This story is part of Forbes’ coverage of Hong Kong’s Richest 2025. See the full list here.
Hong Kong property and jewelry magnate Henry Cheng is in the eye of a perfect storm. Last June, his publicly traded property flagship, New World Development, reported an annual net loss of HK$19.7 billion ($2.5 billion), its highest ever since Cheng’s father, the late Cheng Yu-tung, founded the company in 1970. Revenue dropped by more than a third to HK$36 billion amid Hong Kong’s sluggish real estate market.
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In December, New World was removed from the benchmark Hang Seng Index. By January, its shares had dropped to their lowest point since the company’s listing in 1972; overall, the stock has halved since net worths were last measured a year ago. That’s blown a hole through Cheng’s fortune, which is down $2.6 billion—the biggest drop in dollar terms than anyone on the list—to $19.5 billion, though he remains the third richest.
Jeff Zhang, an equity analyst at research firm Morningstar, says New World’s balance sheet is much weaker compared with those of other major property developers in Hong Kong. Weighed down by HK$124 billion in debt, New World’s net gearing ratio of 55%—for the year ended June—is the highest among its peers. The debt-to-equity ratio of billionaire Lee Shau Kee’s Henderson Land Development was 22% as of June whereas it was 18% at the Kwok family’s Sun Hung Kai Properties.
Responding to investor concerns, New World announced in January that it had refinanced HK$17.8 billion in bank loans since July. The company also confirmed in a stock exchange filing that while it had received offers for one of its prized Hong Kong malls under its K11 brand—billed as a fusion of “art, people and nature”—no sale had been concluded. The company refuted reports about a debt restructuring and said that it “continues to carry out its businesses as usual.”
The K11 brand was a key part of the ambitious strategy devised by Cheng’s eldest son, Adrian, to remake his family’s property legacy. As he told Forbes Asia in 2020, “I’m disrupting it and rejuvenating it to create a new business model.” Adrian’s aggressive expansion, built on a mountain of debt, unraveled amid interest rate hikes and China’s economic slowdown.
The erstwhile heir apparent stepped down as New World’s CEO in September and was succeeded by chief operating officer Eric Ma, who in turn, was replaced two months later by Echo Huang, the CEO of the company’s mainland subsidiary. The revolving door at the company’s corner office has added to investor jitters, clouding the outlook for New World, according to Morningstar’s Zhang.
Meantime, another of Cheng’s big assets, Hong Kong-listed Chow Tai Fook Jewellery Group, overseen by his daughter Sonia as co-vice chairman, is facing slowing demand. (Sonia is also CEO of Rosewood Hotel Group, the Chengs’ luxury hotel chain.) In the six months ended Sept. 30, net profit plunged 44% to HK$2.6 billion as revenue dropped by a fifth to HK$39.4 billion. That was partly due to a 25% decline in same-store sales in mainland China, the company’s biggest market, which accounts for 84% of revenue and where it operates nearly 7,000 stores.
Linda Huang, Macquarie’s head of Asia consumer research, is optimistic about the outcome of the company’s recent moves to shutter hundreds of underperforming stores. “I believe the profit margin will improve,” says Huang.
