Hongkong & Shanghai Hotels Aktie

Good afternoon, ladies and gentlemen. Welcome to the Hong Kong and Shanghai Hotels' 2025 Annual Results Presentation. My name is Aiden, General Manager, Corporate Finance and Investor Relations for the company. The result announcements were posted on the stock exchange website earlier this afternoon. Our presentation will begin with 2025 annual results, followed by an overview of our strategic review vision and finally, a Q&A session. [Operator Instructions] Today, we are pleased to welcome the following speakers: Mr. Benjamin Vuchot, Chief Executive Officer; Mr. Keith Robertson, Chief Financial Officer; Mr. Gareth Roberts, Chief Operating Officer. We would now like to invite our CEO, Mr. Benjamin Vuchot, to begin the presentation.

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We achieved a material strengthening in financial performance compared with the prior year and this reflects the enduring quality of our assets, the strength of the Peninsula brand and disciplined execution across the organization. Importantly, this performance translated into a return to profitability, a clear demonstration of operating leverage and cost discipline throughout the business. But 2025 was not only about delivering results. It was also about taking a hard look at where we stand and where we need to go. Over the past year, we undertook a comprehensive strategic review, a deliberate fact-based assessment of our position, the evolving luxury hospitality landscape and the choices required to ensure HSH remains distinctive and value creating over the long term. So I will share the outcome of that work with you in a second and in the second half of this presentation. But now let me briefly take you through the financial highlights for the year. Our 2025 results reflect a group that is financially stronger and more resilient, providing a solid platform for the next phase of our strategy.

Revenue from operations increased by 11% with growth across all core divisions. Operating EBITDA increased by 43%, reflecting strong flow-through from revenue growth and disciplined cost management. As a result, the group delivered an underlying profit of HKD 105 million compared with an underlying loss last year, a meaningful turnaround. Net cash from operations increased by 69%, highlighting the improving quality and sustainability of earnings. Our balance sheet remains solid with net external debt stable at 23% of total assets and an A credit rating from both JCR and R&I. We also continued to make progress on residential sales at the Peninsula London. Turning to performance by division. Results were positive and broad-based in 2025. In hotels, we achieved RevPAR growth across all regions, driven by the post-renovation rebound of New York, the ramp-up of London and Istanbul and the record-breaking performance in Tokyo.

On the commercial property side, we continue to provide a stable earnings base, supported by robust leasing at The Repulse Bay and improved footfall and tenant mix at The Peak Complex. In Peak Tram, retail and others, our performance benefited from increased patronage, successful brand collaborations, refreshed retail concepts and the launch of Primo Posto, our first freestanding restaurant concept in Hong Kong. Overall, this was a year where a stronger execution, cost discipline and prior investments came together to deliver tangible results. And with that overview, I will now hand over to Keith Robertson, who will take you through the financial results in more detail. Over to you, Keith.

Thank you, Benjamin, and good afternoon, everybody. All figures presented here are in Hong Kong dollars, unless otherwise specified. 2025, the group achieved significant growth in both revenue and EBITDA and returned to profitability during the year. Consolidated revenue amounted to HKD 8 billion. Excluding revenue from the sale of the Peninsula London Residences, it increased by 11% to HKD 7.6 billion. This is driven by robust performance across all divisions, which we will detail in the next slide. Operating EBITDA, excluding the sale of Peninsula London Residences, increased by 43% year-on-year to HKD 1.7 billion. After considering the residential sales, preopening, project and other nonrecurring expenses, EBITDA increased by 16% year-on-year. An underlying profit of HKD 105 million was achieved, a turnaround from an underlying loss of HKD 176 million last year. There is revenue and EBITDA growth across all divisions. The hotel division delivered notable improvements in revenue across all properties, achieving an overall 13% increase.

In particular, the division benefited from the post-impact renovation of Peninsula New York, the ramping up of the Peninsula London and Istanbul and record-breaking metrics at the Peninsula Tokyo. Revenue at the Commercial Properties division, excluding the sales of the Peninsula London Residences, increased 5% to HKD 929 million. The division was supported by increased occupancy of over 94% at The Repulse Bay and an improved tenant mix at The Peak Tower, partially offset by a softer market for St. John's Building and a decrease in revenue from The Landmark Vietnam as the joint venture approached its conclusion in mid-January 2026. Revenue from The Peak Tram, Retail and Others division increased by 6% to HKD 1 billion, driven primarily by the strong performance of The Peak Tram and of the Quail. There's also positive flow-through to EBITDA for all the divisions.

Excluding the cost of inventories for the Peninsula London Residences and project expenses, operating costs amounted to HKD 5.9 billion, representing an increase of 4% against the corresponding revenue increase of 11%. The hospitality industry, as many of you know, by nature, has a high fixed cost base. This positive EBITDA flow-through is a significant achievement, really reflecting our ongoing commitment to operational excellence and cost management discipline. Staff costs continue to be the primary component of our operating expenses, really reflecting the service-intensive nature of luxury hospitality.

In terms of cash flow, the group generated a cash inflow from operations of HKD 839 million, up 69% compared to 2024. This is particularly driven by the increase in operating EBITDA, as we stated in the previous slides. In addition, proceeds from the sale of 1 Peninsula London Residences unit were HKD 395 million compared to over HKD 3 billion from 7 units in 2024. Net cash inflow before dividends and other payments amounted to HKD 800 million. This decrease was primarily driven by fewer Peninsula London Residences units sold compared to the previous year.

Moving on to the balance sheet. The group's consolidated net debt was at HKD 12.7 billion, with net borrowings to total assets remaining stable at 23% as compared to 2024. Undrawn committed facilities amounted to HKD 2 billion. During the year, the group issued its debut private Samurai bond for HKD 16 billion with the longest tenure up to 6 years, becoming the first ever Hong Kong hospitality company to do so. The private Samurai bonds are rated A by both the Japan Credit Rating Agency Limited and Rating & Investment Information, Inc. The group has also successfully refinanced its GBP Green Club Loan of GBP 425 million with 9 banks. During the year, we've also optimized our debt currency mix from an FX and interest rate perspective. These are 2 main drivers for the decrease of weighted average growth rate from 4.69% to 3.9% in 2025. We would regularly review the capital structure to ensure there is ample headroom for its obligations and its commitments. Now I'll hand you over to Gareth to talk about the operations.

Thank you very much, Keith, and good afternoon, ladies and gentlemen. I'll first start with the Hotels division, which delivered a resilient and broadly positive performance across all regions in 2025. In Greater China, performance was stable, supported by inbound demand recovery and expanded visa-free travel to the Chinese Mainland. All 3 Peninsula hotels in Greater China delivered solid room and banqueting results, although food and beverage remained softer due to tightened consumer spending. RevPAR increased by 8%. In Hong Kong, performance strengthened in Q4, closing the year on a high note. We've seen continued growth in long-haul arrivals, which helped to grow performance. Shanghai strengthened in the second half, supported by visa-free policies and the return of major events with cost discipline aiding our margins. Beijing faced softer demand early in the year amid the ongoing long-haul weakness of U.S.-China geopolitical tensions. However, performance improved later on the back of numerous diplomatic delegations, which supported our occupancy and rate across key periods.

European operations delivered healthy results. RevPAR increased by 14% with strong momentum in rooms and events supported by sustained brand visibility and the positive reviews and accolades from guests and media of our new hotels in London and Istanbul. Paris also saw strong results with the continued post-Olympics demand. Our U.S. portfolio delivered solid year-on-year improvement, supported by strong domestic travel, the post-renovation rebound of our property in New York and steady group and leisure demand across major cities. RevPAR increased by 13%. And the rest of our Asia properties delivered improving year-on-year performance, supported by targeted rate strategies, strong banquets and weddings and successful regional programming, RevPAR for these properties increased by 19%. Specifically, Tokyo achieved record-breaking metrics driven by the robust inbound travel during the sakura season, international groups and delegations. And we're in the planning stages for a renovation of our guest rooms and other areas of the hotel to continue enhancing our services and amenities for our guests.

Moving on to our commercial properties. The Repulse Bay delivered steady year-end results, supported by robust leasing momentum and improved occupancy of over 94%. The retail Arcade benefited from an enhanced tenant mix and continued refurbishment, which helped to strengthen positioning and footfall. The Peak Tower recorded strong improvement in visitors, supported by refreshed offerings and The Peak Tram combo ticket success as well as some new high-end retail and food and beverage tenants. From June onwards, The Peak Complex collaborated with Hong Kong Disneyland to present the first-ever Mickey In Real Life campaign. Peak Tram's increased patronage supported by successful brand collaborations together with Disney and Pop-Mart helped drive revenue while cost efficiencies and initiatives supported strong EBITDA growth. Revenue at Peninsula Merchandising increased compared to the previous year, supported by the opening of our refreshed Peninsula Boutique at Hong Kong International Airport and the successful launch of our new Hong Kong souvenir's collection.

Our mid-autumn collaboration with Lane Crawford and the rollout of new lifestyle categories such as leather goods and whiskey were also highlights for Peninsula Merchandising. Meanwhile, Hong Kong's prime office market remains well supplied with high-quality office space despite our office market sentiment, St. John's Building remained resilient in 2025. The Landmark Vietnam joint venture has expired as of the 15th of January 2026, and we'd like to take this opportunity to thank our partners in Vietnam, the Board and all of our employees for their loyal contributions and for the great success of this property over many years. The successful launch of Primo Posto located in Soho, our first freestanding restaurant concept, featuring Milanese cuisine, marked an important milestone in expanding our food and beverage portfolio and has received very positive feedback from both guests and media alike. And with that, I'll now hand back over to Benjamin to discuss the future outlook.

Thank you, Gareth. Thank you, Keith. So turning to 2026. We remain cautiously optimistic about the outlook.

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Luxury travel demand continues to recover in several key markets and will continue to grow. While the operating landscape remains varied across regions, early indicators point to sustained appetite for authentic, personalized and culturally rich luxury hospitality. The Peninsula Tokyo is expected to remain a top performer for the group. And our U.S. portfolio is also expected to remain a stable source of demand and brand visibility. The newer flagships in London and Istanbul continuing to build brand presence. The commercial portfolio is expected to remain resilient, buoyed by steady demand in key residential and retail assets, robust visitor interest in flagship destinations such as The Peak and continued momentum in merchandising and experiential lifestyle platforms. So overall, we expect 2026 to be a year of steady progression.

And by leveraging our world-class brand, our heritage and pursuit of sustainable luxury, I believe we remain well placed to navigate the evolving landscape and the company's future growth. So we have seen that the group delivered a solid performance in 2025, reflecting the strength of our assets, our brand and the commitment of our teams. And those results provide an important foundation, but they are only part of the story. And I would like now to turn on the next chapter, our strategic review. This is about looking beyond the current numbers, stepping back and sharing how we see the future of HSH. It is about the choices we are making today to ensure that the group remains relevant, distinctive and value creating for many years to come. So I'll commence with our presentation just with a short video.

[Presentation]

So what would we like you to remember from today's presentation. We're going to try to make it easy for you guys. Well, the key messages that are important is that, first of all, we are starting from a position of strength. We have a powerful brand, The Peninsula brand. We have an exceptional guest experience, and we have deep expertise. But the luxury hospitality landscape is evolving. And therefore, this is the right moment for us to move from strength to renewal. That is the purpose of Vision 2035 Perform and Transform. This new strategy is built on a number of initiatives, but I would like to highlight 4. First, we will increase our operational and financial performance, unlocking the full potential of our existing assets. Let's do more with what we have. Second, we will engage in an acceleration of our portfolio growth through more partnership, less ownership approach, expanding selectively, diversifying into resorts and residences as well as doing so in a capital disciplined way.

Third, we will reinvent our flagship properties for another era of excellence, starting with the most iconic, The Peninsula Hong Kong. And finally, we will expand the Peninsula brand beyond the 4 walls of our hotels into experiences, deepening guest engagement and capturing where luxury demand is increasingly heading. Let me now take you through the thinking behind this strategy. To frame our strategic choices, it is important to start with the fundamentals of the industry in which we operate. The luxury hospitality is a large and attractive market and one that is expected to continue growing over the long term. What is particularly important is not only the absolute size of this market, but more the quality of its growth. Demand is being driven by structural trends, rising global wealth, continued importance of travel and experiences and the increasing premium placed on true luxury and differentiation. So this backdrop gives us confidence. It tells us that the opportunity is there.

And the key question and the focus for our strategic review, therefore, is how can Hong Kong and Shanghai Hotels position itself to capture this growth. And before presenting change, I'd like to remember something very important, which is very clear about where we stand today, and I mentioned that before. HSH is in a strong position today. The Peninsula brand enjoys genuine global recognition and remains synonymous with luxury. Our guests consistently rate their Peninsula estate as world-class and a large majority express a strong intention to return and to recommend us. We also benefit from distinctive expertise across multiple dimensions: service, facilities, design, where we are perceived to outperform. And beyond hotels, HSH is supported by a diversified portfolio of businesses and asset classes across geographies, providing balance and resilience to the group. So taken together, these elements give us confidence. They confirm that our foundations are strong and that we have the right platform from which to evolve.

To illustrate the strength of the Peninsula brand, it consistently performs above its physical scale. Across key geographies, brand familiarity among luxury travelers is strong and compares very favorably with significantly larger peers. What is important here to read on this chart is that at 51% brand recognition, the other number you want to focus on is the number of properties 12. We are only 20 percentage points lower than the leader in the market who has over 10x more properties than the Peninsula Hotel. So the brand genuinely enjoys global recognition, as I mentioned. And this dynamic really matters. It confirms the depth of our brand equity and the emotional connection we have of our guests -- with our guests. At the same time, it points to a clear strategic question, how can we thoughtfully leverage this strength over time without compromising what makes the Peninsula so distinctive? And while we start from a position of strength, we are, at the same time, confronted with a number of challenges. The luxury hospitality industry is being reshaped.

A new generation of luxury travelers is emerging with expectations that go beyond traditional markers of luxuries. They are looking for highly personalized service, authenticity and distinctive experiences. At the same time, competition is intensifying. Established peers and new entrants are expanding into new destinations, often with innovative concepts in areas such as dining, food and beverage, wellness and lifestyle and with a strong appeal to younger aspirational guests. We are also seeing important shifts in how capital is deployed across the industry. This is changing the competitive landscape and raising the bar in terms of speed and flexibility. So alongside these external dynamics, we have been equally honest about our own international -- internal challenges, sorry. I mean our asset base remains relatively small. We have 12 hotels. And this limits our ability to fully leverage the strength of our brand. And while our standards of quality are exceptionally high, we also see clear opportunities to further improve our operational performance.

And speaking about performance over the past 5 years, we have made very tangible progress. The group has recovered from the unprecedented disruption of 2020 and moved beyond pre-COVID levels. This is a result of disciplined execution, the commitment of our teams and a relentless focus on quality. At the same time, this trajectory also tells us something important. There is still meaningful upside ahead of us. In other words, our aim is to unlock the full potential of what we already have. So where are we headed? Well, Vision 2035 is our long-term ambition for HSH. It reflects how we see the future of the group and the balance we want to strike as we move forward. At its core, this vision is about building a celebrated, growing and innovative luxury lifestyle brand, one that performs strongly in the near term and transforms thoughtfully for the long term. And with that ambition in mind, let me now walk you through how we translate this vision into concrete strategic priorities and actions.

Our Vision 2035 is expressed through a very simple but very deliberate strategic framework, which we call perform and transform. At its core, this strategy recognizes that we must do 2 things at the same time. First, we must continue to strengthen the performance of what we already operate. This is about getting the group in the best possible shape, sharpening our fundamentals across brand and service, across dining, wellness and lifestyle, but also revenue management, operational excellence, culture and technology. And this is really the first train we're launching that has probably a 3- to 5-year horizon, this performance horizon. In parallel, we must also shape the future of the group. This is where the transformation comes in. And it is about placing selective, well-considered strategic bets that expand our opportunity set over time. It's about growing intentionally. It's about expanding the brand, reimagining what we have, which is our flagships and increasing our capital efficiency.

And these 2 dimensions are not sequential. They actually reinforce each other. The stronger we are today, the more ambitious we can be in the future. So having introduced perform and transform as this foundation for our strategy, let me focus a little bit more on the perform part because this is the foundation of our strategy. And we are focusing on 4 execution levers. First, and absolutely uncompromisingly brand and service. We will further strengthen what the Peninsula brand stands for, sharpen our commercial focus and deepen customer loyalty. At the same time, we will elevate service through ultra personalization, ensuring every guest experiences feel truly individual. Secondly, food and beverage, dining, wellness and lifestyle. Guest expectations continue to evolve, and our ambition is to differentiate the experiences through extraordinary dining concepts, renewed wellness and lifestyle experiences while increasing the pace for innovation.

Thirdly, revenue management and operational excellence. We see upside in elevating pricing. We see upside in reviewing distribution and yield management alongside continued progress in operational excellence, both at property level, but also centrally in our head office. And again, without compromising the guest experience. Finally, our organization, our culture and our technology adoption needs to continue to evolve. And to sustain excellence, we will continue fine-tuning our organization and investing further in technology, both guest-facing but also for our internal employees. So in short, perform is about disciplined execution, translating the strength of our assets and our brand into consistently stronger results. And with that foundation in place, let me turn to the transform part of the plan. And the first transform priority I would like to discuss is how do we embrace growth. And we want to grow intentionally. Our ambition is not to pursue scale for its own sake. It is rather to be present in more destinations that truly matter to our most discerning guests.

Let's go where our guests want us to go, while preserving the sense of rarity, exclusivity that defines the Peninsula brand. We will also evolve the way we approach capital and partnerships. While we continue to take equity stakes in selected developments where long-term ownership creates attractive value, in parallel, for other opportunities, we may adopt a management agreement model, working with like-minded partners and sharing investment and risk. An approach that allows us to rebalance from asset-heavy to purely an asset-light, no. It's going to be what we call an asset right, what is right for HSH to sustain the growth that we can afford and that is going to be accepted by our guests. Finally, we're very clear about where we want to grow. We focus on the most desirable global destinations, but with a broader mix that includes residents, but also includes a different class of assets, including branded residences and with the objective of achieving a more balanced geographic footprint over time.

Having explained the logic between our approach to growth, let me now illustrate what this means in practical terms for our development pipeline. Today, our hotel portfolio remains relatively concentrated primarily in Asia, but -- in terms of geography, but also in a number of assets. This reflects our history. We were born in Hong Kong and grew from Hong Kong, but also our deliberate selectivity over time. At the same time, as we look ahead, we see a clear opportunity to build a richer and more balanced pipeline over the long term. By 2035, we envisage a significantly expanded scope compared with today with a geographic profile that is more evenly balanced across regions. This evolution supports both growth and risk management while remaining fully consistent with our brand standards and our disciplined approach to capital. Beyond growth, another critical pillar of our strategy is to reimagine our flagships.

The Peninsula Hong Kong holds a truly special place in the world of luxury hospitality. In 2028, it will celebrate its 100th anniversary, a milestone that very few hotels globally can claim and one that carries both pride and responsibility. And we see this anniversary not simply as a celebration of the past, but as a unique opportunity to look forward. And our ambition is to elevate and reinvent this iconic property by repositioning it as the leading hotel of the 21st century. The Pen 100 anniversary program will also mark the beginning of a new chapter for the Peninsula brand itself, including a refreshed identity and a renewed narrative. So as we look to the future, we believe that the Peninsula brand has a potential to extend well beyond the traditional boundaries of the hotel itself. Luxury guests today are increasingly seeking experiences that are distinctive, immersive and memorable. There is an area where HSH already has strong foundations. Across the group, we are offering a range of unique experiences from motoring and lifestyle events to bespoke journeys on land, at sea and in the air.

So looking ahead, we are exploring how these elements could be brought together in a more intentional and connected way. For example, we may reflect on concepts that connect our properties, allowing guests to discover the Peninsula brand and the Peninsula world across regions in a way that feels both elegant and effortless. And in doing so, we aim to deepen our relationship with our guests, strengthen brand loyalty and thoughtfully expand what the Peninsula stands for, not just as a place to stay, but as a companion in the art of travel and discovery. So as we come to a close, let me just take a step back and reflect on the journey we have shared with you this afternoon. HSH stands on a very strong foundation. We benefit from exceptional brand, a long tradition of excellence, loyal guests and a dedicated team across the group.

At the same time, we operate in an industry that is evolving rapidly, and these shifts require us to continue adapting with clarity and ambition. Our Vision 2035 Perform and Transform is our response to this context. Our aim is to ensure that HSH remains not only competitive, but truly exceptional for the next era. And we will do so by unlocking the full potential of our existing assets, driving operational and financial performance, by accelerating the growth of our portfolio based on more partnerships, less ownership approach, diversifying into resorts, but also branded residences, revamping our flagship properties for another era of excellence, starting with The Peninsula Hong Kong and finally, expanding the brand beyond the 4 walls of our hotels into the fast-growing world of experiences. So I thank you for your attention, and we now look forward to engaging with you in the Q&A session that follows. Thank you.

Thank you, Benjamin. We'll now open the floor for questions. We'll start off with a question on the webcast. What is the company's plan to improve F&B profitability across the group?

Well, first and foremost, we want to make sure that we don't treat F&B purely as an amenity to our guests, but as a very strong performing business pillar for our business. And that includes revisiting our existing concepts, reviewing how do we make sure that at city level or at property level, we remain competitive with a very dynamic environment that we also embrace how talent is critical in the world of F&B in the world of restaurants, investing in that talent and unleashing the potential of some amazing talent we may have in our properties. I think we also have to be a bit more daring and innovative, but we are very encouraged by the resilience of the F&B world and by the strong competition that not only challenges us, but excites us to go above and beyond and regain the positioning of equally exciting room product and experiences with food and beverage experiences. In fact, as we may -- you may have heard in the presentation, we did a very innovative project in Hong Kong, which we did not report under the hotel business.

We report it under the others business. And we opened a beautiful restaurant called Primo Posto. There's no sign of the Peninsula. There's no sign of Hong Kong and Shanghai hotels. But this is a way for us to make sure that we are also able to engage with discerning audience to bring them something that is going to be innovative, it's going to be distinctive and bring the know-how of Hong Kong and Shanghai Hotels in hospitality, but adapting it to a new format. The results have been very encouraging. The restaurant will be turning 1 year old in a couple of weeks. And this, I think, paves the way also to expand further in the world of food and beverage as stand-alone, but also to bring back the learnings of maybe a more entrepreneurial approach back to our hotels, our signature restaurants and our all-day dining opportunities.

This is Jeff Yau from DBS. I got 2 questions. The first question is related to the existing hotel operation. Is there any disruption from the war in Middle East to the hotel operation year-to-date? The second question is about the more partnership and ownership approach. Does this apply to upcoming new hotels, new project or this also applies to the existing hotel in operation. This means would you consider introduce any third-party capital to your existing hotel operation?

Thank you. Let me answer the first question first. I think the geopolitical tensions that we have seen in the Middle East region is definitely impacting the travel industry and the hospitality industry overall. The restrictions on airlift makes that we, among everybody else in our peer group have been suffering some cancellations since the beginning of the conflict. However, I think it's a bit too early to say if this will have a material impact to our business. I tend to remind our group that we're actually quite well balanced from a geographical perspective, 25% of our hotels in the U.S., 25% in Europe, the rest in Asia, but again, between North Asia and Southeast Asia. In fact, we do not have any physical presence in the Middle East. However, the Middle East is an important geo mix to our business. We are very grateful to the patronage of many of our guests who originate from the Middle East who are probably equally frustrated not to be able to travel at the moment.

So I don't think this -- at this stage, it's too early to decide whether it's going to be a material impact, but we're definitely watching this closely. The second question was, I think, with regards to our business model and how do we treat our -- what I coined less ownership, more partnership. Maybe it's important to set a bit of context here as well. Out of the 12 properties that we have under the Peninsula brand today in the hotel division, 25% of them are already on the shared ownership perspective. It's all reported in our annual report. So I'm not revealing any in-house secrets, but we own 20% only of our hotels in the Peninsula Beverly Hills and in the Peninsula Paris. And we're in a joint venture at a 50-50 equity stake in Peninsula Istanbul. So partnership is not something new to HSH. What we are willing to establish going forward is to balance depending on the project, depending on the geography, depending on the expertise, 2 different things.

One, do we want to continue to own 100% of the operations? Or do we want to find a partner? And what level of equity do we want to take in. But also very importantly, and that's why we start to finish on that, we are -- we want to play within asset-heavy and an asset-light model and decided what sometimes we decide to put equity or not and what I coined again, the asset-right strategy rather than asset-light or an asset heavy. So that's the first thing. But there's another important component to how we want to really focus the business going forward is the diversification of the type of asset class that we have, particularly when it comes to branded residences. The branded residences offers another way to generate high revenues, but also bring more profitability to fund maybe more hotel projects, which we know require more patient capital.

So asset right when it comes to partnership, but also diversification and push into more residences like we have done in London recently. And we almost sold out of the 24 units in London. In fact, we sold one of the residences in the last quarter of 2025, which was not particularly a very forthcoming period in the world economy. I mean, it was particularly in London, nothing spectacular that could have engaged more people to confirm their intention to buy. But in fact, in the first 2 months of 2026, we have actually completed another transaction, and we are actively discussing a couple more. So we're actually quite energized and encouraged by the momentum despite the geopolitical tensions and despite the maybe less favorable real estate market in London. I think if you have quality, if you have commitment to excellence and you have a long-term vision, the products that we are going to put available in the market can attract the right level of investors who also have a long-term strategy.

This is Owen from HSBC. You mentioned that you're going to be looking at new experiences and new type of resorts. Will this be via new brands or you guys will leverage your existing brand? What would the strategy be in terms of diversification?

At this stage, we really want to focus on the Peninsula brand [Audio Gap] hospitality division. It's a uniquely celebrated brand, and yet it only has 12 properties across the globe. If you look at the type of property we have, they're very much city hotels, beautiful landmarks, some historical like this one here, some a bit more recent in the history. We actually -- in June 2025, we'll be celebrating the 25th anniversary of our Peninsula Chicago Hotel. And later in the year, we'll celebrate the 35th anniversary of The Peninsula Beverly Hills.

So those are our more recent city hotels, but still very important in the landscape of what we have. So Peninsula brand is our focus. At the same time, I think our guests are evolving. They are asking us to go where they want to go. And they're asking us to provide us alternative options to city hotels. Hence, the residences and hence, the resort ideas and the different formats, probably smaller number of keys, a strong residential component and in further away locations than the city centers that we have traditionally and historically and successfully invested in.

[indiscernible] from Mizuho. Just 2 questions from your transform strategy. By 2035, do you have sort of like a targeted number of assets or hotel or resident you would like to have? Obviously, it depends on situation. And second question is, as you mentioned, you want to have a more balanced portfolio amongst EMEA, Asia and Europe. currently or down the road in the plan, are there any preferred or focus cities/countries that you'd be looking at?

Sure. I mentioned before that we're not chasing growth for growth. It's not a numbers game. We haven't set ourselves a target of how many hotels to reach. Why? Because there's so much respect for the exclusivity that the Peninsula brand holds that we don't want to dilute that exclusivity by going too fast or by just trying to achieve a target for a target. And more importantly, we really want to make sure that we grow where our guests expect us to take them to. But we have an ambition that we want to reflect. The second thing I would like to say, and I don't want not to commit to a number, but I want to explain more the logic. We set a 10-year strategy, right? But we wanted to balance it, balance it in what we can achieve without having to open hotels, and that's the perform plan. Let's do that anyway. We don't need to wait to open a hotel to do better with what we have.

And secondly, we know it takes a few years to open a hotel, and we need to activate our pipeline. So 10-year vision is quite far away. And given the constraints and the cycle, the length of the cycle of filling that pipeline and delivering the hotels, we don't want to have to be locked and constrained by a number that we would give you. We prefer to have strong beliefs, strong values in how we will intentionally grow and deliver that growth at the right pace at the right time. But I can tell you that these gentlemen and the whole team and ladies that we have in the team have set some pretty ambitious targets for themselves, and I hope we can deliver them. Second question is where should we grow [Audio Gap] to understanding where do our guests want us to grow. If we look at the trends and from the research that we've conducted last year during our strategic review, we definitely see a very strong appeal for more European destinations and particularly Southern Europe.

It's an interesting destination because it attracts European guests, which have been celebrating the brand with London, with Istanbul, with Paris. We celebrated 10 years in Paris last year. But there's also a very, very attractive market for American tourists and under normal circumstances for the Middle Eastern travelers. And so where do we -- we go where our guests want us to go. This is a region where they want to go. I personally think Japan is an underserved market for luxury hospitality and luxury branded residences. It's a new emerging product that we can see in Japan. It's quite underserved today. So we'd like to continue and ride on the success of almost 20 years of presence in Japan with a bit more focus. And the obvious question is we're not in the Middle East. Every peer and competitor has established a presence. And so while we have a great patronage from guests coming from the Middle East, being able to establish a presence going forward in that region would be, I think, also a big addition to our network.

We now take on one more question from the webcast. What is the company's dividend plan based on the new strategic plan?

Could you repeat the question, please?

What is the company's dividend plan based on the new strategic plan from the company?

So I'll defer the question to Keith when it's complicated. Can you please, I think, one more time, repeat the question please.

Dividend.

Dividend. Well, you can take that one.

Okay. So we do, as you know, we adopt the dividend policy of providing shareholders with a stable and sustainable dividend stream. [Audio Gap] obviously predicated on a number of things, including the underlying earnings achieved, commercial factors such as current and future cash flows, CapEx spend, financing costs, et cetera, et cetera. Each dividend payment being determined by the Board, obviously, and that's based on the assessments at this particular time. Obviously, we cannot provide guidance on a forecast for you at this current time. But obviously, the Board do look at this and do assess based on those factors.

Thank you, Keith. We have one last question from the webcast. Is the group considering disposing any of our existing assets?

I mean, at this stage, we have a very, very comprehensive collection of assets, some are trophy assets. Patient capital is something that has defined us. It's something that we've been celebrating. But at the same time, I think going forward, as we are going to reinvest into the business, we talked about reinvesting in Peninsula Hong Kong, fueling the growth. I think we have to, at times, maybe reconsider disposing of some of the assets. But no, nothing in the immediate short term that we have. But I think as part of the strategic review, this has enabled us also to reconsider and to really understand better what we have and how can we extract the most value out of it.

If there are no additional questions, we will now conclude our presentation. Thank you for coming. Thank you.

Thank you very much.

Thank you.

Good afternoon, ladies and gentlemen. Welcome to the Hong Kong and Shanghai Hotels' 2025 Interim Results Presentation. My name is Aiden, General Manager of Corporate Finance and Investor Relations for the company. The result announcements were posted on the Stock Exchange website earlier this afternoon.

Our presentation will begin by our senior management team, followed by a Q&A session. [Operator Instructions] Today, we are pleased to welcome the following speakers: Mr. Benjamin Vuchot, Chief Executive Officer; Ms. Christobelle Liao, Chief Corporate and Governance Officer; Mr. Keith Robertson, Chief Financial Officer; and Mr. Gareth Roberts, Chief Operating Officer.

I would now like to invite our CEO, Mr. Benjamin Vuchot, to begin our presentation.

Thank you very much, Aiden. Good afternoon, ladies and gentlemen. Having now spent 5 months with the company as a CEO, I'm pleased to deliver this presentation on the company's results for the first half of 2025. In the period under review, I'm delighted to share that our company delivered operational results that exceeded our expectations. We saw strong RevPAR growth in most hotels and solid operating metrics at The Repulse Bay and The Peak Complex in Hong Kong.

Operating revenue and EBITDA growth were significant, which I will explain further shortly. Our underlying loss improved compared to last year, and we reported better net cash from our recurring operating activities. We also have a stable net debt to total assets ratio. In the second half of 2025, we will continue to focus on enhancing operational and financial performance.

The marketing of the remaining six London Residences remains one of our key priorities, but we have commenced a strategic review, which we expect to complete by the end of 2025 to sharpen our medium- and long-term strategy. We will announce more details in the early 2026. So next, I will share the highlights for the first half of 2025. Given the strong operational results, revenue from operations increased by 13% year-on-year.

Operating EBITDA, excluding the sales of Peninsula London Residences, increased by 63% compared to the same period last year. Our net cash generated from recurring operation activities -- recurring operating activities improved significantly by almost 10x from HKD 38 million in 2024 to HKD 366 million in 2025. The group's financial position remains strong with a net external debt to total assets ratios of 25%.

And the financial health of the group is reinforced by our credit rating. In 2025, we have maintained an A rating with the Japan Credit Rating Agency Limited and also received an A rating from Rating and Investment Information, Inc. Now moving to our divisions. In our Hotel division, the operational results were strong despite facing weaker demand in the Greater China hotels.

Most regions reported double-digit RevPAR growth during the first half. For example, RevPAR growth in other Asia, Europe and U.S. was 27%, 21% and 12%, respectively. RevPAR growth in Greater China was stable, however. A number of hotel properties stood out in their first half performance, and I'd like to share some of them. The Peninsula Tokyo was a significant success stories, reporting historically high rates.

In New York, we are pleased to see the renovation that happened last year, yielding strong results. And the recently opened The Peninsula London and The Peninsula Istanbul hotels are showing great progress. They achieved revenue growth of 8% and 31%, respectively, as they ramp up to stabilize performance. Our second division, our commercial property division, the performance was also robust. Our largest commercial property, The Repulse Bay in Hong Kong had 6% increase in revenues, whereas The Peak Tower enjoyed an 11% revenue growth.

With regards to The Peninsula London Residences, I'm pleased to share that we have now released the remaining six residences for sale. In our third division, Peak Tram, Retail and Others, the revenue growth was also solid, especially for The Peak Tram, which continues to be a leading tourist attraction in Hong Kong with revenue increasing by 17% compared to last year. Another highlight in this division is the opening of our new concept for retail at the Hong Kong International Airport for The Peninsula Boutique.

This happened earlier this year and was very well received. I mentioned briefly the release of the last six units of our Peninsula London Residences. But just to give you a bit of more context, The Peninsula London Complex comprises of a 190-room hotel and 24 Peninsula-branded Residences, which are considered to be among the highest quality property available in the London market. Of the 24 Residences, the sales of 17 have been completed as of 30th of June 2025 and another one was completed in July 2025.

So the final six Residences are now being released for sale. We put a lot of efforts in completing also some show flats, and I'm happy to share some of the design of these apartments on the screen here. Now more from a market perspective. Today's high-end travelers are seeking unique experiences and hyper personalization.

And this is something that The Peninsula does very well. We are crafting incredible experiences for our guests even beyond the hotel. For example, earlier this year, we hosted the Japan Driving Experience, which showcased the spectacular Japanese countryside while offering a driving adventure. And at the same time, guests could experience our world-renowned Peninsula service. I will now hand over to Keith to discuss the financial results in details, and will come back to you afterwards.

Thank you, Benjamin. Good afternoon, everybody. During the first half of 2025, revenue from operations increased by 13% to HKD 3.3 billion, attributable to the strong performance achieved by The Peninsula Tokyo, The Peninsula New York following its major renovation and the significant revenue growth achieved by The Peninsula London. Total revenue, however, decreased by 29% compared to HKD 4.6 billion due to no London residential sales in the period compared to the prior year.

Operating EBITDA, excluding the sales of Peninsula London Residences, increased by 63% to HKD 643 million. After considering residential sales and nonrecurring expenses, EBITDA increased by 19% year-on-year. Although EBITDA improved, the group reported an underlying loss of HKD 216 million, mainly driven by depreciation, particularly in London and net financing charges. The underlying loss was less than last year, by 16%.

Now I will turn to divisional performance. The hotel themselves reported a 14% increase in combined revenue. The increase in the revenue was due to several factors: the strong demand at The Peninsula Tokyo, which recorded an 8% increase in occupancy and 19% increase in revenue. The encouraging results of The Peninsula New York RevPAR increased by 9% following the renovation in 2024. The revenue growth of the two new hotels in London and Istanbul of 8% and 31%, respectively, as they continue to ramp up to stabilized earnings. Due to the strong flow-through, EBITDA in the Hotels division improved by 81% to HKD 466 million.

Excluding the nonrecurring revenue from Peninsula London Residences sales, commercial properties revenue increased by 5%. The revenue growth was primarily driven by The Repulse Bay complex, which had a 97% occupancy in the residential apartments as of the second quarter of 2025 and the increase in fees achieved by the Sky Terrace. Because of the strong flow-through, EBITDA in the commercial properties division increased by 27%. Revenue of The Peak Tram, Retail and Other Services division increased by 15% to HKD 343 million, mainly attributable to the strong performance of The Peak Tram.

Next, I will talk you through the cash flow summary. As mentioned in the highlights, we are pleased to see a significant improvement in net cash inflow from operations of almost 10x from HKD 38 million in 2024 to HKD 366 million in 2025, excluding the sales of London Residences. Net cash inflow after normal capital expenditure decreased to HKD 366 million from HKD 1.7 billion last year. The sale of the remaining six Residences in London is expected to further improve our cash flow position in the future.

Regarding project-related cash flows -- total cash outflow for projects for the period was HKD 331 million, which was mainly due to the finalization of The Peninsula London project, followed by The Peninsula Istanbul joint venture and The Peninsula New York major renovation. Net cash inflow before financing for the period amounted to HKD 35 million. Moving on to the balance sheet. Our net borrowings, excluding lease and other liabilities increased by HKD 1.2 billion to HKD 13.7 billion.

The increase in net borrowings was primarily due to the unfavorable exchange impact on the translation of non-Hong Kong dollar debt balances attributable to the appreciation of the foreign currencies against the Hong Kong dollar. Net debt to total assets remained stable at a healthy level of 25% and undrawn committed facilities amounted to HKD 2.7 billion. Our weighted average interest rate was at 4.27% after taking hedging activities into account.

This reflects a 42 basis points decrease compared to December last year. 56% of total debt had fixed interest rate. The group issued its debut Private Samurai Bond offering on the 6th of June 2025 for JPY 16 billion with the longest tenant up to 6 years. The bond issuance has the benefit of diversifying the group's funding channels by engaging long-term institutional investors in the Japanese bond market.

The group has also successfully refinanced its GBP Green Club loan in the amount of GBP 425 million with a group of nine banks. Drawdown of this facility was executed on the 10th of July 2025. Following this drawdown, the group's average duration for committed facilities increased to 2 years from 1.4 years. 62% of the group's total committed facilities was classified as green loans or sustainability-linked loans.

The group is committed to sustainable luxury and will continuously look for opportunities to establish green financing. At the end of June 2025, as mentioned earlier, the group is rated A from both the Japan Credit Rating Agency Limited and Rating and Investment Information, Inc. for long-term foreign currency and local currency denominated debts. We will continue to closely monitor our overall debt and cash flow positions to maintain sufficient financial headroom.

Now I will hand you over to Gareth to talk about the operations. Thank you.

Many thanks, Keith, and good afternoon, everybody. I'll share the hotel highlights by region, starting with Greater China. The Peninsula Hong Kong experienced stable results in terms of revenue and RevPAR compared to the same period in 2024, while occupancy increased by double digits. Hong Kong is experiencing tourist arrivals from long-haul markets, including the U.S. and Europe, but this recovery is not yet being seen in the luxury market.

Shenzhen as a convenient and affordable air hub and experiential city destination continues to attract affluent Chinese mainland domestic travellers as well as Hong Kong residents, and this affected our food and beverage revenues. We implemented various unique experiences and promotional events to entice visitors and residents alike to visit the hotel. The performance of our hotels in the mainland is mixed. The Peninsula Shanghai experienced a challenging first 2 months of 2025 before and during Chinese New Year, although recovered during the rest of the first half.

While Chinese domestic consumers have become more price sensitive and reluctant to spend on travel or luxuries, we benefited from the positive impact of the visa-free travel to China for many international markets with the Middle East and Russia being particularly strong. As a result, the overall performance for the first half was relatively stable with flat RevPAR growth. The Peninsula Beijing reported a challenging first half of 2025 compared to the same period in '24, which had seen historically high RevPAR.

Flight capacity in Beijing has not yet recovered, and this has affected long-haul leisure travel to Beijing and the U.S.-China trade war, coupled with geopolitical tensions affected travel from the United States. RevPAR decreased by 9% compared to the same period last year. The Peninsula Tokyo reported a strong momentum in 2025 with a 20% increase in RevPAR compared to the first half of last year. This was driven by robust international group business in March and April as well as the traditionally strong Sakura season at the end of March.

The Peninsula Bangkok started the year with a strong January performance compared to the same period last year and reported over 10% increase in RevPAR. However, this tapered off with a decline in bookings from the Greater China market following negative news reports about the kidnapping incidents at the Thailand-Myanmar border in February. In addition, the major earthquake, which affected Bangkok in March, led to cancellations and negatively impacted international travel to the country.

While we were relieved there was no casualties or significant damage to our property or guests, the earthquake affected our financial results as we had to spend a significant sum on repairing nonstructural damage. The Peninsula Manila had a satisfactory performance in the first half. Looking to the United States, The Peninsula New York reported a positive first half of 2025, enjoying rock strong results with revenue increased by 54% following our significant renovation in 2024 of the guest rooms, the lobby, rooftop bar and public areas.

The new renovation has received positive reviews from guests and media and had the effect of attracting many first-time guests as well as loyal patrons of the hotel, and we have continued to work on driving the rates. Food and beverage revenues were strong, and good results from catering. Our geographic mix of this property has become increasingly domestic with fewer numbers of international guests as compared to previous years due to the current U.S. policies, which have affected inbound travel. The rest of the U.S. hotels performed well.

Our outlook for the rest of the year is positive. Moving on to Europe. Now in its second full year of operation, The Peninsula London is gaining market share, although it reported a slow start to the beginning of the year with Ramadan affecting business from the Middle East. The hotel was quick to positively catch up towards the second quarter and captured the higher demand season with the city featuring exciting events such as the Chelsea Flower Show, Ascot and Wimbledon.

Revenue increased by 8% compared to the same period last year. In Istanbul, the hotel reported a positive first half in its second year of full operation with a 31% increase in revenue and is gaining strong market share despite the challenges in the market, including visitor arrivals to the country being impacted by geopolitical tensions in the region and news of an earthquake in April 2025.

Next, I'll hand it to Christobelle to talk through the commercial properties, Peak Tram and Retail performance.

Thank you, Gareth. The Repulse Bay enjoyed a positive first half compared to the previous year with revenue increasing by 6%. Residential revenue and occupancy improved at 101 Repulse Bay and de Ricou following a minor refurbishment of 14 apartments, and we're pleased to see demand from local moves and expatriates who are returning or moving to Hong Kong. We have undertaken an extensive renovation of the retail arcade, which is expected to be completed by September this year with the aim of offering unique and enhanced facilities to guests and retail tenants.

We're also carrying out different activation events to revitalize the Arcade. We're cautiously optimistic about the second half of 2025 with positive leasing renewals for the summer and our long-term outlook is positive. The Peak Tower experienced a strong first half compared to the previous year. Revenue of the Peak Tower improved by 11%. We introduced a variety of new dining and retail options to enhance the Peak Towers' appeal as a destination.

We are working closely with Hong Kong Tourism Board to enhance Hong Kong's image overseas and was also collaborated with Disney on the first-ever, Mickey Keep it Real, campaign to attract family visitors. Visitor numbers to Sky Terrace 428 8 continued to improve compared to the previous year due to successful sales of combo tickets with the Peak Tram.

At The Landmark in Vietnam, revenue and occupancy for the offices declined compared to the same period last year, while residential revenue and occupancy improved. The joint venture partnership and land use right of the property will expire in January 2026. We have had several meetings with our partners to evaluate the future of the property. However, based on the current situation and Vietnamese legislation, there is no possibility of extending the joint venture or the land use right.

The joint venture will proceed to dissolution after the end of its term with the land and the building being handed back in accordance with the joint venture terms and the prevailing legislation. We extend our profound gratitude to all of our colleagues, and it is thanks to their dedication, which has been instrumental to the success of our operations over the years. We are committed to ensuring a smooth and supportive transition for our employees.

Business of the Peak Tram have been robust with record patronage achieved during Golden Week holidays in May. Revenue increased by 17% compared to last year. At Peninsula Merchandising, revenue increased by 7% compared to the previous year. A key highlight was the opening of our transformed retail space at the Hong Kong International Airport. We also launched a new Hong Kong souvenir collection and other new product categories, which have seen positive results.

I'll now hand over to Benjamin to discuss the outlook of our company.

Thank you, Christobelle. For the outlook of the full year 2025 and the second half, we are cautiously optimistic about the outlook for our group. The second half is expected to bring a mix of opportunities and challenges. We believe that the demand for unique, personalized and sustainable luxury experiences remains and remains robust around the world. High-end travelers are seeking exclusive urban retreats and culturally immersive experiences.

And we are determined to defend the unique positioning of the Peninsula brand in offering unique and personalized experiences combined with the utmost commitment to service excellence. In the hotel divisions, we are also cautiously optimistic for the second half, which is traditionally a high season in many markets. The new Peninsula London and The Peninsula Istanbul hotels are truly spectacular and have significantly enhanced our brand presence in Europe.

We believe that most of our operations will perform well, considering the traditional high season in autumn and festive winter season and foresee that our Peninsula hotels in Paris, in Tokyo and in Beverly Hills will remain particularly strong. Our newly renovated hotel in New York will continue to yield positive results. However, the general instability created by geopolitical concerns and the trade tensions, which is challenging for tourism-related businesses, calls for prudent and careful management.

We believe that this will continue to negatively impact our hotels in Greater China, although a major anniversary event, which will be celebrated in Beijing in October could lead to an uptick in business in that city. In Hong Kong, the long-haul market for leisure travelers is improving and it is our great hope that the Hong Kong Tourism Board continues its momentum with an objective to attract more high-end visitors.

We expect Hong Kong residents will continue to transit across the border to Shenzhen, and this may affect our food and beverage revenues, so we endeavor to continue to devise innovative solutions to entice them to stay in Hong Kong. On the commercial property side, we expect to see continued demand for the residential apartments at The Repulse Bay from both the local and expatriate markets, with satisfactory lease renewals occurring in the summer months.

The Peak continues to be an attractive and unique experience for visitors, especially those from the China mainland and other parts of Asia. And we are working on a variety of unique and exclusive activations at The Peak Tower and The Peak Tram.

So we're now happy to answer questions. But before we do that, I would like to thank the team for the incredible work they have put together in delivering the first half results, but also for welcoming me so warmly to the company. So now over to questions and answers. Thank you.

Thank you, Benjamin. We'll now move on to the Q&A session. We have our first question. The first question is, what is the company strategy to sell the remaining six Peninsula London Residences?

As I mentioned, the complex of Peninsula London is truly unique. The 190 rooms and the success we've had in the hotels, combined with the sales of the 17 units has been incredibly encouraging. And we have held back 6 units that we are now releasing to the market. And we are going to put together a couple of initiatives to actively market those 6 units.

One of them is that we have just -- we will be completing by the end of September, the renovation of 3 units, which will be fully furnished and that, I think, truly displayed what those residences have to offer in that market. And that, I think, combined with additional activities in promoting more actively the existence of those apartments is going to be very important.

I was in London a couple of times over the last 5 months, and I was actually very happy but also shocked to -- that the market believes that we've sold out all those residences because we've had so much success in that. So the fact that we are now releasing the last tranche of those residences, I think, gives a very strong signal, and we're very happy to continue to market those with the same success that we've had since we launched the project.

Second question, what is the company's strategy to improve EBITDA margin, cash flow and dividend opportunity in the future?

I'm happy to take this question together with Keith, but I want to highlight the efforts that have been achieved in the first half of the year in both driving top line, but also being much more prudent in the way we engage cost, whether it's operating costs, but also capital expenditure. And Keith, maybe you can highlight a little bit more on our strategy going forward.

Yes. I think just to add to that, it is a twofold approach. It is to maintain that top line revenue, if not improve that top line revenue, but we've had an increasing focus during the past 6 months on looking at the cost base and looking at driving margins in both rooms, F&B and in cost in general -- and fixed costs in general to drive that EBITDA.

And you see it coming through, obviously, in the H1 numbers that have been presented to you today. So it's a case of carrying that on into H2 to ensure that we -- we actively manage -- asset manage the hotels and the assets to make sure we drive that bottom line performance, and it continues throughout the portfolio of assets.

Next question. With exiting The Landmark, what is the company geographical strategy in the future?

Well, I mean, we -- being headquartered in Hong Kong and our history has been rooted in Asia. I think the recent developments, particularly in Europe with the opening of Peninsula London and Peninsula Istanbul, combined with the presence we have had in the United States for over decades, now gives us a much more stable and diversified portfolio across the various continents.

So 50% of our hotels are in Asia, 25% in Europe and 25% in the U.S. And while The Landmark decision, which is really a regretted decision, is reducing marginally our footprint in Southeast Asia. I think the efforts in expanding further and balancing better our geographical portfolio will pay off for the future. And so the impact for the years to come of the contribution of The Landmark project is actually quite marginal.

What is the company's average daily rate strategy for the Greater China hotels?

I'll hand this question over to Gareth to talk to us a little bit more about our focus on revenue management and also understanding the change in landscape in consumer spending and consumer habits in Greater China.

No, in Mainland China, obviously, a very unique market and the revenue strategy that we have to employ there differs from that, that we have in other parts of the world. The channel mix that we have for The Peninsulas in Beijing and Shanghai is focused a lot on the online travel agents. And so that we work very closely with those partners.

However, we also have our preferred travel partners, which is [indiscernible] club, and we work very closely with those partners and to drive those bookings. They're through the major consortiums. And this is also balancing it with our direct bookings through our online and our website through our digital marketing efforts. So it is quite well balanced, but in Mainland China, it does skew a little bit more towards the online travel agents.

We have one more final question. Does the company have any plan to sell existing assets to reduce the debt level for the company?

Well, at this stage, as I've recently joined the company, it's really an opportunity to take stock of how the business is running and what constitutes truly our business. We are engaging into a strategic review of the overall business and understanding really where the strengths are and where we have opportunities. and we'll be happy to share the results of the strategic review in due course in the first or second quarter of 2026.

Thank you, Benjamin. This now concludes our 2025 interim results. Thank you.

Thank you.

Thank you.