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New World Underlying Profit Up 20%, Chairman Cheng Retires

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Feb. 29 (Bloomberg) -- New World Development Co., the Hong Kong developer controlled by billionaire Cheng Yu-tung, said fiscal first-half underlying profit rose 20 percent and that Cheng will retire as chairman.

Profit excluding property revaluations climbed to HK$2.83 billion ($360 million) for the six months ended Dec. 31 from HK$2.35 billion a year earlier, New World said in a statement today. Sales rose to HK$19.1 billion from HK$15.08 billion.

Hong Kong’s used home transactions have increased at least 7 percent in February from a three year-low a month earlier, according to Midland Holdings Ltd., the city’s biggest publicly traded realtor. Home prices have fallen about 5 percent since June because of rising borrowing costs, extra transaction taxes and higher down-payment requirements.

“Stable demand in the short run is expected to provide further support to the residential property market,” Managing Director Henry Cheng said in today’s statement. He will replace his 86-year-old father who will step down in March.

New World shares fell 0.2 percent to HK$10.68 at the close of trading in Hong Kong after declining as much as 5.4 percent. The builder also invests in roads, power generation, transportation, telecommunications and retailing.

Home Sales

The developer plans to sell HK$18.3 billion of homes in Hong Kong this year, Henry Cheng said at a briefing after the results.

New World has 18 million square meters (194 million square feet) of land reserves on the Chinese mainland, he said.

Henry Cheng said that as long as his health permits, he plans to lead the company “for at least another 20 years.” Cheng Yu-tung was rated Hong Kong’s fourth-richest person by Forbes in January, after his wealth jumped $6 billion to $15 billion following the initial public offering of subsidiary Chow Tai Fook Jewellery Group Ltd. in December.

“Part of our plans to reform the business is to make things more transparent to investors and to raise the efficiency and quality of our businesses,” Henry Cheng said.

To contact the reporter for this story: Kelvin Wong in Hong Kong at;

To contact the editor responsible for this story: Andreea Papuc at

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