HKS: Emperor Int'l & Emperor Entertainment

Emperor International Holdings & Emperor Entertainment Hotel Announce 2006/2007 Interim Results




Property Investments Strengthened Hotel Quickly Establishes Brand-Name in
Lucrative Macau Market

HONG KONG, Dec. 20 /Xinhua-PRNewswire-FirstCall/ -- Emperor
International Holdings Limited (Hong Kong Stock code: 163; ADR: EPRRY) and
Emperor Entertainment Hotel Limited (Hong Kong Stock code: 296) announced
interim results for the six months ended September 30, 2006 ("Review
Period" or "Period"):
Highlights
Emperor International Holdings Limited
-- Turnover from core operations rose 30% to HK$200 million
-- All segments recorded growth in turnover
-- Gross profit margin reached 74%
-- Profit amounted to HK$204 million
-- Interim dividend of 4 HK cents
-- To focus on residential property redevelopment projects

Emperor Entertainment Hotel Limited
-- Turnover rose 778% to HK$593 million
-- Profit rose 485% to HK$109 million
-- Mass-market table win per day up 20% to HK$28,000
-- VIP table gross win per day up 17% to HK$676,000
-- Interim dividend of 4 HK cents
-- Room for expand operations

Emperor International Holdings Limited ("the Group" or "EIH")
EIH recorded turnover of HK$200.4 million for the six months ended
September 30, 2006. This compares to HK$154.8 million from continuing
operations in 2005, when total turnover amounted to HK$496.9 million.
Profit attributable to shareholders reached HK$203.6 million (2005:
HK$446.6 million) with gross profit margin reached 74.3%.
Ms Vanessa Fan, Managing Director of the Group, said: "We are delighted
to report the encouraging results during the Review Period. Our
high-quality investment properties continued to record steady rental income
and revaluation gains. EIH reported a surge in turnover in all business
segments, while receiving a significant contribution from associate EEH."
EEH contributed to the Group HK$38.4 million, compared with HK$6.8
million in 2005.
Gross profit amounted to HK$148.9 million (2005: HK$122.4 million),
with the improved profit margin due to the disposal of non-core,
loss-making operations last year.
Earning per share amounted to 15 HK cents (2005: 40 HK cents). The
Group has proposed distributing an interim dividend of 4 HK cents.
"The improved margins show that we are on the right track," Ms Fan
said. "The disposal and discontinuation of non-core businesses has started
the Group on a series of steps to reposition itself as a property play."
Property Development and Investment
This business segment accounted for 40.7% of the Group's total turnover
for the Review Period.
The Group's property-related operations have seen income growing
steadily as the Hong Kong market continued to improve in the Review Period.
Turnover from the lease of investment properties rose 30.4% to
approximately HK$81.6 million (2005: HK$62.6 million). Amid a recovering
property market in Hong Kong, the Group reported a revaluation gain of
HK$144.4 million from investment properties and its Repulse Bay project,
which is under development (2005: HK$457.3 million). Profit from this
segment reached HK$207.9 million (2005: HK$511.2 million).
The Group maintained a high overall occupancy rate for its retail
properties, due to the prime locations of the majority of these properties
-- for example, Emperor Group Centre in Wanchai and a shopping arcade on 8
Russell Street in Causeway Bay had occupancy rates of more than 95% and
100%, respectively.
In general, the Group made positive and active progress in property
development and redevelopment.
In April 2006, the Group announced the acquisition of an 88,420-square-
foot site along the Chang'an Avenue in Beijing for the construction of a
high- end luxury shopping and office complex of approximately 816,000
square feet.
In November 2006, the Group announced it would jointly develop a
commercial and residential complex in North Point, Hong Kong, with New
World Development Company Limited ("New World"). The project, of which the
Group owns 75%, marked the debut partnership with New World after its
Chairman Dato' Dr Cheng Yu Tung bought a 4.67% stake of the Group's issued
share capital in October 2006.
Meanwhile, the Group has acquired several property sites to redevelop
them into high-quality residential projects. These sites -- on Queen's Road
West Western District (sold after Review Period), Java Road North Point,
Ying Fai Terrance and Seymour Road Mid Levels -- together provide a GFA of
more than 230,000 square feet. The sites were bought at the lower range of
average market prices, and are seen to have appreciated in value. The Group
would expect to receive a capital gain should these sites be sold in the
market.
Other development projects include a 151,000 square feet
multifunctional recreation complex at Repulse Bay Hong Kong which is
scheduled to be completed in 2008.
The Group's property portfolio in Hong Kong, Macau and Mainland China
reached approximately HK$5.3 billion.
Mr. Donald Cheung, Property Director of the Group, said: "Our recent
aggressive property development has strengthened the Group's presence in
the property market, especially in our new focus on high-yield residential
redevelopment projects.
"These projects also show our commitment to directing our resources
toward property development and investment where there are possibilities
for achieving higher margins and greater growth," Mr Cheung said.
Hotel
The Group's Emperor (Happy Valley) Hotel performed a remarkable
turnaround of its operations during the year. Turnover for the hotel
increased 12.1% to approximately HK$32.1 million (2005: HK$ 28.6 million),
with revenue mainly coming from the hotel's 150 guest rooms, karaoke lounge
and coffee shop. Profits climbed 476.0% to HK$2.9 million (2005:
HK$501,000), following the conversion of several hotel rooms into karaoke
rooms.
The hotel achieved an improved room and occupancy rate, with the rate
reaching approximately 90% on average.
Securities Brokerage and Consultancy Services
Turnover from this segment climbed 37.4% to HK$86.5 million (2005:
HK$63.0 million). Profit rose by 36.7% to HK$59.4 million (2005: HK$43.4
million). The result was boosted by the expansion of the commodities
futures business in the region and the increase in the number of initial
public offerings in Hong Kong.
As part of the Group's plan to redefine itself as a pure property
player, the Group is planning a spin-off of the securities and brokerage
operation, with a separate listing on the Hong Kong Stock Exchange.
Contribution from associate
The Group received a contribution of HK$38.4 million (2005: HK$6.8
million) from its 45%-owned associate Emperor Entertainment Hotel Limited
(''EEH''). The Macau hotel commenced business in January 2006 and brings in
contributions as well as cash dividends to the Group.
Emperor Entertainment Hotel Limited ("EEH")
The Review Period is the first six-month financial period during which
EEH and its subsidiaries have operated as a full-scale entertainment and
leisure conglomerate.
Turnover soared by more than seven times to approximately HK$593.3
million during the Review Period (2005: HK$67.6 million). Profit
attributable to shareholders rose 485.2% to approximately HK$109.2 million
(2005: HK$18.7 million). The surge in turnover and profit was mainly
attributable to contributions from the Group's flagship project, Grand
Emperor Hotel in the Macau Special Administrative Region.
Macau Hotel Project
The Grand Emperor Hotel in Macau is the flagship of this segment. The
hotel officially commenced business in January 2006, and was the first new
hotel in Macau in the year, in line with the Group's strategy to get in
early in the fast growing and lucrative market. The Review Period marked
the first period to record a full six-month operation of the hotel as a
full-scale entertainment facility. The result showed positive contributions
from all segments.
The Grand Emperor Hotel is located at the heart of Macau's city centre,
a short distance from the main ferry terminal and the casino landmark Hotel
Lisboa. Targeting medium to high rollers, the Grand Emperor Hotel has
136,660 square feet of gaming space spread across seven floors. It offers
348 slot machine seats and approximately 90 gaming tables in a gaming
concourse and VIP rooms, featuring mainly baccarat -- the most popular
table game in Macau.
The Group owns 45% of the project. With management control vesting in
the Group and other stakeholders remaining passive investors, the project's
financials are consolidated into the Group's balance sheet in order to
provide transparency for the market and investors.
Since the commencement of business in January 2006, the hotel has
quickly established its brand-name in Macau, the world's second largest
gaming market. Despite keen industry competition with the arrival of
several new players in the market, the project recorded turnover of
approximately HK$532.1 million (2005: Nil), and profit reached
approximately HK$210.1 million, compared with a loss of HK$10.6 million
previously. The hotel building recorded a revaluation gain of HK$123.1
million (2005: HK$20.4 million).
Gaming Revenue
Despite growing market competition, the Group's casino operations,
provided by licence holder Sociedade de Jogos de Macau ("SJM"), performed
in line with management expectations. All segments picked up quickly since
the project launched in January 2006. Management expects continual
improvement in its results when the hotel further expands its operations.
Gaming Concourse
During the Period, the Group had increased the number of tables in
operation in the mass market-targeted concourse to 48 tables from 44 tables
as reported in the latest annual report. These tables resulted in a gross
win of approximately HK$235.9 million, with an average win of approximately
HK$28,000 per table per day, up from approximately HK$23,000 as reported in
the latest annual report. Revenue for the Period was approximately HK$94.3
million.
Slots
Slot machines recorded turnover of approximately HK$58.6 million from
the operation of 348 slot seats, up from 333 seats as reported in the
latest annual report. The slot machines returned an average win of
approximately HK$900 per seat per day, compared with approximately HK$700
as reported in the latest annual report. Income for the Period was HK$18.2
million. VIP Room -- Self-managed
The Group managed one of the eight VIP halls within the hotel.
Supported by a decade-long operating experience in Macau, the six gaming
tables of the Group in its VIP hall, all of which offer baccarat, recorded
a rolling of approximately HK$28.9 billion and an income of approximately
HK$288.1 million. Average win per table per day was approximately
HK$676,000, compared with approximately HK$579,000 as reported in the
latest annual report.
Win percentage (calculated before discounts and commissions) was 2.6%,
compared with 2.7% as reported in the latest annual report. The win
percentage is subject to short-term fluctuation but is steady in the long
run based on historical industry averages.
VIP Room -- Rental
The Group received rental contribution from the leasing of five VIP
halls operating within the hotel. Income was HK$16.9 million during the
Review Period. The Group had leased out its sixth hall in October 2006.
Non-Gaming Revenue
The Grand Emperor Hotel recorded HK$71.7 million in non-gaming income,
compared with HK$24.7 million as reported in the latest annual report. This
comprised mainly of contributions from hotel rooms, food and beverage, as
well as rental income from sauna, night club and retail space operations on
the ground floor of the hotel.
The hotel rooms had an average daily rate of HK$700 during the Period.
The occupancy rate of the available guestrooms was 81%, compared with 64%
reported in the latest annual report.
Income from food and beverage was HK$25.9 million, and rental income
from sauna, night club and retail space operations was HK$7.3 million.
According to Macau Government Documentation and Information Centre,
there were 12,411 hotel rooms in Macau as of September 30, 2006, a 16.2%
increase from the previous year, with an average occupancy rate of
approximately 70%. Amid growing competition and increase in room supply,
the Group managed to attract and retain hotel guests with its top-class
attentive service and high- end entertainment and lodging facilities.
Golden Princess Cruise Liner
The Group received turnover of HK$61.2 million (2005: HK$67.6 million)
and profit of HK$15.2 million (2005: HK$21.4 million) from its
cruise-related operations. The cruise liner provides entertainment, gaming
and accommodation to customers.
Property Sales and Development
This segment, mainly represented its Shanghai development project,
recorded no turnover during the Period, as its investment property project
in Shanghai remains under development. The project recorded a loss of
approximately HK$1.8 million, mostly of expenses used on the property
development.
The property development project -- to be developed into a retail
development in Yu Yuan, Shanghai -- was in the investment stage during the
Period. The Group plans to build on the 22,870 square metre site a
commercial complex in a 50:50 split with a local partner with a total area
of 114,000 square metre. The Group envisages lucrative returns from the
project, in which it contributed only the land, with construction being
undertaken by its local partner and potential market risk covered by a put
option.
The Group has appointed reputable international consultants for the
Shanghai property development to handle leasing management and revise the
design of the shopping arcade, with a view to improving pedestrian flow
within the complex and thus maximizing the investment value of the project.
The project is set to become a commercial landmark in Shanghai.
Ms Vanessa Fan, Executive Director of the EEH, said: "With the opening
of the Grand Emperor Hotel in Macau in January this year, the Group is on
track
to reposition itself as a full-scale entertainment platform in Macau
and Shanghai."
The Group anticipates increasing contributions from the gaming arm when
the hotel expands its operation following the increased supply of dealers
from SJM.
Ms Fan concluded: "Looking ahead, the Group will continue to look for
expansion possibilities with further utilisation of the Group's execution
strength and rich assets in the entertainment and retail industries."
About Emperor International Holdings
Emperor International Holdings Limited is an investment holding
company, which is principally engaged in property development and
investment business. Its subsidiaries are also engaged in hotel and
financial and brokerage services operations.
About Emperor Entertainment Hotel Limited
Emperor Entertainment Hotel Limited is the gaming business platform of
its parent company Emperor International Holdings Limited. The company owns
the Golden Princess, a casino cruise liner. It also has a hotel in Macau,
offering entertainment and leisure services, food and beverage as well as
retail outlets. The company has a development project for a prime shopping
arcade in Shanghai and continues to look for potential business
opportunities worldwide.
For Enquiries:

Emperor International Holdings Limited/
Emperor Entertainment Hotel Limited
Sidney Luk
Tel: +852-2835-6715
Fax: +852-2893-5327
Email: sidneyluk@emperor.com.hk
Website:


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