Emperor International : Jointly Announces 2016/17 Annual Results Emperor Group Centre Soon-to-be-Launched in Beijing Broaden Future Rental Income Base

(Hong Kong, 22 June, 2017) Emperor International Holdings Limited ("Emperor International") (Stock code: 163) & Emperor Entertainment Hotel Limited ("Emperor E Hotel") (Stock code: 296) jointly announced its 2016/17 annual results for the year ended 31 March 2017 (the "Year").

Emperor International Holdings Limited

Financial Summary

1 Excluding the effect of any fair value changes and write-downs net of deferred taxation

During the Year, Emperor International reported total revenue of HK$4,068.5 million (2016: HK$5,602.9 million). Rental income from the investment properties portfolio grew by 2.6% to HK$857.4 million (2016: HK$836.1 million), representing 21.1% (2016: 14.9%) of total revenue. As for property development for sale, revenue of HK$1,515.7 million (2016: HK$2,971.6 million) was generated from the sales of remaining completed residential units, particularly the Upton. Revenue from the hospitality segment slightly declined to HK$1,695.3 million (2016: HK$1,795.2 million), accounting for 41.7% (2016: 32.1%) of total revenue.

Gross profit was HK$2,844.4 million (2016: HK$3,098.1 million). A revaluation gain on investment properties was amounted to HK$3,228.0 million (2016: revaluation loss of HK$3,167.6 million). A net profit of HK$3,483.2 million (2016: a net loss of HK$2,391.2 million) was recorded.

Basic earnings per share was HK$0.95 (2016: basic loss per share of HK$0.65). Emperor International recommended the payment of a final dividend of HK$0.058 (2016: HK$0.055) per share. Together with the interim dividend of HK$0.045 (2016: HK$0.045) per share, the total dividends for the Year are HK$0.103 (2016: HK$0.10) per share.

Investment Properties for Rental Income

Emperor International's investment properties primarily focus on quality street-level retail spaces and commercial buildings at prominent locations. The key properties include the street-level retail spaces in Causeway Bay and Tsim Sha Tsui, and commercial complexes in the central business districts.

As at 31 March 2017, the overall occupancy rate of Emperor International's investment properties was over 94.0%. In recent years, Emperor International has strived to enhance the proportion of retail and commercial buildings, on a whole block basis, aiming to diversify its rental income streams and ensure it is in a more resilient position to withstand market volatility.

Construction work at Emperor Nam Van Centre on the Macau Peninsula was in progress. It will be redeveloped into a multi-storey premium retail complex with a gross floor area of 30,000 square feet, scheduled for completion in mid-2017. It is expected that Emperor Group Centre in Beijing and Emperor Nam Van Centre in Macau will generate significant additional income starting from the financial year of 2017/18.

During the Year, Emperor International continued to acquire investment properties with high appreciation potential, in order to broaden and enhance the quality of its property portfolio. Ampersand Building, one of the three newly acquired properties, is located at Oxford Street, London. The other two are located in Hong Kong, namely retail shops of Fairview Height in Mid-levels, and commercial and car park complexes at Sui Wo Court in Sha Tin, respectively. Details of these newly acquired properties are as follows:

Property Development for Sale

The remaining units of Harbour One and 18 Upper East, together with part of the remaining units of Upton, were sold and sales proceeds were recognised during the Year.

The residential site at Kwun Fat Street, Siu Lam, Tuen Mun, with a gross floor area of 39,000 square feet, was developed into 14 low-rise detached or semi-detached houses. The occupation permit was obtained in November 2016 and the completed units will be launched to the market by late 2017.

An urban redevelopment project at Fuk Wing Street, Sham Shui Po, is in progress. With a gross floor area of 54,000 square feet, the site will be redeveloped into a 26-storey composite residential/retail tower with more than 130 flats. This project is expected to be completed in 2018, and pre-sales are scheduled to commence in the third quarter of 2017.

The above mentioned projects, along with the luxury sites in Tai Lam, Shouson Hill and Mid-Levels, will build a steady pipeline for providing medium-term contributions to Emperor International through the sale of residential units in the years to come.

Hotel Operations and Related Services

Emperor International currently runs two hotels and a serviced apartment in Hong Kong, as well as two hotels in Macau. They are namely Emperor (Happy Valley) Hotel, Inn Hotel Hong Kong, MORI MORI Serviced Apartments, Grand Emperor Hotel and Inn Hotel Macau.

A 29-storey hotel at No. 373 Queen's Road East, Wan Chai, was completed in April 2017. Offering 300 guest rooms together with leisure, dining and parking facilities, the hotel is expected to open in the first quarter of 2018. It is a signature hotel project for Emperor Hotels Group, elevating overall brand recognition in the hospitality segment.

Meanwhile, construction work of a serviced apartment at Yik Yam Street, Happy Valley, is scheduled for completion in 2018. It will be developed into a 21-storey serviced apartment block with 68 units.

Mr. Donald Cheung, Executive Director of Emperor International, said, "Our long-awaited flagship project Emperor Group Centre in Beijing has finally completed. Backed by the rapid expansion of domestic financial services and professional services sectors, leasing demand for Grade-A office spaces in Central Business Districts remains strong. I am confident that Emperor Group Centre will be definitely well-received by potential tenants, who seek to establish their presence in a prominent location in China's capital city."

Mr. Cheung continued, "We have been able to grow our portfolio through a number of sizeable acquisitions in Hong Kong and London. The contribution from the newly acquired properties, together with our Emperor Group Centre in Beijing and Emperor Nam Van Centre in Macau, will secure our rental income base and provide stable recurring cash flows in long-run. Looking ahead, we will continue to source quality investment properties in major cities worldwide, aside from the Greater China."

Emperor Entertainment Hotel Limited Financial Summary

During the Year, revenue of Emperor E Hotel declined moderately to HK$1,613.2 million (2016: HK$1,721.0 million). Net profit increased by 35.2% to HK$346.5 million (2016: HK$256.2 million) and such increase was primarily due to: i) reduction in exchange loss on Renminbi deposits and ii) reduction in the loss on fair value changes of investment properties.

Basic earnings per share increased to HK$0.27 (2016: HK$0.20). Emperor E Hotel recommended the payment of a final dividend of HK$0.057 (2016: HK$0.052) per share. Together with the interim dividend of HK$0.025 (2016: HK$0.028) per share, the total dividends per share for the Year are HK$0.082 (2016: HK$0.08).

As at 31 March 2017, aggregate of bank balances and cash, short-term bank deposits and pledged bank deposits amounted to HK$3,962.2 million (2016: HK$3,546.0 million). The gearing ratio (total borrowings to total equity) decreased to 10.8% (2016: 12.5%).

Gaming Revenue

Despite of competition from the new supply of casino resorts, Emperor E Hotel strived to optimise its gaming mix and reinforce its market position. Emperor E Hotel's gaming revenue declined slightly to HK$1,362.1 million (2016: HK$1,451.5 million), accounting for 84.4% of total revenue. As a result of focused marketing efforts towards high-roller gamblers, revenue from VIP room was managed to achieve a growth.

The gaming revenue comprises of the income from gaming concourse, VIP room and slot machines, accounting for 48.2%, 33.9% and 2.3% of total revenue respectively. Operational results of gaming concourse and VIP room segments are summarised as follows: