12th October 2025 – (Hong Kong) The unravelling at New World Development is not a morality tale so much as a stress test of Hong Kong’s family capitalism in an unforgiving cycle. A flagship of one of the city’s big four property clans, New World has reported a second straight annual loss of HK$16.3 billion, with revenue down 23% to HK$27.7 billion, weighed by weaker bookings on the Mainland, a sharp slowdown in construction activity and accelerated asset disposals. Total debt sits at HK$146.1 billion. The company has secured a term loan facility of up to HK$5.9 billion from Deutsche Bank backed by a first‑priority mortgage on Victoria Dockside, even after clinching a sizeable refinancing earlier this year, underscoring the persistent need to shore up liquidity in a weak market. These are facts, not judgments.
Adrian Cheng’s departure from Chow Tai Fook Enterprises following his earlier exit as New World’s chief executive and later as a board member closes a generational chapter that began with great promise. Harvard‑educated and groomed for leadership, he entered the family business in 2007 after stints at UBS and Goldman Sachs and rose to the top in 2020, four years after the passing of his grandfather, the late Cheng Yu‑tung, who built the empire from a jewellery storefront into a diversified property powerhouse. The succession appeared textbook: a seasoned patriarch stepping back, an heir apparent stepping forward, continuity assured. Then reality intervened.
Between 2020 and 2024 the industry confronted a once‑in‑a‑generation squeeze i.e. social unrest, pandemic restrictions, rising global rates, a structural slowdown across the border, and a recalibration of Hong Kong’s demand dynamics. Leverage that looked manageable in a zero‑rate world became a vice as financing costs rose and absorption slowed. Against this backdrop, New World pursued heavy capital commitments, including the HK$20 billion 11 Skies complex by the airport. Ambition in itself is not a vice; it is a requirement in a city built on long‑dated bets. The flaw, visible in hindsight, was concentration risk coupled with execution exposure to exogenous shocks. When rates repriced, cash flows lagged capex, and contingency proved thin.
Insiders have described a culture in which the boss’s vision carried unusual primacy. That may work when cycles are benign and balance sheets forgiving. In a tightening environment, it raises the cost of misjudgment and reduces organisational willingness to challenge optimistic timelines. Adrian’s public insistence in 2023 that New World’s finances were “very solid” and insulated from the mainland developer crisis was an assertion of confidence, not deception. Yet the subsequent losses and asset sales told a less buoyant story. The Airport Authority exploring new partners for 11 Skies, alongside New World’s moves to sell down to bolster liquidity, show a pivot from flagship showcase to triage. It is not disloyal to acknowledge these outcomes; it is responsible analysis.
Henry Cheng’s return to the fore and the appointment of an external chief executive marked a pragmatic departure from family‑only control that has long defined the sector. In effect, New World accepted that the old succession playbook — patriarch to son to grandson — needed reinforcement with institutional management and external credibility. That is not a repudiation of family stewardship; it is its evolution. The market’s message is clear: capital will stay loyal to Hong Kong champions that demonstrate discipline, transparency and adaptability under pressure. That is fully aligned with the city’s long‑term stability and the country’s broader emphasis on risk control.
Adrian’s launch of ALMAD Group, pitched as a vehicle for “transformative industries” spanning culture, healthcare, entertainment, sports, media, commercial management and cultural tourism, with an explicit tilt toward digital and virtual assets across ASEAN, the Middle East and mainland China, reflects a common instinct among third‑generation scions under pressure: pivot from hard assets to soft power, from concrete to content, from capex‑heavy projects to platform‑light ecosystems. There is logic here. Younger demographics in emerging markets are digital‑native; cultural commerce is growing; blockchain infrastructure is maturing beyond speculative cycles. Hong Kong remains a natural bridge between East and West, and the city’s role as a conduit to ASEAN and the Gulf is expanding in the current geopolitical environment.
The weaknesses in the ALMAD proposition are not moral flaws but execution risks. First, digital assets remain a volatile, policy‑sensitive domain. Jurisdictional arbitrage can vanish overnight; compliance loads are rising; the distinction between utility and speculation is policed more tightly after global scandals. Second, cultural platforms are notoriously hit‑driven and capital consumptive at scale. K11 by AC has demonstrated curation strength, but replicating that across unfamiliar markets requires patient local partnerships, regulatory navigation and content rights sophistication. Third, promising to “break boundaries” across a half‑dozen sectors risks diffusion. Conglomerate instincts die hard, yet the post‑low‑rate world rewards focus, not breadth.
A credible ALMAD strategy would prioritise beachheads with clear regulatory visibility and near‑term cash generation, aligned with policy tailwinds in the Mainland, ASEAN and the Middle East. Healthcare services with digital layers, regulated tokenisation of real‑world assets in partnership with established institutions, and cultural IP ventures co‑developed with state‑backed venues offer safer ramp‑ups than a broad Web3 crusade. Governance must be professional from day one — independent risk, audit and compliance functions, capital allocation committees with external voices, and conservative treasury management that avoids duration mismatches. The lesson from New World’s balance sheet should not be ignored when building a new balance sheet.
The broader context is succession. Hong Kong’s family empires have handled transitions with varying degrees of grace. The Kwoks weathered a bruising leadership struggle before stabilising. The Lis and Lees executed meticulous handovers years in the making. In each case, success correlated with clarity of mandate, early grooming, and a willingness to institutionalise. The next generation inherits not just assets but social licences — relationships with regulators, lenders, tenants and the public — amid heightened scrutiny. The societal bargain demands that dynastic stability serves the city’s development priorities: housing supply aligned with policy objectives, prudent leverage, and investment that supports diversification. When heirs conflate vision with velocity, they risk breaching that bargain.
For Adrian, ALMAD does not need to conquer multiple regions at once to be meaningful; it needs to prove one or two scalable theses with clean unit economics and visible compliance. It needs to show that the discipline learned in a bruising property cycle has translated into rigorous capital stewardship in the new arena. There is room in Hong Kong’s ecosystem for a culturally literate, tech‑enabled investment platform that respects policy boundaries and partners with the public interest. That would be a worthy contribution from a scion whose family helped build the skyline.
