Monday, July 13, 2020
Martin Hennecke
HKEx Stock Code : 00004 
Corporate Profile
The Group is a leading listed property investment company in Hong Kong. Its flagship properties are Harbour City and Times Square, it also has diverse business interest in the areas of CME (communications, media and entertainment) and China operations. The Company has five core brands, namely, the two flagship property brands, i-CABLE and Wharf T&T from the CME operation as well as Modern Terminals from the China division.

Business Review - For the year ended December 31, 2012


Harbour City

Turnover (excluding hotels) increased by 14% to HK$6,243 million and operating profit by 13% to HK$5,367 million. Excluding the three hotels, and with Ocean Terminal on a new lease for 21 years, Harbour City was valued at HK$125 billion at the end of 2012 representing an increase of 34% over 2011 and representing 36% of the Group's business assets.


Total Hong Kong retail sales reported a moderate 9.8% growth rate in 2012, after a record performance in the past decade to 2011. The retail market held up well at the beginning of the year before the adverse external environment started to affect consumer sentiments. Gradual revival returned in the later part of the year as a result of the stabilising European debt crisis and steady economic recovery in the US.

Harbour City performed solidly in 2012, riding on its premier location, craftily-managed trade mix and powerful retail marketing. Total retail sales registered a growth rate of 13% to reach a record of HK$31 billion or about HK$2,600 per square foot per month. Market share increased further to an unmatched 6.9% of total Hong Kong retail sales, demonstrating its continued leadership in the marketplace.

Turnover of Harbour City's retail sector increased by 18% to HK$4,223 million. Occupancy was maintained at virtually 100% at the end of 2012.

Prominently located at the heart of Hong Kong's most dynamic retail district, Harbour City is one of the world's leading shopping destinations. It is understood to be the largest shopping mall in the world, not in terms of size but total tenants' sales. With a 2 million square feet critical mass and craftily-managed tenant mix across a finely-calibrated price point matrix, Harbour City strives to provide the captivating ¡§shoppertainment¡¨ experience for all shoppers.

During 2012, brand offerings were further enriched and diversified with a host of highly celebrated brands on board including Miu Miu, Galliano, Emilio Pucci, Brunello Cucinelli, Repetto, Gap and Samsung plus the debut of internationally renowned Alexander Wang, Bathing Ape Kids, Silver Cross and Aland. The Food and Beverage sector has been fine-tuned, with the recruitment of the Michelin-starred chef Sergi Arola's Vi Cool Sergi Arola, Maison Eric Kayser, Laduree, Greyhound Cafe and Dressed Salad. Kid X at Ocean Terminal has gradually transformed into a one-of-a-kind ¡¥Petite Canton Road' with kidswear flagship stores including Gucci Kids, Burberry Kids, Fendi Kids and Miss Blumarine.

In the meantime, rejuvenation and conversion works continued to bring excitement to the market and maximise retail value. Fendi and Giorgio Armani opened their multi-level flagship stores on the Canton Road. Gap opened its 16,000-square foot store at Gateway Level 3. These new retail stores were converted from previous non-retail areas such as hotel and office lobbies.

On marketing, in addition to the annual iconic Christmas and Chinese New Year festive decorations, Harbour City has rolled out a series of fun and engaging events to boost foot traffic and retail sales. The acclaimed and popular ¡¥Doraemon' and ¡¥Yue Minjun' exhibitions during 2012 instantly became talk-of-the-town events and attracted many locals and tourists.

Harbour City will continue to focus on value creation by putting its best efforts to enhance its unrivalled position and fortify its competitive edge to stay ahead in the market.


Office demand continued to be fueled by business expansion, new lettings and decentralisation. On the back of positive rental reversion, turnover grew by 6% to HK$1,710 million. Rental rates for new commitments increased modestly whereas occupancy climbed to 97% at the end of 2012.

Harbour City continues to be a popular choice for multinationals, as well as Mainland and local enterprises. Riding on its superb location, convenient transportation network and well-rounded ancillary services including the mega shopping mall, three Marco Polo hotels, a fitness centre and a private recreational club, Harbour City has an unrivalled competitive edge compared to ¡¥pure offices'.

Lease renewal retention rates held up reasonably well at 62% during the year, with favourable rental increments. These included a host of anchor tenants such as Sony Corporation, United Airlines, AIA, Prudential, Roberto Cavalli and Elegant Jewellery.

To stay ahead in the increasingly competitive marketplace, the leasing and property management teams will continuously improve the premises and be flexible to market changes.

Serviced Apartments

Turnover grew by 3% to HK$310 million. Occupancy was maintained at 85% at the end of 2012.

Times Square

Withdrawal of 17% of total retail space from the market for a major renovation moderated the rate of growth compared to recent years. Turnover increased by 10% to HK$1,908 million and operating profit by 10% to HK$1,678 million. Times Square was valued at HK$44 billion at the end of 2012, an increase of 18% over 2011, representing 13% of the Group's business assets.


Times Square is the most successful vertical mall in Hong Kong. Its success stems from its unique 16-level design, comprehensive trade-mix and direct linkage to the Mass Transit Railway in the prime retail district of Causeway Bay on Hong Kong Island. Total retail sales at Times Square maintained a 1.5% growth to HK$9.3 billion despite the withdrawal of approximately 85,000 square feet of lettable area or 17% of total retail space from the market for cinema relocation during the year. On a per-square-foot basis, Times Square's retail sales posted a 15% growth rate over 2011 to over HK$1,700.

Turnover of Times Square's retail sector increased by 7% to HK$1,352 million. Occupancy was maintained at virtually 100% at the end of 2012 (excluding the areas vacated for refurbishment).

The cinema relocation, with a view to adding immense retail value to Times Square, progressed as planned. The new retail shops at the ground and lower floors, as well as the new cinema on 12th and 13th floors are scheduled to open in the second half of 2013.

In an attempt to enrich Times Square's product offerings, tenant-mix was further refined during the year with the recruitment of international and trendy labels including Cartier, Chaumet, Loewe, George Jensen, Black Barrett, IWC, Omega, Jill Stuart, Repetto and Samsung. Some existing tenants including Chanel Beaute, Links of London, A.T. by Atsuro Tayama, Furla, Bose and Jurlique were relocated to uplift the shopping experience. The opening of BLT Burger further widened the culinary selection at Times Square.

Innovative marketing campaigns at Times Square continued to capture shoppers attention and build up its branding as ¡§The Place of Happenings¡¨. The New Year's Eve Apple Countdown remains one of the most popular events in Hong Kong. The ¡¥Lego Christmas Village' was installed during Christmas to celebrate the 80th anniversary of the iconic Danish toy manufacturer. Large scale art and cultural events such as the Fang Lijun Art Exhibition, the Korean Contemporary Art Exhibition and the UK Festival were held at Times Square during the year.

Completion of the cinema relocation will further enhance Times Square's zoning strategy and shoppers' traffic distribution within the retail mall. Times Square will strive to strengthen its leading position as a must-visit shopping landmark in Hong Kong through brand-mix refinement for an all-round and unique shopping experience.


Turnover of the office sector increased by 17% to HK$556 million, on the back of positive rental reversion. Occupancy stood high at 98% at the end of 2012.

Times Square remains the preferred office location for multinationals in the service and consumer goods industries. Lease renewal retention rates were maintained at 67%, with renewals from tenants including Walt Disney, Dennis Lau & Ng Chun Man, Assicurazioni Generali, EF Education, Bates Asia and JT International. New lettings during the year included Alliance Global, Forex Trade, Chanel, Workday Asia, Unity and Kosei International. There were also in-house expansions from Apple, Aon Hong Kong, L'Oreal, Google, Lane Crawford, Honda Motor and Balenciaga.

Plaza Hollywood

Turnover increased by 11% to HK$420 million and operating profit by 10% to HK$307 million. Average occupancy was maintained at 99%.

Retail sales of Plaza Hollywood grew by 15% in 2012 to HK$2.4 billion or HK$570 per square foot per month, riding on its success in brand repositioning and tenant mix refinement. As a regional shopping mall targeting primarily local shoppers, Plaza Hollywood has successfully established its presence in the Kowloon East region.

Marco Polo Hotels in Hong Kong

The Marco Polo Hongkong Hotel, Gateway Hotel and Prince Hotel in Harbour City continued to benefit from Hong Kong's thriving inbound tourism and strong hotel room demand in 2012. The favourable location in the heart of Tsimshatsui and close integration with Harbour City provide convenience for both business and leisure travelers.

Consolidated occupancy of the three Marco Polo hotels in Hong Kong reached 85% in 2012, with an increase of 8% in average room rates. Hongkong Hotel delivered a solid performance, with occupancy rising by 7 percentage points to 91%. Prince and Gateway are undergoing room renovation scheduled for completion in 2013.


Turnover of this sector grew by 26% to HK$1,005 million and operating profit increased by 29% to HK$634 million, on account of considerably higher contribution from Shanghai Wheelock Square and Chongqing Times Square. The investment properties in China were valued at HK$16 billion at the end of 2012.

Shanghai Wheelock Square continued to attract multinationals and major corporations, riding on its premier address on Nanjing Xi Road, distinctive design and world-class management. At the end of 2012, 92% of the office space was leased. Average spot rent achieved stood at RMB430 per square metre per month, with the highest headline rent at RMB476 per square metre per month, which is among the highest office rental rates in Shanghai. Celebrated tenants committed during the year including Daiichi Sankyo, SAP, Tod's and Luenmei. The gross rental yield on cost increased to 13% in 2012, with the property still in its first lease cycle. Wheelock Square was valued at HK$8.3 billion at the end of 2012.

Dalian Times Square retail mall's occupancy stood at 100% at the year end. The tenant mix was further refined with the introduction of Chanel, Bottega Veneta, Tod's, Versace and Sportmax plus the expansion of Dior Homme. It strives to maintain its leadership position for high-end luxuries in the North-east Provinces. The gross rental yield on cost soared to 59% in 2012, with only four years of operation.

Chongqing Times Square retail mall's occupancy was maintained at 94% at the year end, after the re-opening in July 2011. In addition to the existing first tier international labels on the ground level, more young fashion and accessories brands such as Armani Exchange, Anteprima Wirebag, CARAT, and Pandora were recruited at other floors to enrich the overall product offerings. The gross rental yield on cost was maintained at 22% in 2012.

Since the opening of Chengdu Times Outlets in December 2009, it has instantly become one of the most-visited outlets destinations in Chengdu. Located in close proximity to the Chengdu Shuangliu International Airport, it received 2.3 million visitors in 2012. The gross rental yield on cost rose gradually to 30% in 2012, with just three years of operation.

Shanghai Times Square's retail mall has been closed for renovation since May 2012, except for Wagas Express Cafe and Zara. It is scheduled to re-open in the third quarter of 2013 with a brand new tenant mix and anchor stores.

International Finance Square

The Group is developing a series of five International Finance Squares (IFSs) in China, with a scale comparable to Harbour City and Times Square. Upon their completion between 2013 and 2016, the Group's commercial properties and retail area in Hong Kong and China will multiply. The first phase of Chengdu IFS, including a 200,000 square metre mega-sized retail mall and a Grade A office tower, is scheduled for completion in the second half of 2013. Retail pre-leasing has exceeded plan, with 80% of the retail space committed at the year end at rental rates above budget. Mirroring the success of Harbour City, Chengdu IFS retail mall is to become the one-stop flagship shopping landmark in Western China with the most diversified trade mix and entertainment anchors. Hongxing Road, the replica of Canton Road in Hong Kong, will emerge as the home of duplex flagship stores. The ground level obtained the most prestigious fashion brands' commitment, such as Dolce & Gabbana, Emporio Armani, Fendi, Giorgio Armani, Prada and Tod's, etc. A host of prestigious jewellery and watch labels including Chaumet, Franck Muller, Jaeger-LeCoultre, Piaget and Van Cleef & Arpels have taken up space on Level 3, the second ground floor. To enhance the shopping ambience, fashion concept stores including Uniqlo and the fashion trend leader I.T Group will offer hip and street fashion on the upper levels, whereas UA Cineplex and a bowling lounge will provide shoppers with comprehensive entertainment elements. The retail mall is scheduled to open by the first quarter of 2014. Full completion is scheduled for 2014.

Wuxi IFS is located in the Taihu Plaza, Wuxi's new CBD. The development comprises a 340-metre landmark tower and two other towers, offering Grade A offices and a 5-star hotel with total gross floor area (¡§GFA¡¨) of 271,000 square metres. Full completion is scheduled for 2014.

Chongqing IFS is located in Jiangbei District, Chongqing's new CBD, where the Yangtze River meets the Jialing River. The development enjoys a panoramic river view and convenient connectivity through three nearby bridges and light railway lines 6 and 9. It is a 50:50 joint venture development with China Overseas Land, with an attributable GFA of 234,000 square metres. It comprises an iconic 300-metre landmark tower and four other towers atop a 102,000 square meters retail podium, offering up-market retail, Grade A offices and a 5-star hotel. Full completion is scheduled for 2015.

Suzhou IFS is a 450-metre skyscraper landmark development located in Suzhou's new CBD, Suzhou Industrial Park, overlooking Jinji Lake. It comprises Grade A offices, a 5-star premium sky hotel and luxury apartments, with a GFA of 278,000 square metres attributable to the Group's 80% ownership. Full completion is scheduled for 2016.

Changsha IFS is located in the prime area of Jiefang Road in Furong District with a total GFA of 725,000 square metres. The development comprises an iconic 452-metre tower and another 300-metre tower atop a 229,000 square metres mega-sized retail mall, offering upscale retail, Grade A offices and a 5-star hotel. The planned retail mall will be larger than the retail malls at Chengdu IFS and Harbour City, and among the largest in Changsha and Central China to capture the growing consumption demand in the region. Full completion is scheduled for 2016.


China Property Development

China property development continued to be a key source of additional growth. Completion accelerated in 2012 with 758,000 square metres completed and recognized, compared to 546,000 square metres in 2011. Turnover generated from subsidiary projects increased by 51% to HK$9,573 million and operating profit increased by 57% to HK$3,562 million. Recognition during the year primarily included Shanghai Xiyuan, Chengdu Tian Fu Times Square and Wuxi Times City.

Sales continued to gain pace. Seven new projects were launched for presales in 2012 in the cities of Chengdu, Foshan, Hangzhou and Guangzhou. Together with projects previously launched, the Group has 30 projects on sale across 12 cities.

On an attributable basis, a total of 1.3 million square metres were sold in 2012 which generated proceeds of RMB15 billion, 18% over 2011 and 50% above target. All key regions delivered solid growth, demonstrating the pent-up demand locally for quality developments and the Group's sales execution capability. The net order book (net of business tax) increased to RMB15.7 billion for 1,448,000 square metres of properties at the end of 2012.

The Group acquired six property development sites during the year in the cities of Beijing, Shanghai, Chengdu, Dalian and Changzhou with an attributable GFA of 0.84 million square metres for RMB4.8 billion. Total land bank was maintained at 12.3 million square metres at the end of 2012, spanning 15 cities.

In March 2013, a residential project in Shanghai Pudong District with a GFA of 97,900 square metres was added at RMB1.3 billion. The development is surrounded by three rivers and in close proximity to MTR line 16 station to be completed in 2014.

Eastern China

The Eastern China region posted a 21% growth rate in contracted sales over 2011. There are 12 projects on sale across five cities.

In Hangzhou, the first phase of Palazzo Pitti and Junting were launched for presales in December. A total of 7,400 square metres and 14,500 square metres were promptly presold for proceeds of RMB250 million and RMB90 million respectively.

Suzhou Times City launched additional phases and sold a further 197,700 square metres for proceeds of RMB2.2 billion. Wuxi Times City sold 123,000 square metres for proceeds of RMB1.0 billion. Changzhou Times Palace launched additional phases and presold 112,600 square metres for proceeds of RMB770 million. Shanghai Xiyuan sold a further 15,900 square metres for proceeds of RMB705 million during the year.

Other projects for sale included Glory of Time and Xiyuan in Wuxi, Ambassador Villa and Kingsville in Suzhou, No. 1 Xin Hua Road in Shanghai and Golf Landmark in Hangzhou.

In September 2012, the Group acquired a 60,200-square metre residential site in Shanghai's Pudong District through a joint venture development with Greentown China Holdings Limited (¡§Greentown¡¨) and Sunac China Holdings Limited's joint venture company. The Group has a 50% interest of the development, which has an attributable GFA of 36,100 square metres. Design planning is underway.

In December 2012, the Group acquired a 107,500-square metre commercial site in Shanghai's Xuhui District through a joint venture development with China Vanke Co Limited and Greenland Group Co Limited. The Group has a 27% interest in the development. The site, with an attributable GFA of 133,000 square meters, is situated next to the Shanghai South Railway Station and well-connected to existing Metro Line 1, Line 3 and future Line 15 stations. Design planning is underway.

In December, the Group acquired a 109,600-square metre residential site in Changzhou's Xinbei district adjacent to Feng Huang Lake. The development has a GFA of 245,000 square metres. Design planning is underway.

Development Progress
Construction of Shanghai Xiyuan, which consists of 11 medium-rise towers (510 fitted-out units) and a luxurious club house, was fully completed in June 2012. Certain phases of Wuxi Times City involving 127,000 square metres of GFA were completed during the period. Construction of Changzhou Times Palace is underway, with full completion scheduled for 2014. The State Guest House, a five-star hotel and serviced apartments will be completed in stages between 2013 and 2014. Construction progress of other developments in Eastern China is as planned.

Western China

The Western China region posted a 21% growth in contracted sales over 2011. There are 9 projects on sale in Chengdu and Chongqing.

In Chengdu, the Sirius of International Commerce Centre and Times Town of Shuangliu Development Area were launched for presales in April and December. Tian Fu Times Square and Crystal Park sold a further 82,800 square metres and 96,400 square metres for proceeds of RMB1,484 million and RMB1,049 million respectively. The Orion and Le Palais have met with a favourable response.

In Chongqing, initial phases of retail units and additional phases of residential units of the U World were launched to generate attributed proceeds of RMB555 million. International Community sold a further 85,300 square metres for attributed proceeds of RMB662 million. The Throne has also met with good demand.

In November 2012, the Group acquired a 74,400-square metre residential site in Chengdu. The site is located in Shuangliu District with a GFA of 222,000 square metres. It is being planned as a quality residential community in the Southern part of Chengdu. Design planning is underway.

Development Progress
In Chengdu, construction of Times Town commenced in the second quarter of 2012. Four additional residential towers of Crystal Park were completed in June 2012. Construction of the remaining residential towers and one office block is under way, with full completion scheduled for 2014. The last office tower of Tian Fu Times Square is scheduled for completion in 2013. Tower 1 of The Orion and Phase 1 (eight residential towers) of Le Palais are scheduled for completion in 2013.

In Chongqing, construction of International Community, the U World and the Throne is underway. These projects are developed through joint ventures with COLI, with the Group's shareholding ranging between 40% and 55%.

Southern China

The Southern China region posted a 41% growth in contracted sales over 2011. There are five projects on sale in Foshan and Guangzhou.

In Foshan, the first phases of Evian Riviera and Evian Buena Vista were launched for presales in March and April. Total 34,300 square metres and 29,000 square metres were sold for attributed proceeds of RMB394 million and RMB220 million respectively. Evian Town and Evian Uptown sold a further 50,860 square metres and 35,100 square metres for proceeds of RMB842 million and RMB345 million respectively on an attributable basis. These four projects are developed through 50:50 joint ventures with China Merchants Property (¡§CMP¡¨).

In Guangzhou, the first phase of Donghui City was launched for presales in November. Total 17,700 square metres were promptly presold for proceeds of RMB233 million on an attributable basis. This is a joint venture development with China Vanke Co. Limited and CMP, in which the Group has a 33% interest.

Development Progress
The third phase of Evian Town and the second phase of Evian Uptown in Foshan were completed in 2012. Construction of Donghui City in Guangzhou commenced during the year, with full completion scheduled in 2015. All other developments are progressing as planned.

Other Regions

In Tianjin, the Peaceland Cove presold further 90,900 square metres for proceeds of RMB1,144 million on an attributable basis. The Magnificent has also met with a favourable response.

In February 2012, the Group acquired an 72,700-square metre residential site in Beijing's Chaoyang District through a joint venture development, in which the Group has an interest of 33% with the remaining interest held by CMP and Overseas Chinese Town Group. The development offers an attributable GFA of 60,000 square metres and is in close proximity to a future subway station. Construction commenced in the fourth quarter of 2012. Completion is scheduled for 2015.

In November, the Group acquired an 85,700-square metre residential site in Dalian's Zhongshan District through a 60:40 joint venture development with Greentown. The development, with an attributable GFA of 144,000 square metres, enjoys picturesque scenery in the neighborhood and well-established transportation network nearby. Design planning is underway.

Development Progress
The Magnificent in Tianjin was completed in 2012. Construction of residential developments in Wuhan and Beijing commenced in the fourth quarter of 2012. The other developments are progressing as planned.


On 8 June 2012, the Group entered into subscription and investment agreements with Greentown, under which Greentown issued new shares and perpetual subordinated convertible securities (¡§PSCS¡¨) respectively to the Group. Following completion of the transactions on 2 August 2012, the Group holds approximately 24.6% of the equity interest of Greentown and together with the PSCS for a total consideration of approximately HK$5.3 billion. The investment in Greentown is for the long term, complementing the Group's business strategy of continual expansion in property investment and development businesses in China.

The Group envisages that with Greentown's strength in property development and the Group's strength in financial management and undisputed excellence in commercial properties management, there are many strategic co-operation opportunities ahead. The acquisitions of two residential sites in Shanghai and Dalian through joint ventures with Greentown in the second half of 2012 are good examples of closer co-operation and synergy, which will benefit the Group over the long term.

Hong Kong

One Midtown in Tsuen Wan, a high-rise industrial/loft building with a GFA of 644,000 square feet, was completed in June 2012. This enabled the Group to recognise HK$2.6 billion of turnover and HK$1.3 billion of operating profit during the period.

The Group sold Delta House in 2012, the 349,000-square foot commercial development in Shatin, for HK$1.3 billion.

Development Progress
The master layout plan for Mount Nicholson has been approved. This 50:50 joint venture development with Nan Fung Group offers an attributable GFA of 162,000 square feet and will be developed into exclusive luxurious residences with a panoramic view of the Victoria Harbour. Construction work is underway.

Redevelopment of the Peak portfolio including No. 1 & No. 11 Plantation Road and 77 Peak Road is progressing as planned.

The redevelopment plan of Kowloon Godown in Kowloon Bay into a residential and commercial development with a GFA of 829,000 square feet has been approved. Lease modification application is underway.

Yau Tong Godown's redevelopment plan into a residential and commercial development with a GFA of 256,000 square feet has been approved. Premium for the lease modification was settled in July. Foundation work is underway.

Master layout plan for the Yau Tong Bay joint venture project, in which the Group has approximately a 15% interest, was approved by the Town Planning Board in February 2013. The development comprises 12 blocks of residential and commercial buildings with GFA of approximately 4 million square feet.

The redevelopment plan of Wharf T&T Square into a high-rise Grade A commercial building with a GFA of 596,200 square feet has been approved. The premium for the lease modification has been settled.


The Group currently operates 13 owned or managed hotels in the Asia Pacific region. The Marco Polo Lingnan Tiandi in Foshan and Marco Polo Suzhou were added in 2012. A pipeline of 10 new hotels in the cities of Changsha, Changzhou, Chengdu, Chongqing, Guiyang, Suzhou, Tianjin and Wuxi in the Mainland, as well as Manila in the Philippines and Bangkok in Thailand, will come on stream over the next five years to significantly expand Marco Polo's network.

Vibrant business travel and strong inbound tourism propelled the hotel and hospitality industry in the region. Total revenue for the hotels and club grew by 9% to HK$1,391 million. Operating profit increased by 5% to HK$391 million.

All Marco Polo hotels performed strongly in their respective locations. Consolidated occupancy of the three Marco Polo hotels in Hong Kong was maintained at 85%, with an increase of 8% in average room rates. Marco Polo Wuhan continued to achieve dominant market position in the local market. The new Marco Polo hotels in Foshan and Suzhou have met with a favourable response.


Global trade growth continued to be overshadowed by the debt crisis in Europe and economic slow-down in the US. South China's container throughput grew modestly by 0.7% in 2012. Hong Kong's throughput grew marginally by 0.3% while Shenzhen's throughput increased by 1.1%.

Market shares of Shenzhen and Kwai Tsing were 55% and 45% respectively for 2012. Modern Terminals' consolidated revenue decreased by 13% to HK$2,969 million mainly due to a one-off income recovery in 2011. Excluding this one-off impact, consolidated revenue decreased by 6.3%. Consolidated operating profit decreased by 26% to HK$1,142 million. Throughput in Hong Kong declined by 9% to 4.8 million TEUs.

In the Mainland, throughput at Taicang International Gateway in Suzhou grew by 1% to 1.5 million TEUs, while Da Chan Bay Terminal One in Shenzhen handled 572,000 TEUs during the period. Throughput at Shekou Container Terminals in Shenzhen, in which Modern Terminals holds a 20% stake, increased by 11% to 4.5 million TEUs. Chiwan Container Terminal, in which Modern Terminals holds an 8% attributable stake, handled 3.3 million TEUs.

Modern Terminals has an established presence in the Pearl River Delta and Yangtze River Delta, the two largest manufacturing and export regions in China. This places Modern Terminals in an excellent position to benefit from China's robust economy and recovery of the European and US markets.


The Group's other businesses include i-CABLE, Wharf T&T, The ¡¥Star' Ferry and Hong Kong Air Cargo Terminals.


Competitive pressure remained high during the year while the operating environment remained challenging.

Following the fast growth in previous years, there were signs of television customer base entering a new phase in a close to saturated market. Television turnover maintained at a similar level as 2011 but higher programming costs were incurred due to the London Olympics and European football leagues.

Competition in the broadband and telephony sectors remained keen and aggressive price competition affected both turnover and customer base.

Consolidated turnover increased by 1% to HK$2,127 million with net loss at HK$278 million. A healthy financial position was maintained with net cash of HK$188 million.

Wharf T&T

Wharf T&T again reported record turnover and profit in 2012. Revenue increased by 4% to HK$1,826 million and operating profit rose by 9% to HK$250 million. The net cash inflow position started to recover as the investment in +EN rollout for a 95% Fibre-To-The-Desk (FTTD) network coverage for the business market passed its peak. 90% of the planned coverage was achieved at the end of 2012. Robust data and systems integration businesses, resulting from market share gain and contributions from signature projects including the Hong Kong Exchange SDNet Wide Area Network, fuelled the growth momentum.

The ¡¥Star' Ferry

The Star Ferry operates two inner harbour ferry services, namely Tsim Sha Tsui ¡V Central and Tsim Sha Tsui ¡V Wanchai. In a bid to improve its non-fare box revenue, the Star Ferry has been working on the Tsim Sha Tsui pier top redevelopment project with a view to convert the roof top into F&B outlets.

Hong Kong Air Cargo Terminals

Hong Kong Air Cargo Terminals, a 20.8% associate of the Group, posted a 2% growth in throughput in 2012 due to healthy growth from the Asia & Middle East markets despite continued weak demand from the European and US markets. 2012 marked its second best year in throughput volume with 2.8 million tonnes.

Source: Wharf (Holdings) (00004) Annual Results Announcement
Chairman N/A Issued Capital (shares) 3,030M
Par Value HKD 1 Market Capitalisation (HKD) 208,445M
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