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<Research>Jefferies Foresees HK Developers to Face Greater Profit Pressure This Yr Compared to Last Yr
Recommend 21 Positive 36 Negative 24 |
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Jefferies wrote in its report that it had reassessed the financial status of smaller-scale developers in Hong Kong. Out of 11, 8 were classified as relatively high risk according to the broker's criteria, suggesting that developers may accelerate asset sales or financing. The report also mentioned that the total debt of high-risk developers reached $125 billion, equivalent to NEW WORLD DEV (00017.HK)'s outstanding bank loans. The overall exposure to high-risk small-cap stocks and NEW WORLD DEV remained largely stable YoY, with the increased risk from small-cap stocks being offset by NEW WORLD DEV's debt reduction. BOC HONG KONG (02388.HK), BANK OF E ASIA (00023.HK), and HANG SENG BANK (00011.HK) were considered principal banks by 7 out of 8 high-risk small-cap stocks. With early projects sold at a discount starting to reflect in earnings, the broker estimated that developers might face greater profit pressure this year compared to last year. AAStocks Financial News |
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