HONG KONG - The chief executive of Hong Kong's New World Development Adrian Cheng, the third-generation scion of the firm's founding family, has resigned and will be replaced by its chief operating officer, the company said on Thursday.

New World Development made the announcement in a stock exchange filing as it reported a net loss of HK$19.7 billion ($2.53 billion) for the financial year ending June.

Trading in shares of the company will resume on Friday after their suspension on Thursday.

"After long consideration, I decided to devote more time on public services in my next phase in life," Cheng said in a brief speech before he left the earnings conference.

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"A few weeks ago I initiated a resignation ... and I'm very happy my father, Dr Henry Cheng, respects and supports my decision," he said.

He will continue to contribute to the business strategy of K11 as a non-executive vice-chairman, he added.

Previous chief operating officer Eric Ma, who becomes the new CEO, said New World was a sophisticated company and its real estate business strategy would not change, while it has no plan of large-scale lay-offs.

New World has struggled to recover from a drop in property demand resulting from the COVID-19 pandemic while also facing a prolonged slump in retail markets and surging interest rates.

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It will spin off its flagship retail K11 brand management to a company newly set up by Cheng for HK$209 million to save operating costs, the company said in a filing.

The 44-year-old tycoon succeeded his father as CEO in 2020 and rapidly expanded New World's business in the Hong Kong Special Administrative Region and the Chinese mainland with large-scale projects such as malls and offices.

However, New World's market capitalization has shrunk to about $2.7 billion from $12 billion when Adrian Cheng took over, and its stock has slid nearly 80 percent from a mid-2021 peak.

New World has the highest debt among Hong Kong peers at HK$199 billion, JPMorgan data showed in July, with net gearing that counts perpetual bonds as debt standing at 77 percent.

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That compared to 17 percent to 40 percent at Henderson Land, CK Asset and Sun Hung Kai Properties.

New World has hastened sale of its assets to raise funds. This financial year it sold roughly 97 percent of infrastructure arm NWS Holdings to parent Chow Tai Fook Enterprises (CTFE), receiving nearly $3 billion to help cut debt.

In a separate filing, the developer said it is in discussion with CTFE to sell all its equity interest in Kai Tak Sports Park Limited, a new stadium in the Asian financial hub.

At Thursday's conference, New World said it aimed to keep capital expenditure below HK$15 billion in the 2025 financial year, and dispose of non-core assets worth HK$13 billion.

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Striping out non-cash losses including impairments, the firm's core operating profit from continuing operations last financial year was HK$6.9 billion, down 18 percent from a year ago.

Last year Cheng's father said in a television interview he had yet to decide on a successor to run the broader group and that he could hire someone from outside the family, a rare move for a Hong Kong tycoon.

"It depends on whether a company is being managed well; it may not necessarily suit all family businesses to introduce someone from outside," said UOB Kay Hian director Steven Leung.

"But for New World, changing corporate culture by bringing in professional management could be good, but the person has to balance the interests of family members as well."

New World was founded by late billionaire Cheng Yu-tung and has businesses in industries from infrastructure and insurance to transport and retail.