Chinese Estates Holdings Limited provided preliminary consolidated earnings guidance for the six months ended 30 June 2023. For the period, the group may record substantial decrease in both the revenue ranging from 72% to 82% and consolidated net profit attributable to owners of the Company ranging from 78% to 88%, as compared with the revenue of HKD 1,181 million and the consolidated net profit attributable to owners of the Company of HKD 871 million for the six months ended 30 June 2022. Following are the main reasons which led to the substantial decrease in the Revenue and the Profit: Decrease in the Revenue and the Profit derived from decrease in dividend income from an unlisted equity security (the Investee Company).

During the Period, the Group recognised dividend income of HKD 36 million (2022: HKD 950 million) from the Investee Company, holding a property development project in Hong Kong (10% interest). Increase in finance costs. As a result of the surge in interest rates, finance costs almost doubled from approximately HKD 55 million to HKD 109 million during the Period.

Results of investments and treasury products at fair value through profit or loss (FVTPL) turning from loss to profit. The profit/loss mainly comprised realised gain, unrealised loss and interest/dividend income of securities investments and treasury products. During the Period, the Group disposed of certain securities investments and treasury products at FVTPL (the Disposal) which mainly comprised equity securities listed in Hong Kong or elsewhere, bonds and structured products.

It is estimated that realised gain from the Disposal of approximately HKD 58 million (2022: HKD 25 million) and unrealised loss on the fair value changes of approximately HKD 56 million (2022: HKD 213 million) would be recognised in profit or loss for the Period. However, the Group recorded decrease in interest/dividend income, consisted of interest/dividend income from securities investments and treasury products at FVTPL of approximately HKD 8 million (2022: HKD 17 million). Increase in gain on fair value changes of investment properties.

The Group's investment properties were revalued as at 30 June 2023 and gain on fair value changes of approximately HKD 191 million (2022: HKD 104 million) would be recorded for the Period as compared with the fair value as at 31 December 2022. The gain on fair value changes for the Period was mainly derived from the increase in fair value of a redevelopment property located in the United Kingdom. The unrealised fair value change is a non-cash item and will not affect the cash flow of the Group.