Lai Sun Development Company (488) H2 2025 earnings summary

Executive summary

• Demonstrated resilience amid challenging market conditions, with ongoing cost control and asset optimization initiatives.

• Net loss attributable to owners narrowed to HK$2,874.3 million from HK$3,674.7 million year-over-year, mainly due to reduced impairments, lower depreciation, decreased fair value losses, and lower finance costs, partially offset by lower property sales and film/TV segment contributions, and higher joint venture losses.

• Focused on concluding sales of existing property projects and progressing new developments in Hong Kong and China.

• Prudent financial management through refinancing, deleveraging, and targeted disposals to improve liquidity.

• No final or interim dividend declared for the year.

Financial highlights

• LSD revenue down 18% year-over-year to HK$4,899m; net loss reduced to HK$2,874m from HK$3,675m.

• LFH revenue down 41% year-over-year to HK$1,291m; net loss widened to HK$419m from HK$268m.

• Adjusted EBITDA for LSD down 24% to HK$871m; for LFH down 47% to HK$416m.

• Rental income from investment properties was HK$1,201.2 million, down 5.0% year-over-year, with high occupancy rates maintained in Hong Kong and Chinese Mainland.

• Hotel operation income rose 4.4% to HK$1,243.8 million, driven by Caravelle Hotel.

Outlook and guidance

• The Group plans asset disposals totaling HK$8,000 million (including HK$2,000 million at Lai Fung Group) over two years to improve liquidity, with HK$2,200 million achieved and HK$4,500 million in advanced negotiations.

• Expectation of further finance cost reductions as interest rates trend down.

• No new development projects unless financially feasible; current projects fully funded.

• Market recovery in Hong Kong property is expected in the second half of 2025, supported by talent admission schemes, lower HIBOR, and government initiatives, though office and retail leasing remain challenging.

• Chinese Mainland property market shows signs of stabilization, with supportive policies and steady rental income from a 5.9 million sq. ft. portfolio.