Q&ACategory: Dividend StocksHang Lung properties business model
Chia asked 3 months ago
I was looking at hang lung properties  through the dividend machine 8 steps and noted that it had sustainable dividend payout ratio and interest coverage ratio. Does it have a sustainable business model given that they are mostly in the property leasing rather than property sales business? They have retail malls in Hong Kong and mainland but not sure if you would classify them as suburban malls.
4 Answers
Rusmin Ang Staff answered 3 months ago
Hi Chia, What's the percentage of leasing income versus property sales? If the larger percentage come from leasing, then it is more recurring. The leasing business is subjected to property dynamic in their China and Hong Kong. If you read their letter to shareholders, you would have a good sense on the Chairman's take on the HK and China property market. I suggest you to read the past letters by the Chairman as they contain a lot of nuggets in it.
Chia answered 3 months ago
Hi Rusmin, I reviewed their annual reports from 2019 onwards and their property sales comprise 0 to 3 percent of their revenue with the remaining majority of their revenue coming from property leasing.  Yes their current chairman Ronnie Chan has some interesting insights. Too bad he is handing over to his son Adriel chan this year. Any concerns with management due to the handover?
Rusmin Ang Staff replied 3 months ago

I think not really a concern for now. Adriel joined Hang Lung in 2010 and has worked various roles over time. So it is not like he joined the company a few years ago before assuming his vice chair role in Hang Lung. I believe Ronnie will continue to watch him like a hawk. Afterall, the family wealth is tie closely to the success of Hang Lung.

David Lim answered 3 months ago
Thanks, Chia. That's Great. Property sales only ~3% of their total revenue. i.e. ~97% of total revenue from property leasing. 
David Lim answered 3 months ago
My bad. i always confused with:-) Hang Lung Properties Ltd, HKG: 0101
Hang Lung Group Limited, HKG: 0010 I remember Hang Lung Group is "highlighted". I will try to research on Hang lung Properties. Thank you