---
title: "Hong Kong real estate giant changes its leader"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/215635038.md"
description: "New World Development in Hong Kong welcomes its new CEO, Ma Shaoxiang, who succeeds Zheng Zhigang. Zheng Zhigang's resignation comes amid the company's financial difficulties, with a 34% decrease in revenue in the 2024 fiscal year and the first annual loss of HKD 17.126 billion. Although part of the loss is non-cash, there are doubts about his successor's ability. Zheng Zhigang was once seen as the successor to a business empire and played a key role in the success of the K11 Art Mall"
datetime: "2024-09-30T14:40:25.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/215635038.md)
  - [en](https://longbridge.com/en/news/215635038.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/215635038.md)
---

> Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/215635038.md) | [繁體中文](https://longbridge.com/zh-HK/news/215635038.md)


# Hong Kong real estate giant changes its leader

Author | Zheng Qiao

Editor | Zhou Zhiyu

Hong Kong's New World is changing. The third-generation leader, Cheng Zhigang, has successively resigned from multiple family business positions and exited the core enterprise management of the group. The position of CEO has been taken over by Ma Shaoxiang.

With this, New World Development has officially entered the era of professional managers.

As one of the four major tycoons in Hong Kong, the Cheng family's business empire spans multiple fields including jewelry, real estate, hotels, and infrastructure.

Cheng Zhigang, as the third generation of the family and the eldest son of New World Development's chairman Cheng Jiachun, his resignation, on the surface, appears decent, but behind it lies the financial difficulties that New World Development has faced in recent years.

New World Development's performance in the 2024 fiscal year was indeed disappointing.

While Cheng Zhigang resigned as CEO of New World Development, the company also announced the performance for the 2024 fiscal year. During the reporting period, New World Development's revenue from continuing operations was HKD 35.782 billion, a year-on-year decrease of 34%, resulting in an annual loss of HKD 17.126 billion.

It is worth noting that this is the first time the company has reported a loss in 20 years.

This "report card" has raised doubts about the abilities of this once-promising successor in the eyes of the public.

However, Cheng Zhigang clarified at the performance meeting that the loss was not entirely in cash. HKD 8 billion was due to non-cash losses from the sale of the newly created group, while the remaining HKD 9.2 billion was non-cash impairments and provisions. The core operating profit was actually close to HKD 6.9 billion, only a decrease of 18%.

Cheng Zhigang has always been seen as the standard template for a successor to a tycoon: admitted to Harvard based on merit, continuously receiving scholarships during his studies. He also studied in depth Japanese art and culture in Kyoto, Japan.

After graduation, Cheng Zhigang worked at top investment banks Goldman Sachs and UBS, with experience in New York, Japan, and Hong Kong. He and Ho Kailiang have long been known as "Hong Kong's most promising young people."

Since joining New World Development in 2001, Cheng Zhigang has been showcasing his talents.

The year after returning to New World Development, Cheng Zhigang integrated culture and art into commercial real estate, founding the "world's first art shopping mall" K11 in Tsim Sha Tsui, Hong Kong. K11 achieved breakeven in its first year of operation, with a threefold increase in turnover in the second year and a stable monthly footfall of over 1 million people.

After great success in Hong Kong, K11 has successively entered first and second-tier cities such as Shanghai, Beijing, Guangzhou, and Shenyang.

In addition to opening K11 malls in multiple cities in Hong Kong and mainland China, Cheng Zhigang has invested heavily in developing large-scale projects, including the Emperor Theatre, Kai Tak Sports City, and 11 SKIES at Hong Kong International Airport, with each project's investment reaching billions of Hong Kong dollars. Among them, the investment in Kai Tak Sports City is as high as HKD 30 billion, while the total investment in Hong Kong International Airport's 11 SKIES is HKD 20 billion.

Continuous large-scale investments have significantly increased New World Development's loan amount. As of the end of 2023, New World's net debt-to-equity ratio was 82.7%, while peer companies Henderson Land Development Company Limited and Sun Hung Kai Properties Limited had net debt-to-equity ratios of 41.4% and 21.2%, respectively For Zheng Zhigang, who was in charge of NEW WORLD at the time, the pressure was undoubtedly immense.

Due to previous aggressive expansion, NEW WORLD DEV is currently heavily indebted and has had to sell assets to optimize its financial situation. In early September this year, there were market rumors that NEW WORLD DEV planned to sell its first K11 Art Mall (K11 in Tsim Sha Tsui, Hong Kong) to China Resources Land Limited for an estimated price of around HKD 9 billion.

A series of changes have sparked speculation about the third-generation successor of the Zheng family. As one of the four major property developers in Hong Kong, how the successor of the Zheng family balances family wealth with corporate development has always been a focus of external attention.

The second and third generations enjoy the glory of their predecessors but also bear the burden of continuing the family wealth. In addition to Zheng Zhigang, the other three children of the Zheng family hold key positions in the family's companies: daughter Zheng Zhiwen currently heads Chow Tai Fook and Rosewood Hotel Group, second son Zheng Zhiming, and third son Zheng Zhiliang respectively serve as newly appointed Co-CEOs of the Zheng family's private investment flagship Chow Tai Fook Enterprises.

At the end of 2023, Zheng Jiachun made a rare statement in an interview with the media, stating that the successor has not yet been determined. He admitted that finding a perfect successor is not easy, and if there are no suitable family members, he would also consider hiring talent from outside to manage the family business, letting the shareholders' meeting decide on appointments and dismissals.

Now, the company's Chief Operating Officer, Ma Shaoxiang, will succeed Zheng Zhigang as the CEO of NEW WORLD DEV.

Can "professional manager" Ma Shaoxiang succeed Zheng Zhigang and lead NEW WORLD DEV back to its peak? He faces significant challenges, with the primary task being to address the company's first loss in twenty years.

Public information shows that Ma Shaoxiang will focus on optimizing the business portfolio and improving project returns strategically. He clearly stated that NEW WORLD will continue to focus on its core real estate business, emphasizing market orientation to enhance performance.

Ma Shaoxiang pointed out that NEW WORLD has enough land reserves for the next five years of development and plans to cooperate with state-owned enterprises and central enterprises to share the burden of property development and investment. He expects a significant turning point in the market after the "Golden Week" in October and believes that the start of the US interest rate cut cycle will benefit the group and the entire industry by helping to reduce financing costs and interest expenses.

"In the future, we will continue to sell some non-core assets at the right time to recoup funds. It is expected that the target for selling non-core assets for the full year of the 2025 fiscal year will reach HKD 13 billion," he revealed.

In the past three months, NEW WORLD DEV has completed approximately HKD 2.8 billion in non-core asset sales.

"2024 will be a highly challenging year, but also a good time for a fresh start." Ma Shaoxiang has always maintained an optimistic attitude. In this power transition of the wealthy family, he seems to be prepared to face the challenges ahead

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