March 3, 2025 - 10:51
HONG KONG - Shares of New World Development experienced a significant uptick in early trading on Monday, following the company's announcement of plans to enhance cash flow and reduce its debt levels. This comes on the heels of a troubling interim net loss of HK$6.63 billion (approximately $852.63 million) reported by the major Hong Kong developer.
The company's net gearing has climbed above 88%, placing it among the highest debt ratios in the sector. This situation has raised alarms in financial markets, as there are concerns that any further deterioration in New World's debt situation could lead to a crisis similar to the one that began in mainland China in 2021. That crisis resulted in numerous defaults across various companies, prompting a reevaluation of financial stability within the industry.
Investors are closely monitoring New World's strategies to navigate its financial challenges, as the company's future performance could have broader implications for the real estate market in Hong Kong.
