(Bloomberg) -- New World Development Co. replaced its chief executive officer in another dramatic development for the Hong Kong property company mired in leadership woes.
The company named Echo Huang Shaomei as CEO, replacing Eric Ma who was in the job for only two months, New World said in a filing to the Hong Kong stock exchange, confirming an earlier Bloomberg report.
The company’s stock was suspended from trading Friday afternoon after its shares fell as much as 6.9% following the Bloomberg report.
Some of New World’s dollar bonds are on path for its worst daily drop in 14 months, after the news of the leadership change. Its 5.25% perpetual note was down 4.7 cents to 71 cents, the biggest decline since Sept. 11, 2023. according to Bloomberg-compiled prices. Its 6.25% note declined more than 3 cents to 45.2 cents, set for the lowest level since August 2023.
The CEO replacement adds to turmoil at the company, which reported its first loss in two decades. Ma was meant to steady the ship after Adrian Cheng, the eldest son of family patriarch Henry Cheng, resigned as New World’s CEO.
Huang has been the CEO of New World China Land, the company’s property arm in mainland China, since 2020. She serves as a member of Guangdong Provincial Committee of the Chinese People’s Political Consultative Conference, according to her profile on New World’s website.
Her appointment came after the company reviewed its development direction and decided that the role of the CEO needed to be adjusted, Henry Cheng said in a press release. “I am very pleased to have found a more suitable candidate,” he added.
Huang will be responsible for operations in both Hong Kong and Mainland China, while reporting to Henry. The Group has also appointed Gilbert Ho and Lau Fu-Keung as executive directors.
Ma is a former senior government official who oversaw land development matters. After leaving the post in 2017, he joined New World’s sister company NWS Holdings Ltd. a year later as its chief operating officer, before becoming the firm’s CEO in 2019. He resigned from the company in January 2024, when he was named New World’s chief operating officer, before taking over Adrian’s role.
Read: New World Scion’s Fall Upends Succession at $23 Billion Dynasty
Jeff Zhang, an analyst at Morningstar Inc., said he doesn’t expect Ma’s departure will have significant impact on New World’s operations.
“The company will continue to promote residential sales and asset divestment in the future to accelerate deleveraging,” Zhang said, adding that it will take a long time to see a substantial decrease in the company’s net-debt ratio.
New World became the center of the Cheng family’s succession saga after the elder Cheng said he was still looking for a successor for the family’s business empire and wouldn’t rule out bringing in external talent in an interview last year. The comment overturned expectations that Adrian was the strongest candidate to take over the family business empire that spans real estate development, retail, infrastructure, jewelry and insurance.
What Bloomberg Intelligence Says:
“New World Development’s growing urgency to raise cash may prompt it to sell some of its Hong Kong retail and office properties to achieve its non-core asset disposal target of HK$13 billion in fiscal 2025 ending June.”
Analysts Patrick Wong and Yan Chi John Wong
Click here for the research
The elder Cheng has also assigned key parts of the business group to his other children. Sonia is co-vice chairman of the family group’s largest listed arm Chow Tai Fook Jewellery Group Ltd. Brian is co-CEO of NWS, while Christopher is co-CEO of the family’s private investment vehicle.
Henry Cheng remains in charge of the family office and chairman of all three listed companies. The firm will resume trading on Dec. 2.
--With assistance from Jing Jin and Trista Xinyi Luo.
(Updates with company statement about CEO change throughout the story.)
©2024 Bloomberg L.P.