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.

• Underlying net profit dropped 9% year-over-year to HK$1,587 million, reflecting weaker sales and rental performance.

• Occupancy rates remained high across both Hong Kong and Mainland China portfolios, supported by tenant mix optimization.

• Hotels segment saw a strong rebound, with revenue up 84% year-over-year, though it remained loss-making.

• Management highlights a challenging but solid year, expressing cautious optimism for stabilization and potential uplift if recent trends hold.

Financial highlights

• Core rental business declined 3% year-over-year, with sequential improvement seen in the second quarter.

• Mainland China rental revenue in RMB was flat, but down 2% in HKD due to currency depreciation; Hong Kong rental revenue fell 4%.

• Property sales revenue dropped 87% to HK$161 million, with an operating loss of HK$57 million from this segment.

• Residential and service apartment rental in Hong Kong grew 11%, improving overall performance.

• 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 full-year growth if trends persist.

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

• Dividend policy aims to remain flat for the full year, barring unforeseen changes; interim dividend maintained at HK$0.12 per share, with a scrip option.

• CapEx projected to peak this year at HKD 4.9B, declining to HKD 3B next year and further thereafter.

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