"National Toothpaste" Liangmianzhen Suspends Trading, Will Liuzhou State Assets Exit?

(Source: 21Style)

By Tang Weike

Two-sided needle, a national daily chemical brand that carries the memories of several generations, is now facing a turning point in its fate.

On March 29, Liuzhou Two-Sided Needle Co., Ltd. (600249.SH, hereinafter referred to as “Two-Sided Needle”) announced that its controlling shareholder, Guangxi Liuzhou Industry Investment Development Group Co., Ltd. (hereinafter referred to as “Liuzhou Industrial Investment Group”), is in the process of planning a share transfer, which may result in a change in the company’s controlling rights. The company’s shares will be suspended from trading starting March 30, and the expected suspension period will not exceed 2 trading days.

This may signal that the long-established company—one with an 85-year history and once praised as the “No. 1 toothpaste stock”—could be about to bid farewell to the era of local state-owned asset holding and embark on an entirely new chapter of development.

Change of controlling rights is imminent

The announcement shows that Liuzhou Industrial Investment Group directly holds 33.34% of Two-Sided Needle’s shares and also holds an additional 0.55% indirectly through its wholly owned subsidiary, for a total of 33.89% controlling stake. If the shareholding of related parties that are also under the Liuzhou Municipal State-owned Assets Supervision and Administration Commission is included, the core state-owned related parties’ combined shareholding exceeds 35%, making them the absolute controlling subject of the company. If this planned share transfer is successfully implemented, it would mean that the Liuzhou Municipal State-owned Assets Supervision and Administration Commission strategically withdraws, and Two-Sided Needle’s business nature may undergo fundamental change.

Behind the changes in equity lies sustained pressure on the company’s operating performance. According to the latest financial report data, in 2025 Two-Sided Needle recorded attributable net profit of RMB 9.8461 million, a sharp year-on-year decline of 87.8%. Basic earnings per share were only RMB 0.0179, a steep drop from RMB 0.1475 in 2024. Although the company’s 2025 operating revenue slightly increased to RMB 1.063 billion, its operating profit was only RMB 7.8367 million, and its profitability continued to weaken. In fact, in recent years Two-Sided Needle has consistently failed to regain the market performance of its peak era. Its former glory of annual production and sales exceeding 400 million units is no longer, and under pressure from TCM daily chemical leaders such as Yunnan Baiyao, its market share has gradually shrunk.

As the first listed company in the toothpaste industry, Two-Sided Needle once bore the high expectations placed on a national brand. From its origins in 1941 as five small private soap factories, to the R&D of China’s first TCM toothpaste in 1978, and then to its listing on the Shanghai Stock Exchange in 2004, its development history is a clear microcosm of China’s daily chemical industry.

At its peak, the company’s products were sold overseas, even becoming the first efficacy-based TCM toothpaste certified by the U.S. FDA. But as market competition intensified and adjustments to its operating strategy lagged, this long-established brand gradually fell into growth difficulties. This state-owned capital withdrawal may pave the way for introducing new momentum.

With the announcement of the trading suspension taking effect, potential acquirers of Two-Sided Needle have become the focus of market attention. Based on comprehensive industry analysis and the characteristics of its equity structure, Guangxi’s provincial state-owned asset platforms are widely viewed as the most likely transferees. Among them, Guangxi Kangyang Group (under Guangxi Tourism Development Group) has the highest level of support.

As Guangxi’s first provincial-level health and wellness (care) platform, Guangxi Kangyang Group is ultimately controlled by the provincial SASAC. It has total assets of RMB 14 billion, and in 2025 it has already controlled Southern Black Sesame. The group is actively laying out the healthy development + medicine-and-food homology + daily chemical industry chain. Two-Sided Needle’s core business in TCM toothpaste and its medicine segment aligns highly with the group’s industrial layout, enabling synergy effects. Therefore, it has been given a five-star likelihood rating.

In addition, provincial state-owned enterprises such as Guangxi Investment Group and Guangxi Nongken Group have also been included in the list of potential transferees. The former, as Guangxi’s largest state-owned enterprise, has a medicine segment under its portfolio and has the foundation to integrate Two-Sided Needle’s business. The latter can also strengthen its health daily chemical layout through coordinated TCM raw material resources.

Beyond local state-owned capital, there is also potential for industrial capital and financial investors to enter. TCM daily chemical leaders such as Yunnan Baiyao and Pien Tze Huang can complement regional market layout by acquiring Two-Sided Needle and strengthen competitiveness in the TCM toothpaste category. Daily chemical companies such as Shanghai Jahwa and Liby Manufacturing are also expected to achieve downward expansion by leveraging their time-honored brand names and channel resources. It is worth noting that Goldman International newly became one of Two-Sided Needle’s top ten circulating shareholders at the end of 2025, holding 4.1779 million shares. With its existing holdings and capability in industry integration, it is also viewed as a potential participant.

However, the market generally believes that the likelihood of acquisitions across regions or across industries is low. Companies unrelated to the daily chemical industry, such as Huaxin Zhenbang, have been ruled out. Small and medium-sized private enterprises are also unlikely to take over this time-honored brand due to insufficient financial strength and lack of industrial synergy. Ultimately, the acquirer is most likely to emerge within Guangxi’s provincial state-owned asset system. This both fits the logic of local industrial consolidation and can better protect the transmission of the national brand.

Industry reshuffling—time-honored brands seek a path for transformation

The change in Two-Sided Needle’s controlling rights coincides with a peak period of M&A and consolidation in the TCM daily chemical industry.

On the policy front, 《Outline of the Strategic Plan for the Development of Traditional Chinese Medicine and Medicine》 clearly lists TCM + daily chemicals as a key area for cultivation. In 2023, the National Medical Products Administration revised the 《List of Cosmetic Ingredients Already Used》, adding 27 TCM herbs, providing regulatory support for the industry’s development. On the market front, consumers’ demand for natural, safe, efficacy-based skincare products continues to heat up. Forward-looking forecasts show that in 2025–2030, the TCM cosmetics industry will enter a dense period of M&A consolidation, and the market share of leading companies is expected to rise from the current 18% to 35%.

Against this backdrop, Two-Sided Needle’s equity restructuring carries typical industry significance. For a transferee, what they gain is not only an上市 company platform, but also a national brand with an 85-year history, core TCM toothpaste technologies, and a complete production system. As the leading drafting unit for the group standard 《TCM Toothpaste》, Two-Sided Needle has a post-doctoral research workstation and a Guangxi Chinese medicinal materials toothpaste engineering technology research center, and its technical accumulation in the TCM daily chemical field still holds value.

However, the integration challenges after the takeover cannot be ignored either. How to reshape the brand image, invigorate channel vitality, and enhance product innovation capability will be the core issues facing the new controlling shareholder. Currently, competition in the TCM daily chemical industry has entered an extremely intense stage. Leading companies are building competitive barriers through full-industry-chain layout, digital transformation, and full-channel operations. Two-Sided Needle needs to, while maintaining its core advantages in TCM, accelerate product iteration and adjustments to market strategies, so as to stand稳 in the wave of increasing industry concentration.

Earlier, industry analysts pointed out that the exit of local state-owned capital from competitive areas and the introduction of strategic investors with stronger industrial synergy is an inevitable trend of state-owned enterprise reform and industry development. For Two-Sided Needle, this change in controlling rights may be an important opportunity to get out of operational difficulties and achieve brand revival. If it can leverage the resources and funding support of new shareholders, focus on its core TCM daily chemical business, and strengthen R&D and market investment, this time-honored company may be able to regain vitality.

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