Group 1 - The core viewpoint of the article highlights that Swire Properties reported a strong performance for the first half of 2025, with revenue reaching HKD 87.23 billion, a 20% year-on-year increase, and a 15% rise in shareholder profit to HKD 44.2 billion [1] - The company plans to focus on enhancing shareholder value through capital flow strategies and reallocating funds to high-growth potential markets, including Hong Kong, mainland China, and Southeast Asia [1] - Retail sales in mainland China showed signs of stabilization, with rental income from investment properties totaling HKD 30.73 billion, remaining stable compared to the same period in 2024 [1] Group 2 - Swire Properties has initiated a HKD 100 billion investment plan, with 67% of the funds already allocated, primarily targeting Hong Kong, mainland China, and Southeast Asia [2] - The company plans to invest HKD 50 billion in the mainland market, with 92% of this already secured, focusing on large-scale development projects such as Lujiazui Swire Source and the expansion of Qiantan Swire [2] - Swire Properties is enhancing its commitment to sustainable development and community building in projects like Beijing Taikoo Li, while also advancing innovative retail projects in Sanya and establishing a retail-focused Taikoo Li project in Xi'an [2]

Investment Rating - The report maintains a "Recommended" rating for Swire Properties (1972.HK) with a target price of HKD 21.55 [2][8]. Core Insights - The company's Q1 performance met expectations, with improvements in the operation of shopping centers in mainland China. Retail sales in key locations such as Shanghai and Beijing showed positive growth, while declines in other areas were significantly reduced compared to 2024 [2][8]. - The report highlights the strong competitive advantage of Swire Properties due to its prime location shopping centers and robust leasing capabilities, which are expected to drive rental income growth in the coming years [8]. Financial Summary - Total revenue is projected to reach HKD 14,428 million in 2024, with a slight decline of 2.1% year-on-year, followed by a recovery with growth rates of 1.3%, 2.6%, and 24.3% in the subsequent years [4]. - The net profit attributable to shareholders is expected to recover from a loss of HKD 766 million in 2024 to HKD 2,676 million in 2025, reflecting a significant growth of 449.3% [4]. - Earnings per share (EPS) is forecasted to improve from -0.13 HKD in 2024 to 0.46 HKD in 2025, indicating a positive turnaround [4]. Market Performance - The report notes that Swire Properties' shopping centers in Hong Kong maintained full occupancy, with slight improvements in retail sales growth compared to the previous year [8]. - The overall rental market for office spaces in Hong Kong remains under pressure due to oversupply, with an occupancy rate of 89% in Q1 [8]. Investment Recommendations - Swire Properties is characterized as a commercial real estate company that generates stable cash flows through holding assets with a competitive moat. The expected growth in net profit and consistent dividend growth of 5% per year supports the investment thesis [8].