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 major conglomerates, is set to step down from his role as chief executive officer of New World Development and transition into a non-executive position within the company, according to sources familiar with the situation.
Born in 1979, Cheng will assume the role of non-executive vice-chairman of New World, relinquishing his title as chief executive officer. Eric Ma Siu-cheung, New World’s current chief operating officer and former Hong Kong Secretary for Development, is expected to take on the role of CEO when the company announces its full-year financial results this Thursday, according to the sources.
One source revealed that Ma had recently instructed colleagues to review the financial situation of the company’s subsidiaries and make 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 ended June 30, the largest in the company’s history since Cheng’s grandfather established it over 50 years ago. This comes after the company issued a profit warning last month.
The company also estimated a decrease in core operating profit from continuing operations for the full year of between HK$6.5 billion and HK$6.9 billion, a decrease of 18 per cent to 23 per cent from the previous year.
Cheng’s exit from his current role is the latest of a series of shakeups within New World’s parent company, Chow Tai Fook Enterprises (CTEF), in an effort to accelerate growth and strengthen operations. CTEF has established a CEO’s office, headed by three executives, including one of the youngest members of the clan, Christopher Cheng Chi-leong.
Patrick Tsang On-yip has been appointed as co-CEO and head of Americas, Australia, and Europe, while Ho Gilbert Chi-hang is the co-CEO and head of corporate functions and operations.
There have been rumors of discord within the family over succession plans following comments made by patriarch Henry Cheng Kar-shun, 77, who said in a November interview with HOY TV in Hong Kong that he may not be selecting a successor from within the family. However, a senior member of the family has denied these rumors.
Brian Cheng Chi-ming, co-CEO of New World’s sister company NWS, declined to comment on the rumors surrounding Adrian Cheng’s replacement but indicated that news would be revealed within the next 24 hours. Following NWS’s results press conference on Wednesday, he added that his father Henry Cheng is impartial and that substitution is a normal occurrence, stating that he would be replaced if he did not perform well.
As of December 2023, New World had a consolidated net debt of approximately HK$118.92 billion. In recent months, the company has focused on reducing debt, completing more than HK$16 billion of loan arrangements and debt repayments in July and August, as well as refinancing certain loans due in 2025. In the first half of the year, the company repaid HK$35 billion of loans and debts.
Since 2022, the company has also divested several assets, including the sale of 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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Earlier this year, New World also 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.