HK Stock Market Move | WHARF REIC (01997) falls more than 10%, first-half net loss widens, management's view on retail recovery tends towards cautious.

WHARF REIC (01997) fell by more than 10%, dropping by 10.19% to HKD 23.08 as of the time of writing, with a turnover of HKD 2.84 billion. On the news front, WHARF REIC released its mid-term performance for 2025 yesterday, with group revenue in the first half of the year at HKD 6.407 billion, a decrease of 1.45% year-on-year; shareholder's net loss was HKD 2.406 billion, an increase of 128.71% year-on-year; excluding the revaluation loss of investment properties, unaudited basic net profit for the period was HKD 3.119 billion, compared to HKD 3.123 billion in the same period last year. WHARF REIC's Chairman and Executive Director, Mr. Wu Tianhai, stated that although there were positive signals in the retail market from the second quarter onwards, the key is whether the situation can be maintained until the third quarter. If merchants see a turnaround in the market, they will naturally have the confidence to make new investments and expand their businesses, so it is uncertain whether there will be a breakthrough in the retail market in the second half of the year. Morgan Stanley released a research report stating that WHARF REIC's rental income improved in the first half of the year, but the management's view at the financial results meeting was still conservative, believing that the renewal rental income for the second half of the year is expected to record a low single-digit decline, which is within market expectations. In addition, the bank pointed out that the company's Marco Polo Hotels is evaluating the advancement of an asset enhancement plan, which is expected to require a capital expenditure of around HKD 2 billion for a complete renovation, set to begin at the earliest by the end of 2026, and is estimated to temporarily impact rental income by 5% to 6% during the enhancement period.