Core Viewpoint - The commercial property operation industry faces challenges such as uneven consumer recovery in the first half of 2025, but Xing Sheng Commercial (6668.HK) has demonstrated resilience and growth potential through refined management and regional focus, as evidenced by its robust mid-year financial report [1][5]. Financial Performance - In the first half of 2025, Xing Sheng Commercial achieved revenue of approximately 284 million yuan, with 74.9% of this revenue coming from the Greater Bay Area, highlighting its leading position in regional development [3]. - The company reported a gross profit of approximately 149 million yuan, with an overall gross margin of about 52.3%, an increase of approximately 0.7 percentage points year-on-year, maintaining a high level within the industry [3]. - Management expenses decreased to 9.3%, down 0.8 percentage points year-on-year, contributing to a net profit attributable to shareholders of 87 million yuan [3]. Operational Highlights - As of June 30, 2025, Xing Sheng Commercial provided services to 52 commercial property projects across 21 cities in China, with a total contracted building area of approximately 2.65 million square meters [3]. - The average occupancy rate for the first half of 2025 reached 92.5%, with a vacancy rate of only 7.5%, significantly lower than the typical urban average of 13.8% [4]. - Same-store sales increased by 11.4% year-on-year, and same-store foot traffic grew by 4.4%, indicating a positive cycle of stable occupancy and rising sales [4]. Strategic Initiatives - The company has made significant strides in operational management, including the introduction of influential brands such as Hema Fresh and Calvin Klein, and renovations of key stores to enhance project attractiveness [4]. - Xing Sheng Commercial's long-term stable dividend policy provides a safety net for investors, with an interim dividend of 5.0 Hong Kong cents per share and cumulative cash dividends of 586 million Hong Kong dollars over five years [7]. Market Outlook - The company is well-positioned to benefit from the ongoing economic recovery in the Greater Bay Area, with expectations of new project openings in the second half of 2025 that will inject new vitality into its performance [8]. - The integration of digital and AI capabilities is a focus area for the company, aimed at enhancing operational efficiency and user experience, which may uncover new growth opportunities [9].

Performance Summary - The company reported a revenue of 2.84 billion RMB and a gross profit of 1.49 billion RMB, with a gross profit margin of 52.3%, reflecting a year-on-year increase of 0.7 percentage points [4][5] - The net profit attributable to shareholders was 0.87 billion RMB, and the management expense ratio decreased by 0.8 percentage points to 9.3% [4][5] - The company maintained a high cash dividend policy, declaring an interim dividend of 5.0 HKD cents per share, representing a year-on-year growth of 4.2% [5][6] Operational Metrics - Same-store sales increased by 11.4%, while same-store foot traffic decreased by 4.47% [5] - The occupancy rate stood at 92.5%, with a slight increase of 0.1 percentage points [5][11] - The company has a cash reserve of 13.68 billion RMB [4] Development and Expansion - The company operates 27 projects with a total area of 1.65 million square meters, maintaining a high occupancy rate compared to industry averages [9][11] - It has developed over 250 new projects and partnered with 2,800 merchants, with 10 new flagship stores launched during the period [13][30] - The company has a brand resource pool of 5,000, enhancing its market presence [12] Marketing and Customer Engagement - The company has implemented various marketing strategies, including collaborations with major platforms, resulting in over 100 million exposures [25][30] - It has introduced membership programs that enhance customer engagement and satisfaction, with significant increases in member sales and participation [30][34] Sustainability and Corporate Responsibility - The company launched a "Sustainable Exploration Plan" aimed at promoting low-carbon practices and reducing carbon emissions by 11 tons [39][41] - It has taken initiatives to support export enterprises by opening commercial spaces and leveraging government resources [41][42] Industry Recognition - The company has been recognized in various industry rankings, including being listed among the top 10 in the Chinese commercial real estate sector [43][44]