Dong Yuhui (second from left) seen during a livestreaming session in Chongqing earlier this month. [Photo/China Daily]

Shares of East Buy Holding Ltd, the livestreaming arm of education company New Oriental, plunged more than 20 percent in Hong Kong on Friday on news that its top influencer Dong Yuhui has resigned on Thursday.

Shares opened 15 percent down and continued to fall to close at HK$9.5 ($1.2), down 23.39 percent.

Earlier on Friday, Yu Minhong, founder of New Oriental, said during a shareholder meeting that he will not be involved in any business or equity interests related to Dong's eponymous venture Time with Yuhui, which operated under East Buy. Yu assured that no well-known influencers will establish independent workshops under East Buy.

Yu said East Buy will collaborate with 800 New Oriental teaching locations to open offline stores to invite consumers to experience products and services sold on its livestreaming channels.

On Thursday, East Buy announced that Dong decided to step down from his roles as an employee and a senior manager of an affiliated entity of the company, effective Thursday.

The company cited Dong's career aspirations and his desire to manage personal time as reasons for his departure. Dong later said in an online post that his exit, together with the independent operation of Time with Yuhui, were mutually agreed upon, based on the current situation and development plans.

Also on Thursday, New Oriental agreed to sell, and Dong agreed to purchase, 100 percent equity of Time with Yuhui for nearly 76.6 million yuan ($10.5 million). The latter saw a net profit of 141 million yuan in less than a year of establishment as of June 30, which Yu said he had requested the board and the compensation committee to give to Dong as a reward. Yu also said he offered Dong the money needed for Time with Yuhui's purchase.

Hong Yong, an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation's e-commerce research institute, said the primary conflicts between top streamers and companies centered on pricing and quality control, affecting both the brand's long-term growth and the streamers' reputations.

Following the departure of star streamers, e-commerce operators need to shift toward diversified development. This includes training professional streamers, boosting self-broadcasting capabilities of brands and leveraging artificial intelligence technology.

Dong became a top social media influencer around mid-2022 during a livestreaming session organized by East Buy. Following his rise to fame, East Buy's Douyin followers skyrocketed from 1 million to 20 million within a month.

East Buy's revenue also surged from 601 million yuan in 2022 to 4.51 billion yuan last year. In the first half of this year, the company reported a revenue of 2.79 billion yuan.