1H 2022 Financial Results Briefing

Good morning everyone. Welcome to Capital N Investments Financial Results Briefing for FISHAF 2022. I'm Grace Chen, Head of Investor Relations for Capital N Investment or CLI. Before we know it, we are more than halfway through the year and in just a moment we will invite our group CEO, Miss Le Chikun and group CFO, Miss Andrew Lim to share with you how we have done for the year so far. And our CEO's overseeing CLI's various keeping businesses are also here to answer your questions. And today we are very happy to be joined here at our broadcast venue at Capital Tower by analysts from various research houses as well as members of the media. They will be asking questions during a Q&A later.

And if you're watching this broadcast, you are also very welcome to send in your questions by typing in the Q&A box at the bottom of your screens. And without further ado, I would like to introduce the members of our panel today. So first and foremost, we have Mr. Le Chikun, CLI's group CEO. This I Chikun is Mr. Andrew Lim, CLI's group CFO. Next we have Mr. Jonathan Yap, CEO of CLI's listed funds, Mr. Kevin Go, CEO of lodging and the escot's message. Moving on to my left, we have the heads of our real assets teams. Mr. Simon

Tracy, CEO of private equity real estate, as well as Mr. Patrick Buchalk, our CEO of private equity alternative assets. And bring us first hand news from China, a very core market to us. We have Mr. Pwatsi-Siang, CEO of China joining us virtually from Shanghai. So now I'd like to invite Mr. Le Chikun to address us. Hi, morning, everyone. So nice to see so many of you in person. At least I don't have to speak into the camera. Again, I mean, in the last two years, many of the briefings, you know, we're just talking directly into the camera. I think the darkest days of COVID-19

that affected many of us in the corporate world and the personal life should be behind us. Actually, we are all quite hopeful when the year started, you know, when the global economy started to open up countries started to live restrictions. And we actually see the incomes and portfolio, actually performing quite well across the various asset classes and markets. Well, you know, shortly into the early parts of the year, we started to see things getting a little bit g-tary. First with the Russian-New Korean conflict. And then the FETs and the various central banks around the world started to, you know, live interest rates.

I think faster than many of the economies have predicted or will prepare at least towards the end of last year. And of course, the other thing that true or spanner in the works was, you know, China implementing a strict COVID-0 policy, especially in Shanghai, which led to a major lockdown. And that's the backdrop, you know, that we were dealing with in the first half of the year. I mean, despite that, you know, I think we produce a credible set of results operating PEPME has strengthened. And that's a largely due to the increase in terms of the fund management fees. And also in the improvement in the lodging business. I still recall, you know, in the

in the many conversations that I have with the investors and the analysts last year when we were doing the restructuring, you know, asking whether the lodging business should be part of the CRI business. But I think with the recovery that we are seeing in the lodging business with the greater signings and the recent acquisition of an awkward done by Kevin Steem, I think it's starting to demonstrate that, you know, it delivers strong income and we'll continue to do so as the lodging sector continues to improve and we'll fit nicely to the bottom line. I think the from a results perspective, overall, I've known numbers could have done better if not for two reasons. One is really around the COVID-0 policy in China, especially in Shanghai,

where we have the biggest exposure that affected the contributions from the lodging sector. Secondly, in terms of the rebates that we need to provide for to help the retail, the tenants, now we're shopping malls. But I think that's largely going to be one of as the economy start to open up and, you know, the Chinese government taking a more enlightened approach towards the management of COVID and around all the restrictions, we believe that the sector will continue to improve. The other reason, okay, is largely around the capital recycling. First half last year, we recycle about 13 billion, largely due to a recapitalization of the RFO city portfolio,

13 billion, you know, that's quite a significant. This year so far, today we've done about 1.6 billion. I think we are still quite confident that we should be able to deliver the 3 billion target that we have set out to do. So there's quite a bit of work to catch up in the second half of the year, apart from capital recycling. We'll continue to focus in terms of the execution of the funds strategies. Happy to highlight that, you know, we have strengthened the teams at the country levels to look at the off market type views and Simon has also built up capital raising teams. Over the next few months, one to two months, we should be able to share more fun products and also

in terms of the acquisition. I just want to highlight that. I mean, things do take time to cook, so just be patient with us, but definitely things are happening. And before I bust a mic to Andrew who will go through the numbers in greater detail, I just want to, I mean, something that that's not news to us. We are entering into a very volatile environment. Things are extremely uncertain. We have economies and many of the major firms predicting that we will go into recession. Interest rates have gone up. Because of capital have gone up for many, many companies. And that's why, you know, we have to be a lot more careful in the way we look for deals. We have seen

corrections in the public markets. And we have not seen the same level of correction in the private market site. So, you know, we are definitely on the lookout for deals, but we will be very careful in the way we pursue growth. Okay, growth is still at the top of our mind, but we are not going to pursue growth or growth. Growth must be done on the basis of how we can create value for the LP's for unit holders and how do we create long-term value on earnings per share basis for CLI investors. So, that's really the message that I hope to be able to share with all of you. So, without further ado, I pass it to Andrew. We'll go through the details and we can have a

mock you and later. Thanks, Andrew. Thanks, Andrew. Thanks, Chikun. Good morning, everyone. Just a quick one. First of all, thank you for joining us this early with apologies to CDL. We'll try to get you away so that you can attend CDL. We call last time we had the same problem. So, we seem to keep converging. This must be an auspicious date that we keep picking. I'm actually reminded that we're not even one year old. So, to Chikun's point, if you think about the last 10, 11 months, a lot has happened. And we are executing as quickly and as sensibly as we can. But at the same time, very mindful of the very rapidly evolving macroeconomic environment. So, as you look at our results and you look at what we're focused on, it's actually helpful for

me to anchor back to the fact that, and this time last day, we were still capital land. We're not even CLI yet. So, we are still early days in our journey. Okay, very quickly on summary of one H to us, this was a half of two halves. Right? Q1, very strong, lots of evidence of recovery coming out of pandemic operating environments, normalizing travel, opening up. And then I think everyone was hit by a lot of events, conflating to produce a difficult elevated VUCA environment. As you can mention, rapid inflation supply site, demand site coming together, unprecedented. None of us have seen this in over 30 years. Conflated by geopolitical concerns, Russia,