HANG LUNG GROUP(00010)2024-03-27 23:41Financial Performance - Total revenue for 2023 was HK$10.881 billion, with property leasing contributing HK$10.879 billion and property sales contributing HK$2 million[6] - Operating profit for 2023 was HK$7.794 billion, with a loss of HK$50 million from property sales[6] - Shareholders' equity increased to HK$94.36 billion as of December 31, 2023, compared to HK$92.819 billion in 2022[6] - Basic earnings per share based on shareholders' attributable profit was HK$2.15 in 2023[7] - Total dividend per share for 2023 was HK$0.86, consisting of an interim dividend of HK$0.21 and a final dividend of HK$0.65[7] - The dividend payout ratio based on shareholders' attributable profit was 42% in 2023, slightly down from 43% in 2022[8] - Net debt-to-equity ratio decreased to 28.6% in 2023 from 32.7% in 2022[8] - Total revenue decreased by 1% to HKD 10.881 billion due to RMB depreciation and reduced property sales[12] - Rental income increased by 2% to HKD 10.879 billion[12] - Basic profit attributable to shareholders decreased by 2% to HKD 2.931 billion, with basic earnings per share dropping to HKD 2.15[12] - Profit attributable to shareholders, including property revaluation, increased by 3% to HKD 2.811 billion, with earnings per share rising to HKD 2.06[12] - The board proposed a final dividend of HKD 0.65 per share, with total dividends for the year amounting to HKD 0.86 per share[12] - Overall operating profit rose by 1% to HKD 7.794 billion, with property leasing contributing HKD 7.844 billion, up 3% year-on-year[115] - Shareholders' basic profit attributable decreased by 2% to HKD 2.931 billion, with basic earnings per share dropping to HKD 2.15[115] - The company recorded a net revaluation loss of HKD 120 million on investment properties, compared to a loss of HKD 284 million in 2022[116] - The company proposed a final dividend of HKD 0.65 per share, maintaining the same level as 2022, with a total annual dividend of HKD 0.86 per share[114] - Total revenue for 2023 decreased by 1% to HKD 10.881 billion, primarily due to RMB depreciation and a decline in property sales revenue[113] - Property leasing income increased by 2% to HKD 10.879 billion, while property sales revenue dropped to HKD 2 million from HKD 316 million in 2022[113] - The company recorded a profit of HK$127 million from joint ventures, down from HK$153 million in 2022, primarily due to a one-time gain of HK$94 million from acquiring an additional 6.67% stake in Citygate in Hong Kong[138] - The company's investment properties and properties under development were valued at HK$201.068 billion, with mainland properties accounting for HK$137.093 billion and Hong Kong properties for HK$63.975 billion[139] - The company reported a revaluation loss of HK$62 million for its property portfolio, compared to a loss of HK$352 million in 2022[139] - Mainland property portfolio recorded a revaluation gain of HK$260 million, while Hong Kong property portfolio recorded a revaluation loss of HK$322 million[140] - The company's total capital commitments for investment property development projects amounted to HK$15 billion[141] - The company's cash and bank deposits totaled HK$6.343 billion, with 60% in HKD, 37% in CNY, and 3% in USD[144] - The company's total borrowings were HK$50.693 billion, with 71% in HKD and 29% in CNY, serving as a natural hedge for its mainland investments[145] - Fixed-rate debt accounted for 37% of total debt, with 50% of offshore debt being fixed-rate after excluding onshore floating-rate debt[145] - Total borrowing increased to HKD 50,693 million in 2023, up from HKD 45,953 million in 2022, with fixed-rate loans accounting for 37% and floating-rate loans for 63%[147] - Net debt-to-equity ratio rose to 28.6% in 2023 from 25.9% in 2022, primarily due to capital expenditures in mainland China and Hong Kong[148] - The average repayment period of the debt portfolio was 3.0 years in 2023, with 63% of loans due after 2 years[150] - Total financial expenses increased by 29% to HKD 1,987 million in 2023, driven by higher average borrowing rates and increased capital expenditure[151] - The company's interest coverage ratio decreased to 3.8x in 2023 from 4.8x in 2022[151] - The company reported a translation loss of HKD 1,693 million due to a 1.4% depreciation of the RMB against HKD in 2023[153] - The company's net cash balance, excluding Hang Lung Properties, was HKD 1,002 million in 2023, up from HKD 127 million in 2022[148] - The company's unused committed credit facilities amounted to HKD 18,567 million in 2023, down from HKD 24,789 million in 2022[148] Property Portfolio and Leasing - Mainland China property leasing revenue increased to HK$7.399 billion in 2023 from HK$7.218 billion in 2022[6] - Hong Kong property leasing revenue rose to HK$3.48 billion in 2023 from HK$3.407 billion in 2022[6] - The company's property portfolio covers 9 mainland cities, including Shanghai, Shenyang, Jinan, Wuxi, Tianjin, Dalian, Kunming, Wuhan, and Hangzhou[5] - Mainland China accounted for 68% of the company's rental income, with this proportion continuing to rise[12] - The company's property portfolio in China's high-end commercial real estate leasing business has been steadily growing, with annual rental income expected to achieve high single-digit growth[20] - The company aims for an annual growth rate of approximately 10% in the luxury retail sector within the Chinese market, which is expected to outperform GDP growth by several percentage points[21] - The company has successfully operated in Hong Kong for 63 years and in mainland China for over 33 years, with no plans to relocate[20] - The company's brand is considered one of the top in China's commercial real estate sector[20] - The company's strategy has been jointly developed by the current and incoming chairman, with adjustments expected as external conditions evolve[20] - The company anticipates further expansion of its property portfolio[21] - The company's performance is expected to lead the industry if external conditions, particularly China's stability and economic growth, remain favorable[21] - The company's growth strategy is supported by China's large and dynamic market, which is expected to grow at a rate of 4% to 5% annually over the next 10 to 20 years[21] - The company's success is attributed to its strategic timing in acquiring properties in Hong Kong and entering the mainland market[20] - The company's leadership believes that China's social stability and economic growth will continue, despite external challenges[21] - Full-year growth in 2023 recorded low single-digit growth in Hong Kong dollars, supported by strong performance of high-end shopping malls outside Shanghai[28] - Over HKD 5 billion was invested in construction projects in 2023, including the completion of the first building in Wuhan's "Henglong Mansion," though sales have been slow[28] - Hangzhou's Hang Lung Plaza shopping mall is nearing completion, with six buildings under rapid construction, aiming for a 2025 opening[28] - Kunming's Hyatt Hotel is expected to open in June 2024, with serviced apartments following shortly after[28] - Jinan's Hang Lung Plaza optimization plan is ahead of schedule, expected to complete by the end of 2024[29] - The company's total gross floor area in Shanghai's Hang Lung Plaza is 213,255 square meters, with 25% retail and 75% office space[36] - Shanghai's Grand Gateway Hang Lung Plaza has a total gross floor area of 273,427 square meters, with 45% retail, 25% office, and 30% residential and serviced apartments[37] - Shenyang Huangcheng Plaza has a total gross floor area of 109,307 square meters, with 100% retail space and 844 parking spaces[38] - Shenyang City Plaza has a total gross floor area of 293,905 square meters, with 35% retail, 45% office, 20% hotel, and 2,001 parking spaces[39] - Jinan Plaza has a total gross floor area of 171,074 square meters, with 100% retail space and 785 parking spaces, and is the first commercial property in Shandong Province to achieve net-zero carbon emissions[40] - Wuxi Plaza has a total gross floor area of 259,770 square meters, with 47% retail, 53% office, and 1,292 parking spaces[40] - Tianjin Plaza has a total gross floor area of 152,831 square meters, with 100% retail space and 800 parking spaces[41] - Dalian Plaza has a total gross floor area of 221,900 square meters, with 100% retail space and 1,214 parking spaces[42] - Kunming Plaza has a total gross floor area of 333,112 square meters, with 50% retail, 50% office, and 1,629 parking spaces, and is the first project to achieve net-zero carbon emissions in both owner and tenant operations[43] - Wuhan Plaza has a total gross floor area of 328,612 square meters, with 54% retail, 46% office, and 2,265 parking spaces[43] - Fashion Walk in Hong Kong has a total gross floor area of 70,487 square meters, with 57% retail, 31% office, 12% residential and serviced apartments, and 126 parking spaces[44] - Central property portfolio consists of 4 office buildings with a total gross floor area of 50,041 sqm, with 21% allocated to retail and 79% to office space[45] - The Peak Galleria, a tourist landmark in Hong Kong, has a total gross floor area of 12,446 sqm, entirely dedicated to retail, and features 493 parking spaces[46] - Hong Kong East property portfolio includes Kornhill Plaza, Kornhill Gardens, and the newly completed 228 Electric Road, with a total gross floor area of 108,687 sqm, comprising 50% retail, 18% office, and 32% residential and serviced apartments[47] - Mongkok property portfolio, including Granville Road and Argyle Centre, has a total gross floor area of 89,815 sqm, with 32% allocated to retail and 68% to office space[48] - Amoy Plaza, located near Kowloon Bay MTR Station, has a total gross floor area of 49,006 sqm, entirely dedicated to retail[49] - In 2023, the company's leasing income increased by 7% year-on-year in RMB terms, driven by the recovery of the mainland market[50] - Shanghai Plaza 66, a premier property in the company's mainland portfolio, maintained a 100% occupancy rate for its retail spaces and a 96% occupancy rate for its office spaces[54] - The company's marketing efforts in Q1 2023, including innovative activation plans and popular events, successfully boosted tenant sales and leasing income[50] - Shanghai Plaza 66 introduced new luxury brand stores and expanded flagship stores for brands like Dior, Valentino, and Moncler, enhancing its position as a high-end brand hub[52] - The company plans to continue adjusting its tenant mix in 2024, offering a more diversified selection of high-end designer brands and leveraging its efficient membership program activities[52] - Shanghai Grand Gateway 66's foot traffic steadily recovered, with strong performance in dining, sportswear, and jewelry brands, despite a slight dip in occupancy rate due to tenant changes[55] - Shanghai Grand Gateway 66 attracted 17 new brands in 2023, including Dinh Van's first Asia-Pacific store and expanded Gucci flagship, enhancing its luxury beauty tenant mix[55] - Shenyang Imperial Palace 66 saw increased tenant sales and occupancy rate in 2023, driven by new store openings and strong performance in the second half of the year[58] - Shenyang Imperial Palace 66 added brands like On, The North Face, and Emporio Armani, enriching its sportswear and fashion offerings[58] - Shenyang Forum 66 recorded growth in tenant sales and rental income in 2023, despite challenges from overseas travel recovery impacting domestic luxury consumption[60] - Shenyang Forum 66 introduced the FAS Art Exhibition, featuring works from 9 artists, boosting foot traffic and tenant sales[60] - Shenyang Forum 66's office tower, the tallest in Northeast China, secured new tenants like Siemens Energy and Guojin Securities despite market challenges[61] - Shenyang Conrad Hotel performed well in 2023, ranking among China's top 20 hotels by Condé Nast Traveler and leading in RevPAR in Shenyang[62] - Shanghai Grand Gateway 66's office tower maintained stable rental income, focusing on retaining existing tenants and attracting new ones amid increasing competition[56] - Shenyang Imperial Palace 66 plans to expand its tenant mix in 2024, focusing on sportswear, women's fashion, and jewelry brands, with new stores from Salomon and Bananain[58] - Plaza 66, Shanghai: Jinan Plaza 66 saw a significant increase in foot traffic post-pandemic, with the completion of the first phase of its asset optimization plan, including renovations of indoor and outdoor areas, and the introduction of new dining and luxury brands such as Guerlain, Giorgio Armani, Sisley, Breitling, and Chow Sang Sang flagship store[63] - Jinan Plaza 66: The mall hosted the inaugural "Wheat Wave Music Festival," which significantly boosted foot traffic and tenant sales through live music, markets, and interactive activities[63] - Jinan Plaza 66: The second phase of the asset optimization plan, covering floors 3 to 7, is expected to be completed by late 2024 to early 2025, aiming to further enhance the shopping experience and customer flow[63] - Grand Gateway 66, Shanghai: Wuxi Plaza 66 celebrated its 10th anniversary in 2023, with steady growth in tenant sales and rental income, and introduced 28 new brands including Dior, Byredo, and Salomon[65] - Wuxi Plaza 66: The mall successfully held the "Take Center Stage" annual marketing event for the third consecutive year, increasing foot traffic and setting new sales records for multiple tenants[65] - Wuxi Plaza 66: The office towers maintained stable occupancy rates, with new tenants including China Taiping and Siemens, and the "Hengju" co-working space gaining popularity[66] - Tianjin Plaza 66: The mall saw significant improvement in performance due to the recovery of domestic tourism and increased daily foot traffic, with 16 new tenants including Manner Coffee and OTF[68] - Tianjin Plaza 66: The mall hosted a series of themed events, including a mini concert and special decorations for Starbucks, successfully attracting a large number of visitors[69] - Dalian Plaza 66: The mall became a luxury hub in Dalian, with significant sales growth in high-end, sub-high-end, and dining markets, and introduced new brands such as CHANEL BEAUTÉ, Dior Beauty, and Vacheron Constantin[70] - Dalian Plaza 66: The mall celebrated its 7th anniversary with over 150 tenants, achieving record tenant sales and the second-highest daily foot traffic since opening[70] - Kunming Plaza recorded an increase in tenant sales, leasing portfolio, and foot traffic, with a high occupancy rate despite slow economic growth in the city[72] - Kunming Plaza added 8 beauty and cosmetics brands in 2023 and upgraded multiple dining and sub-luxury tenant stores, enhancing the shopping experience[72] - Kunming Plaza's office building, located in the city's core business district, has over 50% of its tenants from the finance, insurance, and professional services sectors[73] - Wuhan Plaza's tenant sales and foot traffic increased in 2023, despite market competition and price-sensitive consumers, with new luxury and lifestyle brands opening their first stores in Wuhan[75] - Wuhan Plaza's office building saw a slight increase in occupancy rate due to new tenants from professional services, technology, media, and telecommunications sectors, but tenant stability remains weak[76] - Kunming Hyatt Hotel, set to open in mid-2024, will offer 331 rooms and suites, integrating Yunnan's unique charm into its design, and will be part of Kunming Plaza's multi-purpose complex[78] - Wuxi Hilton Curio Collection Hotel, expected to open in the first half of 2025, will feature 105 high-end rooms and blend modern and historical architecture within the Wuxi Plaza complex[78] - Hangzhou Plaza will develop into a high-end mixed-use project, including 5 Grade A office towers, a luxury shopping mall, and the Hangzhou Mandarin Oriental Hotel, set to open in phases starting 2024[79] - Hangzhou Mandarin Oriental Hotel, planned to open by the end of 2025, will offer approximately 190 rooms and suites, along with event spaces, a spa, and two restaurants[79] - Hangzhou Plaza's development project incorporates sustainable practices, including carbon emission data collection, construction waste recycling, and net-zero carbon design for historical buildings[79] - Shanghai Plaza expansion to add 3,080 square meters of retail space, expected completion in 2026[80] - Shenyang City Plaza expansion to add 502,660 square meters of retail, office, and residential space, expected completion starting 2028[80] - Hong Kong property portfolio rental income increased by 2% year-over-year due to improved tenant mix and customer loyalty programs[83] - Hong Kong retail market recovery in 2023 driven by increased tourist and business visitor numbers[81] - Fashion Walk in Causeway Bay saw improved foot traffic and tenant sales through marketing initiatives and new tenant additions[85] - Central portfolio in Hong Kong saw increased occupancy rates due to flexible leasing terms and tenant mix adjustments[87] - Peak Galleria in Hong Kong experienced a surge in foot traffic and rental income, with a focus on enhancing dining options and outdoor spaces