(CapitalWatch, Sept. 16, New York) The stock in Chinese hotel operator Huazhu Group Ltd. (Nasdaq: HTHT; HKEX: 1179) tumbled 3% Thursday on the news that its billionaire founder, Qi Ji, has stepped down as chief executive officer.
The Shanghai-based company announced today that Ji steps down on Oct. 1 "for personal reasons" and will be succeeded by Huazhu Group's president Hui Jin. Ji will continue to serve as Huazhu's chairman, according to the report.
The shake-up at Huazhu marked another in a series of top management changes over the past few months among industry leading companies in China. Earlier this month, Chinese tycoon Richard Liu, founder of JD.com Inc. (Nasdaq: JD; HKEX: 9618), gave up control of day-to-day operations at the e-commerce giant, while retaining his titles. At about the same time, Zixue Zhou, the chairman of Semiconductor Manufacturing International Corp. (HKEX: 0981; STAR: 688981) had resigned "due to personal health reasons."
In May, the founder and chairman of Pinduoduo (Nasdaq: PDD), entrepreneur Colin Huang, stepped down, and so did ByteDance's founder and CEO, Yiming Zhang, amid an antitrust crackdown by Chinese authorities. In March, the financial arm of Alibaba, Ant Group, announced the resignation of its CEO, Simon Hu, for the pursuit of "philanthropic work."
Forbes valued Qi Ji, aged 54, at $3.5 billion as of early Thursday. New CEO Jin has been with Huazhu since its early days and has served in several top management roles, including director of development, vice president, and executive vice president. He came to Huazhu from Shanghai Home Inns Hotels Management. Huazhu's chief digital officer, Xinxin Liu, takes over Jin's place as president of the company; she has been with Huazhu for nine years.
The departures occur at a time Beijing is screwing the caps on the independent tech sector, having imposed multiple fines and tightened rules on cybersecurity and data storage, anti-monopoly practices, and excessive capital raises. For Huazhu, the past year-and-half were also troublesome amid the industrywide decline in tourism and hospitality amid the outbreak and the resurgences of Covid-19 and the resulting containment measures.
In late August, however, Huazhu showed strong recovery in the second quarter of 2021 as compared to the same time a year ago. The company saw 84% year-over-year revenue growth and said its hotel turnover had nearly doubled. It also turned up income in contrast to losses at the same time last year.
In the statement today, Ji commented on the new appointments. "Hui is the first employee of the Company and has been with the Company since 2005. He has shown strong loyalty and commitment to the Company and has made significant contributions to the Company's hotel network expansion over the last sixteen years. His dedications and contributions have led us to successfully grow into one of the largest hotel groups in the world."
He continued, "Xinxin has been playing an instrumental role in the Company's digitalization and technology development since 2012. With her efforts and expertise, Huazhu has built industry-leading technology capability, which has become one of our key competitive edges. After their years of hard work, I have full confidence in them, and believe that they will be a strong leadership team for Huazhu in its next chapter of growth."
In both the New York and Hong Kong markets, shares in Huazhu traded 3% lower Thursday.