Highlights of 2018 Interim Results

For the six months ended 30 June 2018, the Group's reported profit attributable to equity shareholders increased by 15% period-on-period to HK$15,030 million. Excluding the fair value change of investment properties and investment properties under development, the Group's underlying profit (Note 4) attributable to equity shareholders increased by 52% period-on-period to HK$13,859 million.

The Group continues to replenish its development land bank in Hong Kong through various means. Encouraging progress was achieved during the period under review: (1) In February 2018, two residential sites in Kai Tak Development Area were secured at a total consideration of about HK$15,958 million, adding about 1.1 million square feet in aggregate gross floor area to its land bank; (2) For the newly acquired urban redevelopment projects with 80% to 100% of their ownerships acquired, the total attributable gross floor area available for sale or leasing was enlarged to 4.4 million square feet covering a total of 49 projects. Some of them may be assembled for more sizeable redevelopments, such as the "Square Mile" collection which provides a cluster of new buildings with an aggregate gross floor area of over 1.0 million square feet. These sizeable redevelopments will create brand new revitalized communities for the living convenience of more residents; (3) the Group acquired further New Territories land lots of about 0.4 million square feet, increasing its land reserves in the New Territories to approximately 45.3 million square feet, which represents the largest holding among all property developers in Hong Kong.

The following three major income pillars of the Group have been progressing well:

As regards "property sales", three development projects are in the pipeline for sales launch in the second half of this year. Together with unsold stocks, a total of over 2,300 residential units and 250,000 square feet of quality industrial/office space in Hong Kong will be available for sale in the second half of this year. Sales generated from Hong Kong developments, amounting to HK$14,848 million in attributable terms, have not been accounted for as at the end of June 2018.

As regards "rental business", the Group holds a large portfolio of quality investment properties comprising an attributable gross floor area of 8.9 million square feet in Hong Kong and 6.4 million square feet in mainland China, respectively. Besides, there are a few major rental properties under development, namely, the commercial project at Middle Road and office development at Murray Road in Hong Kong, as well as Xu Hui Riverside Project in Shanghai and Haizhu Square Station Project in Guangzhou. Construction has been progressing well. Upon the successive completion of these rental properties, the Group's rental portfolio is expected to be enlarged to about 9.6 million and 11.2 million square feet in attributable gross floor area, respectively, in Hong Kong and mainland China. The Group's recurrent rental income is set to grow further.

The "associates", namely, Hong Kong and China Gas, Miramar and Hong Kong Ferry, serve as another steady recurrent income stream to the Group. Hong Kong and China Gas, in particular, has a total of over 28.0 million piped-gas customers in both Hong Kong and mainland China, whilst the number of its customers is expected to rise further. Given society's growing aspiration for more environmental protection, its environmental-friendly energy businesses will ignite a new light, illuminating the way for this company's long-term development and business growth strategy.

With the Group's above three major businesses (namely, "property sales", "rental business" and "associates"), solid financial management, ample stand-by facilities, as well as a seasoned professional management team, it is well placed to create abundant value for our shareholders. Barring unforeseen circumstances, the Group is expected to achieve satisfactory results in the current financial year.

Lee Shau Kee

Chairman

Hong Kong, 23 August 2018

Note 1: The comparative figures are restated under the adoption of Hong Kong Financial Reporting Standard 15 "Revenue from contracts with customers", which was effective on 1 January 2018.

Note 2: This amount includes the Group's attributable share of contributions from subsidiaries, associates and joint ventures ("JVs").

Note 3: If the fair value change of the related properties is excluded, the pre-tax underlying profit contribution for the six months ended 30 June 2018 should be HK$4,113 million (2017: HK$2,388 million).

Note 4: Excluding the Group's attributable share of fair value change (net of tax) of the investment properties held by subsidiaries, associates and JVs.

Note 5: The earnings per share were calculated based on the weighted average number of shares as adjusted for the effect of the bonus issues under Hong Kong Accounting

Standard 33, "Earnings Per Share". The net asset value per share at 30 June 2018 was calculated based on the number of issued shares outstanding at 30 June 2018, whilst the net asset value per share at 31 December 2017 was calculated based on the number of issued shares outstanding at 31 December 2017 and as adjusted for the bonus issue effected in 2018.

Note 6: Including the total attributable developable area of about 4.4 million square feet from the projects in Fanling North and Wo Shang Wai, which are subject to finalisation of land premium.

The information in this advertisement does not constitute a statutory results announcement. The results announcement is available on the Company's website atwww.hld.com and on Hong Kong Exchanges and Clearing Limited's HKEXnews at www.hkexnews.hk.