Tech Platform Pinbianyi to Acquire Beauty Manufacturer Jiaheng for $234 Million

The complete exit of the founding Zeng family from Jiaheng Homecare exposes the deep survival challenges facing traditional beauty contract manufacturers in China.

Why It Matters

For the global beauty industry, this landmark acquisition highlights the growing pressures on traditional OEM/ODM manufacturers in China. As rising costs and shifting brand demands squeeze margins, tech-driven consolidations and unconventional cross-industry buyouts are reshaping the manufacturing landscape.

On May 27, Jiaheng Homecare (Jiaheng) announced that its controlling shareholder and actual controller, Zeng Bensheng, completed the transfer of a 29.70% stake to Hangzhou Pinbianyi and its concerted parties (Wenzhou Cangxiao and Hangzhou Runyi). Zeng has also relinquished voting rights on his remaining 25.79% stake, retaining only economic rights such as dividends. This marks the complete exit of the founding Zeng family from the company's management and a formal shift in control.

This transaction, which began in December 2025, has now been finalized. Hangzhou Pinbianyi has become the new controlling shareholder, with its millennial founder, Xu Yi, taking over as the actual controller. Pinbianyi plans to launch a partial tender offer to acquire an additional 21.10% of the company's shares. If completed, Pinbianyi and its concerted parties will hold a 50.80% stake, securing absolute control. Based on the transfer price of 33.21 RMB per share, the total transaction value is estimated to reach 1.7 billion RMB (approximately $234 million USD).

While a 1.7 billion RMB deal might not seem massive in the broader Chinese stock market, it represents one of the largest capital events in the beauty manufacturing sector since 2026. More importantly, it is the first landmark case in China's beauty contract manufacturing industry where a founder has voluntarily surrendered control and completely exited management. In previous major deals, such as Qingsong Shares' 2.4 billion RMB acquisition of a 90% stake in leading OEM Nox Bellcow, the founding team retained equity and continued to run operations.

The shift in control at Jiaheng exposes the deep survival challenges facing traditional beauty contract manufacturers. It also turns this cross-industry marriage between an internet supply chain company and a traditional manufacturer into a focal point for the entire industry.

Peak at IPO: Jiaheng’s Revenue Growth Without Profit

Jiaheng was founded in 2005 in Quanzhou, Fujian Province, by Zeng Bensheng. It started as a plastic packaging manufacturer before expanding into cosmetics OEM/ODM services, creating a dual-engine business model combining cosmetics manufacturing and plastic packaging. Its client roster includes major global and domestic brands such as Procter & Gamble, Kenvue, Shanghai Jahwa, Yumeijing, and Botanee Group, the parent company of Winona. Its product portfolio spans skincare, haircare, baby care, and household cleaning products.

In 2021, Jiaheng went public on the ChiNext board of the Shenzhen Stock Exchange, becoming one of the few listed companies in China with a fully integrated supply chain spanning both cosmetics and packaging. This unique integration of packaging and formulation aligns with broader regional trends, as seen with South Korean beauty brands increasingly sourcing packaging directly from Chinese manufacturers to streamline their supply chains. However, post-IPO, the company fell into a classic trap: growing revenues but shrinking profits.

After hitting a record high in 2021 with 1.16 billion RMB in revenue and 97 million RMB in net profit, Jiaheng's performance took a sharp downturn. Revenues and net profits declined consecutively through 2022 and 2023. In 2024, the company posted its first annual net loss of 24 million RMB, a year-on-year plunge of 159%. Although revenue rebounded by 23.28% to 1.14 billion RMB in 2025, net losses widened to 37 million RMB. In the first quarter of 2026, despite a 37.93% year-on-year revenue increase, the company still recorded a net loss of 4.18 million RMB.

Looking at its two core business segments, the cosmetics contract manufacturing division saw its revenue surge from 371 million RMB to 630 million RMB between 2020 and 2021, accounting for 54.28% of total sales. However, it declined for three consecutive years from 2022 to 2024, dropping to 455 million RMB, before rebounding strongly to 612 million RMB in 2025—nearly matching its historical peak. Meanwhile, the plastic packaging business remained stable but stagnant, hovering around 380 million to 410 million RMB between 2021 and 2024, with a slight 4.17% increase to 396 million RMB in 2025.

In its financial reports, Jiaheng attributed the widening losses despite rising revenues in 2025 to several factors: low capacity utilization and high depreciation and amortization costs at its newly built Huzhou production facility, lower gross margins due to shifts in client product structures, and rising administrative and financial expenses from business expansion.

However, the deeper issues lie in the inherent flaws of its business model and a challenging family succession.

First, Jiaheng relies on a typical dependent manufacturing model. It is heavily reliant on a few major clients, lacks its own brands, and possesses limited proprietary core technology, leaving it with very low bargaining power in the supply chain. When macroeconomic conditions soften and the consumer market cools, major brands cut orders and squeeze prices, severely compressing the manufacturer's profit margins.

Second, in November 2024, the 79-year-old founder, Zeng Bensheng, handed over the reins to his son, Zeng Huanbin, with his daughter, Zeng Yaping, serving as vice chairwoman. While the second-generation leadership managed to drive a revenue rebound by acquiring new clients, they failed to address core issues of cost control and operational efficiency. Instead, they relied on price cuts to drive volume, which only widened the company's losses.

For the elder Zeng, with the second generation unable to turn the tide, surrendering control while retaining dividend rights was not only a reluctant compromise but also the most rational way to preserve the family's assets.

A Cross-Industry Takeover: Pinbianyi’s Industrial Ambitions and Capital Play

Unlike Jiaheng, a traditional manufacturer with a 21-year history, the buyer, Hangzhou Pinbianyi, is an internet technology startup founded just eight years ago. Launched in 2017 by millennial entrepreneur Xu Yi, Pinbianyi targeted the supply chain pain points of China's millions of independent convenience stores, using AI and big data to provide smart collective procurement services.

Pinbianyi operates on an asset-light model that facilitates transactions without holding physical inventory, connecting independent convenience stores with suppliers. Its algorithms match the best purchasing options while utilizing crowdsourced logistics networks to help stores lower procurement costs and improve inventory turnover.

Since its inception, Pinbianyi has completed its Series C+ funding round, growing into a leading B2B smart supply chain platform for fast-moving consumer goods (FMCG) in China. Public data shows that the platform covers 600,000 community convenience stores, over 4,000 distributors, and 50,000 delivery drivers across the country, posting a net profit of 236 million RMB in 2024. The acquisition of Jiaheng represents Pinbianyi's largest investment to date and marks Xu Yi's first foray into physical manufacturing.

From a supply chain perspective, Pinbianyi and Jiaheng operate at different ends of the spectrum: one controls distribution channels, while the other handles product manufacturing. In theory, this creates natural synergies.

Pinbianyi's network of 600,000 community convenience stores serves as a vital retail channel for lower-tier markets. This network could help Jiaheng's existing brand clients penetrate deeper into regional markets while absorbing the idle capacity of Jiaheng's Huzhou facility. Conversely, Jiaheng's manufacturing capabilities could provide the production backbone for Pinbianyi to launch its own private-label products. Furthermore, Pinbianyi's digital technology could optimize Jiaheng's production, inventory, and supply chain management, addressing the classic OEM dilemma of having capacity but no orders, or orders but no profit.

However, market skepticism regarding this cross-industry marriage remains high.

The first challenge is the clash of management cultures. Internet companies thrive on rapid iteration and fast decision-making, whereas manufacturing demands meticulous management, strict quality control, and safety protocols. Whether a millennial internet entrepreneur like Xu Yi can successfully manage a traditional 21-year-old factory remains to be seen.

Second, the root cause of Jiaheng's ongoing losses—high depreciation and low capacity utilization at its Huzhou facility—cannot be resolved overnight. Under the performance agreement signed by both parties, the elder Zeng guaranteed that Jiaheng's net profit must remain positive from 2026 to 2028, giving Pinbianyi a tight three-year window to prove its capabilities. Additionally, the partial tender offer still carries uncertainties; if the acquisition falls short of expectations, Pinbianyi's control over the listed company could be compromised, stalling its strategic plans.

Tellingly, five months after the transaction was initiated, Jiaheng admitted during its May 2026 earnings call that the two companies had not yet begun any concrete collaboration on industrial synergy. This has led market observers to wonder whether "industrial synergy" is a genuine strategic goal or merely standard corporate speak to secure regulatory approval.

A deeper question is whether Pinbianyi is pursuing a backdoor listing. Amid tightening regulatory scrutiny on IPOs in China's A-share market, acquiring an existing listed shell company provides a direct gateway to the capital markets, opening doors for future asset injections and fundraising.

While Pinbianyi has consistently denied any backdoor listing intentions, emphasizing that the acquisition is a strategic move for industrial synergy, Jiaheng's official statement noted: "Following the completion of this tender offer, the acquirer will leverage its industrial and channel resources in the consumer goods sector to enhance the listed company's continuous operational capabilities and profitability, supporting its long-term development."

Industry Shakeup: Beauty Manufacturing Enters Deep Consolidation

The shift in control at Jiaheng is not an isolated incident but a reflection of accelerating mergers and acquisitions across the global beauty supply chain. In March 2025, German consumer goods giant Henkel completed its acquisition of Chinese cosmetics contract manufacturer Suzhou Boke, turning it into an exclusive production base. More recently, in February 2026, Cosmax, the world's largest cosmetics ODM, announced its acquisition of a 51% stake in Italian ODM Keminova to establish its first European manufacturing hub.

These acquisitions demonstrate that during periods of deep industry adjustment, companies with capital, technology, or channel advantages are actively consolidating to expand market share and build competitive barriers. The transition at Jiaheng further highlights the structural shakeup occurring in the daily chemical contract manufacturing sector. As demographic dividends fade, traffic acquisition costs climb, and beauty brands increasingly build their own manufacturing facilities, the survival space for traditional contract manufacturers is being systematically squeezed.

In the past, beauty manufacturers could rely on labor dividends and economies of scale to secure steady growth. Today, sheer production capacity is no longer a core competitive advantage. Mid-sized and small contract manufacturers that lack technological barriers and rely too heavily on a few major clients will be the first to be phased out. Conversely, new industry players like Pinbianyi, which leverage retail channels and data assets to integrate upward into manufacturing, may represent the emergence of a new industrial model.

While the deal has officially closed, the real test is just beginning. For Pinbianyi, the challenge lies in bridging the gap between the internet and physical manufacturing, translating its digital and channel advantages into profitability for Jiaheng. For the broader beauty manufacturing sector, Jiaheng’s transition serves as a stark warning: the traditional contract manufacturing model is reaching its limit, and only those that pivot toward technology-driven solutions and brand empowerment will survive the next wave of consolidation.