SEHK:17

Stock Analysis Report

New World Development

Executive Summary

New World Development Company Limited, an investment holding company, invests in, develops, constructs, operates, manages, rents, and leases properties.

Snowflake

Fundamentals

Established dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

How has New World Development's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 17 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.6%

17

2.2%

HK Real Estate

0.9%

HK Market


1 Year Return

0.2%

17

2.8%

HK Real Estate

-0.3%

HK Market

Return vs Industry: 17 underperformed the Hong Kong Real Estate industry which returned 2.8% over the past year.

Return vs Market: 17 matched the Hong Kong Market which returned -0.3% over the past year.


Shareholder returns

17IndustryMarket
7 Day-0.6%2.2%0.9%
30 Day-5.8%0.6%0.7%
90 Day2.0%3.2%3.9%
1 Year4.9%0.2%6.8%2.8%3.3%-0.3%
3 Year38.6%21.5%46.7%31.5%19.9%7.8%
5 Year40.5%10.9%57.7%32.2%17.1%-2.3%

Price Volatility Vs. Market

How volatile is New World Development's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is New World Development undervalued compared to its fair value and its price relative to the market?

5.81x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 17 (HK$10.34) is trading above our estimate of fair value (HK$5.89)

Significantly Below Fair Value: 17 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 17 is good value based on its PE Ratio (5.8x) compared to the Real Estate industry average (6.5x).

PE vs Market: 17 is good value based on its PE Ratio (5.8x) compared to the Hong Kong market (10.3x).


Price to Earnings Growth Ratio

PEG Ratio: 17's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: 17 is good value based on its PB Ratio (0.4x) compared to the HK Real Estate industry average (0.5x).


Next Steps

Future Growth

How is New World Development forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

-21.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 17's earnings are forecast to decline over the next 3 years (-21.6% per year).

Earnings vs Market: 17's earnings are forecast to decline over the next 3 years (-21.6% per year).

High Growth Earnings: 17's earnings are forecast to decline over the next 3 years.

Revenue vs Market: 17's revenue (2.3% per year) is forecast to grow slower than the Hong Kong market (10.7% per year).

High Growth Revenue: 17's revenue (2.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 17's Return on Equity is forecast to be low in 3 years time (4.7%).


Next Steps

Past Performance

How has New World Development performed over the past 5 years?

12.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 17 has large one-off items impacting its financial results.

Growing Profit Margin: 17's current net profit margins (23.7%) are lower than last year (38.5%).


Past Earnings Growth Analysis

Earnings Trend: 17's earnings have grown by 12.3% per year over the past 5 years.

Accelerating Growth: 17's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 17 had negative earnings growth (-22.2%) over the past year, making it difficult to compare to the Real Estate industry average (-13%).


Return on Equity

High ROE: 17's Return on Equity (7.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is New World Development's financial position?


Financial Position Analysis

Short Term Liabilities: 17's short term assets (HK$150.2B) exceeds its short term liabilities (HK$101.3B)

Long Term Liabilities: 17's short term assets (HK$150.2B) exceeds its long term liabilities (126.7B)


Debt to Equity History and Analysis

Debt Level: 17's debt to equity ratio (57%) is considered high.

Reducing Debt: 17's debt to equity ratio has reduced from 60.6% to 57% over the past 5 years.

Debt Coverage: 17's debt is not well covered by operating cash flow (4.5%).

Interest Coverage: 17's interest payments on its debt are well covered by EBIT (22.2x coverage).


Balance Sheet

Inventory Level: 17 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 17's debt is not covered by short term assets (assets are 1x debt).


Next Steps

Dividend

What is New World Development's current dividend yield, its reliability and sustainability?

4.93%

Current Dividend Yield


Dividend Yield vs Market

company4.9%marketbottom25%2.2%markettop25%6.3%industryaverage4.4%forecastin3Years5.2%

Current dividend yield vs market & industry

Notable Dividend: 17's dividend (4.93%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.24%).

High Dividend: 17's dividend (4.93%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.34%).


Stability and Growth of Payments

Stable Dividend: 17's dividends per share have been stable in the past 10 years.

Growing Dividend: 17's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (28.7%), 17's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 17's dividends in 3 years are forecast to be covered by earnings (52.8% payout ratio).


Next Steps

Management

What is the CEO of New World Development's salary, the management and board of directors tenure and is there insider trading?

5.8yrs

Average management tenure


CEO

Henry Cheng (72yo)

30.8yrs

Tenure

HK$68,000,000

Compensation

Dr. Kar-Shun Cheng, also known as Henry, BA, MBA, DBA(Hon), LLD(Hon), GBM, GBS, serves as Non-Executive Director at DTXS Silk Road Investment Holdings Company Limited since August 23, 2019. Dr. Cheng has b ...


CEO Compensation Analysis

Compensation vs Market: Henry's total compensation ($USD8.69M) is above average for companies of similar size in the Hong Kong market ($USD822.16K).

Compensation vs Earnings: Henry's compensation has been consistent with company performance over the past year.


Management Age and Tenure

5.8yrs

Average Tenure

65yo

Average Age

Experienced Management: 17's management team is seasoned and experienced (5.8 years average tenure).


Board Age and Tenure

7.7yrs

Average Tenure

68yo

Average Age

Experienced Board: 17's board of directors are considered experienced (7.7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellHK$20,468,68818 Jun 19
BlackRock, Inc.
EntityCompany
Shares1,697,393
Max PriceHK$12.06
SellHK$12,940,15429 May 19
BlackRock, Inc.
EntityCompany
Shares1,062,000
Max PriceHK$12.18
BuyHK$7,203,16323 May 19
BlackRock, Inc.
EntityCompany
Shares579,000
Max PriceHK$12.44
SellHK$20,436,46923 May 19
BlackRock, Inc.
EntityCompany
Shares1,642,711
Max PriceHK$12.44
SellHK$14,786,53315 May 19
BlackRock, Inc.
EntityCompany
Shares1,165,000
Max PriceHK$12.69
SellHK$1,673,78203 Dec 18
Wai-Hoi Doo
EntityIndividual
Role
Vice Chairman
Non-Executive Vice Chairman
Shares156,727
Max PriceHK$10.68

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.4%.


Management Team

  • Alfred So (70yo)

    Executive Director

    • Tenure: 1.4yrs
    • Compensation: HK$19.70m
  • Henry Cheng (72yo)

    Executive Chairman & MD

    • Tenure: 30.8yrs
    • Compensation: HK$68.00m
  • Leonie Ki (72yo)

    Advisor & Non-Executive Director

    • Tenure: 10.9yrs
    • Compensation: HK$9.20m
  • Sonia Cheng (38yo)

    Executive Director

    • Tenure: 7.7yrs
    • Compensation: HK$19.10m
  • Nam-Hoi Sitt (65yo)

    Senior Director of the Project Management Department & Executive Director

    • Tenure: 1.4yrs
    • Compensation: HK$15.90m
  • Adrian Cheng (39yo)

    Executive Vice-Chairman & GM

    • Tenure: 4.6yrs
    • Compensation: HK$44.20m
  • Tak-Cheong Au (67yo)

    Head of Finance & Accounts and Executive Director

    • Tenure: 6.3yrs
    • Compensation: HK$10.20m
  • Conroy Cheng (41yo)

    Executive Director

    • Tenure: 9.4yrs
    • Compensation: HK$2.90m
  • Melvin Yeo (52yo)

    Senior Director of Sales and Marketing Department

    • Tenure: 0yrs
  • Aldous Chiu

    General Manager - Investor Relations

    • Tenure: 0yrs

Board Members

  • John Lee (70yo)

    Independent Non-Executive Director

    • Tenure: 15.3yrs
    • Compensation: HK$1.00m
  • Hamilton Ho (68yo)

    Independent Non-Executive Director

    • Tenure: 15.3yrs
    • Compensation: HK$900.00k
  • Alfred So (70yo)

    Executive Director

    • Tenure: 1.4yrs
    • Compensation: HK$19.70m
  • Henry Cheng (72yo)

    Executive Chairman & MD

    • Tenure: 30.8yrs
    • Compensation: HK$68.00m
  • Leonie Ki (72yo)

    Advisor & Non-Executive Director

    • Tenure: 10.9yrs
    • Compensation: HK$9.20m
  • William Doo (75yo)

    Non-Executive Vice Chairman

    • Tenure: 6.3yrs
    • Compensation: HK$300.00k
  • Sonia Cheng (38yo)

    Executive Director

    • Tenure: 7.7yrs
    • Compensation: HK$19.10m
  • Nam-Hoi Sitt (65yo)

    Senior Director of the Project Management Department & Executive Director

    • Tenure: 1.4yrs
    • Compensation: HK$15.90m
  • Adrian Cheng (39yo)

    Executive Vice-Chairman & GM

    • Tenure: 4.6yrs
    • Compensation: HK$44.20m
  • Tak-Cheong Au (67yo)

    Head of Finance & Accounts and Executive Director

    • Tenure: 6.3yrs
    • Compensation: HK$10.20m
  • Conroy Cheng (41yo)

    Executive Director

    • Tenure: 9.4yrs
    • Compensation: HK$2.90m

Company Information

New World Development Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: New World Development Company Limited
  • Ticker: 17
  • Exchange: SEHK
  • Founded: 1970
  • Industry: Diversified Real Estate Activities
  • Sector: Real Estate
  • Market Cap: HK$110.266b
  • Shares outstanding: 10.23b
  • Website: https://www.nwd.com.hk

Number of Employees


Location

  • New World Development Company Limited
  • New World Tower
  • 30th Floor
  • Central
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NDVL.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
NWDDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
17SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 1992
17SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1992
17SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1992
NDVL.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDJul 1995

Biography

New World Development Company Limited, an investment holding company, invests in, develops, constructs, operates, manages, rents, and leases properties. Its property portfolio comprises residential project ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/21 12:39
End of Day Share Price2019/11/21 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.