Core Viewpoint - Hong Kong Hang Lung Properties reported a 23.07% year-on-year decline in total revenue for the first half of 2025, amounting to HKD 4.968 billion (approximately RMB 4.541 billion) [1] Revenue Breakdown - Rental income from properties decreased by 2.95% to HKD 4.678 billion (approximately RMB 4.276 billion) [1] - Shanghai Hang Lung Plaza and Hong Kong Plaza maintained stable or slightly increased rental income, while Wuxi, Kunming, and Dalian showed the best performance with revenue growth of 8%, 7%, and 10% respectively [1] - Wuhan and Shenyang Hang Lung Plazas experienced the worst performance, with declines of 36% and 37% respectively [1] Future Investments - Hang Lung Properties is pursuing new project investments despite operational challenges, including a potential 20-year lease for the south and north buildings of Hangzhou Department Store starting in April 2028, with an initial quarterly rent of HKD 37.5 million [1][3] - If approved, this lease will add approximately 42,000 square meters of retail space to Hangzhou Hang Lung Plaza, increasing its size by 40% [1] Market Context - The high-end retail sector is facing challenges, as evidenced by LVMH's 4% revenue decline to EUR 42 billion and a 22% drop in net profit to EUR 5.7 billion for the same period [4] - Kering Group's revenue fell by 15% to EUR 3.7 billion, while Hermès only saw a 1.5% growth in Asian markets excluding Japan [4] Competitive Landscape - Hangzhou Hang Lung Plaza is located in a competitive area with established players like Hangzhou Tower and Hangzhou Yintai, which attract significant foot traffic [10] - The new project will need to differentiate itself by exploring categories like sports and lifestyle brands to attract younger consumers [10][12] Challenges Ahead - The design of Hangzhou Hang Lung Plaza may limit consumer access and brand visibility, potentially affecting tenant interest [6][8] - The success of the new project will depend on attracting market-leading brands and innovative operational strategies to enhance consumer experience [13]