Company Overview - The company has organized investor visits to Hong Kong to conduct research on local developers and projects [1] - The retail revenue in mainland China has been under pressure, with a year-on-year decline of 14% and a quarterly decline of 11% in Q4 2024 [1] - There are signs of easing pressure in mainland shopping malls, with expectations of a narrowing decline in retail revenue compared to Q4 2023 [1] Mainland Market Insights - The overall consumption environment in mainland China is improving, which is expected to positively impact the company's retail performance [1] - The performance of mid-range shopping malls is anticipated to outperform high-end projects in Shanghai, particularly in competitive cities like Wuhan and Shenyang [1] - Rental income is expected to perform better than retail revenue due to the high fixed rental proportion, although a slight decline in rental income is anticipated for the year [1] Hong Kong Market Insights - The rental income from Hong Kong properties is projected to decline by 9% in 2024 due to adjustments in major tenant lease renewals, with a minor decline of 1-2% when excluding this impact [2] - The company is selling a luxury apartment in the Yu Feng project for HKD 160 million, which may help in capital recovery and stabilizing financial statements [2] - The sales of residential projects in Hong Kong are in a steady selling phase, contributing a smaller overall income and profit [2] Capital Expenditure and Debt Management - Capital expenditure is expected to peak in 2025 as projects in Hangzhou are completed, with a gradual decline anticipated thereafter [2] - The company is likely to continue its scrip dividend plan to alleviate net debt pressure, with a projected increase in net debt ratio by the end of 2025, remaining below 40% [2] Profit Forecast and Valuation - The profit forecast remains unchanged, with an upgraded target price of HKD 8 per share, reflecting a 13.6 times core P/E for 2025 and a 6.5% target dividend yield [3] - The company is currently trading at a 7.5% dividend yield, providing strong attractiveness in the current market environment [3] - The easing of fundamental pressures and the decline in HIBOR are expected to positively impact interest expenses [3]

Group 1 - CICC raised the target price for Hang Lung Properties (00101) by 8% to HKD 8, maintaining an "outperform" rating, reflecting unchanged profit forecasts for the company [1] - CICC expects the company's net debt ratio to rise slightly by the end of 2025 compared to 33.4% at the end of 2024, but will remain below 40% [1] - Retail sales in mainland China for Hang Lung Properties have been under pressure, with a year-on-year decline of 14% last year and an 11% drop in Q4 2024; however, the decline is expected to narrow in 2025 due to an improving consumption environment [1] Group 2 - Hong Kong's rental income is projected to decline by 9% in 2024 due to the renewal of large-scale leases in certain retail properties and offices; excluding this impact, the decline is expected to be only 1-2% [2] - Capital expenditures for the company are expected to peak in 2025, with a gradual decline starting in 2026 as projects in Hangzhou are completed [2] - The company is likely to continue its scrip dividend plan this year to alleviate net debt ratio pressure, with a reassessment of this plan's necessity expected in 2026 [2]

2024年，对商业地产行业来说是一次冰与火的考验。一边，是销售主导型开发商的利润断崖、资产减值、融资受阻；另一边，是运营导向型企业的租金稳 定增长、EBITDA稳步上升与财务结构修复。这不是一个所有人都糟糕的周期，而是一场能力结构重组的"隐形分层"。 01 利润断崖与现金流的两极分化 当表观增长退潮，真正能撑起现金流的结构开始显影。 2024年商业地产的财务报表呈现出一种近乎"断层式"的对比：一类企业沉入亏损泥潭，账面巨亏甚至接近净资产极限；另一类则悄然保持盈利，不靠去 化、不靠售出，只靠一笔一笔"收进来的租金"。 这不是短期市场的情绪波动，而是商业模式差异在高压之下的结构性体现。财务报表此刻不再只是年终汇总，而成为企业生存逻辑的"X光片"。 "销售驱动型"企业集体掉队，"运营驱动型"企业守住基本盘 我们回顾11家企业的归母净利润，最直观地看到两个世界的分化：万科企业股份有限公司2024年归母净利润为-494亿元，是其上市以来首次大额亏损，且 同比下滑幅度超过500%。宝龙地产全年亏损55亿元，较2023年进一步扩大。大悦城控股按照深交所披露数据2024年亏损29.77亿元，已连续亏损两年，比 上年亏损翻倍。 ...

Core Viewpoint - The company is optimistic about the mainland market, which currently accounts for 70% of its overall revenue, and sees it as a significant consumer market with great potential [2] Group 1: Business Strategy - The company is focusing on high-end commercial complexes, having established landmark projects in cities like Shanghai, Wuxi, Kunming, and Dalian, which has led to steady performance [3] - The company adopts a "commercial first" approach, contrasting with many mainland developers who follow a "residential to support commercial" model [3][4] - The company aims to optimize existing assets and enhance operational efficiency rather than pursuing blind expansion, with a focus on vertical growth [6] Group 2: Market Positioning - The company has positioned itself as a market leader in second-tier cities, which allows it to attract high-end consumer spending from surrounding areas [4] - The company believes that once it secures a leading position in high-end brands in second-tier markets, it becomes difficult for new entrants to disrupt its dominance [4] Group 3: Financial Performance - The company generates stable rental income of approximately 10 billion yuan annually, with a net profit of around 3 billion yuan, which could potentially increase to 4-5 billion yuan with operational optimization [7][8] - The company has a total saleable residential value of about 20 billion yuan in Hong Kong and mainland China, which can provide an average annual cash flow of around 4 billion yuan over a five-year sales cycle [7][8] Group 4: Future Outlook - The company plans to accelerate the sales pace of residential projects in 2025 to enhance cash flow and will not make hasty decisions due to short-term financial pressures [8] - The company anticipates a "golden return period" from 2027 to 2031 as projects like Hangzhou Henglun Plaza begin to yield returns [9]

Core Viewpoint - The event marked the 15th anniversary of the Tsinghua University-Henglong Real Estate Research Center, highlighting its role in promoting sustainable development in the real estate industry and its collaboration with Henglong Group [1][2] Group 1: Research Center Achievements - The research center has published over 500 high-quality papers, contributing significantly to academic research, policy-making, and industry practices, particularly in green building and sustainable development [1] - Henglong Group has donated a total of 33 million RMB to Tsinghua University since 2010 to support the center's academic development and practical innovation [1] - The center has successfully organized over 90 seminars, providing a vital platform for industry exchange and development [1] Group 2: Strategic Goals and Industry Trends - The research center aims to align with China's "dual carbon" goals, focusing on high-quality living demands and enhancing strategic cooperation with industry partners to support sustainable development [2] - The real estate industry is transitioning from expansion to operational efficiency, with new challenges and opportunities arising from carbon neutrality goals [3] - Henglong's plan includes eight core actions to achieve net-zero emissions by 2050, reducing greenhouse gas emissions from nearly 1 million tons in 2023 to below 100,000 tons [3] Group 3: Forum Discussions - The forums addressed urgent challenges and potential development directions in the industry, focusing on the transition from expansion to operational efficiency and the need for housing solutions for new citizens and the aging population [4] - Discussions included green building technologies, carbon reduction measures, and policy mechanisms under the carbon neutrality goals [4] - Experts from industry associations, academia, and enterprises participated, sharing insights and practical experiences to foster sustainable development in the real estate sector [4]

Financial Data and Key Metrics Changes - Rental income decreased by approximately 6% and operating profit fell by 9% due to a decline in variable rent, despite fixed rents increasing by nearly 6% [12][13][14] - The company reported a revenue from property sales of $150 million, which was impacted by provisions made for inventory markdowns [15][36] - The net gearing ratio stood at around 33.4%, with expectations for it to remain similar in 2025 if no new projects are undertaken [40][41] Business Line Data and Key Metrics Changes - The luxury sector performed well, with subluxury malls outperforming the market, while overall retail sales dropped by 14% [24][28] - Fixed rents increased, indicating a successful strategy to convert sales trends into fixed income [61] - The hotel segment was reported separately for the first time, reflecting the company's growing portfolio [16] Market Data and Key Metrics Changes - Mainland rental revenue dropped by 4% in RMB terms and 5% in HKD terms, primarily due to RMB depreciation [18][20] - The company noted a significant drop in luxury spending, with a 30% decrease in sales in Hainan, while the average ticket size dropped by 14% to 16% [66][69] - The overall sentiment in the market remains cautious, with expectations for a mild increase in 2025 [69][87] Company Strategy and Development Direction - The company aims to consolidate brands and increase occupancy rates across its malls, focusing on enhancing customer experience [27][76] - Strategic initiatives include the use of low carbon emissions fuel for new projects and a commitment to renewable energy for properties [42][43] - The company is actively managing its financials through prudent provisions and adjustments to dividends to maintain flexibility [45][84] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging year but highlighted strong occupancy rates and the resilience of the subluxury sector [4][7] - There is a cautious outlook for 2025, with management emphasizing the need for strategic adjustments in response to market conditions [9][69] - The management expressed confidence in the company's ability to navigate the current environment while seeking growth opportunities [45][80] Other Important Information - The company has signed a RMB10 billion syndicated loan with 13 banks, reflecting strong support from financial institutions [39] - A strategic reset of dividends was implemented, with a 33% cut announced, aimed at improving financial stability [17][84] - The company is focusing on enhancing its tenant mix and customer experience to drive traffic and sales [92][95] Q&A Session Summary Question: What is the rental reversion trend in the second half of last year and expectations for 2025? - Management indicated that fixed rents in Mainland increased by 6%, but overall sales trends still impacted revenue negatively [61][62] Question: How is January performing in terms of traffic and tenant sales? - January showed improvements in both foot traffic and sales compared to the previous year, but management remains cautious about drawing conclusions [64][65] Question: What strategies are in place to cope with new supply in Shanghai? - The company plans to consolidate tenant quality and enhance customer experience to remain competitive against new developments [75] Question: Can you elaborate on the dividend reset and its underlying assumptions? - The reset is seen as a strategic move to provide financial flexibility, with the intention to adjust based on market conditions [77][84] Question: What are the expectations for financing costs in 2025? - Financing costs are expected to be slightly lower than the previous year, based on current market conditions and forecasts [82]

Financial Performance - Total revenue for the year ended December 31, 2024, was HKD 11,242 million, a 9% increase compared to HKD 10,316 million in 2023[5] - Basic earnings attributable to shareholders dropped by 25% to HKD 3,095 million, with corresponding earnings per share of HKD 0.67, down from HKD 0.92 in 2023[5] - The overall operating profit for the year was HKD 6,455 million, a decrease of 13% from HKD 7,389 million in 2023[6] - Net profit for the year was HKD 2,657 million, a decline of 42.3% compared to HKD 4,596 million in 2023[85] - The company reported a total comprehensive income of HKD 561 million for 2024, a significant drop from HKD 2,917 million in 2023[85] - The net profit attributable to shareholders for 2024 was HKD 2,153 million, down from HKD 3,970 million in 2023, a decline of 45.7%[97] Revenue Breakdown - Rental income decreased by 6% to HKD 9,515 million, while operating profit fell by 9% to HKD 6,763 million[6] - Overall rental income and tenant sales in Hong Kong decreased by 10% and 4% respectively compared to last year[13] - In mainland China, total rental income fell by 4% to RMB 5,900 million, with a 6% decline in operating profit[14] - Property sales generated HKD 1.538 billion in revenue from the sale of 120 residential units in Hong Kong and other properties[38] - Hotel revenue for 2024 totaled HKD 189 million, up from HKD 154 million in 2023, marking a growth of 22.7%[95] Asset and Liabilities - The net asset value per share decreased to HKD 27.5 from HKD 29.4 in the previous year[4] - The total value of investment properties and properties under development as of December 31, 2024, was HKD 190.52 billion, with mainland properties valued at HKD 128.04 billion and Hong Kong properties at HKD 62.48 billion[41] - The total borrowings amounted to HKD 57.376 billion as of the reporting date, an increase from HKD 50.704 billion in 2023[52] - Non-current liabilities rose to HKD 61,650 million, up from HKD 60,042 million in 2023, indicating a 2.7% increase[87] - The fair value of investment properties decreased to HKD 166,519 million from HKD 169,046 million in 2023, reflecting a decline of 1.5%[87] Dividends - The proposed final dividend for 2024 is HKD 0.40 per share, down from HKD 0.60 in 2023, resulting in a total dividend of HKD 0.52 for the year[9] - The total annual dividend for 2024 is HKD 2.479 billion, down from HKD 3.509 billion in 2023, with an interim dividend of HKD 0.12 per share and a proposed final dividend of HKD 0.40 per share[105] Debt and Financing - The net debt to equity ratio increased to 33.4% from 31.9% in 2023[4] - The average repayment period of the overall debt portfolio is 2.9 years, with approximately 65% of loans due for repayment after two years[56] - The total financial costs increased by 8% to HKD 2.109 billion, maintaining an average effective borrowing rate of 4.3%[59] - The unutilized balance of committed bank credit facilities was HKD 12.535 billion as of December 31, 2024, down from HKD 15.717 billion in the previous year[57] Sustainability Initiatives - The company aims to achieve a 25% usage of renewable energy in its mainland properties by 2025, with over 45% already achieved[67] - The company announced that nearly 100% of the structural steel used in the Shanghai Hang Lung Plaza Phase III expansion will be low-carbon steel, reducing total embedded carbon emissions by 35%[68] - The "Changemakers: Tenant Sustainability Collaboration Program" attracted 46 sustainable tenants across various industries, covering over 210,000 square meters of total leased area[70] Operational Strategies - The company aims to optimize tenant mix and enhance marketing strategies to improve rental rates despite market challenges[11] - The company plans to enhance tenant mix and implement proactive marketing strategies to boost customer traffic and loyalty[22] - The company continues to focus on operational flexibility and core strengths to navigate geopolitical uncertainties and economic challenges[77]

Financial Performance - Property sales reached HKD 1.2 billion, driving total revenue up by 17% to HKD 6.1 billion[5] - Total revenue for the first half of 2024 reached HKD 6,114 million, an increase from HKD 5,237 million in the same period of 2023[11] - Basic earnings per share fell by 22% to HKD 0.38, with net profit attributable to shareholders at HKD 10.61 billion, down from HKD 23.94 billion in 2023[14] - The company reported a profit of HKD 1,339 million for the six months ended June 30, 2024, a decrease of 51.0% compared to HKD 2,732 million in the same period of 2023[85] - The net profit attributable to shareholders for 2024 was HKD 1,061 million, down 22% from HKD 2,394 million in 2023[105] Revenue Breakdown - Core business (recurring rental income) decreased by 7% to HKD 4.9 billion, while basic rental profit attributable to shareholders fell by 22% to HKD 1.8 billion[5] - Property leasing income decreased by 7% to HKD 4.886 billion, with a decline of 11% in Hong Kong and 6% in mainland China[15] - The overall rental income in mainland China decreased by 3% to RMB 3.034 billion, with a 4% decline in office rental income[19] - Retail property revenue decreased by 7% to HKD 940 million, with an overall occupancy rate of 97%[31] - The company expanded its revenue base with strong performance outside Shanghai, adding a fourth pillar to its business model[8] Market Conditions - Tenant sales in Shanghai shopping malls dropped over 20%, contributing to a 13% decline in tenant sales across the mainland property portfolio[5] - Consumer confidence remains low, with tenant sales outside Shanghai declining by 4% due to economic uncertainty and reduced disposable income[6] - The luxury retail market in mainland China remains weak, impacting overall rental income and tenant sales[20] - High-end shopping mall revenue in mainland China dropped by 4%, while mid-tier malls saw a 5% increase in revenue[21] Debt and Financial Management - Interest expenses increased by 52% compared to the same period in 2023, significantly impacting basic profit[5] - Management is exploring debt reduction strategies, including controlling capital and operating expenditures, and prioritizing debt repayment over dividends and new investments[7] - The company anticipates that debt and interest levels will peak at around 35% in two years, which is considered acceptable[6] - The company’s net debt to equity ratio increased to 32.9% as of June 30, 2024, compared to 31.9% at the end of 2023[13] - The financial expenses increased by 21% to HKD 1,063 million in the first half of 2024, with an average effective borrowing rate rising to 4.3%[49] Dividends and Share Options - The company reported a decrease in interim dividend to HKD 0.12 per share from HKD 0.18 in 2023[12] - The company declared an interim dividend of HKD 0.12 per share for 2024, compared to HKD 0.18 per share in 2023, totaling HKD 566 million[103] - The total number of share options under the 2022 Share Option Scheme available for grant is 282,875,550 shares, accounting for approximately 6.0% of the total issued shares[66] - The company has a significant concentration of ownership, with the top shareholders holding over 63% of the total shares[73] Property Valuation and Investments - The company recorded a net loss of HKD 6.74 billion from property revaluation, compared to a net gain of HKD 1.69 billion in 2023[14] - The fair value of properties decreased by HKD 634 million during the period, compared to an increase of HKD 251 million in the previous year[84] - The total value of investment properties and properties under development reached HKD 193.007 billion, with HKD 150 billion in capital commitments[35] - The company acquired investment properties and properties under development totaling HKD 1,915 million in the first half of 2024, compared to HKD 1,569 million in the same period of 2023[108] Sustainability Initiatives - The "Changemakers" sustainability program now includes 16 tenants across 14 properties, covering over 78,000 square meters[8] - Half of the operational properties in mainland China have adopted renewable energy through green power procurement agreements since April 1, 2024[52] - The "Changemakers: Tenant Sustainability Collaboration Program" was launched in December 2023, involving 16 tenants across 14 properties with a total leased area of over 78,000 square meters[53] Corporate Governance - The company emphasizes maintaining high corporate governance standards, with a board composition of 62.5% independent non-executive directors[56][57] - The Audit Committee has reviewed the interim financial report for the six months ending June 30, 2024, and recommended its adoption by the board[59] - The company has complied with the Corporate Governance Code as per the Listing Rules during the six months ending June 30, 2024[60] Future Outlook - The company anticipates a shift from a high-interest environment to potential interest rate cuts, which may boost global economic sentiment[55] - The company expects to maintain weak demand for office leasing in the second half of 2024 due to current market conditions[55] - The company plans to continue expanding its property leasing and sales segments, focusing on enhancing operational efficiency and customer satisfaction[94]

Revenue Performance - Total revenue for the six months ended June 30, 2024, increased by 17% to HKD 6.114 billion, with property sales contributing HKD 1.228 billion, compared to none in 2023[3][8] - Revenue for the first half of 2024 increased to HKD 6,114 million (RMB 5,606 million), up from HKD 5,237 million (RMB 4,626 million) in the same period last year, representing a growth of 16.7% in HKD terms[52] - Total revenue for the first half of 2024 reached HKD 6,114 million, compared to HKD 5,237 million in the same period in 2023, representing a 16.7% increase[58] - Property leasing revenue decreased to HKD 4,243 million in 2024 from HKD 4,582 million in 2023, a decline of 7.4%[58] - Property sales revenue in 2024 was HKD 1,228 million, a new segment compared to no revenue in 2023[58] Property Leasing Performance - Property leasing revenue decreased by 7% to HKD 4.886 billion, impacted by weak luxury consumption in mainland China, a slowdown in Hong Kong's retail and office markets, and RMB depreciation[8] - Mainland China property leasing revenue decreased by 6% in HKD terms to HKD 3.338 billion, with a 3% decline in RMB terms[3][12] - Hong Kong property leasing revenue dropped by 8% to HKD 1.548 billion, with operating profit down 11% to HKD 1.217 billion[3][12] - The company's overall mall portfolio recorded a 3% year-on-year decline in revenue, with high-end malls experiencing a 4% drop, while sub-high-end malls saw growth ranging from 1% to 15%[14] - Shanghai Plaza 66, the flagship high-end mall, saw an 8% decline in revenue and a 23% drop in tenant sales due to cautious luxury spending and overseas shopping trends[16] - Shanghai Grand Gateway 66, a sister mall to Plaza 66, reported a 4% decrease in revenue and a 14% decline in tenant sales, maintaining a high occupancy rate of 97%[17] - Dalian Henglong Plaza achieved an 8% revenue growth and a 2% increase in tenant sales, with occupancy rising 4 percentage points to 93%[17] - Shenyang Huangcheng Henglong Plaza, a sub-high-end mall, recorded a 3% revenue increase and a 2% rise in tenant sales, with occupancy up 6 percentage points to 92%[19] - Jinan Henglong Plaza saw a 1% revenue increase, with occupancy rising 3 percentage points to 92%, and expects further improvements from ongoing asset optimization[19] - Tianjin Henglong Plaza reported a 15% revenue growth and a 9% increase in tenant sales, with occupancy surging 14 percentage points to 94%[19] - The company's office portfolio contributed 18% of total rental income in mainland China, with overall office revenue declining 4% to RMB 556 million due to competitive markets in Shanghai and Shenyang[20] - Property leasing revenue in mainland China decreased by 4% to RMB 556 million, with Shanghai Plaza's revenue dropping 7% due to a 10 percentage point decline in occupancy rate to 88%[21][22] - Hong Kong property leasing revenue fell 8% to HKD 1.548 billion, with retail revenue down 7% to HKD 940 million and office revenue down 8% to HKD 507 million[24][25] - Wuhan Plaza's office occupancy rate decreased by 4 percentage points to 68%, despite a 2% increase in revenue[22] - Shenyang Plaza's office revenue declined 5% despite a 4 percentage point increase in occupancy rate to 90%[22] - Wuxi Plaza's office revenue increased 2% with a 6 percentage point rise in occupancy rate to 89%[22] Profit and Financial Performance - Operating profit declined by 10% to HKD 3.430 billion, with property leasing operating profit down 11% to HKD 3.441 billion[4][8] - Basic profit attributable to shareholders fell by 22% to HKD 1.735 billion, primarily due to lower leasing operating profit and increased financial expenses[5][8] - Net revaluation loss on investment properties attributable to shareholders was HKD 674 million, compared to a net revaluation gain of HKD 169 million in 2023[5][8] - Net profit attributable to shareholders decreased to HKD 1,061 million (RMB 964 million) in H1 2024, down from HKD 2,394 million (RMB 2,120 million) in H1 2023, a decline of 55.7% in HKD terms[52] - Profit before tax for 2024 was HKD 2,068 million, down from HKD 3,530 million in 2023, a decrease of 41.4%[59] - 2024 interim shareholder's attributable profit was HKD 1,061 million, a decrease from HKD 2,394 million in 2023[68][69] - Basic earnings per share decreased to HKD 0.23 (RMB 0.21) in H1 2024, down from HKD 0.53 (RMB 0.47) in H1 2023[52] - Basic earnings per share for 2024 was HKD 0.38, down from HKD 0.49 in 2023[69] Debt and Financial Position - Net debt-to-equity ratio increased to 32.9% as of June 30, 2024, up from 31.9% at the end of 2023[7] - Total borrowings as of June 30, 2024, were HKD 53.229 billion, with 35% denominated in RMB as a natural hedge for net investments in mainland China. Fixed-rate debt accounted for 41% of total debt[38] - The net debt-to-equity ratio increased to 32.9% as of June 30, 2024, from 31.9% at the end of 2023, primarily due to increased borrowings for capital expenditures in mainland China and Hong Kong[41] - The average maturity of the debt portfolio was 3.0 years as of June 30, 2024, with 65% of loans maturing after 2 years[42] - The company had HKD 14.255 billion in undrawn committed bank credit facilities and USD 2.107 billion in undrawn medium-term notes as of June 30, 2024[43] - Average effective borrowing rate increased to 4.3% in H1 2024, up from 3.9% in 2023, leading to a 21% increase in total financial expenses to HKD 1.063 billion[44] - Net financial expenses (excluding capitalized amounts) increased to HKD 455 million in H1 2024[44] - Interest coverage ratio decreased to 3.0x in H1 2024 from 4.2x in 2023[44] - Net interest expense for 2024 was HKD 429 million, up from HKD 260 million in 2023, a 65% increase[62] Investment Properties and Development - Total investment properties and properties under development were valued at HKD 193.007 billion, with mainland properties accounting for HKD 130.765 billion and Hong Kong properties for HKD 62.242 billion[31] - The company has HKD 24.43 billion in properties for lease and HKD 7.825 billion in properties for sale under development, with total capital commitments of HKD 15 billion for investment property projects[32] - Investment properties increased to HKD 168,577 million (RMB 155,258 million) as of June 30, 2024, compared to HKD 169,046 million (RMB 153,511 million) at the end of 2023[54] - Investment properties and development properties additions amounted to HKD 1.915 billion in 2024, up from HKD 1.569 billion in 2023[70] - The company's investment properties and development properties were valued by Savills Valuation and Professional Advisory Limited as of June 30, 2024[71] Sustainability and Green Initiatives - 50% of operational properties in mainland China are now powered by renewable energy, covering five projects across four cities[48] - 16 tenants across 14 properties with over 78,000 sqm of leased area are participating in the Changemakers sustainability program[49] - The company issued RMB 800 million in green bonds and secured RMB 1.9 billion in green loan facilities in H1 2024, accounting for 60% of its total debt and available credit facilities as of June 30, 2024[36] Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.12 per share, down from HKD 0.18 in 2023[10] - The company declared an interim dividend of HKD 0.12 per share for 2024, down from HKD 0.18 per share in 2023[66] - The company paid a final dividend of HKD 0.60 per share for 2023, consistent with the previous year[67] Cash and Liquidity - As of June 30, 2024, the company's cash and bank deposits totaled HKD 6.573 billion, with HKD 4.297 billion (65%) in HKD, RMB 2.275 billion (35%) in RMB, and USD 1 million[37] - Cash and bank deposits rose to HKD 6,573 million (RMB 6,094 million) as of June 30, 2024, up from HKD 5,352 million (RMB 4,868 million) at the end of 2023, reflecting a 22.8% increase in HKD terms[54] - Net current assets rose to HKD 8,278 million (RMB 7,687 million) as of June 30, 2024, up from HKD 7,844 million (RMB 7,143 million) at the end of 2023[54] Market Conditions and Outlook - Office leasing demand is expected to remain weak in H2 2024 due to challenging market conditions[51] - Translation loss due to RMB depreciation was HKD 682 million in H1 2024, compared to HKD 3.394 billion in 2023[46] Corporate Governance and Compliance - The company maintained compliance with the Corporate Governance Code during the first half of 2024[75] - The interim results for 2024 were reviewed by the company's audit committee and KPMG[76] Employee and Operational Costs - Employee costs for the first half of 2024 totaled HKD 928 million, with a total of 4,059 employees as of June 30, 2024[74] Other Financial Metrics - Total assets increased to HKD 218,939 million in 2024 from HKD 217,302 million in 2023, a growth of 0.75%[60] - Total assets minus current liabilities stood at HKD 202,941 million (RMB 186,786 million) as of June 30, 2024, compared to HKD 202,165 million (RMB 183,566 million) at the end of 2023[54] - Total equity increased slightly to HKD 141,900 million (RMB 130,268 million) as of June 30, 2024, compared to HKD 142,123 million (RMB 128,972 million) at the end of 2023[54] - Other comprehensive income for the period showed a loss of HKD 613 million (RMB 964 million) in H1 2024, compared to a loss of HKD 3,371 million (RMB 1,152 million) in H1 2023[53] - Total comprehensive income for the period was HKD 726 million (RMB 2,181 million) in H1 2024, compared to a loss of HKD 639 million (RMB 3,572 million) in H1 2023[53] - Accounts receivable and other receivables totaled HKD 746 million as of June 30, 2024, compared to HKD 148 million as of December 31, 2023[72] - Accounts payable and other payables amounted to HKD 4.197 billion as of June 30, 2024, slightly down from HKD 4.342 billion as of December 31, 2023[73] - Total tax expense for 2024 was HKD 729 million, compared to HKD 798 million in 2023, a decrease of 8.6%[65] Development Projects - Kunming Junyue Residence, offering 254 units including 3 top-tier villas, and Kunming Junyue Hotel, with 331 rooms and suites, are key components of the remaining development projects at Kunming Plaza. Both properties received completion certificates in April 2024, with the hotel set to open in Q3 2024[33] - Wuxi Plaza Phase II includes Wuxi "Henglong Mansion" with 573 units and a Hilton Curio Collection boutique hotel with 105 rooms. The project topped out in December 2023 and is expected to be completed in phases starting in 2025[33] - Hangzhou Plaza, a high-end commercial complex, includes a shopping mall, five Grade A office towers, and the luxurious Mandarin Oriental Hangzhou hotel with over 190 rooms and suites. The hotel is expected to open in H2 2026, with other parts of the project set to be completed in phases starting in 2025[33] - Shanghai Plaza has received government approval to construct a 3,000 sqm retail building on existing landscaped areas, expected to be completed in 2026, enhancing the shopping experience and solidifying its leadership position in Shanghai[33] Tenant and Customer Initiatives - Wuhan Plaza opened its second members-only VIP lounge in May 2024, with a third planned for Kunming Plaza by year-end[51] - The company plans to continue selling high-end serviced residences in mainland China, including Wuhan, Kunming, and Wuxi[51]

Financial Performance - Total revenue for property leasing in 2023 was HKD 10,316 million, a 3% increase from HKD 10,031 million in 2022[8]. - Operating profit for property leasing was HKD 7,441 million, compared to HKD 7,166 million in 2022, reflecting an increase of 3.8%[8]. - Shareholders' attributable net profit for 2023 was HKD 4,010 million, a decrease of 40% from HKD 3,836 million in 2022[8]. - The net asset value per share as of December 31, 2023, was HKD 29.4, slightly down from HKD 29.6 in 2022[10]. - Basic rental net profit attributable to shareholders slightly increased by 1% to HKD 4.177 billion, while basic profit attributable to shareholders decreased by 1% to HKD 4.137 billion after excluding property revaluation impacts[24]. - Total revenue for the year ended December 31, 2023, remained flat at HKD 10.316 billion, with all revenue derived from rental income, which increased by 3% compared to the previous year[24]. - The company recorded a net loss on property revaluation of HKD 1.67 billion, compared to a loss of HKD 3.63 billion in the previous year[138]. - Basic earnings per share decreased by 1% to HKD 0.92, with net profit attributable to shareholders at HKD 4.137 billion[138]. - The company recorded low single-digit growth for the full year, with strong growth in the first four months followed by a slowdown starting mid-May[51]. - Overall rental income increased by 2% year-on-year, reflecting a stable rental rate despite a cautious market environment[104]. Dividend and Shareholder Returns - The company maintained a dividend payout ratio of 88% based on attributable net profit, slightly down from 91% in 2022[10]. - The board proposed a final dividend of HKD 0.60 per share, with a total dividend of HKD 0.78 per share for the year ended December 31, 2023, subject to shareholder approval[24]. - The board proposed a final dividend of HKD 0.60 per share, maintaining the same level as the previous year[136]. Sustainability and Corporate Responsibility - The company aims to achieve 25 sustainability targets by the end of 2025 as part of its commitment to sustainable development[6]. - The company received over 35 awards related to sustainability efforts in 2023, and its MSCI ESG rating was upgraded from "A" to "AA"[52]. - The company aims to achieve net-zero emissions in its value chain by 2050, aligning with its sustainability agenda focused on climate change, resource management, and well-being[171]. - The company has been recognized as the first real estate developer in Hong Kong and mainland China to receive approval for its net-zero carbon emissions targets by the Science Based Targets initiative (SBTi)[178]. - The company has initiated a scholarship program for visually impaired students, demonstrating its commitment to community support[52]. - The company has donated over RMB 33 million to Tsinghua University's education fund to support the development of real estate disciplines and academic research[177]. - The company launched a sustainable finance framework to promote long-term sustainable development goals[176]. - The company is actively seeking opportunities to expand its procurement of renewable energy in mainland China[181]. Market Position and Strategy - The company anticipates challenges in achieving further growth in 2024 due to a weak economic environment, despite a strong start in early 2023[26]. - The company emphasizes a strategy of balancing financial stability with necessary strategic needs, particularly in maintaining sufficient cash flow[26]. - The company is cautious about investing heavily in the current market but sees opportunities due to competitors lacking cash or courage[36]. - The company has a long-term strategy to benefit from the relatively stable environment in mainland China, which is expected to provide a favorable backdrop for its business growth[38]. - The company is focused on learning from experience while not being constrained by it, aiming to seize new opportunities as they arise[47]. Property Development and Projects - The newly completed office project at 228 Electric Road has 22 floors and is strategically located in a vibrant commercial area[14]. - The "Henglong Mansion" project in Wuxi has topped out, offering approximately 570 residential units and 1,000 parking spaces upon completion[16]. - The company has received government approval to increase retail space by 13% at Shanghai Hang Lung Plaza, which is expected to enhance rental income[36]. - The company is developing high-end commercial projects in mainland China, including the Kunming Junyue Hotel, which will feature 331 rooms and is expected to be completed in mid-2024[99]. - The Hangzhou project will include five Grade A office buildings and a luxury hotel, with a total floor area of 194,100 square meters, expected to be completed in phases starting in 2024[100]. Economic Outlook and Challenges - The company anticipates that the Chinese economy will grow at a rate of 3.5% to 5% annually over the next decade, with the company's performance expected to exceed that by an additional 2 to 3 percentage points[38]. - The company acknowledges the impact of geopolitical issues on operations, particularly the tensions between the US and China, which could affect global businesses[30]. - The company expresses concern over the rapid development of technology and its potential negative impacts on society, including rising mental health issues among students[30]. - The company maintains a cautious outlook for 2024 due to geopolitical risks in mainland China, economic slowdown, and a challenging rental market in Hong Kong[127]. Tenant and Retail Performance - The occupancy rate for retail properties in Shanghai Plaza 66 reached 100%, while office buildings maintained a high occupancy rate of 96%[76]. - The company successfully organized events like the "Game of Wonder" and "HOME TO LUXURY" parties, which significantly boosted foot traffic and sales[74]. - The company continues to strengthen its market position through the "恒隆会" membership program, enhancing customer loyalty and attracting new members[72]. - The overall tenant sales growth was recorded at 14% year-on-year, indicating a strong recovery in consumer spending[139]. - The company plans to enhance its tenant mix by introducing more diverse high-end designer brands in Shanghai Plaza 66 in 2024[74]. Governance and Management - The board is committed to maintaining high corporate governance standards and has established three committees to enhance governance functions[192]. - The company has complied with the Corporate Governance Code throughout the fiscal year ending December 31, 2023[194]. - 56% of the board members are independent non-executive directors, surpassing the minimum requirement of one-third[195]. - The company has established a sustainable finance working group, which has been operational since 2019[196]. - The chairman will retire from the board after the 2024 annual general meeting, and a new chairman will be appointed[198].