(Yicai Global) May 10 -- China Literature’s shares dropped after the Tencent Holdings-backed online publisher said it has changed its chief executive officer for the second time in three years, appointing the firm’s president and executive director to the position.

China Literature [HKG: 0772] closed 2 percent lower at HKD33.40 (USD4.23) a share in Hong Kong today, after swinging between a 0.6 percent gain and a 3.4 percent decline. The benchmark Hang Seng Index lost 0.5 percent.

Hou Xiaonan succeeds Cheng Wu, who stepped down for personal reasons today as CEO, executive director, and chair of the board's strategy and investment committee, the Shanghai-based firm announced yesterday. Cheng will continue to serve as an advisor, it added. 

Hou and Cheng, aged 43 and 49 respectively, joined China Literature in April 2020 during a major management change when several executives, including founder Wu Wenhui, left the company and were replaced by a management team from Tencent. 

China Literature will continue to increase support and copyright protection for content creators and further advance the commercialization of existing intellectual properties through strategic partnerships, Hou said in an internal company letter yesterday.

The future focus will be on cutting-edge technologies, including market opportunities for artificial intelligence-generated content, he added.

Hou joined Tencent in 2003, where he is vice president of the platform and content group in charge of the comic and animation business, China Literature noted. He is a leading figure in the Shenzhen-based firm's open strategy and has garnered extensive management experience in product operations, business model innovation, and collaboration, it pointed out.

Founded in 2015 after Tencent acquired Shanda Literature, China Literature's net profit plunged 67 percent to CNY608 million (USD87.9 million) in the 12 months ended Dec. 31 from the year before, according to its latest earnings report. Revenue fell 12 percent to CNY7.6 billion (USD1.1 billion).

Editor: Martin Kadiev