Analysis of the Current Status of Personal Care Business and Diversification Strategy of Zhongshun Jierou (002511.SZ)

I have collected sufficient information, and now I will conduct a systematic and comprehensive analysis for you.

---

According to the latest financial data of Zhongshun Jierou,

, and its diversification strategy is facing major challenges:

Business Segment	2024 Revenue	Proportion	YoY Change
Tissue Paper	RMB 8.042 billion	98.66%	-16.77%
Personal Care and Others	RMB 0.109 billion	1.34%	-21.76%

Data for the first half of 2025 shows that the revenue of the tissue paper business was RMB 4.280 billion, accounting for

of total revenue, while the actual share of the personal care business has shrunk to about [0][1][2].

---

The biggest challenge facing Zhongshun Jierou comes from the sharp fluctuations in upstream raw material prices. As a core raw material, pulp prices have been rising continuously since November 2020, and the average spot price of pulp reached

in early 2025, an increase of nearly 10% compared to early 2024[3][4].

• The company’s revenue fell 16.84% year-on-year to RMB 8.151 billion in 2024
• Net profit plummeted 76.80% year-on-year to only RMB 0.77 billion
• This marks the fourth consecutive year of net profit decline for the company

Liu Peng, the company’s chairman, once stated frankly: “Raw material prices remain high and their trends are complex, the industry has severe overcapacity, and there is no bottom limit to price wars”[4].

In the personal care sector, the market has been deeply occupied by specialized brands:

Segment	Leading Brands	Market Share
Wet Toilet Paper	Deyou	35.9% (ranked first)
Lotion Tissue	Kexinrou	Leading Position
Maternal and Infant Tissue	Babycare, PurCotton	Dominant Position
Sanitary Napkins	Baiya Co., Ltd. (Liberty)	Ranked first in Sichuan and Chongqing

Data from 2023-2024 shows that Deyou’s sales in the wet toilet paper market reached RMB 1.09 billion, while Vinda, a traditional paper industry giant, only achieved RMB 0.31 billion (10.1% market share). Zhongshun Jierou

in these segments[5][6].

The tissue paper industry has low technical barriers, and emerging brands can quickly enter the market through equipment, raw materials, supply chains, and concept marketing. However, traditional giants are lagging behind emerging brands in

[5]:

• Deyou successfully positioned itself as “professional wet toilet paper” brand
• Kexinrou focuses on the lotion tissue segment
• Cross-border brands like Fueryan and Mayinglong have also entered the market to share the pie

Although Zhongshun Jierou launched household cleaning products such as Jieshijia laundry detergent, the base of new personal care categories like laundry detergent was small in 2024, leading to limited growth. The company stated frankly: “This is considered innovation and entrepreneurship, and we will definitely encounter many difficulties and failures”[2].

Zhongshun Jierou chose

as its main direction:

• Face Water-resistant Series (core high-end product)
• Natural Wood Series
• New Cotton White Series

However, the high-end strategy requires a large amount of resource investment, which forms

with diversified expansion. The company’s gross profit margin continued to be under pressure in 2024, and under limited resource conditions, the personal care business could not obtain sufficient development space[2][7].

It’s not just Zhongshun Jierou; the entire tissue paper industry is facing difficulties:

Company	2024 Performance
Hengan International (Hearttex)	Tissue paper business recorded a loss of RMB 0.245 billion, and gross profit margin narrowed from 21.7% to 18.9%
Vinda International	Privatized and delisted with HK$26.1 billion, net profit plummeted 64.16% in 2023
Zhongshun Jierou	Net profit shrank from RMB 0.906 billion in 2020 to RMB 0.77 billion in 2024

The widespread decline in industry profits has left enterprises

, forcing them to scale back operations and focus on core businesses[4][5].

---

From December 2025 to January 2026, the company experienced major executive changes:

Time	Change Content
December 11, 2025	Liu Peng resigned as President, and Gao Bo took over the position
January 10, 2026	Liu Peng resigned as Chairman

The official stated: “Chairman Liu Peng was mainly responsible for the expansion of the company’s new categories and new businesses, and after taking office as President, Gao Bo will be in charge of improving internal management efficiency”[2][8].

Zhongshun Jierou’s current strategy has been significantly adjusted:

1. Focus on the core tissue paper business
   —— The share of tissue paper rebounded to 98.85% in the first half of 2025
2. Consolidate high-end product lines
   —— High-margin products such as Face and Natural Wood series
3. Contract non-core businesses
   —— Strategic contraction of the personal care business
4. Prioritize cost control
   —— With the decline in pulp prices, net profit surged 329.59% year-on-year in the first three quarters of 2025

---

The root causes of the personal care business of Zhongshun Jierou accounting for only about 1.15% of revenue are as follows:

Cause	Explanation
Missed Opportunity	The personal care segments have been occupied by professional brands, resulting in extremely high entry costs for latecomers
Resource Constraints	Raw material cost pressures and industry price wars have limited expansion capabilities
Strategic Conflicts	High-end transformation and diversification compete for the same resource pool
Capability Shortcomings	Lack of brand, channel, and technology accumulation in the personal care sector

The company has now recognized the severity of the problem and has returned to its core business through executive adjustments and strategic contraction. It is expected that Zhongshun Jierou will

in the future, concentrate resources to consolidate its position in the tissue paper market, and seek further development after the industry recovers.

---

[0] Full Text of 2024 Annual Report of Zhongshun Jierou Paper Co., Ltd. (https://static.cninfo.com.cn/finalpage/2025-04-25/1223267242.PDF)

[1] Xinhua News Agency - Zhongshun Jierou Achieves Double Growth in Operating Revenue and Profit in H1 2025 (http://www.news.cn/fashion/20250822/3c398d96f8a04121831b194574631d24/c.html)

[2] 21st Century Business Review - The RMB 10 Billion Zhongshan Tissue King Restructures Its Executive Team (https://www.21jingji.com/article-detail/5772)

[3] Toutiao - Restructuring of the Tissue Paper Industry Landscape (https://jjjjb.fjdaily.com/pc/att/202505/20/0c50c940-4554-4782-ad53-58ecb344110d.pdf)

[4] 36Kr - A Bizarre Customer Service Incident Trips Up Hearttex (https://m.36kr.com/p/3289341279708676)

[5] AgeClub - Adult Incontinence Products Business Doubles in Growth! Analyzing Listed Companies’ Financial Reports (https://www.ageclub.net/article-detail/5772)

[6] Soochow Securities Research Report - In-depth Report on Baiya Co., Ltd. (003006.SZ) (https://pdf.dfcfw.com/pdf/H3_AP202506131690173009_1.pdf)

[7] TF Securities Research Report - Initial Coverage Report on Nuobang Co., Ltd. (603238) (https://pdf.dfcfw.com/pdf/H3_AP202508221732112676_1.pdf)

[8] Sina Finance - Post-80s Liu Peng Resigns Consecutively as President and Chairman of the “Tissue Giant” (https://finance.sina.com.cn/roll/2026-01-11/doc-inhfwpxy8871740.shtml)