Summary of Key Points
Recently, the AI sector has seen a surge in popularity. Food and beverage companies, facing a plateau in growth from their traditional main businesses, have flocked to expand into the fields of AI and semiconductors. There are three main approaches to this expansion:
1. Small-scale investments for observation (e.g., Tangchen Bei Jian);
2. Large-scale acquisitions to enter the sector (e.g., Andeli, Guotou Zhonglu);
3. Building their own industrial chains for in-depth development (e.g., Jinzi Ham, Lianhua Holdings).
Although most of these projects have not yet generated substantial profits, driven by the hype around AI and the potential for a second growth curve, the stock prices of related companies have risen sharply in the short term (with some increases exceeding 40%). However, this cross-sectoral expansion also comes with various risks, including a lack of technical expertise, financial pressure, and the potential marginalization of their core businesses.
Three Approaches to Cross-Sectoral Expansion: Each with Its Own Risks
The ways food and beverage companies are entering the AI sector reflect their risk tolerance:
- Small-scale investments: These companies invest a small amount to test the waters. For example, Tangchen Bei Jian spent 50 million yuan to acquire 0.97% of a semiconductor company, which serves as a low-risk strategic opportunity to gain an understanding of cutting-edge AI technology without investing too much capital.
- Large-scale acquisitions: Companies like Andeli plan to invest 600-800 million yuan in semiconductor material companies, while Guotou Zhonglu is spending 6 billion yuan on purchasing design institutes and building semiconductor factories and computing power centers. This approach allows for a quick entry into the new field but comes with significant investment and higher risks.
- Building their own industrial chains: Companies such as Jinzi Ham and Lianhua Holdings invest in chip companies through subsidiaries, expanding from computing power leasing to semiconductor materials and large model development, aiming to sustain long-term benefits in the AI sector. This requires continuous investment and technical accumulation.
The Pressure of Traditional Business Growth Limits
These companies are not just following trends; they are forced to expand due to the limitations of their traditional businesses:
- Lianhua Holdings: Their main business, monosodium glutamate production, is no longer profitable. After restructuring in 2019, computing power revenue accounted for only 3.53% of their total income in 2025, marking a first step towards transformation.
- Andeli: As a leading global producer of concentrated fruit juices, the industry has reached maturity, resulting in stagnant growth. Their revenue has been fluctuating in the past three years, and their gross margin has dropped from 33% to 24%, necessitating the search for new growth opportunities.
- Jinzi Ham: With an overcapacity in cured meat production and a slowing industry demand, they have decided to transition to AI to diversify their business.
Short-Term Stock Price Surges: Hype Drives Market Activity
Despite the lack of actual profits from these projects, the market is focused on the potential for growth. Since June this year, the stock prices of Jinzi Ham, Lianhua Holdings, and Andeli have all increased by more than 40%. The reason is simple: AI is currently a highly popular sector, and investors believe these companies can find new sources of growth through cross-sectoral expansion.
Cross-Sectoral Expansion Risks
While the AI sector is promising, food and beverage companies face several challenges:
- Lack of technical expertise: Companies like Andeli, which have been in the juice business for 30 years and have no experience with semiconductors, may struggle to generate profits from their acquisitions. They also need to continue investing as the acquired companies are still developing their capabilities.
- Potential marginalization of core businesses: Companies with state-owned backgrounds, such as Guotou Zhonglu, may prioritize their semiconductor initiatives at the expense of their traditional businesses.
- Past failures in cross-sectoral expansion: Jinzi Ham has acknowledged a lack of AI experience and has failed in previous attempts to expand into related fields. Their recent investment in a chip company, which has not yet turned profitable, could lead to future losses if the value of the asset declines.
- Financial pressure: Some companies, like Lianhua Holdings, are facing financial challenges, with their computing power business incurring losses last year and some large contracts being terminated early, resulting in suboptimal outcomes.
In summary, while food and beverage companies’ expansion into AI appears promising, they must overcome technical, financial, and experiential barriers to truly benefit. Short-term stock price gains are driven by market hype, but long-term success depends on the actual implementation and profitability of these projects.
Tangchen Bei Jian: The Conservative Approach
Tangchen Bei Jian’s 50-million yuan investment serves as a low-risk strategy to gain an understanding of AI technology without seeking immediate returns. This approach minimizes risks but also limits potential profits, reflecting a more cautious approach to keeping up with industry trends.
(The entire analysis is presented in plain language, covering the core logic of the news: the reasons for cross-sectoral expansion, the methods used, short-term effects, and long-term risks, making it accessible to non-experts.)