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https://scmp.com/business/companies/article/3050231/new-world-development-puts-harvard-educated-scion-charge-china Companies
New World Development puts Harvard-educated scion in charge of China flagship unit amid succession plan at Hong Kong property empire
- New World Development appoints Adrian Cheng as executive chairman of flagship China unit, a sign of progress in succession plan
- Mainland China accounted for about one-third of the group revenue, 38 per cent of gross profit in 2019, company filings
Adrian Cheng Chi-kong has been given the task to oversee the group’s property business in mainland China in another sign of succession planning at New World Development. Photo: Tory Ho
New World Development has appointed Adrian Cheng Chi-kong as head of its property business in mainland China, entrenching his position as the next-generation successor at Hong Kong’s third-largest hotel-and-property empire by market value.
Cheng has been named the executive chairman of New World China Land, the group’s flagship property arm in the world’s second-largest economy, it said in a statement on Wednesday. The 40-year old Harvard-educated executive is the eldest of six children of current group chairman Henry Cheng Kar-shun.
Other Hong Kong ageing tycoons have also put their succession plans in place over the past years, such as those at CK Hutchison, Henderson Land and K. Wah International. Such a plan is typically cherished as good governance by investors seeking to limit the key-person risks arising from unexpected family spats or business scandals.
The decision strengthened his position as the next in line to take over the HK$104 billion (US$13.4 billion) property group founded by the late Cheng Yu-tung. The family’s other business interests include the world’s second-largest jewellery retailing group under the Chow Tai Fook brand.
Adrian Cheng, who was effectively elevated to the number two position in the group in 2015, will oversee the Chinese market that accounted for about one-third of the group’s revenue and 39 per cent of gross profits in 2019.
“We are steadily increasing investment in the mainland Chinese market at a pace in line with local regulations,” he said in the statement. New World China will continue to respond favourably to national policies and make strategic developments in the Greater Bay Area, he added.
Cheng has plans to develop 36 projects in China under the K11 concept of mixing retail with art experience by 2024, including developments in Shenzhen, Guangzhou, Beijing, Tianjin, and Ningbo, according to Wednesday’s statement.
New World Development had 38 per cent of its HK$251 billion worth of fixed assets in mainland China, according to its latest annual report. It owned a land bank with potential development for 6.5 million square metres in gross floor areas.
About 42 per cent of the areas are located in Guangzhou, Foshan and Shenzhen, three of the 11 cities that make up the Greater Bay Area cluster.
Cheng’s new appointment will also test his mettle in an environment charged with crises and political overtones as the Chinese government comes under scrutiny for its handling of the anti-government protests in Hong Kong and the recent coronavirus outbreak in Wuhan in Hubei province, where New World Development also has some development projects.
He was the group’s public face in Hong Kong as local property developers came under attack on both sides of the border for the housing problems plaguing the city amid the social unrest.