Can the Cheng family behind New World Development, a conglomerate with interests in property, hotels, infrastructure and department stores, prove the Chinese proverb wrong and make its wealth last three generations?
The Hong Kong-listed firm’s board of directors currently includes two grandchildren of founder Cheng Yu-tung: 34-year-old Adrian Cheng Chi-kong, executive director and joint general manager of the company, and his 33-year-old sister, executive director Sonia Cheng Chi-man. Their father is New World Development chairman Henry Cheng Kar-shun, Cheng Yu-tung’s eldest son.
From April 1, Adrian Cheng will be promoted to executive vice-chairman, New World Development announced. This move is seen as an indication he will eventually take over the family business from his father.
This year, I expect Adrian Cheng to put in some new management philosophy and workflow
A younger brother, 31-year-old Brian Cheng Chi-ming, is an executive director of NWS Holdings, the Hong Kong-listed infrastructure subsidiary of New World Development. Henry Cheng is also chairman of NWS.
Patriarch Cheng Yu-tung, now nearly 90, founded New World Development in 1970 and retired as its chairman on March 1, 2012. Adrian Cheng, who had been an executive director since 2007, was appointed joint general manager of the company, while Sonia Cheng was appointed executive director and Henry Cheng succeeded his father as chairman.
In a report released that day, JP Morgan said: “We maintain our positive view on New World Development, post the announcement of a change in the board of directors and 2012 interim results. The retirement of Cheng Yu-tung signals that the founder is comfortable to fully hand over the leadership to the next generation. The announcement of Cheng Yu-tung stepping down as chairman and executive director is an indication of the company entering a new phase of operations. The new management team is expected to introduce Western-style management techniques.”
Bocom International analyst Alfred Lau said Adrian Cheng had introduced new management approaches and workflow at New World Development.
“Adrian is very hands-on in the business,” Lau said. “The feedback from his colleagues is he is very proactive, very energetic and he consults a lot with his management. He has put in new IT systems. I see this as positive. This year, I expect Adrian Cheng to put in some new management philosophy and workflow.”