Core Viewpoint - The company maintains its earnings forecast for Swire Properties (01972) and keeps an outperform rating with a target price of HKD 26.5, implying an 8% upside potential and corresponding dividend yields of 4.3% and 4.5% for 2025 and 2026 respectively [1] Group 1: Retail Performance - The performance of high-end shopping centers in mainland China is outstanding, with retail sales in Shanghai's Xinyi Swire and Beijing's Sanlitun Taikoo Li expected to grow by 49.6% and 11.2% year-on-year in 2025, respectively [2] - Other projects such as Shanghai's Front Beach Taikoo Li, Chengdu Taikoo Li, and Guangzhou Taikoo Hui also recorded year-on-year retail sales growth of 6.9%, 6.5%, and 1.6%, with fourth-quarter performance improving compared to the first three quarters [2] - New projects are on track, with the first phase of Guangzhou Julong Bay Taikoo Li launched by the end of 2025, and other projects in Sanya, Shanghai, and Lujiazui expected to be completed starting in 2026 [2] Group 2: Hong Kong Office Market - The overall occupancy rate of the company's Hong Kong office buildings is 91%, a year-on-year decrease of 2 percentage points, while the core area of Taikoo Place saw an increase of 1 percentage point to 96% [3] - The rental rate for office buildings is expected to decline by 13-15% in 2025 due to competitive market conditions, with the company adopting flexible leasing strategies to prioritize occupancy and tenant retention [3] Group 3: Hong Kong Retail Market - Retail sales in Hong Kong's high-end shopping center Taikoo Place and mass-market center Taikoo City Center are expected to grow by 5.6% and 2.7% year-on-year in 2025, outperforming the overall Hong Kong retail sector, which is projected to grow by 1.0% [4] - The growth is attributed to the recovery of luxury brand sales from a low base and the company's ongoing tenant adjustments and marketing activities to attract diverse customer traffic [4]

Group 1: Core Business Performance - The Hong Kong office market is facing significant challenges, with a vacancy rate rising to 13.6% in the first half of 2025, indicating an oversupply situation [2] - The rental rate for the company's Hong Kong office properties has declined from 93% at the end of 2024 to 91% by the end of Q2 2025, with specific declines of 1% for Taikoo Place and 3% for Taikoo Square [2] - Rental rates for the two core properties have decreased by 14% and 15% respectively, reflecting competitive market conditions [2] Group 2: Retail Market Performance - In contrast to the office sector, the company's retail properties have shown stable growth, with key projects maintaining a 100% occupancy rate [4] - Notable sales growth was observed in Shanghai's Taikoo Hui, which increased by 13.5%, and Beijing's Sanlitun Taikoo Li, which grew by 6.8% [4] - The performance disparity among retail projects is influenced by local economic conditions and operational factors, necessitating targeted strategies for maintaining retail business stability [4] Group 3: Future Development Projects - Several new projects, including Beijing Taikoo Place and Xi'an Taikoo Li, are under construction and are expected to be completed between 2026 and 2027, which will provide new growth momentum for the company [5]