Financial Performance - Total revenue for 2024 was HKD 11,760 million, a decrease of 8.5% from HKD 10,881 million in 2023[9]. - Rental income from properties was HKD 10,033 million, down 6% from HKD 10,725 million in 2023[12]. - The company recorded a basic earnings per share of HKD 1.71, a decline of 20.5% from HKD 2.15 in 2023[10]. - Shareholders' attributable basic leasing profit decreased by 14% to HKD 2.53 billion, and net profit attributable to shareholders after property portfolio revaluation decreased by 43% to HKD 1.61 billion[28]. - The Group recorded a net revaluation loss of HKD 714 million, compared to a net revaluation loss of HKD 120 million in 2023, resulting in a total net profit attributable to shareholders of HKD 16.13 billion, down 43% from HKD 28.11 billion in 2023[198]. - Basic earnings per share decreased to HKD 1.18, down from HKD 2.06 in 2023[198]. - The Group's overall operating profit decreased by 12% to HKD 6.83 billion, down from HKD 7.79 billion in 2023[199]. - The decline in rental income and operating profit was attributed to a weak retail and office leasing market in both mainland China and Hong Kong[198]. Shareholder Returns - The dividend per share remained unchanged at HKD 0.86 for both 2024 and 2023[10]. - The board proposed a final dividend of HKD 0.65 per share, maintaining the same level as in 2023, resulting in a total annual dividend of HKD 0.86 per share for 2024[200]. - The company plans to maintain a total dividend of HKD 0.86 per share for the year ending December 31, 2024, subject to shareholder approval[28]. Market Challenges - The company anticipates challenges in the operating environment, marking the first decline in rental income from mainland China in 24 years[27]. - The current market sentiment is influenced by weak real estate prices, rising unemployment, and a sluggish stock market, creating a difficult retail environment[38]. - The company is facing challenges from various fronts, including financing, leasing, and marketing, necessitating resilience and adaptability in operations[40]. - The retail environment in China is increasingly competitive, with a zero-sum growth scenario where sales increases in one mall lead to declines in another, particularly in saturated luxury markets[37]. - The company observed that consumer confidence has dropped to recent lows, with no clear signs of improvement in the market[32]. Property Development and Expansion - The newly opened Kunming Hotel in August 2024 reflects the company's commitment to excellence and world-class living spaces[4]. - The company has diversified its property portfolio across nine mainland cities, including Shanghai and Wuhan[6]. - The expansion of Shanghai Hang Lung Plaza will add 13% more retail space, enhancing customer experience and positioning it as a luxury destination[48]. - The company is expanding its hotel portfolio, with the Kunming Junyue Hotel set to open in August 2024, alongside several other hotel projects in the coming years[188]. - The company plans to enhance its luxury residential brand series and promote completed properties effectively[179]. Retail Performance - Retail sales in Shanghai's malls saw a significant decline of approximately 20%, while overall high-end mall sales decreased by a more moderate 15%[33]. - The company noted that luxury brand tenants are significantly impacted, with sales rents based on tenant sales revenue decreasing[29]. - The luxury retail sector is experiencing aggressive price competition, with some brands resorting to discounts of around 20% to attract consumers[37]. - The company is focusing on optimizing tenant mix in the retail sector, particularly in jewelry, beauty, and dining, to counteract market competition[148]. - The retail occupancy rate at Kunming Hang Lung Plaza is 98%, while the office occupancy rate stands at 86%[128]. Future Outlook - The company aims for a single-digit growth target for rental income in 2025, reflecting a cautious outlook amidst ongoing market challenges[39]. - The company anticipates cautious investment attitudes from retail brands in the coming year despite government stimulus measures improving market sentiment[87]. - The company aims to leverage government upgrades to enhance shopping experiences and attract potential tenants in Shenyang[98]. - The company plans to further optimize its brand mix in Tianjin to enhance competitiveness and attract more foot traffic[118]. - The company aims to provide more value to tenants by increasing sales and foot traffic as a primary strategy for 2025[37]. Sustainability Initiatives - The company aims to achieve net-zero greenhouse gas emissions by 2050, with specific targets set for 2025[7]. - Jinan IFC is the first commercial property in Shandong province to achieve net zero carbon emissions in annual electricity consumption for both owners and tenants, fully utilizing renewable energy since January 1, 2023[56].

Financial Performance - Total revenue for the year 2024 increased by 8% to HKD 11,760 million compared to HKD 10,881 million in 2023[5] - Operating profit decreased by 12% to HKD 6,826 million, down from HKD 7,794 million in the previous year[5] - Basic earnings attributable to shareholders fell by 21% to HKD 2,327 million, with basic earnings per share dropping to HKD 1.71 from HKD 2.15[5] - Net profit for the year was HKD 2,836 million, a decline of 42.3% compared to HKD 4,915 million in 2023[88] - Total comprehensive income for the year was HKD 618 million, significantly lower than HKD 3,148 million in 2023, a drop of 80.4%[88] - Basic earnings per share decreased to HKD 1.18, down from HKD 2.06 in 2023, representing a 42.7% decline[86] - Shareholders' attributable profit for 2024 was HKD 1,613 million, a decrease of 42.5% from HKD 2,811 million in 2023[110] Rental Income and Property Performance - Rental income from properties declined by 6% to HKD 10,033 million, with a 9% drop in Hong Kong rental income[10] - The company reported a 5% decline in rental income from mainland properties, attributed to economic weakness and geopolitical tensions[10] - Total rental income decreased by 4% to RMB 6,252 million, with a 6% decline in operating profit[13] - High-end mall revenue fell by 4%, with notable declines in flagship locations such as Shanghai Hang Lung Plaza (-6%) and Shenyang City Government Hang Lung Plaza (-16%) due to weakened consumer confidence[16][17][18] - Office rental income decreased by 6% to RMB 1,320 million, attributed to increased market supply and cost control measures by tenants[22] - Overall rental income in Hong Kong dollar terms fell by 5% due to RMB depreciation[13] Property Valuation and Revaluation Losses - The net revaluation loss attributable to shareholders was HKD 714 million, compared to a loss of HKD 120 million in 2023[5] - The company recorded a property revaluation loss of HKD 1.197 billion, compared to a loss of HKD 62 million in 2023[41] - The mainland property portfolio experienced a revaluation loss of HKD 851 million, down from a gain of HKD 260 million in 2023, representing less than 1% of the property portfolio value as of December 31, 2023[41] - The Hong Kong property portfolio recorded a revaluation loss of HKD 346 million, compared to a loss of HKD 322 million in 2023, also reflecting a decline of less than 1% from the property portfolio value as of December 31, 2023[41] Debt and Financial Position - The net debt to equity ratio increased to 30.8% from 28.6% in the previous year[4] - The total borrowings amount to HKD 57.794 billion as of December 31, 2024, compared to HKD 50.693 billion as of December 31, 2023[55] - The debt composition includes 64% in HKD and 36% in RMB, with fixed-rate debt accounting for 41% of total debt as of December 31, 2024[56] - The average repayment period of the overall debt portfolio is 2.9 years, with approximately 65% of loans due for repayment after two years[59] - Total financial costs increased by 7% to HKD 2.130 billion, maintaining an average effective borrowing rate of 4.3%[63] - The interest coverage ratio for 2024 was 3.0 times, down from 3.8 times in 2023[65] Cash Flow and Assets - The total cash and bank deposits balance as of December 31, 2024, is HKD 10.817 billion, up from HKD 6.343 billion in 2023[52] - Non-current assets totaled HKD 207,430 million, slightly up from HKD 207,424 million in 2023[90] - Total liabilities increased to HKD 63,414 million, compared to HKD 61,457 million in 2023, marking a 3.2% rise[90] - The company's net asset value decreased to HKD 152,688 million from HKD 154,916 million in 2023, a decline of 1.5%[90] Dividends and Shareholder Returns - The total dividend for the year remained unchanged at HKD 0.86 per share, with a payout ratio based on attributable profit of 73%[9] - The company plans to distribute a final dividend of HKD 0.65 per share, totaling HKD 885 million, consistent with the previous year's distribution[109] Sustainability and Community Engagement - The company has committed to achieving net-zero emissions by 2050, with a target to use 25% renewable energy in its mainland properties by 2025[70] - Five out of ten operational projects in mainland China are now powered by renewable energy, exceeding the 2025 sustainability goal[71] - The company successfully recycled nearly 180,000 kilograms of urban solid waste through its office renovation project, donating over 400 pieces of furniture to 33 non-profit organizations[76] - The "Caring for Caregivers" initiative has seen over 1,300 public participants in its first six months, providing community respite and leisure activities for caregivers of dementia patients[80] - The company has contributed 68,900 service hours through its volunteer team, benefiting over 30,800 individuals across 11 projects in Hong Kong and mainland China in 2024[79] Market Strategy and Future Plans - The company plans to enhance customer loyalty through marketing strategies and optimize tenant mix to improve rental rates[11] - New marketing initiatives and community engagement activities were launched to drive foot traffic and sales in malls[21] - The company introduced exclusive new stores and expanded brand offerings in response to market competition[21] - The company is actively monitoring and responding to changing corporate demands for office space, anticipating steady demand due to economic conditions[84] - The company has commenced sales activities for the Kunming Junyue Residence, which consists of 254 units, and the Kunming Junyue Hotel, which opened on August 6, 2024, with 331 rooms and suites[43]

Financial Performance - Property sales reached HKD 1.2 billion, contributing to a total revenue increase of 15% to HKD 6.4 billion[6] - Total revenue for the first half of 2024 reached HKD 6,379 million, a decrease of 15% compared to HKD 5,525 million in the same period of 2023[11] - Operating profit for the first half of 2024 was HKD 3,613 million, down from HKD 4,034 million in the same period of 2023, reflecting a decline of 10%[11] - Shareholders' attributable net profit for the first half of 2024 was HKD 1,281 million, a decrease of 18% from HKD 1,560 million in the same period of 2023[11] - The company's profit for the six months ended June 30, 2024, was HKD 1,526 million, a decrease of 47.5% compared to HKD 2,909 million in the same period of 2023[81] - Basic earnings per share for the period were HKD 0.65, down from HKD 1.24 in the same period last year, reflecting a decline of 47.6%[80] Revenue Breakdown - Core business (recurring rental income) decreased by 7% to HKD 5.2 billion, while basic rental profit attributable to shareholders fell by 18% to HKD 1.3 billion[6] - Property leasing income decreased by 7% to HKD 5.151 billion, impacted by a decline in luxury goods consumption in mainland China and a weak retail market in Hong Kong[16] - Rental income decreased to HKD 4,464 million in 2024 from HKD 4,824 million in 2023, representing a decline of 7.5%[91] - The overall leasing income in Hong Kong fell by 8%, with a corresponding 11% decline in operating profit due to a slow market recovery[16] - Retail property revenue fell by 7% to HKD 950 million, with a tenant sales decline of 3% and an overall occupancy rate maintained at 97%[29] Expenses and Financial Costs - Interest expenses increased by 46% compared to the same period in 2023, significantly impacting basic profit[6] - Total financial expenses increased by 19% when including capitalized interest[6] - The average effective borrowing rate rose to 4.4% in the first half of 2024, leading to a 19% increase in total financial costs to HKD 1,069 million[47] - The net interest expense increased to HKD 421 million in 2024 from HKD 265 million in 2023[95] Market Conditions - Tenant sales in Shanghai shopping malls dropped over 20%, leading to a 13% decline in tenant sales across the mainland property portfolio[6] - Consumer confidence remains low, contributing to a 4% decline in tenant sales in shopping malls outside Shanghai[7] - The company anticipates challenges in the first half of 2024, with expectations for tenant sales to recover diminishing as of June[6] - The macroeconomic environment remains uncertain, with high interest rates expected to persist, but a trend towards rate cuts is anticipated to improve global economic sentiment[52] Debt and Equity - The company expects debt and interest levels to peak at around 35% in two years, which is considered acceptable[8] - The net debt-to-equity ratio increased to 30.2% as of June 30, 2024, compared to 28.6% as of December 31, 2023[12] - Total borrowings reached HKD 53,715 million, up from HKD 50,693 million as of December 31, 2023, with 35% denominated in RMB[41] - The company has prioritized debt repayment over dividends and new investments until the debt situation improves[8] Sustainability Initiatives - The collaboration with LVMH has entered its second year, enhancing the company's sustainability efforts[9] - The "Changemakers: Tenant Sustainability Collaboration Program" was launched in December 2023, involving 16 tenants across 14 properties with a total leased area of over 78,000 square meters[50] - The company has transitioned half of its operational properties in mainland China to renewable energy, exceeding its 2025 sustainability target[49] Shareholder Information - The company declared an interim dividend of HKD 0.21 per share, consistent with the previous year[15] - Major shareholder Chen Wenbo holds 551,502,580 shares, representing 40.50% of the total issued shares[70] - The total number of shares held by Hang Lung Properties Limited is 3,008,256,189, accounting for 63.85% of the total issued shares[60] Future Outlook - The company plans to continue optimizing tenant mix and enhancing customer experience to drive foot traffic and stimulate consumer spending[16] - The demand for office space is expected to remain weak in the second half of 2024 due to ongoing challenges in Hong Kong's retail environment[52] - The company plans to continue selling high-end serviced apartments, including those in Wuhan, Kunming, and Wuxi, leveraging superior product and property management services[52]

Revenue Performance - Total revenue for the six months ended June 30, 2024, increased by 15% to HKD 6,379 million, with property sales revenue of HKD 1,228 million compared to HKD 2 million in 2023[5] - Revenue for the six months ended June 30, 2024, was HKD 6,379 million, an increase of 15.4% compared to HKD 5,525 million in 2023[56] - The hotel segment recorded a 3% increase in revenue, indicating some recovery in domestic business and leisure travel[9] - The company's shopping mall revenue decreased by 3% in the first half of 2024 compared to the same period in 2023, with high-end malls experiencing a 4% decline[10] - Total revenue from property leasing decreased by 5% to RMB 668 million compared to RMB 701 million in 2023[17] Profitability and Earnings - Basic earnings attributable to shareholders decreased by 18% to HKD 1,281 million, resulting in basic earnings per share of HKD 0.94[5] - Net profit for the period was HKD 1,526 million, down 47.5% from HKD 2,909 million in the previous year[51] - Net profit attributable to shareholders was HKD 888 million, a decrease of 47.5% compared to HKD 1,682 million in the previous year[57] - Basic and diluted earnings per share for 2024 were HKD 0.94, down from HKD 1.15 in 2023, reflecting a decline of 18.3%[68] - Total comprehensive income for the period was HKD 870 million, compared to a loss of HKD 644 million in 2023[51] Property and Investment Valuation - The total value of investment properties as of June 30, 2024, was HKD 201.301 billion, with a revaluation loss of HKD 715 million[26] - The fair value of investment properties decreased by HKD 715 million, contrasting with an increase of HKD 241 million in the previous year[50] - The Hong Kong property portfolio recorded a revaluation loss of HKD 282 million, compared to a gain of HKD 33 million in 2023, representing a decline of less than 1% from the valuation as of December 31, 2023[27] - The impact of property fair value changes on shareholders' net profit was HKD 656 million for 2024, compared to a negative impact of HKD 202 million in 2023[67] Debt and Financial Position - The net debt-to-equity ratio increased to 30.2% from 28.6% in the previous year[4] - The total borrowing as of the reporting date was HKD 53.715 billion, an increase from HKD 50.693 billion as of December 31, 2023, with 35% denominated in RMB[35] - The net financial expenses increased by 19% to HKD 1.069 billion in the first half of 2024, with an average effective borrowing rate rising to 4.4%[42] - The interest coverage ratio for the first six months of 2024 was 3.2 times, down from 4.4 times in 2023[42] - The average repayment term of the overall debt portfolio is 3.0 years, with approximately 65% of loans due for repayment in over 2 years[39] Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.21 per share, unchanged from the previous year[7] - The interim dividend declared was HKD 286 million, consistent with the previous year[64] Market and Operational Insights - The luxury goods market weakened, particularly affecting Shanghai's business, with high-end mall revenues down 4%[12] - The retail outlook for the second half of 2024 is conservative due to ongoing challenges in Hong Kong, with expected weak demand for office leasing[49] - The company plans to enhance tenant mix and implement promotional activities to drive foot traffic and customer spending[8] - The company launched various marketing activities to enhance customer experience and increase foot traffic across its malls[15] Future Projects and Developments - The Kunming project includes 254 residences and a hotel with 331 rooms, both expected to receive completion certificates in April 2024, with the hotel planned to open in Q3 2024[29] - The Hangzhou project, which includes a shopping center and luxury hotel, is expected to open in H2 2026, with other parts of the project to be completed in phases starting in 2025[29] - The Shanghai project has received government approval for a new retail building of approximately 3,000 square meters, expected to be completed in 2026[30] Employee and Operational Costs - Employee costs for the first half of 2024 amounted to HKD 936 million, with a total workforce of 4,141 employees[74] - The company has implemented a strict credit policy to minimize credit risk, including rigorous assessments of tenants[71]

Core Viewpoint - The chairman of Hang Lung Group, Chen Qizong, reflects on the company's history, performance, and the economic changes in Hong Kong and mainland China, while expressing optimism for the future despite challenges [1][2]. Performance and Dividend Review - For the year ending December 31, 2023, overall revenue slightly decreased by 1% to HKD 10.881 billion, while rental income increased by 2% to HKD 10.879 billion [2]. - Excluding property revaluation impacts, the basic profit attributable to shareholders decreased by 2% to HKD 2.931 billion, with basic earnings per share dropping to HKD 2.15 [2]. - Including all property revaluation impacts, the profit attributable to shareholders increased by 3% to HKD 2.811 billion, with earnings per share rising to HKD 2.06 [2]. - The board proposed a final dividend of HKD 0.65 per share, to be distributed on June 14, 2024, pending shareholder approval, resulting in a total dividend of HKD 0.86 per share for the year [2]. Industry Insights - The chairman emphasizes the need for Hong Kong to strengthen economic ties with mainland China and improve technological capabilities to adapt to global changes [1][9]. - The real estate sector remains a critical pillar of Hong Kong's economy, but the sustainability of high property prices is questioned due to social issues arising from housing affordability [6][7]. - The company maintains a cautious approach to leverage compared to mainland real estate companies, highlighting the importance of financial stability and cash flow [1][2]. - The chairman believes that the world-class commercial real estate leasing business in mainland China presents significant investment opportunities [1][20]. Economic Context - The chairman discusses the historical context of Hong Kong's economy, noting that while it has changed since 1997, the city remains a suitable place for business operations [4][5]. - The impact of geopolitical tensions, particularly between the U.S. and China, is acknowledged as a factor affecting investment sentiment towards China [10][11]. - The chairman asserts that despite the challenges, China's economic growth potential remains strong, particularly in the context of the commercial real estate market [12][20]. Future Outlook - The company is positioned to benefit from the anticipated growth in the mainland's commercial real estate sector, with expectations of achieving annual growth rates of around 10% in the coming years [13][20]. - The chairman expresses confidence in the company's strategies and the ability of the new leadership to navigate the evolving external environment [12][20].

Financial Performance - Total revenue for 2023 was HK$10.881 billion, with property leasing contributing HK$10.879 billion and property sales contributing HK$2 million[6] - Operating profit for 2023 was HK$7.794 billion, with a loss of HK$50 million from property sales[6] - Shareholders' equity increased to HK$94.36 billion as of December 31, 2023, compared to HK$92.819 billion in 2022[6] - Basic earnings per share based on shareholders' attributable profit was HK$2.15 in 2023[7] - Total dividend per share for 2023 was HK$0.86, consisting of an interim dividend of HK$0.21 and a final dividend of HK$0.65[7] - The dividend payout ratio based on shareholders' attributable profit was 42% in 2023, slightly down from 43% in 2022[8] - Net debt-to-equity ratio decreased to 28.6% in 2023 from 32.7% in 2022[8] - Total revenue decreased by 1% to HKD 10.881 billion due to RMB depreciation and reduced property sales[12] - Rental income increased by 2% to HKD 10.879 billion[12] - Basic profit attributable to shareholders decreased by 2% to HKD 2.931 billion, with basic earnings per share dropping to HKD 2.15[12] - Profit attributable to shareholders, including property revaluation, increased by 3% to HKD 2.811 billion, with earnings per share rising to HKD 2.06[12] - The board proposed a final dividend of HKD 0.65 per share, with total dividends for the year amounting to HKD 0.86 per share[12] - Overall operating profit rose by 1% to HKD 7.794 billion, with property leasing contributing HKD 7.844 billion, up 3% year-on-year[115] - Shareholders' basic profit attributable decreased by 2% to HKD 2.931 billion, with basic earnings per share dropping to HKD 2.15[115] - The company recorded a net revaluation loss of HKD 120 million on investment properties, compared to a loss of HKD 284 million in 2022[116] - The company proposed a final dividend of HKD 0.65 per share, maintaining the same level as 2022, with a total annual dividend of HKD 0.86 per share[114] - Total revenue for 2023 decreased by 1% to HKD 10.881 billion, primarily due to RMB depreciation and a decline in property sales revenue[113] - Property leasing income increased by 2% to HKD 10.879 billion, while property sales revenue dropped to HKD 2 million from HKD 316 million in 2022[113] - The company recorded a profit of HK$127 million from joint ventures, down from HK$153 million in 2022, primarily due to a one-time gain of HK$94 million from acquiring an additional 6.67% stake in Citygate in Hong Kong[138] - The company's investment properties and properties under development were valued at HK$201.068 billion, with mainland properties accounting for HK$137.093 billion and Hong Kong properties for HK$63.975 billion[139] - The company reported a revaluation loss of HK$62 million for its property portfolio, compared to a loss of HK$352 million in 2022[139] - Mainland property portfolio recorded a revaluation gain of HK$260 million, while Hong Kong property portfolio recorded a revaluation loss of HK$322 million[140] - The company's total capital commitments for investment property development projects amounted to HK$15 billion[141] - The company's cash and bank deposits totaled HK$6.343 billion, with 60% in HKD, 37% in CNY, and 3% in USD[144] - The company's total borrowings were HK$50.693 billion, with 71% in HKD and 29% in CNY, serving as a natural hedge for its mainland investments[145] - Fixed-rate debt accounted for 37% of total debt, with 50% of offshore debt being fixed-rate after excluding onshore floating-rate debt[145] - Total borrowing increased to HKD 50,693 million in 2023, up from HKD 45,953 million in 2022, with fixed-rate loans accounting for 37% and floating-rate loans for 63%[147] - Net debt-to-equity ratio rose to 28.6% in 2023 from 25.9% in 2022, primarily due to capital expenditures in mainland China and Hong Kong[148] - The average repayment period of the debt portfolio was 3.0 years in 2023, with 63% of loans due after 2 years[150] - Total financial expenses increased by 29% to HKD 1,987 million in 2023, driven by higher average borrowing rates and increased capital expenditure[151] - The company's interest coverage ratio decreased to 3.8x in 2023 from 4.8x in 2022[151] - The company reported a translation loss of HKD 1,693 million due to a 1.4% depreciation of the RMB against HKD in 2023[153] - The company's net cash balance, excluding Hang Lung Properties, was HKD 1,002 million in 2023, up from HKD 127 million in 2022[148] - The company's unused committed credit facilities amounted to HKD 18,567 million in 2023, down from HKD 24,789 million in 2022[148] Property Portfolio and Leasing - Mainland China property leasing revenue increased to HK$7.399 billion in 2023 from HK$7.218 billion in 2022[6] - Hong Kong property leasing revenue rose to HK$3.48 billion in 2023 from HK$3.407 billion in 2022[6] - The company's property portfolio covers 9 mainland cities, including Shanghai, Shenyang, Jinan, Wuxi, Tianjin, Dalian, Kunming, Wuhan, and Hangzhou[5] - Mainland China accounted for 68% of the company's rental income, with this proportion continuing to rise[12] - The company's property portfolio in China's high-end commercial real estate leasing business has been steadily growing, with annual rental income expected to achieve high single-digit growth[20] - The company aims for an annual growth rate of approximately 10% in the luxury retail sector within the Chinese market, which is expected to outperform GDP growth by several percentage points[21] - The company has successfully operated in Hong Kong for 63 years and in mainland China for over 33 years, with no plans to relocate[20] - The company's brand is considered one of the top in China's commercial real estate sector[20] - The company's strategy has been jointly developed by the current and incoming chairman, with adjustments expected as external conditions evolve[20] - The company anticipates further expansion of its property portfolio[21] - The company's performance is expected to lead the industry if external conditions, particularly China's stability and economic growth, remain favorable[21] - The company's growth strategy is supported by China's large and dynamic market, which is expected to grow at a rate of 4% to 5% annually over the next 10 to 20 years[21] - The company's success is attributed to its strategic timing in acquiring properties in Hong Kong and entering the mainland market[20] - The company's leadership believes that China's social stability and economic growth will continue, despite external challenges[21] - Full-year growth in 2023 recorded low single-digit growth in Hong Kong dollars, supported by strong performance of high-end shopping malls outside Shanghai[28] - Over HKD 5 billion was invested in construction projects in 2023, including the completion of the first building in Wuhan's "Henglong Mansion," though sales have been slow[28] - Hangzhou's Hang Lung Plaza shopping mall is nearing completion, with six buildings under rapid construction, aiming for a 2025 opening[28] - Kunming's Hyatt Hotel is expected to open in June 2024, with serviced apartments following shortly after[28] - Jinan's Hang Lung Plaza optimization plan is ahead of schedule, expected to complete by the end of 2024[29] - The company's total gross floor area in Shanghai's Hang Lung Plaza is 213,255 square meters, with 25% retail and 75% office space[36] - Shanghai's Grand Gateway Hang Lung Plaza has a total gross floor area of 273,427 square meters, with 45% retail, 25% office, and 30% residential and serviced apartments[37] - Shenyang Huangcheng Plaza has a total gross floor area of 109,307 square meters, with 100% retail space and 844 parking spaces[38] - Shenyang City Plaza has a total gross floor area of 293,905 square meters, with 35% retail, 45% office, 20% hotel, and 2,001 parking spaces[39] - Jinan Plaza has a total gross floor area of 171,074 square meters, with 100% retail space and 785 parking spaces, and is the first commercial property in Shandong Province to achieve net-zero carbon emissions[40] - Wuxi Plaza has a total gross floor area of 259,770 square meters, with 47% retail, 53% office, and 1,292 parking spaces[40] - Tianjin Plaza has a total gross floor area of 152,831 square meters, with 100% retail space and 800 parking spaces[41] - Dalian Plaza has a total gross floor area of 221,900 square meters, with 100% retail space and 1,214 parking spaces[42] - Kunming Plaza has a total gross floor area of 333,112 square meters, with 50% retail, 50% office, and 1,629 parking spaces, and is the first project to achieve net-zero carbon emissions in both owner and tenant operations[43] - Wuhan Plaza has a total gross floor area of 328,612 square meters, with 54% retail, 46% office, and 2,265 parking spaces[43] - Fashion Walk in Hong Kong has a total gross floor area of 70,487 square meters, with 57% retail, 31% office, 12% residential and serviced apartments, and 126 parking spaces[44] - Central property portfolio consists of 4 office buildings with a total gross floor area of 50,041 sqm, with 21% allocated to retail and 79% to office space[45] - The Peak Galleria, a tourist landmark in Hong Kong, has a total gross floor area of 12,446 sqm, entirely dedicated to retail, and features 493 parking spaces[46] - Hong Kong East property portfolio includes Kornhill Plaza, Kornhill Gardens, and the newly completed 228 Electric Road, with a total gross floor area of 108,687 sqm, comprising 50% retail, 18% office, and 32% residential and serviced apartments[47] - Mongkok property portfolio, including Granville Road and Argyle Centre, has a total gross floor area of 89,815 sqm, with 32% allocated to retail and 68% to office space[48] - Amoy Plaza, located near Kowloon Bay MTR Station, has a total gross floor area of 49,006 sqm, entirely dedicated to retail[49] - In 2023, the company's leasing income increased by 7% year-on-year in RMB terms, driven by the recovery of the mainland market[50] - Shanghai Plaza 66, a premier property in the company's mainland portfolio, maintained a 100% occupancy rate for its retail spaces and a 96% occupancy rate for its office spaces[54] - The company's marketing efforts in Q1 2023, including innovative activation plans and popular events, successfully boosted tenant sales and leasing income[50] - Shanghai Plaza 66 introduced new luxury brand stores and expanded flagship stores for brands like Dior, Valentino, and Moncler, enhancing its position as a high-end brand hub[52] - The company plans to continue adjusting its tenant mix in 2024, offering a more diversified selection of high-end designer brands and leveraging its efficient membership program activities[52] - Shanghai Grand Gateway 66's foot traffic steadily recovered, with strong performance in dining, sportswear, and jewelry brands, despite a slight dip in occupancy rate due to tenant changes[55] - Shanghai Grand Gateway 66 attracted 17 new brands in 2023, including Dinh Van's first Asia-Pacific store and expanded Gucci flagship, enhancing its luxury beauty tenant mix[55] - Shenyang Imperial Palace 66 saw increased tenant sales and occupancy rate in 2023, driven by new store openings and strong performance in the second half of the year[58] - Shenyang Imperial Palace 66 added brands like On, The North Face, and Emporio Armani, enriching its sportswear and fashion offerings[58] - Shenyang Forum 66 recorded growth in tenant sales and rental income in 2023, despite challenges from overseas travel recovery impacting domestic luxury consumption[60] - Shenyang Forum 66 introduced the FAS Art Exhibition, featuring works from 9 artists, boosting foot traffic and tenant sales[60] - Shenyang Forum 66's office tower, the tallest in Northeast China, secured new tenants like Siemens Energy and Guojin Securities despite market challenges[61] - Shenyang Conrad Hotel performed well in 2023, ranking among China's top 20 hotels by Condé Nast Traveler and leading in RevPAR in Shenyang[62] - Shanghai Grand Gateway 66's office tower maintained stable rental income, focusing on retaining existing tenants and attracting new ones amid increasing competition[56] - Shenyang Imperial Palace 66 plans to expand its tenant mix in 2024, focusing on sportswear, women's fashion, and jewelry brands, with new stores from Salomon and Bananain[58] - Plaza 66, Shanghai: Jinan Plaza 66 saw a significant increase in foot traffic post-pandemic, with the completion of the first phase of its asset optimization plan, including renovations of indoor and outdoor areas, and the introduction of new dining and luxury brands such as Guerlain, Giorgio Armani, Sisley, Breitling, and Chow Sang Sang flagship store[63] - Jinan Plaza 66: The mall hosted the inaugural "Wheat Wave Music Festival," which significantly boosted foot traffic and tenant sales through live music, markets, and interactive activities[63] - Jinan Plaza 66: The second phase of the asset optimization plan, covering floors 3 to 7, is expected to be completed by late 2024 to early 2025, aiming to further enhance the shopping experience and customer flow[63] - Grand Gateway 66, Shanghai: Wuxi Plaza 66 celebrated its 10th anniversary in 2023, with steady growth in tenant sales and rental income, and introduced 28 new brands including Dior, Byredo, and Salomon[65] - Wuxi Plaza 66: The mall successfully held the "Take Center Stage" annual marketing event for the third consecutive year, increasing foot traffic and setting new sales records for multiple tenants[65] - Wuxi Plaza 66: The office towers maintained stable occupancy rates, with new tenants including China Taiping and Siemens, and the "Hengju" co-working space gaining popularity[66] - Tianjin Plaza 66: The mall saw significant improvement in performance due to the recovery of domestic tourism and increased daily foot traffic, with 16 new tenants including Manner Coffee and OTF[68] - Tianjin Plaza 66: The mall hosted a series of themed events, including a mini concert and special decorations for Starbucks, successfully attracting a large number of visitors[69] - Dalian Plaza 66: The mall became a luxury hub in Dalian, with significant sales growth in high-end, sub-high-end, and dining markets, and introduced new brands such as CHANEL BEAUTÉ, Dior Beauty, and Vacheron Constantin[70] - Dalian Plaza 66: The mall celebrated its 7th anniversary with over 150 tenants, achieving record tenant sales and the second-highest daily foot traffic since opening[70] - Kunming Plaza recorded an increase in tenant sales, leasing portfolio, and foot traffic, with a high occupancy rate despite slow economic growth in the city[72] - Kunming Plaza added 8 beauty and cosmetics brands in 2023 and upgraded multiple dining and sub-luxury tenant stores, enhancing the shopping experience[72] - Kunming Plaza's office building, located in the city's core business district, has over 50% of its tenants from the finance, insurance, and professional services sectors[73] - Wuhan Plaza's tenant sales and foot traffic increased in 2023, despite market competition and price-sensitive consumers, with new luxury and lifestyle brands opening their first stores in Wuhan[75] - Wuhan Plaza's office building saw a slight increase in occupancy rate due to new tenants from professional services, technology, media, and telecommunications sectors, but tenant stability remains weak[76] - Kunming Hyatt Hotel, set to open in mid-2024, will offer 331 rooms and suites, integrating Yunnan's unique charm into its design, and will be part of Kunming Plaza's multi-purpose complex[78] - Wuxi Hilton Curio Collection Hotel, expected to open in the first half of 2025, will feature 105 high-end rooms and blend modern and historical architecture within the Wuxi Plaza complex[78] - Hangzhou Plaza will develop into a high-end mixed-use project, including 5 Grade A office towers, a luxury shopping mall, and the Hangzhou Mandarin Oriental Hotel, set to open in phases starting 2024[79] - Hangzhou Mandarin Oriental Hotel, planned to open by the end of 2025, will offer approximately 190 rooms and suites, along with event spaces, a spa, and two restaurants[79] - Hangzhou Plaza's development project incorporates sustainable practices, including carbon emission data collection, construction waste recycling, and net-zero carbon design for historical buildings[79] - Shanghai Plaza expansion to add 3,080 square meters of retail space, expected completion in 2026[80] - Shenyang City Plaza expansion to add 502,660 square meters of retail, office, and residential space, expected completion starting 2028[80] - Hong Kong property portfolio rental income increased by 2% year-over-year due to improved tenant mix and customer loyalty programs[83] - Hong Kong retail market recovery in 2023 driven by increased tourist and business visitor numbers[81] - Fashion Walk in Causeway Bay saw improved foot traffic and tenant sales through marketing initiatives and new tenant additions[85] - Central portfolio in Hong Kong saw increased occupancy rates due to flexible leasing terms and tenant mix adjustments[87] - Peak Galleria in Hong Kong experienced a surge in foot traffic and rental income, with a focus on enhancing dining options and outdoor spaces

Revenue Performance - Total revenue for the year ended December 31, 2023, decreased by 1% to HKD 10,881 million, impacted by RMB depreciation and a decline in property sales revenue[4] - Total revenue for 2023 reached HKD 219.081 billion, a slight increase from HKD 214.679 billion in 2022[57] - Total revenue for 2023 was HKD 10,881 million, a slight decrease of 0.5% from HKD 10,941 million in 2022[55] Rental Income - Rental income increased by 2% to HKD 10,879 million, with mainland rental income rising by 3% and Hong Kong rental income also increasing by 2%[5] - Total rental income for 2023 increased by 7% to RMB 6,651 million, with operating profit rising by 8%[8] - Overall rental income growth in Hong Kong dollars was limited to 3% due to the depreciation of the RMB[8] Profitability - Overall operating profit rose by 1% to HKD 7,794 million, with a breakdown showing mainland operating profit at HKD 5,007 million and Hong Kong at HKD 2,787 million[3] - Shareholders' basic net profit decreased by 2% to HKD 2,931 million, resulting in basic earnings per share of HKD 2.15[4] - The net profit for the year was HKD 4,915 million, representing an increase of 2.5% compared to HKD 4,795 million in 2022[50] Property Sales and Valuation - The net revaluation loss of properties attributable to shareholders was HKD 120 million, compared to a loss of HKD 284 million in 2022[4] - Property sales revenue significantly dropped to HKD 2 million in 2023 from HKD 316 million in 2022[55] - The company reported a net gain from the sale of non-core investment properties amounted to HKD 11 million during the reporting year[27] Debt and Financial Position - The net debt-to-equity ratio increased to 28.6% from 25.9% in the previous year[3] - Total borrowings as of December 31, 2023, reached HKD 50,693 million, up from HKD 45,953 million in 2022, with RMB-denominated borrowings constituting 29%[36] - The average effective borrowing rate rose to 4.3% in 2023 from 3.5% in 2022, leading to a 29% increase in total financial costs to HKD 1,987 million[42] Dividends and Shareholder Returns - The company proposed a final dividend of HKD 0.65 per share, maintaining the same level as the previous year[6] - Basic earnings per share for 2023 were HKD 2.15, down from HKD 2.20 in 2022, indicating a decrease of 2.3%[66] Operational Highlights - Tenant sales and rental income in mainland China increased by 23% and 7% respectively year-on-year, reflecting a recovery in business[7] - Hotel operations saw a significant recovery, with revenue increasing by 90% year-on-year due to the easing of travel restrictions[8] - The company plans to enhance its shopping experience by constructing a new retail building of approximately 3,000 square meters at Shanghai Hang Lung Plaza[11] Employee and Governance - As of December 31, 2023, the total number of employees was 4,213, including 968 in Hong Kong and 3,245 in mainland China[71] - The company adhered to the corporate governance code as per the Hong Kong Stock Exchange during the year[72] - The company regularly reviews employee compensation to ensure competitiveness and compliance with regulations[71] Future Plans and Projects - The company plans to launch several new projects in mainland China, including high-end serviced apartments and hotels, with phased completions starting in 2024[31] - The company plans to launch new projects, including Hangzhou Henglong Plaza by the end of 2024 and Kunming Junyue Hotel in mid-2024, to capture post-pandemic business and leisure travel opportunities[48] Environmental Initiatives - The company has established a strategic partnership with a carbon capture technology firm to develop low-carbon recycled aggregates, marking a significant step towards decarbonization in real estate projects[45] - The company successfully reduced urban solid waste by nearly 140,000 kg and avoided over 510 tons of carbon emissions through its office renovation project[46]

Financial Performance - Total revenue for the six months ended June 30, 2023, decreased by 1% to HKD 5.525 billion, impacted by RMB depreciation and reduced property sales revenue[5]. - Basic earnings attributable to shareholders decreased by 3% to HKD 1.560 billion, with basic earnings per share falling to HKD 1.15[5]. - After accounting for property revaluation impacts, net profit attributable to shareholders increased by 17% to HKD 1.682 billion, with earnings per share rising to HKD 1.24[5]. - The basic net profit attributable to shareholders decreased by 3%, while property rental profit increased by 2% to HKD 1.571 billion[12]. - The net profit attributable to shareholders rose by 17% to HKD 1.682 billion, including slight net revaluation gains[12]. - The profit attributable to shareholders for the period was HKD 1,682 million, an increase of 17.6% compared to HKD 1,439 million in 2022[112]. - The company reported a net profit of HKD 1,682 million for the six months ended June 30, 2023, contributing to total equity of HKD 91,569 million[94]. - The total comprehensive income for the period was a loss of HKD 644 million, compared to a loss of HKD 2,755 million in the previous year, indicating an improvement[92]. Revenue Sources - Rental income increased by 4% to HKD 5.523 billion, reflecting improved leasing performance[5]. - Approximately 30% of the company's recurring rental income is derived from the Hong Kong market, despite a strategic shift towards the mainland commercial property market[7]. - Rental income in mainland China increased by 12% in the past six months, but due to a 6.3% depreciation of the RMB against HKD, the actual growth recorded was only 5%[12]. - The rental income from high-end shopping malls in mainland China saw tenant sales increase by over 100%, with two malls experiencing sales growth of 2.5 to 3 times[12]. - The overall rental income from the office portfolio typically experiences a decline of less than 4% annually, indicating strong resilience[11]. - The overall revenue of high-end malls increased by 16% to RMB 2,189 million, with individual mall revenue growth ranging from 6% to 23% compared to the same period last year[28]. Dividends and Shareholder Returns - The board declared an interim dividend of HKD 0.21 per share, to be distributed on September 29, 2023[5]. - The interim dividend for 2023 was declared at HKD 0.21 per share, unchanged from 2022[24]. - The company plans to distribute an interim dividend of HKD 286 million, maintaining the same level as in 2022[109]. Market Outlook and Strategy - The company anticipates a systematic transformation in the Hong Kong real estate market, with increasing land supply expected to pressure property prices[8]. - The company believes that the mainland economy is likely to perform reasonably well in the coming years, despite current market weaknesses in Hong Kong[8]. - The company acknowledges the challenges and necessary adjustments for Hong Kong's economy to maintain its competitive position in a changing global landscape[8]. - The company emphasizes a cautious approach to expansion in light of current economic uncertainties and risks[9]. Property and Investment Developments - The company has accumulated significant financial resources and industry expertise over the years, which supports its operations in the mainland market[7]. - The company has not been active in the general residential market for over 20 years, avoiding high-priced land and property challenges[13]. - The company plans to remain vigilant for future land acquisition opportunities despite not purchasing land this year[14]. - The company has established a real estate research center at Tsinghua University to focus on sustainable development and innovation in real estate technology[61]. Financial Position and Debt Management - The net debt to equity ratio increased to 27.1% from 25.9% in December 2022[21]. - The total borrowing as of June 30, 2023, was HKD 47,453 million, up from HKD 45,953 million at the end of 2022, with 28% denominated in RMB[52]. - The average repayment period of the overall debt portfolio was 3.2 years as of June 30, 2023, with approximately 72% of loans due after two years[56]. - The company issued green bonds worth HKD 400 million and secured green loan credit facilities of HKD 500 million, representing 48% of total debt and available credit facilities[50]. Corporate Governance - The company maintains high standards of corporate governance, emphasizing a competent board, sound internal controls, and effective risk management as of June 30, 2023[65]. - The board consists of 11 members, including 4 executive directors, 3 non-executive directors, and 4 independent non-executive directors, ensuring a balanced distribution of power and authority[66]. - The company has complied with the Corporate Governance Code as stipulated in the Hong Kong Stock Exchange Listing Rules during the six months ending June 30, 2023[69]. Employee and Shareholder Information - Employee count as of June 30, 2023, was 4,204, including 988 in Hong Kong and 3,216 in mainland China[85]. - Total employee costs for the six months ended June 30, 2023, amounted to HKD 950 million[85]. - Major shareholder Chen Wenbo holds 551,002,580 shares, representing 40.47% of the total issued shares[81]. - The company has implemented share option plans to incentivize selected participants, including employees and directors, to contribute to the group's future development[74].

Financial Performance - Total revenue for the first half of 2023 decreased by 1% to HKD 5,525 million compared to HKD 5,605 million in 2022[5] - Basic earnings attributable to shareholders decreased by 3% to HKD 1,560 million, with basic earnings per share at HKD 1.15[5] - Net profit attributable to shareholders, including property revaluation gains, was HKD 1,682 million, up from HKD 1,439 million in 2022[5] - Operating profit rose by 3% to HKD 4,034 million, compared to HKD 3,929 million in the previous year[6] - Net profit for the same period increased to HKD 2,909 million, up 16.0% from HKD 2,507 million in 2022[50] - Profit before tax for the period was HKD 3,756 million, an increase of 18.9% compared to HKD 3,157 million in 2022[56] - The company reported a fair value increase of properties amounting to HKD 241 million, compared to a decrease of HKD 217 million in 2022[49] Revenue Breakdown - Property leasing income increased by 4% to HKD 5,523 million, while property sales revenue was HKD 2 million, down from HKD 316 million in 2022[5] - The shopping mall segment recorded a revenue growth of 13%, with high-end malls increasing by 16% and mid-range malls declining by 3%[10] - The overall revenue for high-end malls grew by 16%, benefiting from improved market conditions and increased tenant sales during festive periods[12] - The overall tenant sales and leasing income in 2023 increased by 42% and 12% respectively compared to the same period last year[8] - Retail property revenue in Hong Kong grew by 6% to HKD 1.019 billion, with tenant sales up 21%[22] - The office building segment contributed 21% to total rental income, with total revenue increasing by 4% to RMB 701 million[15] Property Valuation and Investment - As of June 30, 2023, the total value of investment properties and properties under development is HKD 196.643 billion, with mainland properties valued at HKD 132.867 billion and Hong Kong properties at HKD 63.776 billion[28] - The company recorded a property revaluation gain of HKD 241 million, compared to a loss of HKD 217 million in 2022[28] - The mainland property portfolio achieved a revaluation gain of HKD 208 million, while the Hong Kong portfolio recorded a gain of HKD 33 million, compared to a loss of HKD 70 million in 2022[28] - The total value of properties under development for lease and sale is HKD 21.494 billion and HKD 11.222 billion, respectively[28] Debt and Financial Ratios - The net debt to equity ratio increased to 27.1% from 25.9%[4] - The total borrowings as of June 30, 2023, were HKD 47.453 billion, an increase from HKD 45.953 billion at the end of 2022[35] - Fixed-rate debt accounted for 38% of the total borrowings, while floating-rate debt made up 62%[37] - The total financial expenses increased by 21% to HKD 897 million in the first half of 2023, with the average effective borrowing rate rising to 4.0% from 3.5% in 2022[42] - The interest coverage ratio for the first six months of 2023 was 4 times, down from 5 times in 2022[42] Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.21 per share, unchanged from the previous year[7] - The interim dividend proposed for 2023 remains unchanged at HKD 0.21 per share, consistent with the previous year[63] Employee and Corporate Governance - As of June 30, 2023, the total number of employees was 4,204, including 988 in Hong Kong and 3,216 in mainland China[74] - Total employee costs for the six months ended June 30, 2023, amounted to HKD 950 million[74] - The company has adhered to the corporate governance code as per the Hong Kong Stock Exchange during the reporting period[75] Future Plans and Developments - The company plans to enhance tenant mix and accelerate leasing efforts in underperforming properties[17] - The company plans to launch high-end serviced apartment brand "恒隆府" in mainland China, with the first units in Wuhan expected to be delivered by the end of 2023[48] - The new luxury hotel in Kunming is expected to open in the first half of 2024, enhancing the company's hospitality portfolio[48] - The company anticipates continued growth in leasing income from its office portfolio despite complex market conditions[48] Miscellaneous - The company reported a foreign exchange loss of HKD 3.576 billion due to a 3.1% depreciation of the RMB against the HKD since December 31, 2022[43] - The company established a real estate research center at Tsinghua University to focus on sustainable development and innovation in real estate technology[45]

Financial Performance - In 2022, the total revenue from property leasing was HKD 10,625 million, with a slight increase from HKD 10,619 million in 2021[11]. - The operating profit for property leasing was HKD 7,596 million, down from HKD 7,898 million in 2021, reflecting a decrease of approximately 3.8%[11]. - The net profit attributable to shareholders was HKD 2,680 million, compared to HKD 2,627 million in 2021, indicating a growth of about 2%[11]. - Total revenue for the year ended December 31, 2022, remained stable at HKD 10.941 billion[16]. - Basic net profit attributable to shareholders was approximately HKD 3.002 billion, with basic earnings per share at HKD 2.20, remaining roughly flat compared to 2021[16]. - After accounting for property revaluation, net profit attributable to shareholders increased by 5% to HKD 2.718 billion, with earnings per share rising to HKD 2.00[16]. - The board proposed a final dividend of HKD 0.65 per share, totaling HKD 0.86 per share for the year ended December 31, 2022[16]. - The company maintained a dividend per share of HKD 0.86 for both 2022 and 2021, with a payout ratio based on net profit of 43%[12][13]. Market Conditions - The operational environment in 2022 was challenging, particularly in the second half of the year due to pandemic restrictions[16]. - The company anticipates benefiting more than competitors due to its prime locations in major cities[16]. - The overall performance in a difficult environment was considered satisfactory by the company[16]. - The company acknowledges the need for significant changes in Hong Kong to maintain competitiveness, particularly in industries like tourism that must recover rapidly post-pandemic[21]. - The company highlights the importance of integrating with the mainland market, recognizing the vast opportunities available there compared to the local market[22]. - The company notes that the influx of well-educated individuals from mainland China is a new driving force for economic growth in Hong Kong[22]. - The company expresses concern over the political climate affecting Hong Kong's international standing and its economic framework under the "one country, two systems" principle[23]. Sustainability Initiatives - The company has established 25 sustainability targets to be achieved by the end of 2025, aiming for net-zero greenhouse gas emissions by 2050[10]. - The company achieved significant milestones in sustainability, including a commitment to net-zero greenhouse gas emissions by 2050 and a 25% renewable energy usage target for its mainland property portfolio by 2023[165][166]. - The company has entered a three-year sustainability partnership with LVMH Group to lead climate action and sustainability initiatives in the real estate and retail sectors[167]. - Hang Lung Properties is the first real estate developer in Hong Kong and mainland China to receive SBTi approval for its short-term and long-term net-zero emissions targets, committing to a 46.6% reduction in Scope 1 and 2 absolute greenhouse gas emissions by 2030 based on 2019 levels[168]. - The company has pledged to achieve net-zero value chain greenhouse gas emissions by 2050, aligning with the Paris Agreement and the recommendations of the Intergovernmental Panel on Climate Change to limit global warming to below 1.5°C[169]. Property Development and Strategy - The company has developed a total of ten major commercial projects in mainland China, reinforcing its market presence[5]. - The company’s strategy focuses on developing high-quality properties in prime locations across major cities in mainland China[10]. - The company has been proactive in asset optimization plans, which have benefited both short-term and long-term performance[17]. - The company anticipates continued demand for luxury brands in its shopping malls, as mainland China remains the largest and fastest-growing luxury goods market globally[18]. - The company is expanding its footprint with new projects, including hotels and residential buildings, set to open in 2023 and 2024[44]. Tenant and Leasing Performance - The average rental income from office buildings recorded robust growth, increasing by 9% last year, with the office rental income in mainland China surpassing that of Hong Kong since 2021[20]. - The rental rate for the newly built office buildings in Wuxi, Kunming, and Wuhan is approaching 90%, with the Wuhan office, opened during the pandemic peak in November 2020, achieving nearly 75% occupancy[19]. - The company has successfully maintained a leading position in nearly all cities it operates in, with a significant gap between the market leader and competitors[17]. - The company’s office buildings are expected to complement its shopping mall business, with a focus on developing world-class office buildings in second-tier cities[18]. - The company aims to optimize its tenant mix in 2023 by introducing more luxury and personal care brands to attract affluent young consumers[57]. Challenges and Risks - The company acknowledges the ongoing structural downturn in the residential market, with many developers likely to struggle in the current environment[21]. - There is a potential supply shortage in new housing due to insufficient land sales, which may lead to a slight recovery in property prices in the short term[21]. - The ongoing international situation poses significant risks, with potential impacts on the supply chain and overall economic stability[29]. - The company recognizes the challenges posed by rising costs and inefficiencies in production as labor moves outside of China[29]. - The company identifies three major economic challenges currently facing China, including the high costs of pandemic control measures, a potential real estate market bubble, and the simultaneous emergence of multiple economic difficulties[27]. Corporate Governance - The company has adopted and fully complied with the Corporate Governance Code, exceeding many of its requirements[187]. - The board consists of 11 members, including four executive directors and seven non-executive directors, ensuring a balanced composition[189]. - The nomination and remuneration committee is fully composed of independent non-executive directors, enhancing governance quality[187]. - The company has published independent sustainability reports since the 2017 fiscal year, showcasing its transparency and accountability[187]. - The board held six meetings in 2022, demonstrating active governance and oversight[187]. Community Engagement - The company has a strong commitment to community welfare, with over 11,400 volunteers contributing more than 135,000 service hours since 2012[8]. - The company established a HKD 13 million "Hang Lung Anti-Epidemic Fund 2.0" to support urgent anti-epidemic projects in Hong Kong and mainland China, particularly in Shanghai, Shenyang, and Dalian[173]. - The company is committed to sustainable growth and community development, launching initiatives to support young people and promote diversity and inclusion in 2022[176].