China Overseas Land appoints new CEO after abrupt departure of Hao Jianmin rattled investors
Analysts remain cautious on the property giant’s outlook as management change comes amid takeover of Citic’s property assets
Property giant China Overseas Land and Investment (COLI) has announced the appointment of a new chief executive officer after former chairman and CEO Hao Jianmin’s sudden and unexplained departure last month.
Yan Jianguo, 50, former executive director and senior vice president at rival Longfor Properties, will be appointed as executive director and CEO of COLI from January 1, 2017, according to a company statement to the Hong Kong stock exchange.
After 29 years with the state-run developer, Hao unexpectedly stepped down as chairman and CEO last month, sparking concerns for COLI’s ongoing acquisition of China International Trust and Investment Corporation (Citic) Group’s mainland property assets.
The company then elected former senior vice president Xiao Xiao to the role of chairman and CEO in Hao’s place despite the fact Xiao had already reached China’s official retirement age of 60. He will remain as chairman, but cease to act concurrently as CEO of the company, COLI said.
The new appointment may go some way to reassuring investors, bit it hasn’t completely quelled market concerns about the company’s outlook.
“This is further proof that the departure of Mr Hao was unplanned and abrupt, otherwise the hiring of Yan would have happened before Hao’s departure,” JPMorgan analysts wrote in a note on Thursday.
Hao had gained “real power” in COLI and there is a strong possibility of resistance from middle management to Yan, especially as the company is in the middle of merging with Citic Group’s property assets, a deal which was driven by Hao, said the analysts.
“We stay cautious on COLI,” they added.
Alan Jin, a property analyst with Mizuho Securities, said the market is taking a “wait and see” attitude and Yan needs to prove himself because of his limited track record.
“It all depends on COLI’s business performance next year,” he said.
COLI’s shares tumbled 3.3 per cent to HK$22.00 after the announcement of Hao’s abrupt departure on November 15. They climbed 1.82 per cent to HK$22.40 in Hong Kong on Thursday.
Yan spent much of his career with COLI’s parent company, China State Construction Engineering Corporation (CSCEC), and COLI itself before he joined Longfor, a Beijing-based private developer in 2014.
At Longfor, he was mainly overseeing operations with a focus on cost control and product quality improvement, and was key to helping improve the company’s project execution.
Xiao and Yan are alumni, having both studied at Chongqing Jianzhu University.