Chairman's Statement  


  We took the first bold steps forward to diversify your business portfolio in transportation and hospitality while increasing our stake in the China property market. We delivered commendable financials even as we made significant investments for future growth this year.

Mr. Stanley Ho
Group Executive Chairman
28 March 2014
  Dr. Stanley Ho

Fiscal year 2013 has been a pivotal time for the Group in every sense of the word. This past year, we took the first bold steps forward to diversify our business portfolio in transportation and hospitality, while increasing our stake in the China property market. These represent important groundwork of a significant growth strategy into the next decade. Against this backdrop, all divisions have produced satisfactory earnings results, with profit attributable to shareholders of the Company for the year ended 31 December 2013 amounting to HK$1,406 million (2012: HK$2,563 million). Basic earnings per share were HK47 cents (2012: HK88.7 cents). The Board of Directors does not recommend the payment of any final dividend (2012: HK8.5 cents per share).

Property transactions remained subdued under newly implemented real estate policies. Nonetheless, the Group launched two sales releases over the year, one for Nova Park in November 2013 and another for Chatham Gate in January 2014. Both launches were met with popular demand and achieved satisfactory prices. In early 2014, the last two triplexes at The Residences and Apartments at Mandarin Oriental, Macau, were also sold for record per square feet prices. These are positive reflections of homebuyers’ confidence in our developments, and we will stay responsive to market sentiment in order to flexibly adjust our sales strategy.

Beyond Hong Kong and Macau, the Group took significant steps to expand its property portfolio in mainland China. In 2013, three major development projects have been acquired, namely Beijing Tongzhou Integrated Development Phase 2, Hengqin Integrated Development Project and Beijing Dong Zhi Men Commercial Land Use Project (later renamed as "Shun Tak Tower, Beijing").These integrated projects will inject new growth potentials and synergy into multiple businesses within the Group’s portfolio, as well as generate recurring cash flow with secure and stable returns for the future.

In August 2013, the Group introduced China State Construction International Holdings Limited ("CSCI") as a joint venture partner for the residential portion of Nova City Phase 5. CSCI has been the appointed main contractor for all previous phases under the Nova branded projects, and is widely resourceful in the Macau construction market. This alliance will allow for better cost control and time management.

The transportation division turned in encouraging results attributable to an uptrend in regional tourism demand, a stabilized operating environment, as well as a fare increment on TurboJET routes implemented in March 2013 to improve profitability to sustainable levels. True to its pledge of creating the best sea travel experience for passengers, TurboJET continued to upgrade its fleet and lounge facilities, capitalizing successfully upon the expanding luxury travel market, achieving a 78% year-on-year increase in Premier Grand class business. Our experience in managing ferry terminal facilities is also well recognized, as we earned a new management appointment for ferry services at Shenzhen Airport Fuyong Ferry Terminal, the third major port within Pearl River Delta ("PRD") in addition to SkyPier and Macau Maritime Ferry Terminal under the Group’s management.

Speaking of the PRD, the Group is a forerunner in establishing an air-sea intermodal platform using Hong Kong International Airport as an aviation hub to meet rising travel demand from the rapid internationalization of the region. Expanding upon our relevant experience, the Group made a strategic decision in June 2013 to invest in Jetstar Hong Kong Airways Limited ("Jetstar Hong Kong") based on equal partnership with Qantas Group and China Eastern Airlines. The launch of Jetstar Hong Kong is subject to regulatory approvals.

The hospitality division continued to perform encouragingly on the back of robust regional tourism demand. In particular, our hotel portfolio contributed solid earnings to the Group in 2013, with Hong Kong SkyCity Marriott Hotel leading way. Other arms of the division, including Hospitality Management and Travel & MICE, also turned in compelling results, with each being a solid pillar as we continue to forge an all-rounded tourism brand under the Shun Tak banner. Combining shrewd business sense with creativity, Artyzen Hospitality Group was established to offer hotel management solutions to hotel owners and developers. The Group foresees extensive opportunities in the burgeoning Asian tourism landscape, particularly powered by a deluge of increasingly affluent and discerning mobile travelers from China. Designed to meet the preferences of this market, a collection of luxury hotel brands has been created with distinctively oriental flavour centering around elements of art and heritage. Its target destinations include major gateway cities in Asia, such as Hong Kong, Taipei, Shanghai, Beijing, Singapore and Jakarta.

In February 2013, the Group announced the establishment and listing of a US$1 billion guaranteed medium term note programme (the "MTN Programme") on The Stock Exchange of Hong Kong Limited. In March 2013, the Group further announced a US$400 million 7-year guaranteed notes at 5.7% due in March 2020 (stock code: 5910) issued under the MTN Programme, and an oversubscription of approximately 12 times was recorded. This attests to our investors’ unwavering confidence in the Group’s financial solidarity and prudent management, and provided us with a strong financial position to carry out our expansion plans.

In 2013, we delivered commendable financials even as we made significant investments for future growth. We are confident that the best is yet to come. Taking this opportunity, we would like to thank everyone at Shun Tak whose dedication and hard work have played an instrumental role in achieving another remarkable year as well as our shareholders for their tremendous support. With the decisions we have made in 2013, the clear strategy we have put in place and the exceptionally talented management we have on board, we are well-positioned to deliver a compelling growth vision long into the future.