(Yicai) March 27 -- Shares of Sun Art Retail Group jumped after the operator of hypermarket chain RT-Mart under Chinese e-commerce giant Alibaba Group Holding said its chief executive officer has stepped down from its position.

Sun Art [HKG: 6808] was trading up 4.3 percent at HKD1.47 (19 US cents) as of lunch break in Hong Kong today, after earlier soaring as much as 9 percent.

Lin Xiaohai resigned to return to Alibaba, Sun Art announced late yesterday. Lin will be replaced by Shen Hui, a former senior executive at French supermarket operator Auchan Retail, which is also a former affiliated brand under Sun Art.

Before being appointed CEO of Sun Art in May 2021, Lin worked as general manager at Alibaba’s business-to-business shopping platform, as well as vice president of Alibaba.

Shen joined Auchan in 1999 and took part in the company’s preparation to enter the Chinese market. After working at Auchan’s stores in France, Shen served for around one year as the firm’s GM for operations.

Sun Art owns three major brands: RT-Mart stores, RT-Super mid-sized superstores, and M-Club membership-only outlets. It has over 500 outlets in 230 Chinese cities.

In the fiscal year ended March 31, 2023, Sun Art reported a revenue of CNY83.7 billion (USD11.6 billion), down 5.1 percent from the previous year, and turned a loss into a net profit of CNY78 million (USD10.8 million). However, the firm logged an over 10 percent decline in revenue in the six months ended Sept. 30 last year.

“Some traditional brick-and-mortar retailing businesses are still on Alibaba’s balance sheet but are not core businesses where focus should be laid,” Alibaba’s Chairman Joseph Tsai earlier said. “It is rational for Alibaba to exit from such businesses, but time is needed to consider the market situation.”

Tsai released the above statement to respond to a related question asked during Alibaba’s earnings conference call last month. His words triggered widespread market attention and resulted in speculations about the company’s withdrawal from offline retailing business.

Earlier this month, market rumors claimed Alibaba decided to sell RT-Mart and supermarket chain Freshippo to state-owned food processing giant COFCO for about CNY10 billion and CNY20 billion (USD1.4 billion and USD2.8 billion), respectively. Executives at RT-Mart and Freshippo denied the rumors days after.

After the news about Lin’s resignation and return to Alibaba, more rumors about RT-Mart’s sale started to spread.

An insider told Yicai that Lin’s return to Alibaba can be seen as a “gradual fade-away” of the Hangzhou-based company from Sun Art. The fact that Freshippo’s Chief Financial Officer Yan Xiaolei replaced the CEO could also hint at other capital-related moves, the insider added.

Editor: Futura Costaglione