What the Broker Says...

New World Development is principally involved in property sales, construction and engineering, hotel and restaurant operations and telecommunications.

A recent ING Barings report, released after New World acquired two shopping malls in Wuhan, maintained a 'sell' recommendation on the company's stock and suggested a HK$9.60 price target.

Barings expected the purchase of the malls - from its mainland property arm New World China Land (NWCL) for HK$408 million - to cause 'significant confusion' on New World's debt reduction programme.

A confused Barings was unsure why New World bought the malls from NWCL when the former owns 66 per cent of the latter. The report highlighted the uncertainty over the relationship between the two companies.

New World also was criticised by Salomon Smith Barney recently. The American brokerage accused the company of not keeping to a promise to focus on its core business, property.

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