CHAIRMAN'S STATEMENT (CONTINUED)
PROSPECTS
China and the United States have engaged in active negotiations on the Sino-US trade conflict in recent months. After posting various optimistic messages on twitter, President Donald Trump announced on 24 February 2019 that the US government would delay the imposition of an additional 25% tariff on Chinese goods beyond 1 March, following the constructive progress of the seventh round of Sino-US trade negotiation. The markets expected that favourable results could be concluded ultimately. The stock markets in China, Hong Kong and United States rose significantly in January and February 2019. Furthermore, in order to tackle the economic slowdown, the Chinese government had taken a series of actions, including lowering the bank reserve ratios, encouraging banks to make loans to SMES, reducing tax, speeding up the approval process in bond issuance, lessening foreign restrictions in entering the A-shares market and relaxing the limitations of foreign company on controlling shareholding, etc. In delivering his "Government Work Report" on 5 March 2019, Premier Li Keqiang announced policies on taxes cut, corporate financing, domestic investment and incentives for foreign investments to stimulate the economic growth. Reductions in tax burden and social insurance contributions of
enterprises amounted to nearly RMB2 trillion, all of which will revitalize the economy. It is believed that the economy in China will improve noticeably in mid to late 2019.
Hong Kong economy grew 2.9% year-on-year in the third quarter of 2018 over the previous year. The full year growth forecast in 2019 had been revised to 3.2% by the government. The US Federal Reserve's forecast for this year's interest rate hike has moderated. The Fed announced that they will adopt a more patient strategy in their future monetary policy. The mortgage rates in Hong Kong remain stable, due to ample funds in the banking system, supporting the property market. The various measures to increase the housing and land supply announced by Mrs. Carrie Lam, the Chief Executive, in her 2018 Policy Address, will mostly take time to become effective. It is expected that this year the downward price adjustment of residential properties on average will be limited.
Following the disposal of all the residential units of Harbour Park and the other projects in 2018, the Group is now focusing on the development of the two projects in Tuen Mun and Kweilin Street. It is expected that the sale of the Tuen Mun project will commence by phases at year end. As all the completed residential properties had been sold, the rental income from the commercial arcades will be the main source of income of the Group in 2019. Barring any unforeseen circumstances, the profit of the Group this year is expected to be less than that of 2018.
CONDOLENCES AND ACKNOWLEDGEMENT
Mr. Leung Hay Man, our late Independent Non-executive Director and a member of the Audit Committee and the Remuneration Committee, regrettably passed away on 11 October 2018. Mr. Leung had been the Director of the Company for over thirty-six years. He made valuable contributions to the Company during his long tenure of office. We send our deepest condolences to his family.
Mr. Wong Man Kong, Peter, our late Non-executive Director, regrettably passed away on 11 March 2019. Mr. Wong had been the Director of the Company for over twenty-seven years. He made valuable contributions to the Company during his long tenure of office. We send our deepest condolences to his family.
On behalf of the shareholders and the Board, I would like to take this opportunity to express appreciation to all our staff for their dedication and hard work during the year.
Dr. Lam Ko Yin, Colin Chairman
Hong Kong, 14 March 2019
Hong Kong Ferry (Holdings) Company Limited Annual Report 2018