Hang Lung Group (10) investor relations material

Executive summary

• Revenue and profit declined across most segments in 1H25, with revenue falling 18% year-over-year to HK$5,202 million, mainly due to an 87% drop in property sales revenue; property leasing and hotel segments showed resilience despite market headwinds.

• Operating profit decreased by 6% to HK$3,408 million, with underlying net profit attributable to shareholders down 7% to HK$1,191 million.

• Net profit attributable to shareholders was HK$697 million, down from HK$888 million in the prior year period.

• High occupancy rates were maintained across both Hong Kong and mainland China portfolios, supported by tenant mix optimization and targeted marketing.

• Interim dividend maintained at HK$0.21 per share.

Financial highlights

• Property leasing revenue declined 3% to HK$4,912 million; property sales revenue dropped 87% to HK$161 million; hotel revenue rose 84% to HK$129 million.

• Operating profit from property leasing decreased 4% to HK$3,499 million.

• Net profit after fair value changes was HK$912 million, compared to HK$1,061 million in 1H24.

• Net assets per share increased to HK$71.7 from HK$70.3 at year-end 2024.

• Gross margin remained stable at 72%.

Outlook and guidance

• Management remains cautious due to ongoing economic uncertainties, property market slump, and competitive pressures, but moderate demand recovery is anticipated in mainland China, supported by fiscal expansion and government stimulus.

• Hong Kong retail sector expected to remain challenging; focus remains on immersive experiences and capital recycling.

• Positive long-term outlook for residential sales as market shows signs of bottoming out.

• New projects, including Westlake 66 in Hangzhou, are set to open from 2H25 onwards, expanding the portfolio.

• Dividend expected to remain flat for the full year, with a possible return to pure cash dividend after Westlake 66 opens.