SNW(SH:600628) Ge Long Hui·2025-09-26 10:39Core Viewpoint - New World Development has successfully implemented a debt reduction strategy since the new management team took office in November last year, leading to a significant revaluation in the capital market and outperforming other large Hong Kong developers in stock performance [1][2] Financial Performance - For the fiscal year 2025, New World achieved a core business steady growth, with total debt and net debt decreasing by HKD 57 billion and HKD 35 billion year-on-year, respectively, and cash flow turning positive [1] - The company successfully secured HKD 882 billion in bank refinancing, extending loan maturities and significantly enhancing short-term liquidity [1] - Capital expenditures decreased by 15% to HKD 12.6 billion, with plans to further reduce it to below HKD 12 billion in fiscal year 2026 [1] Operational Efficiency - New World has optimized operational efficiency and governance, resulting in a 16% reduction in general and administrative expenses to HKD 3.5 billion [1] - The average interest rate and total financing costs have significantly decreased, with financing costs reduced by HKD 1.3 billion year-on-year [1] Strategic Outlook - The company aims to maintain a "steady progress" approach in fiscal year 2026, prioritizing the reduction of overall debt and further optimizing its financial structure [2] - New World has raised its sales target for fiscal year 2026 to HKD 27 billion, the only developer in the industry to do so, reflecting strong confidence in its future prospects [2] Market Response - Since 2025, New World’s stock price has increased by 52%, outperforming peers such as Cheung Kong (20%), Sun Hung Kai Properties (18%), and Henderson Land (24%) [2] - Recent policy changes in Shenzhen and other major cities, including relaxed purchase restrictions, are expected to positively impact the real estate market [2] - Analysts suggest that New World’s current stock price is undervalued, providing a high margin of safety, with potential for significant recovery as market confidence improves [2]