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].

Hysan Development Company (00014) H2 2024 Earnings Call February 17, 2025 07:00 PM ET Speaker0 Good afternoon. Thank you all for coming to Hyphen Development's twenty twenty four Annual Results Announcement, the analyst briefing session. Let me introduce our panel for this afternoon. Our Chairman, Ms. Irene Li our Executive Director and COO, Mr. Rick Healer our CFO, Mr. Andy Choi. We will start with the presentation from the management, and we will follow that to take questions. Now I would invite Irene to ...

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]

Hysan Development Company (00014) H1 2024 Earnings Call August 23, 2024 05:00 AM ET Speaker0 Good afternoon. Thank you all for coming to HySun Development's twenty twenty four Interim Results Announcement Analyst Briefing Session. Let me introduce our panel for this afternoon. Our Chairman, Ms. Irene Li our Executive Director and COO, Mr. Rekhi Loy our CFO, Mr. Andy Choi. We will start with the presentation from Irene, Ricky and Andy, and we will follow that to take questions. Now I would invite Irene to st ...

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]

Hysan Development Company (00014) H2 2023 Earnings Call February 22, 2024 04:00 AM ET Speaker0 Thank you all for coming to Hyphen Development twenty twenty three Annual Results Announcement Analyst Briefing Session. Let me introduce our panel for this afternoon. Our Chairman, Ms. Irene Nie our Executive Director and COO, Mr. Rick Keeloy and our CFO, Mr. Roger Hao. I will start today's session with a presentation from Irene, Ricky and Roger, and we will follow that with time to take questions. And now let's ...

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].

Financial Performance - For the six months ended June 30, 2023, the company's revenue decreased by 9.3% year-on-year to HKD 1,611 million[4]. - The company's recurring basic profit fell by 12.2% year-on-year to HKD 1,026 million[4]. - The basic profit attributable to shareholders was HKD 1,026 million, down 16.9% from the previous year[4]. - The group reported a profit attributable to shareholders of HKD 190 million for the six months ended June 30, 2023, compared to HKD 71 million in the same period of 2022[65]. - The company reported a profit for the period of HKD 333 million, slightly down from HKD 335 million in the previous year, representing a decrease of 0.6%[43]. - Gross profit for the same period was HKD 1,347 million, down 11.9% from HKD 1,529 million year-over-year[43]. - The consolidated profit before tax for the six months ended June 30, 2023, was HKD 486 million, compared to HKD 517 million for the same period in 2022[57]. - The total comprehensive income for the period was not specified, but the company recognized share-based payments of HKD 2 million in the first half of 2023[47]. - The company reported a total comprehensive income of HKD 1,202 million for the period, reflecting a significant change in financial performance[50]. Revenue Breakdown - For the six months ended June 30, 2023, the total revenue from rental investment properties was HKD 1,419 million, with contributions from office (HKD 645 million), retail (HKD 682 million), and residential (HKD 92 million) segments[56]. - The office segment revenue fell by 7.5% to HKD 745 million, while the retail segment revenue decreased by 9.9% to HKD 762 million[11]. - The group's retail revenue decreased by 9.9% to HKD 762 million (2022: HKD 846 million), while rental income based on revenue increased by 67% year-on-year to HKD 87 million (2022: HKD 52 million) due to a recovery in consumer spending[14]. - The segment profit for the office division was HKD 630 million, while the retail and residential divisions reported profits of HKD 641 million and HKD 76 million respectively[56]. Dividend and Equity - The company maintained an interim dividend of HKD 0.27 per share, unchanged from the previous year[4]. - The group declared an interim dividend of HKD 0.27 per share, amounting to HKD 277 million, for the six months ended June 30, 2023[68]. - The company's total equity attributable to owners was HKD 70,200 million as of June 30, 2023, compared to HKD 68,729 million at the end of 2022[48]. - The company's equity attributable to owners was HKD 7,723 million, an increase from HKD 7,723 million as of January 1, 2023[47]. - The total equity attributable to owners, including revaluation and other reserves, was HKD 83,411 million as of June 30, 2023[47]. Market Conditions - The unemployment rate in Hong Kong decreased to 2.9%, indicating an improvement in the local labor market[6]. - The global economic outlook remains uncertain, with the IMF lowering its growth forecast for 2023 to 2.8%[6]. - Retail sales recovery outperformed the overall Hong Kong retail market, driven by promotional activities and government consumption voucher schemes[16]. Operational Highlights - The overall occupancy rates for the office and retail segments were 89% and 98%, respectively[3]. - Approximately 11% of retail space was temporarily closed due to significant optimization works in the Lee Garden area, impacting retail revenue[11]. - The occupancy rate of the retail business remained stable at 98% as of June 30, 2023 (December 31, 2022: 99%) despite a challenging market[14]. - The high-end residential project, Linhai Mountain City, received satisfactory approval in Q1 2023, achieving record transaction prices and unit prices despite market uncertainties[10]. - The company has established a joint venture with IWG plc to operate shared workspace brands in Hong Kong and the Greater Bay Area, currently managing 36 locations with plans for further expansion[21]. Financial Position - The company's total equity decreased by 2.1% to HKD 68,729 million as of June 30, 2023[4]. - Total debt decreased to HKD 25,730 million as of June 30, 2023, from HKD 27,487 million on December 31, 2022, with less than 5% of total debt maturing in the next 18 months[30]. - The debt-to-equity ratio as of June 30, 2023, was 25.9%, up from 23.4% on December 31, 2022, while the net interest coverage ratio fell to 10.3 times from 13.1 times[34]. - Cash and bank deposits totaled approximately HKD 4,361 million as of June 30, 2023, down from HKD 7,771 million on December 31, 2022[35]. - The company's cash and cash equivalents decreased to HKD 666 million from HKD 2,560 million at the end of 2022, a decline of 74%[45]. Investment and Development - The group plans to open the Caroline Hill Road project by the end of 2026, which is a key part of the overall planning for the Lee Garden area[10]. - The commercial property development project at Caroline Hill Road is on schedule, with foundation work ongoing and superstructure work expected to commence in Q3 2023, aiming for completion by the end of 2026[18]. - The company reported an investment income of HKD 138 million and other losses of HKD 32 million during the reporting period[56]. - The company invested in New Wind Tianyu Group, a leading private healthcare service provider in mainland China, allowing the company to tap into the growing demand for quality healthcare services[22]. Corporate Governance and Compliance - The company continues to comply with the corporate governance code as per the Hong Kong Stock Exchange regulations[94]. - The company held a hybrid annual general meeting on May 16, 2023, allowing shareholders to attend either in person or via an online streaming system, enhancing participation opportunities[96]. - The proportion of independent non-executive directors increased from 46% to 54.5% following the appointment of new directors, improving board independence[97]. - The percentage of female directors on the board rose from 27% to 36.4%, surpassing the target of 33% for gender diversity[97]. Employee and Remuneration - The total number of employees as of June 30, 2023, was 468, aligning with the company's human resources policy aimed at sustainable growth[123]. - The total remuneration for directors and senior management for the six months ended June 30, 2023, was HKD 30 million, an increase from HKD 28 million in the same period of 2022, representing a 7.14% growth[82]. - The company’s remuneration policy emphasizes fair and performance-based compensation aligned with long-term strategies and shareholder interests[103].