Core Viewpoint - The company reported its 1H25 performance, which met expectations with a revenue of 8.52 billion yuan, a year-on-year increase of 6.5%, and a core net profit of 2.01 billion yuan, up 15.0% year-on-year [1] Group 1: Financial Performance - The reported net profit attributable to shareholders increased by 7.4% year-on-year to 2.03 billion yuan, affected by a high base from fair value changes in the previous year [1] - The company declared an ordinary dividend of 0.529 yuan per share and a special dividend of 0.352 yuan per share, corresponding to a payout ratio of 60% and 40% based on core net profit [1] Group 2: Shopping Center Performance - The retail sales of managed shopping centers grew by 21.1% year-on-year in 1H25, with same-store sales growth of 9.7%, significantly outperforming the overall retail sales growth [1] - The luxury shopping center segment achieved a same-store sales growth of 9.6%, demonstrating resilience [1] - The shopping center segment's revenue increased by 20% year-on-year, with an improvement in operational efficiency, as gross margin rose by 6.2 percentage points to 78.7% [1] Group 3: Office and Community Space Performance - In a challenging industry environment, the office and community space segments maintained stable or slightly increased revenues, with office occupancy rates rising by 0.5 percentage points [2] - The community space business saw a slight increase in gross margin by 0.2 percentage points and a year-on-year collection rate improvement of approximately 0.6 percentage points [2] - The urban space segment achieved a revenue growth of 15% year-on-year, with gross profit increasing by 8% [2] Group 4: Growth Outlook - The company aims to maintain its annual growth guidance and cash flow targets, with over 40% of its 125 operational projects ranking first in local market retail sales [2] - The company has a robust project pipeline, with 75 projects not yet opened as of 1H25, and plans to open 14 new projects in 2025, providing ongoing growth momentum [2] - The company targets a double-digit core net profit growth for the full year, supported by strong cash flow [2] Group 5: Profit Forecast and Valuation - The profit forecast remains largely unchanged, with expected core net profit growth of 15% and 11% for 2025 and 2026, reaching 4.04 billion yuan and 4.50 billion yuan respectively [3] - The company maintains an outperform rating and a target price of 40 HKD, corresponding to a 21 times core P/E ratio for 2025, implying a 6% upside potential [3] - The company is trading at a 20 times core P/E ratio for 2025, with an expected dividend yield of 5.1% based on a 100% core net profit payout [3]

Core Insights - The popularity index serves as a direct indicator of the operational effectiveness of shopping centers in Xi'an, reflecting consumer preferences and the evolution of the city's commercial ecosystem [1] Group 1: Popularity and Rankings - The top shopping centers in Xi'an have successfully integrated the city's rich historical heritage with modern consumer experiences, becoming key destinations for urban vitality [1] - A detailed ranking of shopping centers shows fluctuations in popularity, primarily influenced by marketing activities that resonate with consumer preferences [4][9] - Notable projects like the Old Town Gpark have successfully leveraged themed marketing events to boost foot traffic and consumer engagement [4][8] Group 2: Marketing Activities - Marketing activities are identified as critical variables affecting rankings, with successful campaigns directly correlating to increased consumer interest [3][4] - The "Crystal Dream Cherry Garden" theme at Old Town Gpark exemplifies how immersive experiences can attract significant foot traffic [4][6] - Collaborative events with local universities, such as the "Chang'an Co-Hua Chapter" Hanfu Festival, have further enhanced the project's visibility and appeal [6] Group 3: Seasonal Trends - Monthly average foot traffic data indicates clear trends, with January benefiting from New Year celebrations and February experiencing a decline post-holiday [9][11] - The resurgence of foot traffic in May was attributed to the "May Day" holiday, highlighting the impact of seasonal events on consumer behavior [9] Group 4: Competitive Landscape - The rankings of shopping centers from April to June reflect their operational strategies, with larger projects like CityOn and Xi'an Joy City effectively utilizing anniversary celebrations and thematic events to attract visitors [13][14] - Xi'an Joy City achieved a top position in June by focusing on youth-oriented activities and introducing popular new brands, demonstrating the importance of targeting specific demographics [16] Group 5: Future Outlook - The ongoing innovation in operational models is crucial for maintaining the vibrancy of Xi'an's commercial landscape, with leading shopping centers playing a pivotal role in shaping the city's retail environment [14][16]