Over 160 Million Hong Kong Dollars! Oriental Yuhong to Acquire 100% Equity of World Hardware

On the evening of March 17, Oriental Yuhong (SZ002271) announced that its wholly-owned subsidiary plans to acquire 100% of the shares of World Hardware Plastic Factory Limited (hereinafter referred to as World Hardware or the target company), a well-established Hong Kong company, for approximately HKD 164 million. Founded in 1961, the 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.

Notably, the transferor of the target company includes a global giant in plastic piping and valve systems. This acquisition marks Oriental Yuhong’s entry into the Hong Kong plastic pipe and fittings market, further enhancing its business layout.

Acquisition of 100% of the target company

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 multiple parties including ALIAXIS GROUP SA (Aliaxis Group), intending to use its own funds to acquire 100% of the shares of World Hardware for about HKD 164 million.

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

Public information shows that Aliaxis is one of the world’s largest producers of plastic piping and valve systems, with significant influence in the global plastic pipe industry. Backed by the multinational giant Aliaxis, World Hardware has been deeply rooted in Hong Kong for 65 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 sector, with strong brand influence and premium pricing power.”

To better serve the mainland Chinese market and expand capacity, on March 15, 1993, Aliaxis 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 mutual agreement among the transaction parties, the enterprise value of the target company is approximately HKD 164 million. In 2025, the target company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is projected at HKD 29.493 million (about RMB 26.0178 million), with an EV/EBITDA (Enterprise Value / EBITDA) ratio of 5.56 times.

Financial data details are provided in different currencies for different entities. The consolidated financial statements of World Hardware are mainly denominated in HKD. According to the simulated consolidated financial statements provided by the management of the target company, 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 amounted to 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.

Company accelerates market expansion

In the context of adjustments in the downstream real estate industry, Oriental Yuhong’s main business has faced considerable 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, down 95.24%. In the first three quarters of 2025, the company’s revenue reached RMB 20.601 billion, with net profit attributable to the parent of RMB 810 million, indicating that its traditional core business remains in a bottoming phase.

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

Earlier this year, the company’s wholly-owned subsidiary completed the acquisition of a 60% stake in Novakem in Brazil, with the transaction successfully finalized, further advancing its South American market presence.

Since the beginning of this year, Oriental Yuhong’s market expansion efforts have become more frequent and resolute. At the start of the year, Chairman Li Weiguo publicly stated that 2026 would be a critical year for the company’s turnaround and overseas expansion. He set clear goals for 2026, including an annual shipment of 1 billion square meters of waterproof membranes and an annual production and sales volume of 20 million tons of mortar powder. He emphasized that there is no room for hesitation—only a stark choice between “turning around” or “sinking.”