Adrian Cheng Chi-kong, the third-generation leader of one of Hong Kong’s largest conglomerates, is set to relinquish his role as the CEO of New World Development and will be taking on a non-executive position within the company, according to sources familiar with the matter.
Born in 1979, Cheng will become the non-executive vice-chairman of New World, stepping down from his current role as CEO. The company’s chief operating officer, Eric Ma Siu-cheung, who previously served as Hong Kong’s Secretary for Development, is expected to be promoted to the CEO position when New World announces its full-year financial results on Thursday.
“Ma has recently instructed colleagues to review the financial situation of the subsidiaries for restructuring moves,” a source said.
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New World is expected to report a loss of between HK$19 billion (US$2.44 billion) and HK$20 billion for the fiscal year ending June 30, its biggest loss since Cheng’s grandfather founded the company more than fifty years ago, according to a profit warning issued by the company last month. Its core operating profit from continuing operations is also expected to decrease by 18 to 23 percent compared to the previous year.
Cheng’s departure from his current role is the latest change in leadership within Chow Tai Fook Enterprises (CTEF), New World’s parent company. This move is said to be aimed at accelerating growth and strengthening operations within the company. CTEF has established a CEO’s office led by three executives, including one of the youngest scions of the Cheng family, Christopher Cheng Chi-leong. Patrick Tsang On-yip has been named as co-CEO and head of Americas, Australia, and Europe, and Ho Gilbert Chi-hang as co-CEO and head of corporate functions and operations.
There have been rumors of family discord and uncertainty surrounding the group’s succession plans after patriarch Henry Cheng Kar-shun, 77, indicated in an interview with Hong Kong’s HOY TV last November that he may not be seeking a successor from within the family. However, a senior family member has denied these rumors.
During a press conference for NWS, New World’s sister company, co-CEO Brian Cheng Chi-ming declined to comment on the rumors of Adrian Cheng’s replacement but stated that the news would be disclosed within the next 24 hours. He also noted that his father, Henry Cheng, is completely fair and that a change in leadership is normal. Brian Cheng added that he too would be replaced if he did not perform well.
As of December 2023, New World had a consolidated net debt of about HK$118.92 billion. In recent months, the company has made efforts to reduce its debt, including completing more than HK$16 billion of loan arrangements and debt repayments in July and August and refinancing certain loans due in 2025. In the first half of the year, it repaid HK$35 billion of its loans and debt.
The company has also sold off several assets since 2022, including a 51 percent stake in a prime office building in Cheung Sha Wan to joint venture partner, Ares SSG, a 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.
In 2021, 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 percent higher at HK$8.19, while the benchmark Hang Seng Index rose 0.7 percent.