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New World Development (HK:0017)
:0017
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New World Development
(OTC:0017)
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Rating:48Neutral
Price Target:
HK$7.50
▼(-12.49% Downside)
The overall stock score is primarily impacted by the company's weak financial performance, characterized by declining revenues and profitability, high leverage, and liquidity issues. While technical analysis shows some positive momentum, the poor valuation due to negative earnings limits the stock's attractiveness.
Positive Factors
Successful Refinancing
The successful refinancing enhances liquidity, allowing the company to focus on core business development and improve financial stability.
Property Sales Achievement
Meeting sales targets in uncertain markets underscores strong demand and effective sales strategies, supporting revenue stability.
Debt Reduction
Debt reduction efforts improve the company's financial position, enhancing long-term sustainability and reducing financial risk.
Negative Factors
Significant Financial Loss
Substantial financial losses impact profitability and may hinder future investment capabilities, posing a risk to long-term growth.
Core Operating Profit Decline
A decline in core operating profit reflects operational challenges, potentially affecting the company's ability to sustain growth.
Suspension of Dividend Payments
Suspending dividends can signal financial distress and may reduce investor confidence, impacting the company's market perception.
New World Development (0017) vs. iShares MSCI Hong Kong ETF (EWH)
Market Cap
$20.79B
Dividend Yield6.37%
Average Volume (3M)19.63M
Price to Earnings (P/E)―
Beta (1Y)1.30
Revenue Growth-40.92%
EPS Growth-42.67%
CountryHK
Employees10,500
SectorReal Estate
Sector Strength53
IndustryReal Estate - Diversified
Share Statistics
EPS (TTM)-3.84
Shares Outstanding2,516,633,000
10 Day Avg. Volume12,768,717
30 Day Avg. Volume19,634,931
Financial Highlights & Ratios
PEG Ratio-0.02
Price to Book (P/B)0.09
Price to Sales (P/S)0.52
P/FCF Ratio-21.86
Enterprise Value/Market Cap8.95
Enterprise Value/Revenue6.71
Enterprise Value/Gross Profit17.50
Enterprise Value/Ebitda-56.79
Forecast
1Y Price Target
$5.13Price Target Upside-40.08% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering9
New World Development Business Overview & Revenue Model
Company DescriptionNew World Development Company Limited, an investment holding company, engages in the property development and investment business in Hong Kong and internationally. Its property portfolio comprises residential, retail, office, and industrial properties. The company also provides commercial aircraft leasing services; operates expressways; and constructs residential and commercial projects, as well as provides protection and savings-related life and medical insurance products. In addition, it is involved in the duty-free operation and general trading, civil engineering, loyalty program, marketing, promotion, fashion retailing and trading, and piling and ground investigation businesses; development and operation of sports park; operation of household goods shop and convenience store; sale of LED lighting products and systems; and trading of telecommunication system integration products. Further, the company manages Hong Kong Convention and Exhibition Centre; operates hotels, golf and tennis academies, and shopping malls; operates department stores; and provides information technology, healthcare, training course, ticketing, financial, project management, management, advertising and media related, business and investment consultancy, franchised and non-franchised bus, estate agency, wellness and rehabilitation, endoscopic, carpark management, supply chain management, and catering services, as well as property agency, management, and consultancy services. Additionally, the company undertakes façade and foundation works; and offers elderly residential and nursing care services. As of June 30, 2021, the company had a total of 18 hotel properties with approximately 7,503 rooms in Hong Kong, Mainland China, and the Southeast Asia. New World Development Company Limited was founded in 1970 and is headquartered in Central, Hong Kong.
How the Company Makes MoneyNew World Development generates revenue through several key streams. The primary source is its property development and investment segment, which involves the sale and leasing of residential and commercial properties. The company capitalizes on its extensive land bank and strategic locations to develop high-value real estate projects. In addition to property sales, recurring income from property leasing provides a stable revenue base. The infrastructure and services segment contributes through construction services, facilities management, and transportation solutions. Furthermore, the company earns significant income from its retail and hotel operations, offering luxury accommodations and retail experiences. New World Development also benefits from strategic partnerships and joint ventures that enhance its market presence and operational capabilities.
New World Development Earnings Call Summary
Earnings Call Date:Sep 26, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Feb 20, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant achievements in refinancing, property sales, and debt reduction. However, these were counterbalanced by substantial financial losses, impairments, and suspended dividend payments, leading to a cautious outlook.Q4-2025 Updates
Positive Updates
Successful HKD 88.2 Billion Bank Refinancing
New World Development completed a HKD 88.2 billion bank refinancing, enhancing short- to medium-term liquidity and allowing focus on core business development.
Achievement of Property Sales Target
Despite market uncertainties, the company achieved its annual property sales target of HKD 26 billion, with strong sales in Hong Kong and Mainland China.
Debt Reduction and Positive Cash Flow
Total debt and net debt decreased in FY '25, with cash flow returning to positive territory, indicating a stabilizing financial position.
Strong Performance in Retail and Office Leasing
K11 MUSEA and Art Mall in Hong Kong recorded high foot traffic and double-digit sales growth across multiple tenant categories.
Successful Project Launches in Property Development
Multiple projects in Hong Kong, such as Deepwater Pavilia, achieved significant sales since their launches, contributing to the company's strong property sales performance.
Interest Expense Reduction
Due to rate cuts, the company's average interest rate decreased from 5% in FY '24 to 4.8% in FY '25, reducing total financing costs by HKD 1.3 billion.
Negative Updates
HKD 16.3 Billion Loss Attributable to Shareholders
The company reported a loss of HKD 16.3 billion for FY '25, impacted by noncash provisions and one-off losses.
13% Decrease in Core Operating Profit
Core operating profit decreased by 13% year-on-year due to lower property delivery volume and preopening expenses for new investment properties.
Suspension of Dividend Payments
Dividend payments were suspended to preserve cash amidst ongoing financial management efforts.
Asset Impairments and Provisions
Significant impairments and provisions were recorded, including a HKD 2.7 billion adjustment on the 11 SKIES retail portion and losses from asset disposals in Mainland China.
Decline in Shareholders' Equity
Shareholders' equity declined from HKD 224.9 billion to HKD 206.7 billion, influenced by property development impairments and one-off losses.
Company Guidance
During the call, New World Development provided detailed guidance on several financial metrics and strategic initiatives. The company completed a significant HKD 88.2 billion bank refinancing on June 30, 2025, which extended certain loan maturities to June 2028, improving short- to medium-term liquidity. Additionally, the company secured an additional HKD 3.95 billion in committed loan facilities to address debt-related needs, with the option to scale further. Despite market uncertainties, New World Development achieved its annual property sales target of HKD 26 billion, with strong sales in Hong Kong and Mainland China. The company's total and net debt decreased by HKD 5.7 billion and HKD 4.5 billion, respectively, throughout FY 2025, while the net gearing ratio slightly increased to 58.1% due to a decline in shareholders' equity. Efforts to streamline costs resulted in a 16% reduction in G&A expenses, contributing to a 15% year-on-year decrease in CapEx to HKD 12.6 billion. The company plans to further reduce CapEx to below HKD 12 billion in FY 2026. Despite a reported loss of HKD 16.3 billion, largely due to noncash provisions and one-off losses, the company remains focused on debt reduction, enhancing operational efficiency, and optimizing cash flow.New World Development Financial Statement Overview
Summary
New World Development faces significant financial challenges, with declining revenues, negative profitability, and strained cash flows. Despite a stable equity base, high leverage and recent losses pose substantial risks, requiring improvements in operational efficiency and cash flow management.Income Statement
The income statement reveals a significant decline in total revenue and profitability over the past year. Gross profit margin decreased substantially from the previous period, and the company reported a net loss, resulting in a negative net profit margin. The EBIT and EBITDA margins are also under pressure, reflecting operational challenges. Revenue growth has been negative, indicating a declining trend in business performance.35
Negative
Balance Sheet
The balance sheet shows a stable equity base despite the challenging operating environment. The debt-to-equity ratio is relatively high, indicating a leveraged position, but stockholders' equity remains robust. The return on equity has turned negative due to recent losses, suggesting inefficiencies in generating returns. The equity ratio suggests moderate stability with substantial reliance on liabilities.45
Neutral
Cash Flow
Cash flow analysis highlights significant challenges, with negative free cash flow and a substantial decline in operating cash flow compared to net income. The free cash flow to net income ratio is unfavorable, indicating liquidity issues. The company has experienced a considerable decrease in free cash flow growth, reflecting cash management difficulties.30
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2023 | Dec 2023 | Dec 2023 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 27.71B | 27.71B | 35.78B | 35.78B | 35.78B | 35.78B |
| Gross Profit | 10.63B | 10.63B | 12.85B | 12.85B | 12.85B | 12.85B |
| EBITDA | -3.27B | 1.71B | 3.74B | 3.74B | 3.74B | 3.74B |
| Net Income | -15.37B | -16.30B | -17.51B | -17.51B | -17.51B | -17.51B |
Balance Sheet | ||||||
| Total Assets | 420.26B | 420.26B | 445.16B | 445.16B | 445.16B | 445.16B |
| Cash, Cash Equivalents and Short-Term Investments | 26.39B | 26.39B | 28.24B | 28.24B | 28.24B | 28.24B |
| Total Debt | 190.19B | 190.19B | 160.95B | 160.95B | 160.95B | 160.95B |
| Total Liabilities | 248.71B | 248.71B | 220.27B | 220.27B | 220.27B | 220.27B |
| Stockholders Equity | 163.72B | 163.72B | 216.11B | 216.11B | 216.11B | 216.11B |
Cash Flow | ||||||
| Free Cash Flow | -656.10M | -656.10M | -13.17B | -13.17B | -13.17B | -13.17B |
| Operating Cash Flow | 3.56B | 3.56B | -8.35B | -8.35B | -8.35B | -8.35B |
| Investing Cash Flow | 1.45B | 1.45B | 6.49B | 6.49B | 6.49B | 6.49B |
| Financing Cash Flow | -7.21B | -7.21B | -31.81B | -31.81B | -31.81B | -31.81B |
New World Development Technical Analysis
Positive
8.57
Price Trends
7.29
Positive
6.26
Positive
5.53
Positive
Market Momentum
0.27
Positive
67.27
Neutral
87.81
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0017, the sentiment is Positive. The current price of 8.57 is above the 20-day moving average (MA) of 8.17, above the 50-day MA of 7.29, and above the 200-day MA of 5.53, indicating a bullish trend. The MACD of 0.27 indicates Positive momentum. The RSI at 67.27 is Neutral, neither overbought nor oversold. The STOCH value of 87.81 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0017.
New World Development Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $19.39B | 13.64 | 1.48% | 6.05% | -9.78% | -29.50% | |
69 Neutral | $131.49B | 21.80 | 1.89% | 6.64% | -19.91% | -6.92% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
53 Neutral | $11.20B | ― | -3.35% | 6.22% | 1.37% | -157.43% | |
51 Neutral | €8.25B | ― | -1.16% | 1.24% | 7.69% | 30.06% | |
49 Neutral | €1.56B | ― | -3.45% | 1.15% | -55.51% | -67.95% | |
48 Neutral | $20.79B | ― | -9.54% | 6.37% | -40.92% | -42.67% |
* Real Estate Sector Average
HK:0017
New World Development
8.57
0.06
0.71%
HK:0041
Great Eagle Holdings
14.64
3.48
31.22%
HK:0012
Henderson Land Development Co
27.10
3.16
13.21%
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14.21
4.58
47.50%
HK:0207
Joy City Property Limited
0.58
0.34
140.66%
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HKR International Limited
1.05
-0.16
-13.22%
New World Development Corporate Events
New World Development Announces Leadership Change
Jun 30, 2025
New World Development Company Limited announced the resignation of Dr. Cheng Chi-Kong, Adrian from his roles as non-executive director and non-executive vice-chairman, effective 1 July 2025. Dr. Cheng is stepping down to focus on public services and personal commitments, and he has no disagreements with the Board. The company expressed gratitude for his contributions.
The most recent analyst rating on (HK:0017) stock is a Sell with a HK$9.00 price target. To see the full list of analyst forecasts on New World Development stock, see the HK:0017 Stock Forecast page.
New World Development Announces New Board Composition
Jun 30, 2025
New World Development Company Limited has announced the composition of its board of directors, effective from July 1, 2025. The board includes a mix of executive, non-executive, and independent non-executive directors, with specific roles and committee memberships assigned to each member. This announcement reflects the company’s strategic focus on governance and leadership structure, potentially impacting its operational efficiency and stakeholder confidence.
The most recent analyst rating on (HK:0017) stock is a Sell with a HK$9.00 price target. To see the full list of analyst forecasts on New World Development stock, see the HK:0017 Stock Forecast page.
New World Development Secures HK$88.2 Billion Refinancing
Jun 30, 2025
New World Development Company Limited announced the successful refinancing of its existing offshore unsecured financial indebtedness, amounting to approximately HK$88.2 billion, through a new term loan facility and aligned bank facilities. This strategic move provides the company with enhanced financial flexibility to manage its business and financial needs, potentially strengthening its position in the market and offering reassurance to stakeholders.
The most recent analyst rating on (HK:0017) stock is a Sell with a HK$6.50 price target. To see the full list of analyst forecasts on New World Development stock, see the HK:0017 Stock Forecast page.
New World Development Addresses Loan Refinancing Rumors
Jun 23, 2025
New World Development Company Limited has addressed market rumors regarding the refinancing of its existing loans, confirming ongoing discussions with creditors. The company advises stakeholders to rely solely on official announcements for accurate information and to exercise caution when dealing with its securities.
The most recent analyst rating on (HK:0017) stock is a Sell with a HK$9.00 price target. To see the full list of analyst forecasts on New World Development stock, see the HK:0017 Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.