The "10 billion" ambition becomes a burden, and Huida "cuts its flesh" for New Goldman Sachs

In early September, Huida Sanitary Ware released an announcement stating that the company plans to transfer all of its equity and related creditor's rights in Guangxi New Golden High - Tech Thin Building Ceramics Co., Ltd. through public listing. The base price for the equity transfer is 1 yuan, the total amount of creditor's rights is 269 million yuan, and the base price for the listing transfer is 144,473,960 yuan, with a total of 144,473,961 yuan.

As a leading enterprise in the industry, the news of Huida Sanitary Ware's "1 - yuan transfer" of its subsidiary has attracted high attention in the industry.

Announcement of Huida Sanitary Ware

According to the announcement, Guangxi New Golden High - Tech is a ceramic thin - plate production enterprise with an annual production capacity of up to 22.5 million square meters. However, it has been in continuous losses. It lost 34.886 million yuan in 2024 and another 29.3084 million yuan in the first half of 2025. Its net assets are approximately - 150 million yuan, and it is currently in a state of suspension of production.

On the surface, this is an act of selling off "negative assets". Since last year, the revenue of Guangxi New Golden High - Tech has declined rapidly, and it has faced difficulties in making profits. Huida itself is also under great operating pressure.

In the first half of this year, Huida's revenue and profits both declined. The total operating revenue was 1.425 billion yuan, a year - on - year decrease of 9.94%; the net profit attributable to the parent company was 17.9718 million yuan, a significant year - on - year decline of 70.21%. Selling off loss - making assets will help reduce the company's burden and optimize its asset structure.

However, Guangxi New Golden High - Tech has special significance for Huida. Behind it is a strategic expansion and layout of Huida four years ago.

Looking back to July 8, 2021, a new building materials manufacturing enterprise, Beiliu Xinshengda New Materials Co., Ltd. (hereinafter referred to as "Beiliu Xinshengda"), was established in Beiliu City, Guangxi.

This newly registered company is not a physical production enterprise. It was established specifically for a transaction. Therefore, after its successful registration, a production enterprise established 10 years earlier, "Guangxi New Golden High - Tech Thin Building Ceramics Co., Ltd." (the enterprise subject to be listed for transfer this time, hereinafter referred to as "Guangxi New Golden High - Tech"), was packaged as an asset and incorporated into it.

Guangxi New Golden High - Tech was established on January 19, 2011. It is a high - tech enterprise mainly engaged in the R & D, design, production, and sales of ceramic thin slabs. Its thin - plate and slab products, LA'BOBO, is one of the earliest domestic brands to introduce thin - plates into the home - improvement market. This is the main reason for Huida's investment in Guangxi New Golden High - Tech.

Rendering of LA'BOBO products (Source: Company's official website)

On August 4, 2021, Huida Sanitary Ware Co., Ltd. signed an "Investment Cooperation Framework Agreement" with Tang Shuodu, Beiliu Xinliansheng Investment Consulting Partnership (Limited Partnership), Xinshengda, Guangxi New Golden High - Tech Thin Building Ceramics Co., Ltd., and Foshan Golden High - Tech Thin Ceramics Technology Co., Ltd. At the end of August, Huida invested 130 million yuan to increase the capital of Beiliu Xinshengda, with an equity ratio of 70.61%, completing the control of the latter.

This transaction was Huida's largest acquisition in nearly 10 years, using up more than half of the company's net profit that year.

Behind the large - scale investment is Huida's more aggressive growth target.

Signing ceremony (Source: Official WeChat account of Foshan Ceramic Industry Association)

At the signing ceremony, Wang Yanqing, the chairman and second - generation successor of Huida Sanitary Ware, said, "Huida's official acquisition of New Golden High - Tech this time is another landmark event with milestone significance in Huida's 39 - year development history. It will surely play an important role in promoting Huida to achieve its strategic goal of 'a century - old Huida with a scale of 10 billion yuan'."

In 2021, Huida Sanitary Ware's revenue was 3.893 billion yuan, still 61.07% short of the 10 - billion - yuan target. Huida hoped that through this transaction, it could quickly enter the ceramic thin - plate and slab fields, further enrich its product line, and increase its market share and performance scale by leveraging the production, R & D, and channel resources of Xinshengda and Guangxi New Golden High - Tech.

At that time, the home - improvement and building materials industries began to integrate. Brand enterprises in various sectors of the large - scale home - improvement market were competing to become the "consumer entry point". Huida also actively extended its business line from sanitary ware to overall kitchen and bathroom, ceramic tiles, and slabs to achieve internal business and product synergy and avoid becoming an upstream supplier for the whole - house decoration in the end.

Mergers and acquisitions are the fastest shortcut for brand enterprises to become giants. After Huida Sanitary Ware took a stake in Beiliu Xinshengda, it built new ceramic tile production lines according to Wang Yanqing's plan, and the production capacity of its ceramic tile business increased rapidly: the output in 2021 was 786,200 square meters, and it jumped to 3.8045 million square meters in 2021, a year - on - year increase of 384%. In 2023, it increased again to 5.0713 million square meters. With Beiliu Xinshengda as the main body, Guangxi became Huida's third - largest production base after Tangshan and Chongqing.

However, looking back, this was a failed investment and a price Huida paid for its ambition.

Huida ceramic tiles (Source: Company's official website)

Affected by factors such as the slowdown in economic growth and the liquidity pressure on real - estate enterprises, the market sales of ceramic tiles have been continuously declining. According to a research report by Zhiyan Consulting, in 2022, the national production of ceramic tiles was 7.32 billion square meters, a year - on - year decrease of 10.5%; the sales volume of ceramic tiles was 6.737 billion square meters, a year - on - year decrease of 11.1%; the market scale of the ceramic tile industry was 237.51 billion yuan, a year - on - year decrease of 12.2%.

In 2023, the market further declined. The production of Chinese ceramic tiles decreased by 8%, from 7.312 billion square meters to 6.73 billion square meters. The domestic consumption of ceramic tiles decreased by 9.2%, from 6.737 billion square meters to 6.118 billion square meters. (Data from the China Building and Sanitary Ceramics Association)

By 2024, the utilization rate of the national ceramic tile production capacity was less than 50%.

Huida misjudged the timing. From 2022 to 2024, the revenue and net - profit data of Beiliu Xinshengda were as follows:

In 2022, the revenue was 123 million yuan, and the net profit was 17.77 million yuan; in 2023, the revenue was 149 million yuan, with a loss of 56.496 million yuan; in 2024, it dropped to 110 million yuan, with a loss of 35.921 million yuan.

In the first half of 2025, Huida lost another 29.3084 million yuan on Beiliu Xinshengda. The total loss on the profit statement has exceeded 120 million yuan. On August 26, 2025, Guangxi New Golden High - Tech had a new record of being a person subject to enforcement, and the company's operation has come to a halt.

Tianyancha information

In the face of the cruel market, Huida had to admit defeat. In 2024, Huida made a long - term equity investment impairment provision of approximately 106 million yuan for Beiliu Xinshengda.

This investment has lasted for four years, with a total loss of more than 200 million yuan. If this equity transfer transaction is unsuccessful, Huida will surely lower the price again to "get rid of the burden", and the investment loss will also increase accordingly.

Huida Sanitary Ware admitted in the announcement that this transaction is carried out through public listing, and there are uncertainties regarding the transaction object, transaction price, and transaction completion time. Therefore, Huida has set a follow - up plan: If no potential transferees are solicited or the transaction fails to be completed in the end, the company will convene a board meeting to re - consider whether to lower the listing base price or sell the target assets through other means.

According to industry insiders' judgment, a price cut is highly likely. Huida's announcement shows that as of the disclosure date, the transaction target (Guangxi New Golden High - Tech) has 128 million yuan in mortgage/pledged guarantee due to loan contracts; there are pending contract disputes and labor disputes involving an amount of 3.7591 million yuan, and 2.7778 million yuan of property has been seized and frozen. There are uncertainties in the company's continuous operation and creditor's rights recovery.

The listing transfer of Guangxi New Golden High - Tech means that Huida's ceramic tile business has suffered a setback.

According to Huida's 2024 annual report, the revenue of the company's ceramic tile (wall and floor tile) business was approximately 425 million yuan, a year - on - year decrease of 41.31%; the gross profit margin dropped significantly to 7.65%, making it the only business among Huida's main businesses with a single - digit gross profit margin.

Source: Huida's 2024 annual report

Ceramic tiles are Huida's third - largest business. In 2024, the revenue of Beiliu Xinshengda was approximately 110 million yuan, accounting for 26% of the entire ceramic tile business. After the suspension of production and transfer, it is expected to continue to drag down Huida's revenue.

It is worth noting that in addition to Beiliu Xinshengda, most of Huida's major subsidiaries and affiliated companies have suffered losses. In the first half of this year, the intelligent kitchen and bathroom, smart home, and Huida Housing Industry subsidiaries lost 1.68 million yuan, 0.504 million yuan, and 17.693 million yuan respectively.

Source: Huida's 2025 interim report

Behind the losses of these subsidiaries are the profit - making difficulties of Huida's two major businesses: overall kitchen and bathroom and ceramic tiles.

Therefore, "cutting losses" by selling Guangxi New Golden High - Tech can be regarded as the beginning of Huida's business convergence. After all, Huida's sanitary ware business is still growing, and its brand's overseas expansion is progressing smoothly. Eliminating the businesses that have lost nearly 100 million yuan over the years can prevent the company's cash flow from being dragged down and give the company more opportunities to survive in the downward industry cycle.

This article is from the WeChat public account "Future Habitat", author: Xiaoshi. It is published by 36Kr with authorization.