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, is set to step down as the CEO of New World Development and take on a new role as the company’s non-executive vice-chairman, according to sources with knowledge of the situation.
Born in 1979, Cheng will relinquish his position as CEO and be replaced by Eric Ma Siu-cheung, the company’s chief operating officer and former Hong Kong secretary for development. Ma is expected to be announced as the new CEO when New World Development reports its full-year financial results on Thursday, according to the sources.
One source also revealed that Ma had recently instructed colleagues to review the financial situation of New World’s subsidiaries in preparation for possible restructuring.
Luxury brands have been expanding their presence at K11 Musea, a luxury shopping mall owned by New World. (Photo: K11 Group)
New World Development 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, the company’s biggest loss since Cheng’s grandfather, Cheng Yu-tung, founded the conglomerate over 50 years ago. This was announced in a profit warning last month. The core operating profit from continuing operations is estimated 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 exit from his current role is part of a wider reshuffle at Chow Tai Fook Enterprises (CTFE), New World’s parent company, as it seeks to “accelerate growth and strengthen operations.” CTFE has established a CEO’s office that will be led by three executives, including Christopher Cheng Chi-leong, one of the youngest scions of the prestigious Cheng family. The other two co-CEOs are Patrick Tsang On-yip, who will head the Americas, Australia, and Europe regions, and Ho Gilbert Chi-hang, who will be in charge of corporate functions and operations.
The succession plans at New World’s parent company, CTFE, have been a source of speculation and uncertainty, following comments made by patriarch Henry Cheng Kar-shun during an interview with Hong Kong’s HOY TV last November. In the interview, he hinted that he may not be seeking a successor from within the family. However, a senior family member has since denied these rumors.
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Brian Cheng Chi-ming, co-CEO of NWS, New World’s sister company, declined to comment on the rumors of Adrian Cheng’s replacement but stated that an announcement would be made within the next 24 hours. Speaking after NWS’s results press conference on Wednesday, Cheng added that his father Henry Cheng is fair and that it is normal for leadership to change. He also admitted that he would be replaced if he did not perform satisfactorily.
New World had a consolidated net debt of HK$118.92 billion as of December 2023. In recent months, the company has made significant efforts to reduce this debt, including arranging for a total of HK$16 billion in loan arrangements and payments in July and August, as well as refinancing certain loans that were due in 2025. In the first half of the year, New World repaid HK$35 billion in loans and debt.
The company has also divested several assets since 2022. For instance, in September of that year, they sold a 51 per cent stake in a prime office building to Ares SSG, a joint venture partner and the local unit of US private-equity firm Ares Management, for HK$3.07 billion. Three months later, they sold the 695-room Pentahotel in Kowloon for HK$2 billion. Just this year, they sold the D-Park Shopping Centre and associated parking spaces in Tsuen Wan to private developer Chinachem Group for HK$4.02 billion.
New World’s shares closed 2.5 per cent higher at HK$8.19 on Wednesday, while the benchmark Hang Seng Index rose 0.7 per cent.