Click the image for details P&G's growth in the Chinese market is sluggish, facing not only ineffective marketing but also competition from L'Oréal, Unilever, and local Chinese brands. The FMCG and beauty giant Procter & Gamble (NYSE: PG), with a market cap of over $230 billion (approximately 1.6 trillion RMB), may face a new round of split. Last Tuesday, U.S. hedge fund Trian Fund Management announced the purchase of a $3.5 billion (approximately 24 billion RMB) stake in P&G. This purchase is Trian's largest investment transaction to date. Citing informed market sources from The New York Times, Trian and its principal shareholder Nelson Peltz will likely use the rights from these shares to split P&G. The New York Times also reported various possible scenarios for splitting P&G. This is not the first time a hedge fund has purchased P&G shares. As early as 2012, hedge fund Pershing Square Capital Management invested in P&G and demanded the resignation of then-CEO Robert McDonald. A year later, Robert McDonald left, and in May 2014, Pershing Square Capital Management sold all its shares and cashed out. Founded in 2005, Trian focuses on consumer goods, industrial, and financial companies, managing over $10 billion in assets. The firm is known for large investments in major companies, pushing them to achieve strategic shifts, grow sales, and reduce expenses. Notably, P&G spokesperson Damon Jones welcomed such external investment. Meanwhile, analysts from investment bank Bernstein have sent letters to P&G CEO David Taylor expressing support for the split idea. Affected by the global economic downturn after the financial crisis, P&G has faced pressure to increase sales and cut costs for many years, with its profit growth rate declining from 2006 to 2012. According to data from Fashion Network, P&G experienced several consecutive quarters of decline in fiscal 2016. To boost its stock price, shareholders pressured the company to achieve growth in both sales and profits. P&G has actually been slimming down, continuously cutting businesses in recent years to refocus on core products such as Tide detergent and Gillette razors. Last year, it sold 41 brands, including Clairol and Covergirl, to Coty Group (NYSE: COTY) for $12.5 billion. P&G CEO David Taylor admitted that the company's operating environment in the second quarter remained very difficult. According to P&G's second-quarter report for fiscal 2017, net sales totaled $16.9 billion, flat compared to the same period last year, with no growth. Among beauty brands, only SK-II saw sales increase; all other beauty brands under the company recorded sales declines. Diluted net earnings per share were $2.88, up 157% from the same period last year, including a $1.95 per share gain from the sale of 41 beauty brands. Earlier analysis pointed out that P&G's slow product updates, cost traps, and severe talent attrition have led the once-mythical P&G in the Chinese market to inevitably embark on a path of decline. Some analysts say that in the digital age, P&G's original marketing methods have become ineffective, with nearly $10 billion in annual spending not generating more sales. P&G had previously announced its intention to become a "digital company," but with little success. In recent years, to save costs, P&G has cut $7 billion from its marketing and other expenses, and David Taylor has promised to further reduce spending by up to $1 billion. It is worth noting that the reduction in advertising spending has seriously impacted its market share growth. For the fiscal year ending June 30 last year, net sales fell 8% year-over-year to $65.3 billion. In the fourth quarter, net sales totaled $16.1 billion, down 3% from the same period last year, marking the fourth consecutive quarter of declining revenue. Currently, P&G has not responded to the rumors of a possible split. As of last Friday's close, its market cap was approximately $232.9 billion. -END-