NIO CFO's resignation halts weekly gains

NIO stock gained as much as 15% this week on the back of record Q2 deliveries. In the last two weeks, the company has opened two showrooms in Germany, taking its total NIO Houses to 8 in Europe.

Even after the EU slapped extra tariffs on EV companies including NIO, the stock marched forward.

It has therefore come as a surprise that NIO CFO Steven Wei Feng announced his resignation earlier today, citing personal reasons. He had been with the company for 5 years.

Feng has been replaced by Stanley Yu Qu, who is currently also serving as the Senior Vice President of Finance.

The announcement has stopped the share price in its tracks. NIO shares are trading down 2.87% in pre-market trading.

Who is Stanley Yu Qu?

Stanley Yu Qu currently holds the Senior Vice President of Finance position in the company. He has been with the company since October 2016.

Before he joined NIO, Qu had already gained vital financial experience at both Lear Corporation(LEA) and Johnson Controls International Plc(JCI).

This was preceded by a 10 year stint at PricewaterhouseCoopers. His educational credentials include a Bachelor’s Degree in Accounting from Peking University and a Master’s Degree in Accounting from Shanghai University of Finance and Economics. In short, he's good.

The fact that the board of directors was able to assign the NIO CFO role to an existing executive immediately tells us two things.

First, the management was not taken by surprise and was ready to meet immediately after the announcement to reassign the role.

Second, an existing executive was ready to step in. This could well be a temporary role but until the company looks for a long-term CFO, the company is in good hands.

Morgan Stanley analyst Tim Hsiao was also confident that the resignation won't have a major impact on the company's business operations.

At a time when the demand for NIO's vehicles is picking up, a C-level change is unlikely to cause any issues. It would have been a different story if the company was struggling. CFO resignations tend to accompany a lot of rumours about the company's accounting practices. But the company's thriving operations will easily put those rumours to rest.

It is hard to disagree with Hsiao's assessment. Chinese EV companies are doing so well that Europe wants to have a piece of the pie by imposing tariffs. If the industry's focus is on the business operations, executive distractions are unlikely to be a major issue for the company.