NEW WORLD DEV(HK:00017) KAIYUAN SECURITIES·2024-07-19 08:01Investment Rating - The investment rating for the company is "Buy" (first coverage) [2] Core Views - The company, New World Development (00017.HK), is strategically positioned with a dual market layout, focusing on high-quality development in the Greater Bay Area and Yangtze River Delta regions [12][19] - The company has a clear shareholding structure, with the Cheng family as the actual controller, and has divested non-core assets to concentrate on its main business [15][19] - The company's performance in the mainland market remains strong, with a focus on urban renewal projects and a robust cash collection ability [25][31] Summary by Sections 1. Company Overview - New World Development has evolved into a leading enterprise known for quality since its establishment in 1970, with a clear strategic direction and a focus on high-quality development [12][19] 2. Sales and Revenue - The company reported a revenue of HKD 95.2 billion for FY2023, a year-on-year increase of 39.6%, but a significant decline of 57.4% in the first half of FY2024 due to asset sales [19][25] - The mainland sales in FY2024 are projected to reach HKD 150 billion, with a strong focus on the Greater Bay Area [25][31] 3. Market Conditions - The Hong Kong property market is showing signs of recovery, with the company benefiting from favorable policies and a substantial land reserve in the Northern Metropolis area [44][54] 4. Investment Properties - The company has seen a 17.0% year-on-year increase in property investment income in Hong Kong, driven by improved operational efficiency and higher foot traffic in its K11 properties [64] 5. Financial Performance - The company is expected to optimize its debt structure and improve financial flexibility through the sale of non-core assets, aiming to reduce the net debt ratio to 30% by FY2026/2027 [22][34]