Liangmianzheng changes hands and hits the daily limit; the annual report shows parent-company net profit plunging 88%; profit was 9.85 million and cash dividend distribution was 16.5 million—whether it can break through is still pending evaluation

Yangtze Business News ● Yangtze Business Reporter Shen Yourong

“First Toothpaste Stock” Er Yuanjian (600249.SH) Changes Ownership.

On the evening of March 31, Er Yuanjian disclosed a change of control plan. The company’s controlling shareholder, Guangxi Liuzhou Industrial Investment Development Group Co., Ltd. (hereinafter referred to as “Industrial Group”), and its concerted actioners plan to transfer a total of 28% of the company’s shares to Guangxi Guokong Capital Operation Group Co., Ltd. (hereinafter “Guangxi Guokong”). After the transaction is completed, the company’s actual controller will change from the Liuzhou State-owned Assets Supervision and Administration Commission to the Guangxi Zhuang Autonomous Region State-owned Assets Supervision and Administration Commission.

The agreement transfer price is 7.97 yuan per share, about a 25% premium, with a total transaction amount of 1.23B yuan.

Yangtze Business News found that since listing on the A-share market in 2004, Er Yuanjian has experienced two ownership changes. However, including this plan, Er Yuanjian has changed hands three times, all involving transfers within the Guangxi state-owned asset system. This time, the ownership change involves an upgrade of the actual controller’s level.

As a well-known old-brand toothpaste company, Er Yuanjian’s operational performance has been poor. In 2025, the company achieved operating revenue of 1.06B yuan, unchanged from the previous year; net profit attributable to the parent was only about 9.85 million yuan, a year-on-year plunge of approximately 88%.

In 2025, Er Yuanjian plans to distribute a cash dividend of 16.5 million yuan, with a dividend payout ratio of about 167.58%.

After the ownership change, how will Er Yuanjian break through its development bottleneck?

Premium about 25% for Guangxi Guokong Takeover

Er Yuanjian’s ownership change involves Guangxi Guokong as the new buyer.

On the evening of March 27, Er Yuanjian announced that its controlling shareholder was planning a share transfer, which could lead to a change in control, and the stock was suspended from trading from March 30.

After three days of suspension, the ownership change plan was revealed. The announcement showed that the company’s controlling shareholder, Industrial Group, along with Liuzhou Economic Development Investment Co., Ltd. (“Liuzhou Economic Investment”) and Liuzhou Yuanhong Investment Development Co., Ltd. (“Liuzhou Yuanhong”) signed a share transfer agreement. The three parties will transfer a total of about 154 million shares of Er Yuanjian, representing 28% of the company’s total share capital, to Guangxi Guokong through agreement transfer.

Industrial Group is the controlling shareholder of Er Yuanjian, and Liuzhou Economic Investment and Liuzhou Yuanhong are wholly owned subsidiaries of Industrial Group, forming concerted actioners. The actual controller of Er Yuanjian is the Liuzhou State-owned Assets Supervision and Administration Commission.

After the transaction, Guangxi Guokong will directly hold 28% of Er Yuanjian’s shares. Combined with the 1.59% held by Guangxi Guokong’s concerted actioner, Guangxi Industry Investment Capital Operation Group Co., Ltd., the total shareholding will be 29.59%. The company’s controlling shareholder will change from Industrial Group to Guangxi Guokong, and the actual controller will shift from the Liuzhou SASAC to the Guangxi SASAC.

The agreement transfer price is 7.97 yuan per share, about 25.18% higher than the closing price of 6.37 yuan per share on the trading day before the suspension. The total transfer amount is approximately 1.23B yuan.

Influenced by Guangxi Guokong’s premium takeover, Er Yuanjian’s stock hit the daily limit up on April 1.

Er Yuanjian mainly engages in the research, production, and sales of oral care products, personal hygiene products, and hotel daily necessities. It is a well-known old-brand toothpaste company. Since listing in 2004, the company has changed ownership twice, but control has always remained within the state-owned system.

At the initial listing in 2004, the controlling shareholder was Liuzhou Finance Bureau. In 2007, the controlling shareholder changed to Liuzhou SASAC, with no change in the actual controller.

In 2011, Liuzhou SASAC transferred all its shares in Er Yuanjian to a newly established industrial group free of charge, making the industrial group the controlling shareholder. This ownership change still left the actual controller as Liuzhou SASAC.

Unlike the previous two ownership changes, this time, the actual controller of Er Yuanjian has been upgraded from a municipal state-owned asset to a Guangxi state-owned asset.

Profit of 9.85 million and dividend of 16.5 million

The background of this ownership change is the company’s significant decline in operating performance.

Public information shows that Er Yuanjian originated from five small private soap factories established in 1941, including Asia Soap Factory. In 1978, it was reorganized into “Liuzhou Toothpaste Factory,” and a new factory was built in 1980. In 1994, it was restructured into a joint-stock company. In 2004, it became the first industry company listed on the Shanghai Stock Exchange, earning the nickname “First Toothpaste Stock.”

Starting from herbal toothpaste, Er Yuanjian was once a household name in China. However, the company failed to turn its leading position in toothpaste into a sustained advantage and instead fell into difficulties due to diversification.

Wind data shows that from 2004 onward, Er Yuanjian successively acquired stakes in Jiuzhou Real Estate, Yikang Pharmaceutical, Liujing Paper Factory, and other assets, including investments in Liuzhou Bank and other financial assets.

In the pharmaceutical sector, main products include Cang’e Nasal Congestion Tablets, Amoxicillin and Chlorpheniramine Capsules, Ginkgo Biloba Tablets, Cold Remedy Granules, and raw materials like Danpi Phenol, Yuchuang Methyl Sulfonate, and Asarum Brain.

The diversification strategy has led to poor performance. In 2006, revenue was 428 million yuan; in 2011, it was 1.12B yuan; by 2019, revenue was only 1.19B yuan. Net profit attributable to the parent was 151 million yuan in 2006, fluctuating between profit and loss from 2014 to 2019, with a total of 14 years of net loss after deducting non-recurring gains and losses.

From 2020 to 2023, revenue grew from 685 million yuan to 995 million yuan, showing an upward trend but still below 2019. Net profit attributable to the parent in these years was 58 million yuan, 9 million yuan, -39 million yuan, and 23 million yuan, respectively, with fluctuations but slight improvement compared to earlier years. Meanwhile, net profit after deducting non-recurring items was 902.1k yuan, 1.6998 million yuan, -902.1k yuan, and 2.8M yuan, with only one year of loss.

This is related to the company’s divestment of diversified assets and focus on core business. In 2019, the company announced the sale of real estate and paper assets worth 14.23M yuan to the industrial group.

In 2024, Er Yuanjian achieved revenue of 1.17B yuan and net profit of 81.09 million yuan, up 5.82% and 255.59%, respectively. In 2025, revenue is expected to be 1.05B yuan, roughly the same as the previous year; net profit attributable to the parent is projected at 9.85 million yuan, down 87.86%.

The sharp decline in net profit in 2025 is mainly due to a fair value loss of about 4 million yuan on trading financial assets (mainly CITIC Securities stocks), compared to 87.74 million yuan in the same period last year. Additionally, interest income and other income decreased year-on-year.

With stagnant revenue and declining net profit, Er Yuanjian’s cash dividend in 2025 remains at 16.5 million yuan, with a payout ratio of 167.58%.

Compared to Yunnan Baiyao toothpaste, which ranks first in the domestic omnichannel market share, Er Yuanjian has fallen significantly behind. After this ownership change, how Er Yuanjian will break through and whether new assets will be injected has attracted market attention.

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Editor: ZB