CEO-Insights, Asia Pacific Institute for Strategy，Executive Study Group, 研究報告- 亞太策略研究所，調研數碼中心，高級行政人員學習小組

CEO Insight Series – Eddy Fung

From Quarantine to Turnaround: How Eddy Fung Re-shaped Bauhinia Advanced Materials Group for a New Era

[Hong Kong, Nov 13, 2025] - When Eddy Fung moved to Shanghai in January 2021, he was stepping into an uncertain future. Over the next months and years, he would endure more than 100 days of quarantine when traveling between Shanghai and Hong Kong, live through lockdowns totaling some 70 days, and embed himself within new networks of business and government. Against this backdrop, he orchestrated a transformation at Bauhinia Advanced Materials Group which is one of the subsidiaries under Yip’s Chemical Holdings (Stock Code: 408) that took the business from loss to profit, restructured its core operations, and laid the foundations for asymmetric growth.

Eddy, now 62 years old, continues to contribute through project-based advisory roles. But the period of his active leadership—in which he championed radical change across channels, branding, and operations—offers lessons for any CEO facing legacy pressures, industry disruption, and the tension of balancing short-term returns with long-term relevance.

Anchoring in Crisis: the human side of transition

Eddy’s decision to relocate to Shanghai amid pandemic disruption was not merely symbolic. In his mind, proximity to China’s commercial core was essential to lead—and also to endure—the shifting terrain ahead. During lockdowns, he deepened relationships with government and industry players, anchoring Bauhinia in local resilience. This was no passive survival strategy, but a deliberate move to plug into influence, regulatory awareness and supply-chain agility—intangibles much more durable than cost cuts alone.

That said, those days of confinement catalyzed personal reflection. The isolation, the friction of remote oversight, and the pressure to react instantaneously forced him to re-evaluate legacy habits. In interviews, he often emphasizes that major transformation cannot come from remote edicts alone; empathy, listening and visible presence are essential when people fear volatility.

By the time the lockdowns eased, Eddy had laid the psychological and relational groundwork to galvanize change. He would not start from zero; he had earned broad legitimacy—an asset many CEOs forfeit when they overreach too quickly.

Turning loss into value: sequenced reform and cost discipline

During the 3-year pandemic period, Bauhinia was under severe margin pressure. He initiated a four-pronged agenda: champion technological and product innovation, redesign brand positioning, overhaul channel management, and rewire internal processes. But the reforms were not simultaneous; structure and priorities followed a deliberate sequence.

First is to champion the technological and product innovation. Eddy consistently positioned himself at the forefront of the company's development, driving a series of innovative reform initiatives. He believed that the core competitiveness of an enterprise lies in continuously advancing new quality productive forces. Through technological and product innovation, the company persistently provided target customers with high-quality, innovative, high-performance products and services. He placed great emphasis on building the company's R&D capabilities. He encouraged R&D personnel to actively pursue patent applications and the commercialization of achievements. Under his impetus, the company's total number of granted patents increased by 36% between 2022 and 2023. These patents were further transformed into more green, low-carbon, healthy, and safe products, demonstrating the company's profound industry insight and sense of social responsibility.

Next comes the brand repositioning. By the late of 2019, under Eddy’s leadership, Bauhinia conducted an in-depth analysis of coating industry trends, competitor analysis, consumer core needs, and its own resources and core advantages across the country. Based on the insights from the market study, it promulgated the brand positioning of "High Performance Enables Better Well-being" and followed by a re-formulation of systematic reform plan. The plan included brand image upgrade, channel entrenchment, retail store redesign, and sales structure transformation.

He emphasized that Bauhinia had to shift from a marketing philosophy focused on low profits and price competition towards providing high-quality, reputable, and high-profit product services. By leveraging technological innovation and differentiated market strategies, the company aimed to enhance brand competitiveness. The strategic adjustment not only allowed Bauhinia to stand out from the fierce market competition but also laid a solid foundation for its future sustainable development.

In 2023, Bauhinia became the official supporting brand of the Chinese Women's National Football Team, integrating sports marketing into its brand promotion. Simultaneously, by sponsoring multiple high-speed rail branded trains, it further enhanced the brand image of Bauhinia as "Hong Kong Brand, a source of pride for Chinese people."

Third is to drive the channel entrenchment. Bauhinia had grown accustomed to commoditized relationships with distributors and downstream clients. Through the strenuous efforts of the sales management team, Bauhinia’s distribution network was widened by the introduction of significant and influential VIP customers whose working relationship with Bauhinia was further deepened through customized on-site marketing services and logistics support. During the past few years, the total number of retail shops was enhanced by a double digit growth.

Finally, Eddy placed significant importance on internal reform and stable operations. Amid an environment of market contraction and intense industry competition, he actively promoted adjustments to the management structure, initiated the reform of the logistics and procurement tendering, and vigorously implemented various cost-reduction and efficiency-enhancing measures. These efforts benefited from his long-term strategic development goals and forward-thinking management philosophy, enabling Bauhinia to navigate challenges and continually advance. Under his leadership, the company overcame numerous difficulties, rapidly restored its vitality and returning to profitability.

He also showcased his leadership by taking initiative to personally station himself at the Shanghai factory and directing the group to safely navigate the entire pandemic period. Even during community lockdowns, he remained concerned about the company's operations and the safety of employees, remotely directing and scheduling normal production operations, encouraging employees to face difficulties bravely. At critical moments, he found ways to arrange for the delivery of daily necessities and epidemic prevention materials to all employees. Under his leadership, the company and its employees ultimately overcame the difficulties and rapidly restored efficient production after the pandemic.

Through these orchestrated moves, Eddy’s achievements earned significant recognition from the Municipal Government in Shanghai. In March, 2025, Eddy attained the honor of the 7th Shanghai Industry and Commerce Leader, which was tri-sponsored and organized by the Shanghai Federation of Economic Organizations, the Shanghai Federation of Commerce and the Shanghai Enterprise Confederation.

At the heart, Eddy’s leadership demonstrates that transformation in a mature industrial enterprise requires both rigor and restraint. You cannot simply slash your way to agility; you must reframe value.

Dual engines: industrial coatings and new energy materials

Bauhinia’s core business has long been industrial and architectural coatings—especially in the arena of toy finishes, furniture coatings, interior/exterior wall coatings and protective layers. Its client roster includes giants such as POPMART, Hasbro, McDonald and Mattel. But in an era of tightening safety norms, thin margins, and intensifying competition, a pure coatings play is no longer enough.

Bauhinia has recently steered into adjacent domains, notably new energy vehicle materials. Electrification introduces new failure modes—battery electrolyte leakage, explosion risk, insulation challenges. Bauhinia has begun the development of UV light-curing insulating coatings in replacement of the traditional technology. The logic is clear: expand from decorative and protective coatings into functional, safety-critical layers that command higher margins and deeper customer lock-in.

Still, tension remains. In the base coatings business, competition is fierce. Many players compete purely on volume, driving price erosion. But in markets such as toy coatings, quality and safety non-negotiables prevail: any lapse would catastrophically damage reputation. So Bauhinia cannot sacrifice standards for growth. Instead, both innovation and premium positioning must be the way to sort out winners and losers.

Talent: the silent bottleneck of legacy industry

Perhaps Eddy’s greatest strategic anxiety is talent. In traditional chemical and coatings industries, the brand appeal among young graduates is weak. As emerging energy, technology, and foreign firms compete fiercely for top talent, Bauhinia finds itself squeezed.

In his conversations with leading universities, he hears the same refrain: students prefer new energy, biotech, or big MNCs. As a solution, Eddy deployed HR professionals with deep talent strategy experience—to spearhead proactive talent pipelines, internal brand building, and student engagement programs.

The model is twofold. One, build “talent pool” internally by identifying and engaging HIPOs. Two, design an employer value proposition that emphasizes meaningful industrial innovation (e.g. coatings for EV safety, sustainability) rather than legacy pollution. In other words, reframe the narrative for young engineers: you can still do climate impact and deep technology in a coatings firm.

Eddy’s willingness to elevate HR from cost center to strategic lever illustrates a broader truth: the hardest constraints to growth in legacy industries are not machines but minds.

From cost cutting to value elevation

The temptation for many CEOs in a mature, pressured manufacturing business is to default to cost cutting: headcount, travel budgets, procurement. Eddy understood that such moves are reactive and finite. Instead, he anchored Bauhinia’s strategy in value creation—specifically elevating the “willingness to pay” (WTP) among customers.

To do that, he pushed the company to think beyond materials and consider the full package: maintenance, engineering consultation, after-sales support, safety assurances, and certification services. If a customer perceives higher value in reliability, safety, uptime, or regulatory compliance, they will pay a premium—and Bauhinia can capture margin without racing downward on price.

The ambition is to make innovation the core lever of margin expansion: new coatings, niche formulations, premium positioning, and deep embeddedness in client processes. In the parlance of strategy, the goal is “innovate to uplift margin,” not simply “innovate to diversify.”

A case in brand repositioning: artistic coatings meets home health

One of Eddy’s standout initiatives has been the repositioning of Bauhinia’s “artistic coatings” line. Where once the category leaned toward visual spectacle and flamboyant effect, the new version emphasizes natural, low-chemical, home-friendly aspects—especially for households with children.

The theme draws on marine extraction metaphors, evoking sea minerals, low irritant profiles, eco sensibilities. The visual language shifts from shock to subtlety. The messaging thread is safety, home wellness, and everyday beauty. This relaunch was not peripheral; it tied into the overall brand umbrella of “high performance expression, enabling healthy living”.

By deliberately repositioning around wellness and care, Bauhinia seeks to tether itself emotionally (not just functionally) to consumer households. The payoff: expanded acceptance, improved WTP, and reduced sensitivity to commodity pricing.

What every CEO should take away

Eddy Fung’s journey at Bauhinia embodied a disciplined blend of humility and ambition, structure and flexibility. From the crucible of lockdown to the boardroom of chemical innovation, he navigated the tension between legacy and reinvention.

His leadership teaches us:

First, proximity matters. Being present during disruption builds relational legitimacy.
Second, transformation must be sequenced: don’t try to revamp all axes simultaneously.
Third, value must expand outward—not just cost cut inward.
Fourth, human capital is not optional, especially in so-called legacy sectors.
And finally, every business—even coatings and chemicals—must ask: what emotional or aspirational value can we build so that customers will pay more?

To be sure, Bauhinia still faces headwinds: regulatory shifts, raw material inflation, challenges in the marco-environment. And Eddy, during his past co-presidency in Bauhinia, had to ensure that governance, execution and talent infusion would sustain beyond his active tenure. His articulated playbook—reshaping channels, repositioning brand, investing in adjacent growth, and recasting talent—offers a rich blueprint for CEOs in mature industries seeking to reinvent themselves.

In an era where even the most commoditized sectors demand agility, innovation and emotional anchoring, Eddy Fung’s insights shine as a case of how a legacy enterprise can re-earn relevance without losing its foundations.

For more information, please visit www.apifs.org.

About APIFS

The Asia Pacific Institute for Strategy (APIFS) is a leading management and strategy advisory institute based in Hong Kong, dedicated to helping organizations achieve growth through leadership development, strategic advisory, and applied research.

Media Contact:

Asia Pacific Institute for Strategy

Email: cs@apifs.net

Tel: (852) 3970 1828

Website: www.apifs.org

Related Articles:

APIFS Reflections from Georgetown: Financial Markets Quality Conference 2025

APIFS Strengthens Collaboration with Guangzhou Nansha to Drive GBA Business Ecosystem Growth

APIFS Hosts CEO Strategy Roundtable on "Turning Points in the Age of AI" Featuring Golden Resources

Dr. Mark Lee Shares Cutting-Edge Sales Growth Strategy at Hong Kong Institute of Directors Event

Asia Pacific Institute for Strategy (APIFS) Concludes Insightful Panel at ACCA Hong Kong Annual Conf

Asia Pacific Institute for Strategy Celebrates 3rd Anniversary of Singapore Director Roundtable