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Hang Lung Properties / Group - good Buy near $14, $20?

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CORRELATIONS

Weirdly, Hang Lung (HK10) correlates well with SLV/ Silver prices ... 10-yrs : w/HSI : 12-yrs : w/GLD :

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SLV correlation is better than with HSI

HK-2823 etc ... update

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Stock- : End-14 : End15 : End-16 : End17 : Bk-Val : Divid.s  / $-Last : -%Disc
HK10-- : $35.20 : $25.20 : $27.00 : $28.75 : $61.04 : $1.220 / $27.50 : -54.9%
HK101 : $21.75 : $17.64 : $16.44 : $19.10 : $30.27 : $1.160 / $18.70 : -38.2%
HuiXian $03.48 : $03.33 : $03.14 : $03.14 : $04.80 : $0.261 / $03.26 : -31.1%
Hk-HSI : 23,605 : 21,914 : 22,001 : 29,919 : 00,000 : ====== / 31,502 :
EEM--- : $39.29 : $32.19 : $35.01 : $47.12 : $48.58 : $1.390 /  $49.21 : +1.30%
GLD/au 113.58 : 101.46 : 109.61 : 123.65 : 125.00 : ====== / 124.60 : -0.32%
SLV---- : $15.06 : $13.19 : $15.11 : $15.99 :  $15.50 : ====== / $15.39 : -0.71%
10/101:  R-1.62 : R-1.43 :  R-1.64 :  R-1.51 :  R-2.02 : ====== /  R-1.47 :
10/HuX  R-10.1 : R-7.57 :  R-8.60 :  R-9.16 :  R-12.7 : ====== /  R-8.44 :
10/SLV:  R-2.34 : R-1.91 :  R-1.79 :  R-1.80 :  R-3.93 : ====== /  R-1.79 :

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HK10 .... update : $25.65 -0.20 :  HK101 :

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HK10 / Hang Lung ... update : HK101

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CHART : Calendar 2014 - 18 : update : / 10d: HK10 : HK101 : Both : 870001 : update-4/26/18: $23.95,  $18.40

uDHAuyF.gif

Hang Lung Properties (HK:101) closed yesterday (Sept.8th at): +$17.40 + 0.40 :: +2.35%

Open: 17.30 / High: 17.48 / Low: 17.00 // Volume: 672,675

Yield: 1.95% / P/E Ratio: 6.90 / 52 Week Range: 16.96 to 26.45

COMPARE - HLG owns almost 53% of HLP ++ some other assets

=========== : -- Aug. 2015 --- / --- Apr. 2018 -- /
Company----- : Group- : -Props. / Group- : -Props. / Change : Change :
Stock Symbol: HK-10 : HK101 / HK-10 : HK101  /
Last Price---- : $29.10 : $17.40 / $23.95 : $18.40 / -17.7% : +5.75% :
Low of year--: $28.60 : $16.96 / $23.85 : $17.28  /
Book Value-- : $56.86 : $29.50 / $61.06 : $30.27  / +7.39% : +2.61% :
Price / Book- :  51.2 % : 59.0 % /  39.1 % :  57.1 % /
Shares O/S -- : 1.35bn : 4.48bn /  1.36bn : 4.50bn /
MktCap. HKD : $39.3B : $78.0B / $32.6B :  $82.8B /
Earnings / sh :   $ 4.82 :  $ 2.52 /  $ 3.90 :   $ 1.81 /  -19.1% : -18.2% :
P/E Ratio -------- : r-6.04 :  r-6.90 /    r-6.14 : r-10.17 /
Yield -------------- : 1.30 % : 1.95 % /  3.34 % :  4.08 % /
Div. per share :  $ 0.38 : $ 0.34  /  $ 0.80 :  $0.75  / +111.% : +121.% :

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Hang Lung / HK10 vs HK101 - since 2008 :

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xx

QTR: 10-BKV: 10-div: HK-10 : HK101: 101/10 : -CCLI - : hlg/CC :
e.08: 000.00 : $0.00 : $23.45 : $16.84 : 71.81% : $56.78 : 41.30% :
e.09: 000.00 : $0.00 : $38.65 : $30.60 : 79.17% : $74.07 : 52.80% :
e.10: $ 86.60 : $0.19 : $51.10 : $36.35 : 71.14% : $88.38 : 57.82% > highest ratio since GFC
e.11: $ 89.90 : $0.38 : $42.55 : $22.10 : 51.94% : $95.47 : 44.57% :
e.12: $ 96.00 : $0.79 : $44.05 : $30.80 : 69.92% : 115.60 : 38.11% :
e.13: 101.00 : $0.80 : $39.15 : $24.50 : 62.80% : 118.96 : 32.91% :
e.14: 106.80 : $0.81 : $35.20 : $21.75 : 61.79% : 133.34 : 26.40% :
e.15: 103.50 : $0.80 : $25.20 : $17.64 : 70.00% : 135.89 : 18.54% :
e.16: 101.30 : $0.80 : $27.00 : $16.44 : 60.89% : 144.72 : 18.66% :
e.17: 109.80 : $0.80 : $28.75 : $19.10 : 66.43% : 165.02 : 17.42% :
Q-1 : 000.00 : $0.80 : $25.65 : $18.28 : 71.27% : 177.61 : 14.44% :
Q-2:
====
BkV.: 10: $61.06 / 101: $30.27 :  49.57 % / Apr. 2018

Annual Report 2017 :  HLG : HLP /

 

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Hang Lung Group is getting interesting (again)

HK10 ... update : 3yr : 10d / last HK$22.50

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Hang Lung Group  : Key Long term support for HK10 at $20 (or thereabout)

Hang Lung Properties : support at $14, maybe

HK10 ... all data : 10yr : 5yr : 2yr : 6mo : 10d / Last

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hk10 - hang lung group : 10yr :

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hk101 - hang lung properties : 10yr :

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QTR: 10-BKV: 10-div: 10-yld : HK-10 : HK101: 101/10 : CCLI - : hlg/CC :
e.08: 000.00 : $0.00 : 0.00%: $23.45 : $16.84 : 71.81% : $56.78 : 41.30% :
e.10: $ 86.60 : $0.19 : 0.37%: $51.10 : $36.35 : 71.14% : $88.38 : 57.82% > highest ratio since GFC
e.15: 103.50 : $0.80 : 3.17%: $25.20 : $17.64 : 70.00% : 135.89 : 18.54% :
e.16: 101.30 : $0.80 : 2.96%: $27.00 : $16.44 : 60.89% : 144.72 : 18.66% :
e.17: 109.80 : $0.80 : 2.78%: $28.75 : $19.10 : 66.43% : 165.02 : 17.42% :
Q-1 : 000.00 : $0.80 : 3.11%: $25.65 : $18.28 : 71.27% : 177.61 : 14.44% :
Q-2 : 000.00 : $0.80 : 3.64%: $22.00 : $16.18 : 73.55% : 186.33 : 11.81% :
7/05 000.00 : $0.80 : 3.76%: $21.30 : $15.62 : 73.33% : 186.33 : 11.43% :
====
BkV.: 10: $61.06 / 101: $30.27 :  49.57 % / yr.end Dec. 2017

=========== : -- Aug. 2015 --- / -- Apr. 2018 -- / - July 5, 2018 - /
Company----- : Group- : -Props. / Group- : Props / Group- : -Props. / Change : Change :
Stock Symbol: HK-10 : HK101 / HK-10 : HK101  / HK-10 :  HK101  /
Last Price---- : $29.10 : $17.40 / $23.95: $18.40 / $21.30 : $15.62 / -26.8% : -10.2% :
Low of year--: $28.60 : $16.96 / $23.85 : $17.28 / $21.20 : $15.62 /
Book Value-- : $56.86 : $29.50 / $61.06 : $30.27 / $61.06 : $30.27 / +7.39% : + 2.61% :
Price / Book- :  51.2 % : 59.0 % /  39.1 %:  57.1 % /  34.9% :  51.6 % /
Shares O/S -- : 1.35bn : 4.48bn /  1.36bn: 4.50bn /  1.36bn: 4.50bn /
MktCap. HKD : $39.3B: $78.0B / $32.6B: $82.8B / $29.1B : $70.3B /
Earnings / sh :   $ 4.82 :  $ 2.52 /  $ 3.90 :  $ 1.81 /  $ 3.90 :  $ 1.81 /  -19.1% : -18.2% :
P/E Ratio -------- : r-6.04 :  r-6.90 /    r-6.14 : r-10.17 /  r-5.46 : r- 8.63  /
Yield -------------- : 1.30 % : 1.95 % /  3.34 % :  4.08 % /  3.76% :  4.80% /
Div. per share :  $ 0.38 : $ 0.34  /   $ 0.80 :  $0.75  /  $ 0.80 :  $0.75  / +111.% : +121.% :

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On Silver's correlation with HK China & Property shares

LOOK WHAT HAPPENED - haha! /

The "Cluster" of prices came together, all but one

"SLV correlation is better than with HSI" (historically, I had noted)

HK-2823 etc ... update

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UPDATE - HK2823 & HK12 fell to the level of SLV - as HK10 got cheaper; now almost 35% cheaper

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ONE YEAR
Sym. Stock -- : 07/04/17- Pct. : 07/05/18- Pct. : change :
2823-China50 : $12.28 (100.%) : $12.44 (100.%) : + 1.30%
SLV--Silver Etf : $15.30 (126.%) : $15.03 (121.%) :  - 1.76%
HK12-Hender. : $40.00 (326.%) : $40.95 (329.%) : + 1.02%
HK10-HangLG : $31.30 (255.%) : $21.20 (100.%) : -32.27%
HSI-- HS index : 25,389 (2068x) : 27,985 (100.%) : +10.22%

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Hang Lung Properties (HK101), Historical Summary


 ========= : -2010* : -2011* : -2012- : -2013-- : -2014-- : - 2015-- : - 2016-- : - 2017-- :
HLP Revs-- : $5.19B : $3.07B : $7.37B : $9.138B : $17.03B : $8.948B : $13.06B : $11.20B :
"Net Profit- :  $00.0B : $00.0B : $00.0B : $7.212B : $11.70B : $5.092B : $6.195B : $8.124B :
"Underly'ng : $6.18B : $1.65B : $6.18B : $5.050B : $10.02B : $4.387B : $6.341B : $5.530B :
ShareH-Eqty $110.B : $111.B : $118.B : $124.5B : $132.3B : $129.0B : $126.6B : $136.2B :
EPS-NetPr ':  $1.33 / :  $0.58 /: $1.88 / : $ 1.61 / :  $ 2.61 / :  $ 1.13 / :  $ 1.38 / :  $ 1.81 / :
EPS-UndLy ':  $0.00 / :  $0.00 /: $0.00 / : $ 1.13 / :  $ 2.24 / :  $ 0.98 / :  $ 1.41 / :  $ 1.23 / :
Dividend----- : $0.71 / :  $0.36 /: $0.74 / : $ 0.75 / :  $ 0.76 / :  $ 0.75 / :  $ 0.75 / :  $ 0.75 / :
Shs.O/S----- : 4,472M : 4,473M: 4,477M : 4,479 M : 4,485 M : 4,497 M : 4,498 M : 4,498 M :
BkValue/sh.: $24.5 / :  $24.9 /: $28.3 / : $27.80 / : $29.50 /: $28.68 / : $28.14 / : $30.27 /:
YrEnd.Price : $36.4 / :  $22.1 /: $30.8 / : $24.50 / : $21.75 /: $17.64 / : $16.44 / : $19.10 /:


========= : -2010* : -2011* : -2012- : -2013-- : -2014-- : - 2015-- : - 2016-- : - 2017-- :
% change---- : --N/A- :: +13.5% : +30.0% : +8.88% :: +6.50% : : - 0.40% :  - 0.18 % :  + 0.54% :
TotalRental:  $4.55B : $5.16B : $6.71B : $7.307B : $7.782B : $7.751B : $7.737B : $7.779B :
"Underly.Prf: $6.18B : $1.65B : $6.18B : $5.050B : $10.02B : $4.387B : $6.341B : $5.530B :
%/Und.Prof- :  73.6% : 312.7% : 108.6% : 144.7% :   77.7 % :  176.7 %  :  122.0 % :  140.7  % :

CH Leasing : $45.8B : $56.0B : $76.4B : $ 90.4 B : $ 96.3 B : $ 00.0 B : $ 72.9 B : $ 72.6 B :
CH Rentals : $1,931 : $ 2,339 : $ 3,526 : $ 3,984 :: $ 4,354 : : $ 4,194 : : $ 3,995 : : $ 3,958 :
+ Gr.Yield---- : 4.22 % :  4.18 % :  4.62 % ::  4.41 % : :  4.52 % ::  0.00 % : :  5.48 % ::  5.45 % ::
+ FloorArea: .619m2 : .576m : 1.18m2 :: 1.56m2 :: 1.91m2 :: 2.32m2 :: 2.26m2 :: 2.26m2 ::> 4.0m2 exp'd
+ occup-cy.: : : 98 % : : : 98 % : : :  97 % : : : : 93 % : : : : 79% : : : : 78% : : : : : 80% : : : : 85% : :
HK Leasing : $50.9B : $53.6B : $55.3B : $ 57.0 B : $ 58.9 B : $ 00.0 B : $ 59.0 B : $ 61.9 B :
HK Rentals : $2,615 : $ 2,822 : $ 3,185 : $ 3,323 :: $ 3,438 : : $ 3,557 : : $ 3,742 : : $ 3,821 :
+ FloorArea:.770m2 : .770m2 : .766m2 :: .740m2 :: .740m2 :: .646m2 :: .646m2 :: .642m2 ::

Invest.Props : $85.9B : $93.6B: $98.2B : $107.B :: $120.B :: $129.4B :: $125.4B :: $134.4B :
Under Constr : $21.5B : $23.6B: $24.5B : $30.5B :: $25.6B : $16.71B :: $16.16B :: $21.59B :
P4Sale,Other : $10.0B : $09.7B : $09.1B : $ 9.8B :: $ 7.5B :: $05.60B :: $09.00B :: $05.44B :
Debt O/S ----- : $10.8b : $20.9b: $37.6b : $45.0b :: $40.1b :: $32.77B :: $27.08B :: $24.82B :
Cash held ---- : $11.9b : $28.3b: $40.2b : $39.7b :: $40.3b :: $31.29B :: $24.33B :: $22.11B :

Shd.Eqy-HLP: $110.b: $111.5b: $117.9b: $124.5b: $132.3b: $129.0B: $126.6B:: $136.2B :
Shd.Equity-- : $53.0b : $59.0b : $65.2b :  $70.6b :: $76.0b :: $000.0B :: $000.0B :: $000.0B :

TotalRental:  $4.55 B : $5.16B :  $6.71B : $7.307B :: $7.782B : $7.751B : $7.737B : $7.779B :
CH+HK Leas: $96.7B : $109.6 : $131.7B : $147.4B : $155.2B : $000.0B : $131.9B : $134.5 B :
Invest.Prop   : $85.9B : $93.6B : $ 98.2B : $107.0 B: $120.0B : $129.4 B : $125.4B : $134.4B :
+ GrYield, IP : 5.30 % : : 5.51 % : :  6.83 % : : 6.83 % : : 6.49 % : : : 5.99 % : :  6.17 % : :  5.79 % :
+ FloorArea: 1.39m2 : 1.35m2 :: 1.95m2 :: 2.30m2 :: 2.65m2 :: 2.96m2 :: : 2.90m2 :: : 2.90m2 :
+ occup-cy. : : : 96 % : : : 96 % : : :  94 % : : : : 93 % : : : : 83% : : : : 82% : : : : : 81% : : : : 83% : :
+ OccuArea : 1.33m2 : 1.29m2 :: 1.84m2 :: 2.14m2 :: 2.20m2 :: 2.44m2 :: : 2.35m2 :: : 2.41m2 :

Rent/SqM/yr.: $3,418: $4,000 : : $3,647 :: $3,371 :: $3,543 :: $3,177 :: : $3,292 :: : $3,227 :
Other Revs. : $8,034 : $0,553 : $1,275 ::  $2,518 :  $9,812 :: $0,000 :: : $0,000 :: : $0,000 :
TtlRevenues: $12,580 : $5,714 : $7,986 ::  $9,734 :  17,606 :: $0,000 :: : 13,059 :: : 11,199 :
=========== : -2010* : -2011* : -2012- : --2013-- : --2014-- : --2015-- : --2016-- : --2017-- :

*year ended june 30th / m2= million sq. meters

> Annual Report, 2017 : http://www.hanglung.com/HLPAnnualReport2017/download.html : 2016 : 2015 :
> 10 Year Summary : http://www.hanglung.com/HLGAnnualReport2014/pdf/HLG_Ten_Year_Financial_Summary_E.pdf
> Historical A/R's --- : http://www.hanglung.com/en/investor-relations/financial-information/financial-reports.aspx
==

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FWIW, HSBC has a price target of HKD26.70 on Hang Lung Properties. That's quite  a decent upside from present levels.

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Chairman's Letter, HLP 2017

2017 Annual Report
Business Review
Retail sales continued to recover in both mainland China and Hong Kong. This has yet to be
translated into higher rents due to the lagging effect of lease contracts. It will likely take
another 12 to 18 months after which our results should be positively impacted.
On the Mainland, the recovery of retail sales of luxury products is particularly strong. On a
year-on-year and like-for-like basis, all our malls saw improvements, ranging from 1% in the
case of Shenyang Forum 66 to 99% for Dalian Olympia 66. Most of the others increased by
10% to 12%, with Shanghai Plaza 66 climbing 26%. Occupancy rate also advanced in almost
all properties, with the biggest rise in Wuxi Center 66 and Tianjin Riverside 66.

13dd2e32-91e3-11e7-b116-f4507ff9df92_980

Shanghai Plaza 66 : Sept. 2017 (re) Opening

Overall, there were far fewer instances of lease terminations and negative rent reversions than
in the past few years. In the cases of Shanghai Grand Gateway 66 and Wuxi Center 66, the
fall in rental revenue was entirely due to the renovation and construction works
that took
some retail space out of the market. In the former, on average 20% of the retail space was
under renovation, with 30% affected at one stage. On a like-for-like basis, the rents collected
were 7% higher than the year before. In Wuxi, not counting the 9% retail space taken out by
the construction of the second office tower, the revenues received were flat. Comparing the
second half of 2017 to the first six months of the year, the rents were up 9%.


Offices in Shanghai remained under pressure. Rental income retreated by 8% due primarily
to the lead time required to replace a major tenant at Plaza 66. A new long lease is now
signed at an attractive rate. The incoming tenant is of a much higher quality than the outgoing
one. The office towers in Wuxi Center 66 and Shenyang Forum 66 have done well, with
occupancy rates reaching 80% or above, in fact close to 90% for Center 66.

All this tells us that the six-year winter is now behind us. Even Forum 66, the most challenging
property, is gradually improving. The new on-site management team is delivering positive
results. Everywhere, I expect our operating numbers to further advance in the coming year or
two.

The recovery of Hong Kong retail sales was stronger in the second half of the year. Excluding
certain properties that were undergoing major renovations, our rental revenue rose 3% while
retail sales increased 8%. However, as explained six months ago, years of outperformance
when the market contracted has left our rents with a much higher basis. Consequently, I do
not expect them.

. . . The numbers basically reflected our view of the market and our own condition as I had
presented six months ago. The retail environment everywhere has definitely improved which
will soon favorably impact our bottom line. There is little doubt in my mind that better days
are ahead...


. . . There are two reasons for my optimism. First, under our CEO Mr. Philip Chen, we have in the
past seven years greatly transformed our management. Ours is a much better company
today, and one which is more prepared to cope with the ever-changing market conditions.
We will continue to make improvements.
The second is that China’s economy is undergoing desirable changes. Private consumption
is fast becoming a major pillar. Not long ago it accounted for about one-third of the economy;
now it is over 40%
with the economic pie being much bigger. By comparison, the same
number in the U.S. is around 69%. Over time, China will move closer to the American level,
although it is doubtful if it would ever get as high as that of the U.S.

US is "over-malled", and China is not
Another way of comparing China’s private consumption with that of other major nations is to
look at the average per capita square meter of retail space. The U.S. is the most “over-
malled” — for every citizen, there are over 2.2 square meters.
No one comes close; the next
is Canada with 1.5 square meters per capita. Hong Kong, Singapore, and Australia each has
about 1.1 square meters per person. Then the numbers drop off
. In Europe, the U.K. has the
most at 0.5, France is below 0.4, Italy and Spain each has less than 0.3, and Germany, not
even 0.2.

The number for China is similar to Italy and Spain at 0.3 square meters per person. This is
less than one-seventh of that in the U.S
. Taking out China’s huge rural population —
approximately 43% of 1.38 billion — with less consumption power, and allocate all retail
space just to city dwellers, the number would still be only around 0.5 square meters.
So why do some investors complain that China has too many malls? First, most of the new
facilities are concentrated in tier-one and tier-two cities. Second, the rate of space addition
can be mind-boggling. Although the per capita retail space numbers are favorable for China,
the impression to the casual observer is a different story. This “oversupply” together with the
onslaught of e-commerce have caused some investors to shy away from Chinese retail real
estate. It is amazing how some analysts observing the oversupply in the U.S. market have
assumed that China has the same problem.

> http://www.hanglung.com/HLPAnnualReport2017/file/en/HLP_Chairmans_Letter_To_Shareholders_E.pdf

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Hang Lung's Quality DESIGN

DnVa18H.jpg

Heartland 66 mall in Wuhan, China

While comparing China’s malls with those in other countries, I should add that like nowhere
else, our properties are by far the most spectacular architecture-wise. Every shopping center
of ours can rightfully be considered as quality public art. Beyond just placing say nice
sculptures inside or outside the building, our entire structure, always sizable, is a design
masterpiece. Not many people I believe will dispute this statement. There are very few, if any,
mall developers who pay so much attention to the shape and elevation of their buildings.

Although it may cost us a little more to design and construct, it is good business in the long
run.
First, many municipal leaders from around the country want us in their city. We help
beautify their environment. The image thus created helps them raise the profile of their city
and differentiate them from others in front of their political bosses in Beijing. It will not hurt
their personal chance of career advancement. Their desire to have a Hang Lung 66 project in
their city has given us a slight edge in winning land.

On a more altruistic and less personal level, we believe that designing and erecting
exceptionally beautiful buildings in a city helps fulfill our determination to be a responsible
enterprise that gives back to society. It is a service we provide to all citizens irrespective of
whether they are our customers or not. As society becomes more prosperous, people begin
to seek aesthetics which is innate to all mankind. We try to help in this regard and, in the
process, help foster a more harmonious society.

The Future: A continuing commitment to China
I together with my colleagues must decide whether to
continue to invest in mainland China. So far our decision is a very definite yes. Of less
concern to us than policy blunders is the cyclical fluctuation of the market such as the winter
of the past six years. We knew that spring would sooner or later return, and it did.
On a more immediate business front, I truly believe that in time, in fact quite soon, all of our
properties will perform satisfactorily. This includes the two projects that are being built:
Kunming Spring City 66 and Wuhan Heartland 66. Frankly there are few reasons to believe
otherwise.
What is less clear is our ability to acquire good pieces of land at reasonable prices. While this
is in no way detrimental to our near-to-medium-term, for we have many square meters of
land on the Mainland yet to be developed, our long-term future could be capped. Doubtless
we will buy land some time but the uncertainty of timing and outcome will be a test to our
nerves. While sticking to our time-proven strategy, we may also explore new ideas.
Back to our immediate prospects: I do not expect the rental income of 2018 to be
substantially different from that of the past year. A mild increase is the most likely outcome.
The positive effects of the recovering retail market should soon come through thereafter.
Total profit will again depend on how much of the Blue Pool Road project we sell.
In Hong Kong, the major renovation of The Peak Galleria should finish by the end of 2019.
We now own about 85% of Amoycan Industrial Centre. Plans for redeveloping the site are
being drafted.

240px-Center_66,_Wuxi,_China.jpg

Wuxi Center 66
The second office tower of Wuxi Center 66 should be completed in mid-2019. Plans for the
second site just south of the mall and offices are being drawn up. Trial pile and soil testing
are proceeding.

springcity66_rendering-full_(c)hang__lun

Kunming Spring City 66
Ongoing construction works are all progressing as planned with minor delays. The mall of
Kunming Spring City 66 is expected to open in mid-2019. So far slightly over 30% of the
space is committed or close to being so. Response from retailers is quite encouraging. The
office tower is expecting to open three to six months after the shopping center.


Ronnie C. Chan
Chairman
Hong Kong, January 30, 2018

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HLG Letter

2017 Annual Report
EXCERPT
In the more immediate term, rental income from both Hong Kong and the Mainland is expected to rise
gently. From 2019 onward, revenue growth should pick up, with rental profit following soon thereafter.
It is safe to assume that we will sell out The Long Beach in the coming months. After all, we only have a
few apartments remaining. With luck, we should also be able to part with more houses at Blue Pool Road.
Thereafter, we will become, for the time being, a pure property rental company, until high-end luxury condos
at some of our Mainland developments — Forum 66 in Shenyang, Center 66 (Phase Two) in Wuxi, Spring City
66 in Kunming, and Heartland 66 in Wuhan — are ready for sale.


Long-term observers of this Company know that whenever the share price of our publicly listed major
subsidiary, Hang Lung Properties Limited (HLPL), is down, we buy the scripts
. Inasmuch as we are one of
the most transparent entities on the Hong Kong Stock Exchange, no one knows the intrinsic value of these
shares as well as this management does. We consider it an excellent opportunity to acquire more at today’s
price. HLPL (together with this Company) underperformed before 2002. Thereafter, it became a
market darling until 2011. I cannot predict how hot our shares will become in the coming few years, but
management does believe that sooner rather than later, our intrinsic value will be recognized anew by the
market. I await the arrival of that day.


Before 2001, my letters to the shareholders of this Company were much more substantial than those for
HLPL. Around that time, we clarified the respective functions of the two entities, where HLPL became the
operating arm, and all new real estate projects were put into it. As such, beginning around 2002, my reports
for HLPL became much longer. Moreover, before 2011, when we changed our fiscal year-end from June
30 to December 31, my letter at the time of annual results was much more substantial than the interim
one. So much so that I feared that many people would only read the end-of-year report of HLPL, and overlook
the year-end letter of this Company and the mid-year one of both entities.
> http://www.hanglung.com/HLGAnnualReport2017/file/en/HLG_Chairmans_Letter_To_Shareholders_E.pdf

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Hang Lung snaps up prime Hangzhou plot for US$1.7b | South China ...

www.scmp.com › Business › Companies

May 29, 2018 - Hang Lung is paying 10.7 billion yuan (US$1.7 billion) for a parcel of prime commercial land in Hangzhou in eastern China – the Hong Kong ...

The land is believed to be the most expensive plot for commercial project development in the capital city of affluent Zhejiang province, and one of Hang Lung’s priciest ever mainland acquisitions.

Total investment of 19 billion yuan is earmarked for the planned project, a large-scale commercial mixed-use complex, comprising a world-class shopping centre and office tower, the Hong Kong real estate major said late on Monday.

“We are thrilled to have successfully acquired this premium site in Hangzhou,” said Ronnie Chan, chairman of Hang Lung Group and Hang Lung Properties, stressing the acquisition allows the developer to further extend into another strategic location, to capitalise on opportunities available right across the mainland.

==

The plot extends Hang Lung’s reach to 11 developments in nine mainland cities and marks a “new milestone” for its growth.

“This acquisition aligns with our long-term investment plan and we are confident we will create great value for the city and Hang Lung from this world-class, iconic landmark,” Chan said.

This acquisition aligns with our long-term investment plan and we are confident we will create great value for the city and Hang Lung from this world-class, iconic landmark
Ronnie Chan, chairman of Hang Lung Group and Hang Lung Properties

The plot is located in the city’s Xiacheng District, the commercial and business centre of Hangzhou, and has good access to public transport.

Covering an area of 44,827 square metres and a maximum above-ground gross floor area of 194,101 square metres, the plot is the only remaining large-scale site for commercial development available in the district.

. . . Hangzhou is emerging as one of the most dynamic cities in mainland China, renowned for its tourism attractions and its rising clout as a home to technology majors such as like Alibaba Group and NetEase.

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HLG bought in about 27 Million Hang Lung Properties (HLP) shares in 2017,

raising its ownership from 55.1% to 55.7% - per 2017 Annual Report.
This purchase will keep an extra HK$20Million within HLP, vs. End 2016.

6gCOsKa.png

Non-Controlling Interest : now just 44.3%

NCI percentage at the end of the reporting period
44.9% / 55.1 OWNED > 44.3% / 55.7 OWNED (2017)
Profit allocated to NCI : 2016 : 2,967 / 2017 : 3,599
Dividend paid - to NCI  : 2016 : 1,840 / 2017 : 1,513


 ========== :- 2015-- :- 2016-- :- 2017-- :
HLP Revs--- : $8.948B : $13.06B : $11.20B :
"Net Profit-: $5.092B : $6.195B : $8.124B :
"Underly'ng : $4.387B : $6.341B : $5.530B :
ShareH-Eqty : $129.0B : $126.6B : $136.2B :
EPS-NetPr / :  $ 1.13 / :  $ 1.38 / :  $ 1.81 / :
Dividend----:  $ 0.75 / :  $ 0.75 / :  $ 0.75 / :
Shs.O/S-----: 4,497 M : 4,498 M : 4,498 M :
BkValue/sh. /: $28.68 /: $28.14 /: $30.27 /:
%Held by HLG :  00.0% / : 55.1% / : 55.7% /:
Shs.Held---- : 0,000 M : 2,478 M : 2,505 M :
Book Value-: -000000 : $69.73B : $75.83B :
Shs.O/S----- : 1,355 M : 1,362 M : 1,362 M :
Per HLG sh. /: $00.00 /: $51.20 /: $55.68 /:

=====================

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Hang Lung Co's versus China REIT, HX

On 8/12/2015 at 2:50 PM, DrBubb said:
Hui Xian vs. Hang Lung Companies

(Hui Xian and HL-Props track each other!)

Symbol : Co.------- : Price-- : PE-R. : Yield% : Div. ? : Earn? :
87001 : Hui Xian- : #03.36 : 17.52 : 8.11% : #0.27 : #0.00 :
HK10- : HL-Group: $33.65 : 6.981 : 1.13% : $0.38 : $0.00 :
HK101 : HL-Prop. : $20.00 : 7.937 : 1.70% : $0.34 : $2.52 :
HK101 : @ target : $17.50 : 6.940 : 1.94% : $0.34 : $2.52 :

HK:87001 / Hui Xian vs. Hang Lung Cos. ... All-data : 5-yr : 2-yr : 6-mo : 10d :

CDdxybC.gif

: 5-yr :

rlRHmXx.gif

QTR: 10-BkV 10-div: HK-10 : HK101: 10/101 : HauX  : hlg/HX :
start $89.90 : $0.38 : $52.30 : $34.60 : r1.512 : $ 5.00 : r10.46 :4/29/11
e.11: $89.90 : $0.38 : $42.55 : $22.10 : r1.925 : $ 3.56 : r11.95 :
e.12: $96.00 : $0.79 : $44.05 : $30.80 : r1.430 : $ 4.15 : r10.61 :
e.13: 101.00 : $0.80 : $39.15 : $24.50 : r1.598 : $ 3.88 : r10.09 :
e.14: 106.80 : $0.81 : $35.20 : $21.75 : r1.618 : $ 3.48 : r10.11 :
e.15: 103.50 : $0.80 : $25.20 : $17.64 : r1.429 : $ 3.33 : r 7.57 :
e.16: 101.30 : $0.80 : $27.00 : $16.44 : r1.642 : $ 3.14 : r 8.60 :
Q-1 : 101.30 : $0.80 : $33.15 : $20.20 : r1.641 : $ 3.09 : r10.73 :
Q-2 : 101.30 : $0.80 : $32.30 : $19.50 : r1.656 : $ 3.11 : r10.45 :
Q-3 : 101.30 : $0.80 : $28.05 : $18.54 : r1.513 : $ 3.05 : r 9.20 :
e.17: 109.80 : $0.80 : $28.75 : $19.10 : r1.505 : $ 3.15 : r 9.13 :
Q-1 : 000.00 : $0.80 : $25.65 : $18.28 : r1.403 : $ 3.10 : r 8.27 :
Q-2 : 000.00 : $0.80 : $22.00 : $16.18 : r1.360 : $ 3.19 : r 6.90 :
====
BkV.: 10: $61.06 / 101: $30.27 :  49.57 % / Apr. 2018

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FEARS in China

POSSIBLE ANTI-CHINA BEX - Chinese Millionaires Fleeing to United States

As the Yuan continues to slide downward towards it's worst month ever, more than a third of Chinese millionaires are looking to the United States for a stable place to live and invest their money.
These results came from a study by the Huran Research Institute, an English based Chinese research firm along with the Visas Consulting Group, an immigration advisory group. They surveyed 400 Chinese citizens with an average net worth of $4.5 million.

Webmaster addition: Trying to suck more money out of China?

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87001 offers an 8.4% dividend yield (tax free for HK residents). It may not have the growth potential of 101, but it's a great income generator and offers a DRP for those who like to reinvest and see their returns compound over time.

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"Very interesting near $15, $21" - Yup! We are a little lower than those Targets now!

... and I will start buying HK10 - below $20

Hang Lung ... updated to 10/12 midday:

Symbol : Co.----- : Price-- : tBkVal: P-BV. : PE-R. : Yield% : Div. ? : Earn? :
87001  : Hui Xian- : #03.08 : # 4.71: 65.4% : 11.85 : 9.09% : #0.28 : #0.26 :
HK10-  : HL-Group: $19.50 : $62.87: 31.0% : 5.000: 1.95% : $0.38 : $3.90 :
HK101 : HL-Prop. : $14.24 : $30.59: 46.6% : 7.867 : 2.39% : $0.34 : $1.81 :
HK101 : @ target : $14.00 : $30.59: 45.8% : 7.734 : 2.43% : $0.34 : $1.81 :
HK778 : FortuneR : $ 8.67 : $14.07: 61.6% : 10.84 : 0.00% : $0.00 : $0.80 :
=====> Data-WSJ :

Hang Lung ... HLP/hk101 vs HLG/hk10 / all-data : 10yrs : 2018 : 10d hk10 101:

1iaLsoN.gif

: 2018 . hk10 . 101 :

jUZoESX.gif

HK-10-etc ... update :

l76zGUT.gif

=

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Unpacking 2018 Interim Results

HL Group: HK10
(shs OS 1,362Mn.)
M'sHkd=: 6mo'17: 6mo'18 / FY.2016: FY.2017: FY.2018:
NetAsst: $142.6B $151.0B/ $144.6B $149.6B $
Ch%Lrev:  52.3 % :  54.2 % /  53.1 % :  52.3 % :
%Shang.:  70.5 % :  69.7 % /  70.0 % :  70.0 % / China Revs, % from Shanghai Malls
%asstX2:   4.35% :  4.42%: /   4.23%  :   4.06% :
(Oper.Pr)  
Leasing : $3,101:  $3,337: /  $6,129 :  $6,074 :  $
Sales -- :  $1,642:  $0,565: /  $3,209 :  $2,238 :  $
Net Pr.  :  $2,396:  $3,037: /  $3,713 :  $5,314 :  $
E.P.S. -- :  $ 1.76 :  $ 2.23 : /   $ 2.73 :   $ 3.90 :  $
u/lying  :  $1,811: $1,459 : /  $3,772 :   $3,314 : $
u/l,EPS :  $ 1.33 :  $ 1.07  : /  $ 2.77  :   $ 2.43  :
Dividend  $ 0.19 :  $ 0.19 : /  $ 0.80  :   $ 0.80  :  $
BV/ sh. :  $104.7:  $110.8: /   $101.3 : $109.8 :
tBkValue  $57.60: $ 62.90 /   $55.30 :  $61.00 :  $
NDbt/Eq :  3.2 % :    7.0 % :/     4.8 %  :    3.9 % :
======:
HLG: last two divs: Interim.9/13/18: $0.19 + $0.61, for shares registered May 3, 2018 = $0.80
HLP: last two divs: Interim.

 Chairman's Letter / Hang Lung Group Limited - mid-2018
(excerpt)
...Third, from a business model perspective, it must be stated that the quality of our income is very high. Rent is a steady form of revenue and will not disappear overnight. We do not have to worry about the need to buy more land to generate new development profit, although we will do that as well. This is doubly safe since all our properties on the Mainland are in the four- or five-star categories, which means that our tenants are usually financially strong. When the economy is bad, growth rate will moderate but rents will not disappear. We have amply demonstrated this in the latest bear market of 2011 to 2017. Overall we did not have one downward year in terms of total rents received.
While our downside is quite protected, our upside can also be very satisfying. The Chinese economy is deliberately being directed to emphasize private consumption.
A 6%-7% annual GDP growth and a focus on higher value-added industries from manufacturing to services of all sorts can only hasten the rise of the middle class. By most measures, it is already the biggest of all countries in the world.
Another force which underpins this phenomenon is continual urbanization. It has been ongoing for over three decades, and will last for a few more. It is likely the biggest migration that mankind has ever seen. It can only be good for lifting the population out of poverty and strengthening the bourgeoisie that will invariably lead to the rise in private consumption. This is all good news for us.
Given the above, one can easily see why it is wrong to lump us with other Hong Kong real estate companies. Almost all of them are more dependent on development profits, which are far more volatile. The growth of our bottom line can be much steadier as it depends mainly on rental revenue.
With many complexes coming on stream, some analysts consider us a growth stock. I do not disagree, except that we are a growth company with very little internal volatility. This is not a feature that is usually associated with such companies. This is why I like our business mode

> HLG / H1-2018 : http://www.hanglung.com/CMSPages/GetAzureFile.aspx?path=~\hanglungcorporatesite\media\hanglung_media\investor relations\financial-report\hlg\hlg_2018_interim_e.pdf&hash=f1f6e897fb3463d3a42710a9d0b4b2be3e3ad5337dfcc93ffcdee0d263776d87&ext=.pdf

> General source: http://www.hanglung.com/en-US/media-center/publications/financial-report

 

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I bought HLG (HK10) at $19.64 and $19.50 yesterday & today. And may add more next week.

At $19.50, the $0.80 Dividend represents a 4.10% Dividend yield... much better than the Net yield I could get from Property,.

I prefer HLG because of the Lower PE Ratio, & larger discount to Book Value.

/ 2 / China MALLS (& Offices)

Mn's Hkd: 6mo'17: 6mo'18 / FY.2016: FY.2017: FY.2018:
Ls-OpPrf :  $3,101 :  $3,337: / $6,129 : $6,074 :  $
As%Revs :  75.3 % :  75.4 %: /  73.6 % :  72.7 % :
Ls-Revs. :  $4,118 : $4,425:/ $8,326 :  $8,354 :  $
Ch-Revs.:  $2,153 :  $2,397:/ $4,427 :  $4,372 :  $
Ch%Lrev :  52.3 % :  54.2 % /  53.1 % :  52.3 % :
%Shang. :  70.5 % :  69.7 % /  70.0 % :  70.0 % / %China Revs, from HL's two Shanghai Mall
=======

 Malls - first six months :
"Income of our eight malls in mainland China increased 2% to RMB1,367 million. Benefitting from the successful completion of the major upgrade program last year, Plaza 66 in Shanghai continued its strong growth in both revenue and retail sales. Rental of Grand Gateway 66 in Shanghai decreased 9% due to short-term disruption caused by major on-going upgrading work. The six malls outside of Shanghai achieved higher income during the period, and most of their occupancy rates and retail sales were also on a rising trend.  

8C24BYV.png
 

Shanghai Plaza 66 : R 1,409 Mn revs / Income of Plaza 66, our flagship high-end mall in Shanghai, increased 13%. Having benefitted from the recovery of the luxury sector consumption and the re-opening of the basement following renovation, retail sales of Plaza 66 rose 15% period-on-period. Occupancy of the mall increased eight points to 97%."

Shanghai Grand Gateway 66 : R 1,241 Mn revs./

Revenue of Grand Gateway 66 mall in Shanghai decreased 9% to RMB410 million, but  was  up  1%  if  excluding  32%  of  the  leasable  area  being  closed  for  renovation.  The  first  phase  of  the  upgrading  program  started  last  year  and  will  be  handed  over to tenants for fitting out in the third quarter of 2018. The brand-new area will house many  young  and  trend-setting  brands,  with  most  having  their  first  presence  at  the  mall.  The next  phase  of renovation will  commence  shortly  and  it  will  transform  the  main  entrance  of  the  mall  and  the  basement  into  a  more  vibrant  and  welcoming ambience.  These  works  are  expected  to  be  completed  in  2019.  Meanwhile,  retail  sales retreated 5% period-on-period on a comparable basis.

Income  of  our  eight  malls  in  mainland  China  increased  2%  to  RMB1,367  million.  Benefitting  from the successful completion of the major upgrade program last year, Plaza 66 in Shanghai continued its strong growth in both revenue and retail sales. Rental of Grand Gateway 66 in Shanghai  decreased  9%  due  to  short-term  disruption  caused  by  major  on-going  upgrading work. The six malls outside of Shanghai achieved higher income during the period, and mostof their occupancy rates and retail sales were also on a rising trend.

Offices
Revenue of our office portfolio in mainland China increased 3% to RMB513 million because
of  higher  occupancy.  The  total  office  rental  accounted  for  26%  of  total  Mainland  leasing  revenue.
Rental of the two office towers at Plaza 66 in Shanghai slipped 1%. Following the completed relocation of a major tenant between the two office towers, overall occupancy rate gradually increased  to  94%,  up  eight  points  compared  to  a  year  ago.  The  enhancement  works  for Office Tower Two were completed.
Income  of  the  office  tower  at Grand  Gateway  66 in  Shanghai  increased  4%  because  of  higher  occupancy,  which  rose  nine  points  to  97%.  The  upgrading  works  of  the  tower  have commenced, but are not expected to have a major adverse impact on the revenue

Coming Developments

The  total  value  of  investment  properties  under  development  was  HK$26,098  million.  They  
represented  mainland  China  projects  in  Kunming,  Wuhan,  Hangzhou  and  the  remaining  
phases  of  the  developments  in  Shenyang  and  Wuxi.  The  portfolio  consists  of  malls,  office  
towers, hotels and serviced apartments.
The construction work for Kunming Spring City 66 is making good progress. Total gross floor
area  of  the  entire  mixed-use  development  is  432,000  square  meters,  comprising  a  premier  
mall of 156,700 square meters, a 63-story Grade A office tower with a total gross floor area
of  177,600  square  meters,  serviced  apartments  and  2,000  car  parking  spaces.  The  mall  
is  expected  to  open  in  mid-2019.  

Wuhan  Heartland  66  is  planned  for  completion  by  phases  from  2020  onwards.  
Leasing  activities  for  the  mall  have  commenced.  The  project  covers  a  total  gross  
floor area of 460,000 square meters.

On  May  28,  2018,  the  Company’s  listed  subsidiary,  Hang  Lung  Properties  Limited  (Hang  Lung  Properties),  won  the  bidding  for  a  prime  land  site  in  Hangzhou  at  RMB10.7 billion. The acquisition of this site enables the Group to extend its portfolio into another strategic city in order to capitalize on the opportunities arising across the Mainland. We will develop the site into a large-scale commercial mixed-use complex,comprising  a  world-class  mall  and  office  tower(s)  with  a  maximum  floor  area  of  approximately 194,100 square meters (above ground).

800px-Amoycan_Industrial_Centre_4-alarm_

We plan to re-develop Amoycan Industrial Centre (AIC) in Ngau Tau Kok, Hong Kong, in  which  Hang  Lung  Properties  owns  almost  85%  interests.  An  application  for  a  Land Compulsory Sale for the remaining interests in AIC was submitted to the Lands Tribunal in December 2017.

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That sounds quite interesting. Growing cash flows are wonderful things.

I generally prefer to buy the parent company in a group as well.

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Yup.

Though there is some risk the parent might buy out* the minority interest in HLP at some point.

It puzzles me that HLP-hk10 is not actively buying back shares with its strong cash flow.

Maybe they will consider that to prop up the price of a quality company whose shares are now back near the high of 1994

*HLG - has been (slowly) buying back the Minority interest in HLP

6gCOsKa.png

(per OP, on pg.1)

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COMPARE - HLG / Hang Lung Group owns about 56.8% of HLP ++ some other assets

=========== : -- Aug. 2015 --- / --- Oct. 2018 -- /
Company----- : Group- : -Props. / Group- : -Props. / Change : Change :
Stock Symbol: HK-10 : HK-101 / HK-10 : HK-101 /
Last Price---- : $29.10 : $17.40 / $19.30: $14.48 / - 33.7% : -16.8% :
Low of year--: $28.60 : $16.96 / $19.28 : $14.02  / - 32.6% : -17.4% :
Book Value-- : $56.86 : $29.50 / $62.90 : $31.90  / +10.6% : +8.13% :
Price / Book- :  51.2 % : 59.0 % /  30.6 %:  45.4 % /
Shares O/S -- : 1.35bn : 4.48bn /  1.36bn : 4.50bn /
MktCap. HKD: $39.3B : $78.0B / $26.2B : $65.2B /
Earnings / sh :   $ 4.82 :  $ 2.52 /  $ 3.90 :  $ 2.73 /  -19.1% : +8.33% :
P/E Ratio -------- : r-6.04 :  r-6.90 /    r-4.95 :  r-5.30 /
Yield -------------- : 1.30 % : 1.95 % / 4.14 % :  5.17 %/
Div. per share :  $ 0.38 : $ 0.34  /  $ 0.80 :  $0.75  / +111.% : +121.% :

===========

2,555,563,240 (56.82%) x HLP ($14.48) = 37.01 Bn / 1.36b = $27.21 backing by HLP shs

56.8% x 4.50 Bn : 2.556 Bn shs : Oct.'18 : x$0.75= $ 1.917B - (1.36x0.80=$1.088)= $829M

53.0% x 4.50 Bn : 2.239 Bn shs : Aug.15 : x$0.75= $ 1.679B - (1.36x0.80=$1.088)= $591M

 ===> Difference :  317 Mn shs x $15 = $ 4.7 Bn / +$238M increased Surplus CF

HLP divs : $0.75 x 2.56bn = $1.9 Bn pa (spending most of that to buy HLP shares?)

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