Asking AI · How does Yageo balance investment and core business development?

She has been preparing for this day for at least 15 years.

Text | Reporter Hu Nannan from China Entrepreneur

Editor | Mina

Image source | Visual China

“The younger generation of the Yangtze River pushes the older one forward. This time, the board reshuffle will be led by a new generation responsible for Yageo’s management.” At the end of April, 75-year-old Yageo founder and Chairman Li Rucheng wrote this in the shareholder letter of the 2025 annual report.

Along with the release of the annual report, Yageo also issued a series of board resolution announcements. With the board reshuffle election, current Vice Chairman and President, Li Rucheng’s only daughter Li Hanqiong, was nominated as a candidate for non-independent director of the new board, while the current Chairman Li Rucheng did not appear on the new candidate list.

This is seen as a signal that Yageo’s second generation, Li Hanqiong, is about to officially take over. Regarding Li Hanqiong’s succession as chairman, China Entrepreneur contacted Yageo, and a Yageo representative stated, “It still needs to go through the board (procedures),” and did not deny the news. It’s clear that this 47-year-old, long-established apparel company with a market value of 34.5 billion yuan (as of press time), is about to enter a new phase of second-generation leadership.

Signals of Li Hanqiong’s succession have been evident for some time. She is quite low-profile, rarely appears publicly, and almost never gives media interviews. However, notably, in December 2024, Yageo’s largest acquisition to date—purchasing Intime Department Store from Alibaba for 7.4 billion yuan—was marked by her rare public appearance at the signing ceremony, where she signed on behalf of Yageo.

Currently, Li Hanqiong is not inheriting a booming business empire, but rather a large group still in strategic transformation, lacking the ability to generate core business cash flow, and heavily dependent on investment returns to maintain profitability.

Yageo’s 2025 financial report shows the company achieved a total revenue of 2.45B yuan, down 18.37% year-on-year; net profit attributable to shareholders was 2.47B yuan, down 11.57%. Among the net profit, investment business contributed 96M yuan, while the fashion segment (main apparel business) only contributed 182M yuan, and real estate operations lost 106 million yuan. In other words, without the support of investment income, Yageo’s actual operations are in a loss.

Previously, Yageo’s net profit attributable to shareholders had declined for four consecutive years—from 2021 to 2024, with year-on-year decreases of 29.15%, 1.05%, 32.31%, and 19.41%.

Fashion industry branding expert and founder of Shanghai Liangqi Brand Management Co., Cheng Weixiong, analyzed for China Entrepreneur that the biggest challenge Yageo faces under Li Hanqiong’s leadership is insufficient innovation in its core apparel business—the flagship Yageo brand is aging, with traditional key categories like shirts and suits continuing to decline, and the multi-brand matrix still in the investment phase, unlikely to contribute profits in the short term. In his view, Yageo’s transformation still needs to overcome hurdles such as brand youthfulness, channel digitalization, and profitability of the multi-brand matrix.

But within Yageo, this 49-year-old second-generation heir has been preparing for this day for at least 15 years.

Internal Growth of Li Hanqiong

Li Hanqiong was born in 1977 and is the only daughter of Li Rucheng. Her life began almost simultaneously with her father’s darkest entrepreneurial moments.

The outside world often wonders why Li Rucheng named his daughter “Hanqiong,” an unusual name. Yang Yiqing, Executive President of Zhejiang Business Research Association, mentioned earlier that he visited Li Rucheng in Ningbo at Yageo about ten years ago. During their conversation, he asked about this. Li Rucheng explained that her birth coincided with his most difficult period in life; his “spring” had not yet arrived, but it was also a time of hardship giving way to relief, and life was about to rebound.

Unlike many second-generation successors, Li Hanqiong is not a “parachute.” Before officially taking over, she had already been cultivated within the Yageo system for at least 15 years.

She graduated with a bachelor’s degree in Business Administration from California State University, and later obtained an EMBA from CEIBS. After graduation, she joined the company, starting from the grassroots level. In 2011, she was appointed director of Yageo; in 2016, she became general manager; in 2017, vice chairman; from 2019 to 2020, vice chairman and general manager; from 2021 to 2022, vice chairman; and since 2023, she has served as vice chairman and president.

Meanwhile, she also served as Deputy General Manager of Yageo (Hong Kong) Industrial Co., Ltd. and Deputy General Manager of Shanghai Kaishi Investment Management Co., Ltd. During this period, she gained familiarity with international trade and brand operations, as well as investment judgment capabilities. Her affiliated enterprises exceed 30, including roles as chairman or general manager at core entities like Yageo Fashion (Shanghai) Technology Co., Ltd. and Yageo Apparel Holding Co., Ltd.

The outside world believes that many of Yageo’s major strategic acquisitions in recent years have been led by Li Hanqiong, earning her the reputation as a secret “M&A queen.”

In 2021, Yageo acquired a 40% stake in American streetwear brand UNDEFEATED and established a Greater China joint venture; partnered with Norwegian high-end outdoor brand Helly Hansen, with Yageo responsible for operations and manufacturing in Greater China; incorporated American luxury handcrafted shoe brand CORTHAY into its brand matrix. In 2022, she promoted Yageo’s joint investment with Challenger Capital in American high-end designer brand Alexander Wang. In January 2025, she also spent about 1.5 billion yuan to acquire French luxury children’s wear brand BONPOINT, entering the children’s and luxury goods sectors. That same year, the company also spent 1.34 billion yuan to acquire core stores of Metersbonwe, supplementing offline channels in first- and second-tier cities.

It’s noteworthy that several newly acquired brands and the main brand operate with dual headquarters. According to 21st Century Business Herald, Helly Hansen, UNDEFEATED, and BONPOINT are operated from Shanghai headquarters, directly managed by Li Hanqiong; while the main brands Yageo, Meiya, Hart Max, Hanma Shijia, and CORTHAY are managed from the Zhejiang Ningbo headquarters by Li Rucheng.

In recent years, many domestic apparel companies have been striving toward becoming world-class fashion groups, and mergers and acquisitions seem to be a feasible path. In 2024, Li Rucheng also stated at the annual shareholders’ meeting that Yageo would continue to acquire fashion brands when opportunities arise, and larger acquisitions are not ruled out. “I have a dream—to build a conglomerate like LV, growing the apparel brands through acquisitions and mergers.”

But Cheng Weixiong believes that while apparel companies can grow stronger through M&A, they may not be able to go far. Anta is currently a successful domestic example of M&A operation; as a successful flagship brand, it’s understandable to extend into multiple scenarios and categories, but its multi-brand matrix’s differentiation and internationalization are still under exploration. If the main brand becomes too weak and the goal is to grow a fashion group mainly through acquisitions, there are no successful cases yet.

The Core Question After Succession

Li Rucheng once built Yageo around three pillars: investment + real estate + apparel. But as the dividends from the first two diminish, the apparel core business also faces huge challenges, and finding new growth drivers for Yageo has become the top priority for Li Rucheng and his daughter.

Yageo’s history dates back to 1979. Li Rucheng started in a small town workshop called “Youth Clothing Factory,” marking the beginning of his career. With his sharp business acumen, he developed Yageo into a major domestic menswear brand. The 1990s were Yageo’s “golden era.” By 1993, Yageo’s sales reached nearly 200 million yuan, with profits over 20 million yuan. Yageo was also among China’s earliest private enterprises to venture into real estate, entering the sector in 1992. In 1998, Yageo was listed on the Shanghai Stock Exchange. But Li Rucheng was not satisfied with just the apparel business; after going public, he accelerated diversification, expanding into investment, real estate, and other sectors.

Li Rucheng gained fame for a few key investments, earning titles like “Warren Buffett of the apparel industry” and “Tailor’s stock god.”

Before going public, in 1997, he invested 270B yuan in Ningbo Bank at about 1 yuan per share, becoming one of its top ten shareholders; in 1999, he invested 320 million yuan to help establish CITIC Securities, holding 9.61%. After Ningbo Bank’s listing, its market value once soared to 2.7 trillion yuan, and Yageo, as the third-largest shareholder, cashed out over 10 billion yuan, with annual dividends exceeding 3 billion yuan; from CITIC Securities alone, he earned over 8 billion yuan. Subsequently, Yageo invested in dozens of listed companies including CITIC Shares, Guangbo Shares, Boqian New Materials, Bailong Oriental, and Shangmei Shares, forming a vast investment empire.

In 2007, the company proposed a “three-pillar” development strategy: apparel, real estate, and investment. By 2010, the net profit from investment accounted for 46.59%, with real estate and apparel contributing 25.41% and 26.38%, respectively. This meant that, starting 16 years ago, investment had already surpassed apparel and real estate as Yageo’s largest profit source. Li Rucheng openly acknowledged this, stating in 2018 at the annual shareholders’ meeting: “Whatever the main business is, making money is my main business.” This statement also sparked considerable controversy.

In December 2023, Yageo officially changed its name from “Yageo Group Co., Ltd.” to “Yageo Fashion Co., Ltd.,” signaling its commitment to transformation. Starting in 2024, Li Rucheng accelerated the cleanup of financial assets and invested heavily in the fashion industry. 2024 was also regarded by him as a year of deep adjustment for Yageo.

Despite multiple public statements about “returning to the core apparel business,” investment remains the absolute profit pillar of Yageo today. In 2025, investment contributed 2.47B yuan in net profit, while the fashion segment only contributed 96M yuan—over 25 times the profit of the fashion main business.

From publicly available data, Yageo’s multi-brand matrix still heavily relies on the main brand and investment sectors. In 2025, Yageo’s fashion segment revenue was 7.43B yuan, up 9.33%, mainly due to consolidation of BONPOINT; brands like BONPOINT, UNDEFEATED, MAYOR, HANP, and CORTHAY together contributed 1.63B yuan, increasing their share to 24.54%; the main brand YOUNGOR still dominates with 5.01B yuan in revenue.

A key issue facing Li Hanqiong is: over the past few years, her leading M&A strategy has initially built a multi-brand fashion group, and revenue structure has improved, but most of these newly acquired brands are still in the cultivation and investment phase, with unverified profit conversion capabilities. How these acquisitions will translate into real profits and when the multi-brand matrix will contribute stable earnings remain core questions she must address after taking over.