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].

Financial Performance - Total revenue for 2023 remained stable at HKD 10,316 million, a slight increase of 3% from HKD 10,031 million in 2022[3] - Operating profit rose by 2% to HKD 7,389 million, compared to HKD 7,253 million in the previous year[3] - Basic earnings attributable to shareholders decreased by 1% to HKD 4,137 million, with basic earnings per share at HKD 0.92, down from HKD 0.93 in 2022[4] - The net revaluation loss attributable to shareholders was HKD 167 million, an improvement from HKD 363 million in 2022[4] - Net profit for the year was HKD 4,596 million, representing an increase of 4.5% compared to HKD 4,397 million in 2022[53] - The net profit attributable to shareholders for 2023 was HKD 4,010 million, up from HKD 3,970 million in 2022, indicating a growth of 1.0%[59] - The basic and diluted earnings per share for 2023 were both HKD 0.92, unchanged from 2022[71] Rental Income and Property Performance - Rental income increased by 3% to HKD 10,316 million, with mainland properties showing an 8% increase in RMB terms[8] - The overall rental income growth was supported by a 14% year-on-year increase in tenant sales[8] - Total rental income for 2023 reached RMB 6,263 million, an increase of 8% compared to RMB 5,790 million in 2022[9] - The company's high-end shopping malls saw a revenue increase of 9%, with notable growth in Dalian's revenue rising by 19%[11] - Shanghai Hang Lung Plaza reported a 10% increase in revenue, reaching RMB 1,755 million, with tenant sales up by 24%[12] - Wuhan Hang Lung Plaza's revenue increased by 8% to RMB 251 million, despite a decline in occupancy rate to 82%[14] - The hotel segment experienced a significant recovery, with revenue soaring by 90% year-on-year[9] - The occupancy rate for high-end malls remained strong, with Shanghai Hang Lung Plaza maintaining a 100% occupancy rate[11] - The overall rental income for mid-range malls remained stable, with a slight increase in occupancy rates[10] Debt and Financial Position - The net debt-to-equity ratio increased to 31.9%, up from 28.1% in the previous year[3] - Total borrowings amounted to HKD 50.704 billion, an increase from HKD 45.524 billion in 2022, with 29% denominated in RMB[35] - The average effective borrowing rate increased to 4.3% in 2023 from 3.5% in 2022, leading to a 30% increase in total financial costs to HKD 1,959 million[42] - The interest coverage ratio decreased to 3.6 times in 2023 from 4.6 times in 2022[42] - The net debt position is calculated as total borrowings minus cash and bank deposits, reflecting the company's financial leverage[80] Dividends and Shareholder Returns - The board proposed a final dividend of HKD 0.60 per share, maintaining the same level as in 2022, resulting in a total annual dividend of HKD 0.78 per share[6] - The company plans to distribute a final dividend of HKD 2.699 billion, maintaining the same level as in 2022[66] - The proposed final dividend record date is April 26, 2024, with the dividend payout date set for May 10, 2024[79] Strategic Initiatives and Future Outlook - The company plans to continue optimizing its tenant mix and enhancing customer loyalty through marketing initiatives[8] - The overall business environment in Hong Kong is stabilizing, but competition from surrounding cities is increasing[8] - The company expects to maintain a cautious outlook for 2024 due to ongoing geopolitical risks and a challenging rental market in Hong Kong[50] - The new Hangzhou project is expected to contribute stable income by the end of 2024, alongside the opening of the Kunming hotel in mid-2024[50] - The company plans to continue promoting the "Hello 恒隆商場獎賞計劃" to enhance customer engagement and shopping experience[51] Corporate Governance and Social Responsibility - The company adheres to the corporate governance code as per the Hong Kong Stock Exchange regulations throughout the year[76] - The company donated HKD 30 million to establish a scholarship fund for visually impaired students, supporting their diverse development and continuous education[49] - The company launched a strategic partnership with a carbon capture technology firm to develop low-carbon recycled aggregates, marking a significant step towards decarbonization in real estate[47]

Revenue and Profit Performance - Overall revenue for the first half of 2023 decreased by 1% to HKD 5.237 billion, with rental income increasing by 5% to HKD 5.237 billion[4] - Basic profit attributable to shareholders remained flat at HKD 2.225 billion, while profit including property revaluation increased by 23% to HKD 2.394 billion[4] - Shareholders' basic profit attributable increased by 6% to HKD 2.246 billion, and net profit attributable to shareholders rose by 31% to HKD 2.415 billion[9] - Net profit attributable to shareholders for the first half of 2023 was HK$2,394 million, compared to HK$1,948 million in 2022[89] - Basic earnings per share for the first half of 2023 were HK$0.53, up from HK$0.43 in 2022[89] - Net profit for the period was HKD 2,394 million, compared to HKD 1,948 million in the same period last year, an increase of 22.9%[92] - Profit before tax for property leasing and sales was HKD 3,530 million in 2023, compared to HKD 2,980 million in 2022[101] - Net profit attributable to shareholders was HKD 2,394 million in 2023, up from HKD 1,948 million in 2022[101] - Basic and diluted earnings per share remained stable at HKD 0.49 for both 2022 and 2023, with net profit attributable to shareholders increasing from HKD 1.948 billion to HKD 2.394 billion[110][112] Rental Income and Tenant Sales - Rental income from seven high-end shopping malls in mainland China all increased, with Shanghai Plaza 66 leading at 23% growth, followed by Dalian (19%), Wuxi (16%), Shanghai Grand Gateway (11%), Kunming (9%), and Shenyang (6%)[6] - Tenant sales in high-end shopping malls increased by an average of 42%, with Shanghai Grand Gateway and Shanghai Plaza 66 showing exceptional growth of 68% and 62% respectively[7] - Compared to pre-pandemic 2019, tenant sales in high-end shopping malls surged by an average of 217%, with Wuxi Plaza 66 exceeding four times the 2019 level[7] - Office leasing income in mainland China grew by 6% in RMB terms but decreased by 1% in HKD terms due to currency appreciation[7] - Shanghai Plaza 66 office buildings recorded strong rental income growth, while newer office buildings in Kunming and Wuhan also showed significant increases[7] - Hong Kong shopping mall tenant sales and rental income increased by 22% and 6% year-on-year, respectively, but still decreased by 7% and 16% compared to the same period in 2019 (pre-pandemic)[9] - Mainland rental income increased by 13% in RMB, with high-end shopping malls up 16% and sub-high-end shopping malls down 3%. Office rental income rose 6%, and hotel income surged 130%[9] - Total rental income grew by 5% in HKD, with mainland rental income contributing 68% and Hong Kong contributing 32%[9] - Property leasing revenue in mainland China increased to HKD 3,554 million in H1 2023, up from HKD 3,367 million in H1 2022[22] - Hong Kong property leasing revenue rose to HKD 1,683 million in H1 2023, compared to HKD 1,619 million in H1 2022[22] - Operating profit from mainland China property leasing reached HKD 2,483 million in H1 2023, up from HKD 2,269 million in H1 2022[22] - The company's shopping mall portfolio in Mainland China saw a 13% revenue increase, with high-end malls growing by 16% and sub-high-end malls declining by 3%[29] - Shanghai's high-end malls, which experienced temporary closures in April and May 2022, recorded an 18% revenue growth[29] - The overall tenant sales and leasing revenue in Mainland China increased by 42% and 13% year-over-year, respectively, in the first six months of 2023[27] - Shanghai Plaza 66's revenue and tenant sales increased by 23% and 62% respectively compared to the same period last year[31] - Wuhan Plaza 66's tenant sales increased by 25% despite a drop in occupancy rate to 81%[32] - Office leasing portfolio in mainland China contributed 18% of total rental income, with a 6% increase in total revenue to RMB 580 million[33] - Shanghai Plaza 66's office leasing revenue increased by 6% with a 98% occupancy rate[34] - Kunming Plaza 66's office leasing revenue increased by 19% with an 87% occupancy rate[35] - Hotel revenue surged by 130% due to the relaxation of travel restrictions[36] - Hong Kong retail property portfolio revenue increased by 6% to HKD 1.009 billion with a 97% occupancy rate[38] - Shenyang Huangcheng Plaza's tenant sales increased by 40% despite a 5% drop in revenue[32] - Jinan Plaza 66's tenant sales increased by 31% after the first phase of asset optimization[32] - Dalian Plaza 66's revenue and tenant sales increased by 19% and 26% respectively after its transformation into a high-end mall[31] - Retail revenue increased by 6% to HKD 1,009 million, driven by a 22% rise in tenant sales and a 40% increase in sales rent, primarily in dining, beauty, and jewelry sectors[39][40] - Office revenue grew by 1% to HKD 552 million, with occupancy rates maintained at 88%, despite challenging market conditions[39][41] - Residential and serviced apartments revenue decreased by 1% to HKD 122 million, with occupancy rates dropping due to renovation preparations at The Masterpiece[39][42] Financial Position and Debt - The net debt-to-equity ratio slightly increased to 30.4%[9] - Net debt-to-equity ratio increased to 30.4% as of June 30, 2023, compared to 28.1% at the end of 2022[23] - Total cash and bank deposits amounted to HKD 4,712 million as of June 30, 2023, with RMB deposits making up 64% of the total[50] - Total borrowings increased to HKD 47.16 billion as of June 30, 2023, with 28% denominated in RMB as a natural hedge for net investments in Mainland China[51] - Fixed-rate debt accounted for 38% of total debt as of June 30, 2023, and 52% of offshore debt excluding onshore floating-rate debt[51] - The average repayment period of the debt portfolio was 3.2 years as of June 30, 2023, with 72% of loans maturing after two years[55] - Financial expenses increased by 20% to HKD 881 million in the first half of 2023 due to higher average borrowing costs and increased borrowings for capital expenditures[57] - The company recorded a foreign exchange translation loss of HKD 3.394 billion as of June 30, 2023, due to a 3.1% depreciation of RMB against HKD[58] - The company has no significant contingent liabilities or assets pledged to third parties as of June 30, 2023[59] - Total assets decreased from HKD 197,865 million in 2022 to HKD 196,396 million in 2023, a decline of 0.7%[91] - Cash and bank deposits decreased by 9.9% from HKD 5,229 million in 2022 to HKD 4,712 million in 2023[91] - Total equity decreased from HKD 143,146 million in 2022 to HKD 139,848 million in 2023, a decline of 2.3%[91] - Investment properties decreased slightly from HKD 167,861 million in 2022 to HKD 166,826 million in 2023, a decline of 0.6%[91] - Non-current liabilities increased by 3.3% from HKD 54,719 million in 2022 to HKD 56,548 million in 2023[91] - The company's retained earnings decreased from HKD 96,739 million in 2022 to HKD 96,618 million in 2023, a slight decline of 0.1%[92] - The exchange differences on translation to presentation currency resulted in a loss of HKD 3,070 million, impacting other reserves[92] - Total comprehensive income for the period was a loss of HKD 639 million, compared to a loss of HKD 2,684 million in the same period last year[92][93] - Operating cash flow from business activities increased to HKD 2,802 million in 2023, up from HKD 2,500 million in 2022[96] - Net cash used in investing activities was HKD 1,347 million in 2023, compared to HKD 1,317 million in 2022[96] - New bank loans and borrowings amounted to HKD 23,387 million in 2023, a significant increase from HKD 16,323 million in 2022[96] - Cash and cash equivalents decreased to HKD 4,446 million as of June 30, 2023, from HKD 5,148 million at the beginning of the year[96] - Total assets decreased from HKD 212.688 billion in 2022 to HKD 210.608 billion in 2023, with a notable decrease in cash and bank deposits from HKD 5.229 billion to HKD 4.712 billion[102] - Net interest expense was HKD 260 million in 2023, with total borrowing costs of HKD 881 million, partially offset by capitalized borrowing costs of HKD 582 million[104] - Total tax expense increased from HKD 723 million in 2022 to HKD 798 million in 2023, with deferred tax expenses rising significantly from HKD 121 million to HKD 192 million[107] - Investment properties and properties under development saw additions of HKD 1.569 billion in 2023, up from HKD 1.100 billion in 2022[113] - Accounts receivable decreased from HKD 147 million in 2022 to HKD 132 million in 2023, with a reduction in overdue receivables[115] - Accounts payable decreased slightly from HKD 4.044 billion in 2022 to HKD 3.897 billion in 2023, with a notable decrease in payables due after three months[116] - Capital commitments increased significantly from 1,830 to 6,142 HKD million for signed contracts, a 235.6% increase[130] - Authorized but unsigned capital commitments decreased from 14,135 to 9,066 HKD million[130] - Total capital commitments slightly decreased from 15,965 to 15,208 HKD million[130] Development Projects and Future Plans - The company plans to complete major projects, including the Hangzhou Plaza, with shopping malls and office buildings set to be completed by the end of 2024, and additional office buildings and hotels by 2025[17] - The company is planning to open several new hotels, including the Kunming Hyatt Hotel and the Wuxi Hilton Curio Collection Hotel in 2024, and the Hangzhou Mandarin Oriental Hotel in 2025[17] - The company has four residential projects under development, with most expected to be completed by 2025, including Wuhan "Hang Lung Residence," Wuxi "Hang Lung Residence," and Kunming Hyatt Residence[17] - The company is preparing for the public sale of its high-end serviced residence brand "Henglong Mansion" in mainland China, including properties in Wuhan, Kunming, and Wuxi[63] - The company plans to open its second luxury hotel, the Kunming Hyatt, in the first half of 2024[63] - The Wuhan "Henglong Mansion" is expected to deliver its first batch of units by the end of 2023[63] - The company's office portfolio is expected to maintain rental income growth despite challenging market conditions[63] - The company's "hello Henglong Mall Rewards Program" aims to enhance the shopping experience for loyal customers in Hong Kong[63] - Development projects for rental and sale totaled HKD 214.94 billion and HKD 112.22 billion, respectively, with capital commitments of HKD 15 billion[45] - Wuhan "Hang Lung Residences" is set to be completed in phases starting late 2023, offering 492 units[46] - Kunming Junyue Residences and Kunming Junyue Hotel are expected to be completed in phases from 2024, with 254 residences and 332 hotel rooms[46] - Hangzhou West Lake 66 project, including a luxury Mandarin Oriental Hotel, is on track for phased completion starting 2024[46] - The Aperture in Hong Kong is expected to complete construction in Q1 2024, with 126 units sold for HKD 1.108 billion[47] Corporate Governance and Shareholder Information - The company emphasizes high levels of corporate governance and transparency, with ongoing efforts to improve diversity, particularly at the board level[18] - The company's board consists of 9 members, including 4 executive directors and 5 independent non-executive directors[65] - The company's audit committee meets at least four times a year and reviews internal audit work and risk management[67] - The company has fully complied with the Corporate Governance Code of the Hong Kong Stock Exchange during the six months ended June 30, 2023[68] - The company has adopted a code of conduct for securities transactions by directors, ensuring compliance with the "Standard Code" and confirming adherence during the six months ended June 30, 2023[69] - As of June 30, 2023, Mr. Chan Wai Bor holds 2,733,898,340 shares of the company, representing 60.76% of the total issued shares[71] - Mr. Chan Kai Chong holds 17,155,000 shares of the company, representing 0.38% of the total issued shares[71] - The company's 2022 Share Option Plan allows for the issuance of up to 337,444,550 shares, with 54,569,000 options granted during the six months ended June 30, 2023[75] - As of June 30, 2023, the total number of shares available for issuance under the 2022 Share Option Plan is 282,875,550, representing approximately 6.29% of the company's total issued shares[75] - The 2012 Share Option Plan was terminated on April 27, 2022, and no further options can be granted under this plan[75] - The 2022 Share Option Plan aims to incentivize and retain talent by offering opportunities to acquire equity in the company[74] - The company's directors hold no other interests or short positions in the company or its associated corporations as of June 30, 2023[73] - The company has not made any arrangements benefiting directors through the acquisition of shares or debentures during the six months ended June 30, 2023[73] - The 2022 Share Option Plan includes performance targets that may be specified by the board for individual or collective participants[74] - 4,500,000 stock options granted to Chairman Chan Hoi Chung on June 4, 2013 were forfeited[76] - 13,060,000 stock options granted to employees on June 4, 2013 were forfeited[76] - 2,750,000 stock options granted to Director Chan Man Pok on December 5, 2014 remain unexercised as of June 30, 2023[76] - 13,440,000 stock options granted to employees on December 5, 2014 remain unexercised as of June 30, 2023[76] - 1,925,000 stock options granted to Chairman Chan Hoi Chung on August 10, 2017 remain unexercised as of June 30, 2023[76] - 21,520,000 stock options granted to employees on August 10, 2017 remain unexercised as of June 30, 2023[76] - 10,000,000 stock options granted to Director Lo Wai Pak on May 16, 2018 remain unexercised as of June 30, 2023[76] - 32,262,100 stock options granted to employees on June 28, 2019 remain unexercised as of June 30, 2023[76] - 3,300,000 stock options granted to Chairman Chan Hoi Chung on May 12, 2021 remain unexercised as of June 30, 2023[76] - 46,967,000 stock options granted to employees on May 12, 2021 remain unexercised as of June 30, 2023[76] - Total number of stock options granted as of June 30, 2023, is 216,739,100, with 29,957,600 options forfeited or lapsed during the period[77] - Employee stock options granted as of June 30, 2023, amount to 164,389,100, with 20,757,600 options forfeited or lapsed[77] - Major shareholders collectively hold 60.76% of the company's issued shares, with Chen Tan Ching Fun, Cole Enterprises Holdings (PTC) Limited, Merssion Limited, and Chen Wenbo each holding 2,733,898,340 shares[80] - Hang Lung Group holds 60.13% of the company's issued shares, totaling 2,705,565,240 shares[80] - Employee headcount as of June 30, 2023, is 4,115, with 988 employees in Hong Kong and 3,127 in mainland China[83] - Total employee expenses for the six months ending June 30, 2023, amounted to HKD 942 million[83] - Stock options granted to current directors as of June 30, 2023, total 52,350,000, with 9,200,000 options forfeited or lapsed[77] - The company's issued share capital as of June 30, 2023, is 4,499,260,670 shares[81]

Financial Performance - Total revenue for the six months ended June 30, 2023, was HKD 5.237 billion, a decrease of 1% compared to HKD 5.302 billion in the same period last year[5]. - Operating profit increased by 3% to HKD 3.824 billion, up from HKD 3.708 billion in 2022[5]. - Basic earnings attributable to shareholders remained at HKD 2.225 billion, with basic earnings per share at HKD 0.49, unchanged from the previous year[5]. - Net profit for the same period was HKD 2,732 million, representing an increase of 20.96% from HKD 2,257 million in 2022[47]. - Basic earnings per share increased to HKD 0.53 from HKD 0.43, reflecting a growth of 23.26%[46]. - Total comprehensive income for the period was HKD (639) million, an improvement from HKD (2,684) million in 2022[47]. - The profit attributable to shareholders for the period was HKD 2,394 million, up 23% from HKD 1,948 million in 2022[62]. Revenue Sources - Rental income from mainland properties increased by 6% to HKD 3.554 billion, while Hong Kong rental income rose by 4% to HKD 1.683 billion[6]. - The overall leasing income increased by 5% to HKD 5.237 billion, driven by a 13% increase in rental income from mainland properties[8]. - The hotel segment saw a significant revenue increase of 130% year-on-year, benefiting from the easing of travel restrictions[9]. - The shopping mall segment reported a revenue growth of 13%, with high-end malls increasing by 16% and mid-range malls declining by 3%[10]. - Shanghai Hang Lung Plaza achieved a revenue of RMB 891 million, a 23% increase compared to RMB 724 million in 2022, maintaining a 100% occupancy rate[11]. - Shanghai Port International Plaza's revenue grew by 11% to RMB 613 million, with a tenant sales increase of 68%[13]. - The overall revenue for high-end malls increased by 16%, benefiting from improved market conditions and rising tenant sales during festive periods[12]. Property and Investment - The total value of investment properties and properties under development was HKD 188.32 billion as of June 30, 2023[26]. - The company recorded a property revaluation gain of HKD 251 million, compared to a loss of HKD 221 million in 2022[26]. - Investment properties and development properties acquisitions amounted to HKD 15.69 billion in the first half of 2023, an increase of 42.5% compared to HKD 11.00 billion in 2022[65]. Debt and Financial Position - The net debt-to-equity ratio improved to 30.4% from 28.1% year-on-year[4]. - The total borrowings as of June 30, 2023, were HKD 471.60 billion, an increase from HKD 455.24 billion as of December 31, 2022, with 28% denominated in RMB[32]. - The average repayment period for the overall debt portfolio is 3.2 years, with approximately 72% of loans due for repayment after two years[36]. - The unutilized balance of committed bank credit facilities was HKD 16.88 billion as of June 30, 2023, down from HKD 21.37 billion at the end of 2022[37]. - In the first half of 2023, the total financial expenses increased by 20% to HKD 881 million due to rising average effective borrowing rates of 3.9% compared to 3.5% in 2022[38]. - The net interest expense for the first six months of 2023 rose to HKD 299 million, reflecting the increased borrowing for capital expenditures[38]. Operational Highlights - The company actively engaged in marketing campaigns to capitalize on post-pandemic economic recovery opportunities[8]. - The company plans to unveil its second luxury hotel, the Kunming Hyatt, in the first half of 2024, while the first batch of units for the Wuhan "Henglongfu" is expected to be delivered by the end of 2023[45]. - The company has established a real estate research center at Tsinghua University to focus on sustainable development and innovation in real estate technology[42]. Corporate Governance and Social Responsibility - The company has maintained compliance with the corporate governance code as of June 30, 2023[72]. - The "She Leads" national program attracted approximately 180 female university students, with 75% being first-generation college students from three generations of families[43].

Financial Performance - Total revenue for 2022 was HKD 10,347 million, a slight increase from HKD 10,321 million in 2021[10]. - Operating profit for 2022 was HKD 7,253 million, compared to HKD 7,371 million in 2021, reflecting a decrease of 1.6%[10]. - Basic earnings per share based on shareholders' net profit was HKD 0.85, down from HKD 0.86 in 2021[11]. - Shareholders' basic net profit decreased by 4% to HKD 4.199 billion, resulting in basic earnings per share of HKD 0.93[21]. - After accounting for property revaluation impacts, net profit attributable to shareholders decreased by less than 1% to HKD 3.836 billion, with earnings per share at HKD 0.85[21]. - Overall rental income for the year ended December 31, 2022, decreased by 3% to HKD 10.031 billion, with mainland rental income increasing by 1% in RMB terms but decreasing by 3% in HKD terms due to RMB depreciation[139]. - The company recorded property sales revenue of HKD 316 million, compared to no sales in 2021[136]. - The company experienced strong performance during the three-year pandemic, but acknowledges the need for increased resilience and flexibility moving forward[41]. Property Valuation and Equity - The company reported a net decrease in the fair value of properties amounting to HKD 363 million in 2022, compared to HKD 497 million in 2021[10]. - Shareholders' equity as of December 31, 2022, was HKD 133,381 million, down from HKD 141,719 million in 2021[10]. - The net debt to equity ratio increased to 28.1% in 2022 from 24.4% in 2021[12]. - A property revaluation loss of HKD 345 million was recorded, compared to a gain of HKD 460 million in 2021[158]. Market Conditions and Challenges - Six out of ten shopping malls in mainland China were fully closed at different times during the first half of 2022, with the most severe impact in Shanghai where two malls were closed for two months[20]. - The company faced significant challenges due to the real estate crisis, leading to widespread bankruptcy among private developers and financial distress for property buyers[31]. - The company remains vigilant against potential future outbreaks, despite achieving a high rate of employee recovery from COVID-19[23]. - The company expressed concerns about the unpredictability of future policies, which has made investment in new projects challenging[31]. Sustainability Initiatives - The company has established 25 sustainability targets to be achieved by the end of 2025, as part of its commitment to sustainable development[9]. - The company achieved a significant milestone with the Jinan Hang Lung Plaza becoming the first commercial development in Shandong Province to use 100% renewable energy as of January 1, 2023[15]. - The company has set short-term and long-term carbon reduction targets approved by the Science Based Targets initiative, aiming for net-zero emissions by 2050[15]. - The company launched the "Hang Lung She Leads" program, providing mentorship to 200 female students in Hong Kong and mainland China[175]. Customer Engagement and Sales Performance - Overall customer traffic across ten shopping malls decreased by 21% compared to 2021, while tenant sales only declined by 9%[24]. - The company noted that consumer spending is expected to benefit from the recovery, as wealthy individuals are likely to continue shopping domestically rather than abroad[32]. - The company implemented various marketing activities and membership programs to boost consumer sentiment and foot traffic in the second half of 2022[144]. - The membership program "Hang Lung Club" effectively stimulated tenant sales, playing a crucial role in the overall performance[60]. Future Outlook and Strategic Plans - The chairman expressed optimism for 2023, predicting a good year for mainland leasing business despite external uncertainties[29]. - The company anticipates strong growth in mainland operations, which may further decrease the profit contribution from Hong Kong[29]. - The company plans to release a "Joint Charter" in March 2023, outlining commitments and actions towards sustainability, aiming to set new standards for collaboration between owners and tenants[41]. - The company plans to continue its market expansion and explore new strategies to enhance revenue streams[136]. Corporate Governance and Board Diversity - The board proposed a final cash dividend of HKD 0.60 per share for the fiscal year 2022, maintaining the same level as 2021, resulting in a total annual dividend of HKD 0.78 per share[138]. - The board currently consists of 10 members, including 4 executive directors and 6 independent non-executive directors[195]. - The company aims to appoint one female director by 2024 as part of its board diversity policy[196]. - Approximately 41% of the total workforce are women, with over 60% of clerical staff being female[195].

Financial Performance - Total revenue for Hang Lung Properties in 2022 remained flat at HKD 10.347 billion compared to 2021, with a 3% decrease in property leasing income to HKD 10.031 billion[5]. - Operating profit decreased by 2% to HKD 7.253 billion in 2022, down from HKD 7.371 billion in 2021[5]. - Basic net profit attributable to shareholders decreased by 4% to HKD 4.199 billion, with basic earnings per share dropping to HKD 0.93[5]. - The fair value of properties attributable to shareholders decreased by HKD 363 million, compared to a decrease of HKD 497 million in 2021[5]. - The company recorded a property revaluation loss of HKD 345 million in 2022, compared to a gain of HKD 460 million in 2021[27]. - The net profit for 2022 was HKD 4,397 million, down from HKD 4,805 million in 2021, with RMB net profit at 3,760 million[51]. - The company's net profit attributable to shareholders for 2022 was HKD 3.836 billion, down from HKD 3.868 billion in 2021, reflecting a decrease of about 0.8%[65]. - The basic and diluted earnings per share for 2022 were both HKD 0.93, compared to HKD 0.97 in 2021, indicating a decline of approximately 4.1%[67]. Revenue Breakdown - Rental income from mainland properties increased by 1% in RMB terms but decreased by 3% in HKD terms due to currency depreciation[8]. - The overall leasing income in Hong Kong decreased by 3%, with the business environment impacted by the fifth wave of COVID-19[8]. - The company's mall portfolio revenue decreased by 1% year-on-year, with high-end malls down 1% and mid-range malls down 4%[10]. - The retail property segment in Hong Kong saw a revenue drop of 3% to HKD 1.931 billion, with an occupancy rate of 98%[23]. - Office property revenue in Hong Kong decreased by 5% to HKD 1.096 billion, with an occupancy rate of 90%[25]. - Residential and serviced apartment revenue increased by 4% to HKD 252 million, driven by competitive pricing strategies[26]. - The hotel business in Shenyang faced challenges, with a revenue decline of 22% to RMB 73 million due to intermittent pandemic impacts[20]. Debt and Financial Position - The net debt to equity ratio increased to 28.1% in 2022 from 24.4% in 2021[4]. - The total borrowings as of December 31, 2022, were HKD 45.524 billion, with 28% denominated in RMB[33]. - The company issued green bonds worth HKD 1.2 billion and secured green loan facilities totaling HKD 3.7 billion, representing 46% of total debt and available credit facilities[31]. - The debt composition as of December 31, 2022, shows 72% in HKD and 28% in RMB[34]. - The company reported a net loss from currency translation of HKD 9,770 million due to an 8.5% depreciation of the RMB against the HKD[41]. - The total cash and bank deposits as of December 31, 2022, amounted to HKD 5.229 billion, with RMB accounting for 57% of the total[32]. - The company's equity decreased to HKD 143,146 million in 2022 from HKD 152,384 million in 2021, a decrease of 6.0%[52]. Market Conditions and Challenges - The company faced challenges from pandemic control policies, impacting foot traffic and rental performance across its malls[12]. - Tenant sales at Shenyang Royal City Hang Lung Plaza dropped by 24%, with revenue down 10% due to pandemic-related closures[15]. - The overall rental rate for high-end malls remained high at 99% for Shanghai Hang Lung Plaza and 87% for Shenyang City Government Hang Lung Plaza[13]. - The company implemented various marketing activities and membership programs to boost consumer sentiment and foot traffic, particularly in the second half of 2022[12]. Future Plans and Developments - The company anticipates multiple milestones in 2023, including the public sale of high-end serviced apartments under the "恒隆府" brand in Wuhan and other cities[49]. - The company plans to leverage marketing activities and membership programs to drive foot traffic and stimulate consumer spending in its malls[48]. - The construction of the Hong Kong project "The Aperture" is on schedule, with completion expected in the second half of 2023[30]. - The first batch of units in Wuhan's "恒隆府" is expected to be delivered in 2023, with pre-sale revenue from "The Aperture" anticipated to be recognized in the second half of 2023[49]. Corporate Governance and Employee Engagement - The audit committee reviewed the annual results for the year ending December 31, 2022, and the financial statements were audited by KPMG with no reservations[74]. - The company has complied with the corporate governance code as per the Hong Kong Stock Exchange regulations throughout the year[74]. - The company’s overall employee engagement significantly improved, ranking in the top 25% of companies for employee engagement progress[46]. - The company has a share option plan and provides professional training to employees to ensure competitive compensation[72].

Financial Performance - Revenue increased by 7% to HKD 5.302 billion for the six months ended June 30, 2022[6]. - Shareholders' net profit decreased by 13% to HKD 1.948 billion, with earnings per share dropping to HKD 0.43[6]. - Basic net profit increased by 1% to HKD 2.217 billion when excluding property revaluation gains[6]. - Operating profit rose by 2% to HKD 3.708 billion, up from HKD 3.630 billion in the previous year[34]. - The company reported a net profit of HKD 1,948 million for the six months ended June 30, 2022, compared to HKD 2,235 million for the same period in 2021, reflecting a decrease of approximately 12.9%[105]. - The company reported a profit attributable to shareholders of HKD 1,840 million for the six months ended June 30, 2022, compared to HKD 2,255 million in 2021, reflecting a decrease of 18.4%[113]. - The company’s total comprehensive income for the period was a loss of HKD 2,684 million, compared to a gain of HKD 3,994 million in 2021[103]. Rental Income and Property Performance - Rental income remained stable at HKD 4.986 billion despite the impact of COVID-19[6]. - The overall rental margin slightly decreased to 72%, with mainland China down 1 percentage point to 67%[8]. - The rental income from office buildings increased by RMB 74 million, representing a 16% growth compared to the same period last year[9]. - In Hong Kong, retail rental income decreased by 3% after amortizing rent concessions, while tenant sales fell by 15% compared to the second half of last year[10]. - The rental margin for high-end shopping malls in first-tier cities is at a high level of 80%, with some exceeding 90%[9]. - The rental margin for second-tier city high-end shopping malls is expected to reach at least 70%, with some potentially exceeding 80%[9]. - The overall revenue for the office building portfolio rose by 16% to RMB 547 million, reflecting strong demand and high occupancy rates[44]. Market Challenges and Economic Outlook - The company is facing challenges due to the impact of the COVID-19 pandemic and geopolitical tensions, which may affect future business operations[11][12]. - The company is closely monitoring global issues that could impact its operations, including geopolitical and economic developments[11]. - The ongoing war has led to rising fuel prices and food shortages, which could result in famine in various regions, particularly in Africa[15]. - Inflation is expected to increase as a consequence of the ongoing geopolitical tensions and economic disruptions caused by the war[15]. - The company anticipates that the economic slowdown will indirectly affect its business operations[20]. - The company acknowledges the challenges of reshoring strategic product supply chains, emphasizing that replicating China's established systems will take decades and incur high costs[18]. Strategic Focus and Future Plans - The company plans to continue focusing on high-end properties, which are expected to grow in revenue contribution[8]. - The company anticipates an increase in rental rates and occupancy rates in the next one to two years[9]. - The management plans to adopt a cautious approach over the next 6 to 12 months, ensuring financial stability and carefully reviewing any significant capital expenditures[20]. - The company plans to continue focusing on market expansion and new product development to drive future growth[106]. - The company is prepared to face challenges arising from both domestic and international issues, focusing on prudent decision-making[20]. Shareholder and Governance Information - An interim dividend of HKD 0.18 per share was declared, payable on September 29, 2022[6]. - The board consists of 10 members, including 4 executive directors, 1 non-executive director, and 5 independent non-executive directors[77]. - The company has complied with the Corporate Governance Code as per the Hong Kong Stock Exchange during the six months ending June 30, 2022[80]. - Major shareholders include Chen Tan-hing-fan, holding 2,699,591,340 shares, representing 60.00% of the issued share capital[93]. Debt and Financial Position - The net debt-to-equity ratio increased to 26.9% from 24.4% in the previous year[34]. - The total borrowings as of June 30, 2022, were HKD 44.337 billion, a decrease from HKD 45.695 billion as of December 31, 2021[65]. - The company has maintained a low debt ratio and aims to avoid significant mistakes in capital investment decisions, especially given the unstable economic conditions in China and globally[22]. - The company issued green bonds worth HKD 1.2 billion and secured green loan facilities totaling HKD 600 million, representing 33% of total debt and available credit[63]. Employee and Talent Management - The total number of employees was 4,104, including 1,028 in Hong Kong and 3,076 in mainland China[96]. - Total employee expenses for the six months ended June 30, 2022, amounted to HKD 937 million[96]. - The management team has undergone significant changes, with a focus on promoting internal talent and enhancing the team's capabilities[30]. Environmental and Social Responsibility - The company has committed to achieving net-zero carbon emissions by 2050, becoming the first real estate company in Hong Kong to commit to the ULI Greenprint initiative[74]. - The company is committed to improving its processes and systems to ensure resilience against various challenges, including climate change and geopolitical issues[31].

Financial Performance - Total revenue increased by 7% to HKD 5.302 billion for the six months ended June 30, 2022, compared to HKD 4.975 billion in 2021[5] - Operating profit rose by 2% to HKD 3.708 billion, up from HKD 3.630 billion in the previous year[5] - Basic earnings attributable to shareholders increased by 1% to HKD 2.217 billion, with corresponding earnings per share at HKD 0.49[5] - Net profit for the period was HKD 2,257 million, down 18.5% from HKD 2,771 million in the same period of 2021[47] - Basic earnings per share decreased to HKD 0.43 from HKD 0.50, reflecting a decline of 14%[46] - Profit before tax for the period was HKD 2,980 million, a decrease of 22.2% from HKD 3,824 million in the previous year[53] - Net profit attributable to shareholders was HKD 1,840 million, down 18.4% from HKD 2,255 million in 2021[53] Revenue Breakdown - Rental income remained stable at HKD 4.986 billion, while property sales generated HKD 316 million, compared to zero in 2021[5] - In mainland China, rental income increased by 2% to HKD 3.367 billion, while Hong Kong rental income decreased by 4% to HKD 1.619 billion[6] - The overall rental income in mainland China showed a 1% increase in RMB terms, despite a decline in retail performance due to COVID-19 restrictions[9] - Hong Kong property revenue declined by 4% to HKD 1.619 billion, with an operating profit decrease of 6% to HKD 1.306 billion[21] - Retail property revenue in Hong Kong fell by 3% to HKD 951 million, with a rental occupancy rate of 98%[22][23] - Office property revenue in Hong Kong decreased by 7% to HKD 545 million, with a rental occupancy rate of 87%[22][24] - Residential and serviced apartment revenue increased by 6% to HKD 123 million, with a rental occupancy rate of 70%[22][25] Asset and Liabilities - The net asset value per share decreased to HKD 30.3 from HKD 31.5 as of December 31, 2021[5] - Total assets less current liabilities amounted to HKD 202,042 million, a slight decrease from HKD 204,733 million at the end of 2021[48] - Non-current liabilities increased to HKD 54,996 million from HKD 52,349 million in the previous year[48] - The company’s total equity decreased to HKD 147,046 million from HKD 152,384 million, reflecting a decrease of 3.5%[48] - The total value of investment properties as of June 30, 2022, was HKD 194.607 billion, with mainland properties valued at HKD 133.209 billion and Hong Kong properties at HKD 61.398 billion[27] Debt and Financial Ratios - The net debt to equity ratio increased to 26.9% from 24.4% in the previous year[4] - Total borrowings as of June 30, 2022, were HKD 443.37 billion, down from HKD 456.95 billion at the end of 2021[35] - The fixed-rate debt accounted for 41% of total borrowings, down from 48% in December 2021[37] - The average repayment period of the overall debt portfolio increased to 3.3 years from 3.0 years as of December 31, 2021, with approximately 69% of loans due for repayment after two years[39] - Total financial expenses decreased by 4% to HKD 733 million in the first half of 2022, with the average effective borrowing rate dropping to 3.5% from 3.9% in 2021[41] Property Valuation and Revaluation - The company recorded a property revaluation loss of HKD 221 million in 2022, compared to a gain of HKD 618 million in 2021[28] - The mainland property portfolio experienced a slight revaluation loss of HKD 149 million, representing less than 1% of the portfolio value, while the Hong Kong property portfolio recorded a revaluation loss of HKD 72 million[28] - The fair value of investment properties decreased to HKD 172,339 million from HKD 177,456 million, a decline of 2.5%[48] Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.18 per share, unchanged from the previous year[7] - The company proposed an interim dividend of HKD 0.18 per share, unchanged from 2021[60] Future Outlook and Initiatives - The company has committed to achieving net-zero carbon emissions by 2050, becoming the first real estate company in Hong Kong to pledge to the ULI Greenprint initiative[44] - The company anticipates continued strong growth from its mainland property portfolio, supported by new marketing initiatives to enhance customer loyalty[45] - The company plans to launch the Wuhan "Henglongfu" project, which includes over 490 units, with pre-sales expected to start in the second half of 2023[30] Employee and Operational Costs - Employee costs for the period were HKD 779 million, up from HKD 737 million in 2021[57] - The total number of employees as of June 30, 2022, was 4,104, with total employee costs amounting to HKD 937 million[70]