Executive Summary [Performance Overview](index=3&type=section&id=Performance%20Overview) Hysan Development's H1 2025 revenue and recurring underlying profit increased, but reported profit and basic EPS significantly declined due to fair value changes in investment properties. The company maintained its first interim dividend of 27 HK cents per share 2025 H1 Key Financial Data | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,730 | 1,693 | +2.2% | | Recurring Underlying Profit | 1,031 | 1,019 | +1.2% | | Underlying Profit | 1,031 | 1,019 | +1.2% | | Reported Profit | 75 | 427 | n/m | | Basic EPS (HK cents) | 7 | 42 | n/m | | First Interim Dividend per Share (HK cents) | 27 | 27 | ±0% | | Shareholders' Equity (as at June 30) | 65,181 | 65,993 | –1.2% | | Net Asset Value per Share (HK$) | 63.5 | 64.3 | –1.2% | [Key Business Highlights](index=3&type=section&id=Key%20Business%20Highlights) The company's retail and office businesses both saw revenue growth, driven by optimized retail portfolio, luxury brand flagships, and improved office occupancy. Lee Gardens Area pedestrian system project is progressing well, and an HK$8 billion capital recycling program has been launched - Retail business revenue increased by **2.1% year-on-year**, benefiting from an optimized retail portfolio and new generation luxury brand flagships, attracting quality tenants and driving sales growth[8](index=8&type=chunk) - Office business revenue increased by **0.8% year-on-year**, with Hong Kong office occupancy rising from **90% to 92%**, alleviating pressure from declining rental levels[8](index=8&type=chunk) - The Lee Gardens Area pedestrian system project is progressing smoothly, connecting Lee Garden Eight to Causeway Bay MTR station, creating a covered and walkable community[8](index=8&type=chunk) - An **HK$8 billion capital recycling program** will be launched over the next five years, through the disposal of certain assets in Bamboo Grove and sales of residential units in Villa Lucca and To Kwa Wan projects[8](index=8&type=chunk) [Notes on Financial Metrics](index=4&type=section&id=Notes%20on%20Financial%20Metrics) This section defines key financial metrics such as revenue, recurring underlying profit, underlying profit, reported profit, shareholders' equity, and net asset value per share, highlighting the distinction between non-HKFRS measures and reported profit - Revenue comprises gross rental income from investment property portfolios in Hong Kong and mainland China, and property management service income[9](index=9&type=chunk) - Recurring underlying profit and underlying profit are non-HKFRS measures reflecting core property investment business performance, excluding non-recurring items and unrealized fair value changes of investment properties[9](index=9&type=chunk) - Reported profit is profit attributable to owners of the company prepared in accordance with HKFRS[9](index=9&type=chunk) Chairman's Statement [Legacy of Excellence and Future Vision](index=5&type=section&id=Legacy%20of%20Excellence%20and%20Future%20Vision) Despite challenging economic conditions in Hong Kong during H1 2025, Hysan demonstrated robust business performance, emphasizing its century-long legacy as a pioneer in Hong Kong's development and its ability to innovate and adapt to societal changes, particularly the comprehensive transformation of the Lee Gardens Area - Hong Kong's economic environment was under pressure in H1 2025, with the retail and property sectors facing multiple challenges, but Hysan showed stable performance[10](index=10&type=chunk) - Hysan boasts over a century of excellence, driving development through continuous innovation and anticipating societal needs, with the Lee Gardens Area transformation as a testament to its forward-looking vision[11](index=11&type=chunk) [Transformation and Growth Strategy](index=5&type=section&id=Transformation%20and%20Growth%20Strategy) Hysan's long-term growth is based on a "Core and Pillars" strategy, where the core focuses on consolidating and expanding the Lee Gardens Area through placemaking and asset enhancement, while the pillars drive diversified growth combining asset-heavy development with asset-light investments, already contributing financially - Hysan adopts a "Core and Pillars" strategy, with the core aiming to consolidate and expand the Lee Gardens Area through placemaking and asset enhancement to meet demand[12](index=12&type=chunk) - The pillar strategy drives diversified growth, combining asset-heavy development with asset-light investments, and has begun to generate financial contributions[12](index=12&type=chunk) [Lee Gardens Area Enhancement Progress](index=5&type=section&id=Lee%20Gardens%20Area%20Enhancement%20Progress) The transformation of the Lee Gardens Area has entered a "harvesting period," with over ten newly renovated and expanded luxury brand flagships in 2024, Chanel's reopening in H1 2025, and the introduction of more lifestyle and F&B brands, solidifying its status as Hong Kong's luxury brand hub - The Lee Gardens Area transformation has entered a "harvesting period," welcoming over ten newly renovated and expanded luxury brand flagships in 2024[13](index=13&type=chunk) - In H1 2025, Chanel's new store reopened, and several refined lifestyle brands and F&B outlets were introduced, further enhancing the Lee Gardens Area's brand portfolio[13](index=13&type=chunk) [Lee Garden Eight: Sustainability and Community Connectivity](index=5&type=section&id=Lee%20Garden%20Eight%3A%20Sustainability%20and%20Community%20Connectivity) The flagship Lee Garden Eight project, expected to be completed in 2026, will expand the Lee Gardens Area's total leasable area by nearly 30%, creating a sustainable, connected, and walkable commercial and lifestyle exemplar through large green open spaces and a pedestrian system - Lee Garden Eight is expected to be completed in 2026, with a total area exceeding **1 million sq ft**, expanding the Lee Gardens Area's total leasable area by nearly **30%**[14](index=14&type=chunk) - The project integrates green indoor and outdoor spaces, featuring a **60,000 sq ft** large green open space, and will connect to Causeway Bay MTR station via a pedestrian system, creating a walkable community[15](index=15&type=chunk) [Strategic Pillars: Business and Geographical Diversification](index=6&type=section&id=Strategic%20Pillars%3A%20Business%20and%20Geographical%20Diversification) Hysan's strategic pillars drive business and geographical diversification, with Lee Garden Shanghai successfully attracting high-quality tenants, steady growth in Greater Bay Area co-working spaces, and sustained momentum from healthcare investment New Frontier Health - Lee Garden Shanghai successfully attracted high-quality tenants, strengthening its office tenant portfolio and encompassing diverse retail brands[16](index=16&type=chunk) - The joint venture with IWG continues to record steady growth in its co-working space business in the Greater Bay Area[16](index=16&type=chunk) - Healthcare investment project New Frontier Health Group maintains its growth momentum[16](index=16&type=chunk) [Retail Portfolio and Market Response](index=6&type=section&id=Retail%20Portfolio%20and%20Market%20Response) Facing challenges in Hong Kong's retail sector, Hysan has upgraded and refurbished Hysan Place, introducing new retail and F&B concepts, pop-up stores, and promotional activities to solidify its position as a local trendsetter, anticipating that the return of visitors will inject new impetus into the retail sector - Hong Kong's retail sector faces challenges from changing consumption patterns and the trend of cross-border spending, with the government introducing measures to stimulate consumption[17](index=17&type=chunk) - Hysan Place has solidified its position as a local trendsetter through upgrades, refurbishment, and the introduction of new retail and F&B concepts, pop-up stores, and promotional activities[17](index=17&type=chunk) [Office Market Competition and Advantages](index=6&type=section&id=Office%20Market%20Competition%20and%20Advantages) The Lee Gardens Area office portfolio maintained stable occupancy during the period, leveraging its prime location, convenient transportation, high-quality building specifications, and high-standard property management services. The company boasts a balanced office portfolio, combining traditional offices with flexible co-working spaces, to meet market demands - The Lee Gardens Area office portfolio maintained stable occupancy during the period, leveraging its prime location, convenient transportation, high-quality building specifications, and high-standard property management services[18](index=18&type=chunk) - The office tenant portfolio continues to expand, featuring a balanced mix of traditional offices and flexible co-working spaces to meet evolving corporate needs[19](index=19&type=chunk) [Future Outlook and Commitment](index=7&type=section&id=Future%20Outlook%20and%20Commitment) Despite market uncertainties from global economic instability, Hysan remains confident in Hong Kong's long-term position as a global financial center and Greater Bay Area hub. The company will continue to invest in the Lee Gardens Area and pursue diversified growth strategies, committed to creating sustainable long-term value, and expresses gratitude to its employees - Hysan remains confident in Hong Kong's long-term position as a major global financial center and a hub in the Greater Bay Area[20](index=20&type=chunk) - The company will continue to invest in the Lee Gardens Area and pursue diversified growth strategies to seize emerging opportunities, committed to creating sustainable long-term value[20](index=20&type=chunk) Management Discussion and Analysis [Results Review](index=8&type=section&id=Results%20Review) In H1 2025, Hysan's revenue and recurring underlying profit grew by 2.2% and 1.2% respectively, primarily driven by robust performance across core business segments, including resilient Hong Kong retail, optimized asset portfolio, improved sales, higher office occupancy, and increased occupancy in Lee Garden Shanghai and Bamboo Grove. The company maintained its first interim dividend of 27 HK cents per share 2025 H1 Performance Overview | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,730 | 1,693 | +2.2% | | – Retail | 862 | 844 | +2.1% | | – Office | 750 | 744 | +0.8% | | – Residential | 118 | 105 | +12.4% | | Recurring Underlying Profit | 1,031 | 1,019 | +1.2% | | Underlying Profit | 1,031 | 1,019 | +1.2% | - Revenue and recurring underlying profit growth were mainly driven by robust performance across core business segments, including resilient Hong Kong retail, optimized asset portfolio, and improved sales[23](index=23&type=chunk) - Office occupancy increased from **90% to 92%**, helping to mitigate the impact of rental adjustments; expansion of Lee Garden Shanghai and improved occupancy at Bamboo Grove also contributed[23](index=23&type=chunk) - The company announced a first interim dividend of **27 HK cents per share** for the current year, consistent with last year[24](index=24&type=chunk) Reconciliation of Reported Profit to Underlying Profit | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Reported Profit | 75 | 427 | | Fair Value Changes of Properties | 673 | 209 | | Investment Properties | 964 | 197 | | Less: Impact of Other Non-controlling Interests | (291) | 4 | | Share of Associates (after tax) | – | 8 | | Impairment Loss on Joint Ventures | 30 | 170 | | Other Gains and Losses | (1) | (1) | | Profit Attributable to Holders of Perpetual Capital Securities | 254 | 214 | | Recurring Underlying Profit / Underlying Profit | 1,031 | 1,019 | [Business Review](index=9&type=section&id=Business%20Review) This section details Hysan's performance across its three main business segments: retail, office, and residential. Retail business revenue grew by 2.1%, with Hong Kong retail occupancy rising to 94% and mainland China retail occupancy significantly increasing to 64%. Office business revenue grew by 0.8%, with Hong Kong office occupancy stable at 92% and mainland China office occupancy rising to 68%. Residential business revenue grew by 12.4%, benefiting from the recovery in the high-end residential market [Retail Business](index=9&type=section&id=Retail%20Business) The Group's retail business revenue increased by 2.1% to HK$862 million. Hong Kong retail revenue rose by 0.8%, with occupancy increasing to 94% and renewal rental levels maintaining an upward trend. Mainland China retail occupancy significantly improved to 64%, with Lee Garden Shanghai's market regaining vitality. The company enhanced footfall and sales through innovative marketing campaigns and customer relationship management Retail Business Revenue | HK$ million | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Retail | 862 | 844 | +2.1% | | – Hong Kong | 851 | 844 | +0.8% | | – Mainland China | 11 | – | n/m | - Hong Kong retail occupancy was **94%** as at June 30, 2025 (December 31, 2024: 92%), with renewal, rent review, and new letting rental levels maintaining a significant upward trend[27](index=27&type=chunk) - Mainland China retail portfolio occupancy significantly increased to **64%** (December 31, 2024: 41%), with the Lee Garden Shanghai market regaining vitality[29](index=29&type=chunk) - The company stimulated mall footfall and sales through innovative marketing campaigns such as Chinese New Year street markets, pop-up events with international celebrities, food promotions, and beauty festivals[30](index=30&type=chunk) - Continuous optimization of customer relationship management programs enhanced personalized experiences for premium customers, driving up average spending and Club Avenue member participation rates[31](index=31&type=chunk) [Office Business](index=11&type=section&id=Office%20Business) The Group's office business revenue increased by 0.8% to HK$750 million. Hong Kong business revenue slightly decreased by 2.4%, but occupancy remained stable at 92%, with pre-leasing promotional activities ongoing. Mainland China business revenue significantly increased, with occupancy rising to 68%, actively attracting new tenants Office Business Revenue | HK$ million | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Office | 750 | 744 | +0.8% | | – Hong Kong | 703 | 720 | –2.4% | | – Mainland China | 47 | 24 | n/m | - The Hong Kong office market remains challenging, but the Lee Gardens Area office portfolio maintained stable occupancy at **92%** (December 31, 2024: 90%)[33](index=33&type=chunk) - Mainland China office business revenue increased to **HK$47 million** (2024: HK$24 million), with occupancy rising to **68%** (December 31, 2024: 66%)[34](index=34&type=chunk) - Banking, finance, and wealth management sectors remain the largest tenant category, occupying **21.3%** of the tenant portfolio's leasable area[33](index=33&type=chunk) [Residential Business](index=11&type=section&id=Residential%20Business) Hong Kong's high-end residential leasing market steadily recovered in H1 2025, benefiting from the influx of expatriate professionals and talent admission schemes. Hysan's residential leasing business revenue increased by 12.4% to HK$118 million, with average rental levels rising, though occupancy slightly decreased to 70% - Hong Kong's high-end residential leasing market steadily recovered in H1 2025, benefiting from the influx of expatriate professionals and talent admission schemes[35](index=35&type=chunk) - Residential leasing business revenue increased by **12.4% to HK$118 million** (2024: HK$105 million)[35](index=35&type=chunk) - Occupancy was **70%** (December 31, 2024: 73%), with average rental levels for renewals, rent reviews, and new leases trending upwards[35](index=35&type=chunk) [Core Business and Strategic Pillar Expansion](index=12&type=section&id=Core%20Business%20and%20Strategic%20Pillar%20Expansion) Hysan is actively expanding its core business and strategic pillars, including the Lee Garden Eight commercial property development, Villa Lucca and To Kwa Wan residential projects, investment in Grand Gateway Shanghai, Greater Bay Area co-working joint venture, and healthcare investment in New Frontier Health. Concurrently, the company launched an HK$8 billion capital recycling program to optimize its capital structure and re-deploy capital [Lee Garden Eight Commercial Property Development](index=12&type=section&id=Lee%20Garden%20Eight%20Commercial%20Property%20Development) Construction of the superstructure for the Lee Garden Eight project is progressing smoothly, with completion expected in 2026, which will solidify the Lee Gardens Area's position as a unique hotspot in Hong Kong. The project has received multiple design and sustainability awards, affirming Hysan's vision to create an urban oasis and vibrant community - Lee Garden Eight is a joint venture between Hysan and Chinachem Group, with satisfactory progress on the superstructure construction, expected to be completed in **2026**[37](index=37&type=chunk) - The project has received multiple accolades, including "Best Mixed-use Development (Hong Kong)" and "Best Sustainable Commercial Development (Hong Kong)"[37](index=37&type=chunk) [Residential Development: Villa Lucca and To Kwa Wan Projects](index=12&type=section&id=Residential%20Development%3A%20Villa%20Lucca%20and%20To%20Kwa%20Wan%20Projects) The Villa Lucca high-end residential project has signed contracts for 140 units, benefiting from relaxed mortgage lending and falling interest rates, with 25 units sold and leased during the period. Superstructure construction for the To Kwa Wan residential project is in full swing, with concrete works for the retail portion expected to be completed in Q3 2025, and the overall project expected to obtain occupation permit in Q2 2027 - The Villa Lucca high-end residential project has signed contracts for **140 units**, with **25 units** sold and leased during the period[39](index=39&type=chunk) - Superstructure construction for the To Kwa Wan residential project is in full swing, with concrete works for the retail portion expected to be completed in **Q3 2025**, and the overall project expected to obtain occupation permit in **Q2 2027**[39](index=39&type=chunk) [Shanghai Investment Property: Grand Gateway](index=13&type=section&id=Shanghai%20Investment%20Property%3A%20Grand%20Gateway) Hysan's 26% interest in Grand Gateway Shanghai demonstrated resilient performance during the period, with this investment disclosed as "Investments in associates" in the condensed consolidated statement of financial position - Hysan's **26% interest** in Grand Gateway Shanghai demonstrated resilient performance during the period[41](index=41&type=chunk) [Greater Bay Area Co-working Joint Venture](index=13&type=section&id=Greater%20Bay%20Area%20Co-working%20Joint%20Venture) Hysan's joint venture with IWG in the Greater Bay Area recorded strong and stable occupancy and business performance in its co-working spaces, signing five new locations during the period and currently operating 40 centers, with an optimistic outlook for the future - The joint venture with IWG recorded strong and stable occupancy and business performance in its co-working space business in the Greater Bay Area[42](index=42&type=chunk) - The joint venture signed **five new locations** in H1 2025, currently operating **40 centers** in the Greater Bay Area[42](index=42&type=chunk) [Healthcare: New Frontier Health](index=13&type=section&id=Healthcare%3A%20New%20Frontier%20Health) Through its minority equity investment in New Frontier Health Group, Hysan is involved in mainland China's fast-growing healthcare sector. New Frontier Health Group maintains stable business growth, operating 33 hospitals, opening a new hospital in Ningbo, and acquiring Hong Kong Oncology Medical Group to provide integrated treatment solutions - New Frontier Health Group maintains stable business growth, operating **33 hospitals**, and opening a new hospital in Ningbo[44](index=44&type=chunk) - Through its minority equity investment, Hysan is involved in mainland China's fast-growing healthcare sector[44](index=44&type=chunk) [Capital Recycling Program](index=13&type=section&id=Capital%20Recycling%20Program) The company has launched a five-year, HK$8 billion capital recycling program, strategically disposing of non-core assets (such as Bamboo Grove residential buildings and VILLA LUCCA, To Kwa Wan residential project units) to enhance capital efficiency, optimize capital structure, unlock asset value, and re-deploy capital into strategic focus areas - The company has launched a **five-year, HK$8 billion capital recycling program** through strategic disposal of non-core assets[46](index=46&type=chunk) - The program aims to optimize the Group's capital structure through deleveraging, unlock value from mature residential assets, and re-deploy capital into the company's strategic focus areas[46](index=46&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) This section reviews Hysan's operating expenses, finance costs, revaluation of investment properties, investments in associates and joint ventures, other investments, bank balances, and capital expenditure. Operating expenses as a percentage of revenue slightly increased, and finance costs rose due to increased borrowings. Fair value losses on investment properties primarily reflect increased office market risks. Capital expenditure was mainly for the Caroline Hill Road project and Lee Gardens Area enhancement works [Operating Expenses](index=14&type=section&id=Operating%20Expenses) The Group's operating expenses increased by 5.7% to HK$447 million, with the ratio to revenue slightly increasing to 25.8% (2024: 25.0%), mainly comprising property expenses and administrative expenses Operating Expenses Overview | HK$ million | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Operating Expenses | 447 | 423 | +5.7% | | – Hong Kong | 418 | 400 | +4.5% | | – Mainland China | 29 | 23 | n/m | - The ratio of operating expenses to revenue slightly increased to **25.8%** compared to the same period last year (2024: 25.0%)[47](index=47&type=chunk) [Finance Costs](index=14&type=section&id=Finance%20Costs) Finance costs increased to HK$289 million (H1 2024: HK$213 million), primarily due to increased borrowings during the period. The effective interest rate for the period was 3.8%, down from 4.4% in the same period of 2024 - Finance costs increased to **HK$289 million**, primarily due to increased borrowings during the period[49](index=49&type=chunk) - The effective interest rate for the period was **3.8%**, compared to **4.4%** in the same period of 2024[49](index=49&type=chunk) [Revaluation of Investment Properties](index=14&type=section&id=Revaluation%20of%20Investment%20Properties) The Group's investment property portfolio valuation slightly increased by 0.4% to HK$96,893 million. Excluding capital expenditure, the fair value loss on investment properties was HK$964 million (2024: HK$197 million), primarily reflecting increased office business market risks amidst global economic uncertainties - Investment property portfolio valuation increased by **0.4% to HK$96,893 million**[50](index=50&type=chunk) - The fair value loss on investment properties was **HK$964 million**, primarily reflecting increased office business market risks[50](index=50&type=chunk) [Investments in Associates and Joint Ventures](index=14&type=section&id=Investments%20in%20Associates%20and%20Joint%20Ventures) The Group's share of results from associates (primarily Grand Gateway Shanghai) was HK$115 million. The share of losses from joint ventures was HK$7 million (2024: HK$197 million), mainly reflecting an impairment loss on properties held for sale under development in the Villa Lucca project - The Group's share of results from associates was **HK$115 million** (2024: HK$117 million)[51](index=51&type=chunk) - The Group's share of losses from joint ventures was **HK$7 million** (2024: HK$197 million), mainly reflecting an impairment loss on properties held for sale under development in the Villa Lucca project[51](index=51&type=chunk) [Other Investments](index=15&type=section&id=Other%20Investments) The Group expands its geographical and business scope through strategic minority equity investments, with the investment in New Frontier Health Group providing strategic opportunities in mainland China's fast-growing healthcare sector. As at June 30, 2025, total other financial investments amounted to HK$1,582 million - Total other financial investments amounted to **HK$1,582 million** (December 31, 2024: HK$1,657 million)[52](index=52&type=chunk) - The investment in New Frontier Health Group provides the Group with strategic investment opportunities in mainland China's fast-growing healthcare sector[52](index=52&type=chunk) [Bank Balances](index=15&type=section&id=Bank%20Balances) The Group places surplus funds in fixed deposits with banks of excellent credit ratings and invests in investment-grade debt securities. Interest income decreased to HK$92 million, primarily due to reduced bank deposits - Interest income decreased to **HK$92 million** (2024: HK$95 million), primarily due to reduced bank deposits[54](index=54&type=chunk) [Capital Expenditure](index=15&type=section&id=Capital%20Expenditure) Total cash outflow for capital expenditure increased to HK$1,069 million during the period (2024: HK$645 million), mainly for construction works at the Caroline Hill Road project and enhancement works in the Lee Gardens Area, aimed at enhancing the asset value of the investment property portfolio - Total cash outflow for capital expenditure increased to **HK$1,069 million** during the period (2024: HK$645 million)[55](index=55&type=chunk) - Capital expenditure mainly stemmed from construction works at the Caroline Hill Road project and enhancement works in the Lee Gardens Area[55](index=55&type=chunk) [Treasury Policy](index=16&type=section&id=Treasury%20Policy) Hysan's treasury policy aims to ensure robust liquidity, strong financial health, and an appropriate capital structure through diversified funding sources, suitable repayment period allocation, low borrowing spreads, and appropriate hedging and foreign exchange management strategies. Total debt increased during the period, gearing ratio slightly rose, and net interest cover decreased, but the company maintained its investment-grade credit ratings [Capital Structure Management](index=16&type=section&id=Capital%20Structure%20Management) The Group is committed to diversifying funding sources, maintaining an appropriate allocation of repayment profiles and overall fund utilization, keeping borrowing spreads low, and adopting suitable hedging and foreign exchange management strategies to ensure robust liquidity, strong financial health, and an appropriate capital structure - The Group is committed to diversifying funding sources and maintaining an appropriate allocation of repayment profiles and overall fund utilization[56](index=56&type=chunk) - Committed to maintaining low borrowing spreads in line with market conditions, and adopting appropriate hedging and foreign exchange management strategies[56](index=56&type=chunk) [Sources of Funding](index=16&type=section&id=Sources%20of%20Funding) As at June 30, 2025, the Group's total debt increased to HK$28,796 million, primarily due to capital expenditure for strategic projects. Bank loans accounted for approximately 50% of total debt, with the remaining 50% from capital market issuances - As at June 30, 2025, the Group's total debt increased to **HK$28,796 million** (December 31, 2024: HK$26,717 million), primarily due to capital expenditure for strategic projects[57](index=57&type=chunk) - Bank loans accounted for approximately **50%** of the Group's total debt, with the remaining **50%** raised from capital markets[57](index=57&type=chunk) Debt Funding Sources (as at June 30, 2025) | | Callable (HK$ million) | Drawn (HK$ million) | Available (HK$ million) | | :--- | :--- | :--- | :--- | | Secured Bank Loans | 12,951 | 9,929 | 3,022 | | Unsecured Bank Loans | 4,400 | 4,200 | 200 | | Committed Revolving Facilities | 8,700 | – | 8,700 | | Capital Market Debt | 14,516 | 14,516 | – | | Total Committed Facilities | 40,567 | 28,645 | 11,922 | | Uncommitted Revolving Facilities | 2,699 | 151 | 2,548 | | Total Debt Funding Sources | 43,266 | 28,796 | 14,470 | [Repayment Profile](index=17&type=section&id=Repayment%20Profile) The Group maintains a well-structured debt repayment profile over the next 10 years, aligned with the nature of its assets and operations. As at June 30, 2025, the average repayment period for the debt portfolio was 3.2 years, a slight decrease from 3.4 years as at December 31, 2024 - The average repayment period for the debt portfolio was **3.2 years** (December 31, 2024: 3.4 years)[60](index=60&type=chunk) Debt Repayment Profile (HK$ million) | Year | Unsecured Bank Loans | Fixed Rate Notes | Secured Bank Loans | | :--- | :--- | :--- | :--- | | 2025 | 750 | 2,166 | 151 | | 2026 | 500 | 3,700 | 400 | | 2027 | 1,688 | – | – | | 2028 | 3,790 | – | – | | 2029 | 4,672 | – | – | | 2030 | 5,957 | – | – | | 2031 | 3,972 | – | – | | 2032 | 100 | – | – | | 2033 | 400 | – | – | | 2034 | 550 | – | – | | 2035 | 750 | – | – | [Gearing Ratio and Net Interest Cover](index=17&type=section&id=Gearing%20Ratio%20and%20Net%20Interest%20Cover) The Group's gearing ratio, calculated as net debt to equity, was 32.9% at the end of H1 2025 (December 31, 2024: 31.4%), and the net interest cover was 7.5 times (2024: 10.8 times) - The gearing ratio was **32.9%** at the end of H1 2025 (December 31, 2024: 31.4%)[62](index=62&type=chunk) - The net interest cover for H1 2025 was **7.5 times** (2024: 10.8 times)[62](index=62&type=chunk) [Credit Ratings](index=18&type=section&id=Credit%20Ratings) The Group is committed to maintaining investment-grade credit ratings. As at June 30, 2025, Moody's and Fitch assigned credit ratings of Baa2 and BBB respectively to the Group - As at June 30, 2025, Moody's and Fitch assigned credit ratings of **Baa2 and BBB** respectively to the Group[64](index=64&type=chunk) [Liquidity Management](index=18&type=section&id=Liquidity%20Management) As at June 30, 2025, the Group held total cash and bank balances of approximately HK$3,348 million and invested HK$584 million in investment-grade debt securities, with available committed credit facilities for use if needed - As at June 30, 2025, the Group held total cash and bank balances of approximately **HK$3,348 million** (December 31, 2024: HK$2,211 million)[65](index=65&type=chunk) - Invested **HK$584 million** (December 31, 2024: HK$896 million) in investment-grade debt securities[65](index=65&type=chunk) [Interest Rate Management](index=18&type=section&id=Interest%20Rate%20Management) The Group closely monitors interest rate risk and adopts appropriate hedging strategies. As at June 30, 2025, the fixed-rate debt ratio (after interest rate swaps) was 56%, and the effective interest rate decreased from 4.3% at year-end to 3.8% at H1 2025, mainly due to a decrease in HIBOR - The fixed-rate debt ratio (after interest rate swaps) was **56%** (December 31, 2024: 61%)[67](index=67&type=chunk) - The effective interest rate slightly decreased from **4.3%** at year-end to **3.8%** at H1 2025, mainly due to a decrease in HIBOR[67](index=67&type=chunk) [Foreign Exchange Management](index=18&type=section&id=Foreign%20Exchange%20Management) The Group minimizes currency risk by not speculating in foreign currencies for asset and liability management, monitoring and managing foreign currency risks such as USD and RMB, and implementing systematic measures to reduce risk when necessary. Most guaranteed perpetual capital securities have been converted to HKD via cross-currency swaps to mitigate exchange rate volatility - The Group minimizes currency risk and does not manage assets and liabilities through speculative foreign currency trading[68](index=68&type=chunk) - Most guaranteed perpetual capital securities have been converted to HKD through cross-currency swap derivatives to reduce exchange rate volatility uncertainty[68](index=68&type=chunk) [Capital Management](index=18&type=section&id=Capital%20Management) During H1 2025, the Group issued US$750 million in subordinated guaranteed perpetual capital securities to refinance perpetual capital securities redeemable in 2025. Concurrently, it repurchased HK$5,363 million principal amount of subordinated guaranteed perpetual capital securities for a cash consideration of HK$5,365 million - The Group issued **US$750 million** in subordinated guaranteed perpetual capital securities to refinance perpetual capital securities redeemable in 2025[69](index=69&type=chunk) - Repurchased **HK$5,363 million** principal amount of subordinated guaranteed perpetual capital securities for a cash consideration of **HK$5,365 million** (2024: HK$777 million)[69](index=69&type=chunk) Review Report on Condensed Consolidated Financial Statements Deloitte Touche Tohmatsu has reviewed Hysan Development Company Limited's condensed consolidated financial statements for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410. The review concluded that nothing has come to their attention that causes them to believe the condensed consolidated financial statements are not prepared, in all material respects, in accordance with HKAS 34 - Deloitte Touche Tohmatsu has reviewed the condensed consolidated financial statements in accordance with Hong Kong Standard on Review Engagements 2410[70](index=70&type=chunk)[71](index=71&type=chunk) - The review concluded that nothing has come to their attention that causes them to believe the condensed consolidated financial statements are not prepared, in all material respects, in accordance with HKAS 34[72](index=72&type=chunk) Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, Hysan Development's revenue was HK$1,730 million, and profit for the period was HK$97 million, a significant decrease from HK$717 million in the prior year, primarily due to a HK$964 million fair value loss on investment properties. Basic earnings per share was 7 HK cents Condensed Consolidated Statement of Profit or Loss (for the six months ended June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Revenue | 1,730 | 1,693 | | Gross Profit | 1,426 | 1,407 | | Investment Income | 113 | 94 | | Administrative Expenses | (143) | (137) | | Finance Costs | (289) | (213) | | Fair Value Changes of Investment Properties | (964) | (197) | | Share of Results of Associates | 115 | 117 | | Share of Results of Joint Ventures | (7) | (197) | | Profit Before Tax | 252 | 875 | | Taxation | (155) | (158) | | Profit for the Period | 97 | 717 | | Profit Attributable to Owners of the Company | 75 | 427 | | Basic Earnings Per Share (HK cents) | 7 | 42 | - Profit for the period significantly decreased to **HK$97 million**, primarily due to a **HK$964 million fair value loss** on investment properties[74](index=74&type=chunk) Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, Hysan Development's profit for the period was HK$97 million. Net other comprehensive expenses were HK$53 million, resulting in a total comprehensive income for the period of HK$44 million, a significant decrease from HK$668 million in the prior year. Key factors included fair value changes on equity investments recognized in other comprehensive income and net adjustments to hedging reserves Condensed Consolidated Statement of Comprehensive Income (for the six months ended June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Profit for the Period | 97 | 717 | | Revaluation Loss on Owner-occupied Properties, after tax | – | (12) | | Fair Value Changes on Equity Investments Recognized in Other Comprehensive Income | (80) | 69 | | Exchange Differences on Subsidiaries | 116 | (91) | | Net Adjustments to Hedging Reserves | (175) | 24 | | Exchange Reserve of Associates | 86 | (39) | | Other Comprehensive Expenses for the Period, after tax | (53) | (49) | | Total Comprehensive Income for the Period | 44 | 668 | | Total Comprehensive Income Attributable to Owners of the Company | 22 | 378 | - Total comprehensive income for the period significantly decreased to **HK$44 million**, primarily impacted by a **HK$80 million fair value loss** on equity investments recognized in other comprehensive income and a **HK$175 million net adjustment loss** to hedging reserves[76](index=76&type=chunk) Condensed Consolidated Statement of Financial Position As at June 30, 2025, Hysan Development's total assets less current liabilities were HK$112,305 million, and total equity was HK$76,816 million. Investment properties remained the largest asset class at HK$96,893 million. Net current assets (liabilities) turned positive to HK$764 million from negative HK$1,955 million at year-end 2024, mainly due to reduced borrowings and increased cash and cash equivalents Condensed Consolidated Statement of Financial Position (as at June 30, 2025) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Investment Properties | 96,893 | 96,547 | | Investments in Associates | 5,548 | 5,347 | | Investments in Joint Ventures | 352 | 342 | | Other Financial Investments | 1,582 | 1,657 | | **Current Assets** | | | | Fixed Deposits | 901 | 647 | | Cash and Cash Equivalents | 2,447 | 1,564 | | **Current Liabilities** | | | | Borrowings | 1,444 | 2,872 | | **Non-current Liabilities** | | | | Borrowings | 27,197 | 23,642 | | Perpetual Capital Securities | 9,918 | 9,437 | | **Total Equity** | 76,816 | 77,429 | | Equity Attributable to Owners of the Company | 65,181 | 65,993 | - Net current assets (liabilities) turned from **(HK$1,955 million)** as at December 31, 2024, to **HK$764 million** as at June 30, 2025, indicating improved liquidity[77](index=77&type=chunk) - Total assets less current liabilities increased to **HK$112,305 million** from HK$109,227 million as at December 31, 2024[77](index=77&type=chunk) Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, Hysan Development's total equity decreased from HK$77,429 million at the beginning of the year to HK$76,816 million. Equity attributable to owners of the company decreased from HK$65,993 million to HK$65,181 million, primarily affected by reduced profit for the period, net loss on hedging instruments, dividend payments, and repurchase of perpetual capital securities, despite the issuance of new perpetual capital securities Condensed Consolidated Statement of Changes in Equity (for the six months ended June 30) | Indicator | As at Jan 1, 2025 (HK$ million) | Profit for the Period (HK$ million) | Other Comprehensive Income/Expenses (HK$ million) | Dividends Paid (HK$ million) | Changes in Perpetual Capital Securities (HK$ million) | As at June 30, 2025 (HK$ million) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 65,993 | 75 | 22 | (832) | (2) | 65,181 | | Perpetual Capital Securities | 9,437 | 254 | – | (210) | 437 | 9,918 | | Other Non-controlling Interests | 1,999 | (232) | (232) | (50) | – | 1,717 | | **Total Equity** | **77,429** | **97** | **44** | **(1,092)** | **435** | **76,816** | - Equity attributable to owners of the company decreased by **HK$812 million**, mainly due to reduced profit for the period, net loss on hedging instruments, and dividend payments[79](index=79&type=chunk)[82](index=82&type=chunk) - Issued **HK$5,800 million** in perpetual capital securities while repurchasing **HK$5,365 million**, resulting in a net increase of **HK$435 million**[79](index=79&type=chunk)[82](index=82&type=chunk) Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, Hysan Development's net cash inflow from operating activities was HK$1,142 million. Net cash outflow from investing activities was HK$1,095 million, primarily for payments for investment properties and an increase in fixed deposits. Net cash inflow from financing activities was HK$835 million, mainly from new bank loans and issuance of perpetual capital securities, offsetting loan repayments and repurchase of perpetual capital securities. Net increase in cash and cash equivalents for the period was HK$882 million Condensed Consolidated Statement of Cash Flows (for the six months ended June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 1,142 | 1,070 | | Net Cash Outflow from Investing Activities | (1,095) | (848) | | Net Cash Inflow (Outflow) from Financing Activities | 835 | (1,100) | | Net Increase (Decrease) in Cash and Cash Equivalents | 882 | (878) | | Cash and Cash Equivalents at January 1 | 1,564 | 2,583 | | Cash and Cash Equivalents at June 30 | 2,447 | 1,706 | - Net cash inflow from operating activities was **HK$1,142 million**, an increase from the prior period[83](index=83&type=chunk) - Net cash outflow from investing activities increased to **HK$1,095 million**, primarily for payments for investment properties (**HK$1,069 million**) and an increase in fixed deposits (**HK$2,263 million**)[83](index=83&type=chunk) - Financing activities shifted from a net outflow in the prior period to a net inflow of **HK$835 million**, mainly from new bank loans (**HK$5,641 million**) and issuance of perpetual capital securities (**HK$5,800 million**)[83](index=83&type=chunk) Notes to the Condensed Consolidated Financial Statements [1. Basis of Preparation](index=27&type=section&id=1.%20Basis%20of%20Preparation) The condensed consolidated financial statements for the six months ended June 30, 2025, are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the disclosure requirements of the Listing Rules. Comparative information is extracted from the statutory consolidated financial statements for the year ended December 31, 2024 - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the Listing Rules[84](index=84&type=chunk) - Comparative financial information for the year ended December 31, 2024, is extracted from the statutory consolidated financial statements for that year[84](index=84&type=chunk) [2. Principal Accounting Policies](index=27&type=section&id=2.%20Principal%20Accounting%20Policies) These unaudited condensed consolidated financial statements are prepared primarily on a historical cost basis, except for certain properties and financial instruments measured at revalued amounts or fair value. The accounting policies and methods of computation adopted are consistent with those used in the preparation of the consolidated financial statements for the year ended December 31, 2024, and the application of HKFRS amendments had no significant impact on the results and financial position for the current period - These condensed consolidated financial statements are prepared on a historical cost basis, except for certain properties and financial instruments measured at revalued amounts or fair value[85](index=85&type=chunk) - The accounting policies and methods of computation adopted are consistent with those used in the preparation of the consolidated financial statements for the year ended December 31, 2024[85](index=85&type=chunk) - The application of HKFRS amendments had no significant impact on the Group's results and financial position for the current and/or prior accounting periods, nor on the disclosures in the condensed consolidated financial statements[86](index=86&type=chunk) [3. Revenue](index=28&type=section&id=3.%20Revenue) Revenue primarily comprises gross rental income from the Group's investment properties in Hong Kong and mainland China, and management fees from property management services. Income from property management services is recognized over time based on the completion of performance obligations - Revenue refers to gross rental income from investment properties and management fees from property management services during the period[88](index=88&type=chunk) - The Group's principal businesses are property investment, management, and development, with revenue and results primarily derived from investment properties in Hong Kong and mainland China[89](index=89&type=chunk) [4. Segment Information](index=28&type=section&id=4.%20Segment%20Information) The Group's operating and reportable segments include retail, office, residential, and property development. This section provides an analysis of revenue, results, and assets for each segment, showing income growth across retail, office, and residential segments, and a shift from loss to profit in the property development segment's share of joint venture results. Segment assets primarily consist of investment properties and property development-related assets [Segment Revenue and Results](index=29&type=section&id=Segment%20Revenue%20and%20Results) For the six months ended June 30, 2025, retail segment revenue was HK$862 million, office segment was HK$750 million, and residential segment was HK$118 million, all showing growth compared to the prior period. The property development segment's share of joint venture results turned from a loss of HK$30 million to a profit of HK$13 million Segment Revenue and Results (for the six months ended June 30, 2025) | Indicator | Retail (HK$ million) | Office (HK$ million) | Residential (HK$ million) | Property Development (HK$ million) | Consolidated (HK$ million) | | :--- | :--- | :--- | :--- | :--- | :--- | | Rental Income from Investment Properties | 773 | 637 | 104 | – | 1,514 | | Income from Property Management Services | 89 | 113 | 14 | – | 216 | | Segment Revenue | 862 | 750 | 118 | – | 1,730 | | Segment Gross Profit | 723 | 620 | 83 | – | 1,426 | | Share of Results of Joint Ventures | – | – | – | 13 | 13 | | Segment Profit | 723 | 620 | 83 | 13 | 1,439 | Segment Revenue and Results (for the six months ended June 30, 2024) | Indicator | Retail (HK$ million) | Office (HK$ million) | Residential (HK$ million) | Property Development (HK$ million) | Consolidated (HK$ million) | | :--- | :--- | :--- | :--- | :--- | :--- | | Rental Income from Investment Properties | 759 | 635 | 92 | – | 1,486 | | Income from Property Management Services | 85 | 109 | 13 | – | 207 | | Segment Revenue | 844 | 744 | 105 | – | 1,693 | | Segment Gross Profit | 712 | 621 | 74 | – | 1,407 | | Share of Results of Joint Ventures | – | – | – | (30) | (30) | | Segment Profit (Loss) | 712 | 621 | 74 | (30) | 1,377 | - Revenue for all segments is derived from external customers, and segment profit includes the share of results from the joint venture investing in the Tai Po residential project[94](index=94&type=chunk) [Segment Assets](index=32&type=section&id=Segment%20Assets) As at June 30, 2025, total consolidated assets were HK$115,454 million. Retail, office, and residential segment assets were HK$33,242 million, HK$33,847 million, and HK$8,665 million respectively, while property development segment assets were HK$25,661 million. Unallocated assets include investments in associates and joint ventures, other financial investments, and other assets Segment Assets (as at June 30, 2025) | Segment | 2025 (HK$ million) | | :--- | :--- | | Retail | 33,242 | | Office | 33,847 | | Residential | 8,665 | | Property Development | 25,661 | | **Total Segment Assets** | **101,415** | | Loans to Associates and Investments | 5,556 | | Investments in Joint Ventures | 350 | | Other Financial Investments | 1,582 | | Other Assets | 6,551 | | **Total Consolidated Assets** | **115,454** | Segment Assets (as at December 31, 2024) | Segment | 2024 (HK$ million) | | :--- | :--- | | Retail | 32,986 | | Office | 34,265 | | Residential | 8,667 | | Property Development | 25,006 | | **Total Segment Assets** | **100,924** | | Loans to Associates and Investments | 5,355 | | Investments in Joint Ventures | 340 | | Other Financial Investments | 1,657 | | Other Assets | 5,813 | | **Total Consolidated Assets** | **114,089** | - Retail and office segments include investment properties located in mainland China, valued at **HK$656 million** and **HK$2,742 million** respectively[99](index=99&type=chunk) [5. Finance Costs](index=34&type=section&id=5.%20Finance%20Costs) For the six months ended June 30, 2025, total finance costs were HK$289 million, an increase from HK$213 million in the prior period. Total interest expense was HK$590 million, of which HK$367 million was capitalized. Net exchange loss on borrowings was HK$127 million Details of Finance Costs (for the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Interest on Bank Loans | 300 | 299 | | Interest on Fixed Rate Notes | 267 | 286 | | Estimated Interest on Amounts Payable to Non-controlling Interests | 23 | 23 | | **Total Interest Expense** | **590** | **608** | | Other Finance Costs | 30 | 22 | | Less: Amount Capitalized | (367) | (395) | | Net Exchange Loss (Gain) on Borrowings | 127 | (20) | | Net Income Transferred from Hedging Reserve for Financial Instruments Designated as Cash Flow Hedges | (91) | (3) | | Medium Term Note Programme Fees | – | 1 | | **Total Finance Costs** | **289** | **213** | - Interest on investment properties under development was capitalized at an average annual rate of **3.4%** (2024: 4.0%)[102](index=102&type=chunk) [6. Taxation](index=35&type=section&id=6.%20Taxation) For the six months ended June 30, 2025, total taxation for the period was HK$155 million, a slight decrease from HK$158 million in the prior period. Hong Kong profits tax was HK$127 million, and deferred tax was HK$28 million. Hong Kong profits tax is calculated at a rate of 16.5% Taxation for the Period (for the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 127 | 121 | | Deferred Tax | 28 | 37 | | **Total Taxation for the Period** | **155** | **158** | - Hong Kong profits tax is calculated at a rate of **16.5%** on the estimated assessable profit for the period[103](index=103&type=chunk) [7. Profit for the Period](index=35&type=section&id=7.%20Profit%20for%20the%20Period) For the six months ended June 30, 2025, profit for the period was stated after deducting depreciation of property, plant and equipment of HK$22 million and including gross rental income from investment properties of HK$1,514 million. Interest income was HK$92 million, and staff costs were HK$164 million Profit for the Period Deductions/Inclusions (for the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 22 | 17 | | Gross Rental Income from Investment Properties | (1,514) | (1,486) | | Interest Income | (92) | (95) | | Staff Costs (including Directors' Emoluments) | 164 | 164 | | Taxation of Associates | 52 | 51 | [8. Earnings Per Share](index=36&type=section&id=8.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, profit attributable to owners of the company was HK$75 million, resulting in both basic and diluted earnings per share of 7 HK cents, a significant decrease from 42 HK cents in the prior period. The weighted average number of ordinary shares used for calculating earnings per share was 1,027,008,223 shares Earnings Per Share Calculation (for the six months ended June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 75 | 427 | | Weighted Average Number of Ordinary Shares for Basic EPS | 1,027,008,223 | 1,027,008,223 | | Basic Earnings Per Share (HK cents) | 7 | 42 | | Diluted Earnings Per Share (HK cents) | 7 | 42 | - Both basic and diluted earnings per share were **7 HK cents**, a significant decrease from **42 HK cents** in the prior period[105](index=105&type=chunk)[107](index=107&type=chunk) [9. Dividends](index=37&type=section&id=9.%20Dividends) For the six months ended June 30, 2025, the second interim dividend for 2024 of 81 HK cents per share, totaling HK$832 million, was recognized. The Board declared a first interim dividend of 27 HK cents per share, totaling HK$277 million, which will be paid after the reporting period and thus not recognized as a liability Dividends Recognized (for the six months ended June 30) | Dividend Type | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Second Interim Dividend for 2024 Paid – 81 HK cents per share | 832 | – | | Second Interim Dividend for 2023 Paid – 81 HK cents per share | – | 832 | | **Total** | **832** | **832** | - The Board declared a first interim dividend of **27 HK cents per share** (2024: 27 HK cents per share), totaling **HK$277 million**, to be paid after the reporting period[109](index=109&type=chunk) [10. Investment Properties](index=37&type=section&id=10.%20Investment%20Properties) As at June 30, 2025, the fair value of investment properties was HK$96,893 million, a slight increase from the beginning of the year. Additions during the period amounted to HK$1,217 million, but a fair value change loss of HK$964 million was recognized in the profit or loss. All investment properties were revalued by independent professional valuers at market value, using valuation methods including the income capitalization approach and residual method Fair Value Changes of Investment Properties | Item | HK$ million | | :--- | :--- | | As at January 1, 2025 | 96,547 | | Additions | 1,217 | | Transferred to Property, Plant and Equipment, net | (26) | | Fair Value Changes Recognized in Profit or Loss – Unrealized | (964) | | Exchange Differences | 119 | | As at June 30, 2025 | 96,893 | - The fair value of investment properties was revalued by independent professional valuer Knight Frank Petty Limited at open market value[111](index=111&type=chunk) - Completed investment properties in Hong Kong are valued using the income capitalization approach, while properties under development use the residual method. Investment properties in mainland China are valued using discounted cash flow analysis[113](index=113&type=chunk)[114](index=114&type=chunk) - As at June 30, 2025, the total fair value of investment properties pledged as security for the Group's borrowings was **HK$21,190 million**[113](index=113&type=chunk) [11. Trade and Other Receivables](index=39&type=section&id=11.%20Trade%20and%20Other%20Receivables) As at June 30, 2025, total trade and other receivables amounted to HK$1,699 million, a slight increase from HK$1,690 million as at December 31, 2024. Of this, prepayments for investment properties were HK$1,014 million. Trade receivables primarily consist of rent, with most being less than 30 days old based on aging analysis Trade and Other Receivables (as at June 30, 2025) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Trade Receivables | 51 | 51 | | Interest Receivables | 43 | 43 | | Prepayments for Investment Properties | 1,014 | 943 | | Other Receivables and Prepayments | 591 | 653 | | **Total** | **1,699** | **1,690** | | Current Assets | 314 | 375 | | Non-current Assets | 1,385 | 1,315 | Aging Analysis of Trade Receivables (as at June 30, 2025) | Aging | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Less than 30 days | 25 | 23 | | 31–90 days | 13 | 14 | | Over 90 days | 13 | 14 | | **Total** | **51** | **51** | [12. Trade and Other Payables](index=40&type=section&id=12.%20Trade%20and%20Other%20Payables) As at June 30, 2025, total trade and other payables amounted to HK$1,070 million, a decrease from HK$1,428 million as at December 31, 2024. Of this, trade payables were HK$254 million, and interest payables were HK$57 million. Most trade payables were aged less than 90 days Trade and Other Payables (as at June 30, 2025) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Trade Payables | 254 | 534 | | Interest Payables | 57 | 146 | | Other Payables | 759 | 748 | | **Total** | **1,070** | **1,428** | - As at June 30, 2025, the carrying amount of the Group's trade payables was **HK$157 million**, all aged less than 90 days[117](index=117&type=chunk) [13. Amounts Due to Non-controlling Interests](index=40&type=section&id=13.%20Amounts%20Due%20to%20Non-controlling%20Interests) As at June 30, 2025, total amounts due to non-controlling interests were HK$6,009 million, of which HK$192 million were current liabilities and HK$5,817 million were non-current liabilities. These amounts are unsecured, interest-free, and partly used for the development of commercial land at Caroline Hill Road, Causeway Bay, Hong Kong Amounts Due to Non-controlling Interests (as at June 30, 2025) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Current Liabilities | 192 | 189 | | Non-current Liabilities | 5,817 | 5,686 | | **Total** | **6,009** | **5,875** | - The amounts are unsecured, interest-free, with the current portion repayable on demand, and the non-current portion used for the development of commercial land at Caroline Hill Road, Causeway Bay, Hong Kong[118](index=118&type=chunk)[119](index=119&type=chunk) [14. Borrowings](index=41&type=section&id=14.%20Borrowings) As at June 30, 2025, the total carrying amount of the Group's borrowings was HK$28,641 million (current HK$1,444 million, non-current HK$27,197 million), an increase from HK$26,514 million as at December 31, 2024. Non-current borrowings primarily consist of secured bank loans and unsecured fixed-rate notes Analysis of Carrying Amount of Borrowings (as at June 30, 2025) | Borrowing Type | Current (HK$ million) | Non-current (HK$ million) | Total (HK$ million) | | :--- | :--- | :--- | :--- | | Secured Bank Loans | – | 9,899 | 9,899 | | Unsecured Bank Loans | 151 | 4,130 | 4,281 | | Unsecured Fixed Rate Notes | 1,293 | 13,168 | 14,461 | | **Total** | **1,444** | **27,197** | **28,641** | - As at June 30, 2025, total borrowings amounted to **HK$28,641 million**, an increase from **HK$26,514 million** as at December 31, 2024[59](index=59&type=chunk)[120](index=120&type=chunk) [15. Perpetual Capital Securities](index=41&type=section&id=15.%20Perpetual%20Capital%20Securities) In 2025, the Group issued US$750 million (approximately HK$5,800 million) of 7.20% subordinated guaranteed perpetual capital securities for general corporate purposes and refinancing existing debt. During the period, the company repurchased HK$5,363 million principal amount of subordinated guaranteed perpetual capital securities for a cash consideration of HK$5,365 million. These securities have no maturity date, allow for discretionary deferral of distributions, and are classified as equity in the consolidated financial statements - In 2025, the Group issued **US$750 million** (approximately **HK$5,800 million**) of **7.20%** subordinated guaranteed perpetual capital securities for general corporate purposes and refinancing existing debt[121](index=121&type=chunk) - During the period, the Group repurchased **HK$5,363 million** principal amount of subordinated guaranteed perpetual capital securities for a cash consideration of **HK$5,365 million** (2024: HK$777 million)[122](index=122&type=chunk) - Perpetual capital securities have no maturity date, allow for discretionary deferral of distributions by the issuer, and are classified as equity in the consolidated financial statements[121](index=121&type=chunk)[122](index=122&type=chunk) [16. Commitments](index=42&type=section&id=16.%20Commitments) As at June 30, 2025, the Group's capital commitments contracted but not provided for in respect of its investment properties, property, plant and equipment amounted to HK$4,357 million, an increase from HK$3,974 million as at December 31, 2024 Capital Commitments (as at June 30, 2025) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Contracted but not provided for in respect of investment properties and property, plant and equipment | 4,357 | 3,974 | [17. Related Party Transactions and Balances](index=42&type=section&id=17.%20Related%20Party%20Transactions%20and%20Balances) The Group period with related parties, including estimated interest expense on interest-free loans from non-controlling interests, interest income from loans to joint ventures, and rental income and payables with related companies controlled by directors, non-controlling shareholders of subsidiaries, and joint ventures/associates. Total key management personnel remuneration was HK$27 million - Interest income from loans to joint ventures during the period was **HK$23 million** (2024: HK$18 million)[124](index=124&type=chunk) Transactions and Balances with Related Parties (as at June 30) | Related Party | Total Rental Income (2025, HK$ million) | Total Rental Income (2024, HK$ million) | Amounts Payable to Non-controlling Interests (June 30, 2025, HK$ million) | Amounts Payable to Non-controlling Interests (Dec 31, 2024, HK$ million) | | :--- | :--- | :--- | :--- | :--- | | Related companies controlled by directors | – | 18 | – | – | | Non-controlling shareholders of subsidiaries | 41 | 14 | 6,009 | 5,875 | | Joint ventures and associates | 47 | 37 | – | – | Key Management Personnel Remuneration (for the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Directors' Fees, Salaries and Other Short-term Employee Benefits | 26 | 26 | | Share-based Payments | 1 | 1 | | Contributions to Retirement Benefit Schemes | – | – | | **Total** | **27** | **27** | [18. Financial Risk Management and Fair Value Measurement](index=44&type=section&id=18.%20Financial%20Risk%20Management%20and%20Fair%20Value%20Measurement) The Group's financial risk management objectives and policies are consistent with the prior year. This section detailed the fair value measurement of financial assets and liabilities, including non-recurring and recurring financial instruments measured at fair value, classified into Level 1 to Level 3. The fair value of unsecured fixed-rate notes was lower than their carrying amount. Recurring financial assets measured at fair value primarily include unlisted equity investments, while financial liabilities mainly comprise cross-currency swaps and interest rate swaps - The Group's financial risk management objectives and policies are consistent with those disclosed in the Group's consolidated financial statements for the year ended December 31, 2024[128](index=128&type=chunk) - The carrying amount of unsecured fixed-rate notes was **HK$14,461 million**, with a fair value of **HK$13,489 million**[129](index=129&type=chunk) Recurring Financial Instruments Measured at Fair Value (as at June 30, 2025) | Item | Level 1 (HK$ million) | Level 2 (HK$ million) | Level 3 (HK$ million) | Total (HK$ million) | | :--- | :--- | :--- | :--- | :--- | | **Financial Assets** | | | | | | Unlisted Club Debentures | – | 1 | – | 1 | | Fund Investments | – | – | 87 | 87 | | Unlisted Equity Investments | – | – | 1,495 | 1,495 | | Cross-currency Swaps | – | 23 | – | 23 | | **Total Financial Assets** | **–** | **24** | **1,582** | **1,606** | | **Financial Liabilities** | | | | | | Cross-currency Swaps | – | 523 | – | 523 | | Interest Rate Swaps | – | 34 | – | 34 | | **Total Financial Liabilities** | **–** | **557** | **–** | **557** | - Financial assets at fair value Level 3 primarily consist of fund investments and unlisted equity investments, valued using discounted cash flow or market approaches[139](index=139&type=chunk) Corporate Governance [Compliance with the Corporate Governance Code](index=48&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) Hysan Development is committed to upholding high-quality corporate governance and fully complied with the code provisions set out in Part 2 of Appendix C1 "Corporate Governance Code" of the Rules Governing the Listing of Securities on The Stock Exchange of H

摩根士丹利发布研报称，将希慎兴业(00014)2025至27年各年基本每股盈利预测分别上调1%、4%及 7%，以反映2025年上半年业绩优于预期及利息成本降低等因素。维持2025至27年每股派息1港元预测， 对比2024年为1.08港元，因预期现金盈利无法完全覆盖股息;目标价由12.5港元上调至14.3港元。该行对 香港零售整体市场仍持谨慎态度，因消费模式转变、下半年预期出境旅游增加，以及失业率上升。维持 减持评级，因仍在等待香港零售市场出现实质且可持续的复苏。 ...

Core Viewpoint - Morgan Stanley has raised the earnings per share (EPS) forecasts for Hysan Development (00014) for the years 2025 to 2027 by 1%, 4%, and 7% respectively, reflecting better-than-expected performance in the first half of 2025 and reduced interest costs [1] Company Summary - The EPS forecast for 2025 is adjusted upwards by 1%, for 2026 by 4%, and for 2027 by 7% [1] - The dividend per share forecast for 2025 to 2027 is maintained at HKD 1, compared to HKD 1.08 in 2024, due to expectations that cash earnings will not fully cover dividends [1] - The target price for Hysan Development has been increased from HKD 12.5 to HKD 14.3 [1] Industry Summary - Morgan Stanley maintains a cautious outlook on the overall retail market in Hong Kong due to changes in consumer behavior, expected increase in outbound tourism in the second half of the year, and rising unemployment rates [1] - The firm retains a "reduce" rating as it awaits a substantial and sustainable recovery in the Hong Kong retail market [1]

Group 1 - The core viewpoint is that top shopping centers exhibit strong stability, contrary to the market perception that they are vulnerable to economic downturns and online consumption impacts [2][6] - Despite a projected decline in retail sales growth in major cities like Beijing and Shanghai, top shopping centers have managed to achieve retail sales growth, with specific centers reporting increases of 30%, 6%, and 26% year-on-year [2][3] - The success of top shopping centers is attributed to their ability to attract consumer traffic and popular brands, creating a positive cycle of customer flow and brand presence, which helps maintain rental income stability [2][4] Group 2 - High-end shopping centers are facing challenges due to economic fluctuations, but those in stable competitive environments can still achieve retail growth by attracting fast-growing brands and upgrading their offerings [3][6] - The competitive advantage of shopping centers is not solely based on location or operational capabilities, but rather on their ability to provide an engaging shopping experience, known as "walkability" [4][5] - A robust management system is crucial for commercial real estate companies, as it differentiates them in a market where operational know-how is not scarce [5][7] Group 3 - Top shopping centers and commercial real estate companies are considered valuable assets, maintaining stability even during economic downturns by leveraging their scale advantages and effective marketing strategies [6][7] - Companies that excel in commercial real estate should possess strong management capabilities, stable existing shopping centers, and the ability to successfully launch new projects [7]

Investment Rating - The industry investment rating is "Positive" [2] Core Viewpoints - The real estate sector is at a historical low in holdings, combined with interest rate cuts, which enhances the attractiveness of investments in this sector [4] - The report highlights that the fund holdings in real estate stocks have reached a historical low, with a significant drop in market value from 14.1 billion to 3 billion, a decrease of 80% [19] - The report identifies several driving factors, including low fund holdings, global policy cycles, and high base pressure in Q4 2025, which necessitate further policy support [5] Summary by Sections 1. Real Estate Heavyweight Stock Analysis: Historical Low Holdings - The number of funds holding real estate stocks has reached a five-year low, with a decline from 372 funds in Q4 2020 to 194 funds in Q4 2023 [13] - The total market value of funds holding real estate stocks has decreased significantly, reaching a historical low of 3 billion by H1 2025 [19] - The report notes that the proportion of funds overweight in real estate stocks has remained around 55% over the past five years, indicating a stable but low allocation [23] 2. Impact of US Rate Cuts on Chinese Real Estate Stocks - The report discusses the correlation between US interest rate cuts and the valuation recovery of Chinese real estate stocks, suggesting that these cuts can alleviate pressure on the Chinese yuan and provide opportunities for local rate cuts [56] - It emphasizes that the US rate cuts can improve the financing environment for Chinese real estate companies, thereby enhancing their credit profiles and market valuations [58] - The report anticipates a 92.1% probability of a rate cut by the Federal Reserve in September 2025, which could further influence the Chinese real estate market positively [61]

里昂发布研报称，希慎兴业(00014)上半年各个物业分部的收入均录得增长。由于利园重新发展，希慎 的利园零售组合表现优于香港整体市场，这应会在未来两年继续带动盈利增长。公司已启动一项80亿元 的资本回收计划，应有助其去杠杆化及提升股东回报。由于希慎营运表现理想，加上美国减息预期升 温，该行将希慎目标价由13.5港元上调至18.3港元，并维持"跑赢大市"评级。 ...

智通财经APP获悉，里昂发布研报称，希慎兴业(00014)上半年各个物业分部的收入均录得增长。由于利 园重新发展，希慎的利园零售组合表现优于香港整体市场，这应会在未来两年继续带动盈利增长。公司 已启动一项80亿元的资本回收计划，应有助其去杠杆化及提升股东回报。由于希慎营运表现理想，加上 美国减息预期升温，该行将希慎目标价由13.5港元上调至18.3港元，并维持"跑赢大市"评级。 ...

Financial Performance - The company's turnover increased by 2.2% compared to the first half of 2024[10,92] - Recurring underlying profit increased by 1.2% compared to the first half of 2024[10,92] - Underlying profit increased by 1.2% compared to the first half of 2024[10,92] - HK$15.3 billion in undrawn committed facilities and cash provides ample liquidity[74,156] - Shareholders' Fund is HK$65.2 billion, NAV per share is HK$63.5, and DPS is HK$0.27[72,154] Portfolio Performance - Hong Kong office occupancy is at 92% as of June 30, 2025[10,45,66,127,149] - Hong Kong residential occupancy is at 94% as of June 30, 2025[10,45,127] - Hong Kong retail occupancy is at 70% as of June 30, 2025[10,45,127] - Hong Kong retail revenue increased by 0.8% year-over-year[46,128] - Hong Kong office revenue decreased by 2.4% year-over-year[46,128] Strategic Initiatives - Lee Garden Eight is on track for completion in 2026, expecting a 30% expansion of the Lee Gardens leasable portfolio and a 20% increase in daily footfall[33,37,116,119] - Targeting HK$8 billion over 5 years through capital recycling from non-core assets like Bamboo Grove and VILLA LUCCA[69,151]

Core Viewpoint - Hysan Development (00014) reported a mixed performance in its interim results, with revenue growth but a significant decline in profit attributable to shareholders [1] Financial Performance - The company reported a revenue of HKD 1.73 billion for the six months ending June 30, 2025, representing a year-on-year increase of 2.19% [1] - The recurring basic profit was HKD 1.031 billion, up 1.2% year-on-year [1] - Profit attributable to shareholders was HKD 75 million, showing a substantial decrease of 82.44% year-on-year [1] - The company proposed an interim dividend of HKD 0.27 per share [1] Operational Highlights - Revenue growth was attributed to portfolio optimization and improved sales performance [1] - The office rental rate increased from 90% to 92%, which helped mitigate the impact of rental reductions [1] - Strong expansion in Shanghai Li Yuan and recovery in the rental rate of Zhu Lin Yuan contributed to overall revenue and profit growth during the period [1]

Core Viewpoint - Hysan Development (00014) reported a slight increase in revenue and recurring profit for the six months ending June 30, 2025, despite a significant drop in profit attributable to shareholders [1] Financial Performance - Revenue reached HKD 1.73 billion, representing a year-on-year increase of 2.19% [1] - Recurring basic profit was HKD 1.031 billion, up 1.2% year-on-year [1] - Profit attributable to shareholders was HKD 75 million, a decrease of 82.44% year-on-year [1] Dividend Announcement - The company proposed a first interim dividend of HKD 0.27 per share [1] Operational Highlights - Revenue growth was attributed to portfolio optimization and improved sales performance [1] - Office rental occupancy rate increased from 90% to 92%, helping to mitigate the impact of rental reductions [1] - Strong expansion in Shanghai and recovery in rental rates at Zhulin Garden contributed to overall revenue and profit growth during the period [1]