HANG LUNG PPT(00101)2023-04-04 10:34Financial Performance - Total revenue for 2022 was HKD 10,347 million, a slight increase from HKD 10,321 million in 2021[10]. - Operating profit for 2022 was HKD 7,253 million, compared to HKD 7,371 million in 2021, reflecting a decrease of 1.6%[10]. - Basic earnings per share based on shareholders' net profit was HKD 0.85, down from HKD 0.86 in 2021[11]. - Shareholders' basic net profit decreased by 4% to HKD 4.199 billion, resulting in basic earnings per share of HKD 0.93[21]. - After accounting for property revaluation impacts, net profit attributable to shareholders decreased by less than 1% to HKD 3.836 billion, with earnings per share at HKD 0.85[21]. - Overall rental income for the year ended December 31, 2022, decreased by 3% to HKD 10.031 billion, with mainland rental income increasing by 1% in RMB terms but decreasing by 3% in HKD terms due to RMB depreciation[139]. - The company recorded property sales revenue of HKD 316 million, compared to no sales in 2021[136]. - The company experienced strong performance during the three-year pandemic, but acknowledges the need for increased resilience and flexibility moving forward[41]. Property Valuation and Equity - The company reported a net decrease in the fair value of properties amounting to HKD 363 million in 2022, compared to HKD 497 million in 2021[10]. - Shareholders' equity as of December 31, 2022, was HKD 133,381 million, down from HKD 141,719 million in 2021[10]. - The net debt to equity ratio increased to 28.1% in 2022 from 24.4% in 2021[12]. - A property revaluation loss of HKD 345 million was recorded, compared to a gain of HKD 460 million in 2021[158]. Market Conditions and Challenges - Six out of ten shopping malls in mainland China were fully closed at different times during the first half of 2022, with the most severe impact in Shanghai where two malls were closed for two months[20]. - The company faced significant challenges due to the real estate crisis, leading to widespread bankruptcy among private developers and financial distress for property buyers[31]. - The company remains vigilant against potential future outbreaks, despite achieving a high rate of employee recovery from COVID-19[23]. - The company expressed concerns about the unpredictability of future policies, which has made investment in new projects challenging[31]. Sustainability Initiatives - The company has established 25 sustainability targets to be achieved by the end of 2025, as part of its commitment to sustainable development[9]. - The company achieved a significant milestone with the Jinan Hang Lung Plaza becoming the first commercial development in Shandong Province to use 100% renewable energy as of January 1, 2023[15]. - The company has set short-term and long-term carbon reduction targets approved by the Science Based Targets initiative, aiming for net-zero emissions by 2050[15]. - The company launched the "Hang Lung She Leads" program, providing mentorship to 200 female students in Hong Kong and mainland China[175]. Customer Engagement and Sales Performance - Overall customer traffic across ten shopping malls decreased by 21% compared to 2021, while tenant sales only declined by 9%[24]. - The company noted that consumer spending is expected to benefit from the recovery, as wealthy individuals are likely to continue shopping domestically rather than abroad[32]. - The company implemented various marketing activities and membership programs to boost consumer sentiment and foot traffic in the second half of 2022[144]. - The membership program "Hang Lung Club" effectively stimulated tenant sales, playing a crucial role in the overall performance[60]. Future Outlook and Strategic Plans - The chairman expressed optimism for 2023, predicting a good year for mainland leasing business despite external uncertainties[29]. - The company anticipates strong growth in mainland operations, which may further decrease the profit contribution from Hong Kong[29]. - The company plans to release a "Joint Charter" in March 2023, outlining commitments and actions towards sustainability, aiming to set new standards for collaboration between owners and tenants[41]. - The company plans to continue its market expansion and explore new strategies to enhance revenue streams[136]. Corporate Governance and Board Diversity - The board proposed a final cash dividend of HKD 0.60 per share for the fiscal year 2022, maintaining the same level as 2021, resulting in a total annual dividend of HKD 0.78 per share[138]. - The board currently consists of 10 members, including 4 executive directors and 6 independent non-executive directors[195]. - The company aims to appoint one female director by 2024 as part of its board diversity policy[196]. - Approximately 41% of the total workforce are women, with over 60% of clerical staff being female[195].