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Marissa Wong: Good afternoon, everyone and welcome to CLP's 2025 Interim Results Briefing. I'm Marissa Wong, Director of Investor Relations. Joining me today is Chief Executive Officer, Mr. T.K. Chiang; and Chief Financial Officer, Mr. Alex Keisser. We lodged our 2025 interim results announcement with the Hong Kong Exchange at midday today. That announcement, in addition to this presentation, is available on our IR website now. This recording -- briefing is also being recorded, which you can also access on our website later. Before we begin, customary for me to remind you to read the disclaimer on Slide 2. And for today's briefing, T.K. will open with the business overview, followed by Alex with the financial results and then T.K. will provide his strategic outlook, finished with a Q&A session. So with that, I'll pass it over to T.K. to begin the briefing. Thanks, T.K.
Tung Keung Chiang: Yes. Thank you, Marissa. So good afternoon, everyone. Thanks for joining us. Now as we navigate an accelerating energy transition, shifting market dynamics and heightened geopolitics in the first half of 2025, the group has demonstrated resilience, anchored by the strength of our core Hong Kong business. However, our performance was moderated by specific market headwinds, including downward market tariff evolution in the Mainland and strong retail competition in Australia, both of which impacted this half's results. The fundamentals of the business, however, remains strong. Our commitment to operational excellence continues to deliver results. We maintained our track record of excellent reliability in Hong Kong, achieved commercial operation of new energy transition projects in the Mainland and successfully completed a major maintenance overhaul at Mount Piper in Australia, enhancing its flexibility and reliability. We are continuing to build the energy infrastructure needed to drive decarbonization and the foundation for future recurring earnings. We are funding this growth from a position of strength, underpinned by our strong balance sheet and our recently affirmed A stable rating by S&P. This foundation enables our disciplined capital allocation framework, which prioritizes high-value investments and efficient use of capital, including strategic partnerships in order to drive sustainable long-term returns. We approach the remainder of 2025 with a robust financial structure and clear pathways to continue to create value for our shareholders. Now turning to the highlights. As mentioned, our results this half was shaped by the market challenges in the Mainland and Australia. With that context, our group operating earnings before fair value movements decreased by 8% year-on-year to HKD 5.2 billion. This performance flowed through to our bottom line with total earnings decreasing by 5% to HKD 5.6 billion. Now the Board has recommended a second interim dividend of HKD 0.63 per share, bringing total interim dividends to HKD 1.26 per share, equating to a yield of 4.8%. Operationally, we maintained good performance on our safety and reliability metrics, with higher reliability in Hong Kong at 99.999% and less injuries in Australia. On the customer front, we saw growth in accounts in Hong Kong, while competitive market conditions in Australia resulted in a reduction in customer numbers. Generation performance reflected coal output reduction and we added more noncarbon capacity to our group portfolio. I'll now hand over to Alex to take you through the financial results.
Alexandre Jean Keisser: Thank you, T.K. and good afternoon. A snapshot of our financial results. Earning before interest, tax depreciation and fair value or EBITDAF was down by 5% to HKD 12.4 billion compared with the same period last year. Operating earning before fair value movement decreased by 8% and ended at HKD 5.2 billion. Adjusted for the fair value movement and items affecting comparability, total earning was HKD 5.6 billion, a decrease of 5%. Capital investments of over HKD 8 billion was lower than last year as despite the higher growth CapEx in 2025, our headquarter acquisition was finalized in 2024. Total dividends per share declared for first half 2025 was HKD 1.26, same as last year. Now let's go into the details. Our core Hong Kong business anchored the group's performance with higher contributions. As highlighted by T.K., industry-wide challenges in the Mainland and Australia plus one-offs in India resulted in lower operating earnings. There were small fair value movements, reflecting accounting losses on EnergyAustralia's forward energy contracts as of end of June 2025. This half's results including also a one-off item related to the realization of EnergyAustralia's Wooreen battery post introduction of our 50% joint venture partner, Banpu. All in all, the group total earning were moderately down by 5% to over HKD 5.6 billion. I'll now take you through the detailed performance and outlook for each business units. All balances will exclude foreign exchange to reflect the organic underlying performance of the business. Starting with Hong Kong. Hong Kong delivered yet another round of solid and dependable core earnings through our continued investment and reliable operations. We have made good progress on CapEx, standing at HKD 4.5 billion, primarily for key initiative to support Hong Kong's growth for the Northern Metropolis, new housing development, data centers and decarbonization agenda. While there was slightly lower overall electricity sales, largely because of last year warmer weather and an extra day, which set a high base for comparison, data centers continue to show steady growth. Lower interest cost and positive refinancing outcomes for the USD 500 million perpetual capital securities added to Hong Kong's strong results. Hong Kong continues to charge ahead, enabling a low carbon economy across all major sectors, just as road transportation, shipping and building. Demonstrating our leadership in decarbonization, we partnered with CNOOC, to deliver a Hong Kong first simultaneous liquid financial gas fueling and handling of cargo. Looking ahead, our focus is threefold: to continue providing reliable electricity at a reasonable tariff; to deliver HKD the 52.9 billion program of work in the development program; and to advance our decarbonization efforts toward government's 2035 climate target. Moving now to the Mainland, where financial performance was affected by market challenges. The combination of softer demand, accelerated growth in new generation capacity and wind resources viability contributed to earning reduction of 15% to HKD 870 million. Operationally, our nuclear joint venture plans delivered strong performance, highlighted by another outstanding performance from Yangjiang. However, lower tariffs for Yangjiang ultimately impacted operating earning from the nuclear portfolio. Renewable earnings were also lower, driven by lower wind resources, higher curtailment in the Northern and Eastern regions as well as lower tariffs. Successful commissioning of 3 new renewable projects in the first half as well as higher output from hydro provided a positive offset, demonstrating tangible value to our disciplined growth strategy, while our minority coal JVs were impacted by reduced dispatch from lower demand. Our reputation as a reliable foreign investor enable us again to secure a GEC offtake agreement in one of the largest green power purchaser in the world, enabling earnings visibility and positioning CLP as a provider of choice for green solutions. Our development pipeline is solid, with over 1 gigawatt of renewable and battery projects in various stages of development, including our largest wind and our first independent battery energy storage system. Looking ahead and in response to policy document 136 and the move towards market-based pricing, we will evaluate the renewable portfolio to maximize value. Capital allocation will be based on our value over volume principle and focus on risk return as we track policy implementation and supply and demand trends. Nuclear performance is expected to remain dependable. Also for Yangjiang, we expect increasing market tariff exposure and evolving taxation issues that's being reviewed. Turning to EnergyAustralia results, which overall reflected solid energy market performance but challenging retail conditions. The first half saw another period of intense retail competition coupled with cost of living pressure, leading to margin compression and reduction in customer accounts. Importantly, despite the retail performance in the customer segment, our increasingly flexible generation fleet performed solidly. The combination of favorable wholesale prices and the ability to capture value in volatility plus the recoupment of development expense for Lake Lyell more than offset higher loan depreciation plus the absence of one-off benefits from last year, namely Mount Piper's coal compensation and strategic value book outcome. The net impact was a decrease to HKD 167 million operating earnings. We continue to actively shape our energy transition with our growing portfolio of flexible capacity assets, which include 6 battery storage and 1 pumped hydro into operation or construction. With the objective to have EnergyAustralia self-funded and with a solid credit rating, a key component of our business model is to fund flexible capacity portfolio through a mix of contracted capacity and partnerships. This first half, we signed 2 partnerships, 1 with Banpu Energy to develop Wooreen, a 350-megawatt, 4-hours battery, is single largest investment to date. Another one with EDF Power Solutions to co-develop the potential 330-megawatt, 8-hours Pompadour energy system. Looking ahead, our focus will be to underpin a foundation for stability and earning growth with 3 key actions: ensure performance of our generation to respond to demand and price volatility in favorable wholesale price environment; improve our customer margin through pricing, recontracting activities and cost-saving initiatives, including expected longer-term benefits from the multiyear platform replacement; and lastly, advance our strong pipeline of flexible capacity projects, with new partnerships alongside EnergyAustralia's strong customer base. Apraava Energy operating earnings reached almost HKD 80 million, thanks to solid renewable performance and Jhajjar's continued reliability. Renewables performance was driven by higher wind resources and full commissioning of Apraava largest renewable asset, the 250-megawatt Sidhpur Wind Farm, while Jhajjar continued to uphold its reputation as one of India's best run thermal plant. Earnings performance was, however, offset by a one-off item for the KMTL asset, which including a noncash impairment charge of HKD 83 million, following a reassessment of more conservative assumption in the discount rate. Furthermore, in 2024, we had a retrospective tariff gain from prior years that was not repeated. Apraava made solid advancement in smart meter rollout with around 7 million meters under installation through near-term cost weighted on contribution. Finally, corporate expenses rose due to mark-to-market losses for aluminum hedges taken for transmission projects. Growth momentum remains robust, 15 projects won within 2 years for an equivalent of 2 gigawatt capacity. As India, the world's third largest electricity producer strive to reach 500 gigawatt of noncarbon capacity by 2030, our strategic joint venture will deliver its growth potential, funded by its own balance sheet. Finally, to Taiwan region and Thailand. Lower earnings contributed from Ho-Ping in Taiwan, was attributable to lower recovery of coal cost. Lopburi Solar's performance in Thailand remained stable. In line with the group's strategy to explore new opportunities in the region, higher corporate and development expenses were recorded in the first half for development in the Taiwan region and Vietnam. Together, earning decreased to HKD 19 million. Looking ahead, Ho-Ping, we'll focus on managing fuel costs and more broadly, we are evaluating renewable energy opportunities backed by long-term contractual agreements as part of our Taiwan region and Southeast Asia growth strategy. Turning finally to cash flow. Free cash flow generation was HKD 7.1 billion, down HKD 0.9 billion versus 2024 first half and explained by the underlying EBITDAF performance reduction of HKD 0.6 billion and unfavorable working capital movement of HKD 1.3 billion, which was mainly due to a one-off advanced receipt for EnergyAustralia in the first half of 2024 that was subsequently rebated to customers in second half. On the investment side, with our new headquarter now complete, overall capital spending was lower. The group invested HKD 7 billion in the first half, made up of HKD 5.1 billion for Hong Kong SoC business and nearly HKD 2 billion for renewable energy projects in the Mainland and Wooreen battery at EnergyAustralia. Cash payment for dividends was higher as a results of the higher final dividends for financial year 2024. Now our financial structure remains strong despite an increase in net debt to HKD 62 billion and with a sound liquidity position of close to HKD 30 billion. Our prudent financial management has been recognized by S&P, which reaffirmed our strong investment- grade rating for CLP Holding, CLP Power and CAPCO, all with stable outlooks. The team successfully raised over HKD 10 billion in competitive financing for Hong Kong SoC business, in addition to the refinancing of the USD 500 million perpetual capital securities, all with favorable credit spread. I'll now pass this over to T.K. for the update on the group's strategic priorities.
Tung Keung Chiang: Thank you, Alex. Now in our last result presentation, I outlined our strategy to deliver sustained value in a world that is rapidly moving towards electrification and decarbonization. Our execution is focused on clear pillars and I want to update you on our progress for each. It starts with investing in foundational growth in our core Hong Kong regulated business. Now building on that strength, we are systematically targeting opportunities in some of the fastest-growing energy transition markets that we are currently operating in, the Mainland, India, Taiwan region, Southeast Asia and Australia. Finally, our enabler for execution is our people, our regional and operational expertise and access to capital and partnerships, all capabilities that allow us to turn strategic ambition into results. Now our integrated utility business in Hong Kong is central to our continuous investments and dependable earnings, supported by predictable returns under its asset-based regulatory framework. We are executing the HKD 52.9 billion 5-year development plan to deliver safe and reliable power at reasonable price and decarbonization. With gas infrastructure now fully commissioned, the focus will be on expanding and modernizing our power systems for new development areas, data centers and supporting governments, economic and infrastructure agenda. We are also accelerating Hong Kong's energy transition, electrifying the transport sector, the second largest source of carbon emissions and working with government to enable more zero carbon imports to achieve the city's 60% to 70% clean energy targets by 2035. Delivering a world-class electricity system to support Hong Kong's long-term development sets a strong foundation for the rest of the organization to deliver returns and value to our customers and shareholders. Now almost 3/4 of all solar and wind power projects being built globally are in the Mainland, highlighting the country's rapid expansion of renewable energy. Just in this first half, some 270 gigawatts of renewables have been added, with another 3,000 gigawatt expected by 2030. Our initial target of less than 1 gigawatt a year is modest in comparisons but very much aligned with the Mainland's build-out. We are making solid progress, with just over 0.5 gigawatts of solar, wind and batteries in various stages of execution in the first half and importantly, new projects contributing to earnings. We are closely monitoring the recent introduction of policy document 136 market reform framework as provincial authorities develop implementation plans. During this transition, we'll assess our portfolio and pipeline and allocates capital based on 3 pillars: risk return; focusing on geographic selectivity; prioritizing expansion projects; and green power and green certificate contracts, maintaining our investment discipline with our value over volume approach. If project economics doesn't meet return threshold, we will not build it. And lastly, optimizing our funding. Our Chinese Mainland business is on track to be self-funded by 2026 and we will continue to leverage partnerships, a model we have successfully executed in Australia and India to derisk capital and enhance returns. Now to India, the world's most populous country and one of the largest energy transition opportunities. To meet its climate goals, India needs to invest up to 2% of GDP over the next decade. Apraava Energy is our strategic joint venture to capture these opportunities. It's a self-funded platform with local expertise and strong governance that gives us a stake in the growth without consolidating debt onto our balance sheet and it is delivering with projects across the energy value chain. In the first half of 2025, we achieved full commissioning of Sidhpur Wind Farm and progressed critical infrastructure with 0.5 gigawatt equivalent of transmission under construction and around 7 million smart meters being installed across 6 states. All in all, Apraava has an equivalent of 2 gigawatts low-carbon projects underway. Crucially, they are all underpinned by long-term government-backed contracts, locking in predictive attractive returns. The result is a capital-efficient and diversified growth engine that enhances our earnings and our growth profile. Now to Australia, where the retirement of coal capacity combined with supportive government policies like the Capacity Investment Schemes creates a favorable environment to deploy capital. Our strategy is short energy and balanced capacity, pairing contracted renewable energy PPAs with owned and contracted flexible capacity on a self- funded basis. For renewables, we are adopting a capital-light model, targeting 3 gigawatts of renewable energy PPAs by 2030. For flexible capacity assets like batteries and pumped hydro, we will develop those opportunities on our existing sites where there is access to grid connections and skilled workforce. For opportunities outside our footprint, we will secure capacity through contracting. Smaller flexible capacity assets will be funded on EnergyAustralia's balance sheet, while larger projects will be project financed and leverage strategic partnerships. Momentum is good with almost 1 gigawatt of committed firming capacity and we are actively exploring additional battery developments at our Mount Piper and Hallett sites. Our partnership model has yielded results in the first half, with EnergyAustralia signing 2 important partnerships. One, for the 350- megawatt Wooreen battery under construction with Banpu, the other for the 335-megawatt Lake Lyell pumped hydro project under development with EDF. Now these new dispatchable capacity, combined with our existing highly flexible gas and coal fleets, create a resilient and competitive portfolio that delivers reliable -- reliability and value in our evolving markets. Now turning to our broader growth ambitions in the Asia Pacific. We are actively evaluating renewable energy opportunities in Taiwan region and Vietnam, 2 markets that have significant growth potential. While we see potential, we remain disciplined. We'll only commit capital if an asset meets our requirements for profitable growth and dependable earnings. This includes securing the right partners and financing structure. We are working on creating the opportunities for future earnings and dividends. Now anchoring our efforts will be our continuous work to uplift and enhance capability. This is guided by our cultural framework of care, excellence and responsibility, which we are embedding throughout the organization by accelerating 3 core areas. First, workforce transformation. We are building the teams of the future, making our people more adaptive, skilled and connected. This reflects our care for our people and our commitments to their growth. Second, digital agility. We are modernizing our backbone. Our goal is to shift from doing digital to being digital. With Phase 1 of ERP go-live completed, we have the foundation to unlock efficiencies and drive more innovative, cost-effective solutions. Third, operational excellence. We are embedding a culture of excellence at every level. In Hong Kong, AI grid monitoring and drones enable early fault detection before they occur. In the Mainland, centralized control centers connecting renewable energy assets boosted efficiency. Across the group, upgraded platforms deepened customer engagement. Now these 3 pillars are interconnected and reinforcing. They fulfill our responsibility to deliver safe, reliable energy at a reasonable price and they are the engine that will power our disciplined growth for years to come. I'll now hand over the floor to Marissa to facilitate our Q&A session.
Marissa Wong: [Operator Instructions] So we have Pierre on the line. Pierre.
Pierre Lau: Can you hear me?
Marissa Wong: Yes, Pierre.
Pierre Lau: I have 3 questions. The first one is regarding your Australian business. If you look at your presentation material on Page 44, you show that the forward prices will follow downward trend in the next 3 year. So do you expect the margin of your energy business in Australia under EnergyAustralia in second half and through this year and 2026 to be lower than first half 2025? The second question is about your China business. If you look at Page 19 of your PPT, your target to raise your operational renewable capacity in China from right now 2.3 gigawatt to 6 gigawatt by 2029. We all understand that for new renewable capacity added from June this year onward, they will have to sell all their output on market basis and hence, it's likely to be of lower return. So what kind of expected return that you think you can get for this new project to be at from June 2025? And how much lower compared to the existing one? The last question is for CLP overall. Obviously, we see that your overseas business performance in the first half seems to be weaker than expected. So I want to know what managements have consider in your overseas business strategy and more of the performance in the first half? And that means, what is your overseas investment strategy right now compared to, say, 6 months or 12 months ago? What has been changed?
Tung Keung Chiang: Yes. Thank you, Pierre, for the questions. Now for the first one on Australia forward price. Actually, you can see 2026 forward price actually is at a more or less similar level as we currently have. Maybe going forward, in 2027, 2028, we -- right now, we do see a slight kind of a decrease. So actually, in -- when we look at the market, in particular, in the second half of this year, because the government has just announced the revise default offer, both the DMO and VDO in Australia and there are increases in those prices. So when we do the repricing, we will see -- we can increase our price. At the same time, we are also doing recontracting when our existing contracts of our customers come to an end and then we try to recontract. There's also opportunity for us to renew the price with a higher price. So we do see opportunity to -- for improved margins in the second half. At the same time, if you look at our retail business, I think one of the issues is about our costs. So we are actually also embarking on a cost optimization exercise, hopefully, to improve the efficiency of our operation to improve further efficiency. Over the medium term, we are also looking at replacing our customer platform to a more kind of state-of-the-art platform so that we can improve our product and services and also efficiency, customer experience to improve our customer performance -- customer experience, sorry. Now for the second question about China. Right now, we still maintain our targets of achieving about 6 gigawatt by 2029. Now -- but given the fact that there is new policy being launched and the fact that the details of the documents, the implementation details would be determined by individual provinces. And actually, a lot of them are still not available. So there are some uncertainties in the market. So because of that, while we would still continue to maintain the target but we will be more selective in identifying projects as well as making investment decisions. As I explained in the presentation, so we will look at geographical areas, where the demand is a lot more promising. The tariffs are higher as well as the grid curtailment risk is much lower. At the same time, we will also look at projects that are expansion of our existing assets so that the overall cost could be lower, improving our profitability. And last but not least, continue to ensure longer-term kind of green power contracts or green certificate contracts. Now I think one point I want to stress is that we will maintain our discipline in the investment decision. That means if the project cannot meet our target return, we will not invest. And up to now, we have not changed our threshold hurdle rate. So we'll continue to expand our portfolio with discipline. Now for the group overall performance, the first half definitely is weaker because of the headwinds in China and in Australia. Now as I mentioned, I think Australia, we do see the generation business is doing good. So that actually pays off through our continued investment in the reliability and stability of our generation fleet as well as in the flexible capacity, which definitely benefit from the wholesale market volatility. Now the issue is on the retail segment. And as I mentioned, we'll continue to improve the performance going forward. Now in China, I think there are a mix of reasons. Some of them are temporary. For example, our renewable energy assets, the wind -- the reduction in wind resources, we see it more a cyclical issue. And for the grid curtailment, I think it's also attributed to softened kind of demand growth as well as kind of accelerated capacity addition, partly, I think, is because of the document 136. So a lot of people, they rush completing projects before the so-called deadline. So that resulted in higher kind of surplus capacity. So I think in the coming short term, we do see this kind of uncertainty and volatility. So we'll continue to closely monitor the situation and to stay disciplined in our strategy execution.
Marissa Wong: Evan Li from HSBC has a question.
Ming-Hon Li: Evan Li here from HSBC. I have actually just 2 simple question. As sort of T.K. just mentioned in Australia, we are looking to achieve a certain amount of renewable energy projects, that's 3 gigawatts of contracted renewables and 1.6 gigawatts of flexible capacity by 2030. And I just want to check if this target will be achieved all by self-funding, even without any further potential divestment EnergyAustralia? Based on the cash flow and -- or the balance sheet position of EnergyAustralia, will the company be able to achieve that target based on the current funding situation? That will be my question #1. And second question would be like if we sort of have to look a little bit further beyond in the next development plan for the future 5 years and basically looking in the longer term, is there any upside in terms of CapEx spending in Hong Kong? If so, where those areas might be coming from? Yes.
Tung Keung Chiang: Thank you, Evan, for the question. Maybe I will ask Alex to answer the first question on the funding. So maybe I just try to answer your second question first. Now for the next development plan, I think we are in a very early stage right now. So I don't think I would have a lot of information to provide. But if I look at like more bigger picture, as I just mentioned in the presentation, in Hong Kong, for decarbonization, we have just finished the -- I would say, the first phase of investing and building the gas infrastructure in Hong Kong. So that has been finished. So the next step actually is to further decarbonize. We need to import more zero carbon energy from the Mainland. So maybe the initial part would be our clean energy transmission system that is now being built. But the amount will not be very significant but it does help. Now in the medium-term future, I think based on the government's Climate Action Plan 2050, there is a target of achieving 60% to 70% zero carbon in our generation fuel mix. So right now, I think we have been importing nuclear power from Daya Bay nuclear power station to Hong Kong. From a whole Hong Kong perspective, it amounts to about 25% of -- for the whole Hong Kong. So that means in order to achieve this 60% to 70%, apart from importing renewables, we do foresee that we need to import a lot more nuclear energy from China. And in that sense, we do need to have additional transmission infrastructure, cross-border infrastructure in order to import the power. So I would expect that might be one of the new requirements in the next big plan. But of course, details would yet -- are yet to be finalized. We still need to carry out more study and also discuss with development parties.
Ming-Hon Li: Sorry, T.K., if I could ask a follow-up on that just right on that. How significant would the Northern Metropolis plan of the government be for the future CapEx of CLP?
Tung Keung Chiang: Yes. Now for Northern Metropolis, it would be a development spending quite a long period of time. If you look at government's plan, I think, at least like 10 years. So for the current development plan, actually, it covers part of the CapEx requirements for the development. And I would expect it may be like a more kind of stable CapEx over a long period of time kind of profile rather than suddenly, there will be a upsurge in CapEx.
Alexandre Jean Keisser: To answer your question on EnergyAustralia, first, we have a strong cash flow generation by EnergyAustralia, with a plan to continue to operate our generating assets at performance following the upgrade that we did in Yallourn and the multi-contracting activity that we did in Mount Piper, plus the generation of what we do on our gas plant and we have a turnaround plan also as mentioned by T.K. on the retail side. So the funds from operation are on good path. Regarding now its debt capacity, we took the decision to do 2 things. First, to finance on the balance sheet of EA, I would say, the relatively small CapEx, which are the one which are linked to generation for maintenance, retail and the new small flexible capacity, while we decided to do 2 structures for renewable and flexible capacity of large side charge. For renewable, we decided to sign PPAs. While for flexible capacity of large side, we decided to contract the outcome of them with EA while doing a project finance and looking for partners. We were successful in our Banpu project partnership as you could see and we think that we'll be as successful in the future battery development. And we will also find the right partner for our Pompadour project with EDF. Now the question is more, will we be able to reach our targets? We believe so for the flexible capacity because as you could see, we have today a total of 1.1 gigawatt underway with a portfolio of feasibility of 0.8 gigawatts. So well above our 0.6 gigawatts and it's on a good path. The challenge is more finding the right renewable projects, which is an Australian challenge. Today, there's not enough renewable projects being developed in Australia. So we don't see that as a flexible -- so we don't see that as a funding challenge but more as a market challenge.
Marissa Wong: Thanks, Alex. And Evan, you can find those details on Slide 21, if you want to see the progress of the flexible capacity additions. Okay. Next question from Stephen Tsui, JPMorgan.
T. Tsui: So I have 3 quick questions. The first is about finance costs because HIBOR has been declining in the second quarter. So what's our second half outlook on the average interest rate and also the full year interest expense? Second question is about the dividends because we raised dividends per share last year. But given like the earnings headwinds in Australia, so shall we expect a stable dividend per share on a full year basis? And the third question is about the growth CapEx. Because if you look at the cash flow, we have around HKD 4 billion gap between cash inflow and outflow. Given that we may increase CapEx for the next SoC plan, will it be more like a prudent in the growth CapEx, especially in Mainland China renewable projects given the uncertainty of project return?
Tung Keung Chiang: Yes. Thank you, Stephen. So maybe I'll ask Alex to answer the first question on finance -- financing costs and also the CapEx question. So for dividend, our dividend policy has been giving a reliable and consistent dividend, targeting steady growth, provided the underlying business has a sustainable growth. So in the past, you have been -- you can see that our -- we have never reduced our dividend. So we will be very prudent when we want to adjust our dividend. And it's also our -- I would say, a practice that we'll try to maintain the dividend for the first 3 quarters. And then the last quarter will be based on the Board's decision on the overall dividend level in -- taking into consideration the underlying business performance. So I think we'll have more information, obviously, when we have the year-end result announcement.
Alexandre Jean Keisser: Regarding your 2 other question, if you allow me, I'll start with the question #3, which is our funding strategy and our ability to fund our incremental CapEx. Our funding strategy is quite clear and it's based on 4 principle. First, we want to have strong cash flow being generating by our business unit in order to define what the level of debt that we can target. Second, it's crucial for us to keep a strong credit rating in order to enable us not only to have the financial flexibility but the low cost of debt. As a reminder, with S&P, we have confirmed the rating level for CLP Group, for CLP Power and for CAPCO with stable outcome a few weeks ago. Third, as mentioned by T.K., we want to continue our dividend policy to growing dividends with the earning growth. And 4, I'm and coming to your question now, we want to be able to fund our CapEx, giving first privilege to our CapEx commitment that we have in Hong Kong and then putting in competition, the different alternatives that we have throughout the different region. In H1, there was effectively a gap, as you could mention but we are also moving toward a change of strategy by looking for the partners on where we have the growth. We did that a few years ago in the case of Apraava. We have just shown to you that we're able to do that in EnergyAustralia, with the partnership on a large flexible capacity. And we are currently executing our clean energy fund, which is basically putting a fund with limited partners for the grid parity project where the fund size would be HKD 4 billion for a total CapEx of HKD 20 billion, which will enable us not only not to have these fund anymore on our balance sheet. But on top of that, it enable us to sell our development, our construction and O&M capabilities in order to have a higher return. So this is the strategy that we have put in place. Now going to your first question, it's a good observation that our debt has increased by more than 10% but our funding cost, our interest has reduced in the first half. This is linked to 2 reason. The first one is, we have reduced our debt in the high-cost environment, which is the case of Australia, while increased our debt level in China, which is a low interest cost environment. And second, we did a material interest cost reduction in the case of CLP Power and CAPCO, which enable now to reduce our interest costs well below our 4% threshold. I will not give you what the outlook is for H2. But what I can tell you is that HKD 24 billion are coming to refinancing in the group and with the direction of the interest rate and the ability to be able to capture, as you mentioned, right, interest environment, as it was the case 2 months ago in Hong Kong, we hope to be able to reduce further our interest cost.
Marissa Wong: We have Rob Koh from Morgan Stanley in Australia on the line.
Robert Koh: Can you hear me okay?
Marissa Wong: Yes, we can.
Robert Koh: So I just have 3 questions for you, certainly all related to Australia, I apologize. I guess my first question, just to make sure that I understand the minor risk segmentation or restatement of earnings within EnergyAustralia. It says that the customer earnings there, you've removed a hedge book to make it more comparable. Should I be interpreting those customer earnings to now be your kind of actual customer results versus the default tariffs? Is that the way to think about that? So I guess that's question #1. Question #2, a bit more high level. The -- you mentioned the strategy in EnergyAustralia is to be short energy balanced capacity and that's not new. But as the price of capacity is going up, if your balanced capacity, does that mean that your net earnings leverage in the integrated business would actually be neutral? Or if that's the correct way to think about it? And then my third question is related to the Wooreen battery transaction. Congratulations on that outcome. And just very simply, is that kind of a deal template kind of a 50-50 JV with EnergyAustralia as operator and offtaker? And should we be thinking about that in -- because your pipeline has another 0.5 gigawatt in execution and another 0.8 gigawatt in feasibility. Is that the kind of template we should be thinking about for that pipeline?
Tung Keung Chiang: Okay. Thank you. Rob, maybe I -- can I ask maybe Alex, you answered the last one on the JV partnership. Now for the first one, I think -- now in a way, actually, the customer business in -- as you mentioned, the reason why we want to so-called remove the hedge book from the customer business is such that we can really understand the performance of the customer business in terms of our efficiency of operation as well as the product and services that we have been providing to our customer, whether they are really competitive. So actually, the customer business in Australia is more like a margin business. Based on government's default price, there's an assumed margin. So I think the competition is basically in twofold. One is efficiency. If we can have more efficient operation, then actually, we can have a more higher margin. At the same time, if we can package our product and services, in particular, those behind- the-meter products, then we may be able to earn a even high return. So I would not say that it's totally just based on price. And I think it's also depending on the so-called value adding to our customer. For example, if we can have solar plus battery, that could be a product that can give value to our customer. Now for the second question about the short energy and balance capacity, sorry, maybe I may not fully understand your question. Could you repeat that again?
Robert Koh: Yes. Sure, T.K. I guess you've talked about the company having leverage to higher volatility and being able to capture more volatility through the flexible plant. But then if the integrated operation of EnergyAustralia is balanced for capacity, does it -- is there an equal offset to that gain? Or is it net positive that process become more volatile?
Tung Keung Chiang: Now when we say balanced capacity, that is for kind of ensuring that we will not be long even during the maximum kind of demand period. But doing other times, the reason why we have short energy is that we can make use of the capacity for arbitrage when the wholesale price volatility is high. So that's where we can generate additional profit using our capacity without taking up additional risk if we have length in capacity. So that's the rationale behind.
Alexandre Jean Keisser: Maybe the answer to the third question, we help you also to understand the second one, is we have the strategy first to contract capacity if we don't have a cost competitive advantage. And we do that by contracting, of course, this capacity with our retail portfolio. When we consider that we have a cost advantage, meaning being on one of our site where we have land, transmission, water and people, we're able to capture, as we have proved last year, the CIS tender. When we do that then what we have decided as a model -- and this is our base model is to contract the capacity with EA, provide the O&M from EA, looking for project finance and Wooreen was 50% oversubscribed by banks and looking for the right partner for this. We plan to do the same thing for Mount Piper, if we have this project being developed. And we plan to do the same thing for Hallett. We have not done it yet because it was too small. It was only 50 megawatt. But if we extend it to another 150 megawatts, which would give a total of 200 megawatts, then the cost necessary in order to put the structure in place is outweighted a lot by the benefits of it. So we plan to do it. Now regarding the development of hydro plant with EDF. We have here kept only 25%, while they kept 75%. I think here, it's important not to see that solely as a structuring financial deal but it's -- there's not a lot of Pompadour being developed. So it was also important for us to look for a partner who have a lot of operational and construction capabilities in order to find -- to fund a partnership, bringing on top of money skills from the 2 in order to develop these projects.
Marissa Wong: Cissy Guan from Bank of America.
Cissy Guan: I have 2 questions. First of all, in the first half result, you mentioned that CLP has been making in progress upgrading the clean energy transmission system, linking Hong Kong with Daya Bay. Well, can you share more about that? For example, by how much has the capacity of the power transmission system has increased? And how much more CapEx will be needed if we were to import more clean energy from Mainland to meet the energy -- clean energy targets, like how much more CapEx you expect from the transmission system? That's the first question. Secondly, about EnergyAustralia, we've been a few partnerships on project level. And I would like to ask, going forward, will CLP continue to pursue project-level partnership or will EnergyAustralia actively looking for corporate level partnership? And thirdly, I understand that our shareholders value the dividend payout. And can we commit to a final DPS hike? Or what are the considerations for us to decide whether we'll have the DPS? And if we were to have DPS in the final dividend, will -- would that be HKD 0.05 increment just like before? Or we are flexible in terms of the magnitude?
Tung Keung Chiang: Okay. Thank you, Cissy. Now for the first question about the nuclear imports. So we are now, I would say, in the final phase of completing the [ CTS ]. So it will be completed early next year. So we are considering how to make use of that to import additional zero carbon energy to Hong Kong. But the amount will not be significant. And as you just rightly pointed out, in order to import more to Hong Kong from the Mainland, in order to fulfill the 2035 target as laid out by the Hong Kong government in the Climate Action Plan 2050, the amount will be much more significant. Of course, it will consist of both renewable and nuclear. But given the fact that I think in the nearby region, I think importing nuclear would be the major portion of that zero carbon energy. Now -- but I think right now, because it's 2035, we still have time. And also, right now, there is no, I would say, concrete sources identified. And we need to do like system planning, design in order to determine how to import the power to Hong Kong. So I think at this moment, it is still very early stage to have any estimation on CapEx required. But I think given the fact that it will be a cross- border kind of infrastructure, so I think it will be quite significant. But again, the fact is that it will take quite a long time to do. So I think when there are more information, then we maybe will share later. Now for the EA partnership, as I maybe mentioned previously, we are open in terms of partnership at project level or at enterprise level. But I think the more important thing is that EA really can optimize its performance. I think right now, in the generation assets, we are doing quite good. We have completed all the major kind of investment in upkeeping the reliability and safety. And the -- maybe the next kind of improvement area will be in our customer business, as I just mentioned, in order to reduce our costs as well as improving the platform to provide more kind of product and services to adding value -- to add value to our customer. Now in terms of our dividend payout, I also just explained that we have a dividend policy of providing a reliable and consistent dividend. And we -- based on history, we have never reduced our dividend. So we have -- we will be very cautious when we want to adjust our dividend upwards. So we'll look at our underlying business performance. If it is supported by more sustainable growth in future, then we will consider increasing our dividend. But at the end of the day, of course, the dividend will be approved by our Board.
Marissa Wong: Thank you, T.K. We have come up to time. So I'm going to have to close the briefing there. Thank you, T.K. and Alex, for answering the questions and providing the briefing. My team and I will be available if you have any other questions. We'll happily take them after this briefing. And thank you very much for all your very good questions today. With that, I will now close the briefing.
Tung Keung Chiang: Thank you.
Marissa Wong: Bye.
Alexandre Jean Keisser: Thank you.