Investment Rating - The report assigns a "Buy" rating for the company with a target price of HKD 1.75, indicating a potential upside of 55% from the current price of HKD 1.12 [1][2]. Core Insights - The company experienced an 8.1% year-on-year decline in net profit for the first half of 2024, despite an 8.8% increase in revenue to HKD 314 million. The gross profit decreased by 1.6% to HKD 162 million, with a gross margin of 51.6%, down 5.5 percentage points due to a higher proportion of lower-margin rental projects [1][3]. - The company maintained a high dividend payout ratio of 50%, declaring an interim dividend of HKD 0.048 per share [1][2]. - The company has a strong cash position with cash on hand of HKD 1.466 billion, a 3.9% increase from the end of 2023, and generated cash income of HKD 17.55 million during the period [1][3]. Financial Performance Summary - For the first half of 2024, the company reported: - Revenue: HKD 314 million, up 8.8% year-on-year - Gross Profit: HKD 162 million, down 1.6% year-on-year - Net Profit: HKD 89 million, down 8.1% year-on-year - Gross Margin: 51.6%, down 5.5 percentage points [1][3]. - The company’s same-store sales increased by 8% and customer traffic rose by 16% during the same period, with an overall occupancy rate of 92.5% [1][3]. Project and Operational Insights - The company has opened two new rental projects in Guangzhou and Shanghai, bringing the total number of operational retail projects to 29, covering an area of 1.77 million square meters [1][3]. - The company has a project reserve of approximately 2.77 million square meters across 17 projects, with 44.2% of the area managed by third parties, indicating a solid growth trajectory [1][3]. Future Projections - The company is expected to achieve net profits of approximately HKD 157 million, HKD 198 million, and HKD 236 million for the years 2024, 2025, and 2026, respectively [1][2].
星盛商业：上半年业绩承压，维持高派息