CICC has released a research report maintaining its outperform industry rating and earnings forecasts for HANG LUNG PPT (00101). The firm maintains its target price of HK$9.46 per share, representing 15x 2025 core P/E, 5.5% dividend yield, and 5% upside potential. The company trades at 14.6x 2025 core P/E and 5.8% dividend yield. The bank recommends continued attention to potential fundamental catalysts including year-over-year retail sales performance, opening progress of Hangzhou Hang Lung Plaza, cessation of scrip dividend policy, and valuation catalysts such as Federal Reserve rate cuts.

CICC's main viewpoints are as follows:

**Q3 and National Day Holiday Mainland Mall Operating Performance Shows Strengthened Year-over-Year Improvement Trend**

The bank expects mainland mall retail sales to grow 10% year-over-year in Q3 2025, achieving quarterly improvement throughout the year (Q1 2025 and Q2 2025 down 7% and 1% year-over-year respectively). Breaking down the underlying reasons: First, the same period last year represented the lowest base for the full year (Q3 2024 retail sales down 18% year-over-year); Second, benefiting from the company's rich marketing strategies, customer traffic maintained growth momentum, with the bank expecting July-August traffic up 9% year-over-year (H1 2025 up 3% year-over-year); Finally, by business segment, the bank expects Q3 2025 luxury brand headwinds to ease year-over-year, while jewelry, domestic fashion trends, and experiential categories drive growth.

During the National Day holiday, the company announced retail sales increased 15% year-over-year from October 1-4, with customer traffic up 3% year-over-year, with Wuhan and Shanghai Grand Gateway 66 showing the most prominent retail sales growth.

**Launches "Hang Lung V.3" Strategy to Strengthen Market Position in Core Cities**

The company's next phase focuses on reinvestment in existing projects and leveraging market knowledge to expand surrounding potential opportunities. For example, Phase III expansion of Shanghai Plaza 66 (the bank expects leasable area to potentially increase by 30%), conversion of Shanghai Grand Gateway 66 serviced apartments to a five-star hotel, and long-term lease cooperation with Baida in Hangzhou (the bank expects retail area to potentially increase by 40% with significantly improved project accessibility) all represent specific implementations of this strategy.

**Outstanding Performance of Key East China Malls, Each with Distinctive Strengths**

Shanghai Plaza 66: Through precise positioning and serving top-tier high-end customers, it consolidates its leading position among Shanghai's luxury malls. The bank expects Q4 openings of Lao Pu Gold and Chanel to further consolidate retail sales growth.

Shanghai Grand Gateway 66: Balances luxury brand expansion with optimization of sports outdoor, fragrance & cosmetics, and dining brands. The bank expects Q3 2025 retail sales up 31% year-over-year.

Wuxi Center 66: Operating momentum has continued upward since introducing luxury brands in 2019. The bank expects the company to sign over 180 new brands in 2024-25, with over 70 being first stores in Jiangsu or Wuxi.

**Risk Warning:** Retail sales improvement trend falls short of expectations; new project opening performance falls short of expectations.