Lianhua Flavoring Debunks Bankruptcy Rumors, Proves to be Thriving Despite Past Financial Struggles
Recently, a flurry of rumors has been circulating on social media platforms, claiming that Lianhua Flavoring, a renowned Chinese condiment manufacturer, is on the verge of bankruptcy and has been reduced to owning only one office building. The rumors also alleged that the son of the company's owner had gone live on social media, tearfully announcing the company's demise, but only to an audience of one person. However, on March 26, a spokesperson for Lianhua Holding Co., Ltd. categorically denied these claims, stating that the company is, in fact, performing well and that the rumors are mere fabrications designed to attract attention.
26 March 2025
Lianhua Flavoring's predecessor, Zhoukou Regional Flavor Factory, was established and listed on the stock market in 1998. The company underwent a name change in 2016 to Lianhua Health Industry Group Co., Ltd. and again in 2024 to its current name, Lianhua Holding Co., Ltd. Despite facing bankruptcy risks in the past, the company has witnessed a resurgence in recent years, thanks in part to the growth of short videos and live streaming. The company's financial struggles in the past were significant, with its debt reaching 18.54 billion yuan in 2019, and assets insufficient to cover all liabilities, placing the company at risk of being declared bankrupt.
An employee revealed in an interview that all production areas had basically ceased operation, with most of the land sold off, leaving only a small portion of the staff working in the office building at Lianhua Avenue 18. However, the tide began to turn in June 2023, when a popular science blogger released a video titled "A rumor that made a national enterprise thoroughly despondent," explaining that monosodium glutamate (MSG) is not carcinogenic and is, in fact, an ingredient in many seasoning products, including chicken and oyster sauce. This video sparked widespread attention among netizens, and three months later, the "national product craze" initiated by another brand, Beefeng, swept Lianhua Flavoring along, boosting its sales.
As per data from Tianyancha, Lianhua Holding Co., Ltd. achieved a net profit of 131 million yuan in 2023, representing a year-over-year growth of 178%. In 2024, a company employee expressed in an interview with Henan Minsheng Channel that, in over 20 years, the company had never experienced a period of such prosperity. The recent rumors about Lianhua Flavoring's financial woes have been unequivocally debunked by the company's spokesperson, affirming that the company is thriving and that such claims are nothing more than sensationalist rumors.
Many netizens have come out in support of the company, with some sharing their own experiences of visiting the company's factory and witnessing its large scale and prosperous operations. Others have expressed their admiration for the company's products, which they believe are of high quality and safe to consume. The company's commitment to transparency and accountability has also been praised, with many commending its swift response to the rumors and its efforts to present a truthful picture of its current state.
The company's rise from the ashes can be attributed, in part, to a series of science-based videos that debunked myths surrounding the safety of monosodium glutamate, a key ingredient in the company's products. These videos, which highlighted the fact that many condiments, including chicken and oyster sauce, contain MSG, helped to alleviate consumer concerns and sparked a renewed interest in Lianhua Flavoring's offerings. With its finances back on track and its reputation restored, Lianhua Flavoring is now poised for continued growth and success, making any notions that it is struggling to stay afloat utterly baseless.
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