Hang Lung Group (10) H1 2019 earnings summary

Executive summary

• H1 revenue and profit came from investment properties; leasing was the main source of operating growth.

• Mainland leasing momentum improved, with rental revenue up 7% and H2 2018 also stronger than H1 2018.

Financial highlights

• Mainland leasing revenue rose 7%; RMB depreciation of 6% limited growth translated into HKD to 2%.

• Hong Kong leasing grew 3%; commercial was up 4%, office 3% and residential 5%.

Outlook and guidance

• Five growth drivers: organic growth, new projects, asset enhancements, residential sales and potential non-core asset disposals.

• Kunming Spring City 66 was scheduled to open Aug. 23, 2019; Wuhan was expected to open in summer 2020.

• Serviced-apartment pre-sales were expected to begin first in Wuhan, followed by Wuxi around mid-to-late 2021; sales would target selective, high-end buyers.

• Hong Kong retail impact from protests was expected to be limited in the short term, subject to continued monitoring.