Liangmianzhen changes ownership; can it return to the leading position in the toothpaste industry?

Ask AI · How can Guangxi State-owned Capital improve Liangmianzhen’s management and governance after taking control?

Liuzhou Liangmianzhen Co., Ltd. (referred to as “Liangmianzhen”) announced recently that its controlling shareholder, Guangxi Liuzhou Industrial Investment Development Group Co., Ltd. (referred to as “Liuzhou Industry Investment”), among others, plans to transfer 154 million shares of Liangmianzhen externally. After the transfer, the controlling shareholder of Liangmianzhen will change to Guangxi Guokong Capital Operation Group Co., Ltd. (referred to as “Guangxi Guokong”), and the actual controller will change to the Guangxi State-owned Assets Supervision and Administration Commission.

Data shows that Liangmianzhen is China’s first toothpaste company listed on the A-share market. From its diversified layout in the early days of listing to a recent focus on core businesses, Liangmianzhen has clarified its differentiated competitive advantage of “Traditional Chinese medicine + daily chemicals,” but it has gradually fallen behind the leading companies in the oral care industry. Whether the new controlling shareholder can help Liangmianzhen restore its industry position is worth watching.

“Liangmianzhen’s” actual controller will change to Guangxi SASAC

After a two-day suspension, the final result of the change in control of Liangmianzhen has been reached.

On March 31, Liangmianzhen announced that its controlling shareholder, Liuzhou Industry Investment, signed a share transfer agreement, and together with Liuzhou Economic Development Investment Co., Ltd. (“Liuzhou Economic Investment”) and Liuzhou Yuanhong Investment Development Co., Ltd. (“Liuzhou Yuanhong”), plans to transfer 154 million shares (28% of total share capital) and corresponding voting rights to Guangxi Guokong through an agreement transfer, with a total transfer price of about 1.23B yuan.

The announcement shows that this equity change does not constitute a related-party transaction and does not involve a mandatory tender offer. After the transfer, the controlling shareholder of Liangmianzhen will change from Liuzhou Industry Investment to Guangxi Guokong. The company’s actual controller will change from the Liuzhou State-owned Assets Supervision and Administration Commission to the Guangxi SASAC. Guangxi Guokong and its concerted parties, Guangxi Industry Investment, will hold a total of 29.59% of Liangmianzhen’s shares, while the original controlling shareholder, Liuzhou Industry Investment, will hold 7.88%.

Liangmianzhen stated in its “Detailed Equity Change Report” that after this equity change, the company will fully utilize the resources of its controlling shareholder, optimize asset quality, further improve management and governance levels, enhance business development and financing capabilities, and strengthen the company’s overall competitiveness.

This equity transfer still requires approval from the state-owned assets regulatory authorities, antitrust review by the State Administration for Market Regulation, and compliance confirmation from the Shanghai Stock Exchange, but the capital market has already responded first. Liangmianzhen suspended trading on March 30 and 31, and after resuming trading on April 1, the stock hit the daily limit increase.

Liangmianzhen is China’s first listed toothpaste company

Data shows that Liangmianzhen originated from five small private soap factories, including the Asian Soap Factory established in 1941. In 1978, it formed the “Liuzhou Toothpaste Factory,” producing China’s first traditional Chinese medicine toothpaste. In 2004, Liangmianzhen became the first toothpaste company listed on the Shanghai Stock Exchange.

In its early days, Liangmianzhen openly stated in financial reports that it was “strongly impacted by foreign brands.” It adopted a diversification expansion strategy through mergers and acquisitions, emphasizing “strengthening core businesses, revitalizing auxiliary businesses, and entering new industries.” In 2005, it entered real estate and public transportation operations, and acquired Anhui Fangcao Daily Chemical Co., Ltd. through restructuring.

In 2007, Liangmianzhen became the largest shareholder of Yancheng Jiekang Trichlorosucrose Manufacturing Co., Ltd., controlling Liangmianzhen (Yangzhou) Hotel Supplies Co., Ltd. (now renamed “Liangmianzhen (Jiangsu) Industrial Co., Ltd.”), and decided to establish a real estate development company. The company promoted the idea that “no product operation means instability, no capital operation means wealth,” forming four major sectors: export trade, real estate, industry, and capital operation.

In March 2009, Liangmianzhen announced an investment of 220 million yuan to participate in establishing Liuzhou Liangmianzhen Paper Co., Ltd., and three months later invested another 166 million yuan to jointly establish Liuzhou Liangmianzhen Paper Co., Ltd. with Liuzhou Jiang Paper Factory, taking a controlling stake. Due to ongoing losses at Liuzhou Jiang Paper Factory, this move was questioned externally.

At that time, Liangmianzhen’s business had extended into oral care, cleaning products, travel supplies, papermaking, household paper, pharmaceuticals, fine chemicals, and real estate, among others, but its diversification strategy did not generate sustained performance growth. From 2012 to 2018, subsidiaries such as Liuzhou Liangmianzhen Paper Co., Ltd. and Liuzhou Liangmianzhen Real Estate Development Co., Ltd. continued to lose money, becoming two burdens dragging down the listed company.

After transferring its stake in Yancheng Jiekang Trichlorosucrose Manufacturing Co., Ltd. and exiting fine chemicals in 2017, Liangmianzhen announced in November 2019 that it would sell its paper and real estate subsidiaries and related debts at a total price of about 1.17B yuan, to divest from paper and real estate businesses and focus on core advantages such as daily chemicals and pharmaceuticals.

The Shanghai Stock Exchange issued an inquiry letter questioning whether the asset disposal was used to avoid losses. Liangmianzhen responded that the purpose of this transaction was to optimize debt related to paper companies, reduce losses, lower burdens, and provide funds for business transformation.

Industry experts say Liangmianzhen has fallen behind industry leaders

After divesting its paper and real estate businesses, Liangmianzhen’s revenue once fell below 1 billion yuan. In 2024, due to online and offline promotion, new product development, and changes in the value of trading financial assets, Liangmianzhen’s revenue rebounded to over 1 billion yuan, with net profit increasing by 255.59% year-on-year to 81.09 million yuan, and household toothpaste sales growing by 13.27%.

In 2025, Liangmianzhen’s revenue slightly increased by 0.9% to 1.063 billion yuan, while net profit dropped by 87.86% to 9.85 million yuan. The performance forecast indicates that the decline in net profit was mainly due to unrealized losses from fair value changes in holdings of CITIC Securities stock. By product, revenue from daily chemicals and pharmaceuticals was 933 million yuan and 103 million yuan, respectively, with changes of 0.42% and -1.11%. Sales volume of household toothpaste decreased by 3.54% to 31.44 million tubes.

Liangmianzhen stated in its 2025 financial report that the current daily chemical industry features “stricter regulation, segmented competition, and rising domestic brands.” The toothpaste market’s online and offline landscapes are being reconstructed simultaneously, with fierce competition in raw material innovation, efficacy verification, and omnichannel integration. Liangmianzhen’s competitive advantage remains “Traditional Chinese medicine + daily chemicals.”

A toothpaste industry insider told the “Beijing News Consumer Research Institute” that although Liangmianzhen is China’s first toothpaste listed company, it has long fallen out of the top-tier brands. Compared to Liangmianzhen, Yunnan Baiyao is not only the leading brand in the Chinese herbal toothpaste segment but also a top player in the overall oral care market.

Frost & Sullivan data shows that the retail sales of oral care products in China increased from 67.5 billion yuan in 2020 to 77.9 billion yuan in 2025, with a compound annual growth rate of 2.9%. Among the top five oral care groups in China, Yunnan Baiyao, Haili Chemical (Black Person’s Toothpaste), Xiaoku Group (Sanbain), Weimei Industry (Shu Ke), and Dengkang Oral (Leng Sian Ling) together account for about 33.3% of the market share.

Industry insiders believe that Liangmianzhen has been surpassed by newer brands mainly because it failed to respond well to the impact of new brands and channels. Currently, emerging brands are gaining market share through new e-commerce channels. Although Liangmianzhen has been trying to develop online channels in recent years, it lacks effective operational management and significant marketing actions. Offline, it faces competition from brands like Yunnan Baiyao.

NielsenIQ data shows that in 2025, the toothpaste sector will see a slowdown in omnichannel sales growth, with a divergence between online and offline trends. Online sales will surpass 45% of total sales, with rapid expansion driven by live streaming e-commerce and social media virality; offline, traditional channels like hypermarkets and convenience stores will shrink, while new channels such as warehouse membership stores, snack stores, and discount stores will become new growth engines.

According to Liangmianzhen’s financial reports, in 2025, its online revenue was about 63.53 million yuan, down 9.02% year-on-year, accounting for about 6% of total revenue. In comparison, Dengkang Oral’s e-commerce revenue share in 2024 was about 30.81%; in 2025, Yunnan Baiyao led the domestic omnichannel market in oral care, leveraging all channels including traditional e-commerce, instant retail, and content e-commerce, boosting online sales in the health sector by 27% year-on-year.

As of press time, Liangmianzhen has not responded to related inquiries.

Chief Reporter Guo Tie, Beijing News

Editor Tang Zheng

Proofreader Lu Qian