{"id":364640,"date":"2023-11-21T16:03:42","date_gmt":"2023-11-21T08:03:42","guid":{"rendered":"https:\/\/www.mingtiandi.com\/?p=364640"},"modified":"2023-11-21T22:47:57","modified_gmt":"2023-11-21T14:47:57","slug":"new-worlds-henry-cheng-says-searching-for-successor","status":"publish","type":"post","link":"https:\/\/www.mingtiandi.com\/real-estate\/people\/new-worlds-henry-cheng-says-searching-for-successor\/","title":{"rendered":"New World\u2019s Henry Cheng Says Searching for Successor, May Opt for External Candidate"},"content":{"rendered":"<div id=\"attachment_363346\" style=\"width: 790px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" aria-describedby=\"caption-attachment-363346\" class=\"wp-image-363346 size-full\" src=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/11\/leadership_banner_Henry3.jpg\" alt=\"New World Development chairman Henry Cheng\" width=\"780\" height=\"397\" srcset=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/11\/leadership_banner_Henry3.jpg 780w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/11\/leadership_banner_Henry3-400x204.jpg 400w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/11\/leadership_banner_Henry3-640x326.jpg 640w\" sizes=\"(max-width: 780px) 100vw, 780px\" \/><p id=\"caption-attachment-363346\" class=\"wp-caption-text\">New World Development chairman Henry Cheng<\/p><\/div>\n<p>Hong Kong property and retail tycoon Henry Cheng Kar-shun says he is still looking for a successor to run the family\u2019s business and did not rule out selecting an external candidate, throwing into question the role of his eldest son, Adrian Cheng, who currently serves as CEO of Cheng family-controlled New World Development.<\/p>\n<p>In a local television interview on Saturday, the 76-year old magnate said he is still \u201cobserving\u201d who might be the next leader of the family\u2019s business empire, which includes Hong Kong-listed builder New World Development (NWD) and jewelry retailer Chow Tai Fook Enterprises.<\/p>\n<p style=\"text-align: center;\"><a data-no-instant=\"1\" href=\"https:\/\/ad.doubleclick.net\/ddm\/trackclk\/N6563.3378992MINGTIANDI\/B30546704.375324595;dc_trk_aid=566156183;dc_trk_cid=192150727;dc_lat=;dc_rdid=;tag_for_child_directed_treatment=;tfua=;ltd=;dc_tdv=1\" rel=\"noopener\" class=\"adv-link\" target=\"_blank\" aria-label=\"Copy of APAC_EN_Capabilities_Static_StandoutAPAC_780x250_Real Estate\"><img decoding=\"async\" src=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/10\/Copy-of-APAC_EN_Capabilities_Static_StandoutAPAC_780x250_Real-Estate.jpg\" alt=\"\"  srcset=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/10\/Copy-of-APAC_EN_Capabilities_Static_StandoutAPAC_780x250_Real-Estate.jpg 780w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/10\/Copy-of-APAC_EN_Capabilities_Static_StandoutAPAC_780x250_Real-Estate-400x128.jpg 400w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/10\/Copy-of-APAC_EN_Capabilities_Static_StandoutAPAC_780x250_Real-Estate-640x205.jpg 640w\" sizes=\"(max-width: 780px) 100vw, 780px\" width=\"780\" height=\"250\"   \/><\/a><script language='JavaScript1.1' src=\"https:\/\/ad.doubleclick.net\/ddm\/trackimpj\/N6563.3378992MINGTIANDI\/B30546704.375324595;dc_trk_aid=566156183;dc_trk_cid=192150727;ord=+ Date.now();dc_lat=;dc_rdid=;tag_for_child_directed_treatment=;tfua=;gdpr=${GDPR};gdpr_consent=${GDPR_CONSENT_755};ltd=;dc_tdv=1?\" attributionsrc ><\/script><\/p>\n<p>The interview was conducted by HOY TV, a media company majority-owned by the senior Cheng, who controls <a href=\"https:\/\/www.bloomberg.com\/billionaires\/profiles\/kar-shun-cheng\/\">the estimated $21.8 billion family fortune<\/a> built on businesses established by his father, Cheng Yu-tung, before he passed away at age 91 in 2016. Cheng ranks as Hong Kong&#8217;s third-richest man, according to Bloomberg.<\/p>\n<p>Cheng commented that it is not necessary to have a single successor, as different family members can run their respective units. If there are no suitable successors within the family, recruiting an external candidate is also on the table, he said.<\/p>\n<p>Cheng\u2019s comments come as New World Development has been selling off assets in recent months as it grapples with a high debt load, declining profitability, and a sagging share price under the leadership of the junior Cheng, who was promoted to chief executive of the developer in May 2020.<\/p>\n<h3>Succession Questions<\/h3>\n<p>Since being named chief executive of New World three years ago, Adrian Cheng, now 44, has focused on relabeling the company\u2019s commercial properties under his own K11 brand and aligned its marketing with fashion and design.<\/p>\n<div id=\"attachment_341360\" style=\"width: 610px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" aria-describedby=\"caption-attachment-341360\" class=\"size-full wp-image-341360\" src=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/01\/Adrian-Cheng-of-New-World.jpeg\" alt=\"Adrian Cheng of New World\" width=\"600\" height=\"340\" srcset=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/01\/Adrian-Cheng-of-New-World.jpeg 600w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/01\/Adrian-Cheng-of-New-World-400x227.jpeg 400w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/01\/Adrian-Cheng-of-New-World-348x196.jpeg 348w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><p id=\"caption-attachment-341360\" class=\"wp-caption-text\">Adrian Cheng, chief executive of New World Development<\/p><\/div>\n<p>The company\u2019s $2.6 billion Victoria Dockside project in Hong Kong\u2019s Tsim Sha Tsui area was a redevelopment of an earlier New World project, with the company earlier this year declaring the shopping mall portion of the commercial tower to be \u201cHong Kong&#8217;s \u2018Silicon Valley of Culture\u2019, a revolutionary cultural-retail destination that transcends traditional shopping malls with its avant-garde design fused with a year-round celebration of arts and culture.\u201d<\/p>\n<p>The younger Cheng focused on linking the 66-storey project with global celebrities, including <a href=\"https:\/\/www.mingtiandi.com\/real-estate\/people\/new-world-adrian-cheng-pharrell-williams-hong-kong\/\">hosting a party for pop star Pharrell Williams<\/a>.<\/p>\n<p>The Harvard-educated scion as the eldest of Henry\u2019s six children leads the company\u2019s real estate business, his younger sister, Sonia, is chief executive of New World\u2019s Rosewood Hotels division.<\/p>\n<h3>Deleveraging and Disposing<\/h3>\n<p>Earlier this month, shareholders of NWD approved a deal to sell the company\u2019s lucrative NWS Holdings construction subsidiary to reduce debt and strengthen NWD\u2019s capital position. With a total debt-to-equity ratio of 69 percent and net gearing ratio of 49 percent as of June, NWD had one of the highest debt ratios among the city\u2019s top developers.<\/p>\n<p>NWD received HK$21.8 billion ($2.8 billion) in proceeds from the buyout of NWS Holdings by the subsidiary\u2019s major shareholder Chow Tai Fook Enterprises, and plans to pay a special dividend of HK$4 billion ($510 million), or HK$1.59 per share, upon completion of the deal. The special dividend comes after the company slashed its annual dividend by 63 percent.<\/p>\n<p style=\"text-align: center;\"><a data-no-instant=\"1\" href=\"https:\/\/www.mingtiandi.com\/real-estate\/events\/oxford-ivanhoe-kic-savills-on-singapore-india-markets\/\" rel=\"noopener\" class=\"adv-link\" target=\"_blank\" aria-label=\"14 NOVEMBER 2023 conrad centennial Singapore\"><img decoding=\"async\" src=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/11\/14-NOVEMBER-2023-conrad-centennial-Singapore.jpg\" alt=\"\"  srcset=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/11\/14-NOVEMBER-2023-conrad-centennial-Singapore.jpg 780w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/11\/14-NOVEMBER-2023-conrad-centennial-Singapore-400x128.jpg 400w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/11\/14-NOVEMBER-2023-conrad-centennial-Singapore-640x205.jpg 640w\" sizes=\"(max-width: 780px) 100vw, 780px\" width=\"780\" height=\"250\"   \/><\/a><\/p>\n<p>In order to accelerate deleveraging, NWD disposed of HK$37.8 billion ($4.8 billion) worth of assets deemed as non-core over the three fiscal years ending June 2023, with more asset sales flagged for the current fiscal year.<\/p>\n<p>\u201cManagement remains committed to deleveraging and expects (net gearing ratio) to reach mid-to-high 30s in fiscal year 2026-2027,\u201d the company said in its annual results presentation.<\/p>\n<p>In December 2022, the developer <a href=\"https:\/\/www.mingtiandi.com\/real-estate\/finance\/angelo-gordon-wang-on-buying-nwd-kowloon-hotel\/\">sold the Pentahotel<\/a> in the San Po Kong area of Wong Tai Sin to local developer Wang On Properties and US private equity shop Angelo Gordon for HK$2 billion ($260 million).<\/p>\n<p>That deal came just a few months after US private equity firm Ares Management <a href=\"https:\/\/www.mingtiandi.com\/real-estate\/projects\/ares-buys-51-stake-in-new-world-hong-kong-project\/\">acquired from NWD a 51 percent stake<\/a> in 83 Wing Hong Street, an office project in Kowloon\u2019s Cheung Sha Wan district for approximately HK$3.1 billion ($392 million).<\/p>\n<p>In July 2022, NWD <a href=\"https:\/\/www.mingtiandi.com\/real-estate\/finance\/new-world-puts-tsuen-wan-mall-on-the-market-for-764m\/\">put up for sale<\/a> its D Park shopping centre in Tsuen Wan at a reported price of HK$6 billion ($764.4 million).<\/p>\n<p>The company has also undertaken significant capex reductions, continued trimming of operating expenses, and a bond buyback programme to shore up its financial position.<\/p>\n<h3>Not Easy to Find<\/h3>\n<p>Hong Kong\u2019s <a href=\"https:\/\/www.mingtiandi.com\/real-estate\/research-policy\/hong-kong-land-sale-failures-reach-new-high\/\">property slump<\/a> and rising interest rates have shaken investor confidence in the city\u2019s developers, with the negative sentiment exacerbated by the developers\u2019 exposure to a persistently weak Mainland economy and currency. A string of defaults by Mainland Chinese developers have added to the pessimism.<\/p>\n<p>Investors have soured on NWD\u2019s shares and bonds, with the company\u2019s stock down 31 percent year-to-date compared to a 12 percent decline in the Hang Seng Index, while three of the company\u2019s perpetual bonds are trading at 40 cents on the US dollar level.<\/p>\n<p>In an earnings conference in September, Adrian said the company would use part of the proceeds from the NWS deal to repurchase bonds, including high-coupon perpetual bonds, and repay loans.<\/p>\n<p style=\"text-align: center;\"><div style=\"margin-left: auto; margin-right: auto; text-align: center; \" id=\"mingt-3493017\"><a data-no-instant=\"1\" href=\"https:\/\/www.yardi.asia\/Resource\/?resource=Technology+Transformation+in+Asian+Real+Estate+%28White+Paper%29&#038;utm_source=mingtiandi&#038;utm_medium=website&#038;utm_campaign=wp23ttare\" rel=\"noopener\" class=\"adv-link\" target=\"_blank\" aria-label=\"Yardi &#8211; Asia Proptech Report 2023 v2_250\"><img decoding=\"async\" src=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/11\/Yardi-Asia-Proptech-Report-2023-v2_250.gif\" alt=\"\"  width=\"780\" height=\"250\"  style=\"display: inline-block;\" \/><\/a><\/div><\/p>\n<p>This month, Adrian was appointed by Hong Kong\u2019s Financial Services Development Council to chair the Hong Kong Academy for Wealth Legacy, a newly established institution for promoting Hong Kong as a global family office hub.<\/p>\n<p>In the interview, the senior Cheng listed several qualities that the successor must possess, including talent, virtue, selflessness, leadership, and enthusiasm for the business, noting that such a person \u201cwould not be easy to find.\u201d<\/p>\n<p>Cheng added that he wanted to spin off and list different businesses at an appropriate time to boost transparency.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Hong Kong property and retail tycoon Henry Cheng Kar-shun says he is still looking for a successor to run the family\u2019s business and did not rule out selecting an external candidate, throwing into question the role of his eldest son,&#8230;&nbsp;<a href=\"https:\/\/www.mingtiandi.com\/real-estate\/people\/new-worlds-henry-cheng-says-searching-for-successor\/\">Read&nbsp;More>><\/a><\/p>\n","protected":false},"author":18333,"featured_media":363346,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[2288],"tags":[5946,5382,5359,4935,2518],"ppma_author":[9278],"authors":[{"term_id":9278,"user_id":18333,"is_guest":0,"slug":"kevin-he","display_name":"Kevin He","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/efdb9306ba60ef6852106a81f25dad21?s=96&d=mm&r=g","user_url":"","last_name":"He","first_name":"Kevin","description":""}],"_links":{"self":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts\/364640"}],"collection":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/users\/18333"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/comments?post=364640"}],"version-history":[{"count":0,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts\/364640\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/media\/363346"}],"wp:attachment":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/media?parent=364640"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/categories?post=364640"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/tags?post=364640"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/ppma_author?post=364640"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}