New World Development 0017

[winston]

not vested

<Research>UBS Axes TP of NEW WORLD DEV (00017.HK) to $8.5; Valuation Already Reflected Challenging Cash Situation

2024/04/30

UBS released a report, chopping its target price on NEW WORLD DEV (00017.HK) from $12.8 to $8.5, with a Neutral rating.

The US 10-year bond interest rate has resurged to 4.7%, and the market is once again concerned about the group's cash situation.

However, the broker believed that with only 30% of completed investment properties pledged, there is still room for NWD to secure additional credit support.

NWD outlook is likely to be challenging with increased competition in the local new property market and weakening retail sales, which could widen its profit loss.

It is estimated that a core loss after perpetual bonds of $315 million and $952 million will be recorded in the financial years ending June 2024 and June 2025 respectively.

The final dividend per share may be adjusted downward to $0.2 from $0.3 in the previous year.

The current price of NWD shares is equivalent to a 75% discount to its net asset value (NAV) per share, which is similar to the trough in 2003.

This meant the market has reflected its high level of indebtedness, increased earnings losses and cuts in dividend payouts, according to the broker.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

[winston]

not vested

<Research>M Stanley Cuts NEW WORLD DEV (00017.HK) TP to $8, Reiterates Rating at Underweight

2024/04/17

NEW WORLD DEV (00017.HK) is not a major beneficiary of the recent rise in trading volume/ property prices in Hong Kong's residential market, Morgan Stanley released a research report saying.

Morgan Stanley said that the Company's dividend is not funded by recurring profits, and the annualized dividend yield is still lower than its peers. Therefore, Morgan Stanley cut its target price on NEW WORLD DEV from $10 to $8, and reiterated rating at Underweight.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

[winston]

not vested

<Research>BOCOMI Cuts NEW WORLD DEV (00017.HK) TP to $10.18, Lowers Rev. & Core Profit Forecasts

BOCOMI highlighted in a report that NEW WORLD DEV (00017.HK) issued a profit warning, expecting 1H24 core operating profit from continuing operations of $6.5 billion to $6.9 billion, a decrease of 18% to 23% from the previous year.

Based on the preliminary results of property revaluation (including goodwill valuation), NWD will need to make a one-off non-cash revaluation or impairment loss of $8.5 billion to $9.5 billion, and a one-off non-cash loss of $8.26 billion from the disposal of NWS HOLDINGS (00659.HK) shares.

The company expected its attributable loss for FY24 to be around $19 billion to $20 billion.

Related News: UBS Expects NEW WORLD DEV's Profit Warning for Full-Yr Loss of Up to $20B to Trigger Negative Mkt Reaction

BOCOMI lowered its revenue and core profit forecasts for NWD but still expected the company to not incur losses at the core profit level.

The broker lowered its target price to $10.18, equivalent to an 80% discount to its forecasted net asset value, and maintained its Buy rating.

Looking to the future, the broker believed that the US Federal Reserve may cut interest rates in September, which will support NWD's share price and the outlook of Hong Kong's property market.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

not vested

FY24: Temporarily Halts Dividends; Recovery Of Profitability Takes Time

NWD reported HK$11.8b in attributable loss from continuing business for FY24. D

ividend has been halted to accelerate deleveraging.

Although its IP portfolio has remained resilient, sluggish Hong Kong property sales and high net gearing remain as key concerns.

The new management has pledged to improve profitability.

We think profitability recovery and dividend normalisation will take some time.

Maintain SELL with a target price of HK$7.02.

Source: UOBKH

https://39646150.fs1.hubspotusercontent ... 20(17%20HK)%20240927.pdf?utm_medium=email&_hsenc=p2ANqtz-_4qrWCkdk4NgeceKRCHqhnicgZ172BAfHgmbGHlPwXQAHAaxQ0lRCWKb2No43a9jB0XfhLat8vFx1k7N-1WpT9ZqaPxw&_hsmi=326528334&utm_content=326528334&utm_source=hs_email

[winston]

Broker│ Opinion

UBS│ Annual results were in line with profit warning guidance, with limited short-term refinancing pressure

Morgan Stanley│ Old issues persist amid new management

CCBI│ Governance uncertainty affected value re-rating

Citi│ Replacement of CEO, aiming to deleverage by pragmatic business restructuring

HSBC Global Research│ Waiting for a turnaround

BofA Securities│ Sale of more assets needed to deleverage

Jefferies│ New CEO faces same challenges

Goldman Sachs│ CEO Changed, with higher gearing ratio; declaration of dividend suspended

JPMorgan│ Change of CEO is not a panacea

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

not vested

New World Development sells Hong Kong sports park stake to parent to tackle debt

Stake in New World Sports Development, the developer of Kai Tak Sports Park, sold to Chow Tai Fook Enterprises for US$53.5 million

New World Development (NWD) has sold its stake in Hong Kong’s largest sports infrastructure project to parent Chow Tai Fook Enterprises (CTFE), as the developer takes steps to rein in debt after posting its biggest-ever loss.

NWD sold a 100 per cent equity interest in New World Sports Development, the developer of Kai Tak Sports Park (KTSP), for HK$416.7 million (US$53.5 million) along with a HK$680 million loan to CTFE, the company said in a filing to the Hong Kong stock exchange late on Thursday.

Source: SCMP

https://www.scmp.com/business/article/3 ... pe=section

[winston]

not vested

New World's fast-revolving hot seat

by Mary Ma

The family's patriarch Henry Cheng Kar-shun hand picked Ma in September to replace his son, Adrian Cheng Chi-kong, as CEO.

By coincidence or not, this occurred shortly after Ma went to Shenzhen to meet with Hong Kong and Macao Work Office director Xia Baolong on behalf of New World.

Not much is known about Huang, the new CEO, except that she has been with New World for 20 years, focusing on China property in addition to her role as a CPPCC standing committee member of Guangdong province.

New World is known to be loaded with a high level of debt and Henry Cheng had indicated at the general meeting that activities requiring cash commitment would not be considered.

Investors are concerned about whether the new CEO can prop up New World's share price, which last traded at HK$6.43, compared to its historical high of above HK$100 in November 2007. In December 2023, its share price was in the HK$11 region.

New World is based in Hong Kong and has also been active in the mainland - and the property sectors in both are struggling with strong headwinds.

The patriarch explained that a review of the development direction showed that "timely phased changes need to be made, and the role of the CEO also requires to be adjusted".

Source: The Standard

https://www.thestandard.com.hk/section- ... g-hot-seat

[winston]

not vested

New World loses more market value as developer strives to contain debt crisis

The highly indebted developer is said to have sent out a letter to its bank lenders, seeking a waiver on loan conditions.

The firm is seeking forbearance, after its net debt-to-assets ratio breached the 100 per cent threshold that may allow its lenders to recall their loans.

NWD had HK$123.7 billion (US$16 billion) of consolidated net debt on June 30.

At 55 per cent, its net gearing or debt-to-equity ratio ranked among the highest in the industry.

Interest-bearing loans and bonds stood at HK$151.6 billion.

The group reported a record HK$19.7 billion annual loss.

Source: South China Morning Post

https://sg.finance.yahoo.com/news/world ... 00938.html

[winston]

vested

New World asks banks to extend due dates on loans

Its net debt to equity was 82.7 percent as of the end of last year, compared with 41.4 percent at rival Henderson Land Development (0012) and 21.2 percent at Sun Hung Kai Properties (0016).

Source: Bloomberg

https://www.thestandard.com.hk/section- ... s-on-loans

[winston]

vested

Lenders lower New World's margin financing ratio

Bank of East Asia (0023) was reported to have cut the financing ratio of New World's stocks and bonds from 40 percent to 30 percent, effective December 20,

CMB International Securities also decreased the ratio of pledged New World stocks to 30 percent.

A foreign financial institution even excluded the stocks and bonds of New World from its margin financing list and suspended buying the developer's bonds for its clients.

Source: Bloomberg

https://www.thestandard.com.hk/section- ... cing-ratio