China’s JD.com promotes finance chief to CEO role as Xu Lei resigns

Xu Lei, who has officially been CEO for a year, said on a call with analysts after the company reported first quarter earnings that he had resigned to spend more time with his family.

He will immediately begin the process of handing over CEO responsibilities to Sandy Xu Ran, who will be the company’s third CEO and the first female to hold the position.

Xu Lei has been with JD.com for more than a decade and after his retirement will serve as the first chairman of the advisory council of the company.

Citi called the management appointment “surprising” and said it could mean the major restructuring process undertaken by JD was largely done.

“We expect possibly a more disciplined balance between growth and profit is likely be the focus,” Citi said, while Beijing-based independent industry analyst Liu Xingliang said he believed JD’s operational strategy will remain in place.

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Before joining JD in 2018, Sandy Xu was an audit partner and spent nearly 20 years with PwC in China and the United States. The Beijing-headquartered company beat Wall Street estimates for first-quarter revenue, driven by resilient demand for its e-commerce platform from online shoppers.

Its US-listed shares rose 6.5% in early trading.

TH Data Capital said in a research note issued before the earnings report that it believed JD, China’s leading home electronics retailer, was likely to see better growth in the second quarter thanks to the firm’s 20-year anniversary in June, while a potential improvement in the housing market could lift the second half of the year.

Xu Lei said the company will continue to grow the number of third-party vendors on its platform, especially small- and medium-sized enterprises, after a 20% quarter-on-quarter rise in the first quarter.

Revenue for the three months rose 1.4% to 242.96 billion yuan ($35.15 billion), compared with an average analyst estimate of 239.42 billion yuan, according to Refinitiv data.

Excluding items, JD.com posted a profit of 4.76 yuan per American depository share (ADS), compared with analysts’ expectations of 3.51 yuan.