恒隆集团(00010) - 2020 - 中期财报

Financial Performance - For the six months ended June 30, 2020, revenue decreased by 1% to HKD 4.457 billion compared to the same period last year[5]. - After accounting for property revaluation losses, the net loss attributable to shareholders was HKD 1.595 billion, with a loss per share of HKD 1.17[5]. - Excluding property revaluation losses, the basic net profit attributable to shareholders decreased by 43% to HKD 1.336 billion, with a corresponding basic earnings per share of HKD 0.98[5]. - The company announced an interim dividend of HKD 0.19 per share, unchanged from the previous year[5]. - Total revenue for the property leasing segment was HKD 4,457 million, a slight decrease from HKD 4,505 million in the previous year[34]. - Operating profit for the property leasing segment was HKD 3,243 million, down from HKD 3,432 million year-on-year[34]. - Net profit attributable to shareholders was HKD 1,338 million, a decrease of 8% compared to HKD 1,456 million in the previous year[34]. - The net asset value per share decreased to HKD 64.3 from HKD 67.0 year-on-year[34]. - The company recorded a net loss attributable to shareholders for the first time, with a basic net profit decrease of 43% year-on-year, excluding revaluation impacts[15]. - The company reported a significant increase in bank loans and borrowings, totaling HKD 11,606 million for the first half of 2020, compared to HKD 10,221 million in the previous year[103]. Impact of COVID-19 - The COVID-19 pandemic, along with social unrest and deteriorating US-China relations, significantly impacted the company's business operations in Hong Kong[6]. - The number of visitors to Hong Kong decreased by nearly 40% during the six months of unrest compared to the same period in 2018, and by 90% due to the pandemic in the first half of 2020[8]. - Retail sales in Hong Kong dropped approximately 33% compared to 2019 due to the pandemic[8]. - The company noted that the impact of the pandemic on retail leasing business was more severe than the previous social unrest in Hong Kong[8]. - The retail leasing business has been significantly impacted, with expectations that it may take 10 years to return to 2018 rental levels[14]. - The company implemented rent reductions to alleviate tenant difficulties during the pandemic[39]. - The company established a RMB 10 million epidemic prevention fund to support efforts in mainland China and Hong Kong[39]. Market Trends and Recovery - The company anticipates a rapid recovery in business once the pandemic subsides, potentially leading to "revenge spending" that could restore some operations to previous levels[8]. - High-end shopping malls experienced a less than 25% decline in retail sales during the first three months, with an average increase of 50% in the second quarter, excluding Shenyang City Government Plaza which recorded a 7% growth[9]. - Retail sales at Wuxi Hang Lung Plaza grew by 13% over the past six months, indicating a strong recovery since April[9]. - The Shanghai shopping malls' retail sales surpassed the same period last year by April, indicating a recovery trend[9]. - Retail sales rebounded strongly post-COVID-19, exceeding last year's first half by 7%, with a 41% year-on-year increase in the second quarter[44]. Geopolitical and Economic Context - The pandemic has accelerated the trend of "de-globalization," impacting global supply chains and increasing geopolitical tensions[8]. - The local market in mainland China is expected to expand and improve efficiency due to deteriorating US-China relations, benefiting the company's retail leasing business[11]. - The impact of de-globalization on China is expected to be significant, necessitating internal adjustments for the economy[17]. - The U.S. economy, with a GDP of $21.4 trillion, is choosing to decouple from China, which has a GDP of $14.3 trillion, together accounting for over 40% of the global economy[18]. - The U.S. is forming an alliance to contain China, primarily involving Western countries, with China and Russia identified as adversaries[22]. Political and Social Issues in Hong Kong - The economic situation in Hong Kong is described as severely damaged, with all residents suffering and facing heavy economic costs[13]. - The implementation of the National Security Law has led to a loss of confidence in Hong Kong's governance, affecting the overall economic environment[13]. - The company acknowledges that the fundamental issue in Hong Kong over the past 23 years has been political rather than economic[30]. - There is a growing sentiment among the youth in Hong Kong that prioritizes political interests over economic development, which could hinder future growth[27]. - The company emphasizes the need for political de-escalation and acceptance of Hong Kong as part of China[30]. Company Strategy and Future Outlook - The company is well-positioned to benefit from China's transition to a consumption-driven economy, with many world-class shopping malls located in rapidly developing cities[26]. - The company anticipates that the Wuhan Hang Lung Plaza will be completed in the fourth quarter and open in the first half of 2021[10]. - The company plans to benefit from two upcoming projects in the next two to three years, including a residential project adjacent to the Tiu Keng Leng rental property and an office building in Electric Road, Hong Kong[32]. - The company aims to continue selling completed residential properties in Hong Kong and seek opportunities to divest non-core assets[73]. Corporate Governance and Shareholder Information - The board consists of 11 members, including four executive directors, three non-executive directors, and four independent non-executive directors[75]. - The company has complied with the corporate governance code as per the Hong Kong Stock Exchange during the six months ending June 30, 2020[78]. - The company has adopted a disciplinary code for securities trading by directors, in compliance with the standards set by the listing rules[79]. - Major shareholder Chen Tanqingfen holds 525,102,080 shares, representing 38.56% of the issued shares[88]. - The company has a competitive compensation package for employees, including discretionary bonuses based on individual performance[92].