Hong Kong developer Hang Lung unveils change of guard at its helm, no major strategic changes seen
- Ronnie Chan, who joined the group in 1972 and has been chairman since 1991, to hand over reins to his son Adriel Chan in April
- Adriel Chan, who joined the group in 2010, has been vice-chairman since September 2020
Hang Lung Group and its 60 per cent-owned unit Hang Lung Properties said in separate filings to the stock exchange that Ronnie Chan Chi-chung, 74, will retire from his position as chairman on April 26.
Ronnie Chan said he had spent over a decade preparing for the succession and until 2014, did not expect a family member to take over the conglomerate’s reins.
“We had been observing Adriel for four years till 2014 and both the board and I felt that he had the potential to take over,” Chan said, adding he was very healthy at the moment.
Adriel Chan, 41, joined the group in 2010. He was appointed executive director in 2016 and became the group’s vice chair in September 2020. He said there would be no major changes in the direction of the business and company’s strategy, “thanks to my father’s stewardship and guidance over the years”.
Chan, a beneficiary and settlor of offshore family trusts, has 40.5 per cent control of the property group, according to company filings. Hang Lung Properties, the flagship developer, has a market capitalisation of HK$40.7 billion (US$5.2 billion) or about one-fifth of top-ranked Sun Hung Kai Properties, according to Bloomberg data.
The announcement came shortly after Hang Lung Group reported a 3 per cent increase in net profit to HK$2.8 billion in 2023, while revenue from its twin sources of property leasing and sales was little changed at HK$10.8 billion. Hang Lung Properties reported a 3.5 per cent rise in earnings in 2023.
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“Moving into 2024, we remain vigilant as uncertainties and challenges continue in the markets in which we operate,” Hang Lung said in a statement. “Geopolitical concerns persist in mainland China, resulting in sluggish economic growth and weak currency outlook, while Hong Kong works to re-engineer its international competitiveness and appeal.”
Shares of Hang Lung Properties slumped 8.4 per cent to HK$9.05, a 20-year low, after posting its biggest daily fall since April 2022, according to Bloomberg data. It has declined 78 per cent from the peak in November 2010. Shares of Hang Lung Group weakened 2.5 per cent to HK$9.60.
Regarding the current business environment, Ronnie Chan said it was time to preserve capital and become more prudent about money, as it was difficult to see a big improvement in the overall economy over the next few years, and added that “fortunately the group has a better foundation and a lower gearing ratio”.
Hang Lung’s capital expenditure in 2024 is expected to hit a record HK$6 billion (US$767.7 million), with the area under construction also hitting a peak of about 4 million sq ft. Both its mainland China and Hong Kong portfolios grew, with overall rental revenue increasing by 3 per cent to HK$10.3 billion in 2023.
The group will pay a final dividend of HK$0.60 per share, bringing the full-year dividend to HK$0.78 per share.
The Hang Lung group was founded by Ronnie Chan’s father Chan Tseng-hsi in 1960. Ronnie Chan joined the group in 1972, and has been chairman since 1991. He will not take up a non-executive director role after his retirement, according to the statement.
