New World Development: Another CEO Change Does Not Materially Alter Operations; Valuation Intact

New World Development, or NWD, announced the resignation of CEO Ma Siu-Cheung and the appointment of Huang Shaomei as his successor on Nov. 29, 2024. This was unexpected, given that Ma just replaced Adrian Cheng as CEO in September. Despite scant details on the latest management reshuffle, we believe this reflects pronounced challenges for NWD to deleverage amid a weak property market in Hong Kong and mainland China, in our view. However, we expect no material impact on NWD's strategic focus on divesting noncore assets and accelerating new projects' sales to improve its balance sheet. As such, we maintain our key assumptions and an HKD 8.50 per share fair value estimate on the company. While NWD's shares become undervalued following the recent slump, we prefer its peer Henderson Land given better financial strength and more robust dividend yield.