Jiangsu Hongdou Industrial Co. Ltd. Announces Acquisition of Red Bean Home Online Business Asset Group

Jiangsu Hongdou Industrial Co. Ltd. (SH600400), a leading textile and apparel manufacturer headquartered in Wuxi, has disclosed its intent to acquire a significant asset group from its affiliated entity, Red Bean Home and its subsidiary, Red Bay Apparel. The transaction, valued at 4.85 billion yuan, represents a strategic expansion into the growing online home‑goods market.

Transaction Details

  • Buyer: Jiangsu Hongdou Industrial Co. Ltd.
  • Seller: Red Bean Home (a related party) and its subsidiary, Red Bay Apparel.
  • Asset Group: The “Red Bean Home” series of online product assets, comprising a range of home‑goods and lifestyle items.
  • Purchase Price Basis: The transaction price was anchored to an assessed value of 493 million yuan.
  • Adjustments to Purchase Price:
    • Add: Unpaid related‑party payables amounting to 31.115 million yuan as of the valuation date.
    • Subtract: Uncollected related‑party receivables amounting to 39.738 million yuan as of the valuation date.
    • Net Effective Price: 485 million yuan (4.85 billion yuan).
  • Future Earnings Projections: The seller has committed to delivering net profits of 36 million yuan, 39 million yuan, and 41 million yuan in 2025, 2026, and 2027 respectively, totaling a minimum of 116 million yuan over three years.

Regulatory Oversight

The Shanghai Stock Exchange (SSE) has issued a supervisory letter in response to the proposed transaction. The letter, made public on October 15, 2025, outlines the regulatory review process and requests additional information from the company regarding the transaction structure, valuation methodology, and related‑party terms. This scrutiny reflects the SSE’s emphasis on transparency and fairness in related‑party dealings.

Market Context

  • Current Share Price (13 Oct 2025): 2.97 CNH
  • 52‑Week Range: 1.93 – 4.03 CNH
  • Market Capitalisation: 6.6 billion CNH

The acquisition aligns with Jiangsu Hongdou’s broader strategy of diversifying revenue streams beyond traditional apparel manufacturing. By integrating a high‑margin online business, the company aims to leverage its supply‑chain expertise and brand recognition in a rapidly digitising consumer market.

Implications for Shareholders

Investors should monitor the outcome of the SSE’s supervisory review, as any required disclosures or adjustments could impact the transaction’s final terms. The projected earnings from the asset group suggest a favourable upside, but the transaction’s success will depend on effective integration and market performance of the acquired online platform.

The information presented is derived solely from the company’s official disclosures and regulatory communications dated October 15, 2025.