Softto: China's first listed beauty stock — blind diversification drove it to delist

Softto was founded in 1988 by Liang Guojian, who built functional cosmetics — slimming soap, anti-hair-loss shampoo, papaya whitening face wash — that addressed specific consumer anxieties. The brand grew rapidly through celebrity endorsements (Jet Li, Louis Koo, Cecilia Cheung, Zhang Ziyi) and became a household name. In 2001 Softto completed a backdoor listing on the Shenzhen Stock Exchange, earning the title 'China's first daily chemical stock.' By 2006 it reached peak revenue of ¥1.26 billion and a market capitalization of ¥2.8 billion.

The decline began when Liang Guojian redirected the company's cash and energy into unrelated industries — real estate, pharmaceuticals, and other ventures far from Softto's core competence in cosmetics. The diversification consumed capital and management attention while the beauty business stagnated. Cumulative losses reached approximately ¥5 billion. By 2010 the company posted its first annual loss, and in 2012, after two consecutive loss years, the Shenzhen Stock Exchange designated the stock *ST索芙, its strongest warning before delisting.

To preserve the listing shell, Softto sold itself in 2015 to Teamax Technology, a smart-city company, for ¥4.1 billion, renaming to 天夏智慧 (Teamax Smart). The beauty business was spun off to Liang Guojian's holding company. The shell survived, but Teamax Smart itself later collapsed — its stock fell below ¥1 for 20 consecutive trading days and was delisted in February 2021, a 97.5% decline from its peak. His son Liang Yuhao revived the Softto brand and filed for a Nasdaq IPO in 2025 seeking $15 million, but it remained unprofitable with thinning revenue and a marginal market position.