kok Tau, the Group and the Chinese partner of Zhen Wah has been jointly and actively negotiating with the municipal governmental authorities in relation to land rezoning in an attempt to enhance use of land and ancillary facilities, to increase gross developable area and saleable floor area mainly in high-rise residential area and to negotiate revised land premium for additional gross developable area.

Financial Review

Capital Structure

The financial position of the Group remains stable and liquid, and its financing and treasury policies are managed and controlled at the corporate level and prudent manner during the year. At 30 June 2011, the equity attributable to its owners amounted to HK$1,614,102,000 (2010: HK$1,474,313,000) with net asset value per share of HK$7.37 (2010: HK$6.73). Total unsecured and secured bank borrowings of the Group amounted to about HK$239,700,000 (2010: HK$285,500,000), which were in Hong Kong dollars and repayable within 3 years on floating rate basis. As at 30 June 2011, the gearing ratio of the Group was about 9% (2010: 13%) based on the net debt of the Group (after deducting bank balances and cash) to its equity attributable to owners of the Company. No significant exposure to foreign currency fluctuations affected the Group in the year under review and no financial instruments were used for hedging purpose in the year.

Financial Resources and Liquidity

In the year under review, there was sufficient cashflow as generated by rental income of investment properties in Shanghai and Beijing as well as sales proceeds of properties in Beijing. As at 30 June 2011, the Group's bank balance and cash stood at HK$97,761,000 (2010: HK$88,597,000), denominated primarily in renminbi yuans and Hong Kong dollars. With sufficient cashflow, the Group maintained an unutilised credit facilities of HK$95,800,000 (2010: HK$11,000,000) as working capital at floating interest rate as at 30 June 2011.

Pledge of Assets and Contingent Liabilities

As at 30 June 2011, the Group pledged its properties with a total carrying value of HK$1,055,890,000 (2010: HK$997,948,000), an assignment of rental and sale proceeds from such properties and a charge over shares in respect of a wholly-owned subsidiary of the Group to financial institutions as security against general banking facilities granted to the Group, and also pledged certain of its bank deposits in the sum of HK$60,734,000 (2010: HK$59,618,000) to banks to secure home loans granted to the home buyers of property project of the Group. As at the end of the reporting period, the Group has given guarantees in respect of settlement of home loans provided by banks to the home buyers of a property project in Beijing. As at 30 June 2011, the Group had given guarantees in respect of such home loans of HK$86,200,000 (2010: HK$123,484,000). The Directors of the Company consider that the fair values of these financial guarantee contracts at their initial recognition and at the end of the reporting period are insignificant on the basis of the low loan ratio.

Prospects

Despite global economic challenges on the back of the sovereign debt crises in Europe and the U.S., the overall stable and resilient economic growth in China is prompting positive market outlook. It is anticipated that steady source of rental income will subsist though official tightening policies are expected to endure to cool down property market and to suppress inflationary pressure.

In Beijing, both businesses and consumers confidence in the retail sector will buoy ongoing strengthened investment and spending power under the brisk economic growth in China. More and more foreign and local-branded retailers are expected to maintain expansion pace. Leasing activities are forecasted to remain solid and the Group will continue to adjust tenant mix and brand portfolio for market niche from time to time with effective mall management to maintain high occupancy rate and constant recurring revenue to the Group.

On the other hand, it is anticipated that the sales transaction of residential property will remain low as a result of reduced number of residential units held by the Group for sale and continuing house-purchasing restrictions and credit-tightening measures imposed in the mainland China.

In Shanghai, the influx of new quality office supply in the outer area of Little Lujiazui in Pudong is expected to be taken up by tenants that require office upgrade and relocation. In addition, the robust domestic economy will drive new establishments, in-house expansions and relocation expansions of both local and foreign corporations. To sustain high occupancy rate and steady recurring revenue, the Group will strive for retention and expansion of existing tenants upon lease renewals and new small-to-medium-sized tenants at competitive rental strategies.

Finally, it is anticipated that the progressive economic and city growth in Shenzhen and its cross-border integration with Hong Kong will boom city development particularly the superb residential development in Nanshan District. The Group will endeavor to safeguard its best interests in Zhen Wah and to bargain with the relevant government authorities to strive for enhanced redevelopment plan and maximize asset value of Tung Kok Tau in alignment with the official rezoning, city planning and development of infrastructure in the region.

Appreciation

The Board of Directors would like to thank the shareholders, bankers, customers, suppliers of the Group and others who have extended their invaluable support to the Group and all staff of the Group for their considerable contributions to the Group in the year.

CHUA Domingo
Chairman

Hong Kong, 23 September 2011