(Yicai Global) March 7 -- Shares of Yunnan Baiyao Group slumped after a 61-year-old long-term chairman of the large traditional Chinese medicine company resigned for personal reasons.

Baiyao [SHE: 000538] slid 5.3 percent to close at CNY54.72 (USD7.90), resulting in a 33.4 percent decline over the past 12 months.

Dong Ming, chief executive and president of Baiyao, will serve as the firm’s acting chairman before the board of directors elects the new chairperson after Wang Minghui, who held the position for more than two decades, quit, the Kunming-based company said in a statement yesterday.

Wang, aged 61, became Baiyao’s president in 1999, and five years after, he was named chairman. The chief led the company to grow as Baiyao’s revenue surged to about CNY36.4 billion (USD5.2 billion) in 2021 from CNY230 million (USD33.2 million) in 1999. At present, Wang holds around 1 million shares in Baiyao. He is not allowed to sell them within six months after his resignation.

Originated in 1902, Baiyao is a time-honored brand in China and the medicine is used in wound healing or as a pain reliever. The producer went public on the Shenzhen Stock Exchange in 1993.

Baiyao’s top shareholder is the State-owned Assets Supervision and Administration Commission of Yunnan province, owning a 25 percent stake in it. The second-largest one is Newhuadu Industrial Group, a private company with a nearly 24.3 percent shareholding. State-owned Yunnan Hehe Group is No. 3 with an 8.1 percent equity share. Notably, UBS Asset Management Singapore is the sixth-biggest stockholder with a 2.3 percent share.

The TCM manufacturer has been reporting declining earnings. During the first three quarters of last year, Yunnan Baiyao recorded CNY26.9 billion in revenue, down by 5 percent from a year earlier. Its net profit fell by 6 percent to CNY2.3 billion (USD332.3 million).

Part of the reason behind the sluggish performance is poor investments. In 2021, the company lost nearly CNY2 billion in stock transactions, and more than half of that came from assets of one firm, handset maker Xiaomi.

As of Sept. 30, 2022, Baiyao’s logged a CNY752 million (USD108.4 million) decline in the fair value of trading assets, widening from a CNY417 million slump as of June 30.

Editor: Emmi Laine, Xiao Yi