Hong Kong crypto whale Zheng Zhigang, who invested in Azuki and Sandbox, steps down due to poor performance in his main business.

Adrian Cheng, the heir of the Hong Kong New World Group and founder of K11 Mall, suddenly revealed on X on August 22, 2022, that he is the whale holder of over a hundred blue-chip NFT Azuki, under the alias "LastKnight.ETH." Being the successor of a prominent Hong Kong business conglomerate, the disclosure of his alter ego account caused Azuki's value to surge. However, after reaching its peak in 2021, the NFT market began to decline, with the current floor price of Azuki dropping to 5.7 ETH.

Adrian Cheng is the eldest grandson of the late Hong Kong tycoon Cheng Yu-Tung and ranks third on the Forbes Hong Kong Billionaires list. His father, Cheng Kar-shun, suffered a stroke in 2017, making Adrian Cheng the first in line to inherit the family fortune. Cheng Yu-Tung doted on his eldest grandson, actively grooming him to take over the family business. The New World Group is a real estate investment company and a subsidiary of the Chow Tai Fook Jewellery Group. Adrian Cheng truly lives up to his reputation as a privileged young man born with a silver spoon.

High Leverage in Cultural and Creative Department Stores Playing Away 72 Billion Hong Kong Dollars

Adrian Cheng resigned as the Chief Executive Officer of New World Group and also stepped down from the board of New World Development, Chow Tai Fook, and New World Department Store. According to a report by Hong Kong 01, it is speculated that Cheng's departure is related to the excessive leverage borrowing during his tenure as CEO, which led to continuous losses for New World.New World's market value dropped from 92.6 billion to 20.6 billion Hong Kong dollars, evaporating 72 billion Hong Kong dollars, and the stock price of New World has been on a downward trend from 40 to 8 Hong Kong dollars.

Adrian Cheng, who enjoys contemporary art and department stores, transformed K11 Art Mall into more than just a department store, aiming to become an Asian cultural and creative art museum, combining department stores, dining, and art exhibitions. The second-generation successor of Eslite Bookstore in Taiwan, Wu Minjie, transformed the bookstore into an Eslite cultural and creative department store. Cheng transformed the department store into an art gallery and proclaimed himself as a cultural and creative talent and curator.

Adrian Cheng was actively expanding the territory during his tenure as the CEO of New World Group, with high leverage financing plans including bidding 20 billion Hong Kong dollars for the SkyCity Mall in Hong Kong International Airport, the Kowloon City Sports Park near Hong Kong Kai Tak Airport, and K11 Mall. After Cheng's resignation, New World's stock showed a slight increase.Morgan Stanley analysts believe that replacing the CEO cannot stop the bleeding for New World Group. It is suggested that New World Group should sell K11 Mall and Kowloon City Sports Park to stabilize cash flow.

Cultural and Creative Talent Investing in Azuki NFT and The Sandbox Virtual Real Estate

The owner of 101 Azuki NFTs "LastKnight.ETH" is none other than Adrian Cheng himself, who used to be low-key about his wealth. The mysterious whale "LastKnight.ETH" surfaced, and the transaction volume immediately increased by 2 million USD. The project team and founder of Azuki have a poor reputation, but Cheng, as the heir of one of the four major families in Hong Kong, endorsed Azuki, leaving much room for speculation.

Cheng spared no expense in developing real estate projects and went further to buy virtual real estate, investing 5 million USD in The Sandbox virtual land, where he plans to build another cultural and creative department store. With the decline in the price of ETH, the rush to speculate on virtual real estate has caused the value of the virtual landlords to plummet.

Signs of a Housing and Economic Bubble in Hong Kong?

Since the global outbreak of the COVID-19 pandemic at the end of 2020, the housing market in Hong Kong has plummeted by 15%. Coupled with the general pessimism of Hong Kong residents about the economy and the instability of the world situation, the property market is sluggish. Citigroup and UBS predict that property prices in Hong Kong will fall by another 10% this year. When developers play with leverage and borrow money from banks to build, an oversupply can trigger a financial tsunami. The 2008 Lehman Brothers subprime storm started with real estate loans, where banks provided large loans to tycoons, and bank employees encouraged easy loans for anyone, including low-income households, to buy houses. When this "future money" loses its value, a financial crisis is imminent.