New World Development (0017) AI Stock Analysis

• Market Cap: HK$12.58B
• Dividend Yield: 10.33%
• Average Volume (3M): 12.93M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.21
• Revenue Growth: -56.64%
• EPS Growth: -3398.20%
• Country: HK
• Employees: 10,500
• Sector: Real Estate
• Sector Strength: 73
• Industry: Real Estate - Diversified
• EPS (TTM): -2.64
• Shares Outstanding: 2,516,633,000
• 10 Day Avg. Volume: 12,299,197
• 30 Day Avg. Volume: 12,929,322
• PEG Ratio: -1.92
• Price to Book (P/B): 0.25
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$4.40
• Price Target Upside: -9.17% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

• Rating: 54 Neutral
• Price Target: HK$5.00 ▲(3.31%Upside)

The overall stock score is influenced primarily by the company's financial challenges, including declining revenues and profitability, as well as cash flow issues. While the technical indicators show some short-term positive momentum, the negative P/E ratio suggests financial distress, offsetting the high dividend yield.

Positive Factors

Project Sales Success

The recent launch of State Pavilia was greeted with enthusiastic response with 72% of total units sold for c.HKD3.2bn.

Rental Income Expansion

New World Development is expanding its rental income base with the gradual completion of new rental properties such as K11 ECOAST in Shenzhen.

Negative Factors

Debt Refinancing

Debt refinancing is key to monitor as it plays a crucial role in dictating share price direction.

Leadership Instability

Frequent change of the Chief Executive Officer adds uncertainties to the company’s future.

Net Interim Loss

Net interim loss reached HKD6.6bn, in line with profit warning.

New World Development Business Overview & Revenue Model

Company Description

New World Development Company Limited (0017) is a leading Hong Kong-based conglomerate with a diverse portfolio across various sectors, including property development, infrastructure, services, retail, and hospitality. Established in 1970, the company has a significant presence in Greater China and Southeast Asia, focusing on creating vibrant and sustainable communities through its innovative and quality-driven approach.

How the Company Makes Money

New World Development generates revenue primarily through its property development and investment segment, which involves the development and sale of residential, commercial, and retail properties. The company also earns income from property leasing and management services, offering a steady stream of rental income. Additionally, its infrastructure and services division contributes through investments in public utilities and transport services, while its hotel operations generate revenue from hospitality services. Strategic partnerships and joint ventures further enhance its revenue streams by leveraging shared expertise and resources to expand market reach and improve operational efficiency.

New World Development Financial Statement Overview

Summary

New World Development faces significant financial challenges, characterized by declining revenues, negative profitability, and strained cash flows. The income statement, balance sheet, and cash flow scores indicate operational difficulties, high leverage, and liquidity issues.

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.

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.

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.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
35.51B	35.78B	95.55B	68.69B	68.47B	59.25B
	Gross Profit
12.27B	12.85B	20.76B	17.41B	18.06B	18.89B
	EBIT
3.02B	488.60M	10.01B	7.33B	7.93B	9.48B
	EBITDA
1.64B	3.74B	13.91B	11.22B	12.15B	13.31B
	Net Income Common Stockholders
-18.01B	-17.51B	900.90M	1.25B	1.15B	1.10B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
69.16B	28.24B	70.01B	76.54B	76.21B	78.16B
	Total Assets
639.68B	445.16B	616.48B	635.88B	627.08B	600.20B
	Total Debt
233.46B	160.95B	243.02B	246.73B	231.80B	235.47B
	Net Debt
182.21B	133.55B	189.24B	184.99B	170.98B	172.18B
	Total Liabilities
382.79B	220.27B	395.43B	395.40B	371.82B	357.54B
	Stockholders Equity
225.35B	216.11B	196.05B	213.36B	223.33B	213.02B
Cash Flow		Free Cash Flow
-19.26B	-13.17B	3.76B	1.90B	2.49B	-27.09B
	Operating Cash Flow
-18.57B	-8.35B	10.99B	7.45B	9.65B	-10.29B
	Investing Cash Flow
8.76B	4.02B	1.67B	-3.26B	3.04B	-17.07B
	Financing Cash Flow
-5.74B	-31.81B	-14.78B	-5.72B	-17.91B	28.53B

New World Development Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.84
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 4.84 is above the 20-day moving average (MA) of 4.84, above the 50-day MA of 4.74, and below the 200-day MA of 5.84, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 55.78 is Neutral, neither overbought nor oversold. The STOCH value of 43.50 is Neutral, 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0010	79 Outperform	$16.37B	10.15	1.69%	10.98%	8.13%	-42.62%
0041	63 Neutral	HK$9.88B	―	-3.12%	7.56%	2.20%	-327.14%
0012	62 Neutral	$129.27B	20.53	1.94%	9.74%	-7.64%	-32.01%
Sector *	61 Neutral	$2.83B	10.89	0.42%	9.23%	5.94%	-21.26%
0017	54 Neutral	HK$12.58B	―	-10.34%	10.33%	-56.64%	-3398.20%
0480	50 Neutral	€1.34B	―	-3.45%	1.15%	-59.65%	-290.78%
0207	46 Neutral	HK$3.16B	―	-0.98%	3.24%	48.92%	-176.75%

New World Development Corporate Events

New World Development Updates Nomination Committee Terms

New World Development Company Limited has revised the terms of reference for its Nomination Committee, effective July 1, 2025. The changes emphasize diversity and independence, requiring the majority of committee members to be independent non-executive directors and at least one member to be of a different gender. This move could enhance the company’s governance and decision-making processes, potentially strengthening its industry position and stakeholder confidence.

New World Development Announces Key Executive and Committee Changes

New World Development has announced significant changes in its executive team and committee structures, effective May 1, 2025. These changes include the appointment of Ms. Cheng Chi-Man, Sonia to the Nomination Committee, with Mr. Lee Luen-Wai, John taking over as chairman. Additionally, Mr. Wong Man-Hoi will retire as company secretary, succeeded by Mr. Lau Fu-Keung and Ms. Hui Ka-Wai as joint company secretaries. These strategic shifts are expected to enhance the company’s governance and operational efficiency, potentially impacting its market positioning and stakeholder relations.