Annual Report 2016 - page 221

Annual Report 2016
207
Risk Factors
C. Other Risks
(continued)
3.
The development of, and future trends in Hong Kong and the PRC property industries have been the focus of
numerous media reports. As a leading property developer in Hong Kong and the PRC, information about the Group or
its projects appears frequently in various media outlets. Some of these media reports contain inaccurate information
about the projects of the Company and the Group. There can be no assurance that there will not be false, inaccurate
or adverse media reports about the Group or its projects in the future. In particular, the Group may be required to
respond or take defensive and remedial actions with regard to such inaccurate or adverse media reports, which may
adversely divert its resources and our management’s attention and may materially and adversely impact its business
operations. Moreover, there can be no assurance as to the appropriateness, accuracy, completeness or reliability of
any media reports regarding the Company. The Group disclaims any media reports contain information that is
inconsistent or conflicts with the information contained in its annual report and circulars. Investors should not rely on
such information in making a decision as to invest in the company’s shares and/or its listed securities, and should
rely only on the information included in its listing document.
4.
The Group has insurance in place in relation to its various development projects, including third-party and earthquake
insurances. In general, such insurances do not cover wars, riots, terrorism and acts of God, any of which case would
result in an unpredictable amount of losses and have negative impacts on the Group’s businesses and cash flow to a
certain extent.
5.
Certain businesses of the Group are operated under concession rights, including the Hong Kong Convention and
Exhibition Centre, public bus services, public ferry services, operations of duty-free shops and toll roads etc. The
Group cannot assure that such concession rights can be renewed upon their expiry, and the conditions could be
worse off than the existing ones even if renewals are approved.
6.
Notwithstanding the appropriate measures adopted to protect the Group’s computer system and information, the
Group cannot assure that there will be no occurrence of unlawful break-ins or misuse with rapid technological
advancement, which may affect its businesses to a certain extent.
7.
The International Accounting Standards Board has from time to time issued new and revised International Financial
Reporting Standards (“IFRS”). As accounting standards continue to develop, the International Accounting Standards
Board may in the future issue more new and revised IFRS and the Group may be required to adopt new accounting
policies which might or could have a significant impact on the Group’s businesses, financial condition, results of
operations or growth prospects.
D. Major Risk Factor on Subsidiaries
New World China Land Limited (“NWCL”)
1.
NWCL’s property development business is highly susceptible to the prevailing condition and performance of the PRC
property market which is heavily regulated by the PRC central and local governments. In response to the domestic
and international market volatility, the PRC Government will, from time to time adjust its monetary and economic
policies to monitoring the rate of growth of the PRC economy and economies of local areas within the PRC. Such
policies and regulations would have significant impact on the PRC property market where NWCL operates.
2.
Economic conditions in the PRC are sensitive to global economic conditions, and it is impossible to predict how the
PRC economy will develop in the future and whether it might slow down due to the global crisis or experience a
financial crisis in a manner and scale similar to that in the United States and the European countries. As the real
estate industry is sensitive to macroeconomic trends, real estate prices tend to fluctuate along with the change of
macroeconomic conditions.
3.
These and other issues resulting from the global economic slowdown and financial market turmoil have adversely
affected, and may continue adversely affecting, the Chinese market and consumption capacity in this market, which
may lead to a decline in the general demand for NWCL’s products and erosion of their sale prices. In addition, any
further tightening of liquidity in the global financial markets and in China may negatively affect our liquidity. Therefore,
if the global economic slowdown and turmoil in the financial markets crisis continue, our business, financial condition
and results of operations may be adversely affected.
4.
NWCL’s property development operations face competition from both international and local property developers
with respect to factors such as location, facilities and supporting infrastructure, services and pricing. NWCL competes
with both local and international companies in capturing new business opportunities in the PRC. In addition, some
local companies have extensive local knowledge and business relationships and/ or a longer operational track record
in the relevant local markets than NWCL while international companies are able to capitalise on their overseas
experience to compete in the PRC markets. Intensified competition between property developers may result in
increased costs for land acquisition and an over-supply of properties, both of which may adversely affect NWCL’s
business and financial conditions.
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