"Toothpaste's No. 1 Stock" Liangmianzhen Suspended Pending Change of Ownership

Ask AI · What industry synergy effects will Guangxi Health and Wellness Group have by taking over Liangmian Zhen?

21st Century Business Herald Tang Weike

Liangmian Zhen, a national cosmetics and daily-use brand that carries memories from generations, is now facing a turning point in its fate.

On March 29, Liuzhou Liangmian Zhen Co., Ltd. (600249.SH, hereinafter “Liangmian Zhen”) announced that its controlling shareholder, Guangxi Liuzhou Industrial Investment and Development Group Co., Ltd. (hereinafter “Liuzhou Industrial Investment Group”), is planning a share transfer, which may lead to a change in the company’s controlling rights. Trading in the company’s stock will be suspended starting March 30, and the suspension period is expected not to exceed two trading days.

This signals that the time-honored enterprise, which has a history of 85 years and was once hailed as the “No. 1 toothpaste stock,” may bid farewell to the era of local state-owned capital holding control and begin a brand-new chapter of development.

A change in controlling rights is right on the string

The announcement shows that Liuzhou Industrial Investment Group directly holds 33.34% of Liangmian Zhen’s shares, and indirectly holds 0.55% through its wholly owned subsidiary, for a total controlling stake of 33.89%. If the company further includes shareholding by related parties belonging to Liuzhou’s State-owned Assets Supervision and Administration Commission, the core state-owned related parties’ combined shareholding exceeds 35%, making them the absolute controlling entity of the company. If this share transfer is carried out as planned, it would mean a strategic exit by Liuzhou’s SASAC, and the company’s enterprise nature may undergo fundamental change.

Behind the equity change is the sustained pressure on the company’s operating performance. According to the latest financial report data, in 2025 Liangmian Zhen 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, down significantly from RMB 0.1475 in 2024. Although the company’s operating revenue in 2025 inched up to RMB 1.063 billion, operating profit was only RMB 7.8367 million, indicating that profitability has continued to weaken. In fact, in recent years Liangmian Zhen has consistently failed to regain the market performance it once had. Its past glory—when annual production and sales exceeded 400 million units—is gone. Under pressure from TCM and daily-use giants such as Yunnan Baiyao, its market share has gradually shrunk.

As the first listed enterprise in the toothpaste industry, Liangmian Zhen once carried high expectations for a national brand. From 1941, when it originated from five small privately run soap factories, to 1978, when it developed China’s first medicinal TCM toothpaste, and then to 2004, when it listed on the Shanghai Stock Exchange, its development history can be seen as a microcosm of China’s daily-use and cosmetics industry.

During its peak, the company’s products were sold overseas and even became the first medicinal TCM toothpaste whose efficacy was certified by the U.S. FDA. But as market competition intensified and adjustments to its business strategy lagged, this time-honored brand gradually fell into a growth dilemma. The state-owned capital exit this time may pave the way for new momentum.

With the trading halt announcement landing, potential acquirers for Liangmian Zhen have become a focus of market attention. Based on industry analysis and characteristics of the equity structure, Guangxi’s provincial state-owned capital platforms are generally viewed as the most likely transferees, with Guangxi Health and Wellness Group (under Guangxi Tourism Development Group) drawing the highest attention.

As Guangxi’s first provincial-level health and wellness platform, Guangxi Health and Wellness Group is controlled by the provincial SASAC. It has total assets of RMB 14 billion. In 2025 it has already held controlling stakes in Southern Black Sesame, and is actively planning the health-and-wellness + medicine-food homology + daily cosmetics industrial chain. Liangmian Zhen’s core business in TCM toothpaste and the medical and pharmaceutical 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 on the list of potential transferees. The former, as Guangxi’s largest state-owned enterprise, has a pharmaceutical segment under it and has the foundation to integrate Liangmian Zhen’s business. The latter could strengthen the health-and-daily-cosmetics layout by coordinating TCM raw material resources.

Besides local state-owned capital, there is also a possibility of entry by industrial capital and financial investors. TCM and daily-use giants such as Yunnan Baiyao and Qian Zhenhuang may supplement regional market expansion by acquiring Liangmian Zhen, strengthening competitiveness in the medicinal toothpaste category. Daily-use companies such as Shanghai Jahwa and Lafang Daily Chemical are also expected to achieve downward expansion by leveraging their time-honored brand reputation and channel resources. It is worth noting that Goldman Sachs International entered as a new holder among the top ten tradable shareholders at the end of 2025, holding 4.1779 million shares. With its existing holdings and capability to integrate industry resources, it is also viewed as a potential participant.

However, the market generally believes that the likelihood of cross-regional or cross-industry acquisitions is low. Companies unrelated to the daily-use industry, such as Huaxin Zhenbang, have been ruled out, while small and medium-sized private enterprises find it difficult to take on this time-honored brand due to insufficient financial strength and insufficient industrial synergy. In the end, the acquirer is very likely to come from Guangxi’s provincial state-owned capital system. This not only fits the logic of local industrial integration, but also better protects the transmission of the national brand.

Industry reshuffling Old brands search for transformation paths

The change in controlling rights of Liangmian Zhen coincides with a peak period of M&A consolidation in the TCM daily-use industry.

At the policy level, the “Outline of Strategic Plan for the Development of Traditional Chinese Medicine and Its Related Products” clearly lists TCM + daily-use as a key direction for cultivation. In 2023, the National Medical Products Administration revised the “List of Cosmetics Raw Materials Already Used,” adding 27 kinds of medicinal herbs, providing regulatory support for industry development. At the market level, consumer demand for natural, safe, efficacy-based skincare products continues to heat up. Forward-looking predictions show that from 2025 to 2030, the TCM cosmetics industry will enter a dense period of M&A consolidation. The market share of leading companies is expected to rise from the current 18% to 35%.

Against this backdrop, Liangmian Zhen’s equity restructuring carries typical industry significance. For the transferee, what they gain is not only a listed company platform, but also a national brand with an 85-year history, core technology for medicinal toothpaste, and a complete production system. As the leading drafting unit for the group standard “Medicinal Toothpaste,” Liangmian Zhen has a postdoctoral research workstation and the Guangxi Chinese Herbal Medicine Toothpaste Engineering Technology Research Center. Its technical accumulation in the TCM daily-use field remains valuable.

But the integration challenges after the acquisition also cannot be ignored. How to reshape the brand image, energize channel vitality, and enhance product innovation capabilities will be core questions facing the new controlling shareholder. At present, competition in the TCM daily-use industry has entered a phase of intense rivalry. Leading companies are building competitive barriers through full-industry-chain layouts, digital transformation, and omni-channel operations. Liangmian Zhen needs to, while maintaining its core advantages in TCM, accelerate product iteration and adjust market strategies in order to secure a foothold amid the wave of increasing industry concentration.

Earlier, industry analysts pointed out that exiting competitive sectors by local state-owned capital and introducing strategic investors with stronger industrial synergy is an inevitable trend for state-owned enterprise reform and industry development. For Liangmian Zhen, this change in controlling rights may be an important opportunity to escape operational difficulties and achieve a brand revival. If it can leverage the resources and financial support of the new shareholder, focus on its core business in TCM daily-use, and strengthen R&D and market investment, this time-honored brand may be able to regain vitality.