Cheuk Nang : Interim Report for the six months ended 31 December 2021

CHEUK NANG (HOLDINGS) LIMITED

(Stock Code: 131)

INTERIM REPORT

FOR THE SIX MONTHS ENDED 31/12/2021

CHEUK NANG (HOLDINGS) LIMITED

INTERIM RESULTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2021

CHAIRMAN STATEMENT

RESULTS

I herewith announce that the unaudited consolidated loss after taxation for the six months ended 31 December 2021 of our Group is HK$115,334,000 as compared with 2020: loss HK$62,176,000 as set out in the unaudited consolidated income statement which has been reviewed by the Company's audit committee.

The Directors resolved the payment of an interim dividend of HK1.5 cents per share as compared the interim dividend of 2020: HK2.0 cents.

REVIEW OF OPERATIONS

Hong Kong Properties

Hong Kong economy were seriously affected by the fifth epidemic of coronavirus. Although the economy has been slightly recovered and boosted by the distribution of the consumption coupon by the government during the third and the fourth quarter of last year, the economy is again largely turned down at the beginning of 2022.

The progress of our projects is as follows:

1. One Kowloon Peak, No. 8 Po Fung Terrace, Ting Kau, Tsuen Wan
   Phase 1 has been obtained Occupation Permit which consisted of 49 residential units, out of which 13 units are sold and 21 units are rented. Phase 2 consisted of 5 deluxe residential villas and Clubhouse Facility. The whole development provides 70 no. of car parks. The Occupation Permit of Phase 2 was obtained on 28 July 2020. The application for Certificate of Compliance was submitted in August 2020 and is still pending for approval.
2. Villa Cecil Phase II, 192 Victoria Road, Pokfulam The occupancy rate maintained at 85%.

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1. Villa Cecil Phase III, 216 Victoria Road, Pokfulam
   The occupancy rate of the two blocks has reached 95% which contributed good rental income to the Group.
2. Cheuk Nang Lookout, 30 Severn Road, The Peak
   The renovation of the two villas (Villa Begonia and Villa Crocus) to enhance the quality is completed.
3. New Villa Cecil, 33 Cheung Chau Sai Tai Road, Cheung Chau
   Over 90% of the villas in Phase 1 are leased out. The construction work of Phase 2 and the overall site improvement work are in progress and nearly completed.

China Properties

China's property downturn is expected to continue in the first half of this year, with home prices and sales falling as tight credit policies and COVID-19 pandemic. The sales volume for both new and second hand units during and after Chinese New Year were largely reduced as compared with previous years.

Cheuk Nang Garden

Longhwa, Shenzhen

Upto the date of this report, a total of 809 units have been sold and the sales transactions amount achieved is RMB3,582 million. The government inland revenue has contacted us requesting for payment for increasing value of land appreciation tax. We have engaged tax expert to deal with the tax matter.

Cheuk Nang • Riverside

Yue Hang Qu, Hangzhou

The 19th Asian Games will be held in Hangzhou in September 2022. The construction of stadiums and athletes villages boosted the local economy while the holding of the Asian Games competition will drive the tourist industry increased in 2022.

The construction of whole development of Cheuk Nang • Riverside is completed.

Currently, renovation and beautification works are in progress in order to cope with the requirement of 規劃建築驗收 .

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Macau Properties

The quick and immediate measures taken by the Government to prevent the spread of the pandemic. The Macau economy has gradually resumed slightly but under the influence of the gambling sector, not quite optimistic.

Golden Cotai No. 1

Estrada de Seac Pai Van, Coloane

The lease of the land was expired in October 2021. Our lawyer in Macau has made application to renew the lease since April 2021 but the renewal process was being held up by the Government due to the completion of the Master City Planning. According to the advice from our lawyer in Macau, although under normal practice, the lease of our land will be renewed automatically on expiration, due to the Government undergo a Master City Planning in early 2021, the renewal of our lease will be handle after the City Planning. Our lawyer will contact the government officials frequently to keep us informed of the status for renewal.

Malaysia Properties

Following the disruptive impact of the COVID-19 crisis, the first half year of 2021, sharp drops in transactional activity of real estates were brought by rising infection rates and government-imposed citizen movement restrictions, resulted in price depressions and supply of vacant units increased. The government is adopting sustainable long- term policies in dealing with COVID-19 but we anticipated that the performance of the economy will not be optimistic in the near future.

Phase I "Parkview"

Lot 1359, Section 57, Lorong Perak, Kuala Lumpur, Malaysia

The occupancy and the income of the serviced apartments were very much reduced due to the market situation.

Phase II "Cecil Central Residence"

Lot 11385 and 11386, Section 57, Lorong Perak, Kuala Lumpur, Malaysia

The amended Development Order has been approved. New application for approval of the amended building plans was submitted. Due to the poor market situation, the construction plan will be delayed.

INVESTMENT IN BONDS AND HONG KONG STOCK MARKET

The investment in Bond market as at 31 December 2021 was HK$146,898,000. During the period, a total of HK$2,237,000 was redeemed and no Bond was purchased

The market price of our investment in the Hong Kong stocks as at 31 December 2021 was HK$37,552,000. During the period, a total of HK$5,997,000 stock was purchased and no stock was sold.

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OUTLOOK

The Hong Kong economy will continue to be affected by omicron and geopolitical tensions.

The Hong Kong government has put their effort to fight against the virus by trying to cut the transmission chain but the effect seems cannot catch up with the speed of dispersion. The good news is the China Central Government has promised to give strong support to fight against the disease.

Although we are now facing the most difficult time, we still looking forward to the economy may resume gradually in long run, following the disease may be better under controlled eventually.

DIRECTORS AND STAFF

With our deepest sadness, our director Dr. Sun Ping Hsu Samson has passed away. His contribution to our group will always be remembered by all of us.

All our directors and staff for their dedication and contribution to the steady work of the Company during the most difficult period are much appreciated.

As at the date of this report, the Executive Directors are Dr. Chao Sze Tsung Cecil (Chairman), Ms. Chao Gigi (Vice Chairman), Mr. Yung Philip and Ms. Ho Sau Fun, Connie; the Non-Executive Directors are Mr. Chao Howard and Mr. Lee Ding Yue Joseph; the Independent Non-Executive Directors are Mr. Ting Woo Shou, Kenneth and Mr. Lam Ka Wai, Graham.

By order of the Board

CECIL CHAO SZE TSUNG

Executive Chairman

Hong Kong, 24 February 2022

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