Hong Kong Developer Raises Cash Flow, Cuts Debt to Boost Shares
Shares of New World Development rallied in early trading on Monday after the major Hong Kong developer said it would increase cash flow and cut debt as it reported an interim net loss of HK$6.63 billion ($852.63 million).The company's plan to launch two projects in mainland China in coming months is expected to boost sales and revenue, but analysts caution that a more concrete deleveraging plan is needed to address its high debt ratio. New World Development's market value has shrunk to about $1.5 billion from $14 billion in mid-2019, raising concerns about the company's financial stability.
- The developer's plans to accelerate sales through new project launches may help mitigate the risks associated with its high debt burden and declining market value.
- How will New World Development's ability to execute on these plans impact its long-term ability to restore investor confidence and stabilize its financial position?