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<Research>M Stanley Forecasts Continued Debt Reduction for NEW WORLD DEV (00017.HK), Lifts TP to $5.5, Keeps Rating at Underweight
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Although NEW WORLD DEV (00017.HK) reduced its debt by $3.5 billion in FY2025 and completed loan refinancing of $88.2 billion, its net gearing ratio remained high at 77.5%, Morgan Stanley released a research report saying.

The broker believed that the Company needs to dispose of more assets to accelerate deleveraging. The government's promotion on Northern Metropolis development may help expedite the farmland resumption process.

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Morgan Stanley expected NEW WORLD DEV's net gearing ratio to decline to 74.5% in FY2026 and further decrease to 73% in FY2027.

Therefore, the broker kept rating at Underweight on NEW WORLD DEV, and lifted its target price from $4.2 to $5.5, representing a 50% discount to net asset value per share. Morgan Stanley also reduced its FY2026/ 2027 underlying LPS forecasts to $0.75/ $0.17.
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