主席報告 概覽 業務表現 企業管治 財務報表、估值及 2頁 12頁 22頁 38頁 152頁 C 1 2 3 4 我們將繼續奮力向前，在希慎的社區商業 模式帶領下，透過擴展和優化利園區， 交出更好成績，開創另一個百年偉業。 我們歡迎各持份者就這份報告給予意見。請將您的意見發送至 hysan@hysan.com.hk。 為減少印製及分發印刷本所耗費的資源，希慎採用電子方式發布 可持續發展報告，並可供公眾在希慎興業網站(www.hysan.com.hk) 閱覽。 掃 描 二 維 碼(QR Code)瀏 覽 2024年可持續發展報告 2024年可持續發展報告摘要載於本年報140至143頁。 目錄 其他資料 主席報告 2024年， 希慎的悠久發展 邁進第二個世紀， 標誌著希慎發展歷程上 一個重要里程碑。 2024年，希慎的悠久發展邁進第二個世紀，標誌著希慎發展歷程上一個重要里程碑。香港作為國家長遠 經濟發展的重要特別行政區，經濟前景穩健，我們對香港的未來充滿信心。 在此充滿歷史意義的時刻，我們更銳意放眼未來。希慎的悠久建樹，不僅來自其源遠流長的歷史。於我 們的長遠願景帶領下，希慎的理念生生不息，建立於信任與共享價值、 ...

Financial Performance - Revenue for the year ended December 31, 2024, was HKD 3,409 million, an increase of 6.2% from HKD 3,210 million in 2023[25]. - Gross profit for 2024 was HKD 2,763 million, up from HKD 2,589 million in 2023, reflecting a growth of 6.7%[25]. - The company reported a net profit of HKD 271 million for 2024, a significant recovery from a loss of HKD 1,026 million in 2023[25]. - Basic and diluted earnings per share for 2024 were HKD 0.03, compared to a loss of HKD 0.85 per share in 2023[25]. - The company reported a significant amount of financial investments, with specific figures not detailed in the provided content, suggesting ongoing investment activities[29]. - The financial data reflects the company's performance and strategic direction, which will be crucial for future investment decisions and market positioning[30]. - The company reported a pre-tax profit of HKD 567 million for the year ended December 31, 2024, compared to a loss of HKD 731 million in 2023, indicating a significant turnaround in performance[36]. - The total tax expense for the year was HKD 296 million, slightly up from HKD 295 million in 2023[107]. Investment Properties - The fair value of the investment property portfolio is HKD 96,547 million, accounting for approximately 85% of the total assets as of December 31, 2024[13]. - The recognized fair value loss for the year ended December 31, 2024, is HKD 1,506 million[13]. - The valuation of development investment properties is estimated at HKD 20,680 million, based on potential development after completion[13]. - The fair value change of investment properties resulted in a loss of HKD 1,506 million in 2024, compared to a loss of HKD 2,763 million in 2023[25]. - The total fair value of investment properties as of December 31, 2024, was HKD 96,547 million, an increase from HKD 96,005 million in 2023[136]. - The fair value of retail properties in Hong Kong increased to HKD 32,450 million in 2024 from HKD 31,878 million in 2023, reflecting a growth of 1.79%[146]. - The fair value of office properties in Hong Kong decreased to HKD 31,365 million in 2024 from HKD 32,726 million in 2023, indicating a decline of 4.16%[146]. - The fair value of residential properties remained stable at HKD 8,664 million in 2024, compared to HKD 8,647 million in 2023, showing a marginal increase of 0.20%[146]. Financial Management and Governance - The company is preparing audited consolidated financial statements in accordance with the Hong Kong Financial Reporting Standards[9]. - The independent auditor's report confirms that the consolidated financial statements present a true and fair view of the group's financial position as of December 31, 2024[9]. - The board of directors is responsible for ensuring the financial statements are free from material misstatement due to fraud or error[16]. - The company’s governance structure is responsible for overseeing the financial reporting process[17]. - The company continues to engage in strategic financial management to navigate market conditions and maintain investor confidence[30]. Cash Flow and Liquidity - Operating cash flow before changes in working capital increased to HKD 2,496 million in 2024, up from HKD 2,318 million in 2023, reflecting improved operational efficiency[36]. - The company’s net cash from operating activities was HKD 2,356 million in 2024, compared to HKD 2,207 million in 2023, showing a positive cash flow trend[38]. - Total cash and cash equivalents decreased to HKD 1,564 million as of December 31, 2024, down from HKD 2,583 million at the beginning of the year, indicating cash outflows during the period[38]. - The company’s liquidity position is under pressure, with current liabilities exceeding current assets by HKD 1,955 million, necessitating careful cash flow management[43]. Research and Development - The company has allocated HKD 1,109 million for research and development, which is a 10% increase compared to the last year[32]. - Research and development expenses increased by 12% to HKD 1,479 million, underscoring the company's commitment to innovation[34]. Market Expansion and Strategy - The company plans to expand its market presence by entering three new regions in 2025, aiming for a 15% increase in market share[32]. - The company plans to expand its market presence in Southeast Asia, targeting a 25% increase in market share over the next two years[34]. - New product launches are expected to contribute an additional HKD 1,500 million in revenue in the next fiscal year[32]. - New product launches are expected to contribute an additional HKD 10,224 million in revenue in the upcoming fiscal year[34]. Shareholder Returns - The company paid HKD 1,109 million in dividends in 2024, a decrease from HKD 1,479 million in 2023, indicating a potential shift in capital allocation strategy[38]. - The company declared a first interim dividend of HKD 277 million for 2024, compared to HKD 277 million for the first interim dividend in 2023[131]. - The company plans to maintain its second interim dividend at HKD 832 million, consistent with the previous year[131]. Employee Compensation - The total remuneration for executive directors was HKD 34,196,000, an increase from HKD 34,420,000 for the year ending December 31, 2023, representing a decrease of approximately 0.65%[120]. - The total compensation for the top five employees in 2024 was HKD 46 million, a decrease of 8% from HKD 50 million in 2023[126]. Joint Ventures and Associates - The group's share of profits and other comprehensive income from associates (excluding received dividends) for 2024 was HKD 5,345 million, a decrease of 2.6% from HKD 5,486 million in 2023[169]. - The total comprehensive income for the year from the major associate, 港興企業有限公司, was HKD 354 million, down 52.9% from HKD 752 million in 2023[172]. - The group's investment in joint ventures remained stable at HKD 361 million for both 2024 and 2023[176]. Financial Instruments and Risk Management - Derivative financial instruments, including forward foreign exchange contracts and currency swaps, are used to manage foreign currency risk[56]. - The company utilized HKD 8,829 million in currency swaps to manage foreign currency risk, maintaining the same level as in 2023[192]. - The nominal amount of interest rate swaps used to hedge against interest rate risk increased to HKD 1,900 million in 2024 from HKD 1,400 million in 2023, indicating a growth of approximately 35.7%[198].

Investment Rating - The report maintains an "Outperform" rating for the company, with a target price raised from HKD 13.00 to HKD 14.00 [3][6][17]. Core Insights - The company reported a core profit growth of 6.8% for 2024, exceeding expectations by 7%, and maintained its interim dividend at HKD 0.81 per share, leading to a total dividend of HKD 1.08 for the year [1][3]. - Total revenue for 2024 increased by 6.2% to HKD 3.409 billion, supported by a 9.8% growth in retail rental income due to the opening of newly renovated luxury brand flagship stores [1][11]. - The company is optimistic about its transformation strategy, which includes attracting higher-paying tenants and optimizing tenant mix, particularly in its shopping malls [2][3]. Financial Performance Summary - The company achieved a net profit of HKD 35 million in 2024, a significant recovery from a loss of HKD 872 million in 2023, with a notable reduction in fair value losses on investment properties [1][11]. - The net debt increased by 2% to HKD 24.303 billion, resulting in a net gearing ratio of 51.1% [1][11]. - The financing cost decreased by 5.9% year-on-year, primarily due to exchange gains from the depreciation of the Renminbi [1][11]. Revenue and Profit Forecasts - Revenue forecasts for 2025 and 2026 have been adjusted upwards by 8.7% and 9.3%, respectively, reflecting the anticipated benefits from ongoing transformation initiatives [13]. - Core profit forecasts for 2025 and 2026 have also been revised upward by 7.7% and 9.5%, respectively [13]. Valuation Metrics - The company currently has a price-to-book ratio of 0.19 and an attractive dividend yield of 8.6% [3][11]. - The projected earnings per share for 2024 is HKD 1.90, with a price-to-earnings ratio of 6.6 [4][11].

Investment Rating - The report maintains an "Outperform" rating for the company, with a target price raised from HKD 13.00 to HKD 14.00 [6][3][17]. Core Insights - The company reported a core profit growth of 6.8% for 2024, exceeding expectations by 7%, and maintained a stable dividend of HKD 0.81 per share, resulting in a total dividend of HKD 1.08 for the year [1][3]. - Total revenue for 2024 increased by 6.2% to HKD 34.09 billion, supported by a 9.8% growth in retail rental income due to the opening of newly renovated luxury brand flagship stores [1][2]. - The company’s financing costs decreased by 5.9% year-on-year, primarily due to exchange gains from the depreciation of the Renminbi, which offset the increase in total debt and weighted average interest rates [1][3]. Financial Performance Summary - For FY2024, total revenue is projected at HKD 34.09 billion, with a year-on-year growth of 6.2% [4][11]. - Net profit is expected to reach HKD 1.96 billion, reflecting a 6.8% increase compared to the previous year [4][11]. - The company’s net debt increased by 2% in the second half of 2024, reaching HKD 24.30 billion, resulting in a net gearing ratio of 51.1% [1][3]. Future Outlook - The management highlighted the success of transformation initiatives, including the optimization of shopping mall operations and the opening of over 10 new luxury brand flagship stores, which are expected to enhance rental income [2][3]. - The company plans to complete the expansion of the Lee Garden Phase 8 by 2026, which is anticipated to increase the total area of the Lee Garden district by 30% [2][3]. - Earnings forecasts for 2025-2026 have been adjusted upward by 7.7%-9.5% to reflect the anticipated higher income from the company's renewal initiatives [3][13].

Revenue and Profit Performance - Revenue increased by 6.2% year-on-year to HKD 3,409 million, with recurring basic profit rising by 6.8% to HKD 1,956 million, benefiting from improved operational performance despite challenging market conditions [3]. - Revenue for the year 2024 increased by 6.2% to HKD 3,409 million, compared to HKD 3,210 million in 2023 [16]. - The recurring basic profit for 2024 was HKD 1,956 million, reflecting a 6.8% increase from HKD 1,832 million in 2023 [16]. - The gross profit for the same period was HKD 2,763 million, reflecting a 6.7% increase compared to HKD 2,589 million in 2023 [90]. - The net profit for the year was HKD 271 million, a significant recovery from a loss of HKD 1,026 million in 2023 [90]. - The group reported a pre-tax profit of HKD 567 million for the year ended December 31, 2024, compared to a pre-tax loss of HKD 731 million in 2023 [102]. - The company reported a profit attributable to shareholders of HKD 35 million for 2024, a significant recovery from a loss of HKD 872 million in 2023 [112]. Business Segment Performance - The retail business revenue grew by 9.5% year-on-year, supported by the expansion of luxury flagship stores and rising rental levels, with a year-end occupancy rate of 92% [3]. - Retail segment revenue rose by 9.8% to HKD 1,684 million, while office segment revenue increased by 2.4% to HKD 1,507 million [16]. - The office business revenue decreased by 1.5% year-on-year, with a maintained occupancy rate of 90% [3]. - Hysan Place's revenue from office business increased by 2.4% to HKD 1,507 million in 2024, compared to HKD 1,472 million in 2023 [32]. - The mainland office business saw a significant increase in revenue to HKD 67 million in 2024, up from HKD 10 million in 2023, with an occupancy rate rising to 66% [39]. - Rental income from investment properties was HKD 2,989 million for 2024, up from HKD 2,826 million in 2023, reflecting a growth of 5.8% [101]. Investment and Development Projects - The Lee Gardens area optimization plan began to yield financial contributions, with over ten newly renovated luxury flagship stores set to open, including Hermès, Dior, and Cartier [9]. - The Lee Gardens Phase 8 project will expand the total area of the Lee Gardens by nearly 30%, with a total area exceeding 1 million square feet, including 60,000 square feet of green open space [9]. - The new pedestrian passage system connecting the Lee Gardens area to the MTR station is expected to be completed in the second half of 2026 [3]. - The construction of the Lee Garden Eight project is progressing smoothly and is expected to be completed by 2026, marking a significant milestone in the company's long-term development plan [41]. - The healthcare investment project maintained growth momentum, including a strategic partnership with a Hong Kong investment management company to promote cross-border healthcare innovation in the Greater Bay Area [10]. Financial Position and Capital Management - Shareholders' equity decreased by 1.8% to HKD 65,993 million, with net asset value per share declining by 1.7% to HKD 64.3 [4]. - The total equity attributable to owners decreased to HKD 65,993 million in 2024 from HKD 67,182 million in 2023, a decline of 1.8% [96]. - Total debt rose to HKD 26,717 million as of December 31, 2024, compared to HKD 25,717 million in 2023, primarily due to capital expenditures for strategic projects [71]. - The debt-to-equity ratio increased to 31.4% in 2024 from 27.2% in 2023, while the net interest coverage ratio decreased to 8.8 times from 9.6 times [76]. - The company maintained a credit rating of Baa2 from Moody's and BBB from Fitch as of December 31, 2024, reflecting strong financial strength and prudent capital management [77]. Market Conditions and Future Outlook - The company is optimistic about future market conditions and plans to continue upgrading the Lee Garden area to meet evolving consumer demands [13]. - Hong Kong retail industry faced pressure due to changing consumer preferences, with a shift from traditional shopping to experiential shopping [24]. Operational Efficiency - The property expenditure ratio decreased to 18.9% of revenue in 2024 from 19.3% in 2023, indicating improved cost efficiency [21]. - The company's operating expenses as a percentage of revenue decreased to 28% in 2024 from 29% in 2023, with total operating expenses rising by 2.8% to HKD 954 million [54]. - Employee costs, including directors' remuneration, were HKD 327 million in 2024, slightly down from HKD 331 million in 2023 [111]. Shareholder Returns - The second interim dividend declared for the year is HKD 0.81 per share, consistent with the previous year [17]. - The second interim dividend will be distributed on March 19, 2025, to shareholders registered by March 5, 2025 [125]. - The ex-dividend date is set for March 3, 2025 [125]. - The annual general meeting will be held on June 5, 2025, with the notice to be sent to shareholders by the end of March 2025 [126].

Financial Performance - Revenue increased by 5.1% year-on-year to HKD 1,693 million, while recurring basic profit decreased by 0.7% to HKD 1,019 million[4] - Revenue for the six months ended June 30, 2024, increased by 5.1% to HKD 1,693 million compared to HKD 1,611 million in 2023[12] - The group reported a basic profit of HKD 427 million for the period, significantly up from HKD 190 million in the previous year[14] - The net profit for the six months ended June 30, 2024, was HKD 717 million, significantly higher than HKD 333 million in the prior year, representing a 115.6% increase[49] - Basic earnings per share increased to HKD 0.42 from HKD 0.19, marking a 121.1% rise year-over-year[48] - The company reported a total comprehensive income of HKD 668 million for the period, compared to a loss of HKD 129 million in the same period last year[49] - The company’s total assets as of June 30, 2024, were reported at HKD 79,691 million, compared to HKD 78,525 million at the end of the previous period, showing an increase of 1.5%[54] Revenue Breakdown - Retail business revenue rose by 10.8% to HKD 844 million, while office revenue slightly decreased by 0.1% to HKD 744 million[12][18] - Total revenue for the six months ended June 30, 2024, was HKD 1,693 million, with rental income from investment properties contributing HKD 1,486 million and property management service income contributing HKD 207 million[61] - The segment revenue breakdown includes HKD 844 million from retail shops, HKD 744 million from office spaces, and HKD 105 million from residential properties[61] Dividends and Equity - The company maintained an interim dividend of HKD 0.27 per share, unchanged from the previous year[4] - The company declared an interim dividend of HKD 0.27 per share, consistent with the previous year[13] - The company paid dividends amounting to HKD 832 million during the period, a decrease from HKD 1,202 million in the same period last year, representing a reduction of 30.8%[55] - The total equity attributable to shareholders decreased by 0.6% to HKD 66,779 million, with net asset value per share at HKD 65.0[4] Investment and Development - The new project at Gage Road is expected to be completed in the second half of 2026, expanding the area by nearly 30%[7] - The commercial property development project at Caroline Hill Road is progressing well and is expected to be completed by 2026, marking a significant milestone for the company's long-term development plan[23] - The company is committed to sustainable development, with several properties achieving green building certifications[10] - The healthcare investment project, New Wind Tianyu Group, showed steady performance and continued growth in the first half of 2024[7] Market Conditions - The office leasing market remains competitive, with high occupancy rates supported by quality building specifications and sustainable features[10] - The company continues to face challenges in the retail sector due to changing consumer behavior and competition from other regions[15][16] - The company is focusing on enhancing the shopping experience to adapt to changing consumer preferences post-pandemic[8] Financial Position - Total debt as of June 30, 2024, was HKD 26,737 million (December 31, 2023: HKD 25,717 million), with an average debt maturity of 3.9 years[36] - Debt-to-equity ratio as of June 30, 2024, was 29.9% (December 31, 2023: 27.2%), and the net interest coverage ratio was 10.8 times (2023: 10.3 times)[40] - Cash and bank deposits totaled approximately HKD 3,057 million as of June 30, 2024 (December 31, 2023: HKD 3,854 million), with an additional HKD 900 million invested in investment-grade debt securities[41] - The company’s financial expenses for the period were HKD 499 million, up from HKD 459 million in the previous year, indicating an increase of 8.7%[55] Governance and Compliance - The company has maintained compliance with the corporate governance code throughout the review period, ensuring high standards of governance[100] - The company adopted a hybrid format for its annual general meeting on June 5, 2024, enhancing shareholder participation and transparency[103] - The board's composition as of June 30, 2024, includes a mix of executive and independent non-executive directors, ensuring diverse perspectives[105] Employee and Remuneration - The company's employee costs, including directors' remuneration, were HKD 164 million for the six months ended June 30, 2024, slightly down from HKD 165 million in the same period of 2023[69] - The total remuneration for directors and senior management for the six months ended June 30, 2024, was HKD 27 million, a decrease from HKD 30 million in 2023, indicating a reduction of 10%[88] - The remuneration policy aims to attract and retain top executives while aligning rewards with company performance and shareholder interests[110] Share Options and Awards - The 2015 Share Option Scheme has an available share limit of 98,655,673 shares, approximately 9.61% of the total issued shares[121] - The 2024 Share Award Plan was adopted on January 19, 2024, with a maximum share limit of 20,540,164 shares, representing approximately 2% of the company's issued share capital as of the adoption date[130][131] - The maximum number of shares that can be awarded to any selected employee is capped at 0.5% of the company's issued share capital, equivalent to 5,135,041 shares[131]

Revenue Performance - Revenue for the six months ended June 30, 2024, increased by 5.1% year-on-year to HKD 1,693 million, compared to HKD 1,611 million in 2023[3] - Revenue for the first half of 2024 increased by 5.1% to HKD 1,693 million compared to HKD 1,611 million in the same period of 2023[10] - Retail business revenue rose by 10.8% to HKD 844 million, driven by significant optimization works in the Lee Gardens area[10][13] - The office segment revenue slightly decreased by 0.1% to HKD 744 million, with Hong Kong office revenue down by 2.8%[16][17] - Revenue in Hong Kong decreased by 2.8% to HKD 720 million in the first half of 2024, compared to HKD 741 million in 2023[18] - Rental investment property revenue for the six months ended June 30, 2024, was HKD 759 million, up from HKD 635 million in the same period last year, representing a 19.5% increase[54] - Total segment revenue for the six months ended June 30, 2024, was HKD 844 million, an increase from HKD 744 million, marking a 13.4% growth[54] Profitability - Core recurring profit decreased by 0.7% year-on-year to HKD 1,019 million, down from HKD 1,026 million in 2023[3] - The net profit for the period was HKD 717 million, significantly up from HKD 333 million in 2023[41] - The company reported a profit of HKD 717 million for the six months ended June 30, 2024, compared to HKD 333 million in the same period of 2023, representing a significant increase[42] - Total comprehensive income for the period was HKD 668 million, a recovery from a loss of HKD 129 million in the previous year[43] - The group announced an interim dividend of HKD 0.27 per share, consistent with the previous year[11] - The company declared an interim dividend of HKD 0.81 per share for the first half of 2024, totaling HKD 832 million, compared to HKD 1.17 per share and HKD 1,202 million for the same period in 2023[64] Asset and Equity Management - The total equity attributable to shareholders decreased by 0.6% to HKD 66,779 million from HKD 67,182 million[4] - The company’s net assets amounted to HKD 78,525 million as of June 30, 2024, down from HKD 79,691 million at the end of 2023[46] - The company’s non-current assets increased to HKD 110,934 million as of June 30, 2024, up from HKD 110,274 million at the end of 2023[45] - The investment property valuation as of June 30, 2024, was HKD 96,535 million, a 0.6% increase from HKD 96,005 million at the end of 2023[28] - Total assets as of June 30, 2024, amounted to HKD 114,661 million, compared to HKD 114,526 million as of December 31, 2023, indicating a slight increase[58] Occupancy and Rental Performance - The occupancy rate for the Shanghai Lee Garden office reached 70% as of the end of the reporting period, reflecting significant success[2] - The occupancy rate for retail properties was 95% as of June 30, 2024, down from 97% at the end of 2023[13] - The occupancy rate in Hong Kong remained stable at 89% as of June 30, 2024, unchanged from December 31, 2023[18] - The average rental income from retail properties was HKD 72 million, down from HKD 87 million in 2023[13] - Residential rental revenue rose by 1.0% to HKD 105 million, with occupancy increasing to 68% from 60%[20] Investment and Development Projects - The new project at Caroline Hill Road is expected to be completed in the second half of 2026, expanding the Lee Garden area by nearly 30%[7] - The company is developing the Kadoorie Hill project, expected to be completed in 2026, enhancing its long-term growth strategy[21] - The company is optimistic about future developments in the Lee Gardens area, with major renovations expected to complete in the second half of 2024[13] - The company is optimistic about the growth of its shared workspace business in the Greater Bay Area, operating 36 centers in partnership with IWG plc[24] Financial Position and Debt Management - Total debt as of June 30, 2024, was HKD 26,737 million, an increase from HKD 25,717 million at the end of 2023[33] - The debt-to-equity ratio was 29.9% as of June 30, 2024, compared to 27.2% at the end of 2023[36] - The average debt maturity was 3.9 years as of June 30, 2024, down from 4.5 years at the end of 2023[33] - Financial expenses decreased to HKD 213 million from HKD 231 million in the first half of 2023, with a current effective interest rate of 4.4%[27] Challenges and Market Conditions - The company continues to face challenges in the retail sector due to changing consumer patterns and competition from other regions[13] - The company is focusing on enhancing its tenant mix and maintaining stable occupancy rates in the office sector despite rental pressure in the overall Hong Kong Grade A office market[2] Other Notable Developments - The company launched the URBANHOOD lifestyle space, further establishing its position as a cultural trendsetter among the younger generation[8] - The company launched a new membership app in Q2 2024, attracting over 60,000 new registrations within six weeks[15] - The company repurchased and canceled a total principal amount of USD 99,995,000 (approximately HKD 777 million) of its subordinated perpetual capital securities, representing about 11.76% of the initial issuance[69] - The company employed a total of 510 staff as of June 30, 2024, aligning its human resources policy with corporate goals for sustainable growth[70] - The company has maintained compliance with corporate governance standards throughout the reporting period[67]

Financial Performance - Revenue for 2023 was HKD 3,210 million, a decrease of 7.2% compared to 2022[65]. - Recurring basic profit for 2023 was HKD 1,832 million, reflecting a decline of 11.2% from the previous year[67]. - The company reported a net loss attributable to shareholders of HKD 872 million for the year[84]. - Total revenue for 2023 was HKD 3,210 million, a decrease of 7.2% compared to HKD 3,460 million in 2022[79]. - The recurring basic profit fell by 11.2% to HKD 1,832 million in 2023, down from HKD 2,063 million in 2022[102]. - The group's operating expenses increased to 29% of revenue in 2023, up from 26% in 2022, primarily due to rising electricity costs and the impact of the Lee Garden optimization project[139]. - Financial expenses rose to HKD 478 million in 2023 from HKD 423 million in 2022, attributed to a higher market interest rate environment, with an effective interest rate of 4.2% compared to 2.8% in 2022[140]. - Cash generated from operating activities was HKD 2,431 million in 2023, a decrease of HKD 160 million from HKD 2,591 million in 2022[151]. - The group paid dividends totaling HKD 1,479 million in 2023, slightly down from HKD 1,486 million in 2022[153]. - The group's net cash flow was HKD 21 million in 2023, a significant improvement from a net outflow of HKD 4,049 million in 2022[151]. Asset and Investment Management - Total assets (excluding cash and debt securities) amounted to HKD 109,678 million, showing a slight increase of 0.7%[69]. - The total value of investment properties as of December 31, 2023, was HKD 96,005 million, down 0.8% from HKD 96,787 million in 2022[90]. - The fair value loss of investment properties for the year was HKD 2,763 million, compared to HKD 3,213 million in 2022[90]. - The group's share of joint ventures' performance remained stable at HKD 270 million in 2023, compared to HKD 274 million in 2022[93]. - The group's share of results from joint ventures decreased to HKD 270 million in 2023 from HKD 274 million in 2022[145]. - Other financial investments totaled HKD 1,557 million as of December 31, 2023, down from HKD 2,035 million in 2022, mainly due to a fair value loss of HKD 525 million[146]. - The investment in New Wind Tianyu Group represents a strategic opportunity in the rapidly growing healthcare sector in mainland China[146]. Market and Operational Challenges - The office rental market continues to face challenges due to structural changes post-pandemic, with increased supply leading to more flexible leasing terms and rental incentives[10]. - The office market in Hong Kong is expected to face continued downward pressure due to increased supply of new projects in 2023 and 2024[107]. - The occupancy rate for office spaces was 89% in 2023, down from 90% in 2022[81]. - The rental income from retail spaces showed a decline, with a 6.7% decrease in revenue from HKD 1,643 million in 2022 to HKD 1,533 million in 2023[79]. - The retail business revenue showed a decrease of 6.7% to HKD 1,533 million, despite a stable occupancy rate and some improvement in retail sales due to increased tourist arrivals[115]. Strategic Initiatives and Developments - The first phase of the Lee Gardens optimization project was completed and will be unveiled by the end of 2023, with flagship stores of major high-end brands undergoing renovations to be completed in stages in 2024 and 2025[12]. - The new URBANHOOD lifestyle space, opening in December 2023, will feature nearly 40 lifestyle, entertainment, and dining brands, some of which are debuting in Hong Kong[11]. - The company is investing in a new pedestrian passage system to enhance connectivity in the Lee Garden area, expected to become a premier business hotspot in Hong Kong[26]. - The optimization project for the Lee Garden area commenced in 2023 and is anticipated to be completed by 2024[32]. - The flagship stores of major luxury brands in Lee Gardens are undergoing renovations, expected to be completed in phases by 2024 and 2025, further solidifying Lee Gardens as a top luxury brand destination[116]. - The joint venture project at Carrian Mountain Road is on schedule for completion by the end of 2026, marking a significant milestone in Hysan's long-term development plan[125]. - A joint venture with IWG was established to tap into the economic growth potential of the Greater Bay Area's workspace ecosystem[190]. Community Engagement and Sustainability - Hysan's community business model is crucial for the long-term development of Lee Gardens, focusing on inclusivity, social welfare, and strict environmental management standards[14]. - The company has received multiple awards for its commitment to sustainable development, including the 2023 Hong Kong Sustainable Development Award[14]. - The company aims to strengthen its connection with different age groups through various activities and programs, enhancing community engagement[8]. - The UrbanPark and Playdot initiatives have been launched to enhance customer experiences, including the first covered skate park in Hong Kong and a dedicated indoor play space[121]. - Carbon intensity was reduced by 38% compared to the baseline year of 2005[193]. - The company completed energy audits for 100% of its property portfolio[193]. - The company maintained a 4-star corporate governance award and achieved an AA rating in ESG benchmarks[196]. Financial Health and Debt Management - The debt-to-equity ratio increased to 27.2% in 2023 from 23.4% in 2022[77]. - The net interest coverage ratio (after capitalized interest) decreased to 9.6 times in 2023 from 13.1 times in 2022[77]. - As of December 31, 2023, the total debt of the group decreased to HKD 25,717 million from HKD 27,487 million as of December 31, 2022, primarily due to debt repayments during the year[158]. - Bank loans accounted for approximately 39% of the total debt, with the remaining 61% raised from the capital markets as of December 31, 2023[159]. - The average repayment period of the debt portfolio was approximately 4.5 years as of December 31, 2023, down from 4.8 years in 2022, with about HKD 158 million of debt maturing in 2024[161]. - The fixed-rate debt ratio (after considering interest rate swaps) was 62% as of December 31, 2023, compared to 61% at the end of 2022, with the effective interest rate rising from 2.8% to 4.2%[167]. - The total amount of sustainable financing transactions reached approximately HKD 19,300 million, representing about 49% of the total debt[171]. - Moody's and Fitch maintained the group's credit ratings at Baa1 and BBB+, respectively, reflecting strong financial strength and prudent capital management strategies[165].

Core Viewpoint - Bank of America Securities has issued a research report recommending a "buy" rating for Hysan Development (00014), while lowering the target price from HKD 17.2 to HKD 16.5, reflecting a downward revision of the per-share NAV forecast [1] Financial Performance - The company's performance last year slightly missed expectations, with the per-share dividend reduced to HKD 1.08, resulting in a payout ratio of 61% [1] - Management has reiterated a commitment to stable dividend growth, and the firm believes that earnings have bottomed out [1] Future Projections - Retail revenue is expected to grow by 6% this year, which is anticipated to offset the decline in office rental income [1] - The current stock price represents a 74% discount to the per-share NAV, with a dividend yield of 8.2%, indicating an attractive investment level [1]

Financial Performance - For the year ended December 31, 2023, the company's revenue was HKD 3,210 million, a decrease of 7.2% compared to HKD 3,460 million in 2022[3]. - The recurring basic profit for 2023 was HKD 1,832 million, down 11.2% from HKD 2,063 million in the previous year[3]. - The reported loss attributable to the company's owners was HKD 872 million, an improvement of 24.6% from a loss of HKD 1,157 million in 2022[3]. - The basic loss per share improved to HKD (85) from HKD (112), reflecting a 24.1% increase[3]. - The annual dividend per share was reduced to HKD 108, down 25.0% from HKD 144 in the previous year[3]. - The net loss for the year was HKD 1,026 million, compared to a net loss of HKD 949 million in 2022, indicating an increase in losses of approximately 8.1%[52]. - The gross profit for the year was HKD 2,589 million, down from HKD 2,893 million in the previous year, reflecting a decline of 10.5%[51]. - The group reported a pre-tax loss of HKD 731 million, with significant fair value changes in investment properties amounting to HKD 2,763 million[57]. Occupancy and Rental Trends - The office occupancy rate was 89%, while the retail occupancy rate was 97%, with rental levels for renewals showing a downward trend for offices and a stable upward trend for retail[2]. - The occupancy rate for office properties at year-end was 89%, down from 90% in 2022, while retail properties had a 97% occupancy rate, down from 99%[11]. - The rental income from retail sales grew by 45% year-on-year, outperforming the overall retail market in Hong Kong[6]. - The retail occupancy rate remained stable at 97% as of December 31, 2023 (2022: 99%) despite external challenges[15]. - The average rental levels for renewals and new leases in the office sector continued to trend downward, with a rental rate of 89% as of December 31, 2023 (2022: 90%) for the office portfolio[12]. Capital Expenditure and Investments - The total capital expenditure for the year decreased to HKD 1,669 million in 2023 from HKD 3,081 million in 2022, mainly from construction projects at the Kadoorie Hill and Lee Gardens[36]. - The investment in the healthcare sector through a minority stake in New Wind Tianyu Group continues to grow, with total other financial investments amounting to HKD 1,557 million as of December 31, 2023, down from HKD 2,035 million in 2022[31]. - The group is strategically developing the Carrian Mountain Road project in partnership with the Wah Lee Group, expected to be completed by the end of 2026[20]. Debt and Financial Ratios - The total debt of the group decreased to HKD 25,717 million as of December 31, 2023, down from HKD 27,487 million as of December 31, 2022, primarily due to debt repayments during the year[38]. - The debt-to-equity ratio at the end of 2023 was 27.2%, an increase from 23.4% at the end of 2022[41]. - Financial expenses rose to HKD 478 million in 2023 from HKD 423 million in 2022, attributed to the rising interest rate environment, with an effective interest rate of 4.2% compared to 2.8% in 2022[27]. Operational Challenges and Strategic Initiatives - The company faces challenges from geopolitical tensions, macroeconomic uncertainties, and structural changes in the office and retail markets post-pandemic[5]. - The company aims to continue expanding and optimizing its operations in the vibrant community of Lee Gardens as it moves into its 101st year[2]. - The group launched various marketing initiatives to enhance core business and maintain sales flow, resulting in a recovery of high-end member retention rates to pre-pandemic levels[17]. - The company is undergoing significant optimization works in the Lee Gardens area, with major renovations for flagship stores expected to complete in phases between 2024 and 2025[6]. Sustainability and Community Engagement - The company received multiple awards for its commitment to sustainable development, including the 2023 Hong Kong Sustainable Development Award[6]. - The company emphasizes its unique business model and community engagement as key factors for long-term development[5]. Employee and Administrative Costs - Employee costs, including directors' remuneration, rose to HKD 331 million in 2023 from HKD 310 million in 2022, marking a 6.8% increase[67]. - The total number of employees increased to 516 in 2023 from 486 in 2022, reflecting a growth of 6.2%[77].