[ET Net News Agency, 30 July 2020] BofA Global Research lifted its target price for New
World Development (NWD)(00017) to HK$45 from HK$42 and upgraded its rating to "buy" from
"neutral".
The research house said the upgrade reflects (1) end-user residential demand proved to
be resilient even amid the peak of the virus outbreak - bodes well for the upcoming Tai
Wai Station Ph. 1 launch; (2) cash proceeds from Tai Wai sales (HK$37bn over time),
non-core asset disposals, and subsidiary NWS' (00659) commitment to a stable dividend
should partly mitigate pressure on cash flow (a key investor concern) and help NWD
maintain stable dividends; (3) sales execution in the Mainland is better than expected at
HK$17bn+ in FY2020, offsetting the HK weakness; and (4) recent stock weakness after the
third wave of COVID, but home purchase demand should be mostly intact; outbreak may peak
soon given tough social-distancing measures and declining infection rate (positive for NWD
due to its high-beta nature).
BofA added that the current dividend yield of 5.6% looks attractive. (KL)