CNY 856 million, the State-owned Assets Supervision and Administration Commission of Jinhua City has acquired control of Beingmate. The cost of this acquisition is the complete loss of the 34-year legacy built by founder Xie Hong—his holding platform, in which he held 83.33% of the shares, has gone through bankruptcy reorganization, and the shares of the listed company held through this platform have long been pledged and frozen. This undignified "breakup" is not a cash-out exit after achieving success.

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The "Final" Liquidation

First, let's clarify the timeline.

On the evening of June 2, 2026, the Intermediate People's Court of Jinhua City ruled to approve the "Reorganization Plan of Zhejiang Xiaobei Dama Holdings Co., Ltd." According to this plan, the reorganization investor, Jinhua Zhenhe Enterprise Management Partnership, will collectively control 13.35% of Beingmate's shares, and the actual controller of Beingmate will change from Xie Hong to the State-owned Assets Supervision and Administration Commission of Jinhua City.

The day after the announcement, Beingmate's stock price opened with a limit-up, reporting CNY 5.51 per share, an increase of 7.83%, with a total market value of CNY 59.51 billion.

The market interpreted this as good news: state-owned capital entering the scene, credit endorsement, alleviating difficulties, and reversing the predicament. However, looking at the accounts, the story is quite different.

It is understood that Xiaobei Dama Holdings was formerly Beingmate Group, in which Xie Hong held 83.33% of the shares, and Xie Hong's wife, Yuan Fang, held 10%. The company's current fixed assets consist of only 3 vehicles and a batch of office equipment. Its only core asset is the 12.28% stake in Beingmate it holds, of which 98.85% is pledged or frozen.

The company's application for pre-reorganization to the court clearly states the reason—tight liquidity, inability to repay due debts, and a clear lack of repayment capacity.

Translated into one word: bankruptcy.

The acquirer, Jinhua Zhenhe, was established on February 13, 2026, specifically for this acquisition, with the actual controller being the State-owned Assets Supervision and Administration Commission of Jinhua City. It paid CNY 856 million in reorganization investment and acquired all the shares of Xiaobei Dama Holdings, and additionally paid CNY 30 million to help Xie Hong and his related parties resolve guaranteed debts.

It is worth examining the recruitment process. During the entire public recruitment window for investors, only Jinhua Zhenhe applied.

There was no bidding, no competition for shares. The control of the leading milk powder stock, which should have attracted multiple contenders, ultimately had only one buyer willing to step in and provide support.

This fact itself is the most authentic valuation of this asset.

However, Xie Hong's leverage story did not begin in the last two or three years.

Beingmate's peak was in 2013. That year, Beingmate achieved revenue of CNY 6.117 billion and a net profit of CNY 721 million, with a maximum market value exceeding CNY 31 billion. According to AC Nielsen data, in 2014, Beingmate's market share once reached 7.4%, surpassing Yili and Feihe, making it the undisputed leader in domestic milk powder.

Then came a steep decline. From 2013 to 2016, Beingmate's revenue fell from CNY 6.117 billion to CNY 2.764 billion, with a three-year compound annual growth rate of -23%. In 2016 and 2017, the company lost CNY 781 million and CNY 1.057 billion, respectively, and was once labeled ST, nearing the edge of delisting It is worth noting that in 2016, Beingmate's revenue was surpassed by Feihe. Today, Feihe's market share exceeds 21%, which is several times that of Beingmate, and its revenue is also several times that of Beingmate.

The group's pledge also began in 2016. By September 2018, the pledge ratio of Beingmate Group had reached as high as 99.99%. This was not operational financing for expansion, but a typical case of debt feeding debt—using stocks to exchange for money, then using the exchanged money to fill old holes, resulting in the holes becoming larger and larger, with all stocks locked up.

It was also in 2018 that Xie Hong declared, "The listed company has stumbled, and I will resolutely return to the front line," making a comeback and setting a target of 30 billion yuan in revenue and 100 billion yuan in market value. Eight years later, the market value of the listed company is less than 6 billion yuan, and his own holding platform has already entered bankruptcy court.

More details are hidden in regulatory documents.

The Zhejiang Securities Regulatory Bureau once issued a warning letter to Xie Hong and several other executives, which was recorded in the integrity file of the securities and futures market. The Hangzhou Binjiang Court had issued a consumption restriction order against Xie Hong, with an enforcement amount of 414,200 yuan—someone who once led a company with a market value of 31 billion yuan was restricted from high consumption due to failing to fulfill obligations of over 400,000 yuan. In addition, the controlling shareholder has an old account: non-operational occupation of nearly 50 million yuan of the listed company's funds.

Years of "chronic illness"

The A-share market has given Beingmate a nickname, "King of Changing Faces."

This nickname comes from its long history of repeatedly correcting financial reports and adjusting performance. Until May 2025, it was still releasing correction reports for the 2022 to 2023 financial statements, involving adjustments in three categories: investment properties, trade business receipts and payments, and equity investments, affecting nearly ten periodic reports from the 2021 annual report to the 2023 third quarterly report.

A company whose financial data needs to be repeatedly revised must be viewed with skepticism regarding its so-called "turnaround."

Now, Xie Hong is out. However, the assets taken over by Jinhua State-owned Assets are more intriguing than what the stock price reflects.

First, let's look at the positives. In 2024, Beingmate's revenue was 2.773 billion yuan, a year-on-year increase of 9.70%; net profit attributable to the parent company was 103 million yuan, a year-on-year surge of 116.92%. In the third quarter of 2025, the company's revenue was 2.033 billion yuan, ranking 8th among 19 peers; net profit was 114 million yuan, ranking 5th; gross profit margin was 45.04%, higher than the industry average of 24.79%.

But upon closer examination, it becomes clear that the growth was achieved through savings, and the profits were squeezed out.

After Xie Hong's return, marketing expenses were reduced from a peak of 62% of revenue in 2016 to single digits. During the same period, Feihe spent over 6 billion yuan on advertising, resulting in 21.3 billion yuan in revenue. One used money to buy market share, while the other maintained its balance sheet through cost-cutting, with completely different approaches. The OEM business became the main force for Beingmate's growth: in 2024, the income from exclusive and total underwriting (including customization) was 1.315 billion yuan, accounting for nearly half of total revenue The problem is that this business has a gross profit margin of only 26.75%, far lower than the 64.71% gross profit margin of the dealer and direct supply customer businesses. In other words, half of the revenue is supported by low-margin OEM business. Relying on this model, market share cannot be regained, and the brand cannot be established.

Moreover, the company's debt structure is also tight.

As of the third quarter of 2025, Beingmate's asset-liability ratio was 55.94%, higher than the industry average of 41.11%. In fact, investors have already calculated this for the company: during the restructuring period, banks may recover loans, and if the company’s short-term borrowings of over 1.1 billion yuan cannot be renewed, there is a risk of a break in the capital chain; coupled with the company's credit rating already declining, the cost of subsequent financing will only be higher.

These are the concerns that retail investors are worrying about in the stock forum, rather than the optimistic wording glossed over in brokerage research reports.

There is also a historical debt that is a bottleneck.

By the end of 2024, Beingmate's cumulative unabsorbed losses in the consolidated financial statements reached 966 million yuan, exceeding one-third of the paid-in capital. For this reason, the company clearly stated in 2024 that it would not distribute profits—not because it does not want to, but because it must first fill this loss according to regulations before it is eligible for dividends. The 110,000 shareholders have been waiting for so many years, and the company has not yet accumulated enough qualifications to distribute even one cent in cash dividends.

Adding these accounts together: the 856 million yuan spent by Jinhua State-owned Assets bought a business that relies on OEM for revenue, saves costs for profit, has seen its market share drop from 7.4% to less than 2%, and is still burdened with nearly one billion yuan in unabsorbed losses. In the restructuring agreement, Jinhua Zhenhe promised not to transfer shares within 36 months and to maintain stable performance growth. The promise is written solidly, but whether it can be fulfilled depends on whether state-owned assets can solve the problems that Xie Hong has not been able to resolve for many years: shrinking market share, insufficient R&D investment, and fluctuating strategies.

Xie Hong has turned away. From 1992 to 2026, from the leader in domestic milk powder to a restricted high-consumption executor, he has turned a good hand into bankruptcy liquidation.

And taking over is local state-owned assets, not a white knight. The debt hole is currently being filled by someone; however, the business hole remains