Tung Kok Tau in Shenzhen

During the period, the Group continued to develop a plot of land known as Land No. K709-0003 located in Tung Kok Tau, Shekou, Nanshan District, Shenzhen (the “Land”). The Land was granted to the Group by 深圳市規劃和自然資源局南山管理局 (Nanshan Administration of Shenzhen Municipal Bureau of Planning and Natural Resources) in the prior year.

The Land is strategically located to the east of 後海大道 (Hou Hai Avenue), to the south of 蛇口新街 (Shekou New Street), to the north of 望海路 (Wang Hai Road) and to the west of 後海濱路 (Hou Hai Bin Road) within the premier waterfront cultural and leisure region in Tung Kok Tau, Nanshan District. It covers a site area of approximately 65,000 square metres for multi-purpose development, with a developable gross floor area of approximately 179,000 square metres. This comprises about 143,000 square metres for residential use and 29,000 square metres for commercial use and other supporting ancillary facilities.

During the period, the Group commenced construction of the Land, having obtained a construction permit for the foundation pit support and earthwork project from 深圳市住房和建设局 (Shenzhen Municipal Housing and Construction Bureau). Concurrently, the Group continued to work closely with various relevant government authorities and relevant parties to refine the development options and master planning of the Land. These plans are aligned with the city planning and infrastructure, including development of metro line and station, to support cultural and leisure amenities in the region as well as the nearby opera house.

It is anticipated that the construction and development costs of the Land will be funded through internal resources, bank financing and other applicable means. Several major banks have positively indicated suitable financing terms for the property development of the Land, and the Group will procure the most favorable financing for the project.

Regarding the joint venture known as Shenzhen Zhen Wah Harbour Enterprises Ltd. (“Zhen Wah”), in which the Company holds 49% of equity interests and whose license expired in 2014, the Group and the JV partner (the “JV Partner”) continued its liquidation. Following the land swap in the prior year whereby Zhen Wah surrendered its interest in a piece of land located in Tung Kok Tau, Nanshan District, Shenzhen (the “Previous Land”) in the prior year, Zhen Wah no longer holds any significant assets. The Group did not record any share of profit from the JV during the period (2024: nil).

Meanwhile, as previously disclosed, an ex-tenant has objected to the relocation compensation agreement previously entered into between the relevant official authorities (the “Authorities”) and Zhen Wah concerning demolition, relocation and compensation for those buildings, erections and equipment on the Previous Land; and claimed additional compensation. In the prior year, the court ordered the Authorities to reconsider the ex-tenant’s compensation claim. The Authorities (including Zhen Wah as third party) have since been in negotiation with the ex-tenant about the compensation claim. The Group and the JV Partner are monitoring the situation and will take appropriate actions as and when necessary, based on the advice of their PRC legal advisers.

Based on the PRC legal advice received by the Group regarding historical disputes over Zhen Wah between the Group and JV Partner, including the change of equity interests from 80% to 49% in Zhen Wah in prior years (the “Historical Disputes”), the Group was entitled to the distribution of the relevant income and profit from the Previous Land held by Zhen Wah before re-development, as supported in the arbitral award made in 2010 after arbitration between the Group and JV Partner in respect of the Historical Disputes. The Group continued to act and to seek PRC legal advice and to take expedient actions (including but not limited to litigation and/or arbitration) to safeguard the best interest of the Group in Zhen Wah and its assets in respect of the Historical Disputes.

Shenzhen is well-positioned to remain a pioneer in economic and digital competitiveness, building on its status as a premier special economic zone and global hub for innovation, entrepreneurship, and advanced technology. With continued official support and stimulus policies, particularly in the high-end, tech-centric Nanshan District, the city is expected to play a pivotal role in driving the sustainable growth and development of the Guangdong-Hong Kong-Macao Greater Bay Area.

The local property market in Shenzhen is showing signs of policy-driven stabilisation, as evidenced by the recent swift sale of new premium residential projects adjacent to the Land at strong prices. In addition, it is anticipated that the hosting of “the 33rd APEC Economic Leaders’ Meeting” in Shenzhen in November this year will significantly boost the city’s global profile and infrastructure through high-quality urban renewal, further supporting property values. A promising outlook for Shenzhen’s property market is further supported by the city’s reputation as a highly liveable destination and ongoing government stimulus policies. Enhanced urban planning around the Land as a quality cultural and leisure zone, together with the development of metro infrastructure near the opera house in Tung Kok Tau will further augment the future development value of the Land.

The Group will continue to act proactively to safeguard the Company’s interests in relation to Zhen Wah and its assets in connection with the Historical Disputes. It will pursue the best available measures and take timely action as appropriate, while continuing to seek PRC legal advice to protect and advance the Group’s position.

At the same time, the Group will maintain close collaboration with relevant authorities and other relevant parties to explore various development options, with the aim of optimising the future development value of the Land in alignment with city planning and adjacent infrastructure projects including the opera house, so as to maximise value for the Company and its shareholders.

Further details can refer to the interim report of the Company for the six months ended 31 December 2025.