Financial Performance - The company's underlying profit attributable to shareholders, excluding the impact of investment property fair value changes, was HKD 21.739 billion, compared to HKD 23.885 billion last year[2] - Revenue for the fiscal year ending June 30, 2024, was HKD 71,506 million, compared to HKD 71,195 million in the previous year[44] - Gross profit for the fiscal year ending June 30, 2024, was HKD 32,214 million, down from HKD 34,458 million in the previous year[44] - Operating profit for the fiscal year ending June 30, 2024, was HKD 26,752 million, compared to HKD 27,545 million in the previous year[44] - Net profit attributable to shareholders for the fiscal year ending June 30, 2024, was HKD 19,046 million, down from HKD 23,907 million in the previous year[44] - Basic and diluted earnings per share for the fiscal year ending June 30, 2024, were HKD 6.57, compared to HKD 8.25 in the previous year[44] - The company's underlying profit, excluding investment property valuation changes, was HKD 21,739 million for 2024[58] - The company's attributable profit to shareholders for 2024 was HK$19,046 million, a decrease from HK$23,907 million in 2023[59] - The fair value decrease in investment properties for 2024 was HK$1,481 million for subsidiaries and HK$1,352 million for joint ventures, compared to an increase of HK$593 million and HK$77 million respectively in 2023[59] - The total dividends declared and paid for 2024 were HK$10,867 million, down from HK$14,344 million in 2023[60] - The company's underlying profit attributable to shareholders for 2024 was HK$21,739 million, a decrease of 9% from HK$23,885 million in 2023[68] - The total revenue for the company's business segments (including joint ventures and associates) for 2024 was HK$83,636 million, slightly up from HK$83,381 million in 2023[69] - The operating profit for the company's business segments decreased by 7% to HK$32,359 million in 2024[69] - Underlying profit for the year was HKD 21.739 billion, excluding unrealized revaluation losses of HKD 2.412 billion and including realized revaluation gains of HKD 281 million from the sale of investment properties[78] Dividends and Shareholder Returns - The total dividend per share for the year was HKD 3.75, a decrease of 24% compared to the previous year[3] - The board proposed a final dividend of HKD 2.80 per share for the year ended June 30, 2024, bringing the total annual dividend to HKD 3.75 per share[93] Property Development and Sales - Profit from property sales was HKD 7.85 billion, down from HKD 11.299 billion last year, with total contract sales of approximately HKD 37.5 billion[4] - The company added three residential sites with a total gross floor area of approximately 1.548 million square feet[7] - As of June 30, 2024, the company's land reserve in Hong Kong was approximately 57.8 million square feet, with 38.2 million square feet being diversified completed properties[8] - The company recorded contract sales of approximately HKD 25.6 billion in Hong Kong, primarily from projects such as YOHO WEST Phase 1 and The YOHO Hub II[9] - Six projects in Hong Kong were completed during the year, with a total gross floor area of approximately 3.5 million square feet, including 2.5 million square feet of residential properties for sale[10] - The company's unbooked contract sales in Hong Kong as of June 30, 2024, reached HKD 24.9 billion, with approximately HKD 19.6 billion expected to be recognized in the 2024/25 fiscal year[11] - The company's land reserves in mainland China total approximately 66.7 million square feet, with 21 million square feet completed and 45.7 million square feet under development, over 50% of which will be developed into high-quality residential and office properties[17] - The company achieved contracted sales of approximately RMB 11 billion in mainland China, primarily from two landmark projects: Binjiang Triumphal Gate Phase 3 in Shanghai and Hangzhou International Finance Centre (Huidong) Phase 3 in Hangzhou[18] - The company completed approximately 1.45 million square feet of properties in mainland China, including the Suzhou Four Seasons Hotel, which opened at the end of 2023[19] - Unrecognized contracted sales in mainland China amounted to RMB 12.6 billion as of June 30, 2024, with approximately RMB 8 billion expected to be recognized in the 2024/25 fiscal year[20] - Hong Kong property development revenue increased by 4% to HKD 24.745 billion, driven by sales of residential projects such as NOVO LAND 2A & 2B, University Hill 2A & 2B, and Silicon Hill[71] - Mainland China property development revenue decreased by 49% to HKD 2.677 billion due to reduced residential unit sales[71] Property Rental Income - Total rental income increased by 3% year-on-year to HKD 24.991 billion, with net rental income also rising by 3% to HKD 19 billion[5] - Total rental income from the company's diversified investment property portfolio in Hong Kong increased by 1% year-on-year to HKD 17.942 billion[12] - The retail property portfolio achieved an average occupancy rate of 94%, with rental income recording moderate growth despite challenges in the retail sector[13] - The company's office property portfolio maintained an average occupancy rate of 91%, with flagship properties like International Finance Centre and Global Trade Plaza exceeding 90% occupancy[15] - Total rental income in mainland China increased by 12% year-on-year to RMB 5.822 billion, driven by new contributions from completed projects and strong performance of the company's premium shopping malls[21] - Hong Kong property investment rental income increased by 1% to HKD 17.942 billion, with retail property rental income up 3% to HKD 9.283 billion[71] - Mainland China property investment rental income increased by 8% to HKD 6.305 billion, with a 12% increase in RMB terms to RMB 5.822 billion[71] Investment Properties - The fair value of completed investment properties in Hong Kong increased to HK$274,585 million in 2024 from HK$263,266 million in 2023, with a weighted average capitalization rate of 5.1%[64] - The fair value of investment properties under development in Hong Kong decreased to HK$25,578 million in 2024 from HK$33,151 million in 2023, with a capitalization rate range of 3.5%-5.5%[65] - Investment properties recorded a net fair value loss of HKD 1.481 billion, primarily due to declining market rents for office properties[75] Debt and Financial Position - The group's debt ratio as of June 2024 is 18.3%, with a strong financial position and A+ credit rating from S&P[29] - The group secured a HKD 23 billion syndicated loan agreement with 23 banks in May 2024[29] - The group issued offshore RMB bonds totaling RMB 8 billion (5-year) and RMB 2.85 billion (2-year) in 2024[29] - The group's total borrowings as of June 2024 include 46% in HKD fixed-rate or RMB-denominated debt[30] - Net debt increased to HKD 110.866 billion (2023: HKD 109.773 billion), with a debt-to-equity ratio of 18.3% (2023: 18.2%)[80] - Total debt amounted to HKD 127.087 billion, with 68% being bank loans and 32% being notes and bonds, all maturing by June 2033[81] - Approximately 76% of the total debt is due after two years, with a weighted average repayment period of 3.3 years[82] - Debt composition by currency (post-currency swap) shows 79% in HKD, 20% in RMB, and 1% in GBP[83] - Fixed-rate debt accounts for 31% of total debt, primarily consisting of medium-term notes and RMB 2 billion commercial mortgage-backed securities issued in mainland China[84] - The company maintains a strong financial position with ample liquidity, supported by recurring income, property sales cash inflows, and substantial unused credit facilities[85] - Foreign exchange risk is minimal, with RMB-denominated net assets accounting for approximately 17% of total net assets, and a RMB depreciation of 0.5% against HKD resulting in a HKD 450 million exchange loss[86] - The total nominal principal amount of interest rate swaps, cross-currency interest rate swaps, and foreign exchange forward contracts used to manage interest rate and foreign exchange risks was HKD 16.389 billion as of June 30, 2024[87] - Bank deposits and cash amounted to HKD 16.221 billion as of June 30, 2024, with 61% in HKD, 33% in RMB, and 6% primarily in USD[88] - Subsidiaries pledged bank deposits totaling HKD 48 million and assets with a book value of HKD 5.84 billion as collateral for bank guarantees and loans[89] - Contingent liabilities related to guarantees for joint venture loans and other guarantees totaled HKD 1.907 billion as of June 30, 2024[90] ESG and Sustainability - The group ranked in the top 20% of the Dow Jones Sustainability Asia Pacific Index for ESG performance[32] - The group achieved the highest AAA rating in the Hang Seng Corporate Sustainability Index[32] - The group received an A rating in the MSCI ESG Ratings[32] - The company has achieved a 25% reduction in greenhouse gas emissions from its major commercial properties over four years[33] - The company plans to double the number of fast EV charging stations in its shopping malls in the coming months, currently having installed nearly 40 stations[33] - The company is developing Hong Kong's first solar power plant on a landfill site, expected to generate 1.2 million kWh annually[33] - The company has purchased several electric construction equipment, becoming a pioneer in this area among Hong Kong developers[34] Corporate Governance and Compliance - The company complied with the Corporate Governance Code during the year, except for not separating the roles of Chairman and CEO, as major decisions are made collectively by the board and senior management[97] - The 2023-2024 annual report will be published on the Hong Kong Exchanges and Clearing Limited website and the company's website by the end of October 2024[98] Employee and Community Initiatives - The company has lent a plot of land in Yuen Long to the government for the construction of 2,100 simplified public housing units, expected to be completed by 2025[35] - The company is supporting the "2024 Hong Kong Reading +" carnival to promote reading culture and cross-border exchanges with Shenzhen[35] - The company is collaborating with the Hong Kong Sports Association to promote the 2024 Paris Olympics across its shopping malls[35] - The company is launching comprehensive training programs for employees, covering AI, data mining, and blockchain technologies[37] - The company's total employee compensation before reimbursements was approximately HKD 14.888 billion for the year, with over 40,000 employees as of June 30, 2024[91] Market Outlook and Economic Environment - The company expects moderate economic growth in Hong Kong, driven by government measures to attract international talent and investment[38] - The company anticipates a recovery in inbound tourism and a positive impact on the property market due to potential interest rate cuts[38] Infrastructure and Transportation - Infrastructure and transportation business performance varies, with the Hong Kong Commercial Aviation Center recording strong growth, nearing pre-pandemic passenger levels[27] - Cross-border transport volume remains below pre-pandemic levels, impacting traffic flow[27] - The Hong Kong Airport Air Cargo Terminal plans a major renovation to upgrade facilities to world-class standards[28] Telecommunications and Data Centers - SmarTone's 5G user base has reached nearly 40%, with 5G home broadband services driving growth[25] - SmarTone's roaming service revenue increased significantly after Hong Kong reopened its borders[25] - SUNeVision's MEGA IDC Phase 1, a state-of-the-art data center, was launched in H1 2024 and has attracted inquiries from major cloud service providers and financial institutions[26] - SUNeVision's data centers are nearly fully leased, with significant rental growth[26] - Data center business revenue increased by 14% to HKD 2.674 billion, driven by growing demand for data center services[73] New Projects and Developments - TOWNPLACE WEST KOWLOON, operational since October 2023, offers mixed lease options and has successfully attracted young professionals and corporate clients[15] - The newly opened YOHO MIX in Yuen Long, with a total retail area of 107,000 sq ft, integrates with the existing YOHO MALL to form the largest retail property in the Northwest New Territories, totaling approximately 1.1 million sq ft[15] - The high-speed rail West Kowloon Terminus development project is expected to contribute to the company's recurring income, with the International Gateway Centre (IGC) office tower already leased by UBS for 460,000 square feet[16] - The Nanjing International Finance Centre Mall, with a total gross floor area of approximately 1 million square feet, officially opened in July 2024, featuring high-end brands and innovative design[21] - Shanghai ITC Phase 3A has been completed with a total floor area of 1.1 million sq. ft. and a leasing rate exceeding 70%[22] - Shanghai ITC Phase 3B, a 370-meter skyscraper with 2.4 million sq. ft. of office space, is expected to be completed by 2025[22] - ITC Maison, a flagship mall with 2.6 million sq. ft. of retail space, is set to open in phases and has received positive initial market response[22] - Hangzhou International Finance Centre, located in the CBD of Qianjiang New Town, is progressing well and expected to be completed in phases by 2025[22] - The Millennity base mall in Kwun Tong is planned to open in phases starting from the end of 2024[39] - The first office tower at IGC above the West Kowloon High-Speed Rail Station is expected to be delivered to tenants in early 2026[39] - ITC Phase III in Shanghai, including the B office tower and ITC Maison mall, is expected to be completed in phases by 2025[39] - The company plans to launch several major Hong Kong projects in the next ten months, including The YOHO Hub II in Yuen Long and YOHO WEST Phase 2 in Tin Shui Wai[40] - The company is developing the West Saddle Mountain project, which includes the West Saddle GO PARK, a new sports and entertainment landmark[40] Membership Programs and Retail Initiatives - The Point membership program expanded its coverage to approximately 60% of tenants in the company's major shopping malls, with stable member spending despite a challenging environment[14] - The "Di Rewards" membership program has grown to over 180,000 members, with a significant increase in mainland China members[24] - The company's retail properties, including Shanghai IAPM and Guangzhou Tianhuan, maintained high occupancy rates and introduced new brand concepts and pet-friendly events to enhance their market positioning[21] Other Financial Metrics - Total assets increased to HKD 756,082 million in 2024 from HKD 752,577 million in 2023, reflecting growth in non-current and current assets[46] - Property development revenue in Hong Kong reached HKD 24,745 million with a profit of HKD 6,513 million, while mainland China contributed HKD 2,677 million in revenue and HKD 1,337 million in profit[50] - Property rental revenue in Hong Kong was HKD 17,942 million with a profit of HKD 13,423 million, and mainland China contributed HKD 6,305 million in revenue and HKD 5,027 million in profit[50] - Hotel business revenue totaled HKD 5,261 million with a profit of HKD 650 million, while telecommunications revenue was HKD 6,221 million with a profit of HKD 701 million[50] - Transport infrastructure and logistics revenue reached HKD 8,612 million with a profit of HKD 1,712 million, and data center business revenue was HKD 2,674 million with a profit of HKD 1,266 million[50] - Total segment revenue for the year was HKD 83,636 million, with a combined segment profit of HKD 32,359 million[50] - Operating profit for the year was HKD 32,042 million, including other net gains of HKD 1,671 million and unallocated administrative expenses of HKD 1,988 million[50] - Investment property fair value changes resulted in a loss of HKD 2,780 million, with significant losses in Singapore (HKD 1,299 million) and mainland China (HKD 1,030 million)[50] - Net finance costs for the year were HKD 4,281 million, contributing to a pre-tax profit of HKD 24,981 million[50] - The company reported a net profit of HKD 19,605 million for the year, after accounting for taxes of HKD 5,376 million[50] - Property development revenue in Hong Kong reached HKD 23,853 million, with a performance of HKD 8,467 million, accounting for 13% of total revenue[51] - Property leasing revenue in Hong Kong was HKD 14,996 million, with a performance of HKD 11,081 million, contributing significantly to the overall leasing segment[51] - The company recorded other net gains of HKD 1,766 million, including HKD 1,095 million from land resumption by the Hong Kong government[52] - Revenue from the Hong Kong market increased to HKD 65,267 million in 2024, up from HKD 63,512 million in 2023[53] - Net financial expenses for 202

Financial Performance - For the six months ended December 31, 2023, the group's revenue was HKD 27,542 million, a slight increase of 0.4% compared to HKD 27,428 million in the same period last year[6]. - The attributable profit to shareholders was HKD 9,145 million, representing an increase of 8.7% from HKD 8,410 million year-on-year[6]. - Basic earnings per share were HKD 3.16, up 8.7% from HKD 2.90 in the previous year[10]. - Total comprehensive income for the period was HKD 11,372 million, significantly higher than HKD 4,180 million in the prior year, indicating a substantial increase of 171.5%[44]. - The net profit for the period was HKD 9,473 million, up from HKD 8,790 million, representing a growth of 7.8% year-on-year[44]. - The company reported a profit of HKD 8,410 million for the period, contributing to a total comprehensive income of HKD 3,847 million[47]. - The company reported a profit of HKD 9,145 million for the six months ended December 31, 2023, compared to a profit of HKD 9,473 million for the previous period[48]. - The total operating profit, including fair value changes of investment properties, was HKD 13,881 million, with a pre-tax profit of HKD 11,244 million[52]. Revenue Sources - Total rental income increased by 4% to HKD 12,454 million, while net rental income rose by 4.9% to HKD 9,326 million[6][13]. - The hotel business generated revenue of HKD 2,757 million, with a profit of HKD 430 million[51]. - The telecommunications segment reported revenue of HKD 3,390 million, contributing HKD 361 million to the overall performance[51]. - Property sales in Hong Kong generated revenue of HKD 3,612 million, while mainland property sales contributed HKD 256 million[51]. - The hotel division's revenue increased by 48% to HKD 2.76 billion, with an operating profit of HKD 430 million, recovering from a loss of HKD 63 million in the previous year[90]. Dividends and Shareholder Returns - The interim dividend declared is HKD 0.95 per share, a decrease of 24% compared to HKD 1.25 in the same period last year[11]. - The company declared a dividend of HKD 10,722 million for the year-end, consistent with previous distributions[47]. - The interim dividend will be paid in cash on March 20, 2024, with the ex-dividend date set for March 12, 2024[151]. Property and Investment Developments - The group added two residential land parcels through land deed amendments, with a total buildable floor area of approximately 1 million square feet[14]. - The group recorded a profit from property sales of HKD 2,040 million, down from HKD 3,366 million in the previous year[12]. - The group expects a significant increase in completion volume to approximately 3.1 million square feet in the second half of the fiscal year, with about 2.5 million square feet being residential properties for sale[17]. - The group has unrecognized contract sales amounting to HKD 32.8 billion, with an estimated HKD 22.4 billion expected to be recognized in the second half of the fiscal year[17]. - The group is integrating sustainable development and technology elements into new projects, including smart home features and green spaces[16]. Financial Position and Debt Management - The company's bank and other borrowings increased significantly to HKD 20,290 million from HKD 7,508 million, reflecting a rise of 169.5%[45]. - The net debt as of December 31, 2023, was HKD 127.8 billion, up from HKD 109.8 billion as of June 30, 2023, with a debt-to-equity ratio of 21.2%[94]. - The average effective interest rate increased to 4.5% as of December 31, 2023, compared to 3.1% in 2022, due to rising borrowing costs[96]. - The company maintains a strong financial position with ample unused credit facilities, ensuring sufficient liquidity for future investment opportunities[101]. Corporate Governance and Management - The company is committed to high levels of corporate governance, with a diverse board of 19 members ensuring effective strategy and risk management[32]. - The company has a strong governance structure with independent non-executive directors serving on various committees, including audit, risk management, and remuneration[111][112][113]. - The company continues to engage with its independent directors to leverage their expertise in navigating market challenges and opportunities[111][112][113]. - The company is committed to continuous improvement in governance practices, reflecting best practices in corporate governance and accountability[111][112][113]. Sustainability and Community Engagement - The group is actively involved in community support initiatives, including sponsoring cycling events and educational programs to promote reading among youth[36]. - The group has achieved significant ESG recognition, being included in the S&P Global Sustainability Yearbook for the second consecutive year and receiving the highest AAA rating in the Hang Seng Sustainability Index since 2020[33]. - The group is the first developer in Hong Kong to purchase and use fully electric construction equipment, aiming to reduce carbon emissions on construction sites[35]. Employee and Workforce Management - The total employee compensation for the group was approximately HKD 7.135 billion, reflecting the company's commitment to market-level compensation and individual performance[149]. - The company has over 40,000 employees as of December 31, 2023, indicating a stable workforce size[149]. - The company has a long-term incentive plan in place for key employees, which includes stock options and share reward plans[149].

Investment Rating - The report maintains a **Buy** rating for Sun Hung Kai Properties (16 HK) with a revised target price of HKD 110.1, representing a potential upside of 41.2% from the current price of HKD 78.00 [1][2] Core Views - The company's 2024 interim results were stable, with a slight increase in total revenue by 0.4% YoY to HKD 27.5 billion, while core net profit declined by 5.9% to HKD 8.9 billion, in line with Bloomberg consensus [1] - Property development revenue fell by 23.5% YoY to HKD 3.87 billion due to a 60% decline in mainland project deliveries, partially offset by a 25% increase in Hong Kong property development revenue [1] - Rental income increased by 1.7% YoY to HKD 8.94 billion, with retail rental income growing by 3.5%, supported by the relaxation of travel restrictions and a recovery in tourism [1] - Hotel revenue surged by 48% YoY to HKD 2.76 billion, with operating profit turning positive at HKD 430 million compared to a loss of HKD 63 million in the previous year [1] - The company revised its full-year sales target downward to HKD 23 billion from HKD 33 billion due to delayed project launches, with seven projects scheduled for launch in the second half of the year [1] Financial Data Summary - Revenue for FY2024E is projected to grow by 14.2% YoY to HKD 81.33 billion, with core net profit expected to increase by 5.3% to HKD 25.15 billion [3] - Core EPS for FY2024E is forecasted at HKD 8.68, a 5.3% YoY increase, with a P/E ratio of 9.0x [3] - The company's net asset value per share is estimated at HKD 210.76 for FY2024E, with a P/B ratio of 0.37x [3] - Dividend yield for FY2024E is expected to be 5.6%, with a payout ratio of 50% [3] Property Development and Rental Performance - Hong Kong property development revenue increased by 25% YoY to HKD 3.61 billion, driven by project deliveries including Grand YOHO 2 and Wetland Season Bay 2 [1] - Mainland property development revenue declined by 60% YoY to HKD 1.59 billion, impacting overall development revenue [1] - Retail rental income is expected to continue growing in the second half of 2024, supported by the relaxation of travel restrictions and a recovery in tourism [1] Valuation and Target Price Adjustment - The target price was revised downward to HKD 110.1 from HKD 127.6, based on a 45% discount to the revised NAV estimate of HKD 200.21, primarily due to adjustments in office property valuations [2] - The revised target price reflects a 41.2% potential upside from the current price, supported by the company's strong mid-market property portfolio and recovery in rental income [2]

Financial Performance - The company's basic profit attributable to shareholders for the six months ended December 31, 2023, was HKD 8.906 billion, down from HKD 9.465 billion in the same period last year, representing a decrease of approximately 5.9%[2]. - The total revenue for the group's business segments for the six months ended December 31, 2023, was HKD 33.933 billion, slightly up from HKD 33.864 billion in the previous year[68]. - The net profit for the period was HKD 9,473 million, up from HKD 8,790 million year-on-year, representing an increase of approximately 7.8%[44]. - The group reported a pre-tax profit of HKD 10,958 million, compared to HKD 10,458 million in the previous year, showing a growth of approximately 4.8%[43]. - The total comprehensive income for the period was HKD 11,372 million, significantly higher than HKD 4,180 million in the previous year[44]. - The group reported a net profit of HKD 7,721 million for the period, compared to HKD 9,473 million in the previous period, indicating a decrease of 18.5%[47]. - The company recorded a profit attributable to shareholders of HKD 9,145 million, compared to HKD 8,410 million in the previous year[56]. - The basic and diluted earnings per share for the company were HKD 3.16, compared to HKD 2.90 in the previous year, indicating a year-on-year increase of 8.97%[43]. Revenue Sources - The total rental income for the period increased by 4% year-on-year to HKD 12.454 billion, while net rental income rose by 5% to HKD 9.326 billion[5]. - Revenue from property sales in Hong Kong reached HKD 3,612 million, while mainland China contributed HKD 3,868 million, totaling HKD 7,480 million in property sales[47]. - The hotel division's revenue increased by 48% to HKD 2.757 billion, with an operating profit of HKD 430 million compared to a loss of HKD 63 million in the previous year[70]. - The transportation infrastructure and logistics segment recorded a 12% revenue increase to HKD 4.342 billion, with operating profit rising by 19% to HKD 947 million[71]. - Total rental income in mainland China increased by 16% year-on-year to RMB 2.89 billion, driven by rising retail rental income and the conclusion of rent concessions[18]. Dividends and Shareholder Returns - The interim dividend declared was HKD 0.95 per share, a decrease of 24% compared to the same period last year[3]. - The company announced an interim dividend of HKD 0.95 per share for the six months ending December 31, 2023, compared to HKD 1.25 per share for the same period in 2022[88]. - The record date for shareholders entitled to the interim dividend is March 14, 2024, with the shares trading ex-dividend from March 12, 2024[89]. Property Development and Investment - The group recorded a total contract sales amount of approximately HKD 12.9 billion during the period, with a total contract sales amount in Hong Kong of approximately HKD 9.6 billion[4][8]. - The group added two residential land parcels, providing a total gross floor area of approximately 1 million square feet[6]. - The group's land reserves in Hong Kong amounted to approximately 58.88 million square feet, with about 36.6 million square feet being diversified completed properties[7]. - The group has a total land reserve of 67.2 million square feet in mainland China as of December 31, 2023, with 20.9 million square feet completed and the majority located in major urban commercial areas[16]. - The group plans to launch several major projects in Hong Kong over the next ten months, including The YOHO Hub II and NOVO LAND Phase III[39]. Market Position and Strategy - The group aims to maintain its leading market position through cost control measures and enhancing building quality while responding to customer expectations for healthy living and green smart homes[8]. - The group is actively adjusting its retail tenant mix to attract customers, including introducing experiential retail stores and various promotional activities to stimulate local consumption[11]. - The group plans to enhance its property investment portfolio's competitiveness through innovative concepts and digital solutions to achieve higher green building standards[38]. - The company remains confident in the long-term prospects of the Hong Kong property market despite short-term fluctuations[37]. Sustainability and Technology - The group plans to integrate sustainable development and technology elements into new projects, including the introduction of smart home devices and 5G network coverage[8]. - The group aims to integrate smart technology into operations to save energy and reduce carbon emissions[34]. - The group has received multiple green building certifications, including LEED Platinum for projects in Hong Kong and Shanghai[33]. - The group has established urban farms in several projects to promote green living and fresh food cultivation[34]. Financial Position and Debt Management - The group reported a net debt ratio of 21.2% as of December 31, 2023, primarily due to the distribution of the previous fiscal year's final dividend[27]. - The group’s net debt as of December 31, 2023, stands at HKD 127.786 billion, compared to HKD 109.773 billion as of June 30, 2023[77]. - The group maintains a strong financial position, ensuring ample unused credit facilities primarily for medium to long-term financing[80]. - The group’s fixed-rate debt comprises 29% of total debt, while floating-rate debt accounts for 71%[79]. Corporate Governance and Compliance - The interim financial results for the six months ending December 31, 2023, have been reviewed by Deloitte, in accordance with the Hong Kong Institute of Certified Public Accountants' standards[91]. - The company has complied with the corporate governance code as per the listing rules, although the roles of Chairman and CEO are not separated[92]. - The group has been recognized for its high level of corporate governance and received multiple awards, including "Best Overall Real Estate Company" in the Asia-Pacific region from Euromoney[31].

Financial Performance - Group revenue for the fiscal year ending June 30, 2023, was HKD 71,195 million, a decrease of 8.4% from HKD 77,747 million in 2022[10]. - Profit attributable to shareholders was HKD 23,907 million, down 6.5% from HKD 25,560 million in the previous year[10]. - Basic earnings per share decreased to HKD 8.25, a decline of 6.5% from HKD 8.82 in 2022[10]. - Total rental income was HKD 24,322 million, a decrease of 2.0% compared to HKD 24,810 million in the prior year[10]. - Net rental income fell to HKD 18,461 million, down 4.1% from HKD 19,250 million in 2022[10]. - The profit from property sales was HKD 11.299 billion, down from HKD 15.847 billion in the previous year, with total contracted sales amounting to approximately HKD 37.9 billion[17]. - The company reported a total rental income of HKD 24.322 billion, down 2% year-on-year, with net rental income decreasing by 4% to HKD 18.461 billion[18]. - The net debt to equity ratio increased to 18.2% from 17.4% in the previous year, while the payout ratio rose to 60.1% from 49.9%[10]. Dividend and Shareholder Returns - The company maintained a final dividend of HKD 3.70 per share, consistent with the previous year[10]. - The company declared a final dividend of HKD 3.70 per share, maintaining the total annual dividend at HKD 4.95 per share, which represents about 60% of the basic profit for the year[19]. - The company plans to maintain its dividend policy, distributing 40% to 50% of its basic profit as dividends in the future[16]. Land Bank and Development Projects - The total land bank in Hong Kong amounted to 58.0 million square feet, an increase of 1.6% from 57.1 million square feet in 2022[10]. - The land bank in mainland China decreased to 67.5 million square feet, down 4.4% from 70.6 million square feet in the previous year[10]. - The group added three commercial land reserves, totaling approximately 2.33 million square feet, including a project in Mong Kok expected to be completed by the end of 2030[20]. - The group has 21.6 million square feet of properties under development, primarily for sale, and 36.4 million square feet of completed properties, mostly for leasing/investment[15]. - The group is actively pursuing new development projects, including properties in Hong Kong and mainland China, to enhance its market presence[10]. Market Performance and Sales - The group achieved a 13% increase in sales, nearing its annual sales target, primarily from various residential projects[24]. - Approximately 3 million square feet of properties were completed in Hong Kong during the year, with about 2 million square feet available for sale, most of which have already been sold[25]. - The group has an unrecognized contract sales amount of HKD 28 billion, with an estimated HKD 24 billion expected to be recognized in the 2023/24 fiscal year[26]. - The total contract sales amount to HKD 33.4 billion, reflecting the group's strong performance in property sales[66]. Rental Income and Occupancy Rates - The group's total rental income in Hong Kong increased by 1% year-on-year to HKD 17.73 billion, with an overall occupancy rate maintained at a satisfactory level[27]. - The average occupancy rate for the group's office properties was approximately 92%, reflecting a satisfactory level despite challenges in the office leasing market[27]. - Total rental income increased by 1% year-on-year to HKD 17.738 billion, including income from joint ventures and associates[111]. - The overall occupancy rate of the property investment portfolio remained stable at approximately 93%[111]. Sustainability and ESG Initiatives - The group aims to achieve LEED Gold or Platinum certification for its new commercial projects while continuously improving the green building standards of existing properties[27]. - The company is committed to enhancing its ESG standards and has been included in the S&P Global Sustainability Yearbook 2023[45]. - The group is focused on sustainable development, integrating environmental, social, and governance (ESG) elements into its property development and management[60]. - The group plans to install fast electric vehicle chargers in major shopping malls by mid-2024 to address the limited number of public chargers[47]. - The group has set a ten-year environmental goal and is collaborating with a local university on green building solutions[46]. Technology and Innovation - The company is integrating technology and smart design into its projects, including wireless internet systems and smart home features[88]. - The group has implemented advanced technology to enhance operational efficiency, including an online reservation system that reduces costs and increases booking rates[193]. - The construction department is focusing on digital transformation, including workflow restructuring and the comprehensive application of BIM technology[200]. Hotel Operations and Recovery - The group’s hotel operations in Hong Kong are recovering, with significant improvements noted in the performance of the Ritz-Carlton Shanghai due to domestic tourism recovery[36]. - The hotel portfolio in Hong Kong has seen improved occupancy rates and room prices returning to pre-pandemic levels, driven by an increase in travelers[183]. - The luxury Nanjing River West Andaz Hotel opened during the year, enhancing the group's hotel portfolio in mainland China[183]. - The group achieved a significant recovery in hotel occupancy rates and room prices in mainland China following the lifting of travel restrictions in early 2023[192]. Future Development Plans - The company is actively pursuing market expansion through new developments in various regions, including Tuen Mun and Tai Po, with significant residential and commercial projects planned[104]. - Future major projects expected to be completed by the fiscal year 2026/27 are projected to total 11,730,000 square feet, with residential developments comprising 7,075,000 square feet[104]. - The group is focused on expanding its business in mainland China, leveraging its strong reputation and experienced team to develop high-quality projects[62]. - The group is committed to maintaining high-quality standards, evidenced by its introduction of a three-year warranty for newly sold residential properties in Hong Kong[72].

Financial Performance - The company's basic profit attributable to shareholders for the year ended June 30, 2023, was HKD 23.885 billion, down from HKD 28.72 billion the previous year, representing a decrease of approximately 17.5%[2] - The basic earnings per share decreased to HKD 8.24 from HKD 9.91, reflecting the decline in property sales profits[2] - The group reported a revenue of HKD 71,195 million for the year ended June 30, 2023, compared to HKD 77,747 million in the previous year, reflecting a decrease of approximately 8.5%[38] - The net profit for the year was HKD 24,575 million, down from HKD 26,131 million in the prior year, representing a decline of about 5.9%[39] - Basic and diluted earnings per share were HKD 8.25 for the current year, compared to HKD 8.82 in the previous year, indicating a decrease of approximately 6.5%[38] - The group reported a significant other comprehensive loss of HKD 9,572 million for the year, compared to HKD 3,104 million in the previous year, primarily due to foreign exchange differences[39] - The fair value changes of investment properties resulted in a loss of HKD 3,145 million, compared to a loss of HKD 3,033 million in the previous year[38] Property Sales and Revenue - The profit from property sales was HKD 11.299 billion, down from HKD 15.847 billion the previous year, indicating a decline of approximately 29.1%[4] - Property sales in Hong Kong generated revenue of HKD 23,853 million, contributing to a profit of HKD 8,467 million[43] - Hong Kong property sales revenue decreased by 27% to HKD 23.86 billion, with a significant drop in residential unit deliveries[62] - Mainland property sales revenue increased by 108% to HKD 5.25 billion, driven by higher sales deliveries[62] - The group has unrecognized contract property sales revenue of HKD 32.4 billion, with HKD 28 billion expected to be recognized in the next fiscal year[62] Rental Income and Property Management - Total rental income for the year decreased by 2% to HKD 24.322 billion, while net rental income fell by 4% to HKD 18.461 billion[5] - Total rental income in Hong Kong increased by 1% year-on-year to HKD 17.73 billion, maintaining a healthy overall occupancy rate of 95%[11] - The group’s office properties achieved an average occupancy rate of approximately 92%, reflecting satisfactory performance despite a challenging operating environment[12] - The group’s investment properties continue to generate substantial recurring income, contributing to overall financial stability[11] - The average rental rate for the group’s office properties in Kowloon East remains satisfactory despite intense competition[13] Dividends and Financial Policy - The company plans to maintain its dividend policy, distributing 40% to 50% of its basic profit as dividends, with a final dividend of HKD 3.70 per share[3] - The interim dividend declared was HKD 1.25 per share, consistent with the previous year, totaling HKD 3.622 billion[53] - The proposed final dividend is HKD 3.70 per share, totaling HKD 10.722 billion, unchanged from the previous year[53] Land Reserves and Development Projects - The company added three commercial land reserves, totaling approximately 2.3 million square feet, with a significant project in Mong Kok expected to be completed by the end of 2030[6] - Approximately 5.58 million square feet of land reserves are held in Hong Kong, with 3.64 million square feet being diversified completed properties[7] - As of June 30, 2023, the group's land reserves in mainland China amounted to approximately 6.75 million square feet, with about 4.71 million square feet under development[15] - The group anticipates the opening of several new properties, including TOWNPLACE WEST KOWLOON in Q4 2023 and expansions in Yuen Long and Shanghai ITC by 2024, which will enhance recurring income[34] Sustainability and Innovation - The company aims to integrate technology and natural elements into its projects to meet customer demands for smart homes and healthy living[8] - The group has achieved LEED Platinum certification for its International Finance Centre and headquarters, reflecting its commitment to high standards in green building[12] - The group has set a ten-year environmental goal and is making progress in adopting green building technologies to reduce waste and emissions[29] - NOVO LAND has become the first residential project in Hong Kong to receive three international health building certifications[29] - The group is developing one of Hong Kong's largest solar power networks, including the first solar power plant located in a landfill area[29] Financial Health and Debt Management - The group maintained a strong financial policy, receiving credit ratings of A1 and A+ from Moody's and S&P, respectively, both with stable outlooks[25] - The group achieved a five-year syndicated loan amounting to HKD 27.5 billion, the largest in its history, in May 2023[26] - The group’s net debt as of June 30, 2023, was HKD 109.773 billion, with a debt-to-equity ratio of 18.2%[66] - Interest coverage ratio decreased to 6.8 times from 12.8 times last year, reflecting higher net financial expenses[67] - The group’s debt composition indicates that 85% is denominated in HKD, 14% in RMB, and 1% in GBP as of June 30, 2023[71] Market Outlook and Strategic Initiatives - The group is focusing on high-selectivity investment strategies, concentrating on core areas in first-tier and major second-tier cities in mainland China[15] - The group is optimistic about the prospects in Hong Kong and mainland China, planning to invest in major cities in both regions[34] - The group plans to launch several residential projects in Hong Kong and mainland China, including developments in Yuen Long and Shanghai[33] - The group continues to enhance its ESG standards and was included in the "S&P Global Sustainability Yearbook 2023"[28] Employee and Governance - The total employee compensation for the year is approximately HKD 14.164 billion, with over 40,000 employees as of June 30, 2023[79] - The financial statements for the year have been reviewed by the Audit and Risk Management Committee and audited by Deloitte, with an unqualified opinion issued[84] - The company has complied with the corporate governance code as per the listing rules, although the roles of Chairman and CEO are not separated[85]

Financial Performance - Group revenue for the six months ended December 31, 2022, was HKD 27,428 million, a decrease of 31.7% compared to HKD 40,153 million in the same period last year[7] - Profit attributable to shareholders (basic) was HKD 8,410 million, a decrease of 44.6% compared to HKD 15,186 million in the same period last year[7] - Revenue for the six months ended December 31, 2022, was HK$27,428 million, a decrease from HK$40,153 million in the same period in 2021[50] - Gross profit for the period was HK$14,044 million, down from HK$19,900 million in 2021[50] - Operating profit for the six months ended December 31, 2022, was HK$10,859 million, compared to HK$16,907 million in 2021[50] - Profit attributable to shareholders for the period was HK$8,410 million, a decrease from HK$15,186 million in 2021[50] - Basic and diluted earnings per share were HK$2.90, down from HK$5.24 in the same period last year[50] - Total assets as of December 31, 2022, were HK$738,741 million, compared to HK$745,191 million as of June 30, 2022[52] - Net cash generated from operating activities for the six months ended December 31, 2022, was HK$7,896 million, compared to HK$4,016 million in 2021[53] - Cash and cash equivalents at the end of the period were HK$15,690 million, down from HK$17,830 million at the end of 2021[53] - Investment properties as of December 31, 2022, were valued at HK$399,068 million, slightly up from HK$398,729 million as of June 30, 2022[52] - Total equity attributable to shareholders as of December 31, 2022, was HK$595,070 million, compared to HK$601,946 million as of June 30, 2022[52] - Net profit for the period was HKD 15,186 million, with non-controlling interests contributing HKD 328 million, totaling HKD 15,514 million[54] - Exchange differences from the translation of mainland subsidiaries amounted to HKD 1,773 million[54] - Fair value gains on cash flow hedges were HKD 185 million[54] - Fair value losses on debt securities measured at fair value through other comprehensive income were HKD 31 million[54] - Fair value losses on equity securities measured at fair value through other comprehensive income were HKD 80 million[54] - Total comprehensive income for the period was HKD 18,034 million[54] - Net profit for the six months ended December 31, 2022, was HKD 8,410 million, with non-controlling interests contributing HKD 380 million, totaling HKD 8,790 million[55] - Exchange differences from the translation of mainland subsidiaries resulted in a loss of HKD 3,352 million[55] - Fair value losses on cash flow hedges were HKD 330 million[55] - Total comprehensive loss for the six months ended December 31, 2022, was HKD 4,610 million[55] - Property sales in Hong Kong generated revenue of HKD 2,881 million, with a profit of HKD 1,198 million[58] - Property sales in Mainland China contributed HKD 2,176 million in revenue and HKD 1,083 million in profit[58] - Property leasing in Hong Kong achieved revenue of HKD 7,429 million and profit of HKD 5,352 million[58] - Data center business reported revenue of HKD 1,108 million and profit of HKD 557 million[58] - Hotel business recorded a loss of HKD 82 million despite revenue of HKD 1,551 million[58] - Telecommunications segment generated revenue of HKD 3,809 million with a profit of HKD 391 million[58] - Transport infrastructure and logistics segment contributed HKD 2,051 million in revenue and HKD 604 million in profit[58] - Other businesses, including property management and department stores, reported revenue of HKD 4,128 million and profit of HKD 656 million[58] - Total consolidated revenue for the period was HKD 33,864 million, with a consolidated profit of HKD 14,618 million[58] - Revenue from property sales in Hong Kong for the previous period (H1 2021) was HKD 16,964 million, with a profit of HKD 7,012 million[59] - Property sales revenue for the six months ended December 31, 2021, was HKD 17,305 million, with no revenue recognized over time[63] - Property leasing revenue for the same period was HKD 1,024 million, with other income sources contributing HKD 9,418 million, totaling HKD 10,442 million[63] - Hotel business revenue was HKD 1,564 million, with HKD 881 million recognized at a point in time and HKD 683 million recognized over time[63] - Telecommunications revenue was HKD 3,792 million, with HKD 1,549 million recognized at a point in time and HKD 2,243 million recognized over time[63] - Transportation infrastructure and logistics revenue was HKD 1,819 million, with HKD 38 million recognized at a point in time and HKD 1,781 million recognized over time[63] - Data center business revenue was HKD 995 million, all recognized over time[63] - Property management revenue was HKD 2,487 million, with HKD 131 million recognized at a point in time and HKD 2,356 million recognized over time[63] - Department store business revenue was HKD 1,211 million, all recognized at a point in time[63] - Financial services and other revenue was HKD 355 million, with HKD 12 million recognized over time and HKD 343 million from other sources[63] - Total revenue from contracts with customers was HKD 30,209 million, with HKD 21,115 million recognized at a point in time and HKD 9,094 million recognized over time[63] - Interim dividend declared at HKD 1.25 per share, totaling HKD 3,622 million, unchanged from 2021[71] - Final dividend for the previous fiscal year approved and paid at HKD 3.70 per share, totaling HKD 10,722 million, unchanged from 2021[71] - Investment properties valuation increased to HKD 399,068 million as of December 31, 2022, from HKD 398,729 million on July 1, 2022, with additions of HKD 4,906 million and fair value decrease of HKD 348 million[73] - Completed investment properties in Hong Kong valued at HKD 257,481 million with a weighted average capitalization rate of 5.1%, while Mainland China properties valued at HKD 78,237 million with a capitalization rate of 6.5%[75] - Development properties in Hong Kong valued at HKD 29,587 million with a capitalization rate range of 3.0%-5.5%, and Mainland China properties valued at HKD 33,763 million with a capitalization rate range of 5.0%-8.8%[75] - Property, plant, and equipment additions amounted to HKD 2,779 million, including HKD 428 million for right-of-use assets, with disposals at a net book value of HKD 20 million[76] - Financial investments in equity securities at fair value through profit or loss increased to HKD 1,497 million as of December 31, 2022, from HKD 1,029 million as of June 30, 2022[77] - Total receivables decreased to HKD 3,726 million as of December 31, 2022, from HKD 5,234 million as of June 30, 2022, with first mortgage loans at HKD 1,419 million[78] - Trade receivables aged less than 30 days accounted for 63% as of December 31, 2022, compared to 83% as of June 30, 2022[79] - Contract costs capitalized amounted to HKD 482 million as of December 31, 2022, primarily related to commissions for property sales and telecommunications services[80] - Business payables increased to HKD 3,306 million as of December 31, 2022, from HKD 3,237 million on June 30, 2022, with 62% aged less than 30 days, 10% aged 31-60 days, 3% aged 61-90 days, and 25% aged over 90 days[81] - Total other payables and accrued expenses decreased to HKD 22,951 million as of December 31, 2022, from HKD 24,215 million on June 30, 2022[81] - Contract liabilities increased to HKD 817 million as of December 31, 2022, from HKD 658 million on June 30, 2022[81] - The company's issued and fully paid ordinary shares remained at 2,898 million shares, with a total value of HKD 70,703 million as of both June 30, 2022, and December 31, 2022[82] - Capital commitments for investment properties and property, plant, and equipment totaled HKD 7,068 million (contracted but not provided for) and HKD 4,576 million (approved but not contracted) as of December 31, 2022[86] - The company's share of joint venture capital commitments was HKD 2,826 million (contracted but not provided for) and HKD 4,338 million (approved but not contracted) as of December 31, 2022[86] - The fair value of financial assets classified as Level 1, Level 2, and Level 3 totaled HKD 1,296 million, HKD 220 million, and HKD 826 million, respectively, as of December 31, 2022[88] - The fair value of financial liabilities classified as Level 2 was HKD 616 million as of December 31, 2022[88] - Interest income from joint ventures was HKD 46 million for the six months ended December 31, 2022, compared to HKD 52 million for the same period in 2021[85] - Revenue from services provided to joint ventures increased to HKD 574 million for the six months ended December 31, 2022, from HKD 23 million for the same period in 2021[85] - The company's basic profit attributable to shareholders for the first half of the fiscal year 2022/23 was HK$9.465 billion, a decrease of 36% compared to HK$14.818 billion in the same period last year[94] - The profit decrease was mainly due to reduced property development profits and rental income in Hong Kong, partially offset by increased contributions from non-property and hotel businesses[94] - The fair value of debt securities decreased from HK$657 million to HK$644 million as of December 31, 2022[93] - The fair value of long-term bank loans and bonds decreased from HK$106.070 billion to HK$106.423 billion as of December 31, 2022[93] - Hong Kong property sales revenue (including joint ventures) decreased by 83% to HK$2.885 billion compared to the same period last year[97] - Mainland China property sales revenue (including joint ventures) increased by 175% to HK$4.031 billion compared to the same period last year[97] - The company's unrecognized contracted property sales revenue (including joint ventures) amounted to HK$35.5 billion as of December 31, 2022[97] - Hong Kong property rental income (including joint ventures) decreased by 2% to HK$8.772 billion compared to the same period last year[97] - The company's total revenue decreased by 26% to HK$33.864 billion compared to the same period last year[96] - The company's total operating profit decreased by 25% to HK$14.618 billion compared to the same period last year[96] - The rental income and net rental income of the mainland investment property portfolio, including joint ventures, decreased by 17% and 20% respectively to HKD 2.798 billion and HKD 2.218 billion compared to the same period last year[98] - The hotel business revenue increased by 3% to HKD 1.86 billion, and the operating loss decreased by 61% to HKD 63 million (after deducting depreciation expenses of HKD 325 million)[98] - SmarTone's revenue was HKD 3.809 billion, with an operating profit of HKD 391 million, driven by the growth of its 5G business and cost optimization measures[98] - The transportation infrastructure and logistics business revenue remained stable at HKD 3.886 billion, with operating profit increasing by 3% to HKD 799 million[98] - SUNeVision's revenue increased by 11% to HKD 1.108 billion, and operating profit increased by 10% to HKD 557 million, driven by increased demand for data center services[99] - The revaluation loss of investment properties, including joint ventures and associates, was HKD 1.206 billion, with a net revaluation loss of HKD 967 million after deducting deferred tax and non-controlling interests[100] - The net debt of the company increased to HKD 114.067 billion, with a debt-to-equity ratio of 19.2%, up from 17.4% due to capital expenditures in mainland China and Hong Kong[102] - The net finance costs before interest capitalization increased by HKD 517 million to HKD 1.821 billion, with the weighted average borrowing cost rising to 3.1%[103] - The total debt of the company was HKD 131.869 billion, with 76% borrowed through wholly-owned financial subsidiaries and 24% through operational subsidiaries[105] - The weighted average repayment period of the company's debt was approximately 3.9 years, with 16% of the total debt due within one year[106] - Total debt of the group increased to HKD 131.869 billion as of December 31, 2022, up from HKD 124.931 billion as of June 30, 2022, with HKD-denominated debt accounting for 81% of the total[107] - RMB-denominated debt accounted for 15% of the total debt, primarily used for financing ongoing property projects in mainland China[107] - Fixed-rate debt accounted for 34% of the total debt, including a RMB 2 billion commercial mortgage-backed bond issued in September 2022[108] - The group's bank deposits and cash stood at HKD 17.802 billion as of December 31, 2022, with 62% held in RMB to meet funding needs for mainland projects[112] - The group's net assets were approximately 20% denominated in RMB, with a HKD 4.2 billion exchange loss due to a 3.7% depreciation of RMB against HKD[110] - The group utilized derivative instruments with a total notional principal of HKD 18.557 billion to manage interest rate and foreign exchange risks[111] - Contingent liabilities amounted to HKD 2.157 billion as of December 31, 2022, related to guarantees for joint venture loans[114] - The group's financial resources include substantial unutilized credit facilities and steady cash inflows from property sales, ensuring liquidity and flexibility for future investments[109] - Total employee compensation for the six months ended December 31, 2022, was approximately HKD 6.889 billion before reimbursements[166] - The company will pay an interim dividend of HKD 1.25 per share for the six months ended December 31, 2022, unchanged from the previous year[168] - The record date for determining shareholders' entitlement to the interim dividend is March 10, 2023, with the ex-dividend date set for March 8, 2023[169] - The company did not purchase, sell, or redeem any of its listed securities during the six months ended December 31, 2022[170] - The interim financial results for the six months ended December 31, 2022, were reviewed by Deloitte Touche Tohmatsu in accordance with Hong Kong Standard on Review Engagements 2410[171] - The company complied with the Corporate Governance Code during the six months ended December 31, 2022, except for not separating the roles of Chairman and CEO[172] Property Development and Leasing - Total rental income decreased by 6% to HKD 11,927 million, and net rental income decreased by 9% to HKD 8,887 million, primarily due to the impact of the pandemic on the mainland rental property portfolio[14] - Profit from property sales was HKD 3,366 million, a significant decrease from HKD 7,658 million in the same period last year, mainly due to the completion of Hong Kong residential projects for sale in the second half of the fiscal year[13] - Added a total gross floor area of approximately 809,000 square feet to the land reserve, including the West Kowloon Cultural District Art Square Building project with 672,000 square feet of Grade A office space and 27,000 square feet of retail space[15] - Acquired a site near Anderson Road in Kwun Tong, developing a community shopping mall with a total gross floor area of approximately 110,000 square feet[16] - Total land reserve in Hong Kong as of December 31, 2022, was approximately 57.9 million square feet, including 34.8 million square feet of completed properties and 23.1 million square feet of properties under development[16] - Contracted sales for the period amounted to approximately HKD 13.4 billion, primarily from NOVO LAND Phase 1A and 1B in Tuen Mun and Wetland Seasons Bay Phase 3 in Yuen Long[17] - Plaza 228, a premium office project in Wan Chai, was completed with a total gross floor area of 122,000 square feet[17] - Total rental income in Hong Kong decreased by 2% year-on-year to HKD 8.772 billion, with an overall occupancy rate of approximately 96% for retail properties[18] - The retail portfolio covers approximately 12 million square feet, with Play Park, a 60

Financial Performance - The group's revenue attributable to shareholders decreased by 8.8% to HKD 77,747 million in 2022 from HKD 85,262 million in 2021[10] - The company reported a basic underlying profit of HKD 28,729 million, down 3.8% from HKD 29,873 million[10] - The basic earnings per share attributable to shareholders decreased by 4.2% to HKD 8.82 from HKD 9.21[10] - Basic earnings per share for 2022 were HKD 9.91, compared to HKD 10.31 in 2021, reflecting a decrease of about 3.9%[12] - The property sales segment generated revenue of HKD 35,403 million in 2022, down from HKD 46,017 million in 2021, a decline of approximately 23%[17] - The operating profit from property sales was HKD 15,847 million in 2022, compared to HKD 19,250 million in 2021, a decrease of about 17.5%[17] - The company declared a total dividend of HKD 14,344 million for 2022, unchanged from the previous year[17] Rental Income and Property Management - Total rental income remained stable, increasing slightly by 0.1% to HKD 24,810 million[10] - Net rental income rose by 0.5% to HKD 19,250 million compared to HKD 19,149 million in the previous year[10] - The total rental income for the year was HKD 24.81 billion, remaining stable compared to the previous year, while net rental income increased by 1% to HKD 19.25 billion[24] - The total rental income from the diversified property investment portfolio in Hong Kong decreased by 3% to HKD 17.55 billion due to the impact of the Omicron variant[31] - The net rental income from the diversified quality rental property portfolio was HKD 13.207 billion, a decrease of 3% compared to the previous fiscal year[93] Land Reserves and Development Projects - The total land reserve in Hong Kong decreased by 1.4% to 57.1 million square feet, with ongoing projects down by 6.3%[10] - The land reserve in mainland China decreased by 6.2% to 70.6 million square feet, with ongoing projects down by 10.2%[10] - The company has 24.4 million square feet of properties under development, primarily for sale, as of June 30, 2022[18] - The company has a land bank of 56.5 million square feet in Hong Kong and 58.0 million square feet in mainland China as of 2022[15] - The company aims to continue enhancing its land reserves through various channels, including converting agricultural land into developable land[27] Market Expansion and Future Plans - The company plans to continue its market expansion and development of new properties in both Hong Kong and mainland China[10] - The company is committed to maintaining rigorous financial management principles, especially during uncertain global economic conditions and rising interest rates[75] - The company aims to enhance its property investment business in Hong Kong and mainland China, with several new projects expected to support recurring income over the next 18 months[77] - The company plans to launch multiple residential projects in Hong Kong, including Silicon Hill in Tai Po and NOVO LAND in Tuen Mun, in the remaining fiscal year[76] - The company is optimistic about the future, believing that Hong Kong will continue to thrive as an international metropolis with unique advantages under the "One Country, Two Systems" principle[72] Sustainability and ESG Initiatives - The group aims to reduce greenhouse gas emissions intensity by 25% and electricity consumption intensity by 13% by the fiscal year 2029/30[66] - The group has been recognized as one of the top three companies in the Hang Seng Sustainability Index for three consecutive years and received an A rating in the MSCI ESG ratings in 2022[63] - The group is committed to integrating environmental, social, and governance (ESG) elements into its property development and management operations[87] - The group is actively promoting green initiatives, including the installation of solar panels in its properties[68] - The group is enhancing its properties' ESG performance to increase attractiveness to tenants[156] Tenant and Customer Engagement - The active membership of the group's loyalty program, The Point, grew by nearly 20% during the year, reaching close to 2 million members[34] - The group introduced new features in its app to enhance customer engagement, allowing points to be converted into Point Dollars for cash consumption in participating malls[146] - The group is actively managing its tenant mix and conducting promotional campaigns to attract customers, resulting in increased rental inquiries and discussions for longer lease terms[146] - The group is collaborating with tenants to boost customer spending in its malls[40] - The group plans to upgrade its malls, with a major renovation at WTC Mall set to begin in Q4 2022, introducing new premium brands and dining options[149] Economic Outlook and Market Conditions - The global economic environment remains uncertain due to supply chain disruptions, rising inflation, and geopolitical risks, impacting short-term forecasts[71] - The company anticipates reasonable growth in the mainland economy in the coming year due to enhanced domestic circulation and government monetary and fiscal stimulus measures[72] - The mainland real estate market continues to face challenges, but recent policy easing and interest rate cuts are expected to positively impact financially stable developers[59] - The residential market in major cities is expected to remain stable, supported by recent assistance measures, despite a prolonged consolidation period in the real estate market[72] - The group has seen an increase in rental inquiries for office spaces, indicating signs of improvement in the leasing market[34]

Financial Performance - For the six months ended December 31, 2021, the company's attributable profit to shareholders was HKD 14.81 billion, a decrease of 15.2% from HKD 17.48 billion in the same period last year[11]. - The basic earnings per share based on the attributable profit was HKD 5.11, down 15.3% from HKD 6.03 in the previous year[11]. - The company’s basic profit attributable to shareholders as per accounts was HKD 15.19 billion, compared to HKD 13.58 billion last year, marking an increase of 11.8%[6]. - The company reported a profit of HKD 15,514 million for the six months ended December 31, 2021, an increase from HKD 13,975 million in the same period of 2020, representing a growth of 11%[68]. - Revenue for the six months was HKD 40,153 million, compared to HKD 46,070 million in the previous year, indicating a decrease of approximately 13%[67]. - The total comprehensive income for the period was HKD 18,034 million, down from HKD 22,770 million, a decrease of 20.8%[68]. - The group reported a net profit of HKD 13,560 million for the period, reflecting a significant performance increase compared to the previous year[78]. Rental and Property Sales - Total rental income increased by 2.2% year-on-year to HKD 12.63 billion, while net rental income rose by 2.4% to HKD 9.73 billion[6]. - The profit from property sales during the review period was HKD 7.65 billion, compared to HKD 12.36 billion in the same period last year[14]. - The total revenue from property sales in Hong Kong and Mainland China for the six months ended December 31, 2021, was HKD 16.997 billion and HKD 1.465 billion, respectively, with a decrease of 33% in Hong Kong property sales profit to HKD 7.036 billion[120]. - Total revenue from customer contracts for the six months ended December 31, 2020, was HKD 46,070 million, with property sales contributing HKD 24,964 million and rental income contributing HKD 10,190 million[82]. Dividends and Shareholder Returns - The company declared an interim dividend of HKD 1.25 per share, unchanged from the same period last year[13]. - The interim dividend declared for shareholders is HKD 1.25 per share, consistent with the previous year, totaling HKD 3,622 million[91]. - The board of directors has declared that the interim dividend will be paid in cash on March 17, 2022[197]. Investment and Development - The group has a total land reserve of approximately 57.8 million square feet in Hong Kong, including 23.6 million square feet of properties under development, sufficient for the next 5 to 6 years of development needs[17]. - The group plans to deliver approximately 1.4 million square feet of properties in the second half of the fiscal year, with around 1.3 million square feet being residential properties from Wetland Seasons Bay[20]. - The group plans to expand its property investment portfolio with approximately 5 million square feet of new quality property projects, including 2.6 million square feet of Grade A office space and 600,000 square feet of retail space at the West Kowloon high-speed rail station development[24]. - The group is focused on selective land acquisitions to strengthen its property development business in both Hong Kong and mainland China[59]. Financial Position and Debt Management - The group's net debt to equity ratio is at a low level of 17.5%, with an interest coverage ratio of 13 times[42]. - The group has a solid recurring revenue base and ample financial resources to meet funding needs and seize future investment opportunities[127]. - The total debt of the group was HKD 122.864 billion, with net debt of HKD 104.955 billion after deducting cash and bank deposits[126]. - The group has minimal foreign exchange risk due to a large asset base primarily in HKD, with 76% of borrowings in HKD after cross-currency swaps[130]. Sustainability and Corporate Responsibility - The group is focused on creating sustainable and green communities in its developments, integrating health and wellness concepts[19]. - The group plans to increase the number of properties with solar panels from 26 to approximately 45 by the end of 2022[49]. - The group has established a ten-year environmental goal focusing on greenhouse gas emissions, energy consumption, and waste diversion[49]. - The group actively promotes the use of electric vehicles and is installing charging stations in its commercial and residential projects[49]. Market Outlook and Economic Conditions - The economic outlook for 2022 remains challenging due to ongoing COVID-19 variants and geopolitical risks, but supportive macroeconomic measures are expected to stimulate growth[57]. - The group is optimistic about the economic recovery in Hong Kong, supported by government stimulus measures and the potential for a gradual return to quarantine-free travel with mainland China[58]. - The dual circulation strategy and further promotion of innovation and green economy development are expected to yield positive economic effects[57]. Employee and Management - The group employed over 38,500 employees as of December 31, 2021[195]. - The total employee compensation for the six months ending December 31, 2021, was approximately HKD 6.508 billion[195]. - The company expresses gratitude to its employees for their dedication during the pandemic, ensuring effective operations and continued service to customers[62]. Corporate Governance - The company is committed to enhancing its corporate governance by maintaining a diverse and experienced board of directors[153]. - The company has been recognized in major financial publications for outstanding management and corporate governance[46].