Annual Report 2015
RISK FACTORS
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RISK FACTORS
The Group’s businesses, financial condition, results of operations and growth prospects may be affected by risks and
uncertainties directly or indirectly pertaining to the Group’s businesses. The risk factors set out below are those that
could result in the Group’s businesses, financial conditions, results of operations or growth prospects differing materially
from expected or historical results. Such factors are by no means exhaustive or comprehensive, and there may be other
risks in addition to those shown below which are not known to the Group or which may not be material now but could
turn out to be material in the future.
A. RISKS RELATING TO PROPERTY DEVELOPMENT, SALES, INVESTMENTS AND HOTEL
OPERATIONS
1. As most properties of the Group are located in Hong Kong and the PRC, the Group’s businesses and prospects
are principally dependent on the performance of property market in Hong Kong and the PRC. The property
market in Hong Kong and the PRC are affected by a number of factors, including changes in social, political,
economic and legal environment, as well as changes in the government’s financial, economic, monetary,
industrial and conservation policies. The Group is also susceptible to changes in economic conditions,
consumer confidence, consumption spending, and changes in consumption preferences. Other factors beyond
the Group’s control, including personal and family disposable income levels and mortgage market condition
etc., may also affect consumer confidence and demand for properties in the Group’s location of operations.
Any adverse changes, price control on property prices or rental value and restrictions on the growth of property
market imposed by the relevant governments in the locations where the Group operates may have material
adverse impacts on its businesses, financial condition, results of operations and growth prospects.
2. Under the influence of government policies and present economic trend of Hong Kong, the PRC and the
world, property markets in Hong Kong and the PRC have witnessed volatility in recent years. In future, any
downturn or financial turmoil in Hong Kong, the PRC and the global economies may have a material adverse
impact on the Group’s potential purchasers or tenants, which will in turn lead to a decrease in the general
market demand for the Group’s properties and its property price or rental value.
3. The Group’s results of operations may fluctuate according to the progress of property development and the
timing of its property sales. Turnover from property sales is recognised on the date of the sale or on the
date of issue of the relevant occupation permit, whilst the economic benefit and the risks and returns are
respectively accrued to the Group and the purchasers. The Group’s revenue and results may vary from one
period to another depending on the number of properties completed in a specific period, or the time and
capital required for the completion of construction projects. The timing of its property sales is dependent on
the lead time required for the Group to obtain the requisite government approvals, which is beyond the control
of the Group.
4. The property industries in Hong Kong and the PRC are regulated by the respective governments. In general,
property developers must comply with requirements mandated by the applicable laws and regulations, which
include policies and procedures established by the local governments for implementation thereof. Property
developers in Hong Kong and the PRC, in particular, must obtain relevant permits, licenses, certificates and
other approvals at various stages of property development for the purpose of its property development
business. The grant of relevant permits, licenses, certificates and other approvals is dependent on whether
certain conditions set by the relevant authorities are fulfilled as they are often subject to governmental
discretions and new laws, regulations, and changes in polices that are in relation to the property industry.
