FAST NEWS: Co-founder Ou Yaping resigns as chairman of ZhongAn Online

The latest: Online insurer ZhongAn Online P & C Insurance Co. Ltd. (6060.HK) said Monday its Chairman Ou Yaping resigned for personal reasons but retained his position as a non-executive director. The company also announced Yin Hai, an independent non-executive director, has been elected as the new chairman by the board of directors.

Looking up: Despite the resignation, Ou’s family still owns 14.6% of the shares of ZhongAn, which is the largest shareholder, and therefore remains the de facto controller of the company.

Take Note: As one of the founders of ZhongAn, Ou has long been seen as the soul of the company that brought in Ping An Insurance (2318.HK; 601318.SH), Tencent (0700.HK) and Ant Financial to set up the company, and his resignation as chairman could affect investor confidence.

Digging Deeper: Established in 2013 by Ant Financial, Tencent and Ping An Insurance, ZhongAn is the first and largest online insurance company in China, and was listed in Hong Kong in 2017. The company’s premium income has been steadily increasing in recent years, but its financial results have varied due to volatility in its investment income. Last year, the company’s adoption of the new IFRS 9 accounting standard for financial instruments magnified the negative impact of poor investment income on its results. That, combined with a foreign exchange loss, led the company to report an annual net loss of 1.36 billion yuan ($1.89 million) last year, reversing a year-ago profit.

Market Reaction: ZhongAn shares rose on Tuesday, closing up 2.5% at HK$22.3 by the midday break. The stock now trades in the middle of its 52-week range.

Translation by A. Au

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