NEW WORLD DEV (00017) Significant Cost Control Effect Northern Metropolitan Area Construction Boosts Future Growth

On February 28, NEW WORLD DEV (00017) held a 2025 interim performance briefing for the fiscal year. During the reporting period, NEW WORLD DEV's core business maintained resilience, cost support continued to decrease, deleveraging began to show results, the company's overall total liabilities continued to decrease, and cash flow and capital structure improved. At a time when the Hong Kong government is accelerating the development and industrial introduction of the Northern Metropolis Area, Shanghai New World, as one of the Hong Kong companies actively participating in the construction of the Northern Metropolis Area in cooperation with central state-owned enterprises, has great potential for future overall development. According to the announcement, as of December 31, 2024, NEW WORLD DEV had access to capital resources of HK$34 billion, with cash and bank deposits totaling around HK$22 billion and available bank loans totaling approximately HK$12 billion. The company's overall total liabilities continued to decrease, with a net debt ratio of 57.5%, a reduction of HK$9.4 billion in short-term liabilities, and significant relief in repayment pressure. The management of NEW WORLD DEV stated that the group's financial situation is quite sound, and in the future it will continue to optimize its financial situation through various means, including increasing revenue, reducing expenses, strictly controlling capital expenditures, operating expenses, and selling non-core assets, to accelerate deleveraging and stabilize the debt ratio. It is worth noting that recently, Hong Kong Financial Secretary Paul Chan Mo-po emphasized the key role of the Northern Metropolis Area in the social and economic development of Hong Kong when announcing a new financial budget, stating that efforts will be made to accelerate the construction and industrial introduction of the Northern Metropolis Area. NEW WORLD DEV, as one of the first Hong Kong companies to cooperate with central state-owned enterprises and actively participate in the construction of the Northern Metropolis Area, has early mover and local advantages. As early as 2023, Shanghai New World signed the first "Northern Metropolis Area Project Cooperation Agreement" in Hong Kong with CHINA RES LAND (01109). In the past two years, Shanghai New World has also signed important cooperation agreements for the Northern Metropolis Area with China Merchants Shekou Industrial Zone Holdings and Shenzhen Group. In addition, the group has signed an expression of intent to support the development of the Northern Metropolis Area led by the Hong Kong SAR government, and has reached cooperation intentions with other industry leaders such as CHINA OVERSEAS (00688), China Railway Construction Corporation (01186), and BOC HONG KONG (02388) to jointly develop the Northern Metropolis Area. Celeste Hui, Executive Director and CEO of NEW WORLD DEV, said that Shanghai New World has a land reserve of over 14 million square feet in the Northern Metropolis Area, many of which are in prime locations with complete transportation infrastructure. In the future, the group will accelerate the conversion of agricultural land into developable land, continue to apply for urban planning and land exchange applications, and is estimated to add approximately 9 million square feet of attributable developable floor area for the group in the short to medium term. At the same time, the group will continue to seek more cooperation with state-owned enterprises to jointly promote the development of the Northern Metropolis Area, thereby enhancing the overall potential of the projects.