Lai Fung Holdings (1125) investor relations material

Executive summary

• Group demonstrated resilience amid challenging market, with stable rental and hotel operations, proactive asset disposals, and a 43.1% year-over-year turnover rise to HK$927.3 million driven by property sales, despite lower rental and hotel income.

• Net loss attributable to owners widened to HK$384.0 million from HK$164.0 million year-over-year, mainly due to losses on property sales and write-downs in Hengqin Novotown Phase II.

• Adjusted EBITDA dropped 46.8% year-over-year to HK$131.5 million, reflecting non-recurring losses and property write-downs.

• The Group maintained high occupancy rates in rental properties and hotels, with proactive tenant renewals and new leases, but rental income declined 2.6% year-over-year.

• Cost reductions and refinancing efforts improved liquidity, with administrative expenses down 31.4% and finance costs down 7.7% year-over-year.

Financial highlights

• Group revenue: HK$2,633m (LSG), HK$2,584m (LSD), HK$927m (LFH), HK$354m (eSun) for 1H FY25/26.

• Net loss: HK$682m (LSG), HK$1,166m (LSD), HK$384m (LFH), HK$9m profit (eSun).

• Adjusted EBITDA: LSD down 23% to HK$379m; LFH down 46.8% to HK$131.5m year-over-year.

• Rental revenue: LSD down 8% to HK$573m; LFH down 2.6% to HK$499.9m; hotel revenue remained broadly stable in both HK and China.

• Sale of properties surged 224.2% to HK$425.4 million, mainly from Hengqin Novotown Phase II.

Outlook and guidance

• Disposal targets expected to be met ahead of schedule, with HK$2,000 million targeted over two years and HK$1,000 million achieved to date.

• Ongoing focus on refinancing, engagement with bondholders, and prudent liquidity management to address significant obligations maturing in 2026.

• Market conditions remain challenging due to global geopolitical risks and a weak Chinese property market, but supportive policies and urban renewal initiatives are expected.