Hang Lung Properties: 1H rental income in-line; new CEO to be named soon

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Hang Lung Properties

1H rental income in-line; new CEO to be

named soon

Reiterate Rating: BUY | PO: 8.50 HKD | Price: 7.29 HKD

1H26 missed on impairment; rental in line; reiterate Buy

31 July 2026

HLP’s 1H26 net profit declined 10% YoY to HK$1,476mn, missing our estimates due to

impairment and a higher tax rate. Ex-impairment related to Wuhan serviced apartments,

underlying net profit was down 2%, while rental income was broadly in line (Exhibit 1).

As expected, HLP discontinued its scrip dividend, while interim DPS remained flat. On

the positive side, the company announced that a new CEO will be named within the next

few weeks, and management expects high-single-digit Mainland tenant sales growth in

2H26 despite a much higher base and a still-weak consumer environment. We reiterate

Buy given attractive valuation of 69% discount to NAV and a 6.9% dividend yield. We

trim our FY26 estimate by 4% to reflect the impairment charge.

Equity

Mainland tenant sales up 17% in 1H; more openings at HZ

Fan Tso, CFA >>

Research Analyst

Merrill Lynch (Hong Kong)

In RMB terms, Mainland retail revenue grew 6%, supported by positive base rent

reversions, while turnover rent accounted for c.22% of revenue. Tenant sales increased

17% in 1H26 (24%/9% in 1Q/2Q), with both Plaza 66 and Grand Gateway 66 achieving

24% growth. By trade, F&B (+16%), non-luxury fashion & accessories (+25%), and midrange watches & jewelry (>30%) all outperformed, highlighting tenant diversification.

Westlake 66 continues to be positioned as a luxury-focused mall, with Dolce & Gabbana,

Brunello Cucinelli, Moncler (duplex), and Chopard among the brands set to open soon.

Footfall was strong at 120k/day during the May Golden Week. Mainland office revenue

declined 12% YoY and 6% HoH, owing to intense pricing competition.

HK rental broadly stable; further DP impairment unlikely

HK rental income was broadly stable, with retail/ office/ resi revenue came in -2%/+1%/

+7%, respectively. Excluding the impact of tenant changes in Causeway Bay, retail

revenue increased 1%. Overall tenant sales rose 3% in 1H26, supported by solid

performance from Kornhill and Amoy.…