Adrian Cheng Chi-kong stepped down as CEO and Executive Vice Chairman of Hong Kong-based property giant New World Development following the company’s first annual loss in 20 years, with a staggering deficit of 19.68 billion HKD (approximately 2.5 billion USD) for the fiscal year ending June 30, 2024. This marks a significant decline from the last reported loss in 2004, which totaled 975 million HKD.

In 2007, Cheng joined the board of New World Development as an executive director and became CEO in 2020 during a challenging period marked by a nearly 25% drop in revenues. Under his leadership, the K11 brand emerged as a hallmark of the company, blending art, culture, and retail across Hong Kong and the Chinese mainland in cities like Shanghai and Guangzhou. 

Notably, Hong Kong’s K11 Musea stands out as a vibrant hub for art and lifestyle, showcasing Cheng’s vision for high-end retail. As part of its restructuring, New World Development will spin off five key K11 assets, including the K11 brand and the Gentry Club, selling them to Adrian Cheng for 209 million HKD (approximately 25 million USD), allowing him to retain a significant role in the brand’s global expansion.

This spin-off indicates a strategic pivot for New World Development as it seeks to stabilize its finances. While the company has not disclosed specific numbers, reports suggest that staff cuts may accompany these changes, reflecting the broader challenges facing the property sector in Hong Kong, which has been mired in a prolonged downturn since 2019. The company had previously warned of the loss, citing different issues — such as asset impairments, losses on investments, and higher interest rates. New World’s woes have been intensified by a real estate slump as the city loses its allure as a financial hub.

Effective immediately, Eric Ma Siu-cheung has been appointed as the new CEO of New World Development. With 38 years of experience in land planning and construction, Ma brings extensive expertise in urban development and infrastructure from both public service and the private sector. Having previously served as the Secretary for Development, he has shaped key policies affecting the city’s infrastructure and housing markets, positioning him to lead New World through its current challenges and potentially revitalize its brand and market presence.

Adrian Cheng said he submitted the resignation a few weeks ago and expressed a commitment to public service, “I believe it is time for me to focus on contributions to society and pursue my passion for art and culture. I am confident that New World Development will continue to thrive under new leadership.” 

Cheng will take on the role of Non-Executive Vice Chairman of the company. 

His father, Henry Cheng Kar-shun, added, “I fully respect and support his decision to dedicate more time to public service, and I firmly believe he will bring about positive and far-reaching changes for society.”

Rudi Leung, founder of the creative agency Hungry Digital and a marketing expert, stated “I hope the Arts Development Bureau or the Tourism Development Bureau will hire Adrian Cheung Chi-kong as a part-time official. His presence would bring a level of sophistication that is often lacking, as taste can be cultivated with investment.” 

The Cheng family remains one of Hong Kong’s wealthiest dynasties, with a fortune estimated at 22.1 billion USD, according to Forbes. The family’s business interests span various sectors —  including property, jewelry, and logistics. While Adrian Cheng’s departure marks a new chapter for New World Development, the family’s legacy and influence in the Hong Kong business landscape are likely to endure, particularly with the continuing success of the K11 brand.

Banner image via Marketing Interactive.