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<Research>UBS Downgrades NEW WORLD DEV (00017.HK) to Sell, Trims TP to $4
Recommend 7 Positive 10 Negative 12 |
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NEW WORLD DEV (00017.HK)'s bumpy deleveraging path and cash flow challenges were already highlighted in November 2022, UBS released a research report saying. Two years later, the Group's net gearing (treated convertible bonds as debt) rose further to 87% in June 2024, from 74% in June 2022, despite a number of key asset disposals (e.g., NWS, D-park and Kai Tak Sports Park). The broker believed that its deleveraging path will remain bumpy. Considering the decrease in the number of NEW WORLD DEV's investment properties, a further 10% drop in the price of residential properties in mainland China this year and the continued RMB depreciation, UBS lowered its net asset value forecast for the Company by 53% to $15.9 per share, and expected the Company to incur a loss of $2 billion to $3 billion from FY2025 to FY2026. Therefore, the bank trimmed its target price from $8.5 to $4, and downgraded NEW WORLD DEV from Neutral to Sell. AAStocks Financial News |
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