Core Viewpoint - The company reported a net profit of 2.682 billion HKD for H1 2025, representing an 11% year-on-year increase, primarily due to reduced financial expenses and a decrease in net losses from fair value adjustments of investment properties [1]. Financial Performance - The company achieved revenue of 9.428 billion HKD in H1 2025, a 1% decline year-on-year; however, net profit increased by 11% to 2.682 billion HKD [1]. - Financial expenses were significantly reduced by 201 million HKD to 188 million HKD, contributing to the profit increase [1]. - The fair value adjustment losses of investment properties decreased by 58 million HKD to 3 million HKD [1]. Dividend and Cash Flow - The company maintained a dividend payout ratio of 65%, with an interim dividend of 0.266 HKD per share [2]. - Net cash inflow from operating activities was 3.339 billion HKD, down from 4.876 billion HKD in the same period of 2024 [2]. - Capital expenditure increased to 566 million HKD from 445 million HKD in 2024 [2]. Business Segment Performance - Water supply projects generated revenue of 3.506 billion HKD, a 1% increase year-on-year, with a tax profit increase of 3% to 2.396 billion HKD [2]. - Other water resource businesses saw a 2% revenue increase to 3.680 billion HKD, but tax profit decreased by 6% to 1.079 billion HKD [2]. - Property management revenue rose by 4% to 822 million HKD, with a tax profit increase of 10% to 492 million HKD [2]. - Department store operations experienced a 44% revenue decline to 217 million HKD, while tax profit increased by 19% to 45.83 million HKD [3]. - Hotel management revenue grew by 7% to 337 million HKD, but tax profit fell by 20% to 51.06 million HKD [3]. - Energy business revenue decreased by 4% to 770 million HKD, while tax profit increased by 23% to 91.18 million HKD [3]. - Toll road business revenue declined by 7% to 290 million HKD, with tax profit down by 9% to 147 million HKD [3].

Investment Rating - The report maintains a rating of "Accumulate" for the company [7][11]. Core Insights - The company's net profit attributable to shareholders for H1 2025 was HKD 2.682 billion, representing a year-on-year increase of 11%. This profit growth was primarily driven by a reduction in financial expenses and a decrease in net losses from fair value adjustments of investment properties [2][11]. - The report forecasts net profits for 2025, 2026, and 2027 to be HKD 4.415 billion, HKD 4.533 billion, and HKD 4.663 billion, respectively, with corresponding EPS of HKD 0.68, HKD 0.69, and HKD 0.71 [11][12]. - The company achieved a revenue of HKD 9.428 billion in H1 2025, a slight decline of 1% year-on-year, while the net financial expenses decreased by HKD 201 million to HKD 188 million [11]. Financial Summary - Total revenue for 2023 was HKD 24.355 billion, with a projected decline to HKD 18.505 billion in 2024, followed by a slight decrease to HKD 18.080 billion in 2025. The revenue is expected to grow gradually to HKD 18.924 billion by 2027 [5][12]. - The gross profit for 2023 was HKD 10.075 billion, with projections of HKD 9.822 billion in 2024 and HKD 9.601 billion in 2025, indicating a steady gross margin [5][12]. - The company’s PE ratio is projected to be 10.5 in 2025, decreasing to 10.0 by 2027, while the PB ratio is expected to remain stable around 1.07 to 1.00 during the same period [5][12]. Business Performance - The water supply segment, particularly the Dongshen project, generated revenue of HKD 3.506 billion, a 1% increase year-on-year, while the water supply volume decreased by 1% [11]. - The property management segment saw a revenue increase of 4% to HKD 822 million, attributed to improved rental levels and occupancy rates [11]. - The retail operations experienced a significant decline, with revenue dropping 44% to HKD 217 million, although the pre-tax profit increased by 19% to HKD 45.83 million [11].