Annual Reports Year 2025

HK Electric Investments

Constant Innovation

Annual Report 2025

constituted in January 2014, is a fixed single investment trust in Hong Kong focusing purely on the energy sector. Our Share Stapled Units, issued by the trust and HK Electric Investments Limited (collectively known as "HKEI"), are listed on the Main Board of the Hong Kong Stock Exchange. Our trust is structured to enable us to maintain a dedicated focus on delivering stable distributions to holders of our Share Stapled Units, while ensuring potential for sustainable

long-term growth.

Our main operating company, HK Electric, is a power utility responsible for the generation, transmission, distribution and supply of electricity to more than 599,000 customers in Hong Kong. Powering the city's economic growth since 1890 with affordable, safe and reliable electricity, HK Electric is increasing its gas-fired generation capacity and the use of renewable energy, as well as supporting the community to decarbonise as we help Hong Kong achieve carbon neutrality before 2050.

We are committed to continuing HK Electric's long tradition of community engagement and support for the underprivileged, and to remaining a positive and responsible member of the Hong Kong community.

With a world-class supply reliability of over 99.999% since 1997 and over 99.9999% in recent years, HK Electric will continue to power Hong Kong into a caring, sustainable and low-carbon city.

Scan to find out more about our history

Enduring Legacy

The annual report cover design captures HK Electric's enduring legacy and its continuous growth alongside Hong Kong. Built on the principles of reliability, trust, care, and an unwavering commitment to excellence, the visual concept expresses how the company's heritage continues to guide its future.

The overlapping circles symbolise the seamless connection between tradition and evolution, illustrating how long-standing values inspire ongoing innovation. By uniting past and present operations, the design highlights the equilibrium between stability and forward-looking progress that has long defined the company in powering Hong Kong.

2 Performance Highlights

Business Review

6 Chairman's Statement

10 Long-term Development Strategy

12 Year at a Glance

CEO's Report

16 Operation Review

24 Sustainability Review

34 Financial Review

37 Awards Gallery

Corporate Governance

42 Boards of Directors and Management Team

48 Combined Report of the Directors

51 Combined Corporate Governance Report

77 Risk Management

79 Risk Factors

Financial Statements

HK Electric Investments and

HK Electric Investments Limited

84 Independent Auditor's Report

1. Consolidated Statement of Profit or Loss

2. Consolidated Statement of Comprehensive Income

3. Consolidated Statement of Financial Position

4. Consolidated Statement of Changes in Equity

5. Consolidated Cash Flow Statement

6. Notes to the Financial Statements

HK Electric Investments Manager Limited

168 Independent Auditor's Report

1. Statement of Profit or Loss and Other Comprehensive Income

2. Statement of Financial Position

3. Statement of Changes in Equity

4. Cash Flow Statement

5. Notes to the Financial Statements

Other Information

1. Five-Year Financial Summary of the Groups

2. HK Electric - Ten-Year Scheme of Control Statement

3. HK Electric - Ten-Year Statement of Financial Position

4. HK Electric - Ten-Year Operating Statistics

5. Corporate Information

1. Financial Calendar and Share Stapled Unit Information

2. Glossary

Performance Highlights

FINANCIALS

HK Electric Investments 2

Generation

OPERATIONS

2024: 674 (Total capacity 13.4 MW)

Renewable Energy Certificates Subscribed by Customers

2024: ~8.7 GWh

Transmission & Distribution

Supply Reliability

2024: >99.9999%

Network Length

2024: 7,047 km

Unplanned Power Interruption per Customer

2024: <0.5 minutes

Customer Services

Number of Customers

2024: 593,000

Units Sold

2024: 10,150 GWh

Smart Meters Installed

2024: >480,000

Average Customer Satisfaction Index (5-Point Scale)

2024: 4.77

3 Annual Report 2025

Lamma Power Station (1982)

In 1982, Lamma Power Station began operation as a coal-fired facility with two 250-MW coal-fired units.

Lamma Power Station (2025)

By 2025, Lamma Power Station had an installed capacity of 3,083 MW, with gas-fired units contributing 1,475 MW. The three new gas-fired units (L10 - L12) are equipped with Selective Catalytic Reduction systems to reduce emissions, supporting Hong Kong's progress toward decarbonisation.

Business Review

Chairman's Statement

HK Electric Investments 6

The year 2025 marked our 135th anniversary of lighting up Hong Kong. Over more than a century and a quarter, Hong Kong - and our own operations - have transformed beyond recognition. The economy, society, technologies, fuels, customer expectations and environmental responsibilities, have all evolved.

However, we have been steadfast in our commitment to our core purpose and values. We invest and innovate with a long-term vision, support the community and each other with care and professionalism, and respect the environment in everything we do.

Engineering innovation has always been our pathway to the future. From the early adoption of computerisation in the 1960s, to network automation in the 1970s and today's advanced equipment diagnostics and artificial intelligence (AI), we take pride in pioneering technologies to improve our supply reliability, safety and efficiency.

During the year, we continued to progress the key undertakings in our 2024 - 2028 Development Plan in support of the HKSAR

Government's decarbonisation objectives. The construction of L13, our next gas-fired combined-cycle generating unit, and three new oil-fired open-cycle gas-turbine units, advanced on schedule. These projects reinforce generation security, uphold system reliability and pave the way for continued reductions in emissions over time. At the same time, we have practically completed the rollout of smart meters across our customer base.

Financial results and distributions

For the year ended 31 December 2025, HKEI's EBITDA was HK$8,749 million (2024: HK$8,719 million) and audited profits attributable to holders of Share Stapled Units (SSU) was HK$3,149 million (2024: HK$3,111 million).

The Board of the Trustee-Manager has declared a final distribution by the Trust of HK16.09 cents (2024: HK16.09 cents) per SSU, payable on 22 April 2026 to SSU holders whose names appear on the Share Stapled Units Register on 9 April 2026. Together with the interim distribution of HK15.94 cents (2024: HK15.94 cents) per SSU, this amounts to a total distribution of HK32.03 cents (2024: HK32.03 cents) per SSU for the year.

Infrastructure for a carbon-neutral future

2025 marked the second year of our 2024 - 2028 Development Plan and the transition from planning to intensive implementation. We completed piling works, advanced major civil works for

L13, and initiated detailed design and manufacturing of plant equipment during the year. The unit is on track for commissioning in early 2029. When completed, it will increase our proportion of gas-fired generation to about 80%, which will enable us to further reduce carbon emissions.

We also advanced the construction of three new oil-fired open-cycle gas-turbine units, which will replace four existing ageing units. These units are a necessary part of our system to

maintain reliability, resilience and operational flexibility. Phased commissioning of the new units is scheduled to begin in early 2027.

During the year, we have practically completed the rollout of smart meters across our entire customer base. We now have detailed electricity consumption data for customers to better understand and manage their energy use, while enabling us to manage our electricity grid more effectively.

7 Annual Report 2025

Business Review

Chairman's Statement

A reliable, resilient partner for Hong Kong today

Reliability remains the cornerstone of our commitment to Hong Kong. In 2025, we once again achieved a supply reliability of over 99.9999%, meaning customers experienced, on average, less than half a minute of unplanned power interruption over the year. This performance is, as always, the result of proactive asset management, preventive maintenance and decades of investment in network reinforcement and modernisation.

We seek to ensure that customers have uninterrupted power supply as far as possible even during extreme weather events like super typhoons. Our network assets like distribution substations near the sea are vulnerable to flooding during storms. To mitigate this, we have elevated critical equipment, enhanced drainage and installed protective systems to reduce vulnerability to storm surges and heavy rainfall. These measures complement earlier investments such as cable tunnels and underground power

lines, projects initiated by earlier generations of engineers whose foresight continues to benefit Hong Kong today.

Sustainable generation on a green pathway

Gas-fired generation accounted for approximately 69% of our total electricity output in 2025. This reflects steady progress along our coal-to-gas transition and contributes directly to lower carbon intensity and improved air quality. We continued to maximise opportunities for renewable generation despite constraints imposed on the scale of these installations by Hong Kong's geography and scarcity of land resources. Our renewable energy installations, together with customer-owned renewable systems connected under the Feed-in Tariff Scheme, generated around

16 GWh of green electricity throughout the year.

Tech-led operations: embedding IoT and AI

During the year, we have been building an in-house "AI Powerhouse", aiming to make use of this new field of technology to enhance our operations, which is expected to be ready in early 2026. We believe that AI adoption can enhance operational efficiency and support informed decision-making through advanced data analysis, automation, and secure integration. Projects leveraging other

AI tools and machine learning to facilitate asset inspection, fault analysis, and maintenance planning have also been successfully launched. These initiatives are improving productivity, safety and resource efficiency.

Following our successful experience with the high-voltage network, we have started to implement round-the-clock automated

remote monitoring to our low-voltage network. In addition, our SmartLink@HK Electric platform, supported by sensors connected wirelessly over the LoRaWAN network, now enables

earlier fault detection, richer data and faster response capabilities across a wider portion of the system. This is HK Electric's first Internet-of-Things project.

Facilitating customers' green digital lifestyles

Digital channels now sit alongside our customer centre as primary points of engagement. We continued to expand self-service options through the HK Electric App and online platforms. In 2025, around 40% of customer transactions related to service activation, service requests and information access were completed through digital channels. Around 70% of bill payments were made through electronic means.

Green transport remains a key enabler of decarbonisation and the uptake of electric vehicles is growing robustly in Hong Kong. We are supporting this trend with technical consultancy to property managers, transport operators and government bodies on the installation of large-scale charging facilities.

HK Electric Investments 8

A caring partner for those in need

We continued our long-standing commitment to support vulnerable members of the community through programmes focusing on dignity, accessibility and tangible impact. Our flagship initiatives including CAREnJOY and community care programmes under our Smart Power Care Fund provided practical assistance

to the elderly and underprivileged, helping them to improve their quality of life. The Happy Green Campaign and Green Hong Kong Green programme continued to foster appreciation of our

environment and promote sustainable living through educational and engaging activities.

Outlook

Looking ahead, affordability remains a central concern for our customers. In January 2026, our Net Tariff fell by 2.2% year-on-year to HK163.3 cents per unit, driven by a lower Fuel Clause Charge. This reduction was achieved despite an increase in the Basic

Tariff reflecting ongoing capital investment. We concentrate on managing tariffs carefully in order to balance affordability, reliability and long-term sustainability.

We will focus Smart Power Services where they deliver the greatest benefit, particularly for vulnerable customers and those with high energy needs. We are also exploring initiatives such as time-of-use tariff to encourage home charging of electric vehicles (EVs) during off-peak periods given the rapid increase in EV adoption.

The pathway to carbon neutrality before 2050 is clear but challenging. We are committed to advancing the projects in our Development Plan, enhancing resilience and continuing to plan for the future import of zero-carbon energy. Our systems are capable of supporting widespread electrification of transport, and we will continue to enable the decarbonisation of Hong Kong.

HK Electric's achievements are built on the dedication of our people, the trust of our customers and the vision of those who came before us. I thank my colleagues, SSU holders and board members for all their efforts as we move forward with humbleness, confidence and a deep sense of responsibility towards Hong Kong.

Fok Kin Ning, Canning

Chairman

Hong Kong, 17 March 2026

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Business Review

Long-term Development Strategy

Over our long history we have consistently supported Hong Kong's economic journey by offering safe, reliable and affordable electricity while minimising the impact of our operations

on the environment as we strive to deliver sustainable growth in long-term value to our investors.

To achieve our vision to excel in the power business in Hong Kong and continue our long-standing tradition of efficiency and sustainability performance, we are guided by the following long-term strategies:

Serve Hong Kong through world-class power provision

A fail-safe supply of electricity is critical for Hong Kong's economic success. Our priority is maintaining world-class supply reliability, delivered with unrivalled customer service standards. We are also innovating, deploying technology and equipment that allow us to minimise environmental impact.

In recent years, we plan to phase out coal-fired generation by 2035 and have been increasing gas-fired generation and renewable energy in support of Clean Air Plan for Hong Kong 2035. In the long term, we look forward to working with our stakeholders to help achieve the Government's carbon neutrality vision for the city before 2050.

Sustain steady growth in our asset base

Pragmatic and long-term principles guide our investment in power generation, transmission and distribution facilities. All expenditure must support our goals of maintaining supply reliability, enhancing efficiency and customer services while conserving the environment with low-emission energy sources. These investments will enable steady growth in our

asset base which in turn generates stable and growing returns for our long-term investors.

HK Electric Investments 10

Run our business on prudent financial and efficient principles

We embrace the values of prudent financial management and maintain an optimal capital structure with strong liquidity. We strive for operational efficiency and effectiveness and rigorously manage operating costs, including fuel costs. These principles enable us to deliver sustainable returns to our investors while allowing us to provide electricity to our customers at affordable prices.

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Business Review

Year at a Glance

"Smart Power Ambassador Training Programme 2024/2025" offers over 80 retirees opportunities to learn about artificial intelligence and sustainability, including a study tour to the Greater Bay Area on smart ageing enabled by gerontology.

Seven major power restoration drills are conducted to maintain emergency preparedness, including backup power tests for the 15th National Games Beach Volleyball competition,

an exercise with the Electrical and Mechanical Services Department at Heng Fa Chuen to prepare for extreme weather, and a drill with Hong Kong Tramways to strengthen communication and incident-response capabilities.

Despite its small size, Lamma Island hosts about two-thirds of Hong Kong's recorded biodiversity, with Lamma Power Station (LPS) attracting

over 40% of the island's bird species through long-term conservation efforts. Alongside bird and coral surveys of habitats, HK Electric's Green Hong Kong Green nighttime safaris give members of the public an opportunity to explore local wildlife after dark.

HK Electric and Maxim's Group's "All You Can Cook!" x "Happy Green Campaign" Culinary Competition challenges the community to turn unconsumed, leftover ingredients into creative dishes. 24 finalist teams compete in four categories with special awards for "Zero Food Waste Dish", "Most Creative Dish", and "Most Popular Dish", promoting waste reduction and sustainable cooking.

HK Electric Investments 12

The Smart Power Gallery 2.0 showcases HK Electric's energy transformation and commitment to sustainability through a revitalised and interactive experience. Featuring redesigned multimedia displays, interactive games and STEAM workshops, the Gallery introduces Smart Power Services and demonstrates the role of electrification and low-carbon energy transition in advancing Hong Kong's roadmap to achieving carbon neutrality before 2050.

HK Electric holds its first barter event to encourage reuse of resources and waste reduction to

support World Environment Day 2025. Colleagues contribute idle items in new or good condition, with around 200 items finding new owners.

Unwanted items are either donated or recycled, giving resources a meaningful second life.

HK Electric's training strategy is showcased by three trainees winning HKIE and Sir Edward Youde

Memorial Fund awards. The achievements of Ivan Ip, Zion Yung and Mike Tse reflect the company's strong development pathways, on-the-job training and partnership with Employees Retraining Board, underscoring its sustained investment in cultivating future power industry professionals.

The 13-day "Belt and Road Advanced Programme in Power and Energy 2025" gathers 28 professionals from six Belt and Road countries and regions for lectures and site visits in Jinan, Xi'an and Hong Kong. The program has been held for eight consecutive years and is co-organised by The Hong Kong Polytechnic University, Xi'an Jiaotong University, State Grid Corporation of China and HK Electric. This year's program focuses on green energy collaboration, smart grids and carbon-neutrality goals.

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Business Review

Year at a Glance

The company's Happy Green Campaign promotes green power and environmental education through its flagship Green Energy Dreams Come True competition. Winning teams create a solar-powered "artificial tree" water harvesting system, an AI-enabled infrared "tree doctor", and an algae-based "living wall". Winners also join a study tour to Chengdu, Sichuan on Chinese Mainland to explore green energy developments.

HK Electric enters into an agreement with Taihei Dengyo Kaisha, Ltd. to commence erection of the new gas-fired generating unit, L13, scheduled for commissioning in 2029. The unit is expected to increase the company's gas-fired generation to around 80%, supporting Hong Kong's decarbonisation targets.

HK Electric is advancing transport electrification through Smart Power Services, supporting electric buses, ferries,

EV charging and petrol-station upgrades. NGOs such as the Aberdeen Kai-fong Welfare Association benefited from the Green Rehabilitation Bus Pilot Scheme in the provision of accessible rehabilitation buses with less carbon emission.

Hong Kong Baptist University and HK Electric sign a MOU to collaborate on AI-driven solutions that will enhance power infrastructure and operational efficiency. The first joint-project uses AI to detect faults in low-voltage networks, enabling proactive maintenance and strengthening supply reliability.

HK Electric Investments 14

HK Electric supports the 15th National Games by converting the electricity supply to the Media Centre from 11 kV to 22 kV and reinforcing the supply network to ensure reliable electricity supply for all competition venues and training facilities

on Hong Kong Island. The company also deploys volunteers to assist at triathlon events and engages the community by arranging viewing sessions for elderly residents.

The installation ceremony at Hing Tung Estate in Sai Wan Ho marks the near-full rollout of smart

meters. With more than 580,000 units installed across Hong Kong Island and Lamma Island, the Advanced Metering Infrastructure helps customers better manage energy use while strengthening HK Electric's overall grid management.

Supported by advanced control and monitoring systems, strengthened infrastructure and dedicated round-the-clock teams, HK Electric maintains a stable power supply during Super Typhoon Ragasa, with LPS and the power networks operating normally throughout the storm. Only 5 customers on Lamma Island experienced short power interruptions due to trees falling on power lines.

The company announces a 2.2% reduction in its tariff in January 2026 compared with January 2025, while commits to contributing over HK$80 million to enhance Smart Power

Services and drive low-carbon transformation.

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Business Review

CEO's Report

An innovation mindset remains at the core of our daily operations as we advance our energy transition.

At 6 p.m. on 1 December 1890, we began supplying power to Hong Kong. Since then, the city, its economy and its community have undergone profound transformation. Marking the 135th anniversary of brightening the first 50 streetlights in Central, we took pride in reflecting on our journey while reaffirming our commitment to customers, the community and the environment. We celebrated our legacy, expressed gratitude, and deepened engagement with those we serve through special initiatives.

We have always been committed to innovating to solve business challenges, and this mindset remains at the core of our daily operations as we advance our energy transition. Despite challenging external conditions, our overall performance remained stable and outstanding. Supply reliability exceeded 99.9999%, despite the severe weather brought about by Super Typhoon Ragasa in September 2025. Carbon emissions declined by around 42% against the baseline year of 2005, as gas-fired generation accounted for about 69% of our output in 2025.

Cheng Cho Ying, Francis

Chief Executive Officer

Evolving to meet the carbon neutrality goals

Our operational priorities were aligned with the HKSAR Government's decarbonisation targets to halve the city's carbon emissions by

2035, from 2005 levels, and achieve carbon neutrality before 2050. Efforts during the year covered the modernisation of our generation, transmission and digital infrastructure.

At Lamma Power Station (LPS), the major projects of the 2024 - 2028 Development Plan moved from planning into active execution.

Construction of the new gas-fired combined-cycle generating unit L13 advanced according to schedule, with piling works completed in February

HK Electric Investments 16

Operation Review

2025 and structural works for the main station building progressing on schedule. The contract for electrical and mechanical erection was awarded in September 2025, and preparatory works are progressing steadily ahead of key erection activities beginning in mid-2026. The unit is targeted to commence operations in early 2029, whereby gas-fired generation will increase to about 80% of our total output, further reducing our carbon emissions, by capturing the opportunity of replacing another aged coal-fired unit L6.

In parallel, site installation works for the reprovisioning of three new oil-fired open-cycle gas-turbine units are under way. The units will provide contingency capacity and are scheduled for phased commissioning from early 2027.

Completion of the rollout of the smart meters, together with the associated network and IT infrastructure across our customer base of more than 599,000, represented another significant milestone. Data from smart meters enables customers to use energy more wisely. The changeover has also established a network-wide digital backbone that gives us better visibility across the

low-voltage network, enabling us to optimise our system performance, detect faults and trigger proactive maintenance more effectively.

HK Electric Managing Director, Francis C.Y. Cheng (2nd from right), joins distinguished guests to celebrate the completion of the advanced metering infrastructure and the near-full deployment of smart meters.

Electricity meter -

changing with the times

Did you know that HK Electric has replaced mechanical meters with modern smart meters? They enable real-time remote data access, allowing us to take readings more efficiently and customers manage their consumption more effectively.

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Business Review

CEO's Report

HK Electric's engineering team conducts

on-site drills and simulated voltage-dip tests ahead of the 15th National Games.

Enhancing the resilience of our substations ensures uninterrupted power supply.

Assuring reliability across the network

Augmenting network resilience remained a key focus in our evolution to meet the needs of Hong Kong's energy future. We moved forward with long-term projects, including the phased replacement of ageing cables and equipment and the expansion of the 22-kV distribution network.

Targeted infrastructure development progressed in the Southern and Eastern Districts of Hong Kong Island to support new and large-scale developments in the area, with land acquisition for new primary substations in the pipeline.

Installation of anti-flooding systems for substations in high-risk areas, has been ongoing in the past two years, and is almost completed. Bund walls, flood gates, sump pumps, and alarm systems have been installed at all substations located within

100 metres of the coastline at areas identified with high flooding risk. Enhanced flood-proofing measures have also been implemented at 145 out of 157 substation sites located at vulnerable sites beyond 100 metres of the coastline.

Operational readiness was reinforced through internal and joint emergency drills. These included joint emergency power restoration drills with relevant government departments for various venues of the 15th National Games, a coordinated drill with Hong Kong Tramways to test incident communication, and a black-rainstorm simulation

at Heng Fa Chuen with the Electrical and Mechanical Services

Department. These exercises enhanced cross-team coordination and preparedness during important events and climate emergencies.

HK Electric maintained stable operations throughout Super Typhoon Ragasa, with power generation and transmission systems operating normally. LPS remained fully operational, supported by enhanced flood-protection infrastructure and climate-resilience measures. The operation teams and emergency support teams stayed in the station throughout the typhoon period and worked two shifts to maintain continuous operation of the station. Four brief voltage dips were recorded during the typhoon attack, all triggered by faults outside our system and resolved within a second. During the period, only two low-voltage supply interruption cases occurred on Lamma Island, affecting five customers. Supply was restored before the typhoon signal was lowered in all cases.

Long-term infrastructure investments also contributed to system resilience. The replacement of overhead lines with underground cables, the deployment of smart technologies such as the Intelligent Distribution Solution, and real-time monitoring at high-risk substations enabled early detection of anomalies.

Engineering teams combined remote monitoring with safe on-site support to maintain reliable service and ensure rapid restoration where needed.

A reliability performance exceeding 99.9999% is a testament to the strength of disciplined asset management, effective predictive maintenance, comprehensive emergency preparedness and structured operational planning.

Cables - from up above to down below

Once-familiar pylons and overhead lines have been replaced with subterranean or in-tunnel cables, helping achieve a world-class supply reliability of over 99.9999%.

HK Electric Investments 18

Operation Review

HK Electric successfully launched a new Low-Voltage Management System (LVMS) in November 2025 - a major step in smart-grid innovation and operational excellence.

Leveraging SmartLink@HK Electric, a LoRaWAN wireless communication system deployed across our network and Lamma Power Station, the LVMS delivers near real-time visibility of the

low-voltage network, helping to improve operational efficiency, minimise fault impacts, and accelerate supply restoration.

The LVMS provides continuous monitoring of low-voltage network conditions through the in-house developed and patented

Low-Voltage Fault Indicators, a low-cost Internet-of-Things sensor for large-scale deployment and tailored to the site constraints of low-voltage customer supply points. This enables more efficient fault location, faster deployment of operation teams and more targeted remedial actions as sensor deployment progresses.

The LVMS also incorporates geographical data, providing an intuitive visualisation of the network through both geographic layouts and schematic circuit diagrams. This enhances situational awareness and supports more effective decision-making

in low-voltage operations.

The successful implementation of the LVMS represents a significant milestone in

HK Electric's digital transformation journey, supporting our goal of powering Hong Kong with resilience, intelligence, and innovation.

We supported Ocean Park's popular Giant Panda Adventure exhibit and its adjacent facilities with Hong Kong's first Low-Voltage Direct Current (LVDC) System designed to enhance supply stability and operational flexibility.

The LVDC System integrates alternating current (AC) and direct current (DC) networks to supply power efficiently. Leveraging advances in modern power electronics, existing cables that traditionally operate on AC systems can have their power capacity increased by operating under higher DC voltage. Direct current interconnects low-voltage distribution devices using existing

AC cables, allowing the system to operate as an additional back-feed source without the need for extensive civil works

for installing new cables. This approach enables more efficient and flexible power distribution while making use of established infrastructure.

System resilience is the key benefit of the design. In the event of a fault affecting part of the network, devices within the LVDC System can switch power sources rapidly. This capability reduces the risk of service interruption and enhances supply reliability for critical functions within the campus.

Operational data from the LVDC System is continuously monitored, providing visibility of performance and supporting timely intervention when abnormal conditions arise.

The LVDC System for Giant Panda Adventure demonstrates how easily it can be retrofitted into existing networks to enhance supply reliability and back-feed capability. The design and operating experience provide a practical reference for other mission-critical campuses or sites where supply continuity, flexibility and efficient use of infrastructure are required.

HK Electric introduces smarter power distribution at Ocean Park's Giant Panda Adventure, with an LVDC power cabinet installed in the distribution substation to further enhance power supply reliability for the Park's critical facilities.

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Business Review

CEO's Report

HK Electric customer service representatives provide professional and friendly support while consistently upholding the highest service standards.

Delivering service and operational excellence

In 2025, electricity sales to our 599,000 customers declined by 2.3% to 9,916 GWh (2024: 10,150 GWh) due to challenging economic conditions, the absence of a leap day, and milder weather.

Entering its second full year of operation, the offshore liquefied natural gas (LNG) terminal met more than half of LPS's natural gas needs and has helped us source natural gas at more competitive prices from the global market.

As always, we sought to keep tariffs affordable for our customers. In January 2025, the Net Tariff, which includes both the Basic Tariff and Fuel Clause Charge (FCC), increased by HK1.5 cents, or 0.9%,

per unit of electricity to HK167.0 cents, compared with HK165.5 cents a year earlier.

For 2026, the Basic Tariff increased by HK5.0 cents to HK127.9 cents per unit to support ongoing capital investment and higher operating expenses. Meanwhile, FCC reduced from HK44.1 cents per unit in January 2025 to HK35.4 cents per unit, resulting in a 2.2% reduction in the Net Tariff to HK163.3 cents per unit in January 2026.

All 18 pledged service standards were met or surpassed during the year. Customer satisfaction remained high, with an index score of

4.79 out of 5.

We continued to expand our digital service offerings to improve customer experience. A new online enquiry form streamlined customer interactions and improved service responsiveness.

Our "AI Powerhouse" platform provides a secure, centralised and systematised infrastructure for hosting and operating AI models.

Enhanced electronic application forms allowed residential customers to set up autopay during move-in. Customers can now settle electricity bills via the Faster Payment System (FPS) either by scanning the QR codes on the bills or through the Government's "iAM Smart" app. Following the practical completion of the rollout of smart meters, we released a series of educational videos to help customers make better use of our energy management tools.

Digital transformation pathway

Over our 135 years, we have always been an early adopter of technology and believe that artificial intelligence (AI), automation and connected technologies have the potential to drive improvements in safety, operational efficiency, and performance.

A wireless network named SmartLink@HK Electric using Long Range Wide Area Network (LoRaWAN) technology now covers our entire grid and LPS, creating an advanced communications platform that enables seamless data flow from sensors and field devices to data platforms. This greatly enhances our oversight of the network and generating units, and supports 24x7 monitoring with early detection of emerging issues.

We also rolled out an Intelligent Distribution Solution to enhance monitoring across our distribution substations. This newly deployed system integrates AI-powered CCTV and smart sensors to provide real-time surveillance and operational oversight, further improving reliability and situational awareness across the grid.

Bills and payments get digital

Electronic bills with e-payment options via FPS and other electronic means have replaced paper invoices, offering greater convenience and saving an estimated 22.1 tonnes of paper each year.

HK Electric Investments 20

Operation Review

The Smart Power Building Fund provides subsidies to building owners to enhance the energy efficiency of communal building services installations.

We created a reliable and secure foundation for innovation through AI with the launch of an in-house "AI Powerhouse". Built on multiple open-source large language models, the platform

supports both training and inferencing while safeguarding sensitive information. It will allow models to be created and tuned, and allow integration with internal systems to enhance efficiency.

Collaboration with academia will help us accelerate our AI capabilities and to this end, a Memorandum of Understanding was signed with Hong Kong Baptist University for research and development in this area.

We continued to digitalise our operational records, converting historical and in-service substation files into a searchable, paperless system using structured tagging and AI-driven classification.

Following testing, the platform release is targeted for March 2026.

Sustainability-first mindset

Lower-emissions generation from natural gas accounted for approximately 69% of electricity produced while about 31% was coal-fired generation, using low-sulphur coal with reduced ash contents. Emissions control facilities - including flue gas

desulphurisation plants, low-NOx burner systems and electrostatic precipitators - helped us minimise our impact on local air quality. Relative to the baseline year of 2005, sulphur dioxide emissions declined by 97%, nitrogen oxides by 85%, respirable suspended particulates by 92%, and carbon emissions by 42%, approximately. We met or exceeded applicable regulatory targets on all fronts.

We continued to leverage the Smart Power Services umbrella as our primary channel to support the community's energy transition.

In 2025, 210 non-residential customers received free energy audits under the Smart Power Energy Audit scheme. The Smart Power Building Fund approved 77 applications covering 161 buildings, providing subsidies to upgrade communal building services with eligible energy-efficiency projects.

A total of 10 non-profit-making NGOs and schools implemented projects to improve energy efficiency and adopt renewable energy with funding from the Energy-efficient Community Subsidy Programme offered under the Smart Power Services umbrella.

Each eligible building received a subsidy of up to HK$3 million.

The customer's renewable energy system uses solar panels installed on both the rooftop and façade to maximise power output.

Customer participation in renewable generation continued to grow. Under the Feed-in Tariff (FiT) Scheme, 80 new installations were connected. In total, 750 customer-side FiT installations are now linked to the grid with a combined capacity of 15.1 MW.

Our renewable energy installations, together with customer-owned installations, delivered around 16 GWh of renewable electricity.

We continued to help Hong Kong create greener buildings with lower embedded carbon by connecting building sites to grid supply through a Smart Power for Construction Site initiative.

The scheme received 20 requests in 2025, and since its launch has connected 60 construction sites to the grid, helping reduce approximately 45,000 tonnes of carbon emissions throughout the construction life-cycle.

HK Electric offers a one-stop Smart Power for Construction Site service, ensuring timely grid-electricity supply for construction sites while reducing carbon emissions and eliminating the air and noise pollution.

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Business Review

CEO's Report

Minimising and reusing resources

We monitor our operational environmental performance through regular audits covering electricity and water consumption, as well as waste management practices.

In 2025, a range of energy-saving measures, including the installation of LED lighting and the optimisation of the temperatures of chiller water and the operating schedules of chillers in manned buildings at LPS, resulted in an estimated 2.6% reduction in electricity consumption compared with that of 2024. Over 119,000 m3 of rainwater and plant processing water was collected and reused. We reduced freshwater consumption for LPS by 2.3% as compared with 2024. The by-products of electricity

generation such as pulverised fly ash and gypsum were also reused in construction and other activities.

In addition, 6,290 litres of turbine oil from the retired generating unit L3 were reused in units L6, L7 and L8 in 2025.

All waste generated from operations was separated in accordance with the Environmental Protection Department's Programme on Source Separation of Commercial and Industrial Waste, supporting higher recycling rates and reduced landfill disposal.

Support for electric transportation

Momentum in electric vehicle (EV) adoption remained strong across Hong Kong and we continued to be at the forefront as an enabler in installing charging infrastructure. Our Smart Power EV Charging Solution received about 470 requests under the Government's EV-charging at Home Subsidy Scheme (EHSS). A total of 120 EV charging-enabling infrastructure projects were completed in 2025, including 95 under the EHSS.

Support extended beyond individual installations. Technical advice, assessments of power supply and installation coordination were complemented by grid planning for large-scale fast-charging facilities at bus terminals and North Point Ferry Pier. HK Electric's own fleet includes 190 EVs and one electric bus, supported by

231 charging stations. HK Electric is also exploring the introduction of a new Time-of-Use tariff for residential EV charging in mid-2026, encouraging users to charge during off-peak hours and offering more flexible options. This initiative promotes low-carbon living and sustainable development.

Increase in the number of

HK Electric's EVs: 2025 vs 2021

191EVs

Our support for electric transportation extends to Hong Kong's iconic ferries.

174 EVs

2021

+9.8 %

2025

HK Electric Investments 22

Operation Review

HK Electric marked its 135th anniversary of power supply to Hong Kong in 2025, a milestone that highlights the enduring service behind

Hong Kong's electricity system. For over a century, generations of engineers and operation professionals have strengthened and modernised the network, ensuring it keeps pace with evolving demand, advancing technologies and rising environmental expectations.

A series of activities were designed to celebrate this important milestone focusing on sustainability, professional exchange, and institutional memory. In April, a tree-planting ceremony at Lamma Power Station (LPS) showcased the company's commitment

to carbon neutrality and biodiversity. Under-Secretary for Environment and Ecology Diane Wong was joined by about

100 stakeholders and green supporters in planting 135 trees and shrubs along the station's main bridge, which connects LPS, and Lamma Extension where all gas-fired units in operation or under construction are located. The bridge was named "Eco-Carbon Bridge", symbolising how these 135 seedlings will grow into mini carbon sinks supporting Hong Kong's low-carbon future.

In October, an Engineering Conference "When Tradition Meets Technology" brought together more than 100 professionals from different utility companies and engineering sectors to exchange operational insights, trace the evolution of engineering practices and explore emerging innovations shaping the future of the engineering industry. The company also marked the occasion

by publishing "HK Electric - The Endeavour Behind High Supply Reliability", a commemorative book that captures and passes on the knowledge, experience and wisdom of the many predecessors who helped build HK Electric's world-class distribution network.

The planting of 135 seedlings at the "Eco-Carbon Bridge" of LPS symbolises the company's commitment to carbon neutrality.

The launch of the Historical Corner brings the company's past to life.

A Historical Corner was established in the lobby of Hongkong Electric Centre to showcase landmark moments and exhibits from

our 135-year journey. Five interactive panels brought the company's history to life through more than 100 historical photos, videos and documents. By linking past decisions with present-day operations,

the exhibition illustrates how early innovations and long-term investments in generation, transmission and distribution infrastructure continue to underpin today's system performance - reinforcing the

importance of visionary planning and disciplined execution.

A "Homecoming Reunion" was also organised to reconnect retired and current colleagues across generations to express our gratitude to our predecessors. Their stories and experiences reminded us

that the company's achievements today are built on the steadfast efforts of those who came before us.

Engineering conference explores future directions in energy and sustainability.

"Homecoming Reunion" pays tribute to our predecessors.

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CEO's Report

We implemented a range of initiatives to reduce our own environmental footprint and align with ESG best practices.

WE EMBODY WE SUPPORT

transparency and inclusiveness in our activities

communities and groups where we can have a real impact

WE PRESERVE WE FOSTER

the environment and our heritage in partnership with the community

a safe, supportive and rewarding work

environment that promotes employee wellbeing

HK Electric Investments 24

Sustainability Review

Sustainability is central to our corporate strategy and long-term development. Throughout the year, we implemented a wide range of initiatives to reduce our own environmental footprint while maintaining a strong focus on environmental, social, and governance (ESG) best practices. Across generation, transmission and distribution, customer services and corporate functions,

our actions were guided by sustainability considerations, as we continued to support Hong Kong's decarbonisation objectives while delivering world-class supply reliability and service excellence.

The strategies pertaining to sustainability and ESG are set across the Group by a board-level Sustainability Committee.

A Sustainability Management Committee, led by the CEO, is responsible for cultivating an appreciation of sustainability across the Group, implementing initiatives under the strategy and ensuring adherence to them.

This Sustainability Review should be read together with the Operation Review, which outlines the technical and investment measures underpinning our transition towards clean energy.

Governance and commitment

HK Electric's sustainability framework is rooted in the Group's Vision, Missions and Core Values, as well as our Sustainability Policy. Addressing climate change is a material focus within our strategic direction and is aligned with Hong Kong's Climate Action Plan 2050. In support of

the objective to reduce the city's carbon emissions by 50% by 2035 compared with 2005, the company is switching from coal-fired to gas-fired generation and exploring a number of routes to achieve net-zero electricity generation. These include promoting renewable energy and exploring other zero-carbon energy solutions.

HK Electric also supports the six United Nations' Sustainable Development Goals (UNSDGs) that are most relevant to its business, including:

The company has established targets to track progress against these UNSDGs.

Minimising operational footprint and waste

Across our generation facilities, transmission and distribution networks, offices and support facilities, HK Electric applies a long-established 4R principles - reduce, reuse, recover and recycle - to manage resource use and environmental impact.

Building on these principles, we proactively prevent or minimise potential environmental impacts across our operations. At LPS, we consistently meet the Government's emission caps, staying well below the required limits. We also continue to drive down our water and energy consumption while reducing waste generation across our processes. Our green certifications, including ISO 14001, ISO 50001, Energywi$e and Wastewi$e Certificates of Excellent Level, and Carbon Reduction Certificates for major manned buildings, demonstrate our commitment to continuous improvement and sustainability leadership.

Sustainability Management Committee

1. Francis C.Y. Cheng

   Chief Executive Officer

2. Alex Ng

   Group Legal Counsel and Company Secretary

3. Wong Kim Man

   Chief Financial Officer

4. Raymond Choi

   Operations Director

5. Bill Ho

   General Manager (Corporate Development)

6. Dennis Wu General Manager (Human Resources)

7. John Liauw 2

General Manager 3 4 1

(Public Affairs)

5 6 7

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CEO's Report

Children enjoy interactive games at the Smart Power Gallery while learning about renewable energy and sustainable living.

Employees trade unused items, from bicycle helmets to milk frothers, at our first "Barter Market".

Our staff canteens served more than 524,000 meals in 2025. Enhanced meal planning and employee engagement initiatives, such as food pre-ordering, contributed to a reduction in food waste by around 680 kg in 2025 compared with 2024. Employees were also encouraged to participate in post-meal food-waste segregation, promoting a more environmentally responsible workplace culture. In recognition of these ongoing efforts,

our canteens at LPS and Head Office received the "Diamond" Class Food Wise Eateries accreditation from the Environmental Protection Department in 2025.

Resource circulation and reuse were further promoted through internal engagement activities. HK Electric organised its first internal barter event on World Environment Day 2025, encouraging employees to exchange reusable items. Around 200 items were collected for exchange, with surplus items either donated to charitable organisations or recycled via government recycling facilities.

HK Electric is a long-term signatory to the Government's Energy Saving Charter and 4T Charter, under which organisations commit to setting energy-saving targets, implementing reduction

measures, and reporting progress transparently. Internal targets covering electricity, water and paper consumption have been established, with staff engagement forming an integral part of delivery. Targets for our key office premises focus on reducing resource use and waste generation. As of 2025, electricity, water and paper consumption, together with waste generated, had decreased by 8.9%, 5.7%, 33.3% and 16.9% respectively compared with the 2020 baseline year.

Indoor air quality remained an operational priority. Office buildings continued to receive recognition under the Government's Indoor Air Quality Certification Scheme, supporting a healthy working environment for employees.

Raising green shoots in the community

Apart from minimising our own footprint, we also spread awareness of environmental conservation within the community.

Our Smart Power Gallery in Sheung Wan was revamped with new interactive exhibits illustrating Hong Kong's evolution towards

a smart, zero-carbon and caring city. Smart Power Gallery 2.0

Renewable energy for Hong Kong

Over two decades, we have expanded renewables generation from the pioneering Lamma Winds turbine and one of Hong Kong's largest solar power system at LPS to 750 customer-side renewable systems under our popular FiT Scheme.

HK Electric Investments 26

Sustainability Review

Appreciating our

eco and cultural heritage

Green Lamma Green, a tree-planting initiative launched in 2005, has blossomed into today's Green Hong Kong Green programme with

12 eco-heritage routes that showcase local history and ecology, enjoyed by more than 34,000 people so far through guided tours.

showcases topics including climate change and carbon neutrality, low-carbon energy transition, smart grids, energy management and electrification. A total of 106 guided tours and online learning activities were conducted in 2025 for students, community groups and other stakeholders, providing hands-on learning experiences for visitors.

The Happy Green Campaign remained our flagship umbrella under which a wide range of activities were organised to promote energy efficiency and green lifestyles among the younger generation, reaching out to around 120,000 people through various initiatives held during the year. As part of our efforts to promote waste reduction and decarbonisation, we organised the debut "All You Can Cook!" x "Happy Green Campaign" cooking competition, motivating the public to unlock their culinary creativity by transforming leftover food into delicious dishes. Winning teams received dining and shopping vouchers and also had their recipes showcased in an e-cookbook.

More than 800 schools across Hong Kong are members of the Happy Green Schools Network, receiving educational resources and opportunities to participate in over

100 Other Learning Experiences (OLE) activities that integrate energy efficiency, renewable energy and

low-carbon lifestyle into everyday living. About 100 secondary school students were trained as Happy Green Ambassadors, helping to promote green messages on campus and in the community, while 12 primary schools received funding to implement their green projects.

The annual Green Energy Dreams Come True competition encouraged students from secondary schools and tertiary institutions to propose innovative ideas to help make Hong Kong a more sustainable city. In 2025, 13 winning projects were

recognised for their creativity and practical applicability. In addition, 18 delegates joined a six-day learning and cultural tour to Chengdu in Sichuan Province, where they deepened their understanding

of clean energy and sustainability, marking the programme's first study tour outside Hong Kong.

The 12 eco-heritage routes operated under the Green Hong Kong Green campaign continued to attract strong public interest. During the year, more than 1,500 local citizens came to appreciate the

eco-heritage spots along our routes on Hong Kong and Lamma Islands through physical, online and virtual tours. Night safaris were also organised in August in support of the National Ecology Day, showcasing the city's nocturnal ecology and charm.

Winners of the Green Energy Dreams Come True competition join a six-day "Green Energy Study Tour" to Chengdu to learn about green energy and Chinese culture.

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CEO's Report

Serving with our hearts

Our volunteers have been a familiar sight across Hong Kong for over 22 years. From around

600 colleagues offering monthly electrical inspections for the elderly, we now have 1,100 "ambassadors of care", who support cultural events, deliver environmental programmes, and assist underprivileged communities.

Fostering care and inclusion

We consider it our responsibility to help the underprivileged and run a programme of service activities throughout the year. Our efforts are especially targeted towards enriching the lives of elderly members of the society.

The Smart Power Care Fund continued to support a range of programmes to assist low-income families. In 2025, we distributed 10,000 sets of cash coupons to customers under the Concessionary Tariff Schemes and households in financial need, helping them purchase daily necessities.

We partnered with the Government's Care Teams across Hong Kong Island to expand access to our range of care services including

the Concessionary Tariff Schemes and the Registration of

Life-Support Equipment Users. Information materials and e-leaflets were shared with the Care Teams and Home Affairs Department to convey these messages to eligible customers.

Care for the elderly remains a long-standing focus of our community work. Through the CAREnJOY programme, we partnered with local NGOs to deliver social, educational and recreational activities for senior members of the community. Popular initiatives included two "CAREnJOY Movie Days", which encouraged elders and their caregivers to socialise and stay connected, as well as an "Electrical Safety Fun Day" that promoted the safe and efficient use of electricity through games and quizzes.

Volunteering is deeply rooted in HK Electric's culture, reflecting our commitment to caring for the community and being appreciated by both our employees and the public. In 2025, our volunteers contributed a total of 4,849 hours across a wide range of services, from supporting major sporting and cultural events to visiting elderly people and preparing meals for people in need. Our employees also provided on-site assistance to those affected

by the Tai Po fire tragedy, complemented by staff donations to provide financial support for longer-term needs.

Our Catering Subsidy Programme supports NGO community centres in providing food and beverages to underprivileged families and those in need during

energy-efficiency promotional events. Electrical Safety Fun Day educates over 130 seniors and their caregivers on safe and smart use of electricity.

HK Electric Investments 28