New World Development to Exit 11 SKIES, Booking Over HK$18b in Losses

Simply Wall St··HKCN·Read original
3▲0 ▼1Impact / 5
Summary · why it matters

New World Development has agreed with Airport Authority Hong Kong to exit its 11 SKIES project, surrendering the lease, transferring the assets by 2027, and booking over HK$18b in related losses. The loss has dragged the company's earnings sharply lower, and the shares are down 13.81% over the past 30 days, with the year-to-date share price return down 27.81% and the 5 year total shareholder return down 78.33%. Against a last close of HK$5.34, the most followed analyst narrative places fair value nearer HK$6.77, implying 21% undervaluation, with a consensus price target of HK$6.77, a most bullish target of HK$10.0 and a most bearish target of just HK$4.0. A separate discounted cash flow model estimates future cash flow value at approximately HK$0.40 per share, which would place the HK$5.34 level in overvalued territory. The bullish case rests on a broader stabilisation of the Chinese property market and continued solid tenants and recurring income at the company's core K11 and commercial assets.

Impact on assets 1

Real Estate▼
New World Development Co Ltd
0017
▼ NegativeCapitalrelevance

New World agreed to exit the 11 SKIES project, surrendering the lease and booking over HK$18b in related losses that dragged earnings sharply lower.

Off-coverage companies 1

Airport Authority Hong Kongi
Private± Mixedrelevance

Airport Authority Hong Kong is the counterparty taking back the 11 SKIES lease and assets by 2027, but the article gives no clear positive or negative impact for it.