Ma Shaozhang’s unexpected departure casts a shadow on New World’s efforts to turn around its troubled business during the real estate downturn.
Lin Yi/Bloomberg
SecondMa Qiqi, chief executive of New World Development, the flagship company of Hong Kong’s billionaire Cheng family, has resigned from the top job. The surprise announcement comes just two months after New World Chief Operating Officer Jack Ma replaced Cheng Zhigang, the third generation of the Cheng family, in a bid to stabilize the debt-laden property developer.
New World announced in a filing with the Hong Kong Stock Exchange on Friday that Ma’s successor will be Echo Huang, who has been the company’s executive director and CEO of subsidiary New World China Land since 2020, effective immediately. Ma said he resigned to “pursue other personal commitments” and he also resigned from the board of directors.
New World’s share price plummeted 6% on the Hong Kong Stock Exchange on Friday after the media reported the news about the leadership change, and trading was subsequently suspended.
“Looking back at the development direction of the group, I understand that phased changes need to be made in a timely manner, and the role of the CEO also needs to be adjusted. I am very happy to have found a more suitable candidate.
“With Ms. Huang’s extensive experience in real estate and corporate management, and her outstanding achievements in assisting the Group in real estate development and investment management in Hong Kong and Mainland China, I look forward to her playing a greater role in the future development of the Group in Hong Kong and Mainland China. and synergies,” Henry added.
Cheng Jiachun, Chairman of New World Development.
Brent Lewin/Bloomberg
Mr Wong previously served as managing director of Sun Hung Kai Properties, another major Hong Kong property developer controlled by the billionaire Kwok family. She joined New World China Land as deputy CEO in 2015 and was promoted to the company’s top position in 2020.
“Since joining the group, Ms. Huang has made outstanding contributions in promoting design and construction progress and quality, enhancing corporate brand, increasing sales and leasing returns, and strengthening corporate governance,” New World said in a press release.
Ma’s unexpected departure casts a shadow over New World’s efforts to turn around its troubled business amid a real estate downturn in Hong Kong and mainland China. Ma replaced Henry in September after his eldest son Adrian resigned from the top job to focus on public service amid mounting losses at the company.
New World reported a net loss of HK$19.7 billion ($2.5 billion) for the year ended June 30, its worst loss since the late Cheng Yu-tung founded the property developer in 1970, as revenue plunged 34% to HK$35.8 billion. During the same period, its net gearing ratio increased from 47.7% to 55%, much higher than its peers.
The dismal financial performance has dragged down New World’s share price, which has plunged more than 45% in the past year. The company will be removed from Hong Kong’s benchmark Hang Seng Index next month, stripping it of its status as one of the city’s longest-tenured blue chips.
The management change comes as New World seeks to improve its liquidity. The property developer received government approval on Thursday to sell its stake in a major sports venture development in Hong Kong’s Kai Tak district to shareholder Chow Tai Fook Enterprises, the private investment company of the Cheng family.
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