HANG LUNG PPT(00101)2023-01-31 04:06Financial Performance - Total revenue for Hang Lung Properties in 2022 remained flat at HKD 10.347 billion compared to 2021, with a 3% decrease in property leasing income to HKD 10.031 billion[5]. - Operating profit decreased by 2% to HKD 7.253 billion in 2022, down from HKD 7.371 billion in 2021[5]. - Basic net profit attributable to shareholders decreased by 4% to HKD 4.199 billion, with basic earnings per share dropping to HKD 0.93[5]. - The fair value of properties attributable to shareholders decreased by HKD 363 million, compared to a decrease of HKD 497 million in 2021[5]. - The company recorded a property revaluation loss of HKD 345 million in 2022, compared to a gain of HKD 460 million in 2021[27]. - The net profit for 2022 was HKD 4,397 million, down from HKD 4,805 million in 2021, with RMB net profit at 3,760 million[51]. - The company's net profit attributable to shareholders for 2022 was HKD 3.836 billion, down from HKD 3.868 billion in 2021, reflecting a decrease of about 0.8%[65]. - The basic and diluted earnings per share for 2022 were both HKD 0.93, compared to HKD 0.97 in 2021, indicating a decline of approximately 4.1%[67]. Revenue Breakdown - Rental income from mainland properties increased by 1% in RMB terms but decreased by 3% in HKD terms due to currency depreciation[8]. - The overall leasing income in Hong Kong decreased by 3%, with the business environment impacted by the fifth wave of COVID-19[8]. - The company's mall portfolio revenue decreased by 1% year-on-year, with high-end malls down 1% and mid-range malls down 4%[10]. - The retail property segment in Hong Kong saw a revenue drop of 3% to HKD 1.931 billion, with an occupancy rate of 98%[23]. - Office property revenue in Hong Kong decreased by 5% to HKD 1.096 billion, with an occupancy rate of 90%[25]. - Residential and serviced apartment revenue increased by 4% to HKD 252 million, driven by competitive pricing strategies[26]. - The hotel business in Shenyang faced challenges, with a revenue decline of 22% to RMB 73 million due to intermittent pandemic impacts[20]. Debt and Financial Position - The net debt to equity ratio increased to 28.1% in 2022 from 24.4% in 2021[4]. - The total borrowings as of December 31, 2022, were HKD 45.524 billion, with 28% denominated in RMB[33]. - The company issued green bonds worth HKD 1.2 billion and secured green loan facilities totaling HKD 3.7 billion, representing 46% of total debt and available credit facilities[31]. - The debt composition as of December 31, 2022, shows 72% in HKD and 28% in RMB[34]. - The company reported a net loss from currency translation of HKD 9,770 million due to an 8.5% depreciation of the RMB against the HKD[41]. - The total cash and bank deposits as of December 31, 2022, amounted to HKD 5.229 billion, with RMB accounting for 57% of the total[32]. - The company's equity decreased to HKD 143,146 million in 2022 from HKD 152,384 million in 2021, a decrease of 6.0%[52]. Market Conditions and Challenges - The company faced challenges from pandemic control policies, impacting foot traffic and rental performance across its malls[12]. - Tenant sales at Shenyang Royal City Hang Lung Plaza dropped by 24%, with revenue down 10% due to pandemic-related closures[15]. - The overall rental rate for high-end malls remained high at 99% for Shanghai Hang Lung Plaza and 87% for Shenyang City Government Hang Lung Plaza[13]. - The company implemented various marketing activities and membership programs to boost consumer sentiment and foot traffic, particularly in the second half of 2022[12]. Future Plans and Developments - The company anticipates multiple milestones in 2023, including the public sale of high-end serviced apartments under the "恒隆府" brand in Wuhan and other cities[49]. - The company plans to leverage marketing activities and membership programs to drive foot traffic and stimulate consumer spending in its malls[48]. - The construction of the Hong Kong project "The Aperture" is on schedule, with completion expected in the second half of 2023[30]. - The first batch of units in Wuhan's "恒隆府" is expected to be delivered in 2023, with pre-sale revenue from "The Aperture" anticipated to be recognized in the second half of 2023[49]. Corporate Governance and Employee Engagement - The audit committee reviewed the annual results for the year ending December 31, 2022, and the financial statements were audited by KPMG with no reservations[74]. - The company has complied with the corporate governance code as per the Hong Kong Stock Exchange regulations throughout the year[74]. - The company’s overall employee engagement significantly improved, ranking in the top 25% of companies for employee engagement progress[46]. - The company has a share option plan and provides professional training to employees to ensure competitive compensation[72].