CK Asset Holdings Ltd

HKEX:1113

Earnings Call Transcript 2022-Q4

[Lai Chee Ma, executive]

Good afternoon. Welcome to the 2022 Annual Results Presentation for CK Assets. My name is Gerald, I will be presenting the results followed by a Q&A session with our management team, which I will be the moderator. Mr. Simon Man has joined me for this session; and our Chairman, Mr. Victor Li; and our Deputy MD, Mr. Edmond IP will be joining us shortly, as soon as they finish the meeting with the press. So without further ado, let's go through the presentation results.

$21.68 billion of reported earnings for 2022, up 2.1% because of our buyback activity during 2022. Earnings per share went up 3.6% to $5.98. Happy to report that we have declared a final dividend of $1.85, bringing full year 2022 dividend to $2.28, also up 3.6% compared to last year. As at the end of year 2022, net book value per share came to $105.30, up 3.3% compared to end of 2021.

68% of our principal activity revenue is deemed as recurrent, and 57% of our profit contribution or EBIT is also recurrent in nature. Now this is a fundamental reason why we think we are well placed to navigate through a more volatile period in the macro environment. And we hope that will long continue. 47% of our contribution from Hong Kong, 17% from the Mainland, and 37% from the U.K. and other places.

Let's turn into -- let's turn to divisional performances. Property Sales, $25.8 billion of revenue and $10.34 billion of profit contribution. A very strong margin at 40.1%. Now it's a good time to remind you that last year -- 2021's margin of 48% was unusually high due to three projects in -- on the Mainland with over 60% margin, which is quite unusual, as you would expect. Normally 35% to 40% margin would be what we consider pretty wholesome already. So I think this is a return to normality.

Now the reduction of revenue and profit contribution was mainly caused by COVID restrictions, some of the lockdown on the Mainland affecting or impacting sales, as well as having fewer projects from [ Hui Xian ] as well. We had $4.4 billion of contribution from Sea to Sky, $1.6 billion from 21 Borrett Road and $1.55 billion from City Link Shanghai. Those were the top 3 projects contributing to the sales figures in 2022.

We had healthy margins in our core markets, Hong Kong and Mainland: 43.9% for Hong Kong and 38.3% from the Mainland. Overseas, you see a 12.5% here. But if you break it down, in U.K. recorded roughly 30% margin, which was pretty good. And then we have some insignificant numbers from activities in Australia, the Bahamas and Singapore. We still have almost $14.9 billion of contracted sales which we have not yet recognized, of which $9.4 billion should be recognized in 2023. And most of it would be from Hong Kong, the Mainland and the U.K., as you would expect.

Turning to Property Rental. The contribution was impacted by our disposal of 5 Broadgate. Roughly, each year, we would have just under $500 million of revenue from 5 Broadgate, and this disposal, obviously, would have a negative impact. If you use a like-for-like comparison without any contribution of 5 Broadgate, and office revenue without 5 Broadgate would have gone down roughly by 5.1%, and overall rental revenue without 5 Broadgate would have gone down by roughly 7.5%. Margin was still very healthy at over 80%, and in the surplus on disposal of investment properties column, you will see an additional further contribution from the disposal of 5 Broadgate of $738 million over and above last year 2021 end-of-year carrying value.

Major contribution from Cheung Kong Center, $1.29 billion; Whampoa -- Garden of the Whampoa, $663 million; and Hutchison Logistics Centre, $637 million. We have a total of 17.1 million square feet of investment property.

In terms of fair value adjustments, we recorded a net increase of $967 million and our -- the range of the cap rates used still the conservative 4% to 8%.

Turning to the hotel and serviced suite division. We're one of the few hotel serviced suite operator that had been able to record a positive contribution in 2022 and 2021. Decent increase compared to 2021 to $567 million. And we're expecting a gradual recovery ahead as we continue to open up to the world.

As you can see, Hong Kong actually did pretty well compared to 2021. Mainland, there was a little bit of a lag, as Mainland was still largely affected by the COVID restrictions in 2022. We are hoping to see the 58% average room -- hotel room occupancy to significantly improve over the course of 2023. And hopefully, our serviced suites division will continue to perform as well as they have been.

Property and project management. This is rather a more boring -- good, boring division. That is to say they always provide us with a very steady contribution, $362 million last year and a very, very healthy margin of 40.4%.

Turning to pub operation. Again, 2,700 pubs across the U.K. We recorded a much improved profit contribution from a negative $55 million to $835 million in 2022, which included a $994 million onetime impairment largely caused by the rise in discount rate, as these operating assets normally would be valued based on a discounted cash flow methodology. As a result, the rise in cost of debt would make the present value of these assets a little bit lower.

Infrastructure and utility asset operation. Then just a slide to show you the 7 JVs that we have and their respective percentage under CKA. We had a full year contribution from all of these businesses in 2022. Hence, the revenue went up by 10% to $22.9 billion, and contribution went up by 8% to $7.5 billion.

Obviously, in -- both for the pub operation and for the infrastructure utility operation, as they are overseas, in their local currency terms, the revenue and contribution would be higher than what's presented here due to the currency movement last year.

I'll turn the next few pages to Mr. Simon Man, and then I'll wrap up. Thank you, Simon.

[Ka Keung Man, executive]

Thanks, Gerald. The gross interest in listed real estate investment was remain more or less the same at the year-end date. 33.5% in Hui Xian REIT, which owns and manages 11.8 million square feet of hotels, serviced suites, office and retail properties on the Mainland. 26.5% in Fortune REIT, which owns and manages 3 million square feet of retail published in Hong Kong and Singapore. 18.2% in Prosperity REIT, which owns and manages 1.3 million square feet of office, retail and industrial properties in Hong Kong.

Hui Xian REIT is an associate of the group, and we share a net rental of $178 million for the year, down 38% from last year. Cash distribution received from Fortune REIT and Prosperity REIT amounted to $273 million and were recognized as investment income and down 12% from last year. So the overall return from interest in REITs, $451 million this year and down 25% from last year's $598 million.

In April 2022, the group completed the disposal of its aircraft leasing division. A post-tax profit of $2.056 billion was recognized, including a gain of $1.468 billion on the disposal of the aircraft assets.

At the year-end date, the group's bank and other borrowings amounted to $48.6 billion, a decrease of $47.9 billion from last year. Maturities within 1 year was $2.5 billion and maturities between 2 to 5 years is $36.9 billion, and maturities beyond 5 years, $9.2 billion. Taking into account the cash balance and deposits of $61.2 billion at the year-end date, we will have a net cash surplus of $12.6 billion. The group has maintained A2 stable credit rating from Moody's and A stable from Standard & Poor's.

At the year-end date, the group had a land bank of 128 million square feet, of which 28 million square feet was in Hong Kong, 67 million square feet on the Mainland and 33 million square feet overseas. 75 million square feet was under development, 17 million square feet was held for rental, 9 million square feet was held for hotel and serviced suite operation, and 27 million square feet was held for pub operation in the United Kingdom.

In March 2022, the group was awarded a tender by the Urban Renewal Authority for a combined development of projects located at To Kwa Wan. The approximate developable gross floor area is 526,000 square feet, approximately. In October 2022, the group was awarded a government tender for the site at Tuen Mun Town Lot No. 561 at Castle Peak Road, Tai Lam, Tuen Mun, and the approximate developable gross floor area is 1,306,000 square feet.

In December 2022, the group was awarded a tender by the Urban Renewal Authority for the development project at Queen's Road West, Sai Ying Pun, and the approximate developable gross floor area is 128,000 square feet. In December 2022, also, the group was awarded a government tender for a site at New Kowloon Inland Lot No. 6649 in the Kai Tak Area. The approximate developable gross floor area is 1,417,000 square feet.

And I'll pass it back to Gerald to talk about ESG.

[Lai Chee Ma, executive]

Thank you, Simon. Obviously, ESG, we will be publishing a separate report along with our annual reports going forward. And this topic has become a very important part of our day-to-day management and also our strategic planning going forward.

In 2022, we achieved a 16% reduction on greenhouse gas emission against the baseline level measured in 2019, 2020. And we have set group level targets to reach by 2030 to reduce electricity consumption by 11%, water consumption by 5%, waste by 11% and carbon emission by 9%. It requires an active -- as an active property developer, going forward, as we build, as we continue to build, we will be very conscious of materials we will use and also, hopefully, we will build many more what we would call the green buildings. And as of now, over 40 buildings within our group have obtained the green building certificates. And CK Center II, the office complex that all -- everyone can see next to the Victoria Harbour has advanced sustainability technology built in, and hopefully, that will be something we will all be very proud of.

In terms of our governance and reporting standard, we aim to continue to improve. We know we have done much better, but we will continue to do a lot better. And with the formation of the Sustainability Committee a couple of years ago, we now have a task force to make sure that -- to oversee, monitor and direct all the different stakeholders internally and work with stakeholders externally to make sure that all of our strategic and operating decisions would have climate change governance in mind.

ESG has also, in fact, begun to factor into our investment decision as well in terms of what we choose to acquire or what we choose to dispose of or how we operate. Last year, we disposed of the aircraft leasing division. And also last year, we have begun investing in high-quality social housing, particularly in the U.K. where there is a long waiting list and a particular targeting to assist underprivileged families to be able to have a home earlier rather than later. The group has also participated in Hong Kong's Starter Homes Pilot Project. So we can -- we will be selling certain units in the development to serve first-time homebuyers at a discount to market value.

Now before we turn -- before our 2 senior management members join us and returning to -- turn the floor over to a Q&A session, you can -- you may begin putting your questions into our online platform, and then I will try to gather them, consolidate them as so we can conduct the next phase of our -- of this discussion efficiently.

ESG sustainability highlights -- turn to business units highlights. If you look at property development, here you can see City Point and Trinity Towers, Wong Chuk Hang Station Package 3, Sea to Sky and Seaside Sonata. All have received BEAM Plus green building certificates. Hotels and service suites operation are -- have really turned over a new into -- a new leaf in terms of how they operate with operating better, using better material, all of that in into that day-to-day operating plan.

29 of our existing managed properties have received Good or Excellent ratings on the BEAM Plus Existing Rating Version 2.0 Selective Scheme. And we've begun installing solar panels across many of our assets as well. Greene King, a leader in this area, have pledged to become carbon net zero by 2040. And actually, they have recently set Science Based Targets and committed to reducing greenhouse gas emissions by 50% by 2030 and procure 80% renewable energy by 2025. These are very, very aggressive targets. And hopefully, they will be a leader in that space.

Northumbrian Water, U.K. Power Network, ista, Dutch Enviro Energy have all taken the carbonization and -- very seriously and begun initiatives committing to net zero targets ahead of the relevant government authority.

Now I have already -- I'm already seeing many questions from you guys. I know that Mr. Victor Li and Mr. Edmond IP are -- I think they're coming over now. But I think there are a number of more operational specific questions that I see. Maybe before they join us, I will attempt to take on these more operational level questions. So when they get here, then we can -- we can post more strategic ones to them. Keep the questions coming.

[Lai Chee Ma, executive]

Well, one of the questions that we have, $14.9 billion of contracted sales not yet recognized, and which are the projects that we expect to book in 2023?

So as I said in the presentation, there's about $9.9 -- $9.4 billion of contracted sales from development projects that we expect to book in 2023. And they will be El Futuro in Kau To Shan, Sha Tin as well as Grand Jete Phase I and #LYOS in [ Tsuen Yuen ].

Another question is that other developers in Hong Kong have reported revaluation impairment for the investment properties while we have not, whether we have any comments.

So just to say that the cap rates we use, as outlined in the presentation, are always on the conservative side, as everyone knows. And so the pressure on impairment last year was not so high, even when -- with rent softening. Also, the main reason for the net increase in fair value was actually because of the 2 under development projects, CKC II and 13 Hok Yuen Street as well as Hutchison Logistics Centre. So all 3 recorded a decent uplift in valuation, but we do think cap rate expansion for the whole sector, actually, may be undercut if interest rates continue to be elevated.

So I see that Mr. Victor Li has just joined us. So we will start to post a more high-level strategic questions to Mr. Li, if you are ready.

[Tzar Kuoi Li, executive]

Yes, I am. I have just come back from the press, so sorry -- apologies for a slight delay. So let me know what are the questions.

[Lai Chee Ma, executive]

So we dealt with 2 more operational level questions. So we'll start with the other questions now. The first one is, are you happy with your results in general? And any overall comments that you may have?

[Tzar Kuoi Li, executive]

I'm never happy with any results, if that's the answer. But I think the one thing I'm happy about is that it shows our management philosophy is serving us well. The diversified approach makes us more resilient. And our financial discipline, even though sometimes it's tempting, it serves us well. We can resist temptation of doing a deal, so -- especially in our current environment. What we have -- in the last couple of years, what we have achieved is that we have choices and we utilize those choices. Property by nature is always cyclical. And if we only have one industry, one property development industry in one city, then it is very difficult to play the cycles of that market because it's very dangerous not to reinvest whatever you've earned right back into the business.

But the unique nature of CKA is that we have choices. When we see margins getting a bit thinner or getting more risky on the property side, we can elect to divert a little bit of our capital into, in the last couple of years, for example, infrastructure, pubs, aircraft or properties in other countries, including U.K. That gives us the choice of allocating capital when we see margins or risks in one industry increasing.

On the other hand, when we see the margins improving, then we can divest some of our other businesses and reinvesting a bit more into the property in Hong Kong. I mean the last couple of years, I think that's exactly what we've done. We have bought and sold some overseas properties. We have bought and sold some aircrafts. We have increased our exposure in infrastructure, which gives us very good recurring income. And I must add one thing. The infrastructure is a better performer at a higher inflation rate because the principal regulated asset value increases with inflation. So it's not just a benefit for 1 year, but the benefit for the future -- all through the future. When you have 1 year of high inflation rate, your principal moves up by the inflation rate.

So in the last -- also in Hong Kong, we have also sold and bought properties. So you notice I used buy and sold in opposite -- opposite side. So that's what CKA has been doing. We have choices. But we do -- we use our choice and our decision with a very, very strict financial discipline.

So Gerald, do I -- did I answer your -- their question?

[Lai Chee Ma, executive]

Yes. I think you actually helped answer a number of related questions, so I'll be a little bit more selective because the next question was about whether we will continue to buy land in Hong Kong and elsewhere, which Mr. Li already touched on.

[Tzar Kuoi Li, executive]

But I don't think we are making any distinction between whether I like Hong Kong more or less, or any other industry more or less. It's more to do with different parts of the cycle so that you can move among different parts of the cycles in different industries.

[Lai Chee Ma, executive]

Mr. Edmond IP has just joined us as well. So we now have to...

[Tak Ip, executive]

Hi. Good afternoon to all.

[Lai Chee Ma, executive]

The next question, the Mong Kok site, I think it's the commercial site recently bought by a competitor. The result seems to indicate that CKA is very pessimistic on commercial property investment. Is that still the case following the reopening of the border?

[Tzar Kuoi Li, executive]

I wouldn't say I'm pessimistic on commercial property. I mean we're building CKC II, sort of a trophy central water view, harbor view ramp-up building. I would more say that the capital value or the cap rate given to commercial property may be challenged, that the unique situation for the ultra low cap rate for commercial properties in Hong Kong in the last decade may or may not be with us forever. So it may join the global norm of normal cap rates.

[Lai Chee Ma, executive]

Thank you, Mr. Li.

[Tak Ip, executive]

And also players in the industries may not like us too much.

[Lai Chee Ma, executive]

Contribution from your property sales division dropped by 43% in 2022, and only about $9.4 billion of contracted sales is expected to be booked in 2023. Are you concerned about the potential drop in earnings next year due to the lack of bookings?

[Tzar Kuoi Li, executive]

Well, we still have 9 months to go in 2023 and -- but on a day-to-day basis, we should try to do our job as well as we can to execute the sales. But if you take a step back and look at it from a high level, isn't it our good fortune that we didn't buy too much land at the height of the market a couple of years ago? And so that our average cost in our land bank is now lower, but the side effect of that, obviously, is that your completion will be lower in the short term. But I think most shareholders will look at property companies as sort of our net asset value and our average cost of our property and our earnings ability in the next couple of years rather than the short-term P&L on the next quarter or next year.

[Lai Chee Ma, executive]

The next question actually is on an announcement we just made. So this fund manager is really up-to-date. They just saw an announcement regarding the launch of Grand Jete Phase 2. It looks like we had priced the project -- it looks like you have priced the project at market clearing levels. We have seen this move by CKA in past cycles. Any comments on this strategy?

[Tzar Kuoi Li, executive]

Well, if we can buy land at lower prices and assuming a profit by selling condos, isn't it the Hong Kong government's and Hong Kong people's wish and policy to generate more flats and more affordable prices? That's exactly what we've been doing. I think 60% of this launch of units will have prices below $4 million, and in today's mortgage rate and mortgage insurance rate, it's very affordable to a lot of people. And I didn't invent the nickname, but Justin comes out with this name recently in Cantonese, [Foreign Language]. What does it translate to English, a deepwater tornado. So I think that will have quite a bit of rippling effect in the market.

[Lai Chee Ma, executive]

Next question on cap rates, which we already answered.

The CKA group has completed the sale of 25% of Northumbrian Water recently. Will you be divesting more assets in the future, like UKPN?

[Tzar Kuoi Li, executive]

We're now in a -- we have now a net cash position and a good recurring income portfolio. And actually, we do have a good war chest of looking at acquisitions. So any disposal of assets will be purely on the attractiveness of the deal. I don't think strategically, we're looking to dispose of anything at the moment.

[Lai Chee Ma, executive]

Our overall Hong Kong office vacancy has remained high. Do you expect further drop in property rental contribution for your office or retail assets in 2023? And could you please give an update on CKC Phase 2?

[Tzar Kuoi Li, executive]

The drop in our rental contribution was really mainly due to the disposal of 5 Broadgate, London. And so we took the profit. Obviously, the rental comes down. But in terms of Hong Kong office rental, it will continue to be quite competitive for the tenants.

But I'm more optimistic about Class A office buildings in core Central. I use the word core Central. At the end of the day, this is almost the definite Hong Kong Financial Center. This is it. These buildings in core Central defines Hong Kong's status as a financial center in the world. So I'm in good confidence that this position as the financial center will continue for Hong Kong. There will be some times when it's more difficult. But for core Central and the financial center of Hong Kong, I think this decision is going to continue.

So for CKC Phase 2, should be completed in late 2023. It's actually -- I think it's just topped up. So pre-letting efforts will be underway.

[Lai Chee Ma, executive]

Thank you, Mr. Li. What is your outlook for the pub business?

[Tzar Kuoi Li, executive]

Sales have recovered to pre-COVID levels, but that's partly because of inflation and increases in prices. Volume, if you count number of drinks or food, is still about 10% below pre-COVID, so there's room for growth. The challenge for the business will be inflationary pressure on utilities, raw material, labor costs, et cetera. And we're doing -- the team is doing what they can to mitigate the impact.

But some Hong Kongers who have never been to U.K. often confuse pubs with bars. Pubs are not bars. Pubs are -- it's almost like an integral part of U.K. culture. I think it's a combination of, using Hong Kong terms, our neighborhood clubhouse together with our tea house together with a bar. So that's where you see your relatives, good friends. It's most probably the same place you go to when you are kid versus when you are middle-aged. So it's a gathering place for people to meet. So I think the -- and we're seeing it through stress tests and believe me, the pubs have gone through the biggest stress test, I think, for ever in history through COVID, and I think they've passed the stress test with good colors and the recovery pace is pretty good. Given the headwind, the recovery rate is pretty good.

So we believe we have bought something which I call the human infrastructure. So it start -- pubs is -- to start with, we only profitably hold. So this is also a property business. And in the last couple of years, we've done trading of these properties, some bought, some sold, some redeveloped. And I'm still hopeful that when life returns to normal and when the inflation pressure is not so serious, pubs will be a good contributor.

[Lai Chee Ma, executive]

The next question is on infrastructure and utility. Infrastructure and utility division now exceeds 30% of your principal activity contribution. Any plan to further increase the weighting?

[Tzar Kuoi Li, executive]

I think it really depends on the project that we can get our hands on. We have a very strict financial discipline. So I would not sit in head office and say, I want to increase this division contribution by x amount. I would say, let's look at new deals. If the new deals are attractive and we think that the risk is low, then we will certainly grow that business.

And -- but infrastructure, we've also stretched the definition of what is infrastructure. We will expand it further to what I called society infrastructure. I mean if you look at the businesses that CKI has been, I mean including waste to energy, collecting garbage and turning it into energy, I think that's very much society's infrastructure. So we'll continue to look for those.

[Lai Chee Ma, executive]

You are now the largest -- you are the largest unit holder for both Fortune and Prosperity REITs, and the unit prices have corrected a lot. Any chance you will privatize them?

[Tak Ip, executive]

I'm not going to answer whether I'm going to privatize a company. The general good cash flows for CKA, and we're happy with them. With higher interest rate, of course, prices will decrease a little bit. That's the nature of that business. But we cannot speculate on whether we would privatize or not.

[Lai Chee Ma, executive]

Next question is on hotel. With the reopening of the border, what is your outlook for your hotel segment?

[Tzar Kuoi Li, executive]

It should be better. Finally, I think -- but I should describe our hotel groups, maybe, to the analysts in today's meeting. We have 2 types of rooms in the original design. Some of them are suites that can be occupied longer term. Some are regular daily hotels. So generally in the company we would refer them to monthly versus day lease. Now the month lease are not affected by the pandemic and the -- and this whole stress situation for the last 3 years. They are steady contributors and very good business. The daily ones, of course, are miserable. Now some of the daily ones have been converted to monthly ones. So that's why all through this difficult period, our whole hotel division has been regularly continuing to be okay profitable, generally speaking, throughout the whole period. So we're not in red.

Now when the tourist arrivals pick up, obviously, the day lease on a per square foot level may make more money than the monthly, then we switch them back. I think the magic -- this year, if there's something that I want to share with the market is that 2 faces, we have choices and we have financial discipline. So whatever we do is not because I like it or Edmond likes it or Gerald likes it or Simon likes it. It's more because of the formula that we all share. And if the formula works, then we make the choices.

The choices allow us to play the different cycles in the property market, both in Hong Kong and overseas, allow us to play the interest rate cycles, and also allow us to play the daily versus monthly because we have the architecture that was built years ago for that switch.

[Lai Chee Ma, executive]

The next question, CKA's share price was negatively impacted last September with the drop or slump of the sterling exchange rate. Are you concerned that the fluctuations in exchange rates will impact the value of your assets overseas?

[Tzar Kuoi Li, executive]

Let me try to answer this a couple of ways. From a hedging perspective, we have been as prudent as can be, as the cost of our international investments are all fully hedged. So while the profit contribution from individual business can -- may go up and down due to exchange rates, the principal are well protected.

To further elaborate, maybe I use infrastructure as an example. Let's take U.K.'s example. With the sterling down and interest rate up, our earnings from the regulated assets are adjusted accordingly. So interest rate is a pass along. On top of that, there's an adjustment for the -- this, I hope you pay attention, not only to the revenue and to the operating costs, but an adjustment to the principal of the business, principal meaning the regulated asset value. So let's say one year, inflation is high. The principal will be raised by that interest rate, which means that it will benefit the earnings ability of that particular business for all the years to come.

So the benefits of a lower currency, whatever that currency is, coupled with a -- lower currency usually comes with a higher inflation, will bring us cost in the short term, but extra profit contribution in the future. I start to sound like economics professor, which is not my job. But I'm sure Gerald and [ Ivan ] can explain to the details of that regulation in detail. It's a public document that can be viewed.

[Lai Chee Ma, executive]

The next question, CKA is in a net cash position. Could you share with us your outlook on CKA's 2023 plan and also your capital deployment plan to reinvest some of the cash?

[Tzar Kuoi Li, executive]

Well, I'd like to say we have a crystal ball, but we don't and -- but we're lucky. So we divest of certain assets apparently at pretty good times. We have a choice. I keep using that word. We have choice, and we're financial disciplined and we can be selective. We have a good war chest. We are always on the outlook for new deals, which allow us to pick up land at good prices recently. What else can I say?

[Lai Chee Ma, executive]

The next question has something to do with interest rate as well. Are you concerned with the rising interest rate environment and its impact on your interest expense? Or what proportion of your borrowings is fixed?

[Tzar Kuoi Li, executive]

We are net cash. And over half of our borrowings are fixed, so we are -- everything is quite manageable.

[Lai Chee Ma, executive]

Any plans for further share buyback?

[Tzar Kuoi Li, executive]

Sorry, I just have to beat this. Sorry, sorry. Question about share buyback?

[Lai Chee Ma, executive]

Yes. Any further share buys?

[Tzar Kuoi Li, executive]

It's one of our midterm strategy. And in 2022, we spent close to $2.5 billion buying back over 49 million shares, so more than any listed peers in Hong Kong. If I may also ask that, analyst and reporters, that's what I said earlier to in our media meeting, please look at our earnings per share rather than the total earnings because our dividend policy also revolves around on a per share basis. Our earnings, dividends, everything we look at per share, because looking at the total is not very meaningful when you have such a large buyback program.

[Lai Chee Ma, executive]

While absolute EPS is higher than 2021, the increase was mild compared to your impressive disposals that you -- which you have done last year. What should investors expect from CKA as a dividend policy going forward?

[Ka Keung Man, executive]

Come on, we just delivered growth in profit and a growth its dividend. How many property companies in Hong Kong are increasing dividend this year? I don't think that number would be very large. So I think it will -- our dividend policy will be in line with our profit. It will go up, it may come down, depending on the market. But we are very disciplined and we would -- we work for shareholders. Our job is to deliver growth in value to shareholders. And sometimes that cycle may be longer than 1 or 2 years. And in the last 5 years, that's what we've been doing.

[Lai Chee Ma, executive]

There's just one last question that -- I think Mr. Li can quickly answer this. Over 20 analysts have asked this question. They're talking about the CKH submitting a plan for United Dockyards, whether CKH will become a developer instead of CKA?

[Tzar Kuoi Li, executive]

Let's get the plan approved first. It's a piece of land owned by [ H ] Hutchison United Dockyard. It's a dockyard piece of land. And the reason we have that opportunity is we found that the government land that is sitting next to it does not have land access. The only land access to the government piece of land is via the HUD piece of land. So its waterfront is close to major arteries. The only reason why a lot of people don't realize it, it's underneath a cliff when you are at the top of Tsing Yi. So unless you stand really close to the cliff, you can't see us. But if you're crossing Tsing Ma bridge, walking and look down, you can see us. But I question how many people walked -- walked by there?

Now if and when it's approved, I have a feeling, I use the word feeling, that CKA and CKHH must find a way to pool our resources together because a lot of planning, construction and expertise is within CKA, and expertise in CKHH is the ship repair and maintenance [ by heart ]. So I have a feeling we have opportunities to work together again. But that's a bit too early.

[Lai Chee Ma, executive]

Now that's all the questions that we have, and our IR team will continue to work with you on the other operational level questions, but I thank our management for joining this webcast. And thank you for joining our results presentation, everyone.

[Tzar Kuoi Li, executive]

Thank you very much. So I will switch to CKHH Analyst Meeting. Thank you.

[Lai Chee Ma, executive]

Thank you all. Bye.

[Tak Ip, executive]

Thank you.