8.56 billion, Beingmate Changes Ownership: The Era of State-Owned Assets for a Domestic Milk Powder Brand

On March 18, an official notice issued by Beingmate (rights protection) declared that the brand—once closely linked to the “No. 1 domestic milk powder listed company”—is about to say goodbye to the era of its founder.

The controlling shareholder, Zhejiang Xiaobei Damei Holding Co., Ltd. (hereinafter “Xiaobei Damei”), and Jinhua Zhenhe Enterprise Management Partnership (Limited Partnership) (hereinafter “Jinhua Zhenhe”) signed a “Reorganization Investment Agreement.” If the reorganization is successful, Beingmate’s actual controller will change from founder Xie Hong to the Jinhua Municipal SASAC.

This is not a voluntary capital marriage, but a passive handover forced by a debt crisis. When an entity of a listed company is still profitable and the brand still enjoys recognition, yet is forced to change hands due to a debt collapse at the shareholder level, the problem no longer stays at the capital level—it points to a deeper proposition: how did a consumer brand that once rose to the top of its industry end up here? After the state-owned assets take over, where will the brand go next?

Let’s roll the timeline back to 2011. Beingmate went public on the Shenzhen Stock Exchange and became the “No. 1 domestic milk powder listed company.” At the time, the aftermath of the melamine incident had not yet fully faded; trust in domestic brands had dropped to rock bottom. Still, Beingmate managed to stand firm in the high-end market by differentiating itself with the positioning of “international quality, Chinese formulas.” When the founder Xie Hong took the company public in 2011, he chose to step away from the torrent, leaving behind what seemed like a perfect start.

But what followed is almost a textbook example of a typical domestic consumer brand sliding from its peak. Starting in 2016, Beingmate’s performance fell off a cliff. Revenue dropped from 61.17 billion yuan in 2013 to 27.64 billion yuan in 2016, while net profit turned from a gain of 0.721 billion yuan to a loss of 0.781 billion yuan. In 2018, Xie Hong was forced to “return to the rescue,” trying to turn things around.

After returning, the reforms did have some effect. Financial reports show that from 2022 to 2024, Beingmate’s revenue rebounded from 2.509 billion yuan to 2.773 billion yuan, and net profit rose from a loss of 0.176 billion yuan to a profit of 0.103 billion yuan. In the first three quarters of 2025, the company achieved revenue of 2.033 billion yuan, and attributable net profit of 0.106 billion yuan, up 48.07% year over year.

However, behind this seemingly repaired set of results, the brand’s market standing has continued to slip. Nielsen data shows that Beingmate’s share in China’s infant formula market shrank from nearly 10% at its peak to under 3% in 2025. Feihe has remained number one with a market share of over 20%. Brands such as Yili, Junlebao, and Ausnut follow closely. Beingmate has already fallen into the second-tier camp.

The comparison between these data reveals a harsh reality: Beingmate is not without profitability—it has lost growth capability. In a market environment where industry concentration continues to increase and where top brands enjoy a “stronger and stronger” advantage, share losses often mean a brand becomes marginalized. Once it slips out of mainstream view, regaining consumers’ mindshare is far more difficult than simply repairing financial performance.

Beingmate’s brand decline stems from repeated wavering at the strategic level and continued “bleeding” at the channel system level. Looking back at Beingmate’s development history, the brand’s positioning has undergone multiple adjustments: from early “international quality” to the mid-stage “domestic high-end,” and then to recent attempts to transition toward “family nutrition.” Each strategic shift means the brand must re-accumulate assets, while consumer recognition continues to be diluted.

More fatally, the channel system has collapsed. Around 2016, in order to hit performance targets, Beingmate pushed large volumes of inventory onto distributors, leading to high channel stock levels, a breakdown of the pricing system, and many distributors losing money and exiting.

A milk powder brand’s lifeline is precisely distributor loyalty and its ability to manage terminal pricing. When both of these fail at the same time, the brand’s foundation has already been shaken.

Some experts have pointed out that Beingmate’s channel problems have not been fully repaired to this day. Distributors’ trust in Beingmate is still not high, and the brand’s voice power at the terminal is weakening.

This can be seen clearly in the input-output ratio of selling expenses. In the first three quarters of 2025, Beingmate’s selling expenses reached 0.719 billion yuan, accounting for 35.36% of revenue. But this investment did not translate into corresponding growth in market share.

After Xie Hong returned in 2018, he did indeed carry out some repair work, including clearing channel inventory, adjusting the product structure, and shrinking non-core businesses. But the speed of repair lagged far behind the speed of industry consolidation.

In the years when Xie Hong was busy “putting out fires,” Feihe completed its leap from a regional brand to a national leader. Yili and Junlebao continued expanding with sustained advantages in overall strength, and overseas brands also consolidated positions in first- and second-tier cities. What Beingmate missed was the critical window period when the industry’s overall landscape was being reshaped.

The Jinhua state-owned assets involved in this takeover paid a price of 0.856 billion yuan as reorganization investment funds, plus 30 million yuan to help resolve guarantee-related debts of the actual controller. Given that consumer brand valuations are generally adjusting downward at the moment, this price itself is not particularly high.

But for Beingmate’s brand, what does state-owned ownership really mean? It needs to be broken down. In the short term, the takeover addresses the biggest source of uncertainty— the debt crisis of the controlling shareholder.

Out of the 133 million shares of Beingmate held by Xiaobei Damei, as much as 98.85% have been pledged or frozen. Creditors include multiple financial institutions such as Bank of Communications, China Construction Bank, Agricultural Bank of China, Industrial and Commercial Bank of China, and others.

If this situation continues to ferment, it could trigger a chain reaction, affecting the listed company’s financing ability and supplier-chain credit. The state-owned takeover is essentially a credit endorsement for the brand—at least in the short term, it can help stabilize the basic business base.

But from the standpoint of long-term brand development, the challenges have not been solved. First, competition in the infant formula industry has moved from “channels first” to a two-wheel drive model of “brand + research.” Top brands invest several hundred million yuan every year into breast milk research and formula upgrades; R&D investment and brand building form a positive feedback loop.

In the first three quarters of 2025, Beingmate’s R&D expenses increased by 53.22% year over year, but the absolute scale is still limited. Whether the state-owned background can support sustained R&D investment remains unknown.

Second, the assignment of brand management rights after the state-owned takeover is key to determining where the brand will go. In the reorganization plan, Jinhua Zhenhe promised to “implement a modern enterprise management system and introduce advanced management and business philosophies.” However, between how consumer goods brands are managed and how decision-making mechanisms operate under a state-owned assets system, there is naturally a conflict in timing and rhythm.

The infant formula industry requires extremely fast responses to market changes. Product iteration, channel adjustments, and marketing strategy all require quick decisions. Whether the state-owned system can adapt to this pace is still in question in the market.

An insider revealed that after the reorganization succeeds, Jinhua state-owned assets may also keep Xie Hong as chairman for a period of time to maintain a smooth transition. The unspoken implication of this arrangement is: the state-owned side also clearly understands that the core capabilities for brand operations cannot be replaced in the short term, and the founder’s role remains temporarily indispensable.

From a more macro view of the industry, Beingmate’s change of ownership is not an isolated case. In recent years, multiple once-glorious domestic consumer brands have undergone changes in control: Huiyuan Juice went through bankruptcy reorganization, Taizi Milk had long faded from the market, and Yinlu has changed hands several times.

These brands share a common feature: they accumulated brand assets during periods when the industry was on an upswing. But during industry turning points, due to strategic missteps, internal governance problems, or issues with capital operations, they gradually lost competitiveness and ultimately completed a cycle in the form of a change in control. Beingmate is the latest case under this model.

However, unlike Huiyuan or Taizi Milk, Beingmate’s core business operations have not collapsed. Data showing attributable net profit of 0.106 billion yuan in 2025 and a 48.07% year-over-year increase indicates its core business still has a capacity to generate “blood.”

This means that what the state-owned assets take over is not a “shell,” but an enterprise that has been crushed by shareholder debt problems while still retaining its brand foundation. This leaves room for possible brand recovery going forward.

Industry insiders believe that Beingmate’s future direction may be to transition from basic nutrition to functional nutrition, while also developing the adult nutrition business. This judgment points to another trend in the infant formula industry: as the birth rate declines and the infant formula market enters stock competition, adult nutrition and nutrition for middle-aged and seniors become new growth points. If the state-owned assets can provide sustained support in R&D and channels, Beingmate still has a chance to turn things around.

Beingmate’s change of ownership is both a turning point for a brand and a footnote to an era. From 1992, when Xie Hong left his job to found Beingmate, to 2011, when it went public as the “No. 1 domestic milk powder listed company,” and now to the takeover by state-owned assets—this brand has followed a typical trajectory of a private consumer goods company in China: it rose during a market blank period, flourished during the industry expansion phase, fell into difficulties during the industry consolidation phase, and ultimately completed a cycle through a change in control.

For Jinhua state-owned assets, the 0.856 billion yuan price tag buys not only control of a listed company, but also a consumer brand asset with established brand awareness. The next question is: can state-owned assets help this brand regain its former glory, or will it only put a dignified period at the end?

The answer does not lie in the announcement—it lies in how the market treats the Beingmate brand in the coming years. Consumer choices will ultimately deliver the most objective verdict.

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