Message to Shareholders

CHAIRMAN’S MESSAGE

I present my report for the first half of our current financial year to 31 December 2025.

Continued progress has been achieved through further sales of properties and debt reduction. This has been delivered against an extremely challenging backdrop for the real estate sector and for Macau’s economy in general. The property sales we announced in our annual report all completed successfully, and debt levels against the Waterside assets have been reduced. However, falling market valuations have kept the loan-to value covenants under pressure, and lending banks have become more restrictive in their approach in response to both the market and the Company’s public statements on financial constraints.

Lower interest rates have eased some of the debt service costs, but the availability of debt to purchasers remains a constraint. Whilst measures to ease mortgage restrictions and reduce stamp duty costs at the beginning of 2026 provided some increase in sales enquiries, the market backdrop remains disappointing, with many prospective purchasers continuing a “wait-and-see” approach. On a wider perspective, geopolitical uncertainty continues, and it is too early to fully understand what impact the recent conflict in the Middle East will have on the market.

During the period, a further nine units at the Waterside were sold, reducing the number of units remaining to 14. An additional two units were sold post-period end, bringing the number of units remaining to be sold to 12. Another three Waterside units are under advance stage of negotiation; two of which are expected to commit into contract before end of March 2026. In addition, the sale of the sole remaining villa at the Fountainside
was completed.

This combination of results enabled pre-payments on the Waterside loan facility of US$5.5 million and US$5.4 million to be made in January and February 2026, respectively. It is projected that with the sale of the additional units post-period end, a further US$3.2 million will be repaid in May 2026. This will see debt levels on the Waterside reduced to US$16.6 million.

Penha Heights remains a priority, as the associated loan facilities are now in default. There has been renewed interest in the property from multiple parties from across the Greater Bay area, with inspection visits increasing and one prospect delivering a Letter of Intent and engaging an architect to draw up plans. Whilst no offer or sales contract has yet been achieved, hard work continues to resolve this situation.

There has also been progress on securing the necessary approvals to allow the three remaining apartments at the Fountainside to be sold, and the Manager is targeting these assets for a sales process in the second quarter of 2026.

As previously announced, the Company sought additional capital from shareholders at the end of the period. Regrettably, despite positive indications before this step was taken, investor commitments were not sufficient for the capital raise to proceed, which is disappointing. As a consequence, the intended application of funds to meet interest payments and allow loan extensions—primarily on Penha Heights—was not possible. This triggered a default on the loan provided by BCM, active discussions with Banco Tai Fung. It also led to intensified levels of control and restrictions imposed by Hang Seng Bank because of the perceived lack of shareholder support for the Company and the impact of cross asset obligations. The consequences of this are set out further in the Going Concern section in Note 1 of the financial statements.

Constructive and extremely active engagement between the Manager and our lenders has been taking place, and this will continue as we work through our divestment plan. It is necessary to highlight that a forced or accelerated sale, as a consequence of the unsuccessful fundraise (and if a sale of Penha Heights is not achieved) could trigger a series of unhelpful outcomes, including the possibility of being unable to repay secured borrowings. For this reason, it has been necessary to adapt and, where possible, accelerate our disposals, accepting that return targets are compromised.

We are actively seeking to agree releases of working capital by Hang Seng Bank given the improved repayment profile on the Waterside facilities and our commitment to dispose of remaining assets. In this regard, the Manager reports that active sales enquiries have been received for six of the remaining units at the Waterside. These units are mainly on the higher levels and are therefore considered to be more attractive to prospective purchasers, which provides support for the asset values. It is a reality, however, that the Manager’s ability to execute the planned divestment programme is compromised by market circumstances and the conditions imposed by our lenders, which may reduce overall returns, possibly significantly. Every effort and full focus remain on delivering the best possible result for shareholders.

The Company’s share price has reacted negatively to the necessary regulatory announcements that were made and the financial challenges, including the impact of the unsuccessful capital raise and loan default on Penha Heights. The Board is grateful, however, for the overwhelming support at the Annual General Meeting, which included the extension of life to allow the divestment programme to continue.

Whilst the determination remains to complete the task of divestment, there continue to be some very difficult challenges to overcome, and successful sales of the remaining assets are necessary to determine the outcome and the ability to distribute meaningful returns of capital.

The Board have decided that the financial year end of the Company should be changed
from 30th June 2026 to 31st December 2026. The purpose behind this change is to align
our financial reporting with the planned divestment of the remainder of the portfolio.

MARK HUNTLEY

CHAIRMAN

MACAU PROPERTY OPPORTUNITIES FUND LIMITED

13 March 2026