Jiangsu Hongdou Industrial Co Ltd

The judicial auction transfer of 166.5 million unrestricted tradable shares held by Hongdou Group, the controlling shareholder of Hongdou Co., has been completed. Super retail investors Zhong Ge and Wei Wei won 83 million shares and 83.5 million shares for 229 million yuan and 231 million yuan respectively, spending about 460 million yuan in total. The shares they acquired account for approximately 3.62% and 3.65% of the company's total share capital respectively. After the passive reduction, the shareholding ratio of Hongdou Group and its concert parties fell from 57.85% to 50.59%, with Hongdou Group's direct stake dropping from 55.48% to 48.21%. The company said the equity change will not lead to a change in controlling shareholder or actual controller. Behind the two judicial auctions is the mounting debt pressure on Hongdou Group. As of September 30, Hongdou Group, Zhou Haijiang, and Honghong Apparel had pledged a total of 1.147 billion shares of Hongdou Co., while shares held by Hongdou Group and Zhou Haijiang included a cumulative judicial freeze of 902 million shares and judicial marking of 227 million shares. Hongdou Co. is mainly engaged in apparel production and sales. In 2025, its operating revenue was 2.229 billion yuan, down 20.12% year on year on an adjusted basis, with a net loss attributable to the parent of 423 million yuan. In the first half of 2026, operating revenue was 1.029 billion yuan, down 10.79% year on year, and the net loss attributable to the parent narrowed to 94.394 million yuan.

Hongdou Shares released its 2026 interim report, showing total operating revenue of 1.029 billion yuan, down 10.79 percent from the same period last year, with net profit attributable to the parent company at negative 94.394 million yuan. Net cash inflow from operating activities was 25.6143 million yuan, the asset-liability ratio was 53.27 percent, gross margin was 37.65 percent, and diluted earnings per share were negative 0.04 yuan. The company had 51,700 shareholders, and the top ten shareholders held 64.88 percent of total share capital.

Hongdou Shares disclosed its earnings forecast, expecting operating revenue in the first half of 2026 to decline 10 percent year-on-year, with a net loss attributable to the parent company of 80 million to 95 million yuan, compared to a loss of 96.9028 million yuan in the same period last year. The net loss after deducting non-recurring items is expected to be 78 million to 93 million yuan, compared to a loss of 114 million yuan in the same period last year. The company stated that due to multiple factors such as intensified industry competition, temporary weakness in market demand, and the proactive closure of underperforming stores, main business revenue in the first half of the year decreased by about 10 percent year-on-year. In the second quarter, the decline in revenue during the traditional off-season combined with rigid expense payments led to a net loss. Despite overall pressure, the company continues to optimize its offline store structure and strengthen cost control, resulting in a slight year-on-year improvement in net profit and net profit after deducting non-recurring items for the first half of the year.