A substantial shareholder of Haotaitai, the listed maker long known as China’s leading clothes‑rack brand, has filed a plan to sell roughly 12.07 million shares between April and July 2026 — a disposal that, at the company’s March 17 close of ¥16.57, would fetch about ¥200 million. The filing shows the sale will be split between block trades (up to 8.048 million shares, c.2% of total equity) and centralized bidding (up to 4.024 million shares, c.1%). The move follows an earlier sell‑down in late 2025, leaving the shareholder’s cumulative take at some ¥274 million if the new plan is completed.
The wave of selling comes amid signs that Haotaitai’s growth momentum has weakened. The company’s 2025 first‑three‑quarter results show revenue of ¥1.059 billion, a slight year‑on‑year decline, while net profit attributable to shareholders plunged about 24.8% to ¥143 million. Although the third quarter posted a clear sequential recovery — revenue rose 7.3% and net profit by roughly 21.7% — the broader trend over the past two years is one of shrinking investment in product development: R&D spending fell from about ¥53.1 million in 2023 to ¥49.0 million in 2024 and to ¥31.8 million in the first three quarters of 2025.
That reduction in R&D spending is notable because Haotaitai’s business has increasingly depended on smart‑home features and integration. The company’s catalogue ranges from motorised drying racks and smart towel rails to smart curtains, lighting and gateways; maintaining technological edge is central to defending margins and sustaining growth. The recent R&D retrenchment, combined with high marketing and selling costs that have already swollen to the hundreds of millions of yuan annually, raises questions about the sustainability of the company’s product upgrade strategy.
Operational pressures are compounded by reputational headwinds. Consumer complaints collected on popular grievance platforms have flagged frequent product failures and unsatisfactory after‑sales service, and Haotaitai was singled out in 2024 for “frequent clothes‑rack malfunctions and passive after‑sales handling.” In consumer‑facing categories such as home appliances, such public criticism can translate quickly into lost retail momentum and higher warranty costs.
The pattern of insider selling — not only by the major shareholder but also by senior executives who reduced holdings earlier this year — carries two immediate market implications. First, it weakens investor confidence by suggesting that those closest to the company are monetising rather than backing management’s recovery narrative. Second, the planned block trades could exert downward pressure on the share price if buyers do not match the sellers’ scale, especially given the relatively concentrated nature of the holdings to be divested.
For Haotaitai the strategic challenge is clear: to convert a decent quarter‑on‑quarter rebound into durable growth, the company will need to reverse recent cuts to R&D, shore up after‑sales operations and demonstrate successful product upgrades that justify higher price points or capture share in adjacent smart‑home segments. Failing that, the firm risks becoming an acquisition target for larger appliance groups that can afford sustained R&D and superior channel reach, or continuing to suffer margin erosion in a commoditising market.
Investors and competitors will watch three things closely over the coming months: whether the planned sales are executed in full, any follow‑on selling by other insiders or cornerstone holders, and management’s concrete plans for investing in product quality and software‑enabled features. How Haotaitai responds will determine whether the company can regain its footing as a leader in smart drying and household electric appliances, or whether it simply becomes another casualty of intensifying competition and shifting consumer expectations in China’s smart‑home market.