Adrian Cheng Chi-kong, the third-generation member of Hong Kong’s largest business conglomerate, will be transitioning from the role of chief executive officer to non-executive vice-chairman at New World Development. According to sources familiar with the company, the change will be announced when New World releases its financial results on Thursday.
Cheng, who was born in 1979, will be succeeded by the company’s current chief operating officer, Eric Ma Siu-cheung. Ma, a former Hong Kong secretary for development, is said to be implementing restructuring changes within the firm’s subsidiaries.
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New World Development is expected to report a loss of HK$19 billion to HK$20 billion for their fiscal year ending on June 30, the largest deficit since Cheng’s grandfather, Cheng Yu-tung, founded the corporation over 50 years ago. The company’s core operating profit is estimated to decrease by 18 per cent to 23 per cent compared to the previous year.
Cheng’s departure is the latest in a series of management shake-ups at Chow Tai Fook Enterprises (CTFE), New World’s parent company. CTFE has established a CEO’s office, headed by three executives, including one of the Cheng family’s youngest members, Christopher Cheng Chi-leong. Patrick Tsang On-yip has been appointed as the co-CEO and head of Americas, Australia, and Europe, while Ho Gilbert Chi-hang has been named co-CEO and head of corporate functions and operations.
There have been rumors of family disagreements over succession plans after 77-year-old patriarch Henry Cheng Kar-shun sparked speculation about the future of the family’s vast empire in a November 2021 interview with Hong Kong’s HOY TV. However, a senior family member has denied these reports.
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Brian Cheng Chi-ming, co-CEO of New World’s sister company NWS, declined to comment on reports of Adrian Cheng’s replacement but said that an announcement would be made within 24 hours. He added that his father, Henry Cheng, is fair and that changes in leadership are normal, stating that he too would be replaced if he did not perform well.
As of December 2023, New World had a consolidated net debt of around HK$118.92 billion. In recent months, the company has been focusing on reducing its debt, with more than HK$16 billion in loan agreements and repayments completed in July and August, as well as early refinancing of certain loans due in 2025. In the first half of the year, New World paid off HK$35 billion in loans and debt.
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The corporation has sold off several assets since 2022, including a 51 per cent stake in a prime office building in Cheung Sha Wan for HK$3.07 billion to Ares SSG, the Hong Kong branch of US private equity firm Ares Management. In December of that year, the 695-room Pentahotel in Kowloon was sold for HK$2 billion. This year, New World sold the D-Park Shopping Centre and associated parking spaces in Tsuen Wan to private developer Chinachem Group for HK$4.02 billion.
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On Wednesday, New World’s shares climbed 2.5 per cent to HK$8.19, while the Hang Seng Index rose 0.7 per cent.