What is Wang Chuanfu's intention in resigning as BYD's legal representative and chairman?

It is reported that Wang Chuanfu has resigned as the legal representative and chairman of BYD Auto Co., Ltd., and his successor is He Zhiqi, who will also serve as general manager.

BYD said that it has successively made industrial and commercial changes to the legal persons of a number of its legal subsidiaries, changing the heads of the legal subsidiaries to actual business heads. Except for the changes in legal persons, the company's operations and equity structure have not changed.

It is understood that Wang Chuanfu is still the legal representative of 49 companies, including BYD Co., Ltd. Although Wang Chuanfu has resigned as chairman of the company, it is speculated that he will focus on the strategic level in the future and still have actual control.

Since last year, Wang Chuanfu has frequently withdrawn from the management of subsidiaries. Public information shows that Wang Chuanfu has resigned as the legal representative and chairman of as many as 15 BYD subsidiaries, including Shanghai BYD Co., Ltd., Xi'an BYD Industrial Co., Ltd., and Qinghai BYD Lithium Battery Co., Ltd.

He Zhiqi, who takes over this time, is 48 years old. After joining BYD Co., Ltd., he has served as the company's central research department, quality department manager, fourth business unit general manager, procurement department general manager, and the company's passenger car business group chief operating officer. He has worked in BYD for more than 20 years.

In addition, according to BYD's 2019 financial report, the company achieved an attributable net profit of 1.614 billion yuan in 2019, a year-on-year decline of 41.93%; the decline in non-net profit reached 60.64% to 231 million yuan. This is the result of the government's current subsidy of 1.484 billion yuan, which accounts for 70% of the net profit.

In recent years, in order to cope with the competitive pressure from rivals such as CATL and the impact of market changes, BYD has begun to break its original vertically integrated production and operation model since 2017. Since then, Wang Chuanfu has repeatedly revealed to the outside world that BYD is going to open up, including opening up battery business cooperation and splitting its high-quality businesses.

BYD Auto Co., Ltd. was established on March 21, 1997. The company is located in Xi'an, Shaanxi Province. Its main business is the manufacturing and sales of automobiles and parts, rail transit equipment, and electronic components.