What: New World Development reports first annual loss in two decades as CEO Adrian Cheng steps down.

Why it is important: This development underscores the volatility in Hong Kong's property market and the challenges faced by even well-established companies, potentially influencing future investment and development strategies in the region.

Adrian Cheng has resigned as CEO of Hong Kong property developer New World Development, following the company's report of a HKD 11.807 billion (USD1.52 billion) loss. This marks the company's first annual loss in two decades. Ma Siu-Cheung has been appointed as Cheng's replacement. The loss is largely attributed to writedowns in the business. In August, the company had anticipated a one-off loss of USD1.06 billion from the disposal of NWS Holdings in fiscal 2024. Additionally, New World Development is in discussions with Chow Tai Fook Enterprises, another Cheng family-controlled company, regarding the potential disposal of its investment in Kai Tak Sports Park. Adrian Cheng, son of billionaire Henry Cheng, has also resigned his executive directorship with Chow Tai Fook, citing a desire to focus on public services and personal commitments. This move represents a significant shift for Cheng, who has held several key positions within New World Development, including those of executive vice-chairman and general manager. These changes come amid challenging times for Hong Kong's property and retail sectors, reflecting broader economic pressures in the region.

IADS Notes: Adrian Cheng's resignation from New World Development comes amid a broader context of shifting business strategies and challenging market conditions in Hong Kong. Earlier in 2024, Cheng had planned to list his investment unit, C Capital, on the SIX Swiss exchange, aiming to bring Asian investment opportunities closer to European investors. This move demonstrated Cheng's broader business interests beyond New World Development. Meanwhile, Hong Kong's retail sector has been facing significant challenges, with sales falling after an initial post-pandemic rebound. This decline is attributed to changing consumer behaviour, particularly among mainland Chinese visitors, which has impacted the overall retail performance in the city. These trends align with the broader economic challenges facing companies like New World Development, highlighting the complex business environment in which Cheng's resignation takes place.

Adrian Cheng resigns as New World Development CEO