Parc 66, Center 66, Jinan Wuxi Plaza 66, Shanghai Heartland 66, Wuhan Olympia 66, Dalian Spring City 66, Kunming Grand Plaza, Hong Kong Fashion Walk, Hong Kong Grand Gateway 66, Shanghai Riverside 66, Tianjin Palace 66, Shenyang Forum 66, Shenyang Multifaceted Design The Hang Lung brand is renowned for world-class developments designed by outstanding international architectural firms and showcasing perfect unity of aesthetics, creativity and practicability, topped with impeccable service standards. Our holistic approach to design has delivered consistently high standards in providing our customers with the ultimate lifestyle and shopping experiences. Management Discussion and Analysis 26 Business Overview 30 Mainland China Property Leasing Shenyang 44 Hong Kong Property Leasing 58 Hong Kong Property Sales Tianjin Dalian and Development Jinan 60 Mainland China Property Development 66 Major Properties of the Group 70 Financial Review Wuxi Wuhan Shanghai 76 Risk Management Kunming Hong Kong Shenyang Tianjin Dalian Jinan Wuxi Wuhan Shanghai Kunming Hong Kong Management Discussion and Analysis Business Overview Upholding the We Do It Right business philosophy, Hang Lung Group remained committed to building world-class commercial projects in key mainland cities and to enhancing our core assets, amidst the ephemeral challenges in the external environment. In 2014, Hang Lung Group reported continual growth of mainland China and Hong Kong property leasing portfolios. Couple with taking advantages of improved Hong Kong residential market sentiment, the Group achieved strong financial results. PROPERTY HK$ Million LEASING HK$7,792 Million 8,000 TURNOVER 44% 7,000 6,000 5,000 4,000 56% 3,000 Mainland China 2,000 Hong Kong 1,000 ^ Financial year ended June 30 0 2010/ 2011 2012 2013 2014 2011^ AREA OF Mainland China Portfolio Hong Kong Portfolio INVESTMENT PROPERTIES 25% 36% 36% 43% 1,911,000 740,000 sq.m. sq.m. Commercial 9% Ofce and Industrial/Ofce Residential & Apartment 4% Car Park 17% 30% 26 For the 12-month period ended December 31, 2014, our core business, property leasing continued to achieve steady growth in a challenging business environment in mainland China and Hong Kong. Property leasing turnover and operating profit rose 8% and 4% to HK$7,792 million and HK$5,987 million, respectively. Riding on improved sentiments in the Hong Kong residential market, the Group launched the sales campaigns for The Long Beach and The HarbourSide in 2014. As a result of the sale of a total of 412 residential units and some car parking spaces, our property sales turnover reached HK$9,814 million. Overall profit margin realized was 75.6%. VALUATION OF INVESTMENT HK$ Billion PROPERTIES AND 200 PROPERTIES HK$154.0 Billion UNDER 150 DEVELOPMENT AS AT DECEMBER 31 100 50 0 2010 2011 2012 2013 2014 COMPLETION Million sq.m. AREA OF Total Gross Floor Area: 3.9 Million sq.m. INVESTMENT 4 PROPERTIES IN 1.7 MAINLAND CHINA 3 2 2.2 1 Existing Newly completed 0 2010 2011 2012 2013 2014 2015 Upon completion of existing committed projects HANG LUNG GROUP LIMITED 2014 ANNUAL REPORT 27.