Ge Long Hui·2025-10-12 12:26Company Overview - Recent management roadshow and site visits conducted by the company revealed a strengthening trend in retail performance for its mainland shopping malls, with a projected 10% year-on-year increase in retail sales for Q3 2025, following a gradual improvement throughout the year [1] - The company attributes this improvement to a low base from the previous year, effective marketing strategies, and an increase in foot traffic, which is expected to rise by 9% in July and August [1] Strategic Initiatives - The company has launched the "Henglong V.3" strategy to reinforce its market position in core cities, focusing on reinvestment in existing projects and exploring potential opportunities in surrounding areas [2] - Specific initiatives under this strategy include a 30% increase in leasable area at Shanghai Henglong Plaza, the transformation of Shanghai Port Exchange Henglong into a five-star hotel, and a 40% increase in retail space through long-term leasing cooperation in Hangzhou [2] Performance Insights - Key shopping malls in East China are performing well, with Shanghai Henglong Plaza expected to maintain its leading position in the luxury market, bolstered by the opening of high-end brands [2] - Shanghai Port Exchange Henglong is optimizing its brand mix, with a projected 31% year-on-year increase in retail sales for Q3 2025 [2] - Wuxi Henglong Plaza has seen continuous growth since introducing luxury brands in 2019, with over 180 new brand signings expected between 2024 and 2025, including more than 70 first stores in Jiangsu or Wuxi [2] Financial Projections - The company maintains an outperform rating and unchanged profit forecasts, with a target price of HKD 9.46 per share, reflecting a 15x core P/E for 2025 and a 5.5% dividend yield [2] - Current trading is at 14.6x core P/E for 2025, with a 5.8% dividend yield, suggesting continued attention to year-on-year retail performance and the progress of new openings [3]