This story is part of Forbes' most abundant 2025 report on Hong Kong. See the full list here.
Hong Kong property and jewelry tycoon Henry Cheng is in the eye of a perfect storm. Last June, his publicly traded real estate flagship (New World Development) reported that the late Cheng Yu-tung's father ($2.5 billion) was founded in 1970.
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Last December, New World was removed from the benchmark Hang Seng Index. By January, its stock had fallen to its lowest point since its listing in 1972. Overall, the stock has halved since the last measurement of net assets a year ago. This blows a hole in Zheng's fortune, which dropped $2.6 billion, the biggest drop from anyone on the list – reaching $19.5 billion, even though he remains the third richest man.
Jeff Zhang, an equity analyst at research firm Morningstar, said New World's balance sheet is much weaker than other major real estate developers in Hong Kong. The weight of debt was reduced by HK$124 billion, and New World's net gear ratio was 55% (the year ended June) the highest among its peers. As of June, billionaire Lee Shau Kee's Henderson Land Development had a debt-to-rights ratio of 22%, while the Kwok family's Sun Hung Kai Properties had a debt-to-rights ratio of 18%.
In response to investor concerns, New World announced in January that it has refinanced HK$17.8 billion from bank loans since July. The company also confirmed in stock exchange filings that although it received a offer from one of its precious Hong Kong shopping malls under its K11 brand, it incorporates a fusion of “art, man and nature” that has not yet concluded. The company refuted the report on the debt restructuring and said it “continues to do business as usual.”
The K11 brand is a key part of the ambitious strategy developed by Cheng’s eldest son Adrian to reshape the property legacy of his family. As he said Forbes Asia In 2020, “I’m destroying it and rejuvenating it to create new business models.” Adrian’s aggressive expansion is built on debt hills, breaking away from debt amid rising interest rates and a slowdown in China’s economy.
The former heir apparently became New World CEO in September, succeeded by COO Eric Ma, who was replaced two months later by Echo Huang, the company's mainland subsidiary. According to Zhang of Morningstar, the revolving doors of the company’s corner office add to the shock of investors and cast a new world outlook.
Meanwhile, Zheng's other big asset is the Hong Kong-listed Chow Tai Fook Jewelry Group, whose daughter Sonia serves as co-chairman, is facing a slowdown in demand. (Sonia is also the CEO of Chengs' luxury hotel chain Rosewood Hotel Group.) For the six months ended September 30, net profit fell to 44% to HK$2.6 billion, and revenue fell by the fifth to HK$39.4 billion. This is partly due to a 25% drop in the same-store sales in the company’s largest market, which accounts for 84% of revenue, and it operates nearly 7,000 stores.
Linda Huang, head of Asian consumer research at Macquarie, is optimistic about the company's recent transfer to the closing of hundreds of underperforming stores. “I believe profit margins will increase,” Huang said.
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