Assessing New World Development (SEHK:17) Valuation After Its Sharp Recent Share Price Rebound

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AdvertisementRecent share performance and business snapshot New World Development (SEHK:17) has attracted fresh attention after a sharp share price move, with the stock showing strong returns over the...

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Recent share price gains include 2.25% over the past day, 20.81% over the past week, 56.53%...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0762540952.USD":"HSBC GIF MANAGED SOLUTIONS ASIA FOCUSED INCOME \"AC\" (USD) ACC","BK1559":"蓝筹地产股","00017":"新世界发展","LU0831093199.SGD":"HSBC GIF MANAGED SOLUTIONS ASIA FOCUSED INCOME \"AM3\" (SGDHDG) INC","BK1216":"多样化房地产活动"},"translate_title":"评估新世界发展(SEHK：17)近期股价大幅反弹后的估值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"00017":0.9},"content_text":"AdvertisementRecent share performance and business snapshot New World Development (SEHK:17) has attracted fresh attention after a sharp share price move, with the stock showing strong returns over the past month and past 3 months compared with its recent history. The company reported HK$27,680.5m in revenue and a net loss of HK$17,172.9m, while annual revenue growth is 3.93% and net income growth is very large. Recent share price gains include 2.25% over the past day, 20.81% over the past week, 56.53% over the past month, 58.28% over the past 3 months, 53.99% year to date, and 172.90% over the past year. See our latest analysis for New World Development. At a latest share price of HK$11.38, New World Development has seen strong short term momentum, with the 1 month share price return far ahead of its longer term 3 year and 5 year total shareholder returns, which remain negative overall. If New World Development’s rebound has caught your eye and you want to see what else is moving, this is a good moment to broaden your search with fast growing stocks with high insider ownership. The key question now is whether New World Development’s sharp rebound and current HK$11.38 share price still leave room for upside, or if the market has already priced in any future recovery in the business. Most Popular Narrative: 89.4% Overvalued New World Development’s latest close at HK$11.38 sits well above the most followed fair value estimate of HK$6.01, which is built using a 13.02% discount rate and long term cash flow assumptions.  The company's high leverage remains a critical risk, and management continues to prioritize debt reduction through asset sales, cost cutting, and suspending dividends; however, persistently high interest rates mean debt servicing costs will remain elevated, potentially compressing net margins and weighing on future earnings.  Read the complete narrative. Curious how a loss making business ends up with this fair value and a lower implied future P/E than the broader sector. The narrative leans heavily on a turn in margins, a shift in earnings trajectory and a specific path for revenue over several years. Want to see which assumptions about profitability and growth underpin that outcome and how they interact with the discount rate used. Result: Fair Value of HK$6.01 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, there are still clear swing factors, including any sustained recovery in Chinese property demand and stronger recurring income from K11 and other commercial assets. Find out about the key risks to this New World Development narrative. Another angle on valuation So far, the focus has been on fair value estimates suggesting New World Development looks overvalued at HK$11.38 compared with an assessed value of about HK$6.01. On simple sales terms though, the picture is different. The shares trade on a P/S of 1x, which sits above the Hong Kong Real Estate industry average of 0.7x, yet below the peer average of 5.3x. Our fair ratio for New World Development is 1.1x, which is very close to where the stock is now, so the room for a big valuation swing on this measure alone may be limited. The real question is which story you trust more: the earnings based fair value or the revenue based multiples. See what the numbers say about this price — find out in our valuation breakdown. SEHK:17 P/S Ratio as at Feb 2026 Build Your Own New World Development Narrative If you look at the numbers and reach a different conclusion, or simply prefer to rely on your own research, you can shape a complete view in just a few minutes with Do it your way. A great starting point for your New World Development research is our analysis highlighting 1 important warning sign that could impact your investment decision. Looking for more investment ideas? If New World Development has sharpened your focus, do not stop here. Use the Simply Wall St Screener to spot other opportunities before they move without you.  Target income potential by scanning these 12 dividend stocks with yields > 3% that combine higher yields with the comfort of listed company disclosures. Hunt for value by checking these 875 undervalued stocks based on cash flows where prices currently sit below our cash flow based estimates. Get ahead of the next computing shift by reviewing these 22 quantum computing stocks that are working on real world quantum applications.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.Valuation is complex, but we're here to simplify it.Discover if New World Development might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. 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