Oriental Yuhong to acquire 100% equity stake in World Hardware!

Meiri Reporter | Xu Shuai Meiri Editor | Zhang Jinhe Zhang Yiming

Reporter | Xu Shuai

Editor | Zhang Jinhe Zhang Yiming Du Bo Proofreader | Jin Mingyu

Beijing Oriental Yuhong Waterproof Technology Co., Ltd. (hereinafter referred to as Oriental Yuhong) has announced another acquisition.

On the evening of March 17, Oriental Yuhong (SZ002271, stock price 15.74 RMB, market value 37.598 billion RMB) disclosed that its wholly owned subsidiary plans to acquire 100% equity of Hong Kong-based well-established company World Hardware & Plastic Factory Limited (hereinafter referred to as World Hardware) for approximately HKD 164 million. Founded in 1961, this target company is a representative brand in Hong Kong’s plastic pipe industry, with its “Anchor” brand enjoying high recognition in the Guangdong-Hong Kong-Macau Greater Bay Area.

Additionally, one of the transferor parties is one of the world’s largest plastic pipe manufacturing companies. This move marks Oriental Yuhong’s entry into the Hong Kong plastic piping and fittings market, further expanding its business footprint.

On the evening of March 17, Oriental Yuhong issued an announcement titled “Signing of the SHARE PURCHASE AGREEMENT (SPA).” The announcement states that Oriental Yuhong’s wholly owned subsidiary, Hong Kong Oriental Yuhong Investment Limited, has signed agreements with ALIAXIS GROUP SA (Aliaxis Group, hereinafter referred to as Aliaxis) and other parties, intending to use its own funds totaling about HKD 164 million to acquire 100% equity of The Universal Hardware & Plastic Factory Limited (hereinafter referred to as World Hardware or the Target Company).

The core target of this transaction, World Hardware, was established on February 24, 1961, and is registered in Kowloon, Hong Kong. Its main business is the production and sale of pipes and fittings made of materials such as CPVC (chlorinated polyvinyl chloride) and UPVC (rigid polyvinyl chloride). It is also one of the early pioneers in Hong Kong’s plastic piping industry. The company was founded during a critical period when Hong Kong’s industry was transitioning from traditional handicrafts to modern manufacturing.

Public information shows that Aliaxis Group is one of the largest global plastic pipe manufacturers, holding a dominant position in the worldwide plastic piping and valve systems sector. Backed by the multinational giant Aliaxis, World Hardware has been deeply rooted in Hong Kong for over 60 years. Regarding its industry position in Hong Kong, Oriental Yuhong’s announcement affirms: “World Hardware has always focused on the production and sales of plastic pipes and fittings. Its ‘Anchor’ brand is well-known in Hong Kong and Guangdong due to its excellent quality and outstanding customer service, and has become a representative brand in Hong Kong’s plastic pipe industry, with strong brand influence and premium pricing power.”

To better serve the mainland Chinese market and expand capacity, on March 15, 1993, Aliaxis Group and World Hardware jointly established Zhongshan Huanyu Industrial Co., Ltd. (hereinafter referred to as Zhongshan Huanyu) in Zhongshan, Guangdong Province. Zhongshan Huanyu took over the core manufacturing operations and technical capabilities of the Target Company.

After negotiations, all parties agreed that the enterprise value of 100% of the Target Company is set at HKD 164 million. The projected EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for 2025 is HKD 29.943 million (about RMB 26.0178 million), with an EV/EBITDA ratio of 5.56x.

Regarding financial data, the announcement details the currency distinctions for different entities. The consolidated financial statements of World Hardware are mainly denominated in HKD. Based on the management’s simulated consolidated financial statements, the key financial indicators are as follows: for 2024 (unaudited), revenue of HKD 121 million, operating profit of HKD 33.547 million, net profit of HKD 29.164 million; for 2025 (unaudited), revenue of HKD 115 million, operating profit of HKD 29.913 million, net profit of HKD 25.33 million. As of December 31, 2025, the Target Company’s total assets are HKD 130 million, with net assets of HKD 109 million.

Meanwhile, Zhongshan Huanyu’s main financial data are denominated in RMB: for 2024 (audited), revenue of RMB 78.7264 million, net profit of RMB 13.5994 million; for 2025 (audited), revenue of RMB 75.2401 million, net profit of RMB 11.0219 million.

Traditional business faces challenges; company accelerates new market expansion

Against the backdrop of deep adjustments in the downstream real estate industry, Oriental Yuhong’s main business has faced significant operational pressure. Public financial reports show that in 2024, Oriental Yuhong achieved revenue of RMB 28.056 billion, a decrease of 14.52% year-on-year; net profit attributable to the parent was RMB 108 million, a sharp decline of 95.24%. In the first three quarters of 2025, it recorded revenue of RMB 20.601 billion and net profit of RMB 810 million, with its traditional core business still in a bottoming phase.

Faced with stock competition, seeking incremental growth in new markets has become the core strategy for Oriental Yuhong to break through. In 2024, the company achieved overseas revenue of RMB 877 million, a year-on-year increase of 24.73%, making it one of the few bright spots in overall performance.

At the beginning of this year, the company’s wholly owned subsidiary completed the acquisition of a 60% stake in Brazil’s Novakem, with the transaction smoothly concluded, further advancing its South American market presence.

Looking ahead to 2026, Oriental Yuhong’s market expansion activities are more frequent and resolute. At the start of the year, Chairman Li Weiguo publicly stated that 2026 would be a tough year for the company’s turnaround and overseas expansion. He set clear goals: to achieve annual shipments of 1 billion square meters of waterproof membranes and an annual production and sales volume of mortar powder exceeding 20 million tons. He emphasized that there is no room for hesitation—only a clear divide between “turning around” and “sinking.”

| Daily Economic News nbdnews | Original Article |

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