Summary of Key Points
Beinmei, a well-established domestic dairy company, is about to have a new owner. The Jinhua State-owned Assets Supervision and Administration Commission (SASAC) has acquired a 13.35% stake in the company through two of its subsidiaries, becoming the new controlling shareholder. This change comes after years of declining main business performance, management chaos, and the founder's inability to turn things around. The intervention of state-owned assets is aimed at stabilizing the company.
How Did the State-Owned Assets Take Over Beinmei?
The transition to state ownership wasn't sudden but was a gradual process:
1. The Controlling Shareholder Faces Problems: At the end of 2023, Beinmei's original controlling shareholder (later renamed "Xiaobei Dama Holdings") ran into financial difficulties, with 132 million yuan in assets frozen by the court. In July 2025, due to its inability to repay debts, the company applied for a "pre-restructuring" process to see if it could be saved.
2. Reorganizational Steps: In May 2024, the controlling shareholder changed its name from "Beinmei Group" to "Xiaobei Dama Holdings" and moved its registered office from Hangzhou to Jinhua to facilitate cooperation with the local SASAC.
3. State-Owned Assets Enter the Picture: After the pre-restructuring plan was approved in January 2026, "Jinhua Zhenhe," a subsidiary of the SASAC, was selected as the sole investor. It invested 856 million yuan to acquire 100% of the controlling shareholder's shares (equivalent to a 12.28% stake in Beinmei), plus an additional 30 million yuan to cover debts. Another SASAC subsidiary, "Jinhua Yuanheng," purchased an additional 1.07% of Beinmei's shares. Together, the state-owned entities hold 13.35% of the company, making them the largest shareholders.
Why Did Beinmei Need State-Owned Support?
Beinmei used to be the leader in the domestic dairy market but has now dropped to the third tier:
1. Market Share Loss: It once had a dominant market share but is now only at 1.7%, behind companies like Yili, Mengniu, and Feihe.
2. Challenging Industry Environment: The birth rate is declining, and the dairy market is not growing. Competitors are focusing on product innovation (formulas, milk sources) and distribution channels (online and offline), leaving Beinmei behind.
3. Declining Revenue and Profit: Beinmei's dairy revenue has stagnated from 2.3 billion yuan in 2023 to 2.45 billion yuan in 2025, with a gross profit margin dropping from 49% to 45%. Expensive marketing efforts (192 million yuan in 2024, an 81% increase) only had a temporary effect on revenue.
4. Eroding Channels: The number of distributors decreased by 186 in 2025, leaving 1,579 outlets, indicating a shrinking offline presence.
5. New Product Challenges: New products (children's powder, adult powder, diapers) are still in the development stage and not generating immediate profits.
Management Chaos as a Critical Factor
Beinmei's decline is closely linked to frequent changes in its management:
1. Founder's Withdrawal: Just three months after going public in 2011, founder Xie Hong resigned and handed over control to professional managers.
2. Successive Poor Managers: Successors struggled:
- Zhu Deyu took over as chairman but left within nine months.
- Huang Xiaoqiang managed other companies and neglected Beinmei, leading to inventory buildup.
- Wang Zhentai's aggressive sales strategy caused inventory issues, and the implementation of new regulations (slow product development) led to a loss of 780 million yuan in 2016.
- After bringing in foreign investor Hengtian, internal conflicts forced Xie Hong to return and hire Bao Xiufei as general manager, but they had different visions, leading to Bao's resignation in 2021.
- Even under Xie Hong's leadership, key executives (financial director, secretary of the board) left frequently.
3. Uncertain Strategy: The company's focus has shifted frequently between infant formula and diversification, without a clear long-term direction, resulting in the loss of its previous market advantages.
Can Beinmei Survive with State-Owned Support?
The state-owned takeover is a timely help, but there are challenges:
Positive Aspects:
- Financial Relief: The SASAC provided 856 million yuan to cover debts and improve liquidity.
- Resource Access: The state-owned entity can help Beinmei connect with government resources and expand market channels (e.g., entering public institutions and government procurement).
- Stable Management: With state ownership, management will be more stable, potentially leading to more consistent strategies.
Uncertainties:
- State-Owned Management Style: While state-owned companies may be more conservative, the dairy industry requires quick decision-making and innovation. Will this slow down Beinmei's progress?
- Main Business Transformation: Reclaiming market share will require significant efforts in product development and channel expansion. Can the SASAC help Beinmei find new growth opportunities?
In summary, Beinmei no longer has to struggle with internal conflicts, but its future success depends on how the state-owned assets manage the company. Founder Xie Hong can breathe a sigh of relief, as Beinmei enters a new era under state ownership.