On the other hand, if revenue from our Connected Customers further increase, over-reliance on Connected Customers may affect our operational independency, as such Connected Customers, many of which are controlled by one or more of our Directors or Controlling Shareholders, may be able to exert excessive influence on us. For details, please see the section ‘‘Relationship with Controlling Shareholders’’.

# Labour shortages or increases in labour costs could harm our business, reduce our profitability and slow our growth.

Experienced professional staff and other labour are important for the operation of our businesses, and therefore, our success depends in part on our ability to attract, retain and motivate a sufficient number of qualified engineers, construction workers and the engagement of subcontractors for certain labour intensive works. Qualified individuals in the relevant industries are in short supply and competition for workers is intense.

Any future inability to recruit and retain qualified individuals may delay the completion of our works and could result in deduction of liquidated and ascertained damages from the contract sum payable to our Group. Any such delays could have a material adverse effect on our business and results of operations. In addition, competition for qualified construction workers could also require us to pay higher wages, which could result in higher labour costs. For example, in Macau, given that it only has a total population of slightly above half a million and there have been a large number of construction projects in recent years, the labour market in Macau has been tight and average labour costs in Macau have increased significantly.

Moreover, the minimum wage requirement in Hong Kong has increased and can continue to increase our labour costs in the future. The salary level of construction workers in Hong Kong has been increasing in the past several years. As for the PRC market, there was an increase in labour cost over the past few years and the average annual wage of employees in the PRC construction industry is expected to continue to increase in the coming years. Some of our revenues, in particular in the E&M Engineering Segment, are generated from agreements with terms over one year. Most of such agreements do not contain labour cost adjustment mechanism, and we may fail to anticipate or may be unable to transfer the full impact of the increase in labour cost to our customers in the relevant agreements with such mechanism. In such or other cases, we may not be able to increase our prices in order to pass these increased labour costs on to our customers for contracts without price adjustments, in which case our business and results of operations would be negatively affected.

# Any change or deterioration of our relationship with, and the performance of, ourj oint venture partners and third party service providers may have an adverse impact on our business operation and reputation.

For the operations of our E&M Engineering Segment, we often formj oint ventures with other companies in the E&M engineering industry to tender for and carry out the E&M engineering works in major construction projects. We also engage third-party service providers as our subcontractors to perform certain, generally more labour-intensive parts, of the E&M engineering works. Any change or deterioration of our relationship with, and the performance of, such third-parties may have adverse impact on our business operation and reputation

# . We are dependent on subcontractors, and in some projects our joint venture partners, to implement certain contracts.

We are dependent on subcontractors to implement certain contracts in our E&M Engineering Segment. As we generally do not sign any long term contracts with our major subcontractors, there is no assurance that they will be able to continue to provide services to our Group at prices acceptable to us or whether we can maintain our relationship with them in the future. In the event that any of the