2025-02-27 01:00Financial Data and Key Indicators Changes - The group's underlying profit for the six months ended December 31, 2024, was approximately HKD 10.5 billion, representing a 17.5% year-on-year increase, primarily due to higher property development profit from Hong Kong [5] - Reported profit decreased by 17.7% year-on-year to HKD 7.5 billion, influenced by a net revaluation loss of around HKD 2 billion on investment properties [5] - Underlying earnings per share rose by 17.5% to HKD 3.61, while reported earnings per share fell by 17.7% to HKD 2.6 [6] - The net debt as of December 2024 was HKD 107.8 billion, with a net gearing ratio of 17.8%, down from 18.3% [8] Business Segment Performance Changes - Property development profit increased by 22.8% to approximately RMB 2.5 billion, mainly due to higher revenue from property development in Hong Kong [6] - Net rental income decreased by 3.5% to around HKD 9 billion, with declines in both Hong Kong and Mainland portfolios [7] - Hotel operating profit dropped to BRL 377 million from BRL 430 million, a decrease of 12% year-on-year [30] Market Data and Key Indicators Changes - The group's total land bank in Hong Kong was about 56.9 million square feet, with 37.6 million square feet completed and 19.3 million square feet under development [12] - In Hong Kong, contracted sales increased by 344% year-on-year to about HKD 16 billion, driven by several key projects [15] - The Mainland's recognized property sales decreased by 61% year-on-year to about RMB 617 million, primarily due to lower sales volume of residential units [23] Company Strategy and Development Direction - The group aims to maintain prudent financial management, focusing on cash flow management, strict control of construction CapEx, and strengthening recurring income from property investments [9][10] - The company plans to launch new projects when ready and sell unsold residential units and non-core properties [10] - The group is committed to enhancing its property investment portfolio's competitiveness through asset enhancement initiatives and maintaining close relationships with tenants [36] Management's Comments on Operating Environment and Future Outlook - The management expressed cautious optimism for the Hong Kong residential market, citing lower mortgage rates and a robust rental market [58] - For the Mainland, the management noted that supportive policies are expected to drive domestic consumption and restore buyer confidence in the property market [35] - The company remains confident in achieving its sales target of RMB 4 billion for the financial year 2025, with several new launches planned [66] Other Important Information - The group has achieved a 25% reduction in greenhouse gas emissions for key commercial buildings ahead of schedule and aims for a further 35% reduction by 2029 [31] - The company is developing Hong Kong's first privately funded solar farm, expected to be completed in 2025 [32] Q&A Session Summary Question: Expectations for Hong Kong residential home prices - Management noted that lower mortgage rates are expected to continue, which may support the residential market despite high supply levels [58] Question: Revision of Hong Kong property contract sales - Management indicated that they are confident in achieving their sales targets and have several new projects launching in the upcoming months [66] Question: Profit margin outlook for property development in Hong Kong - Management acknowledged that profit margins have been affected but expressed confidence in achieving high unit prices for premium projects [61] Question: Outlook for Mainland China residential demand - Management highlighted a polarization in the market, with strong sales in Tier one and Tier two cities, supported by government policies [63] Question: Concerns about liquidity in the sector - Management reassured that the company maintains a strong financial position with ample undrawn bank lines, mitigating potential risks [78] Question: Dividend policy considerations - Management confirmed that the dividend policy will remain at 40% to 50% of earnings per share [79] Question: Risk of further cap rate expansion - Management believes that further cap rate expansion is unlikely due to decreasing interest rates [80]