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

Everyday Reporter | Xu Shu Everyday Editor | Zhang Yiming

On the evening of March 17, Oriental Yuhong (SZ002271) announced that its wholly owned subsidiary plans to acquire 100% equity of Hong Kong-based established company World Hardware Plastic Factory Limited (hereinafter referred to as World Hardware or the target company) 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.

Notably, among the transferors of the target company is 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% Equity 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), intending to use its own funds to acquire 100% equity of World Hardware for about HKD 164 million.

World Hardware was established on February 24, 1961, with its registered address 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. Its founding coincided with a critical period when Hong Kong’s industry was transitioning from traditional handicrafts to modern manufacturing.

Public information shows that Aliaxis is one of the world’s largest producers in the plastic piping industry, with significant influence in global plastic pipe and valve system markets. 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 customer service, and has become a representative brand in Hong Kong’s local plastic pipe sector, with strong brand influence and premium pricing power.”

To better serve the Mainland China 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 set at approximately HKD 164 million. The EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for 2025 is estimated at HKD 29.49 million (about RMB 26.02 million), with an EV/EBITDA ratio of 5.56x.

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, key financial indicators are as follows: for 2024 (unaudited), revenue of HKD 121 million, operating profit of HKD 33.55 million, net profit of HKD 29.16 million; for 2025 (unaudited), revenue of HKD 115 million, operating profit of HKD 29.91 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 78.73 million, net profit of RMB 13.60 million; for 2025 (audited), revenue of RMB 75.24 million, net profit of RMB 11.02 million.

Company Accelerates 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 company 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.

In the face of stock competition, seeking new markets for incremental growth has become a core strategy for Oriental Yuhong. In 2024, the company’s overseas revenue reached RMB 877 million, a year-on-year increase of 24.73%, making it one of the few bright spots in its 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 by 2026, the company faces a tough battle to break through and expand overseas. Li Weiguo set clear development goals for 2026, including annual shipments 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 retreat—only a stark choice between “turning the tide” or “sinking.”

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