According to the report released by Open Source Securities, which was obtained by the Wisdom Finance APP, it initiated coverage of China New World Development Co Ltd (00017) and gave it a “buy” rating, expected that the company's net income attributable to the parent for the fiscal years 2024-2026 to be HKD 1.08 billion, HKD 1.39 billion and HKD 1.72 billion respectively, with corresponding earnings per share of HKD 0.43, HKD 0.55, and HKD 0.68. The company's core land reserve on the mainland is of high quality, it is expected that the value of the Hong Kong land reserve will be unlocked through conversion of agricultural land, and the property sales system has a high profit margin. The K11 brand owned by the company has entered the harvest stage of real estate investment layout, debt structure optimization, ensuring future profit space, and stable cash flow.

The major viewpoints of Open source Securities are as follows:

Strong sales ensure the ability to collect payment, high-quality land reserves contain stable returns.

Since the 2019 fiscal year, the company's sales in mainland China have exceeded 15 billion yuan, with contract sales of 7.55 billion yuan in the second half of 2023, completing the sales target of 50%. The company's salable resources from the Greater Bay Area and the Yangtze River Delta will be about 57 billion yuan from the 2024 fiscal year onwards, mainly distributed in core cities such as Shenzhen, Guangzhou, and Hangzhou. As of the end of 2023, the company has invested in eight urban renewal projects in Guangzhou and Shenzhen, with a salable area of 2 million square meters and a total salable resource value of about 80-100 billion yuan. In the New Territories of Hong Kong, the company holds 16.342 million square feet of agricultural land reserves awaiting rezoning, about 90% of which are located within the scope of the northern metropolitan area. It has cooperated with quality state-owned enterprises such as China Resources Land and China Merchants Shekou Industrial Zone Holdings to continuously release the potential value of the agricultural land through land conversion actions.

The investment property layout is stable, and the rebound in consumption shows a "double recovery" performance.

The company's investment in properties is expected to generate higher-than-expected returns through the recovery of the two markets. In the first half of 2024, the company's property investment in mainland China and Hong Kong is expected to increase by 3.6% and 17.0%, respectively. In the investment property sector, the company plans to open 38 K11 projects in Beijing, Shenzhen, Hangzhou, and other cities in the 2024 fiscal year and beyond, with a total area of about 2.97 million square meters. The K11 ECOAST flagship project in Shenzhen's Taizi Bay is expected to open by the end of 2024.