Core Insights - The rise of short dramas has led various industries, including real estate, to explore cross-industry collaborations, with companies like Greenland and Vanke actively participating in this trend [2][3][22] - The short drama market is projected to grow significantly, with estimates suggesting a market size of 504.4 billion yuan in 2024 and 634.3 billion yuan in 2025, indicating a growth rate of 25.6% [4][21] - Despite the potential benefits, the effectiveness of short dramas in revitalizing struggling real estate companies remains uncertain, as many properties may not see substantial financial returns from this venture [5][26] Real Estate and Short Drama Collaboration - Greenland has opened a short drama base in Zhengzhou, covering nearly 604 acres, with plans to host over 1,000 short dramas annually [2] - Vanke is promoting its real estate projects on social media, highlighting their suitability for themes like "wealthy family emotions" and "substitute literature" [2] - The trend of repurposing vacant properties for short drama filming is not limited to Greenland and Vanke; other companies have also transformed unused spaces into filming locations [3][6] Market Dynamics and Growth - The short drama industry is experiencing rapid growth, with a significant increase in the number of projects being registered; for instance, 318 new short dramas were planned in just one month [6] - The demand for filming locations has surged, leading to a scarcity of modern scenes in traditional film bases, prompting production teams to seek alternative spaces [7][11] - The average cost of renting filming locations is relatively low, making it feasible for real estate companies to convert vacant properties into short drama bases [8][9] Challenges and Limitations - While short dramas can activate some idle properties, they cannot address the vast amount of vacant real estate across the country, which remains a significant challenge for the industry [11][26] - Many short drama bases are struggling financially, with a high percentage of them operating at a loss, indicating that the profitability of this venture is not guaranteed [25][26] - The current trend of real estate companies entering the short drama space is driven by the need to alleviate cash flow pressures and explore new revenue streams, reflecting a shift in strategy amid market challenges [19][23]

Financial Data and Key Metrics Changes - The revenue for the first half of 2024 was HKD 2.4 billion, representing a 5% year-on-year growth [13] - Retail revenue increased by 10.8% due to the reopening of rejuvenated areas and positive rental reversion [14] - Office revenue decreased by 2.8% due to rental pressure, but occupancy remained stable at 89% [13][14] - Residential revenue and occupancy showed recovery, with Lee Gardens Shanghai starting to contribute [14] - Shareholders' funds remained stable, with NAV per share at HKD 65 [22] Business Line Data and Key Metrics Changes - Retail occupancy was at 95%, office at 89%, and residential at 68% [13] - The loyalty program saw a 38% increase in member spending compared to 2018, contributing 13% to total retail sales [16] - Over 50 new brands opened in the last year, with further key openings planned [15] Market Data and Key Metrics Changes - The company attracted over 100,000 daily visitors to the Lee Gardens area [5] - The retail sales performance aligned with Hong Kong's overall retail sales trends, facing pressure from changing consumption patterns [15] Company Strategy and Development Direction - The company is focused on the rejuvenation of Lee Gardens, which includes expanding luxury brand flagship stores and enhancing the shopping experience [4][6] - Strategic pillars have been established to complement core operations, including a joint venture with IWG for flexible office solutions [8][9] - The completion of Lee Gardens 8 and an integrated pedestrian walkway system is expected by 2026, reinforcing the company's position in the market [7][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the flexible workspace sector and the ongoing transformation of Lee Gardens [9][10] - The company is in a harvesting phase, with rejuvenation projects starting to contribute positively to revenue [24] - Management emphasized the importance of innovation and adapting to changing consumer preferences in the retail landscape [5][10] Other Important Information - The company has a strong liquidity position with around HKD 3 billion in cash and additional committed facilities [22] - A syndication loan with 20 banks was signed in July to strengthen the capital base [22] Q&A Session Summary Question: Dividend policy and stability - Management reiterated their commitment to a steady and progressive dividend policy while balancing operational performance and capital commitments [30][32] Question: Bank covenants and credit rating metrics - The gearing ratio is around one-third, with a comfortable buffer for refinancing debts [33][34] Question: Ideal tenant mix for Lee Garden 8 - The focus will be on a balanced portfolio including financial institutions, wealth management, and medical sectors [35] Question: Latest occupancy cost and rental reversion - The occupancy cost ratio is in the high teens percentage, with positive rental reversion expected for the rest of the year [46][47] Question: Construction costs and timing for Lee Garden 8 - Construction contracts are within budget, and completion is targeted for mid-2026 [59][60]