Planning to cash out 260 million! Tao Li Bread's 91-year-old founder announces additional share reduction plan, with the family potentially cashing out over 3.7 billion in total

Image Source: Visual China

Blue Whale News, February 27th (Reporter Dai Ziting) The 91-year-old founder is planning to cash out another 200 million yuan, as the “Number One Bread Stock” family plans to reduce holdings again.

On February 26th, Taoli Bread (603866.SH) announced that the company’s controlling shareholder and actual controller, Wu Zhigang, along with his concerted action partner Xiao Shuyan, intends to reduce no more than 47.9916 million shares within three months after the disclosure date, representing up to 2.999% of the company’s total share capital. The reason for the reduction is “personal funding needs.” Based on the closing price on February 25th, this reduction could realize approximately 260 million yuan.

In fact, this is not Wu family’s first cash-out. Since the unlocking of restricted shares at the end of 2018, the controlling family of Taoli Bread has continued to reduce holdings.

Currently, Taoli Bread faces multiple difficulties: five consecutive declines in net profit, ongoing losses in southern markets, and industry transformation. At a critical moment when the company is investing heavily in R&D and expanding southward for self-rescue, the 91-year-old founder’s repeated “cash extraction” has attracted industry attention.

Family Cash-Out Over 3.7 Billion Yuan in Ten Years of Listing

Founded in 1997, Taoli Bread was formerly known as Shenyang Taoli Food Co., Ltd., established by 91-year-old Wu Zhigang. In December 2015, Taoli Bread listed on the Shanghai Stock Exchange, with an issue price of 13.76 yuan per share, raising 619 million yuan, becoming the “Number One Bread Stock” in A-shares. After listing, the company’s market value once soared to 42.6 billion yuan in 2020, maintaining its position as the industry leader in “short-life bread.”

According to the announcement, Wu Zhigang plans to reduce no more than 2.62% of shares through block trades and centralized bidding. His daughter-in-law Xiao Shuyan plans to “clear all” her holdings of 6.0174 million shares, accounting for 0.38% of total shares. Based on the February 25th closing price of 5.43 yuan per share, if both sell to the maximum extent, they could cash out about 260 million yuan.

The announcement disclosed that Wu Zhigang’s shares originated from pre-IPO holdings, while Xiao Shuyan’s shares came from pre-IPO and block trades. The company explained that the reason for the reduction was “personal funding needs.” According to 21 Finance, a Taoli Bread staff member responded that Wu Zhigang, now over 90 years old, has long since stepped back from actual management, and this reduction is for personal financial arrangements. Xiao Shuyan, although Wu Zhigang’s daughter-in-law, does not hold a management position in the company.

In fact, since early 2025, internal reduction actions within the Wu family have become more frequent.

On May 30th, Wu Zhigang transferred 2% of shares to his second son Wu Xuequn and third son Wu Xueliang via block trade. By November 7th, Wu Zhigang again transferred 2% of shares to his wife Sheng Yali. Meanwhile, his eldest son Wu Xuedong, who had ceased to be in concert with others, completely liquidated his 189 shares, fully exiting the shareholder ranks.

Taoli Bread has always been characterized by a typical family-controlled model. Wu Zhigang and his wife Sheng Yali are the controlling shareholders; his three sons—Wu Xuedong, Wu Xuequn, and Wu Xueliang—have participated in management, serving as directors, general managers, and chairmen.

According to the latest announcement, the core shareholding structure of Wu Zhigang’s family is: Wu Xuequn holds 24.99%, Wu Xueliang 15.71%, Sheng Yali 10.19%, and Wu Zhigang’s own shareholding has fallen to 5.47%. The entire Wu family holds approximately 56.36% of Taoli Bread’s shares, maintaining absolute influence over the company’s strategy and operations.

However, this is just a snapshot of Wu family’s reduction activities. Blue Whale News’ review shows that since Taoli Bread’s listing, Wu family’s reduction operations have occurred repeatedly. Excluding internal transfers that do not involve market reductions, the family and related concerted action persons have carried out at least 13 reductions, with a disclosed total cash-out of about 3.464 billion yuan. If the latest reduction plan is included, the total cash-out could exceed 3.7 billion yuan.

Main reduction subjects include Wu Zhigang, Wu Xuedong, Sheng Yali, mainly through block trades and centralized bidding, mostly concentrated between 2019 and 2021.

Performance Decline for Four and a Half Years, Downward Trend Continues

Contrasting with the continuous “cash extraction” by the controlling family, Taoli Bread’s fundamentals are deteriorating rapidly.

Latest financial reports show that in the first three quarters of 2025, the company achieved a total revenue of 4.049 billion yuan, down 12.88% year-on-year; net profit attributable to shareholders was 298 million yuan, a drop of 31.49%, marking the largest decline in recent years. In Q3 alone, revenue was 1.437 billion yuan, and net profit attributable to shareholders was 94 million yuan, down 11.64% and 35.05% respectively year-on-year.

This marks the fifth consecutive year of net profit decline. Data shows that from 2021 to 2024, net profits attributable to shareholders were 763 million yuan, 640 million yuan, 574 million yuan, and 522 million yuan, decreasing year after year. 2024 was the first year since listing that revenue experienced negative growth.

The company attributes the performance pressure mainly to shrinking revenue scale, increased depreciation of new capacity, rising fixed costs, along with higher advertising expenses and income tax costs.

From a business perspective, core categories such as bread and pastries have seen significant revenue declines. In the first half of 2025, revenue from these categories decreased by nearly 400 million yuan compared to the previous year.

Regionally, the southern market, once highly anticipated, has become a “disaster zone.” In the first half of 2025, three subsidiaries—Shanghai Taoli, Zhejiang Taoli, and Quanzhou Taoli—lost a total of 36.566 million yuan, while in 2024, nearly ten wholly owned subsidiaries in southern markets collectively lost over 100 million yuan.

Taoli Bread, which once dominated the northern market with a “central factory + wholesale” model, has faced serious challenges in the south. Food industry analyst Zhu Danpeng told Blue Whale News that South China’s baking industry is among the most advanced nationwide. Compared to brands like Garden and Mankoton, which had early layouts, Taoli Bread struggles with quality, innovation, and product iteration, making it difficult to keep pace with local sales rhythms, and its product positioning is hard to compete with these brands.

Beyond performance issues, Taoli Bread has also been frequently in the headlines for marketing and food safety problems.

In July 2025, the State Administration for Market Regulation reported that the “Ripe Sliced Bread” sold at Taoli Grain and Oil flagship stores did not meet national standards for total bacterial count. The product was produced by a wholly owned subsidiary, impacting brand reputation.

In September 2025, Taoli Bread’s “Taoli Egg Moon Cake” elevator advertisement caused controversy for a line saying, “Some say five nuts are not tasty; we believe that’s because you’re still young and haven’t tasted the poison of life.” The ad was criticized for being “paternalistic.” The company quickly removed the ad and responded with self-deprecating remarks to salvage its image, but the incident exposed shortcomings in the company’s brand communication and youth marketing.

In December of the same year, the “Scrubbing Cloth Cake” also sparked controversy. This novelty product, resembling a kitchen cleaning cloth, attracted curiosity but also raised concerns among parents about children accidentally eating it, and industry criticism about the company’s focus on marketing over R&D.

Financial data shows that in the first half of 2025, advertising and promotional expenses increased by over 40% year-on-year to 42.96 million yuan, while R&D investment continued to decline. R&D expenses in 2024 were 22.98 million yuan, down 31.84% year-on-year; in the first half of 2025, only 10.66 million yuan, a further 30.81% decrease, with R&D accounting for just 0.4%.

6.7 Billion Investment in R&D

Faced with declining performance and industry upheaval, this veteran company approaching its 30th anniversary is seeking change.

According to reports from Fast Moving Consumer Goods Network and other media, in October 2025, Taoli Bread held its 30th anniversary celebration in Shanghai, announcing the official launch of its Shanghai R&D center. The center was established with a capital increase of 260 million yuan from Shanghai company, used for high-end equipment procurement, laboratory construction, talent recruitment, and R&D projects. Simultaneously, Taoli Bread announced plans to increase capital by a total of 670 million yuan across three wholly owned subsidiaries: 260 million yuan for Shanghai Taoli, 210 million yuan for Quanzhou Taoli, and 200 million yuan for Zhejiang Taoli, to promote business development and expand operations.

General Manager Wu Xuequn stated that Taoli Bread is striving to transform from a “closed production and sales company” into a “provider of industry-appropriate product and supply chain solutions.” The Shanghai R&D center will focus on health-oriented and scenario-based innovation, collaborating with the Shenyang and Tianjin centers—leveraging the Yangtze River Delta for innovation, and focusing on flavor optimization and cost control in the north.

The 260 million yuan investment in the Shanghai center is considered a “huge sum” for Taoli Bread. Financial reports show that from 2015 to mid-2025, the company’s total R&D investment over 11.5 years was only 156 million yuan.

It appears that Taoli Bread is finally “spending heavily” to address its long-standing innovation issues. However, whether this substantial investment can truly revitalize its short-life bread market remains to be seen.

Industry insiders told Blue Whale News that in today’s fierce baking market, health-oriented products such as low-sugar, low-fat, and high-fiber are gradually becoming mainstream. As a traditional brand, Taoli Bread not only needs to adapt quickly to changing consumer habits but also requires systematic breakthroughs in talent structure, product innovation, and channel transformation.

For this industry leader over its “second decade,” continuous “cash extraction” by the founding family and the ongoing decline in listed company performance have become one of the contradictions undermining market confidence. Perhaps the 260 million yuan R&D center is just the beginning; whether it can truly develop products that cater to southern tastes and health trends remains to be tested by the market.