Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of HKD 164.37 [1][5] Core Insights - The company reported a strong revenue growth of 32% year-on-year, achieving HKD 52.7 billion in revenue for FY1H26, with a core net profit of HKD 12.2 billion, up 17% year-on-year [1][2] - The growth is primarily driven by the release of profits from mainland property development, sales of investment properties, and reduced interest expenses [2] - The company is actively expanding its land reserves in Hong Kong after reducing its debt levels, positioning itself to benefit from the recovery of the Hong Kong real estate market [3] Summary by Sections Financial Performance - For FY1H26, the core net profit growth was attributed to a HKD 2.7 billion increase in profits from mainland property development, mainly from high-margin projects in Hangzhou and Suzhou [2] - The sale of investment properties in Hong Kong contributed an additional HKD 0.8 billion in realized fair value gains [2] - The company’s financial expenses decreased by HKD 0.6 billion due to reduced interest-bearing debt and financing costs [2] Property Development - The company’s equity sales in Hong Kong decreased by 30% year-on-year to HKD 17.4 billion, but subsequent sales from the SIERRA SEA Phase II project contributed HKD 9 billion [3] - The company expects equity sales to reach HKD 35 billion for FY26, continuing to lead among Hong Kong property developers [3] Property Leasing - Despite rental pressures in Hong Kong and mainland cities, the company’s rental income remained stable, with a slight decline of 1% in rental yield [4] - Upcoming projects in Hong Kong and mainland China are expected to increase the company’s investment property area by 10% and 46% respectively by FY28, driving rental income growth [4] Profit Forecast and Valuation - The forecasted core net profits for FY26-28 are HKD 23.3 billion, HKD 24.5 billion, and HKD 25.4 billion respectively, reflecting slight upward adjustments in project price assumptions [5] - The company’s NAV is estimated at HKD 635.1 billion, with a target price adjustment to HKD 164.37, reflecting a 25% discount based on the recovery trend in the Hong Kong real estate market [5][25]