Hui Ka-yan steps down as chairman of Hengda as China Evergrande reshuffles its executive ranks in restructuring

Hengda director Zhao Changlong was promoted to chairman of Evergrande’s mainland China property unit

He also takes over from Ke Peng as Hengda’s general manager, according to information by the National Enterprise Credit Information Publicity System

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Hui Ka-yan, chairman of China Evergrande Group, during the company’s 2017 annual results press conference at the Four Seasons Hotel in Central on 26 March 2018. Photo: David Wong

Published: 6:00pm, 17 Aug 2021Updated: 11:55am, 15 Sep 2021

Billionaire Hui Ka-yan, the property magnate who controls the world’s most-indebted developer, has promoted one of his corporate lieutenants as he stepped down as chairman of the closely held Hengda Real Estate Group, in an executive reshuffling that raised concerns about his grip on his flagship China Evergrande Group.

Hengda director Zhao Changlong was promoted to chairman of Evergrande’s mainland China property unit. The executive will also take over from Ke Peng as Hengda’s general manager, according to information by the National Enterprise Credit Information Publicity System (NECIPS), a state-owned credit data portal.

Evergrande’s stock fell 4.3 per cent to HK$5.29 while the shares of the China Evergrande New Energy Vehicle subsidiary dropped 5.1 per cent to HK$12.62, and Evergrande Property Services Group plunged 8.7 per cent to HK$6.42 in Hong Kong. A Shanghai-traded Evergrande bond maturing in July 2022 closed 16 per cent lower at 33.92 yuan compared with its face value of 100 yuan, while another maturing in January 2023 fell 4.6 per cent in Shenzhen to 58 yuan.

“Confidence in the company is fragile and are sensitive to any move of the company and are worried whether Hui will not take care of the business after stepping down as the chairman,” said CGS-CIMB‘s property analyst Raymond Cheng, who recommended that investors “add” the stock as of April 1, with a target price of HK$20.10.

An undated photo of Zhao Changlong. Photo: ifeng.com

Hengda is the issuer of eight onshore bonds worth a combined 45.3 billion yuan (US$7 billion), according to the latest annual bond report it filed to the Shanghai Stock Exchange. The company’s shares are not publicly traded.

Evergrande first mooted a reorganisation plan in 2016 with Shenzhen Special Economic Zone Real Estate & Properties Group (Shenzhen Real Estate), which involved selling Hengda to equity control in Shenzhen Real Estate. The plan to engineer a back-door listing for Hengda was terminated last year after a costly four-year pursuit of the state-backed developer.