Adrian Cheng Step Down New World Ceo Likely Be Replaced Coo Eric Ma Sources
According to sources familiar with the matter, Adrian Cheng Chi-kong, the third-generation head of one of Hong Kong’s biggest conglomerates, will be stepping down as the chief executive of New World Development and transitioning to a non-executive role within the company.
Born in 1979, Cheng will become the non-executive vice-chairman of New World, relinquishing his position as chief executive officer, according to the sources. The company’s current chief operating officer, Eric Ma Siu-cheung, who previously served as Hong Kong’s secretary for development, is expected to take over as CEO when New World announces its full-year financial results on Thursday, the sources added.
One insider revealed that Ma had recently instructed colleagues to review the financial situation of the company’s subsidiaries in order to make any necessary restructuring moves.
New World is expected to report a loss of between HK$19 billion (US$2.44 billion) and HK$20 billion for the financial year ending on June 30 – its biggest loss since the company was founded more than 50 years ago by Cheng’s grandfather, Cheng Yu-tung – according to its profit warning last month. The company’s core operating profit from continuing operations is also estimated to be between HK$6.5 billion and HK$6.9 billion, a decrease of 18 to 23 per cent from the previous year.
Cheng’s exit from his current role is the latest leadership change at Chow Tai Fook Enterprises (CTEF), New World’s parent company, which it stated was intended to “accelerate growth and strengthen operations.” CTEF has formed a CEO’s office that will be managed by three executives, including one of the youngest members of the family, Christopher Cheng Chi-leong. Additionally, Patrick Tsang On-yip has been appointed as co-CEO and Head of Americas, Australia, and Europe, and Gilbert Ho Chi-hang has been named co-CEO and Head of Corporate Functions and Operations.
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Rumors of family discord over succession plans for the group have been circulating since patriarch Henry Cheng Kar-shun, 77, sparked speculation and uncertainty regarding the future of the family’s extensive empire in an interview with Hong Kong’s HOY TV last November. He stated that he might not be looking for a successor within the family; however, a senior family member denied those rumors.
Brian Cheng Chi-ming, co-CEO of New World’s sister company, NWS, declined to comment on the rumors of Adrian Cheng’s replacement but stated that the news would be announced within the next 24 hours. Following NWS’ results presser on Wednesday, Cheng stated that his father, Henry Cheng, is completely impartial. He continued by saying that succession is a normal occurrence and that he, too, would be replaced if he performed poorly.
As of December 2023, New World had a consolidated net debt of approximately HK$118.92 billion. In recent months, the company has ramped up its efforts to reduce debt by completing more than HK$16 billion of loan arrangements and debt repayments in July and August, as well as refinancing certain loans that weren’t due until 2025. In the first half of the year, the company repaid HK$35 billion in loans and debt.
Since 2022, the company has divested several assets, including selling a 51 per cent stake in a prime office building in Cheung Sha Wan to joint venture partner Ares SSG (the local unit of US private-equity firm Ares Management) for HK$3.07 billion. Three months later, it sold the 695-room Pentahotel in Kowloon for HK$2 billion.
This year, New World also sold its D-Park Shopping Center and associated parking spaces in Tsuen Wan to private developer Chinachem Group for HK$4.02 billion. On Wednesday, the company’s shares closed 2.5 per cent higher at HK$8.19, while the benchmark Hang Seng Index rose 0.7 per cent.