Investment Rating - The report maintains a "Recommended" rating for Swire Properties (1972.HK) with a target price of HKD 21.55 [2][8]. Core Insights - The company's Q1 performance met expectations, with improvements in the operation of shopping centers in mainland China. Retail sales in key locations such as Shanghai and Beijing showed positive growth, while declines in other areas were significantly reduced compared to 2024 [2][8]. - The report highlights the strong competitive advantage of Swire Properties due to its prime location shopping centers and robust leasing capabilities, which are expected to drive rental income growth in the coming years [8]. Financial Summary - Total revenue projections for 2024A, 2025E, 2026E, and 2027E are HKD 14,428 million, HKD 14,616 million, HKD 14,995 million, and HKD 18,638 million respectively, with growth rates of -2.1%, 1.3%, 2.6%, and 24.3% [4]. - The net profit attributable to shareholders is forecasted to be -HKD 766 million in 2024, increasing to HKD 2,676 million in 2025, HKD 4,132 million in 2026, and HKD 5,671 million in 2027, with growth rates of -129.0%, 449.3%, 54.4%, and 37.2% respectively [4]. - Earnings per share (EPS) are projected to be -HKD 0.13 in 2024, HKD 0.46 in 2025, HKD 0.72 in 2026, and HKD 0.98 in 2027 [4]. Market Performance - The report notes that Swire Properties' shopping centers in Hong Kong maintained full occupancy, with slight improvements in retail sales growth compared to the previous year [8]. - The overall rental market for office spaces in Hong Kong remains under pressure due to oversupply, with an occupancy rate of 89% in Q1 [8]. Investment Recommendation - Swire Properties is characterized as a commercial real estate company that generates stable cash flow through holding assets with a competitive moat. The expected growth in net profit and consistent dividend growth of 5% annually supports the investment thesis [8].

Group 1 - Morgan Stanley maintains a target price of HKD 16 for Swire Properties and a "Market Perform" rating [1] - In Q1 2025, rental performance for Swire Properties in Hong Kong showed flat rental rates for Taikoo Place, with a rental adjustment rate of -16% year-on-year [1] - Retail performance in Hong Kong for Q1 2025 indicated a 5% year-on-year decrease in retail sales at Taikoo Place and a 5.8% decrease at Cityplaza, while Taikoo City Centre saw a 2.9% increase [1] Group 2 - In mainland China, all six retail malls recorded quarter-on-quarter improvements in retail sales for Q1 2025 [1] - Positive growth was observed in Shanghai and Beijing, while Guangzhou and Chengdu experienced declines [1]

Financial Performance - The company reported a profit of HK$7980 million for FY 2022 [9], a 12% increase compared to FY 2021's HK$7112 million [9] - Recurring profit for FY 2022 was HK$7176 million [9], a 9% decrease from FY 2021's HK$7143 million [9] - Underlying profit decreased by 1% to HK$8706 million in FY 2022 [9], compared to HK$9532 million in FY 2021 [9] - The company is aiming for mid-single-digit dividend growth [9], with a full year dividend per share of HK$1.00 [9], a 5% increase from HK$0.95 in 2021 [9] Portfolio Performance - Hong Kong office portfolio maintained a resilient performance with 96% overall occupancy [9] - Hong Kong retail portfolio is recovering, with almost fully let occupancy [9] - Chinese Mainland retail portfolio saw a 5% increase in attributable retail gross rental [9] - Chinese Mainland office portfolio demonstrated robust performance with overall occupancy between 94% and 99% [9] Investments and Developments - The company has committed close to 40% of its HK$100 billion investment plan [11] - The company expects 8.2 million sq ft of attributable GFA to be completed from 2023 onwards [19] - The company acquired the remaining 50% interest in Sino-Ocean Taikoo Li Chengdu for RMB 5.6 billion [34]

2022 INTERIM RESULTS | ANALYST BRIEFING 11TH AUGUST 2022 DISCLAIMER This presentation has been prepared by Swire Properties Limited (the "Company", and together with its subsidiaries, the "Group") solely for information purposes and certain information has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the accuracy, fairness, completeness, reasonableness or correctness of the information or opinions presented herein or ...

Financial Performance - The company reported a profit of HK$7,121 million, a 74% increase compared to HK$4,096 million in FY2020[9, 192] - Recurring profit increased by 1% to HK$7,152 million in FY2021 from HK$7,089 million in FY2020[9, 113] - Underlying profit decreased by 25% to HK$9,541 million in FY2021, compared to HK$12,679 million in FY2020[9, 113] - The company aims for mid-single-digit annual dividend growth[9, 11] - The full year dividend per share (DPS) for FY2021 was HK$0.95, a 4.4% increase compared to HK$0.91 in FY2020[9, 123, 192] Portfolio Performance - The Hong Kong office portfolio maintained a high overall occupancy of 97%[9] - The Hong Kong retail portfolio is almost fully let[9] - Chinese Mainland retail portfolio experienced a 30% attributable retail sales growth[9] - Chinese Mainland overall portfolio contributed 37% attributable gross rental income in FY2021[46, 47] - Taikoo Li Qiantan achieved approximately 90% occupancy since opening in September 2021[49, 66, 256] Strategic Investments and Capital Management - The company plans to make over HK$100 billion in strategic investments over the next 10 years[9, 11, 13, 188] - The company has sales proceeds of over HK$6.3 billion from EDEN, Singapore and Reach & Rise, Miami[9] - The company's gearing ratio increased to 3.5% in Dec 2021 from 2.3% in Dec 2020[128, 192]

Summary of Key Points Core Viewpoint - Swire Properties has been actively repurchasing its shares, indicating a strong commitment to enhancing shareholder value through buybacks [2][3]. Buyback Activity - On April 28, Swire Properties repurchased 600,000 shares at a price range of HKD 16.400 to HKD 16.880, totaling HKD 10.07 million [2]. - The stock closed at HKD 16.820 on the same day, reflecting a 1.94% increase, with a total trading volume of HKD 41.79 million [2]. - Since April 1, the company has conducted buybacks for 17 consecutive days, acquiring a total of 10.2 million shares for a cumulative amount of HKD 164 million, during which the stock price increased by 3.19% [2]. Year-to-Date Buyback Summary - Year-to-date, Swire Properties has executed 75 buybacks, acquiring a total of 40.92 million shares for a total expenditure of HKD 643 million [3].

Financial Performance - The company's revenue for 2024 was HKD 14,428 million, a decrease of 2% compared to HKD 14,670 million in 2023[52]. - Basic earnings attributable to shareholders dropped by 42% to HKD 6,768 million from HKD 11,570 million in the previous year[52]. - The net cash outflow before financing improved by 70%, reducing to HKD 2,515 million from HKD 8,416 million[52]. - The basic earnings per share decreased by 41% to HKD 1.16 from HKD 1.98 in 2023[52]. - The company reported a total operating profit of HKD 1,702 million in 2024, significantly down from HKD 5,180 million in 2023, indicating a decline of around 67.16%[103]. - The fair value loss on investment properties was HKD 5,996 million in 2024, compared to HKD 2,829 million in 2023, marking an increase of approximately 111.43%[103]. - The reported loss attributable to shareholders for 2024 was HKD 7.66 billion, compared to a profit of HKD 26.37 billion in 2023, primarily due to a fair value loss of investment properties amounting to HKD 62.99 billion in 2024[67]. - The recurring basic profit for 2024 was HKD 64.79 billion, down from HKD 72.85 billion in 2023, mainly due to a decline in rental income from Hong Kong office properties[108]. Sustainability Initiatives - The company aims to achieve its 2030 sustainability vision six years ahead of schedule, ranking first globally in the real estate management and development industry by 2024[27]. - The company has established a partnership with LVMH to enhance environmental, social, and governance performance in retail, office, and dining locations in mainland China and Hong Kong[23]. - The company received the highest sustainability rating of "AAA" and maintained its position as the top index leader for seven consecutive years[36]. - The company achieved a 3.8% reduction in electricity intensity among participating tenants, saving approximately 750,000 kWh[44]. - The company’s sustainable procurement expenditure amounted to HKD 447 million[44]. - The company’s community initiatives created over HKD 60 million in social value since 2019[38]. - The company continues to pursue sustainability initiatives, achieving over 60% of its energy consumption from renewable sources in its mainland China properties[90]. - The "Green Retail Partnership" framework was established to promote sustainable store design and improve environmental performance in collaboration with tenants like LVMH[90]. Investment and Development - The company announced a share buyback plan of up to HKD 1.5 billion, set to conclude by May 2025[22]. - The company acquired a 50% stake in Guangzhou Poly Dragon Bay Taikoo Li, enhancing its retail portfolio[22]. - The company successfully secured the property at Tianhe Road 387, which will be renovated as part of the Guangzhou Taikoo Hui premium retail property portfolio[32]. - The company is expanding its operations into Japan with plans for hotel development[11]. - The company has six operational large-scale commercial development projects in Beijing, Guangzhou, Chengdu, and Shanghai, with several more under development[10]. - The company has invested over HKD 500 billion in mainland China, with more than 90% of this capital already allocated to various new projects[70]. - The company plans to invest HKD 100 billion over the next decade in various projects in Hong Kong and mainland China, with a target allocation of HKD 30 billion for Hong Kong, HKD 50 billion for mainland China, and HKD 20 billion for residential projects including Southeast Asia[119]. - The company plans to double its total floor area in mainland China with more retail-led developments in first-tier and emerging first-tier cities[119]. Market Performance - The short-term outlook for the Hong Kong office market is expected to remain soft, while retail sales in mainland China are anticipated to gradually recover[74]. - The Hong Kong office market is expected to remain sluggish through 2025, with continued pressure on rents due to weak demand and oversupply[83]. - The retail malls maintained a 100% occupancy rate, with strong performance in mainland China, highlighting their status as preferred leisure destinations[72]. - The overall retail sales in Hong Kong dropped by 7% in 2024, with specific declines of 11% at Pacific Place, 2% at Cityplaza, and 4% at Citygate Outlets[153]. - The luxury retail market in first-tier cities in mainland China remains strong, with ongoing expansion plans for luxury brands in key locations[86]. - Retail sales in mainland China are expected to accelerate in 2025, driven by domestic demand growth and ongoing renovations of several malls[85]. Employee and Community Engagement - The average training hours per employee increased by 105% to 25 hours, totaling approximately 173,900 hours of training[39]. - The lost time injury rate (LTIR) for non-hotel operations was reported at 0.56, significantly below the target of ≤1.2[40]. - The female employee ratio reached 42.5%, exceeding the target of at least 40%[41]. - The company achieved a 35.7% representation of women on the board, exceeding the 30% target for 2024[49]. - The group is committed to enhancing community-building capabilities, including tenant engagement programs and strong ESG initiatives[136]. Financial Outlook - The company maintained a capital net debt ratio of 15.7%, an increase of 3.0 percentage points from 12.7%[52]. - The company reported a total equity attributable to shareholders of HKD 275,326 million in 2024, a decrease from HKD 285,082 million in 2023[55]. - The average return on equity for the company was 2.4% in 2024, down from 4.0% in 2023[55]. - The company maintained a healthy financial liquidity, which supports the implementation of the next phase of its investment plan[65]. - Approximately 70% of the company's bond and loan financing came from green finance, with a total issuance of green bonds valued at about HKD 6,900 million[49].

Financial Data and Key Metrics Changes - The company reported a recurring underlying profit of HKD 6.5 billion, a decrease of 11% year on year, primarily due to higher net finance charges and reduced office rental income in Hong Kong [4][23] - Attributable gross rental income decreased slightly by 2% year on year [4][24] - The full year dividend per share was declared at HKD 1.10, an increase of 5% [5][25] - The valuation of investment properties at the end of 2024 was RMB 271.5 billion, a 3% decrease compared to the end of 2023 [27][28] Business Line Data and Key Metrics Changes - In Hong Kong, gross rental income for the office sector decreased by 4% year on year, while retail gross rental income decreased by 3% [24][12] - The Chinese Mainland retail portfolio achieved a 2% increase in gross rental income in Hong Kong dollar terms and a 4% increase in renminbi terms [24][13] - The office portfolio in the Chinese Mainland had a steady performance with a 1% increase in gross rental income in renminbi terms [17][25] Market Data and Key Metrics Changes - The Hong Kong office market remains soft due to oversupply, with overall occupancy at 93% [10][11] - Retail sales growth in the Chinese Mainland stabilized in Q4 2024, with an overall decline of 7% in retail sales, except for Taiguli Tian Tan in Shanghai, which reported positive sales growth [14][15] - In Miami, retail sales increased by 3% year on year, with occupancy at 100% [18] Company Strategy and Development Direction - The company aims to achieve long-term growth targets through an active capital recycling strategy and a diverse development pipeline [6][7] - The company plans to invest HKD 100 billion across three core markets, with 67% already committed [7][9] - The strategy includes maintaining a balanced portfolio mix between retail and office sectors to support sustainable annual dividend growth [7][36] Management Comments on Operating Environment and Future Outlook - Management described the outlook as positive despite market headwinds, emphasizing the resilience of the business [36][39] - The company anticipates a gradual recovery in the premium office sector and expects improved consumer sentiment in the Chinese Mainland retail market [38][39] - Management remains cautious about the Hong Kong office market due to high vacancy rates and new supply pressures [58][59] Other Important Information - The company achieved the number one ranking in the global Dow Jones Best in Class World Index, reflecting its commitment to sustainability [5][31] - The green financing ratio increased to approximately 70%, exceeding the 2025 target of 50% [30] Q&A Session Summary Question: About the buyback program and Mainland China retail outlook - Management confirmed the buyback program will be assessed closer to May, considering market conditions and liquidity [44] - Retail sales in the Chinese Mainland showed mild positive growth in Q1 2025, with expectations for positive rental reversions over time [46] Question: Confidence in luxury retailers' commitments and remuneration structure - Management expressed confidence in luxury brands' commitment to new developments, emphasizing strong partnerships [51] - There are no current plans to change the remuneration structure, maintaining a balance between financial and operational incentives [52] Question: Capital allocation and Hong Kong office market outlook - Management highlighted significant cash flow from residential projects expected in 2025 and 2026, supporting capital allocation [56] - The outlook for the Hong Kong office market remains under pressure, with expectations for stronger demand in 2026 and 2027 [59] Question: Payout ratio and capital recycling - The cumulative payout ratio since listing is 50%, with a commitment to maintain this ratio despite current high levels [65] - Management is actively pursuing capital recycling opportunities to support future investments [67] Question: Asset held for sale and CapEx rationale - The transfer of investment properties to assets held for sale relates to Miami and a project in Hong Kong, with active divestment opportunities being explored [75] - The long-term gearing target is around 20%, with confidence in maintaining credit ratings while managing capital commitments [76]

Investment Rating - The report maintains an "Outperform" rating for the company with a target price of HK$18.00, while the current price is HK$15.28 [5][23]. Core Insights - The company's performance for 2024 is expected to be weak, with core earnings projected to decline by 10% to HK$6.5 billion, primarily due to a sluggish office market, stagnant retail sector, and high interest costs [1][2]. - Earnings are anticipated to stabilize in 2025 and slightly recover in 2026, influenced by factors such as declining rental income from mainland malls and the absence of contributions from new projects [2][11]. - Despite challenges, the company is expected to fulfill its dividend growth commitment, with a projected increase of 2.9% for the full year 2024 [1][2]. Financial Forecasts - Total revenue is forecasted to decrease from HK$14.67 billion in 2023 to HK$13.89 billion in 2024, representing a year-on-year decline of 5.3% [3][11]. - The company’s core profit is expected to drop from HK$7.29 billion in 2023 to HK$6.54 billion in 2024, a decrease of 10.2% [3][11]. - The projected basic earnings per share (EPS) for 2024 is HK$1.12, down from HK$1.25 in 2023 [3][11]. - The dividend per share is expected to increase from HK$1.05 in 2023 to HK$1.08 in 2024, reflecting a dividend yield of 7.1% to 7.5% over the forecast period [3][11]. Market Conditions - The report highlights that the retail sales in Hong Kong continue to be affected by local tourism loss and changing consumer spending patterns, while the office rental market remains weak [1][2]. - The company’s properties in mainland China are also experiencing a decline in rental income due to consumer downgrading [2][19]. Share Buyback Program - The company has made progress on its HK$1.5 billion share buyback program, having repurchased 28.2 million shares, which is approximately 29% of the total program [21].

Group 1 - The core point of the article is that Swire Properties has been actively repurchasing its shares, indicating a strategy to support its stock price amidst a decline [1] - On February 20, the company repurchased 600,000 shares at a price range of HKD 14.880 to HKD 15.160, totaling HKD 8.9976 million [1] - The stock closed at HKD 14.940 on the same day, reflecting a decrease of 0.53% with a total trading volume of HKD 89.5639 million [1] Group 2 - Since October 3, 2024, the company has conducted share repurchases for 94 consecutive days, totaling 55.905 million shares and an aggregate amount of HKD 883 million [1] - During this period, the stock has experienced a cumulative decline of 13.54% [1] - In 2024, the company has executed 33 repurchase transactions, acquiring a total of 19.305 million shares for a total of HKD 296 million [1]