CEO and VP resigned one after another, what happened to Liangmianzhen?
- Chaileedo Press
- Sep 19, 2022
- 2 min read
The accumulated annual loss of nearly 1.4 billion yuan ($199 million) over the past 17 years.
A few days ago, Liangmianzhen announced the resignation of Vice President Mo Shanjun. Just 45 days ago, the company's director and president, Wu Kun, also announced his resignation. In February, Yang Min, who had served as Liangmianzhen's securities representative for more than three years, announced his resignation, and his successor, Li Xiaojie, also eventually chose to leave after only six months in the post.
The outside world will inevitably interpret the frequent senior resignations as a sign of the decline of Liangmianzhen.
Liangmianzhen Toothpaste was the No.1 seller in China for 15 consecutive years. In 2004, the company was successfully listed on the A-share market with record revenues of 500 million yuan ($71 million) in that year.
However, in the same year of the IPO, after obtaining a large amount of money in the capital market, Liangmianzhen began to diversify its investments. It s accumulated an annual loss of nearly 1.4 billion yuan ($199 million) over the past 17 years.
A senior observer of the daily chemical industry once told the media, "It's not the talent, nor the commodity, the real problem of Liangmianzhen is the mechanism." As a Liuzhou state-owned enterprise, the long decision-making chain has affected its development.
The difficulties of reality have made it gradually realize that perhaps returning to the main business is the right path.
China's local toothpaste brands still hold a large share, But Liangmianzhen is no longer in the forefront. According to Nielsen retail research data, in 2021, YUNNAN BAIYAO, DARLIE, Lesening, and Saky ranked first, second, fourth, and sixth with 23.86%, 20.10%, 6.83%, and 4.88% market shares respectively. It is known that the share of Liangmianzhen does not exceed 1%.
According to the latest financial report, Liangmianzhen divided its main business into two segments: daily chemical and pharmaceutical. The daily chemical segment is mainly engaged in the R & D, production, and sales of oral care products, personal washing & care, and hotel daily necessities, while the pharmaceutical segment is mainly engaged in the production and sales of pharmaceuticals.
The financial report shows that Liangmianzhen is currently more influential in the field of economy hotels. According to multiple analyses, its main subsidiary, Liangmianzhen (Jiangsu) Industrial Company, is mainly engaged in the hotel supplies business, which currently has a stable market share and has firmly occupied the leading position in the hotel disposables section.
Due to the impact of the local pandemic, as well as the promulgation of the Law of the People's Republic of China on Prevention and Control of Environmental Pollution, "Plastic Restriction Order", and other regulations and policies, Liangmianzhen (Jiangsu) Industrial Company’s revenue of 148 million yuan ($21 million) in the first half of 2022, down 35.08% year-on-year. The net loss was 11.1847 million yuan ($1.5937 million), compared with a net profit of 4.8305 million yuan ($688,300) in the same period last year.
The toothpaste section is still expanding, and the whole oral care section, whether it is mouthwash, oral spray, dental floss, electric toothbrush, etc., is also renewed with new business opportunities. The Liangmianzhen that had half-beat late finally can not thrive any more.
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