A Corporate Marriage Ends in Boardroom Warfare
The boardroom of Coco Healthcare (301009.SZ), China’s self-proclaimed “first adult diaper listed company,” has become the latest battleground for divorced former power couple Jin Liwei and Bao Jia. What began as a private marital dissolution has escalated into a very public corporate governance crisis, complete with regulatory sanctions, opposing shareholder votes, and questions about the company’s future direction.
Summary of Key Developments
– Former director Bao Jia has cast multiple opposing votes against proposals from ex-husband Jin Liwei
– The China Securities Regulatory Commission’s Zhejiang branch issued warning letters for failure to properly disclose related-party transactions
– Jin Liwei received regulatory sanctions for disclosure violations involving transactions with Guangxi Hanggang Materials Technology
– The company has experienced significant executive turnover, with four different board secretaries since 2021
– Stock price dropped nearly 5% following public disclosure of the internal conflicts
The Boardroom Battle Erupts
Opposition Votes and Governance Challenges
On August 21, 2025, Coco Healthcare’s board meeting became ground zero for the escalating conflict between the former spouses. Director Bao Jia voted against three of the four proposals on the agenda, including the appointment of Wang Xiangting as vice president and board secretary. Bao publicly questioned Wang’s qualifications, stating he “lacks professional knowledge and experience, has questionable professional ethics, and poses regulatory risk.”
The independent director Jing Naiquan also expressed reservations by abstaining from the vote, noting the nominee needed to “work more carefully and improve professionalism.” This very public disagreement between major shareholders and directors represents a significant breakdown in corporate governance at the adult diaper manufacturer.
Regulatory Sanctions Compound Problems
Just days after the contentious board meeting, Coco Healthcare received formal warning letters from the Zhejiang branch of the China Securities Regulatory Commission. The regulatory action stemmed from the company’s failure to properly disclose related-party transactions with Guangxi Hanggang Materials Technology totaling 21.12 million yuan, which represented 1.54% of the company’s net assets.
According to investigation findings, the company didn’t review and disclose these transactions until April 24, at least a week later than required by regulations. Both Jin Liwei (then serving as chairman, general manager, and board secretary) and financial director Li Chaonan were held personally responsible and subjected to regulatory interviews.
The Divorce That Split an Empire
From Power Couple to Adversaries
Jin Liwei and Bao Jia were once the golden couple of China’s hygiene products industry. Jin founded the company’s predecessor, Hangzhou Qiaozi Paper Industry Co., Ltd., in 2001 with his sister Jin Liqin. Bao Jia joined in 2004 as a recent Zhejiang University graduate with a degree in economic and trade English.
The two Zhejiang natives built both a personal and professional life together, marrying and eventually leading Coco Healthcare to its 2021 IPO. They served as co-actual controllers of the company until their divorce in February 2024, which ended not just their marriage but their business partnership as well.
The Complex Division of Assets
The divorce settlement involved a meticulous division of the company’s shares. Before the split, Jin directly held 59.26% of Coco Healthcare, while Bao held indirect stakes through several investment vehicles. In the settlement, they essentially split the direct shareholding down the middle, with Jin receiving 30.13% and Bao receiving 29.13%.
Interestingly, Bao made significant concessions regarding voting rights, voluntarily and irreversibly relinquishing 4% of her voting power. This concession left Jin with 34.25% of voting rights compared to Bao’s 25.13%, effectively making Jin the sole actual controller of the company while Bao remained the second-largest shareholder.
Yang Zhaoquan, partner at WeiNuo Law Firm, notes that in protocol divorces, “the share and type of property division can be determined through negotiation between the two parties. Allowing the party with advantageous shareholding to distribute full shares while the other party obtains other property is conducive to the stability of the listed company’s control and economic management.”
Performance Decline Fuels Conflict
The Struggle Behind Declining Profits</h3
The internal conflict at Coco Healthcare has been exacerbated by concerning financial performance. Despite operating in the growing adult incontinence products market—which benefits from China's aging population and increasing health awareness—the company has struggled since its 2021 listing.
Prior to going public, Coco Healthcare demonstrated consistent revenue growth, reaching 1.635 billion yuan in 2020. However, this figure was significantly inflated by mask sales during the pandemic, which accounted for 175 million yuan in sales and 122 million yuan in gross profit that year.
Once these pandemic-related sales disappeared, the company's revenue dropped precipitously by 27.44% to 1.186 billion yuan in 2021. Profit performance was even more concerning, with net income plummeting 82.88% to 39 million yuan in 2021, followed by a 56 million yuan net loss in 2022.
Management Turmoil and Operational Challenges</h3
The period of declining performance has been accompanied by significant executive instability. Since 2021, multiple directors and senior managers have resigned from their positions. The board secretary position has been particularly unstable, with four different individuals holding the role in as many years, none lasting more than twelve months.
While the company's first-half 2025 financial report showed some improvement with revenue of 549 million yuan (up 5.4% year-over-year) and net profit of 28.28 million yuan (up 21.8%), profitability remains far below pre-IPO levels. The company has cited numerous challenges including decreased original equipment manufacturing business, rising raw material costs and shipping expenses, and significant investment in its own brand.
Governance Implications and Shareholder Impact
The Ripple Effects of Internal Conflict</h3
The very public dispute between the company's two largest shareholders has raised serious questions about Coco Healthcare's corporate governance practices. The regulatory sanctions for disclosure violations suggest deeper issues in compliance and oversight that extend beyond the personal conflict between Jin and Bao.
Investors have expressed concern about the situation, with one noting that "in the face of huge interests, even the relationship between husband and wife is unreliable, even if it is Coco Healthcare." The company's stock price dropped 4.79% to 15.09 yuan per share following disclosure of the internal conflicts, reflecting market nervousness about the governance situation.
Broader Implications for Family-Controlled ListCos
The situation at Coco Healthcare highlights the particular vulnerabilities of companies that transition from family-controlled businesses to publicly-listed entities. When personal relationships between controlling shareholders break down, the fallout can directly impact all shareholders through poor decision-making, governance failures, and strategic inconsistency.
This case serves as a cautionary tale for other family-controlled companies considering public listings, emphasizing the importance of establishing robust governance structures that can withstand changes in personal relationships between major shareholders.
Looking Forward: Resolution or Escalation?
The ongoing conflict at Coco Healthcare represents more than just a personal dispute between ex-spouses—it strikes at the heart of corporate governance quality and shareholder protection in China’s capital markets. How the company navigates this challenging period will test both its leadership and its institutional resilience.
The regulatory intervention from the Zhejiang CSRC represents an important external check on the company’s governance practices, but ultimately, sustainable resolution must come from within. Shareholders will be watching closely to see whether Jin Liwei and Bao Jia can find a way to reconcile their differences for the benefit of the company, or whether their personal conflict will continue to damage corporate value.
For investors considering Chinese listed companies, particularly those with significant family ownership, the Coco Healthcare situation underscores the importance of thorough governance due diligence. Sometimes, the strongest corporate structures can prove surprisingly fragile when personal relationships between key stakeholders break down.
As this situation continues to develop, market participants should monitor regulatory filings, shareholder voting patterns, and any changes to the company’s board composition or leadership structure. The resolution—or escalation—of this conflict will have meaningful implications not just for Coco Healthcare, but for how similar situations might be handled elsewhere in China’s corporate landscape.