Hang Lung Properties Limited (0101) investor relations material

Executive summary

• Revenue for 1H25 declined 19% year-over-year to HK$4,968 million, mainly due to an 87% drop in property sales revenue, while underlying net profit dropped 9% to HK$1,587 million.

• Core rental business remains the main revenue driver, accounting for 94% of total business, with leasing revenue showing sequential improvement and high occupancy rates.

• Hotel segment saw an 84% revenue rebound year-over-year, though it remained loss-making.

• Management is focused on adapting to evolving retail trends, enhancing customer engagement, and maintaining high occupancy.

• Strategic investments in development projects and new marketing initiatives are underway to drive long-term growth.

Financial highlights

• Property leasing revenue decreased 3% year-over-year to HK$4,678 million; property sales revenue dropped 87% to HK$161 million, with only 19 units sold in Hong Kong.

• Net gearing stands at 33.5%, with net debt at HK$47.9 billion as of June 30, 2025.

• Gross finance cost before capitalization dropped by 7%, with average borrowing cost at 3.9%.

• Cash and bank deposits stood at HK$6.9 billion, down from HK$10.3 billion at end-2024.

• Gross margin remained high at 72%, with Hong Kong at 79% and Mainland China at 68%.

Outlook and guidance

• Management expects mild growth in tenant sales in the second half, with potential for positive full-year growth if trends hold.

• Westlake 66 in Hangzhou is set to open in 2H 2025, with significant pre-leasing activity.

• CapEx projected at HK$4.9 billion for this year, declining to HK$3 billion next year as major projects complete.

• Dividend policy may return to pure cash after Westlake 66 opens, with scrip dividend considered a temporary measure.

• Ongoing focus on immersive shopping experiences, tenant retention, and capital recycling to optimize portfolio performance.