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 chief executive of New World Development and transition into a non-executive role in the company, according to sources familiar with the matter.
Born in 1979, Cheng will become the non-executive vice-chairman of New World, relinquishing his position as CEO, the sources have confirmed. The board is expected to make the announcement along with the company’s full-year financial results this Thursday. In his place, Eric Ma Siu-cheung, the former secretary for development of Hong Kong and the current chief operating officer of New World, is likely to be promoted to CEO.
One source revealed that Ma has recently instructed colleagues to review the financial situation of the company’s subsidiaries as a part of restructuring efforts.
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New World is expected to report a loss of HK$19 billion to HK$20 billion (US$2.44 billion) for the financial year ending June 30, according to its profit warning last month. If this happens, it will be the biggest loss for the company since Cheng’s grandfather, Cheng Yu-tung, founded it over fifty years ago. Its core operating profit is also estimated to have declined by 18 per cent to 23 per cent from the previous year.
Cheng’s decision to step down marks the latest reshuffle within Chow Tai Fook Enterprises (CTEF), the parent company of New World. The move is said to be aimed at accelerating growth and strengthening operations. CTEF has formed a CEO’s office, which will be overseen by three executives, including Christopher Cheng Chi-leong, one of the youngest members of the clan.
Additionally, Patrick Tsang On-yip and Ho Gilbert Chi-hang have been appointed as the co-CEOs and heads of different divisions within the company.
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There have been rumors circulating about potential family disagreements regarding New World’s succession plans after 77-year-old patriarch, Henry Cheng Kar-shun, sparked speculation and uncertainty about the future of the family’s vast empire. In an interview with HOY TV in November last year, he had hinted that he might not pass on the business to a family member. However, a senior family member has since denied these claims.
Brian Cheng Chi-ming, the co-CEO of New World’s sister company NWS, declined to comment on the rumors about Adrian Cheng’s replacement but assured that an official announcement would be made within the next 24 hours.
Speaking after NWS’ results presser on Wednesday, he stated that his father, Henry Cheng, is completely fair and that the transition is a usual occurrence. He added that he would also be replaced if he didn’t 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 intensified its efforts to reduce debt, with more than HK$16 billion of loan arrangements and repayments completed in July and August. It has also refinanced some of its loans due in 2025. To date, the company has repaid HK$35 billion of its loans and debt.
In 2022, New World sold a 51 per cent stake in a prime office building in Cheung Sha Wan to Ares SSG, the local unit of American private-equity firm Ares Management, for HK$3.07 billion. In the following three months, it sold its 695-room Pentahotel in Kowloon for HK$2 billion. This year, it sold its D-Park Shopping Centre and associated parking spaces in Tsuen Wan to 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 Hang Seng Index rose by 0.7 per cent.