China's 'king of software', Wang Wenjing, steps down as president of enterprise management systems firm Yonyou amid mounting losses

Tech billionaire Wang Wenjing, who was once known as China's "king of software", has stepped down as president of enterprise management systems provider Yonyou Network Technology, as the company he founded in 1988 continues to struggle with sluggish sales and mounting losses amid the mainland's weak post-pandemic economic recovery.

Wang had tendered his resignation with immediate effect, according to Yonyou's filing with the Shanghai Stock Exchange on Wednesday. "The company's board expresses its sincere gratitude to Wang for his contribution," the Beijing-based firm said.

The 60-year-old Wang - with a net worth of US$3.1 billion as of January 5, according to Forbes - will remain in his roles as Yonyou chairman and chief executive, overseeing corporate strategy and product development, according to a separate statement released by the firm.

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Veteran Yonyou executive Chen Qiangbin, 48, takes over as company president, with a focus on operations and management, according to the company. After joining Yonyou in 2000, Chen was involved in software development, sales and then served as general manager at the firm's branch offices in Beijing, northern Hebei province and southwestern Sichuan province.

Yonyou Network Technology, formerly known as Ufida, has been mainland China's largest enterprise management software provider for many years. Photo: Shutterstock alt=Yonyou Network Technology, formerly known as Ufida, has been mainland China's largest enterprise management software provider for many years. Photo: Shutterstock>

Yonyou, ranked by research firm Gartner as one of the world's top 10 enterprise resource planning (ERP) software providers, saw its shares close down 2.48 per cent to 16.49 yuan (US$2.32) on Friday.

ERP refers to software designed to automate business processes, as well as provide insights and internal controls, often in real time. It manages operations including accounting and finance, procurement, supply chain, manufacturing, human resources and collaboration.

In recent years, Yonyou changed its focus from selling licences of its ERP and other enterprise management software to collecting service fees by providing these systems via a software-as-a-service model called Yonyou BIP. By 2022, cloud-based services accounted for nearly 70 per cent of the firm's revenue.

Still, the senior management shuffle at Yonyou reflects the company's effort to try and turn around its business after about two years of stagnant revenue growth and widening losses, as fresh opportunities beckon from Beijing's digitalisation drive.

Yonyou initiated one of its largest organisational changes last year, when it set up 23 industry client and solution business units to cover a range of industries including manufacturing, consumer products, energy, logistics and the public sector. The move was expected to make its operations more focused on vertical industries, instead of regional markets.

Even as China's weak macroeconomic environment has driven a round of poor earnings from cybersecurity and finance software stocks, Yonyou's third-quarter results last year - with "positive revenue growth across all segments" - "indicate that ERP demand has been resilient", according to a November research note by Jefferies.

While it reported 2 per cent revenue growth in the first three quarters of last year, Yonyou saw its losses widen 91 per cent year on year to 1 billion yuan.

Wang, who was 24 when he founded Yonyou after leaving a job in government, initially provided accounting software to businesses and quickly became a dominant player in that market. When Yonyou - first known as Ufsoft and then Ufida - expanded into ERP and other enterprise management systems, it surpassed the performance of major foreign ERP players like Oracle and SAP in the Chinese market.

Yonyou currently has more than 230 branch offices worldwide - including in the mainland, Hong Kong, Macau, Australia, New Zealand and a number of countries in Southeast Asia.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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