Adrian Cheng Step Down New World Ceo Likely Be Replaced Coo Eric Ma Sources
Adrian Cheng Chi-kong, the third-generation leader of one of Hong Kong’s largest conglomerates, will be stepping down as CEO of New World Development and taking on a non-executive role, sources familiar with the situation have revealed.
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Born in 1979, Cheng will now serve as non-executive vice-chairman of the company, relinquishing his position as CEO. Sources say that Eric Ma Siu-cheung, former secretary for development in Hong Kong, is expected to be promoted to CEO when New World announces its full-year financial results on Thursday.
One insider shared that Ma has recently instructed colleagues to review the financial situation of New World’s subsidiaries, possibly for restructuring purposes.
New World is likely to report a loss of between HK$19 billion and HK$20 billion for the financial year ending June 30, as per its profit warning last month. This will be the company’s biggest losses since its founding over 50 years ago by Cheng’s grandfather, Cheng Yu-tung.
Moreover, its core operating profit is estimated to be between HK$6.5 billion and HK$6.9 billion, down between 18 per cent and 23 per cent compared to the previous year.
Cheng’s departure will mark the latest shakeup at Chow Tai Fook Enterprises (CTEF), New World’s parent company, which said it aims to accelerate growth and improve operations with this move.
To achieve this, CTEF has established a CEO’s office headed by three executives, including Christopher Cheng Chi-leong, one of the youngest members of the clan. Meanwhile, Patrick Tsang On-yip will serve as co-CEO and head of business in the Americas, Australia, and Europe, and Gilbert Ho Chi-hang will be co-CEO and head of corporate functions and operations.
The group’s succession plan has been the subject of rumours, sparked by patriarch Henry Cheng Kar-shun, 77, who said in an interview last November that he may not be passing on the reins to a family member. However, a senior family member has since dismissed these speculations.
Brian Cheng Chi-ming, co-CEO of New World’s sister company NWS, declined to comment on rumours about Adrian Cheng’s replacement but said that the news will be revealed within the next 24 hours.
During NWS’ results press conference on Wednesday, Cheng said that his father, Henry Cheng, is a fair leader and that it is normal for substitutions to occur. He added that he, too, would be replaced if he did not perform well.
As of December 2023, New World had about HK$118.92 billion in consolidated net debt. However, the company has been working to reduce its debt in recent months, having completed more than HK$16 billion in loan arrangements and repayments in July and August, and refinancing certain loans due in 2025. In the first half of the year, it repaid HK$35 billion in loans and debt.
Since 2022, New World has also been selling off assets. In September of that year, it sold a 51 per cent stake in a prime office building in Cheung Sha Wan to Ares SSG, the Hong Kong unit of US private equity firm Ares Management, for HK$3.07 billion. Three months later, it sold the Pentahotel in Kowloon, which has 695 rooms, for HK$2 billion.
This year, New World sold its D-Park Shopping Centre and associated parking spaces in Tsuen Wan to private developer Chinachem Group for HK$4.02 billion.
On Wednesday, New World’s shares closed 2.5 per cent higher at HK$8.19, while the benchmark Hang Seng Index rose 0.7 per cent.
