Sources familiar with the matter say that Adrian Cheng Chi-kong, the chief executive of New World Development and scion of one of Hong Kong’s largest conglomerates, will step down from his position and take on a non-executive role in the company.
Cheng, who was born in 1979, is expected to become the non-executive vice-chairman of New World, giving up his current title of chief executive officer. The company’s chief operating officer, Eric Ma Siu-cheung, a former Hong Kong secretary for development, is likely to be promoted to CEO when New World announces its full-year financial results on Thursday, according to the sources.
A source revealed that Ma had recently directed colleagues to review the financial situation of the company’s subsidiaries for potential restructuring moves.
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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 financial year ending June 30, which would be its largest loss since Cheng’s grandfather, Cheng Yu-tung, founded the company over 50 years ago. This was announced in the company’s profit warning last month. The company also estimates its core operating profit from continuing operations for the year 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 departure from his current role is part of a reshuffle at Chow Tai Fook Enterprises (CTFE), New World’s parent company. This move is said to “accelerate growth and strengthen operations”. CTFE has set up a CEO’s office, which will be led by three executives, including Christopher Cheng Chi-leong, one of the family’s youngest scions. Patrick Tsang On-yip has been appointed as co-CEO and head of Americas, Australia, and Europe, while Ho Gilbert Chi-hang is co-CEO and head of corporate functions and operations.
There have been speculations about family conflicts over the group’s succession plans after patriarch Henry Cheng Kar-shun, 77, sparked rumors and uncertainty about the future of the family’s vast empire.
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In an interview with Hong Kong’s HOY TV last November, he stated that he may not be looking for a successor within the family. However, a senior family member has denied these rumors.
Brian Cheng Chi-ming, co-CEO of New World’s sister company NWS, declined to comment on the rumors about Adrian Cheng’s replacement but said that the news will be revealed within the next 24 hours. Speaking after NWS’ results press conference on Wednesday, he added that his father, Henry Cheng, is completely fair. He also mentioned that changing leaders is normal, and he would be replaced if he did not perform well.
As of December 2023, New World had consolidated net debt of around HK$118.92 billion. In recent months, the company has made substantial efforts to reduce its debt, completing more than HK$16 billion of loan arrangements and repayments in July and August, as well as early refinancing of some loans set to mature in 2025. In the first half of the year, the company repaid HK$35 billion in loans and debts.
New World has also sold off various assets since 2022. In September that year, it sold 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.
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This year, New World sold 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.