$NEW WORLD DEV(00017.HK)HSBC Global Research has lowered the target price of New World Development (00017) for two consecutive months, from HK$4 last month to HK$3.66. HSBC's report pointed out that investors focused on New World's financial and debt reduction progress. Although a breakthrough in refinancing or deleveraging could benefit the stock price, the bank believes New World has low visibility in profitability and dividend resumption, hence maintaining a "Reduce" rating.

HSBC Global Research released two analysis reports on New World at once, not only cutting the target price again but also reiterating the potential impact of New World's debt on the banking sector. HSBC mentioned:

In the worst-case scenario, if banks need to classify New World Development's loans as "non-performing loans (NPLs)," the NPL ratio of Hong Kong's banking system would rise by 1.3 percentage points to 3.3%.