Hysan Development Company (14) H1 2024 earnings summary

Executive summary

• Lee Gardens rejuvenation and expansion projects, including luxury flagship stores and diversified F&B, drove 10.8% retail turnover growth and enhanced the luxury retail experience, with loyalty program spending up 40% since 2018.

• Lee Gardens Shanghai launched with 70% office space commitments, attracting international tenants and diversifying revenue; Greater Bay Area flex office JV with IWG maintained high occupancy.

• Urbanhood concept, over 100 annual events, and expanded loyalty programs increased organic traffic and member spending, reinforcing Lee Gardens as a trendsetter in urban culture.

• Caroline Hill Road project and Lee Garden Eight are on track for 2026 completion, expanding the portfolio by nearly 30% and enhancing connectivity.

• Interim dividend maintained at HK$0.27 per share.

Financial highlights

• Revenue for H1 2024 reached HK$1.69 billion, up 5.9% year-on-year; retail revenue grew 10.8%, office revenue declined 2.8%, and residential revenue rose 1.0%.

• Reported profit attributable to owners was HK$427 million, up from HK$190 million year-on-year, with basic EPS at 42 HK cents.

• Shareholders' funds at HK$66.8 billion, NAV per share at HK$65.0, and operating costs to turnover ratio improved to 25.0%.

• Cash and bank deposits totaled HK$3,057 million, with total liquidity resources of HK$14 billion.

• Finance costs decreased to HK$213 million, effective interest rate at 4.4%.

Outlook and guidance

• Lee Garden Eight, Caroline Hill Road, and integrated walkways to complete by 2026, expected to diversify revenue streams and expand the portfolio by nearly 30%.

• Further key retail openings and luxury/lifestyle expansions planned over the next 12 months.

• Strategic pillars, including Shanghai and flex office ventures, anticipated to mature and contribute more significantly.

• Board remains committed to stable dividends, balancing prudence with growth and CapEx commitments.

• Focus on innovation and customer engagement to address evolving market dynamics.