Core Viewpoint - The performance of Hang Lung Group and Hang Lung Properties for the mid-2025 period can be summarized as "steady progress," with significant declines in total revenue primarily due to reduced property sales [1] Group 1: Financial Performance - Hang Lung Group's total revenue decreased by 18% to HKD 5.202 billion, while Hang Lung Properties' total revenue fell by 19% to HKD 4.968 billion, mainly due to lower property sales [1] - The rental business accounted for 94% of total revenue, with property sales and hotel services each contributing 3% [2] - Shareholders' net profit attributable to the company dropped by 7% to HKD 1.191 billion for Hang Lung Group and by 9% to HKD 1.587 billion for Hang Lung Properties, attributed to rising financial costs [2] Group 2: Rental Business Insights - The rental income from the mainland was HKD 2.941 billion, representing 68% of total rental income, while Hong Kong's rental income was HKD 1.488 billion, accounting for 32% [2] - The rental business saw a slight decline of 3%, with mainland rental income down by 1% and Hong Kong rental income down by 4% [2] - The overall occupancy rate of the company's 10 large shopping malls in the mainland remained at 94%, with over half of the malls experiencing an increase in rental income [2] Group 3: Property Sales and Development - The company reported HKD 161 million in revenue from residential sales, with significant contributions from properties in Hong Kong and Wuhan [4] - The company plans to commence 11 real estate projects across 9 cities in the mainland, with a focus on expanding existing properties [5] - The expansion of Hang Lung Plaza Westlake 66 in Hangzhou has been initiated, increasing the mall's area by 40% [5] Group 4: Strategic Focus - The company aims to maintain high occupancy rates in shopping malls rather than focusing solely on high rental prices, as low occupancy can negatively impact rental income [1] - The company is actively introducing new brands to attract local and mainland consumers to Hong Kong [3] - The company is committed to prudent financial management, with a net debt ratio of 33.5% and a focus on increasing the proportion of RMB loans [4][5]

Financial Performance - The total revenue of Hang Lung Group and Hang Lung Properties decreased by 18% and 19% to HKD 5.202 billion and HKD 4.968 billion, primarily due to a reduction in property sales revenue [1][7] - Core property leasing income remained stable, only declining by 3%, with overall rental rates for mainland shopping malls maintaining a high level of 94% [1][7] - Shareholders' basic net profit for Hang Lung Group and Hang Lung Properties fell by 7% and 9% to HKD 1.191 billion and HKD 1.587 billion, mainly due to rising financial costs [1][8] Strategic Developments - A 20-year operating lease agreement was signed with Baida Group for the south and north buildings of Hangzhou Department Store, potentially adding approximately 42,000 square meters of retail space, a 40% increase [2] - The Hangzhou Hang Lung Plaza is set to open in phases starting in the second half of 2025, with a current pre-leasing rate of about 77% [5] - The second phase of the Wuxi Hang Lung Plaza development is also scheduled to open in phases starting in the second half of 2025 [4] - The third phase expansion of Shanghai Hang Lung Plaza was successfully topped off in June this year, with an expected opening in the second half of 2026 [6] Sustainability Initiatives - 80% of the operational properties in mainland China are now powered by renewable energy, a significant increase from 50% last year, exceeding the 2025 target of 25% [7][10] - The company has committed to achieving net-zero emissions by 2050, demonstrating its leadership in sustainable development within the real estate industry [10] Dividend Announcements - The board of Hang Lung Group announced an interim dividend of HKD 0.21 per share, to be distributed on September 24, 2025 [8] - Hang Lung Properties also announced an interim dividend of HKD 0.12 per share, with a cash or scrip option for shareholders [9] Market Position and Strategy - The company has shown resilience in its business model despite market pressures, with a gradual recovery in property performance [9] - The diversified property portfolio in Hong Kong includes prime office buildings and luxury residential projects, while the mainland projects are recognized as quality commercial landmarks [10]