On behalf of the board of directors (the “Board”) of Winfair Investment Company Limited (the “Company”, together with its subsidiaries, the “Group”), I am delighted to report the Group’s financial results and activities for the year ended 31 March 2025.

RESULTS AND DIVIDENDS

For the year under review, the revenue of the Group increased by approximately HK$1,394,000 (or 7.0%), to approximately HK$21,447,000, as compared to the preceding year. The Group recorded a loss of approximately HK$74,716,000, representing an increase in loss of approximately HK$24,967,000 (or 50.2%), as compared to the preceding year. The increase in loss was mainly due to an increase in fair value loss on investment properties.

In January 2025, an interim dividend of HK$0.02 per share was paid. The Board now recommends a final dividend of HK$0.12 per share, totaling HK$4,800,000. Subject to approval by the shareholders of the Company at the forthcoming annual general meeting, such dividend will be payable on or about 29 September 2025.

BUSINESS REVIEW

^# Return on Capital Employed (ROCE) = Loss before tax and interest divided by average capital employed

The increase in loss of approximately HK$24,967,000 was mainly due to an increase in fair value loss on investment properties during the year.

The rental income of the Group for the year ended 31 March 2025 was approximately HK$15,262,000, representing an increase of approximately HK$619,000 (or 4.2%), as compared to the preceding year. The increase was mainly due to an increase in occupancy rate.

Excluding a recurring valuation gain or loss of investment properties, the leasing segment recorded a profit of approximately HK$10,883,000 for the year ended 31 March 2025, representing an increase of approximately HK$427,000 (or 4.1%), as compared to the preceding year.

A persistent high interest rate, an increase in northbound consumption trend, tightening policy implemented by the banks and other uncertain external factors have brought challenges to economic recovery and Hong Kong property market sentiment remained cautious during the year ended 31 March 2025. Even though the HIBOR has been reduced from approximately 4% to less than 1% since May 2025, the property market sentiment remains weak due to an over-supply of property and a lack of confidence in the property market. Also, the economic recovery has been weaker-than-expected due to a trade war and tariff issues initiated by the U.S. government which affect Hong Kong’s exports. Given the above-mentioned unfavourable factors and uncertainties, the redevelopment project at No. 31 Fuk Tsun Street (“FTS Project”) will be put on hold to minimize negative impacts on shareholders’ interests, but the Group will continue to take due care to assess the cost and benefit of the FTS Project and review the market changes from time to time. The Group will relaunch and speed up the redevelopment plan, if and when the directors consider it appropriate, subject to prevailing market conditions.

The Group recorded a fair value loss on investment properties of approximately HK$108,906,000 (2024: HK$48,900,000) during the year under review. As at 31 March 2025, the Group’s investment properties portfolio amounted to HK$747,800,000 (2024: HK$856,700,000).

For the year ended 31 March 2025, the Group recorded no fair value gain or loss (2024: fair value loss of HK$130,000) on property held for future development.

As at the date of this report, there was no significant progress on the development.

Dividend income for the year ended 31 March 2025 increased by approximately HK$774,000 (equivalent to approximately 14.3%) to HK$6,185,000, as compared to the preceding year.

During the year under review, the Group recorded a fair value gain on equity instruments at FVTPL of approximately HK$18,497,000 (2024: fair value loss of HK$15,085,000) and a fair value gain on equity instruments at fair value through other comprehensive income (“equity instruments at FVTOCI”) of approximately HK$10,396,000 (2024: fair value loss of HK$10,241,000) which were recorded in the consolidated statement of profit or loss and other comprehensive income respectively. As at 31 March 2025, the Group’s listed share investment portfolios had an aggregate fair value of approximately HK$126,807,000 (2024: HK$95,328,000).

Details of the top five of the Group’s share investment portfolios as at 31 March 2025 for long-term investment and trading purposes are set out in Table 1 and Table 2 below, respectively:

Table 1: Details of the Top Five in the Group’s Share Investment Portfolio for Long-Term Investment Purpose

Note (1): Other securities included ten stocks listed on the Hong Kong Stock Exchange, five of which were current constituents of the Hang Seng Index and their principal businesses mainly included property and construction, conglomerates, financials, and information technology.

Note (2): The Group held less than 1% interest in the issued share capital for each underlying company.

Table 2: Det ails of the Top Five in the Group’s Sha re Investment Portfolio fo r Trading Purpose

Note (1): Other securities included 22 stocks listed on the Hong Kong Stock Exchange, eight of which were current constituents of the Hang Seng Index and their principal businesses were properties and construction, financials, energy, consumer staples, automobile, utilities and real estate investment trusts (REIT).

Note (2): The Group held less than 1% interest in the issued share capital for each underlying company.

During the year under review, all of the Group’s bank borrowings of approximately HK$16,295,000 as at 31 March 2024, which were denominated in Hong Kong dollars and at floating interest rates, were fully repaid in accordance with the repayment schedules as set out in the respective loan agreements. As a result, the Group’s gearing ratio, which was taken as bank borrowings to total shareholders’ equity, dropped from 1.5% to 0 compared to the preceding year.

Cash held by the Group as at 31 March 2025 amounted to approximately HK$132,365,000 (2024: HK$140,604,000). The Group’s outstanding capital commitments for property redevelopment projects, which were contracted but not provided for, were HK$12,050,000. The capital expenditures for redevelopment projects are expected to be partly funded by internal resources and partly funded by construction loans. The management of the Group continues to operate under a prudent financial policy and will implement all necessary measures to ensure that the Group maintains adequate cash and appropriate credit facilities to meet its future operating and project development expenditure. The Group will continue to closely monitor the market changes especially in interest rate trends, policies implemented by the Hong Kong Monetary Authority and the Hong Kong Government, and the banker’s lending attitude towards the real estate business. The Group will arrange new credit facilities for the Group’s property development when the Group considers it in the best of the shareholders as a whole. In the long run, the Group will continue to adopt an optimal financial structure for the best interests of its shareholders in light of changes in economic conditions.

The Group did not have any financial instruments for hedging purposes during the years ended 31 March 2025 and 2024.

ASSETS PLEDGED

As at 31 March 2025, no assets of the Group were pledged to bank to secure general banking facilities granted to the Group. As at 31 March 2024, the Group’s investment properties with an aggregate carrying value of HK$61,300,000 were pledged to a bank to secure general banking facilities granted to the Group.

CONTINGENT LIABILITIES

The Group did not have any contingent liabilities as at 31 March 2025 and 2024.

RISK AND UNCERTAINTY

The Group operates in an ever-changing business and economic environment. The Group’s business, financial condition and results of operation are subject to various business risks and uncertainties.

ECONOMIC RISK

The volatility in the U.S. and worldwide credit and financial markets, rising energy costs, inflationary pressure, a continuation of high interest rate environment, trade war, political turbulence, and geopolitical risk have increased the uncertainty of global economic prospects, economic growth and financial markets. The Group’s results of property leasing, property development and securities investment would be adversely affected. This also increases the cost of property development and finance costs on bank borrowings.

REGULATORY AND COMPLIANCE RISK

The Group is exposed to and subject to extensive government policies and regulations in Hong Kong.

The value of properties may fluctuate according to property market trends and policies implemented by the Hong Kong Government, which may change from time to time. All demand-side management measures for residential properties in Hong Kong have been cancelled since late February 2024, which may potentially stimulate the number of transactions. In addition, “Interim Housing” and “Lantau Tomorrow Vision” would have an impact on the local property market environment. Those regulatory measures and policies/vision will affect the Group’s decision on the acquisition of property for redevelopment and investment purposes. The Group would consider all risk factors as included in this section of “Risk and Uncertainty” when considering potential investment opportunities. The Group expects that the property market will be exposed to these risks.

For each potential material investment, a feasibility assessment will be carried out before the proposed acquisition, and focus will be placed on long-term prospects instead of short-term prospects. The Group would invest in capital expenditure and raise long-term borrowings based on periodic feasibility assessment in line with the market. The strategic risk regarding capital expenditure and financial arrangement is of significance nowadays and the Group will remain cautious and prudent in its investment and borrowing to minimize such risk.

RISK ARISING FROM CHANGE IN CONSUMPTION PATTERNS/CHANGE IN POPULATION

The net population movement will affect the local economic recovery, the rental yield and property market in Hong Kong.

The change in consumption patterns such as an increase in digital/online consumption and northbound consumption will also affect the business environment and consequently indirectly affect the performance of the Group. The value of properties and rental yield will be adversely affected.

PROJECT RISK

The value of the property is generally subject to prevailing market conditions, expected and recent interest rate trend, expected construction costs and income and the bankers’ lending policy or attitudes. The continued tightening of lending policies by the banks in Hong Kong has created obstacles to commence the redevelopment project. High interest rate increases construction costs. If the project is carried out under a high interest rate environment and economic downturn, the Group expects that the project risk, liquidity risk and risk of delay are very high. The Group will assess redevelopment feasibility regularly based on market conditions and review the market trend from time to time. The Group must be cautious and prudent in carrying out projects and borrowing in order to reduce these risks.

PRICE RISK

The actual and expected global and mainland China economic growth and global/local political factors affect the value and performance of listed shares in Hong Kong. Due to the unpredictable ever-changing economic and geopolitical environment, the securities market is expected to be more volatile. Volatility in the securities market may affect the value and composition of shares in the Group’s investment portfolio, resulting in timely buy/sell decisions in response to rapidly changing market conditions. The commercial risk in the equity market is safeguarded to a certain extent by the long-established expertise and experience of the Group in securities investment. Details of the Group’s price risk management are set out in note 35(d) to the Group’s consolidated financial statements.

FINANCIAL RISK

The Group is also subject to credit risk, liquidity risk, and interest rate risk in the normal course of the Group’s business. Particulars of financial risk management of the Group are set out in note 35 to the Group’s consolidated financial statements.

The Group has no significant exposure to foreign currency risk or fluctuations in exchange rates as the Group’s business activities are solely operated in Hong Kong and mainly dominated in Hong Kong Dollars.

CLIMATE CHANGE RISK

The Group may face risks associated with climate change in the long run. Possible rise in sea level resulting from ice melting, severe and frequent typhoon or extreme weather such as flooding or drought, and tsunami resulting from earthquake may arise due to climate change. These possible outcomes may not only be detrimental to physical properties or buildings but also affect the living standards of the global population. Particulars of climate change risk management are set out in the section headed “Climate Change” of the Environmental, Social and Governance Report (“ESG Report”) on page 30 of this annual report.

BUSINESS MODEL AND STRATEGY

The core business of the Group focuses on property investment and development in Hong Kong. The Group’s strategy for generating and preserving shareholder value is to invest in properties that offer reasonable returns. The Group continues to pursue growth opportunities and make appropriate adjustments to its property investment portfolio.

The Group also focuses on securities investment. The Group’s strategy for generating and preserving shareholder value is to adopt a prudent investment policy on securities which have long-term potential growth. The Group continues to exercise prudent and disciplined financial management to ensure sustainable growth.

EMPLOYEE AND EMOLUMENT POLICY

As at 31 March 2025, the Group had four (2024: four) employees (excluding two executive directors). The Company’s emolument policy is to ensure that the remuneration offered to employees, including executive directors and senior management, is commensurate with their skills, knowledge, responsibilities and involvement in the Company’s affairs. The remuneration packages of the Group’s employees are periodically reviewed objectively and determined based on each individual’s performance. During the year ended 31 March 2025, the total staff costs (including directors’ emoluments) were approximately HK$4,569,000 (2024: HK$4,453,000).

ENVIRONMENTAL POLICY

The principal activities of the Group are property and shares investment, property development and securities dealings. As the Group has not directly engaged in the construction of property during the year, it considers that it has not operated in any environmentally sensitive business during the year. The “Environmental Policy” was formulated by the Group as a guide for the environmental protection practices in the Group’s operations during the year.

For its daily operations, the Group continues to implement feasible measures to reduce paper and electricity consumption in the office. Also, the Group is inclined to let out its properties to eligible tenants with tendencies to carry out environmentally sustainable business practices. The Group believes that the existing laws and regulations do not have any significant adverse effect on the Group’s principal activities during the year ended 31 March 2025. Disclosure relating to the Group’s environment policy and performance is set out in the section headed “Environmental” of the ESG Report on pages 28 to 36 of this annual report.

COMPLIANCE WITH THE RELEVANT LAWS AND REGULATIONS

The Group continues to commit to compliance with relevant laws and regulations in Hong Kong, such as the Companies Ordinance, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”), and other local laws and regulations implemented by the Hong Kong Government. The Group believes the existing laws and regulations do not have any significant adverse effect on the Group’s principal activities during the year ended 31 March 2025. There was no confirmed non-compliance incident resulting in fines or prosecution during the year ended 31 March 2025.

STAKEHOLDERS OTHER THAN MEMBERS

The success of the Group hinges on the knowledge, skill, drive, passion, and enthusiasm of its employees. To enhance the value for shareholders of the Company, the Group engages its employees in its recruitment plan to ensure that the right individuals are in place, combining the right mix of skill and experience.

The Group recognises the importance of health and safety, and is committed to providing a safe and healthy environment for its employees and tenants. Also, the Group recognises the importance of maintaining a good long-term relationship with its core business stakeholders such as employees, tenants, agents, repairs sub-contractors, other professional bodies, who are all important to the development of the Group’s business. The Group has established at least 10 years of good relationship with its largest tenant, with good creditability. Also, half the number of employees has worked with the Group for at least 10 years.

PROSPECTS

Looking ahead, the Company’s business will face more challenges due to uncertain geopolitical environment and trade wars among different countries. Also, northbound consumption has become a norm that adversely affects the amusement, retail and catering businesses in Hong Kong. In addition, due to an excessive supply of residential flats in Hong Kong and economic uncertainty, the Hong Kong property market remains weak. Even though a HIBOR has dropped from approximately 4% to less than 1% since May 2025, bankers remain more conservative in their lending policies to property developers under unfavourable economic environment. In the short to medium term, the property market is expected to remain under pressure and the securities market to remain volatile. We will keep monitoring the market sentiment, interest rate trends, lending attitudes of banks, and make appropriate decisions in each business segment and property development plans which would be in the best interest of the shareholders of the Company. When appropriate, the Group will negotiate loan arrangements with banks to get the redevelopment projects back on track.

APPRECIATION

I appreciate the support and co-operation of my fellow directors and staff of the Group and thank them for their dedicated services and contribution.

Ng Tai Wai
Chairman

Hong Kong, 24 June 2025