Latest news with #JeffZhang
CNBC
16-07-2025
- Business
- CNBC
Chinese toymaker Pop Mart shares slide despite strong earnings forecast
Shares in Pop Mart International tumbled over 6% on Wednesday after the toymaker issued a bullish first-half earnings forecast. The Beijing-headquartered company is behind the global craze around Labubu, a toothy, pointy-eared monster-like character. The toymaker sells its dolls in a blind box to buyers who don't know what character is inside until they open it, with prices ranging from about 59 yuan to 5,999 yuan. In a filing to the Hong Kong stock exchange on Tuesday, Pop Mart said it expects at least a 350% increase in profit and at least a 200% increase in revenue for the first six months of 2025 from the same period last year. The negative stock reaction may be a reflection of investors' conservative outlook on Pop Mart's sales growth, Jeff Zhang, an equity analyst at Morningstar, told CNBC on Wednesday. "Despite stellar earnings growth in H1, it may have peaked and will likely see slowdown starting in H2," he added, saying it may have prompted many investors to take profits. Zhang maintained his view that Pop Mart's shares have been "overvalued," as the high level of uncertainty over the popularity of its major intellectual properties was not fully priced in. In the filing Tuesday, the company attributed its robust profit forecast to the greater global recognition of its brand and intellectual properties — referring to signature toy characters such as Labubu, Molly and Crybaby — and diversified product portfolios, as well as a growing portion of overseas sales. It also benefited from a substantial increase in profits driven by the economies of scale, cost optimization and tighter expense controls, the company said. Buoyed by the runaway success of Labubu figurines, Pop Mart's Hong Kong-listed shares have been on tear this year. Despite the latest tumble Wednesday, its share prices have nearly tripled year to date, trading at 247 Hong Kong dollars ($31.5) at 11:43 p.m. ET. The stock suffered a brief setback last month after an editorial from Chinese state media took aim at businesses enticing young children to spend excessively on "blind cards" and "mystery boxes," a model central to Pop Mart's appeal. Investors have largely shrugged off fears of a regulatory crackdown on Pop Mart, which counts Gen Zers and millennials, rather than young children, as main consumer demographic. But despite the latest pullback in share prices, many investment banks held on to their bullish calls for Pop Mart to remain one of the hottest consumer brands in China this year. In the first quarter of this year, the toymaker's revenue rose 170% from a year earlier, buoyed by a nearly 480% surge in overseas markets and about 100% revenue growth at home. The latest profit forecast was "slightly above the capital market's already-high expectation," analysts at Nomura Bank said in a note Tuesday, underscoring the "continued acceleration of sales growth." The investment bank lifted its target price for Pop Mart to 330 Hong Kong dollars from 291 Hong Kong dollars, keeping the stock as its "preferred pick in the China consumer space." Pop Mart's soaring popularity has been a stark contrast to the broader economic downturn in China which has led consumers to become more frugal and scale back on spending. A human-sized Labubu was sold for $150,000 at an auction in Beijing last month. "When optimism about long-term financial prospects fades, people shift from investing in the future, [buying] homes, cars, to seeking momentary emotional rewards," said Ivy Yang, founder of Wavelet Strategy, New York-based consultancy. "Each collector [is] projecting their own mood or story onto the toy. This is why Pop Mart differs from Sanrio or Miniso," Yang added, referring to the Japanese toymaker behind Hello Kitty and a Chinese retailer for consumer goods such as cosmetics, stationery and toys featuring IP design.
Business Times
09-07-2025
- Business
- Business Times
New World is selling China property assets after loan deal: sources
[HONG KONG] New World Development is seeking to divest real estate projects in mainland China after pulling off an US$11 billion refinancing deal in June, according to people familiar with the matter. The Hong Kong developer is planning to sell property assets in China piecemeal, including landmarks like its K11 buildings in Hangzhou, Shenzhen and Shanghai, the people said, asking not to be named because the matter is private. New World is expediting asset sales as part of its agreement to secure its June loan refinancing agreement with banks, the people added. The company favours buyers such as investment funds or private firms that can make swift decisions and offer faster cash recovery, one of them said. The developer remains in the spotlight as it continues to face liquidity stress and is seeking to raise as much as US$2 billion through a new loan that would be backed by its crown jewel asset, Victoria Dockside in Hong Kong. The firm set a commitment deadline for Jul 11, Bloomberg previously reported. It's common for borrowers to extend such deadlines for various reasons in the syndicated loan market. 'The prior refinancing has only eased the liquidity strains but not reduced overall debt balance,' said Jeff Zhang, an analyst with Morningstar 'Finding buyers with reasonable valuation may take long durations.' A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up New World had HK$50 billion (S$8.2 billion) in completed investment properties in mainland China as of Dec 31, according to Bloomberg Intelligence. Its prospects for selling the assets are clouded by the country's ongoing real estate downturn and slowing economy. In Shanghai, the company is seeking 2.85 billion yuan (S$508 million) for its K11 tower, according to a property agent brochure. New World did not respond to an emailed query. Controlled by the family empire of Hong Kong tycoon Henry Cheng, New World has one of the highest debt burdens of any big developer in the city. Its net debt reached 95.5 per cent of shareholders' equity as of December, according to Bloomberg Intelligence. The funding environment for troubled and small Hong Kong developers has become increasingly challenging given that property prices in the city are now around a nine-year low. Banks are demanding stricter refinancing terms and asking for more credit enhancements. New World had been exploring other options earlier in the year, including holding talks with Chinese state-owned firms about a potential full sale of the company, according to other people familiar with the matter. The Cheng clan, worth an estimated US$21 billion as of March, proposed a semi-bailout to New World about two years ago, when it offered to take a subsidiary private and give the developer about HK$21.7 billion. The firm reported its first annual loss in 20 years for the 12 months ended June 2024. Adrian Cheng, the eldest son of the family's patriarch Henry Cheng, stepped down as chief executive officer soon after that, and this month he left the board. The Cheng family also owns a stake in Chow Tai Fook Jewellery Group Adrian Cheng's siblings include Sonia Cheng, who looks after the Rosewood Hotel. BLOOMBERG
South China Morning Post
23-06-2025
- Business
- South China Morning Post
Hong Kong's New World downplays debt-deal rumours as analysts see path out of crunch
Hong Kong's New World Development said talks with creditors about refinancing its HK$124 billion (US$15.8 billion) debt were 'ongoing', downplaying 'market speculation and rumours' about an imminent deal while analysts said government support and bank leniency would help the company navigate the crunch. The city's most indebted developer said in a stock-exchange filing on Monday that it was aware of speculation about the refinancing of its existing loans, adding that it remained 'actively engaged' with its creditors. The statement followed a recent Bloomberg report that said the debt-laden firm was nearing a HK$87.5 billion deal to refinance its loans after months of negotiation, citing sources familiar with the matter. The deal would require consent from more than 50 lenders by June 30, and failure to meet this threshold could trigger covenant breaches, force the release of pledged collateral or lead to repayment demands, the report said. '[New World's statement] is more about managing investors' expectations given that the refinancing terms have not been finalised,' said Jeff Zhang, an analyst with Morningstar. The proposed refinancing deal was said to be backed by some 40 assets, including the company's New World Tower headquarters and its flagship Victoria Dockside complex in Tsim Sha Tsui. Bloomberg also reported that New World was in the market for a separate HK$15.6 billion loan secured against Victoria Dockside to support the larger refinancing exercise. New World's statement came after Hong Kong Financial Secretary Paul Chan Mo-po signalled a supportive stance from regulators and banks towards developers navigating financing stress.
Yahoo
05-06-2025
- Business
- Yahoo
New World's distress worsens after shock delay on bond interest
New World, which is grappling with HK$210.9 billion of liabilities, said in a filing late Friday that it's planning the deferment for coupons on four perpetual notes. Hong Kong developer New World Development is sliding deeper into distress after jolting investors by delaying interest payments on some bonds, marking the latest flashpoint in a years-long crisis in China's property market. New World, which is grappling with HK$210.9 billion ($34.67 billion) of liabilities, said in a filing late Friday that it's planning the deferment for coupons on four perpetual notes. In total, that means it's postponing US$77.2 million of debt obligations, according to Bloomberg calculations. The bonds concerned slid to record lows. Its 6.15% perpetual notes dropped about 3 US cents to 23 US cents on the dollar after tumbling more than 30 US cents on Friday, on pace for its lowest level since issuance. Its 4.8% perpetual securities fell 10 US cents to 15.5 US cents, also on track for a record low and the biggest daily decline since October 2022. Its shares slid as much as 11%, the biggest intra-day drop in about two months. 'While this will not trigger a default, the total amount to be repaid will pile up so the headwind should remain in the long run,' said Jeff Zhang, an analyst at Morningstar. A company spokesperson said Friday that the company was continuing 'to manage its overall financial indebtedness whilst taking into account the current market volatility and continues to comply with its existing financial obligations'. While the market moves on Monday underscore how investor unease is worsening, there have also been some more positive developments for the builder, which is controlled by the family empire of tycoon Henry Cheng. Bloomberg reported earlier Monday morning that as of May 30 the company had received written commitments from banks for 60% of HK$87.5 billion of loan refinancing that it's seeking by the end of June, according to people familiar with the matter. New World didn't immediately respond to a request for comment Monday morning. The company also said Friday that total contracted sales year-to-date amount to about HK$24.8 billion, representing over 95% of the annual sales target, according to its monthly business update. But markets clearly need more certainty on debt repayment plans after a years-long property slump in the city and mainland China has left New World with one of the highest debt burdens of any Hong Kong developer. Investors have also become increasingly sceptical after New World reported its first loss in 20 years for the financial year ended last June. The company's stock is trading at a price-to-book ratio of just 0.06x, with a market capitalisation of US$1.4 billion versus about US$17 billion at its peak in 2019. See Also: Click here to stay updated with the Latest Business & Investment News in Singapore New World Development defers perpetual bond coupon payments Hong Kong bankers sweat US$11 billion New World refinancing New World Development's billionaire Cheng family in talks with Louis Vuitton on mega Hong Kong store Read more stories about where the money flows, and analysis of the biggest market stories from Singapore and around the World Get in-depth insights from our expert contributors, and dive into financial and economic trends Follow the market issue situation with our daily updates Or want more Lifestyle and Passion stories? Click here
Yahoo
02-06-2025
- Business
- Yahoo
$28 Billion Shock: Hong Kong Giant Defers Debt Payments, Investors Blindsided
New World Development (NDVLY) has just reignited investor anxiety in Asias battered property sector. On the eve of Hong Kongs Dragon Boat Festival, the company quietly dropped news its pushing back coupon payments on four of its perpetual bondstotaling roughly $77.2 million. While this doesnt count as a technical default, the timing and lack of prior signals caught creditors off guard. Shares tumbled as much as 11% before closing down 6.5%, and its 4.8% perpetuals slid to just over 60 cents on the dollar before clawing back slightly. Several fixed-income desks scrambled late Friday, fielding urgent calls from senior PMs seeking clarity on what just happenedand why they werent warned sooner. Warning! GuruFocus has detected 8 Warning Signs with NDVLY. The developer, grappling with HK$220 billion ($28 billion) in liabilities, said the deferment is part of a broader effort to manage debt amid market volatility. But skepticism is rising. Morningstars Jeff Zhang noted the move, though not a default, adds to the future repayment burden. Nomura analysts called the action a credit negative, and floated the possibility of selective bond repurchases to ease pressure. Bondholder discussions with PJT Partners reportedly continue behind the scenes, though no formal action has been proposed. Its a stark reminder of the fragility still lingering in Hong Kongs real estate landscape, where rising vacancies and softening rents are squeezing even the most storied names. There is, however, a thread of optimism. As of late May, New World had reportedly secured commitments for around 60% of the HK$87.5 billion in refinancing its targeting by end-June. Management expects more progress after the public holiday. On the sales front, year-to-date property sales have already hit 95% of its full-year goal, according to its latest business update. Still, with a share price trading at just 0.07 times book and a market cap of $1.4 billiondown from $17 billion in 2019investors will likely need more than sales milestones to regain confidence. The next few weeks could determine whether this is a short-term scare or the start of something deeper. This article first appeared on GuruFocus.
