(Yicai Global) March 19 -- Troubled Chinese leading milk powder maker Beingmate Baby & Child Food Co. may see a glimpse of hope as its founder Xie Hong burst back into the public eye to fill the long-vacant chief executive officer post. Xie has been shunning the spotlight ever since the company’s flotation back in 2011.
Following the announcement of Xie’s return on the company website on March 15, industry analysts argued that Xie will play a critical role in an overhaul of the company’s internal management and is expected to help Beingmate [SHE:002575] bid farewell to consecutive two years of massive losses, Beijing Business Today reported.
The news shored up the company's stock price today by a whopping 10.06 percent, hitting the single-day limit for gain and closing at CNY5.91 (USD0.93) per share.
Xie, 53, came to fame as an expert in the field of baby & child food. He founded Beingmate as early as 1992 where he served as its chief scientist and pushed the company to go public at the Shenzhen Stock Exchange in 2011. Though resigning from his post as chairman later due to personal health reasons, he actually remained in charge of the company with a 24.69 percent stake.
Beingmate sank into operation difficulties in recent years, posting a net loss of CNY963.69 million (USD152.16 million) in 2017, said the preliminary earnings estimate it released on Feb. 28, which marked another huge loss for it on the heels of CNY780.67 million in 2016.
The dilemma Beingmate faced stemmed in part from the internal conflicts among its shareholders. As its second largest shareholder with an 18.82 percent stake, New Zealand-based dairy giant Fonterra Co-operative Group Ltd. once repeatedly raised objections to the decisions of the board of directors, revealing a divergence of views between the two sides over management philosophy. Return of Xie is expected to help solve this problem.