智通财经网·2025-10-20 07:11Core Viewpoint - The report from Industrial Securities initiates coverage on Hang Lung Properties (00101) with a "Buy" rating, anticipating stable rental income growth as the Hang Lung Plaza in Hangzhou opens in phases, alongside a decline in capital expenditure and net debt ratio starting in 2026, with dividends expected to remain stable and return to pure cash dividends [1] Group 1: High-End Shopping Malls - The company focuses on high-end shopping malls, occupying core business districts, with 10 high-end malls in 9 major cities in mainland China as of H1 2025, establishing itself as a benchmark mall through years of operation and updates, particularly the Shanghai Hang Lung Plaza, which has become a leading luxury mall in Shanghai after over 20 years of operation [1] Group 2: Rental Income Recovery - The core projects, Shanghai Hang Lung Plaza and Shanghai Port International Hang Lung, contribute over 50% of the rental income from retail properties in mainland China, with rental income growth turning positive year-on-year in H1 2025; the overall rental income decline is expected to narrow in 2025 due to stable performance and the opening of the Hangzhou Hang Lung Plaza office space in the second half of 2025 [2] Group 3: Hangzhou Hang Lung Plaza Contribution - The Hangzhou Hang Lung Plaza, a key development project, is set to open part of its office space in the second half of 2025, with a pre-leasing rate of 22% as of H1 2025; the shopping center portion is expected to open in the first half of 2026, with a pre-leasing rate of 77%, which will enhance the company's recurring income and support stable dividend capabilities [3] Group 4: Dividend Stability - From 2013 to 2022, the company maintained a steady increase in cash dividends per share; however, in 2023, it introduced a scrip dividend for the first time, leading to a 33% decline in the dividend per share to HKD 0.52 in 2024; the company is expected to maintain dividend stability and potentially return to pure cash dividends after the retail portion of the Hangzhou Hang Lung Plaza opens [4] Group 5: Net Debt Ratio Outlook - As of H1 2025, the company's net debt ratio stands at 33.5%, stable compared to the end of 2024; it is anticipated that the net debt ratio will decline by the end of 2026 following the opening of the retail portion of the Hangzhou Hang Lung Plaza in the first half of 2026 [5]