In the past year, Economy of Hong Kong rose by 3.8% year-on-year in 2017 amidst rising exports, strong domestic demand and rebounding tourism. On the other hand, esidential property prices surged to an all-time high which are obviously beyond the affordability of the general public, notwithstanding the anticipated interest rate hikes as a result of the dollar peg, the imposition of new restrictions on bank mortgage lendings and the raising of stamp duties on transactions etc. Increasing supply seems to be the fundamental remedy to ease the problem.

The escalation in trade tensions between the United States and China could trigger a trade war between these two biggest economies and bring uncertainties to the global markets. If tariffs or barriers are enacted at the end of the day, it would not only cause damages to these two economies themselves, other countries and regions could too be the losers. Both governments are still unmoved by the challenges put to them and it appears more and more likely that an unwanted trade war will eventually begin.

Hong Kong has been confronted by labour shortage for more than a decade. The unemployment rate during the year under review dropped to 2.9% reflecting a tighter labour market in Hong Kong and hindering our competiveness. Effective measures to address the issue should be afforded priority.

The controversial abolition of offsetting severance payments (SP) and long service payments (LSP) against the Mandatory Provident Fund (MPF) as put forth by the Government has given rise to fierce debate in the community. The proposal, according to the Government, aims to improve the retirement protection for the employees but will without doubt create pressure for the employers if they are not allowed to use the employers’ contributions to offset those payments. Whether cancelling the “offsetting mechanism” in one go or on a progressive basis requires holistic and careful consideration as it will inevitably bring impact on the business environment and the stakeholders as a whole and in the long run, though the Government has agreed a funding injection to alleviate the employers’ burden during the transitional period.

Occupational health and safety have been our adopted policy superior to all. With our continued effort to instill safety concepts to our employees and inculcating a safety culture within the Group, our work injury rate during the year under review was again above the norm of the sector. We will remain steadfast in upholding the record.

The Group is actively seeking to expand in the cleaning and related business, including, but not limited to, building management, through mergers and acquisitions. A horizontal growth strategy is able to bring synergy and benefits to the Group and our shareholders.

I would like to take this opportunity to thank our shareholders and my fellow directors for your unfailing support and to our staff for your devoted efforts over the past year. With your continued contributions, I am confident that the Group will be able to further grow and develop in the years ahead.

Lo Kou Hong
Co-chairman
Hong Kong, 28 June 2018