Investment Rating - The report assigns a "Buy" rating for Swire Properties (01972.HK) with a target price of HKD 21.52, compared to the current price of HKD 15.52 [2][7]. Core Insights - Swire Properties is recognized as a high-end commercial real estate developer, with property investments contributing an average of 117% to the shareholders' recurring net profit. The company has a stable dividend policy, aiming to distribute approximately 50% of its recurring profit as dividends, with annual growth in dividends expected in the mid-single digits [7][11]. - The company's revenue and net profit are primarily derived from rental income from property investments, which accounted for an average of 88% of total revenue from 2018 to 2024. Despite a projected loss in net profit for 2024 due to fair value fluctuations, the company's underlying profitability remains intact [15][16]. - The report highlights the strong growth potential of Swire's mainland China shopping centers, which are expected to contribute significantly to rental income, with a projected 50% growth in rental income from these centers in the coming years [36][37]. Summary by Sections 1. High-End Commercial Real Estate Developer - Swire Properties has established a strong presence in high-end commercial real estate, with significant projects in Hong Kong and mainland China, including landmark shopping centers like Beijing Sanlitun Taikoo Li and Guangzhou Taikoo Hui [15][31]. - The company has a robust rental income model, with property investments contributing approximately 93% of total revenue in 2024 [17][19]. 2. Rental Income Contribution - Rental income is the primary driver of the company's revenue, with a stable contribution to net profit. The rental income from mainland shopping centers is expected to grow significantly, becoming a major pillar of the company's revenue [20][21]. - The report indicates that the rental income from mainland shopping centers is projected to reach HKD 52.25 billion in 2024, accounting for 35% of total rental income [21][36]. 3. Investment Strategy and Future Growth - Swire Properties has announced a HKD 100 billion investment plan, with a focus on expanding its presence in mainland China and enhancing the competitiveness of existing projects [28][36]. - The company is set to launch several new projects in the coming years, which are expected to drive rental income growth and further solidify its market position [36][37]. 4. Market Position and Competitive Advantage - The company's shopping centers benefit from prime locations and a strong brand portfolio, which provide a competitive edge in attracting high-end retailers and maintaining high occupancy rates [32][42]. - Swire Properties has a stable management team and a concentrated ownership structure, with Swire Group holding 82% of the shares, ensuring strategic continuity and long-term planning [33][34].