Property Market Weakness Should Lead to Lower Top-Line Growth for New World Development

New World Development, or NWD, is a leading property developer in Hong Kong and mainland China under the Cheng family, with property development and investment as core businesses. As NWD aims to raise the revenue mix of investment properties, we think execution efficiency remains crucial for the group to maintain robust top-line growth. We believe NWD is poised to leverage the success of its well-received K11 commercial project in Victoria Dockside to deliver the new 11 Skies project in Hong Kong. We also expect the group to complete a rich portfolio of K11 malls over the next five years in mainland China. With continuing floor area expansion and upward rental reversion, we estimate that recurring earnings from investment properties should represent over 30% of NWD’s operating profit in fiscal 2028.