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Salina Li

Hong Kong developer Hang Lung Properties’ 2024 earnings slumped 45.8 per cent from a year earlier due to lower operating leasing profits and higher finance costs.
The company’s net profit attributable to shareholders fell to HK$2.1 billion (US$269.7 million) from HK$3.97 billion a year earlier, which included a net revaluation loss on some properties, according to a statement to the Hong Kong stock exchange on Friday.
Overall rental revenue fell 6 per cent to HK$9.52 billion. Rental revenue from its mainland portfolio dropped by 4 per cent and by 9 per cent in Hong Kong.
On the mainland, consumer confidence has been hurt by lacklustre economic conditions, geopolitical tensions and a weakened global economy, the company said.
“While the recent stimulus measures introduced by the Chinese central government seek to bolster the economic outlook, the extent to which they will boost the overall economy remains uncertain,” the company said.
Rental revenue and tenant sales from its mainland mall portfolio dropped by 3 per cent and 14 per cent, respectively.
Its flagship Plaza 66 mall in Shanghai reported declines of 6 per cent in revenue and 22 per cent in tenant sales from a high base, “primarily because our lower-tier customers exercised greater caution in high-end spending and searched for bargains internationally”, it said.
Hong Kong’s business landscape remained challenging in 2024 thanks to competition from nearby cities and regions, the company said.
“Consumer sentiment remained low amid a structural change in tourist spending patterns and the northbound travelling trend of local residents,” it said. “Retailers and restaurants remained hesitant to expand their operations. The momentum for office leasing stayed weak.”
Hang Lung generated revenue of HK$1.54 billion from the sale of 120 residential units at The Aperture and two houses on Blue Pool Road in Hong Kong, six unit s at Heartland the Residences in Wuhan and three units at the Grand Hyatt Residences Kunming.
But taking into account the gross profit from the sale of properties in mainland China and Hong Kong, associated selling expenses and other operating expenditures, the company recorded an operating loss from property sales of HK$245 million.
Hang Lung’s net debt balance was HK$47.08 billion as of December 31. The net debt to equity ratio climbed to 33.4 per cent from 31.9 per cent a year earlier.
The increase in the net debt to equity ratio was largely due to an increase in borrowing used for capital expenditures in mainland China and Hong Kong, the company said.
Looking ahead, “uncertainty surrounding US-China geopolitical tensions and additional tariffs to be imposed on Chinese products is casting a shadow over the revival of the Chinese economy”, Hang Lung said, adding that the trajectory for US Federal Reserve rates and the strong US dollar are hurting prospects for a global economic recovery.
In Hong Kong, consumer sentiment remains soft and travel patterns continue to trend northbound.
“However, we are seeing initial signs of recovery in both visitor arrivals and retail sales as a result of government initiatives,” the company said. “The demand for office space is expected to remain stagnant amid the sluggish economic climate.”
The company’s shares fell 2.6 per cent on Friday to close at HK$5.95. Its shares are down more than 85.2 per cent since reaching a high of HK$40.30 in November 2020.
Hang Lung will pay a final dividend of HK$0.40 per share, down from HK$0.60 a share a year earlier.
Its parent company, Hang Lung Group, which owns 60 per cent of the developer, reported a full-year profit attributable to shareholders of HK$1.61 billion, down 42.6 per cent from a year earlier.
Hang Lung Group will pay a final dividend of HK$0.65 a share.


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