Hang Lung Properties (0101) H2 2023 earnings summary

Executive summary

• FY2023 rental revenue rose 3% YoY to HK$10,316mn; underlying profit was HK$4,137mn, down 1% YoY. Total DPS remained HK78 cents.

• Mainland China generated 68% of rental revenue; retail recovery lifted mainland mall sales, while Shanghai tenant sales remained below FY2021.

Financial highlights

• FY2023 revenue was HK$10,316mn, comprising HK$6,967mn from Mainland China and HK$3,349mn from Hong Kong; 2022 revenue was HK$10,347mn.

• Operating profit was HK$7,389mn versus HK$7,253mn in 2022; underlying net profit was HK$4,137mn versus HK$4,199mn.

• Net profit was HK$3,970mn versus HK$3,836mn; FY2023 included a HK$167mn net fair-value loss on properties, versus a HK$363mn loss in 2022.

• Mainland rental revenue reached RMB6,263mn, up 8% YoY; Hong Kong rental revenue was HK$3,349mn, up 2% YoY.

• Total DPS was HK78 cents, flat YoY; final dividend was HK59 cents and interim dividend HK19 cents.

Outlook and guidance

• Westlake 66 in Hangzhou is scheduled for phased completion from 2024 onward, including a retail podium, five Grade A office towers and a Mandarin Oriental hotel.

• Mainland residential pipeline includes Grand Hyatt Residences Kunming targeted for 2024 completion, Center Residences for 2025 and Forum Residences for 2027+.

• Hong Kong residential pipeline includes The Aperture, targeted for completion in 2024, and the Shouson Hill Road redevelopment, under development with ~47,397 sq ft total GFA.

• ESG targets include a 70% reduction in Scope 1 and 2 emissions intensity by 2030 versus 2018, and net-zero value-chain emissions by 2050.