New World Development : Interim Report 2022/2023

2 0 2 2 / 2 0 2 3 I N T E R I M R E P O R T

THE

ARTISANAL

MOVEMENT

THE ARTISANAL MOVEMENT IS A CULTURAL VISION, A CELEBRATION OF THE HUMAN VALUES OF CRAFTSMANSHIP, HERITAGE AND IMAGINATION.

TODAY, AS OUR BUSINESS EVOLVES IN STEP WITH THE SOCIETY, WE LOOK AHEAD TO BRING A NEW PURPOSE TO THIS VISION: CREATE SHARED VALUE FOR ALL STAKEHOLDERS IN COMMUNITIES THAT WE SERVE, IN ORDER TO MAKE A POSITIVE IMPACT ON THE WORLD.

IT IS OUR BELIEF OF USING THE POWER OF BUSINESS AND INNOVATION TO GIVE BACK TO THE SOCIETY. THROUGH THREE CORE AREAS - CULTURE AND CREATIVITY, SUSTAINABILITY, AND SOCIAL INNOVATION - WE WILL FORGE NEW PATHS THAT TIE OUR BUSINESS SUCCESS TO SOCIAL PROGRESS.

BECAUSE TOGETHER

WE CREATE,

WE ARE ARTISANS,

WE ARE CSV.

Content

2	Financial Highlights
3	Chairman's Statement
4	CEO's Report
18	Condensed Consolidated Income
	Statement - Unaudited
19	Condensed Consolidated Statement of
	Comprehensive Income - Unaudited
20	Condensed Consolidated Statement of
	Financial Position - Unaudited
22	Condensed Consolidated Statement of
	Changes in Equity - Unaudited
26	Condensed Consolidated Statement of
	Cash Flows - Unaudited
27	Notes to Condensed Accounts
45	Liquidity and Capital Resources
47	Other Information
60	Corporate Information

The Artisanal Movement is a cultural vision, a celebration of the human values of craftsmanship, heritage and imagination.

Today, as our business evolves in step with the society, we look ahead to bring a new purpose to this vision: create shared value for all stakeholders in communities that we serve, in order to make a positive impact on the world.

It is our belief of using the power of business and innovation to give back to the society. Through three core areas - culture and creativity, sustainability, and social innovation - we will forge new paths that tie our business success to social progress.

Because together we create, we are artisans, we are CSV.

Financial Highlights

	Unaudited
	For the six months ended
	31 December
	2022	2021
	HK$m	HK$m
		(restated)
Revenues	40,193.3	35,572.8
Segment results(1)	6,342.9	9,321.5
Underlying profit	3,359.8	3,891.0
Interim dividend per share (HK$)	0.46	0.56
	Unaudited	Audited
	As at	As at
	31 December	30 June
	2022	2022
	HK$m	HK$m
Total assets	621,893.5	635,883.9
Cash and bank balances (including restricted bank balances)	56,660.6	62,210.1
Undrawn facilities from banks	35,768.9	42,761.9
Consolidated net debt(2)	129,275.7	124,349.3
Net gearing ratio (%)(3)	46.9	43.2

RESULTS HIGHLIGHTS:

• The Group recorded consolidated revenues of HK$40,193 million, an increase of 13% comparing to 1HFY2022. Underlying profit was HK$3,360 million and profit attributable to shareholders of the Company was HK$1,209 million, down by 14% and 15% respectively
• The Group's attributable contracted sales in Hong Kong amounted to about HK$7.87 billion
• The Group's overall contracted sales in Mainland China amounted to about RMB9.24 billion
• The accumulated sales proceeds of the sole project under New World Arts Centre in Hangzhou has exceeded RMB11 billion, evidencing the Group's pursuit of excellence and its appeal to the market, further revealing the vast potential in cities in Yangtze River Delta
• The construction of urban renewal project of 188 Industrial Zone located in the Longgang District, Shenzhen has commenced during the period under review, which indicated that the urban renewal business of the Group has advanced to the harvest stage
• Revenues and segment results of property investment in Hong Kong amounted to HK$1,492 million and HK$1,095 million respectively. The Group's K11 projects in Hong Kong continued to record resilient performance, with year-on-year increase of 4% and 9% in revenues and segment results, respectively
• Non-coreasset disposal amounted to approximately HK$5.6 billion in 1HFY2023
• All refinancing of borrowings due in FY2023 has been taken care of
• FY2023 interim dividend: HK$0.46 per share, revisiting dividend policy as to maintain the Company's long-term robust and sustainable development
• In response to the rapidly-evolving industry landscape, the Group continues to actively explore strategic options for its various businesses in order to (i) unlock value of individual business units; (ii) sharpen the respective strategic focus of our group companies; and (iii) maximise return for our shareholders. Such options, if pursued by the Group, may take place together or at different times considering the respective business plans and prevailing market conditions
• Total capital resources amounted to approximately HK$92 billion, including cash and bank balances of approximately HK$57 billion and undrawn facilities from banks of approximately HK$35 billion. With the Group's robust financial position, there is no need or plan by the Group for any equity capital raising from shareholders in the foreseeable future, including rights issuance and share placement

Remarks:

1. Include share of results of joint ventures and associated companies, but exclude changes in fair value of investment properties
2. The aggregate of bank loans, other loans, fixed rate bonds and other borrowings less cash and bank balances
3. Consolidated net debt divided by total equity

2 New World Development Company Limited

Chairman's Statement

TO OUR SHAREHOLDERS

2022 was an extraordinary year. In such a turbulent time when the recurring pandemic and volatile geopolitical conditions interwove with complex and ever-changing economic development, New World embraced the challenges and strived ahead. By adhering to the strategy of "Pursuing the Path of High-Quality Development with Steady and Sustainable Growth", it made significant progress while ensuring stability, leading the Group to brave the waves and sail to high-quality development.

As the report of the 20th National Congress of the Communist Party of China ("CPC") stated, "to build a modern socialist country in all respects, we must, first and foremost, pursue high-quality development". In response to this, New World has been insisting on developing exquisite and high quality projects and building urban landmarks in key cities in the Greater Bay Area and major areas in the Yangtze River Delta, so as to play a part in accomplishing high quality economic and urban development in the PRC.

In Hong Kong, we have been, as always, actively worked on farmland conversions. The development of Northern Metropolis and the SKYCITY complex "11 SKIES" were on track, which will create new tourist attractions for the city in the near future. In Mainland China, as our urban renewal business has entered into the harvest stage, we continued to bring "the soul of the city" to life through city-industry integration. "K11 ECOAST", the first K11 flagship project in the Mainland, is expected to complete by 2024, which will become a new cultural and retail landmark on the waterfront of the Greater Bay Area, upgrading the cultural and retail enjoyment in the area.

As mentioned in "Tao Te Ching" by Laozi, "Mountain is towering as it never resists every speck of dust; ocean is vast as it never turns away every drop of water"; success is built upon growth bit-by-bit. Backed by New World's business acumen gained from achievements over the past half-century, we managed to achieve remarkable results even when the industry is facing challenges.

While focusing on business development, New World created shared value for the need of society, achieving business success while furthering social progress. We are the third property developer in Asia to receive approval from Science Based Targets initiative of its near-term 1.5°C aligned science-based targets. With a vision to mitigate Hong Kong's housing problems through innovative solutions, we have been liaising closely with NGOs and government authorities to build better communities for Hong Kong's next generation.

The pandemic, which has lasted for three years, is finally coming to an end. The reopening of border is huge excitement to us and we look forward to seeing more mainland travellers and talents visiting Hong Kong, which will reinvigorate Hong Kong's economic growth. Leveraging on years of operation in the Greater Bay Area, the Group will continue to contribute its successful experience and resources in such diversified industries as finance, education, healthcare and technology to the Mainland, actively utilise our industrial advantages to accelerate and enhance the interaction among economic and business activities in the region, and promote industrial integration, resource sharing and opportunity creation in the Greater Bay Area, thereby providing stronger support to the inclusion and high-quality development in the Greater Bay Area. 2023 is the year to embark on the entire plan set at the 20th National Congress of CPC. New World will keep abreast of the national development strategy, uphold the strategy of "Pursuing the Path of High-Quality Development with Steady and Sustainable Growth", forge ahead and create value for shareholders and society.

Dr. Cheng Kar-Shun, Henry

Chairman

Hong Kong, China, 23 February 2023

Interim Report 2022/2023

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