HUTCHISON PORT HOLDINGS TRUST 186 NOTES TO THE FINANCIAL STATEMENTS 31 Financial risk and capital management (Continued) (h) Fair value estimation The table below analyses recurring fair value measurements for fi nancial assets/(liabilities). These fair value measurements are categorised into diff erent levels in the fair value hierarchy based on the inputs to valuation techniques used. The diff erent levels are defi ned as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and Level 3: Inputs for the assets or liabilities that are not based on observable market data (i.e. unobservable inputs). Level 1 Level 2 Level 3 Total Note HK$’000 HK$’000 HK$’000 HK$’000 At 31 December 2025 Listed equity security 17 35,100 – – 35,100 River Ports Economic Benefi ts 17 – – 167,500 167,500 Cash fl ow hedges Cross currency swaps – 17,810 – 17,810 35,100 17,810 167,500 220,410 Level 1 Level 2 Level 3 Total Note HK$’000 HK$’000 HK$’000 HK$’000 At 31 December 2024 Listed equity security 17 31,050 – – 31,050 River Ports Economic Benefi ts 17 – – 219,873 219,873 Cash fl ow hedges Interest rate swaps – 27,651 – 27,651 31,050 27,651 219,873 278,574 The fair value of the cross currency swaps and interest rate swaps included in level 2 category above are estimated using the present value of the estimated future cash fl ows based on observable yield curves. The fair value of fi nancial instruments that are not traded in active market (level 3) is determined by discounted cash fl ow analysis with reference to inputs such as dividend stream. The signifi cant unobservable inputs for the Level 3 valuation are average dividend growth rate of 10% (2024: 11%) and discount rate of 11% (2024: 11%). The higher the average dividend growth rate or the lower the discount rate, the higher the fair value of Level 3 valuation. During the years ended 31 December 2025 and 2024, there were no transfers between the Level 1, Level 2 and Level 3 fair value measurements. At 31 December 2025, the fair value of bank and other debts (Note 22) was HK$24,239.9 million (31 December 2024: HK$24,798.6 million).b The carrying amounts of the remaining fi nancial assets and fi nancial liabilities approximate their fair values.
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