希慎兴业(00014) - 2025 - 中期业绩

Performance Summary The company achieved modest growth in turnover and recurring underlying profit for the six months ended June 30, 2025, while maintaining its interim dividend Financial and Operational Highlights For the six months ended June 30, 2025, the company reported modest year-on-year growth in turnover and recurring underlying profit, alongside improved office occupancy and a new capital recycling program Key Financial Indicators for H1 2025 | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Turnover (billion HKD) | 1.730 | 1.693 | +2.2% | | Recurring Underlying Profit (billion HKD) | 1.031 | 1.019 | +1.2% | | Reported Profit (billion HKD) | 0.075 | 0.427 | n/m | | Basic Earnings Per Share (HK cents) | 7 | 42 | n/m | | First Interim Dividend Per Share (HK cents) | 27 | 27 | ±0% | | Shareholders' Equity (Period-end, billion HKD) | 65.181 | 65.993 (2024 year-end) | -1.2% | | Net Asset Value Per Share (Period-end, HKD) | 63.5 | 64.3 (2024 year-end) | -1.2% | - Retail business turnover increased by 2.1% year-on-year, driven by portfolio optimization and new luxury brand flagship stores[2] - Office business turnover grew by 0.8% year-on-year, with occupancy rising from 90% to 92%, easing rental pressure[2] - The company plans to launch an HKD 8 billion capital recycling program over the next five years, funded by asset disposals and residential project sales[2] Chairman's Statement The Chairman's Statement highlights robust business performance in H1 2025, driven by the "Core and Pillars" strategy, Lee Garden area transformation, and diversified expansion, affirming confidence in Hong Kong's long-term prospects Core and Pillars Strategy The company's long-term growth is anchored by its "Core and Pillars" strategy, focusing on enhancing the Lee Garden area and diversifying value creation through heavy and light asset investments - The "Core" strategy aims to consolidate and expand the Lee Garden area, positioning it as a vibrant commercial and cultural hub[6] - The "Pillars" strategy combines heavy asset development with light asset investments, forming a diversified value-added model[6] Lee Garden Area Optimization and Development Lee Garden's optimization is yielding results with over ten luxury brand flagships completed, while the flagship Lee Garden Eight project and new pedestrian links are set to enhance the area by 2026 - Since 2024, over ten newly renovated and expanded luxury brand flagship stores, including Hermès, Dior, Cartier, and Chanel, have opened[7] - The flagship Lee Garden Eight project is expected to be completed in 2026, increasing the Lee Garden area's total leasable area by nearly 30%[8] - A new pedestrian link system, expected to be completed in 2026, will connect the Lee Garden area to Causeway Bay MTR Station, enhancing community connectivity[9] Strategic Pillars and Business Diversification The company's strategic pillars drive business and geographical diversification, with successful tenant attraction at Lee Garden Shanghai, growth in Greater Bay Area co-working spaces, and healthcare investments, alongside retail upgrades at Hysan Place - The Lee Garden Shanghai project has successfully attracted prominent financial institutions and multinational corporations[10] - The joint venture with IWG in the Greater Bay Area's co-working space business continues to record robust growth[10] - Hysan Place has undergone upgrades, renovations, and repositioning to introduce new retail and dining concepts, catering to local youth and international visitors[11] Market Outlook The company anticipates continued market uncertainty in 2025, maintaining cautious risk management while remaining confident in Hong Kong's long-term position and pursuing diversified growth strategies - The company remains confident in Hong Kong's long-term position as a major global financial center and a key hub in the Greater Bay Area[13] - The company will continue to maintain prudent financial and risk management, steadfastly advancing its "Core and Pillars" strategy to create sustainable long-term value for stakeholders[13] Business Review and Outlook In H1 2025, the Group achieved overall turnover and recurring underlying profit growth of 2.2% and 1.2% respectively, driven by solid performance across retail, office, and residential segments, alongside strategic project advancements and a new capital recycling program Overall Performance Review In H1 2025, Group turnover increased by 2.2% to HKD 1.73 billion, and recurring underlying profit grew by 1.2% to HKD 1.031 billion, supported by core business strength and a maintained interim dividend Turnover by Business Segment (million HKD) | Business Segment | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Turnover | 1,730 | 1,693 | +2.2% | | Retail | 862 | 844 | +2.1% | | Office | 750 | 744 | +0.8% | | Residential | 118 | 105 | +12.4% | - The Board declared a first interim dividend of 27 HK cents per share, consistent with the same period in 2024[17] Retail Business Retail business turnover increased by 2.1% to HKD 862 million, driven by strong Hong Kong performance and mainland growth, with Hong Kong occupancy rising to 94% and Shanghai Lee Garden to 64%, supported by strategic marketing Retail Business Turnover (million HKD) | Region | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total | 862 | 844 | +2.1% | | Hong Kong | 851 | 844 | +0.8% | | Mainland China | 11 | - | n/m | - Hong Kong retail occupancy was 94% as of June 30, 2025, up from 92% at the end of 2024[20] - Mainland retail (Lee Garden Shanghai) occupancy significantly increased from 41% at the end of 2024 to 64% as of June 30, 2025[22] - Various marketing activities, including exclusive pop-up events with international stars like Korean artist Jisoo, effectively boosted mall traffic and sales during the period[23] Office Business Office business turnover slightly increased by 0.8% to HKD 750 million, with Hong Kong occupancy stable at 92% despite a 2.4% revenue decline, while mainland operations saw significant growth due to rising occupancy Office Business Turnover (million HKD) | Region | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total | 750 | 744 | +0.8% | | Hong Kong | 703 | 720 | -2.4% | | Mainland China | 47 | 24 | n/m | - Hong Kong office portfolio occupancy remained stable at 92% as of June 30, 2025, up from 90% at the end of 2024[27] - Mainland office portfolio occupancy increased to 68% (end of 2024: 66%), driving significant turnover growth[28] Residential Business Residential leasing turnover significantly increased by 12.4% to HKD 118 million, driven by a recovering high-end market, despite a slight dip in occupancy to 70%, with average rental rates trending upwards Residential Business Key Metrics | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Turnover (million HKD) | 118 | 105 | +12.4% | | Occupancy Rate (Period-end, %) | 70 | 73 (2024 year-end) | -3 p.p. | Expansion of Core Business and Strategic Pillars The company is actively advancing expansion projects, including the Lee Garden Eight commercial development and residential projects, while diversifying through joint ventures in Shanghai, Greater Bay Area co-working spaces, and mainland healthcare - Commercial property development: The flagship Lee Garden Eight project is expected to be completed in 2026 and has received multiple accolades, including "Best Mixed-use Development (Hong Kong)"[30] - Residential development: The "Forest Hills" project in Tai Po has signed contracts for 140 units; the To Kwa Wan URA residential project is expected to obtain its occupation permit in Q2 2027[32][33] - Greater Bay Area co-working spaces: The joint venture with IWG signed five new locations in H1, now operating 40 centers in the Greater Bay Area[36] - Healthcare: Investment in New Frontier Health Corporation provides exposure to the fast-growing mainland healthcare sector, with the group opening a new hospital in Ningbo during H1[38] Capital Recycling Program The company has launched an HKD 8 billion, five-year capital recycling program to optimize its capital structure, unlock asset value through non-core disposals, and redeploy capital into strategic focus areas for sustainable value enhancement - Launched a five-year capital recycling program totaling HKD 8 billion[40] - Program objectives include deleveraging to optimize capital structure, unlocking value from mature residential assets, and redeploying capital into strategic focus areas[40] Financial Review In H1 2025, the Group saw increased operating and finance expenses, a slight rise in investment property valuation despite a fair value loss of HKD 964 million, and a modest increase in total debt to HKD 28.8 billion with a 32.9% gearing ratio, while maintaining a strong financial position and investment-grade credit ratings Operating and Finance Expenses Operating expenses increased by 5.7% to HKD 447 million, representing 25.8% of turnover, while finance expenses rose to HKD 289 million due to increased borrowings, despite a lower effective interest rate of 3.8% Expense Overview (million HKD) | Item | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Operating Expenses | 447 | 423 | +5.7% | | Finance Expenses | 289 | 213 | +35.7% | Asset Valuation and Investments As of June 30, 2025, the investment property portfolio was valued at HKD 96.893 billion, a 0.4% increase from year-end 2024, despite a fair value loss of HKD 964 million, while associate and joint venture contributions were HKD 115 million and a HKD 7 million loss, respectively - The investment property portfolio was valued at HKD 96.893 billion as of June 30, 2025, a 0.4% increase from the end of 2024[43] - A fair value loss on investment properties of HKD 964 million was recorded during the period (H1 2024: loss of HKD 197 million), primarily reflecting increased market risks in the office business[43] Treasury Policy The Group maintains a robust capital structure with diversified financing, ending the period with total debt of HKD 28.8 billion, a 32.9% gearing ratio, and a 7.5x net interest cover, while retaining investment-grade credit ratings and managing interest rate risk with 56% fixed-rate debt - As of June 30, 2025, the Group's total debt increased to HKD 28.796 billion, with bank loans and capital market debt each accounting for approximately 50%[50] - The gearing ratio (net debt to equity) was 32.9% at period-end, a slight increase from 31.4% at the end of 2024[56] - Net interest cover was 7.5 times, lower than 10.8 times in the same period of 2024[56] - Moody's and Fitch credit ratings for the Group are Baa2 and BBB, respectively[58] - The fixed-rate debt ratio (after interest rate swaps) was 56% at period-end[61] Condensed Consolidated Financial Statements This section presents the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025, including the statement of profit or loss, statement of comprehensive income, and statement of financial position, reflecting period-end operating results, financial position, and cash flow changes Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the Group reported turnover of HKD 1.73 billion (+2.2%), but pre-tax profit significantly declined to HKD 252 million due to a HKD 964 million fair value loss on investment properties, resulting in HKD 75 million profit attributable to owners and 7 HK cents basic EPS Condensed Consolidated Statement of Profit or Loss Summary (million HKD) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Turnover | 1,730 | 1,693 | | Gross Profit | 1,426 | 1,407 | | Fair Value Change of Investment Properties | (964) | (197) | | Profit Before Tax | 252 | 875 | | Profit for the Period | 97 | 717 | | Profit Attributable to Owners of the Company | 75 | 427 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets were HKD 115.454 billion, with net assets of HKD 76.816 billion, primarily comprising HKD 96.893 billion in investment properties, while total borrowings stood at HKD 28.641 billion, and shareholders' equity decreased by 1.2% to HKD 65.181 billion Condensed Consolidated Statement of Financial Position Summary (million HKD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Investment Properties | 96,893 | 96,547 | | Total Assets | 115,454 | 114,089 | | Liabilities and Equity | | | | Borrowings (Current + Non-current) | 28,641 | 26,514 | | Net Assets | 76,816 | 77,429 | | Equity Attributable to Owners of the Company | 65,181 | 65,993 | Notes to the Financial Statements This section provides essential notes to the condensed consolidated financial statements, including independent review, basis of preparation, significant accounting policies, turnover breakdown, segment information, taxation, dividends, and receivables/payables, offering crucial context and supplementary data Segment Information The Group operates in four segments: Retail, Office, Residential, and Property Development, with the Retail segment contributing the highest revenue of HKD 862 million and segment profit of HKD 723 million in H1 2025 H1 2025 Segment Performance (million HKD) | Segment | Segment Revenue | Segment Gross Profit | Segment Profit | | :--- | :--- | :--- | :--- | | Retail | 862 | 723 | 723 | | Office | 750 | 620 | 620 | | Residential | 118 | 83 | 83 | | Property Development | - | - | 13 | | Consolidated | 1,730 | 1,426 | 1,439 | Dividends The Board declared a first interim dividend of 27 HK cents per share for the six months ended June 30, 2025, totaling approximately HKD 277 million, consistent with 2024, and not recognized as a liability in the current financial statements - The 2025 first interim dividend of 27 HK cents per share was declared, consistent with the same period in 2024[95] Other Information This section covers corporate governance, securities transactions, human resources, and dividend arrangements, noting full compliance with governance codes, the repurchase and cancellation of USD 690 million in perpetual capital securities, and the interim dividend payment schedule Repurchase, Sale or Redemption of Listed Securities During the review period, the Group repurchased and cancelled USD 690 million in aggregate principal amount of subordinated guaranteed perpetual capital securities for approximately HKD 5.365 billion, representing about 81.2% of the initial issuance - During the review period, the Group repurchased and cancelled subordinated guaranteed perpetual capital securities with an aggregate principal amount of USD 690 million[102] Human Resources Policy The Group is committed to attracting, retaining, and developing talent, with 493 employees as of June 30, 2025, aligning HR policies with corporate goals for shareholder value creation and sustainable growth - As of June 30, 2025, the Group's total number of employees was 493[104] Closure of Register of Members To facilitate the first interim dividend payment, the company will close its register of members on August 29, 2025, with dividends payable on September 9, 2025, to shareholders registered on that date - The first interim dividend will be distributed on September 9, 2025[105] - The record date for dividend entitlement is August 29, 2025[105]