Chairman's Statement

DEAR SHAREHOLDERS,

On behalf of the Board of Directors (the “Board”) of HONG FOK CORPORATION LIMITED (the “Company”) and its subsidiaries (the “Group”), I am pleased to present our Annual Report for the financial year ended 31 December 2024 ("FY2024").

REVIEW OF FY2024

In FY2024, the Group continued to recognise revenue mainly from rental income and sales of its properties. Revenue for the year was lower by approximately $6 million compared to FY2023.

The Group recorded a gain of approximately $12 million from the revaluation of its investment properties as at 31 December 2024 which is lower than the gain of approximately $87 million as at 31 December 2023.

For FY2024, the Group posted a net profit attributable to Owners of the Company of approximately $24 million as against $88 million in FY2023.

The Group was supported by a strong balance sheet as at 31 December 2024, with net current assets of approximately $103 million, of which cash and cash equivalents was approximately $34 million.

The Group maintained a sound financial position in FY2024 with its net interest bearing debt to equity ratio at only 0.22. Net asset value per share was $3.61.

PROSPECTS FOR FY2025

In 2025, the hotel industry is likely to continue to face certain economic and operational challenges. YOTEL Singapore Orchard Road (“YOTEL”) will focus on improving operational efficiency, implementing cost saving measures and increasing guest satisfaction to drive loyal and repeat guests on top of new visitors to YOTEL.

Geopolitical uncertainties make it difficult to predict the direction that interest rates may be headed for the short or medium term. If mortgage financing costs in Singapore do decline in the course of 2025, this may enhance affordability and encourage both first-time homeowners and upgraders to enter the private residential market. However, demand for residential units from foreigners will stay muted as long as the current level of Additional Buyer’s Stamp Duty is in place. The Group is nevertheless expected to continue to recognise revenue from the sales of its residential units in Concourse Skyline.

The Singapore office market is expected to face modest growth amidst economic uncertainty in 2025. Leasing activity of office units has been weighed down by high fit-out costs and hybrid/flexible work arrangement. With tenants increasingly seeking buildings with green mark certification and eco-friendly features, the Group will continue to adopt and explore sustainability practices. The Group will also boost its targeted marketing efforts to retain tenants and to attract new tenants to its commercial properties. The rental income for the Group’s investment properties is likely to remain stable.

APPRECIATION

On behalf of the Board and Management, I would like to thank our shareholders, tenants, customers, business associates and bankers for their continued support to the Group.

The Board would also like to thank our Management and staff for their commitment, dedication and hard work.

CHAN PENGEE, ADRIAN

Non-executive Non-independent Chairman