The GREATER CHINA CIVIL HELICOPTER FLEET REPORT. Year End 2013

Transcription

1 The GREATER CHINA CIVIL HELICOPTER FLEET REPORT Year End 2013

2 ABOUT ASIAN SKY GROUP ASIAN SKY GROUP LIMITED is headquartered in Hong Kong with offices throughout China. It has assembled the most experienced business aviation team in the Asia-Pacific region to provide a wide range of consulting services for both fixed-wing and rotary-wing aircraft. Asian Sky Group provides access to a significant customer base around the world with the help of its exclusive partners: Avpro Inc., the largest business jet brokerage firm in the US; and AVIC International Development Corporation, the largest state-owned aviation enterprise in mainland China. Asian Sky Group is backed by SEACOR Holdings Inc., a publically listed US company ( NYSE: CKH ) with over US$ 1B in revenue and nearly US$ 3B in assets, and also by Avion Pacific Limited, a mainland China-based general aviation service provider with 20 years of experience and 6 offices and bases throughout the country. Asian Sky Group provides its clients with the following aviation consulting services: 1) AIRCRAFT SALES, such as acquisition or remarketing; selection of aircraft, asset financing, structuring & registration and operator; inspections and appraisals; contractual support; 2) COMPLETION MANAGEMENT, such as cabin definition; facility selection; completion oversight; delivery and regulatory compliance; contractual support; 3) OPERATION OVERSIGHT, such as invoice analysis and owner representation; 4) VIP CHARTER SERVICES; 5) SPECIAL PROJECTS and 6) TRANSACTIONAL ADVISORY.

3 INTRODUCTION ASIAN SKY GROUP ( ASG ) is proud to present the Greater China Civil Helicopter Fleet Report. This report will provide complete coverage of the civil helicopter market in the Greater China region, which includes mainland China, Hong Kong, Macau and Taiwan. The report follows ASG s previously established Greater China Business Jet Fleet Report, which was first published in March, For a copy of the Greater China Business Jet Fleet Report and its first half 2013 update, please visit us at TABLE OF CONTENTS EXECUTIVE SUMMARY KEY FINDINGS CIVIL HELICOPTER MARKET IN GREATER CHINA CHINA AIRSPACE REFORMS DETAILED FLEET BREAKDOWN BY: ORIGINAL EQUIPMENT MANUFACTURERS (OEM) MISSION CATEGoRIES OPERATORS WEIGHT CLASSIFICATIONS AGE DISTRIBUTION THE NEAR FUTURE AND TRENDS ASIAN SKY GROUP would like to graciously acknowledge the contributions made by numerous operators, OEMs and organizations to this report, without which a reasonable level of accuracy could not have been achieved. The report is nevertheless the first of its type and undoubtedly there will be perceived errors. Asian Sky Group welcomes your comments, questions and general thoughts and looks forward to producing an even better second version of the report in the future. Should you wish to reproduce or distribute any portion of this report, in part or in full, you may do so by mentioning the source as: Asian Sky Group, a Hong Kong based business aviation consulting group. Thank you for your interest in this report and we hope you find the information useful. If you would like to receive further information about our services, please contact us at info@asianskygroup.com or visit us at 1

4 EXECUTIVE SUMMARY Over the past four years, the civil helicopter fleet in Greater China including law enforcement and government sponsored Search and Rescue (SAR) operations but excluding military applications has doubled in size, growing at nearly 20% annually. As of year-end 2013, the Greater China fleet numbered 465 Civil helicopters, with 424 based in Mainland China, 30 in Hong Kong and Macau, and 11 in Taiwan. While growth in 2013 was consistent with previous years, Asian Sky Group expects even stronger growth in 2014 and 2015, as the civil helicopter industry in Greater China and its related infrastructure continues to develop. Heilongjiang 30 Xinjiang 6 Inner Mongolia 3 1 Shaanxi 18 Sichuan Yunnan 10 5 Hubei 19 Liaoning Beijing 4 61 Tianjin Hebei 18 9 Shandong 19 Henan 26 Jiangsu 18 3 Shanghai 40 Hunan Guangdong Taiwan Hong Kong Hainan 3 2

5 Helicopter operations in Greater China have developed along mission specific geographic lines. Large operators such as CITIC Offshore Helicopter Corporation (COHC) and China Southern Helicopter Corporation (CSHC) - both based in Guangdong province along the South Eastern coast - primarily serve the offshore oil and gas industry which has been experiencing high growth for the last several years, as exploration in the South China Sea increases to match China s growing energy needs. The northern city of Tianjin has also developed a significant helicopter fleet to service the Bohai Bay oil producing fields, off of China s North East coast. Cities such as Beijing, Shanghai and Hong Kong are home to law enforcement and government flight departments, such as mainland China s Ministry of Transportation (MOT) and Hong Kong s Government Flying Service (GFS), both of which provide Search and Rescue (SAR) and Emergency Medical Services (EMS). Areas approved for low altitude civil aviation flights, such as Heilongjiang province in the Northeast, are home to several general aviation and flight training operators with a high number of helicopters in their fleet. But with less than 30% of mainland China s total area currently approved for low altitude airspace usage, ASG expects recent and upcoming reforms in China s airspace regulations to lead to further growth and development in the civil helicopter industry (See section titled CHINA AIRSPACE REFORMS ). Changes in regulations should help lift the country s aviation industry and encourage growth, which in turn should encourage more investment.development of the general aviation industry is also expected to enhance other related industries, including aircraft manufacturing, maintenance, infrastructure and training. 3

6 KEY FINDINGS The majority of Greater China s helicopters operate in proximity to large cities and along coastal areas, with Guangdong province on the Southeast coast being an operating base for almost a quarter of China s helicopters. The Original Equipment Manufacturer (OEM) market leader by number of aircraft and by replacement value is Airbus Helicopters (formally Eurocopter) with 121 helicopters in Greater China, representing 26% of the market. Based on an estimated aircraft replacement cost analysis, Airbus Helicopters make up nearly 40% of the market. Bell Helicopters is gaining a stronger presence with a large number of aircraft delivered during 2013, adding 32% to the Bell fleet in Greater China. The single engine Bell 407, Bell 206 and the Airbus Helicopter AS350 have become the most prevalent models in Greater China. The Bell 407 fleet doubled in Sikorsky Helicopters continues to have a strong presence in the offshore oil and gas sector and maintains its dominance in the heavy and medium helicopter categories. Despite its 9% market share by numbers, it represents 30% of the market by aircraft replacement value. Of the four major OEMs, Sikorsky is the only one that does not have a light or single engine product line and therefore is less represented in total figures. Sikorsky s market share is expected to rise due to firm orders in Of all helicopter mission categories in Greater China, offshore helicopter operations grew by 32% during 2013, almost double the growth rate of other mission categories. This growth can be attributed to China s growing investment in offshore oil and gas exploration in recent years and its plans to further develop the offshore oil and gas industry. The light single-engine helicopter segment has shown a growth rate of nearly 30%. This is similar to trends in other regions in the world, however medium helicopters are still expected to hold a dominant share in the Greater China market. The medium and heavy helicopter segments in Greater China represent approximately 30% of the market by numbers but over 80% by aircraft replacement value. There are 159 piston engine helicopters in Greater China, representing 34% of the market by numbers but only 2% by replacement value. 4

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8 CIVIL HELICOPTER MARKET IN GREATER CHINA In line with a surging Chinese economy in recent years, China s general aviation market is also expected to take off, with many predicting it could become one of the world s largest markets. As noted in previous market studies and by the media, there have historically been several key impediments to the growth of general aviation in Greater China. These factors include air space restrictions, a lack of supporting infrastructure, a lack of available civilian helicopter pilots and technicians, and the difficulty in qualifying for an Air Operators Certificate (AOC) due to strict regulatory requirements. Tax and other regulatory issues, including the differences between state-owned and independent operators, have also contributed to the slower development of the industry. Despite China s land mass and population, high GDP growth and a large industrial sector, it has traditionally been more difficult to set up private general aviation companies, corporate flight departments or other dedicated helicopter operations as one would find in places such as the United States, Canada, Brazil and parts of Europe. As a result, the civil helicopter industry in Greater China has developed primarily according to mission requirements and the operator s role within the state sector. It should be noted that unlike the corporate jet market, which developed from the personal transport needs of China s growing ranks of high net worth individuals and successful publically listed companies, most of the growth and development in China s civil helicopter fleet has come from more traditional rotary operation mission profiles and industry needs, such as offshore oil and gas, emergency medical services, search and rescue, law enforcement, and other industrial applications, which are dominated by either partially or wholly state-owned enterprises and government departments. CHINA AIRSPACE REFORMS In the past year, two significant announcements were made by the Civil Aviation Administration of China (CAAC) and the People Liberation Army (PLA) regarding general aviation flights in Mainland China: 1) Opening of low altitude airspace in specific regions in China with the intention to open most of China s low altitude airspace for civil flights during 2015; 2) New regulations regarding the planning and approval process of general aviation flights, with military approval no longer required for the majority of these flights. Other sectors that will enjoy a significant easing of regulations are flights performing maritime search and rescue operations, offshore oil and gas security or those that patrol the sea. Additionally, the CAAC loosened licensing requirements for private pilots with the new private pilot licensing (PPL) conforming to FAA requirements for private certificates. This will make private licenses achievable to a wider range of applicants. Helicopter operations are expected to benefit significantly from these latest airspace reforms. 6

9 Fleet Breakdown Summary by OEM & Mission 465 in Total Total Brantly Kamov MD Enstrom Harbin Mil Agusta Westland Sikorsky Schweizer Bell Robinson Airbus Helicopters Multi Mission Offshore Operations SAR / EMS Law Enforcement Flight Training Charter / Other Corporate / Private Flight Club 4 4 Total

10 FLEET BREAKDOWN BY OEM Fleet Breakdown by OEM (Number of Aircraft) 465 in Total Schweizer 52 11% Sikorsky 41 9% Robinson % Airbus Helicopters % MD 6 1% Other 11 2% Bell 74 16% Harbin 10 2% Mil 17 4% AgustaWestland 31 7% Fleet Breakdown by OEM (Number of Aircraft - Turbine Only) 306 in Total Mil 17 6% AgustaWestland 31 10% Harbin 10 3% MD 6 2% Other 6 2% Sikorsky 41 13% Bell 74 24% Airbus Helicopters % 8

11 Fleet Breakdown by OEM (Replacement Cost*) 465 in Total Harbin 4% Other 1% MD 1% Robinson 1% Schweizer 1% Mil 9% AgustaWestland 10% Sikorsky 28% Bell 9% Airbus Helicopters 36% Fleet Breakdown by OEM (Replacement Cost - Turbine Only) 306 in Total Harbin 4% MD 1% Mil 10% Sikorsky 28% AgustaWestland 10% Bell 9% Airbus Helicopters 37% * Replacement cost analysis as used in this report should be considered as a tool to help determine the overall dollar value of the Greater China Civil Helicopter fleet. Replacement costs are based on 2013 OEM list prices for new aircraft of equivalent model and mission configuration. In some cases an estimate was used, particularly with regard to aircraft models no longer in production. 9

12 Fleet Breakdown by OEM & Model (Turbine only) 306 in Total S - 92A S - 76A S - 76A++ S - 76B S - 76C S - 76C+ S - 76C++ S - 76D Bell212 Bell429 Bell427 Bell206B3 Bell206L4 Bell407 AW139 A109 A119 SW4 Sikorsky (41) AgustaWestland (31) Bell (74) 10

13 EC225LP AS332L1 AS332L2 AS355NP AS365N3 SA315B EC155B EC155B1 EC135 BO-105 EC120 EC130 AS350B2 AS350B3 BK - 117A BK - 117B Mi Mi - 8 Mi - 26 MD500 MD520 MD600 MD902 Z9A Z11 S KA B Airbus Helicopters (121) Mil (17) McDonnell Douglas (6) Harbin (10) Schweizer (1) Kamov (2) Enstrom (3) 11

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15 FLEET BREAKDOWN BY MISSION CATEGORIES Fleet Breakdown by Mission (Number of Aircraft) 465 in Total SAR / EMS 25 5% Corporate / Private 24 5% Flight Club 4 1% Charter / Other 28 6% Law Enforcement 41 9% Multi Mission % Flight Training 42 9% Offshore Operations 74 16% Fleet Breakdown by Mission (Replacement Cost) Corporate / Private 13 4% SAR / EMS 15% Multi Mission 26% Charter / Other 5% Law Enforcement 9% Flight Training 2% Offshore Operations 39% 13

16 Fleet Breakdown by Mission (Number of Aircraft - Turbine Only) 306 in Total Corporate / Private 13 4% SAR / EMS 25 8% Multi Mission % Charter / Other 23 8% Law Enforcement 30 10% Flight Training 8 3% Offshore Operations 74 24% Fleet Breakdown by Mission (Replacement Cost - Turbine Only) Corporate / Private 4% SAR / EMS 15% Charter / Other 5% Multi Mission 26% Law Enforcement 9% Flight Training 1% Offshore Operations 40% 14

17 OVERVIEW OF MISSION CATEGORIES 1. Multi Mission - Subcategories In this report, the largest mission category is broadly defined as Multi Mission, also referred to as General Aviation in the industry. This includes a number of subcategories: Onshore Oil & Gas (distinct from Cat-A offshore operations) Forestry (surveying, logging and protection) Fire Fighting Aerial Photography Aerial Tours Agriculture and Pest Control Power Line Repair and Survey News Gathering Most helicopters in this category are active in more than one mission and can be configured to perform various tasks. Multi Mission Fleet Breakdown by Subcategories (Estimated Distribution) 227 in Total Forestry 7% Onshore Oil & Gas 11% Power Line 15% News Gathering 2% Aerial Tours 19% Agriculture 19% Aerial Photography 17% Fire Fighting 10% 15

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19 2. Offshore Operations Oil and gas consumption has soared in China amid the country s rapid economic growth. Chinese and western oil and gas companies are therefore investing in offshore exploration and production (E&P). Currently over 15% of overall Chinese oil production comes from shallow offshore reserves, a large contributor to China s oil production growth. However, shallow offshore reserves are drying out, forcing exploration to move into deeper waters. Offshore E&P activities are focused on three main areas: The Bohai Bay region, off the northern coast of China; The East China Sea, off the coast of Zhejiang province; The South China Sea, particularly the Pearl River Mouth Basin, off the coast of Guangdong province. Oil field operations in Bohai Bay and the East China Sea are currently at a distance of 150 to 200 kilometers from the coast. In the South China Sea, the large oil fields lie further out, at a distances of up to 350 kilometers from the Guangdong coast. Helicopter flights over open water are a specialized form of aviation that requires specific equipment, training and procedures. As exploration moves farther offshore, the challenges posed by weather, distance and other factors require helicopters suitable for such operations. Asian Sky Group expects the growth in offshore exploration to lead to an increase in the demand for helicopters capable of performing these missions such as the Sikorsky S-92 and the Airbus Helicopter EC

20 3. SAR / EMS Search and Rescue (SAR) and Emergency Medical Services (EMS) are placed in the same category since in most cases such missions are carried out by helicopters with the same configuration and are intended for both missions. Most SAR and EMS missions in Greater China are performed by government entities such as the Rescue and Salvage Bureau of the Ministry of Transport (MOT) in Mainland China, the Government Flying Services (GFS) in Hong Kong and the Taiwan Provincial Government. Helicopter SAR is a unique service, performed in the most challenging circumstances undertaking missions in extreme conditions and therefore requires specialized training and specific aircraft configurations. 4. Law Enforcement Helicopters used for law enforcement in China are primarily operated by both local municipalities and large cities and are used to perform traditional law enforcement operations. It is worth noting that U.S. export restrictions prevent some North American OEMs from entering this market in Mainland China, which has led to AgustaWestland and Airbus Helicopters taking a more dominant role in this sector. 5. Flight Training There are 12 operators providing flight training in China and not too surprisingly piston helicopters are the most widely used training platform with these operators. China is still short of helicopter pilots to match its needs but is taking action in order to establish more flight schools and training centers. 6. Corporate / Private The corporate and private category grew at 26% in This sector is still small and not yet significant by numbers, but demand for such helicopters is expected to grow together with the general aviation reforms taking place in China. 7. Charter / Other The Charter / Other category includes operators that are flying as charter service providers and will also be active in other General Aviation activities. As the commercial helicopter industry is still in its infancy and developing in China, many operators are performing other missions in addition to the charter services they provide. 8. Flight Clubs Recreational helicopter flying is currently very limited in Greater China. As the number of pilots holding a Private Pilot Licence (PPL) is low, such flight clubs have not been in demand. Recent reforms in the PPL acquisition procedures may lead to more individuals able to acquire civil helicopter licences and thereby drive future growth in this category. 18

21 FLEET BREAKDOWN BY OPERATORS There are 110 operators and owners in Greater China, with 99 of them in Mainland China. The 10 largest operators (shown in the chart below) make up over 40% of the total number of helicopters in Greater China. Their combined fleets make up nearly 70% of the total Mainland China fleet by replacement value. Key among these figures is that three of the ten are Cat-A offshore oil and gas operators (COHC, CSHC, and EGAC), and two, Ministry of Transport (MOT) and Government Flying Services HK (GFS), are governmental department tasked with carrying out Search & Rescue (SAR) operations. This is a similar profile to what one might expect in developed countries, where large public helicopter companies are typically involved in offshore oil and gas and SAR operations. Top 10 Operators Fleet Breakdown by OEM 193 in Total COHC Flying Dragon CSHC State Grid Co Guangzhou Suilian Kingwing EGAC MOT Anyang GFS HK Total Airbus Helicopters Bell Sikorsky AgustaWestland Schweizer Robinson 11 6 Harbin 4 3 Mil 5 Kamov 1 Total

22 Fleet Breakdown by All Operators 110 Operators, 465 Aircraft in Total COHC Flying Dragon CSHC State Grid Suilian Helicopter Kingwing EGAC Private MOT Anyang Tongcheng Reignwood Beijing Capital GA Shanghai Heli Yuling Baltic Heliservices HK Yunnan GAC HK GFS Huayu GAC Guanchen GA Xilin Fengteng Sky Shuttle HK Tangshan Lianwang Zhongshan Eagle Beijing Police Wuhan Helicopter Civil Aviation Uni Emerald Pacific Air HK Aviation Club Qingdao Helicopter Shanghai Police Shandong Qixiang Wuhuan GA NUAA Flying Academy Shaanxi Police Tianyi GA Jinyan GAC Guangdong Police Ordos Police Tianhang GA Skyway Kaiyuan Sichuan Tuofeng Universal Unicom Yinyan Zhengzhou Police Beite GA Chongqing GAC Hunan Hengyang Nanjing Police 20

23 Sunrise Airlines Daily Air Wuhan Police Huaxi Group Kings Aviation Ding Hong Tianju GAC Maritime Safety Xian Helicopters Nanjing GAC Zhejiang Police Yalong GAC Nanning police Taiwan Government Beijing Star Civil Flight Academy Xianglong GAC Hai Xiang GAC Jingcheng Group Yanan Police SHEGAE King Jet Dalian Police Tian Xin GAC Huaxin GAC Boyee Dunhuang Aviation GAC Dezhou Wanli Xinmei Zhongyuan GAC Tian Rui Group Zhongfei First Helicopter Feitian Zhongou GAC Dayou Xiang Huan Shenzhen Police Hefei Police AP Winbond Union Rise Asia Sanxing GA Kunming Police Beijing Tianye Sanmenxia Police Broad Henan GAC Harbin Police Fanya GA Zhonghen Flight Club Taiwan Police Fujian Changtai Guangdong GAC Hunan Nine GAC HNA Academy Chongqing Police Helicopter Link 21

24 FLEET BREAKDOWN BY WEIGHT CLASSIFICATIONS* Weight Classification Breakdown - Top Five OEM 284 in Total Heavy Medium 0 Light Twin Airbus Helicopters Bell Sikorsky AgustaWestland Mil Single Total Total *Helicopter Weight Classification Models Heavy Medium Light Twin Single Piston S92A S76 A109 A119 R44 EC225LP Bell429 Bell427 AS350 R22 AS332L1 Bell212 EC135 SA315B 269C-1 AS332L2 AW139 MD902 Bell C Mi-26 AS365N BO-105 Bell206 B-2B Mi-8 AS355N EC130 EN280FX Mi-171 EC155 EC120 Ka32 MD600 Z9A MD500 BK117 MD520 Z-11 EN480B S-333 SW-4 22

25 Fleet Weight Classification Breakdown (Number of Aircraft) 465 in Total Heavy 46 10% Piston % Medium % Single % Light Twin 32 7% Fleet Weight Classification Breakdown (Replacement Cost) Single 12% Piston 2% Light Twin 7% Heavy 35% Medium 44% 23

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27 Heavy Weight Classification Breakdown by Mission (Number of Aircraft) 46 in Total Law Enforcement 1 2% Corporate / Private 1 2% SAR / EMS 8 18% Multi Mission 17 37% Offshore Operations 19 41% Medium Weight Classification Breakdown by Mission (Number of Aircraft) 103 in Total Charter / Other 10 10% Corporate / Private 3 3% Law Enforcement 12 12% Multi Mission 18 17% SAR / EMS 17 16% Offshore Operations 43 42% 25

28 Light Twin Weight Classification Breakdown by Mission (Number of Aircraft) 32 in Total Flight Training 3 9% Corporate / Private 2 6% Multi Mission 7 22% Charter / Other 3 9% Law Enforcement 12 38% Offshore Operations 5 16% Single Weight Classification Breakdown by Mission (Number of Aircraft) 125 in Total Corporate / Private 7 6% Flight Training 5 4% Charter / Other 10 8% Multi Mission 91 73% Law Enforcement 5 4% Offshore Operations 7 5% 26

29 Piston Weight Classification Breakdown by Mission (Number of Aircraft) 159 in Total Corporate / Private 11 7% Flight Club 4 3% Flight Training 34 21% Multi Mission 94 59% Charter / Other 5 3% Law Enforcement 11 7% 27

30 FLEET BREAKDOWN BY AGE DISTRIBUTION* Total Fleet Age Distribution 465 in Total Multi Mission Fleet Breakdown by Age Distribution 227 in Total *Age based on year of manufacture 28

31 Flight Training Fleet Breakdown by Age Distribution 42 in Total Offshore Operations Fleet Breakdown by Age Distribution 74 in Total

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33 EMS / SAR Fleet Breakdown by Age Distribution 25 in Total Law Enforcement Fleet Breakdown by Age Distribution 41 in Total

34 Charter / Other Fleet Breakdown by Age Distribution 28 in Total Corporate / Private Fleet Breakdown by Age Distribution 24 in Total

35 THE NEAR FUTURE AND TRENDS The civil helicopter industry in Greater China has been growing steadily over the past several years with 2013 achieving a 20% growth rate in terms of the number of helicopters added to the Greater China fleet. Asian Sky Group expects 2014 and 2015 to show high levels of growth as operational barriers are gradually removed, the opening of airspace for civil aviation is accelerated, and as the significant investment in infrastructure begins to pay dividends. ASG s projection for 2014 is based on actual orders placed, helicopters pending delivery to operators in Greater China, and expected order placements. ASG expects the Greater China market to maintain a 20% growth rate and add helicopters during The total fleet is expected to reach 560 civil helicopters by the end of the year

36 Greater China Total Fleet By Numbers Greater China Total Fleet By Growth Rate 18% 19% 20% 19% 21% 20%

37 Fleet Growth by OEM Growth % % 32% % % 30% 25% 20% 15% 10% 5% 0% Airbus Helicopters Sikorsky Bell AgustaWestland Growth Fleet Growth by Mission % % 14% Offshore Operations General Aviation SAR-EMS 26% Corporate / Private Flight Training 17% 14% % Law Enforcement Charter / Other 35% 30% 25% 20% 15% 10% 5% 0% Fleet Growth by Weight Classification Growth % % % 14% Heavy Medium Light Twin Single Piston 35% 30% 25% 20% 20% 15% 10% 5% 0% 35

38 The information contained in this report is provided free of charge for references only. ASG is not responsible for, and expressly disclaims any and all liability for damages of any kind, either direct or indirect, arising out of use, reference to, or reliance on any information contained within this report. While such information was compiled using the best available data as of December 2013, ASG makes no warranties, either expressed or implied, concerning the accuracy, completeness, reliability, or suitability of such information. ASIAN SKY GROUP STRATEGIC PARTNER AVIC International ADC Suite 3905, Far East Finance Centre, 16 Harcourt Road Admiralty, Hong Kong Telephone Facsimile