With the successive rollout of favorable policies, the maternal and infant industry has ushered in promising times.
Recently, two major birth support policies have been announced: On July 28, the "Implementation Plan for Childcare Subsidy System" was released, providing 3,600 yuan annual subsidies from January 2025 for infants and toddlers under 3 years old born in compliance with legal regulations; On August 5, the State Council announced the gradual exemption of pre-school education fees for the final year of public kindergartens starting from autumn 2025.
The implementation of these two policies directly benefits the maternal and infant market, leading to collective surges in infant formula stocks including Beingmate Co.,Ltd., China Feihe, and Ausnutria Dairy. Among them, Beingmate's stock price rose over 33% between July 28 and August 1, significantly outperforming Feihe and Ausnutria.
However, while enjoying success in the capital market, Beingmate is facing a series of challenges, such as its controlling shareholder Xiao Bei Da Mei Holdings' 131 million pledged shares triggering pre-restructuring procedures, potentially leading to changes in control.
Additionally, due to factors including declining demand caused by demographic structural adjustments and intensifying price wars from increased competition, Beingmate's performance continues to face pressure. For years, Beingmate's revenue has not exceeded 3 billion yuan, less than half of its 2013 peak.
Why has this former domestic infant formula leader fallen to such circumstances? Does it have opportunities to turn things around in the future?
**Continuous Turmoil and Deep Control Crisis**
As national birth subsidy policies are being implemented in detail, news of infant formula price increases has also emerged.
Recently, media reports indicated that multiple netizens posted on social platforms discussing how maternal and infant products including infant formula, diapers, and complementary foods have seen price increases following the birth subsidy policy announcement, including some of Beingmate's products. Subsequently, multiple listed dairy companies responded that related price increase rumors were false. On August 3, Beingmate's official flagship store Douyin account also posted a video stating that Beingmate adheres to a 5% profit baseline and none of its products have increased prices.
Regarding this, Zhu Danpeng, a Chinese food industry analyst and special advisor to Dalang Think Tank, stated that birth rates have been relatively low in recent years, keeping overall infant formula prices at relatively low levels. Currently, including infant formula, all fast-moving consumer goods are in a slow season. Without significant promotional efforts, prices tend to rise.
While the price increase controversy has subsided, the control crisis still looms over Beingmate.
On July 17, Beingmate announced that its controlling shareholder Xiao Bei Da Mei Holdings had submitted a pre-restructuring application to the court due to liquidity constraints and inability to repay due debts. On the 24th, this application was formally accepted by the court. The announcement shows that Xiao Bei Da Mei Holdings holds 12.28% of Beingmate's shares, with pledged or frozen shares accounting for 98.85% of its holdings.
Regarding this, Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance, stated in an interview that if Xiao Bei Da Mei Holdings' restructuring fails, it could lead to bankruptcy liquidation and judicial auction of its Beingmate shares, triggering control changes.
According to Tianyancha, Beingmate Chairman Xie Hong is the actual controller of Xiao Bei Da Mei Holdings, holding an 83.33% stake.
Notably, on March 28, 2025, the People's Court of Binjiang District, Hangzhou issued a consumption restriction order against Xie Hong. The restriction order shows that Beingmate's chairman and actual controller Xie Hong was subject to consumption restrictions for failing to fulfill payment obligations determined by effective legal documents within the period specified in the execution notice. Tianyancha shows the executed amount was 414,246 yuan.
Despite Beingmate's announcement that the aforementioned matters of Xiao Bei Da Mei Holdings would not significantly impact the company's daily production and operations, this cannot dispel external doubts, as control changes would raise questions about whether the company's established strategies can continue.
Additionally, Xiao Bei Da Mei Holdings had previously occupied Beingmate's funds, which also drew regulatory attention. An April announcement showed that Beingmate received an administrative supervisory measure decision from the Zhejiang Securities Regulatory Bureau, stating that "the controlling shareholder occupied company funds of 30.9166 million yuan and 16.9355 million yuan in 2021 and 2022 respectively, with these funds returned to the company within the same year." Therefore, the Zhejiang Securities Regulatory Bureau decided to issue warning letters to Xie Hong and others as supervisory measures and record them in the securities and futures market integrity files.
**Frequent Performance Corrections and Major Shareholder Reductions**
While experiencing a series of turmoil, Beingmate's performance is also under pressure.
In the first quarter of 2025, Beingmate's revenue was 727 million yuan, with year-on-year growth of only 1.01%, significantly down from the 9.7% growth rate in 2024.
Looking at the longer term, 2013 was Beingmate's highlight moment, with revenue reaching 6.1 billion yuan and profits exceeding 700 million yuan. However, since then, Beingmate's performance has declined consecutively, especially with losses exceeding 1 billion yuan in 2017. In 2016 and 2017, Beingmate suffered losses for two consecutive years, triggering delisting warnings.
In 2018, founder Xie Hong returned after seven years away from the company, boldly stating "I won't consider retirement until annual revenue reaches 30 billion yuan and market value reaches 100 billion yuan." That year, through divesting non-core categories, focusing on main products, and adjusting sales organizational structure, Beingmate successfully turned losses into profits.
However, from then on, Beingmate's performance became a roller coaster ride. In 2019 and 2020, Beingmate fell back into losses, with cumulative losses exceeding 400 million yuan, before returning to profitability.
In terms of revenue, Beingmate began growing again from 2020, but its 2024 revenue of 2.77 billion yuan still hasn't returned to 2019 levels.
Over the years, Beingmate's performance has fluctuated, management has been continuously turbulent, and market share has declined accordingly. According to media reports, Beingmate's infant formula market share dropped from 8.5% in 2013 to 1.7% in 2023, falling out of the industry's top ten.
Notably, Beingmate has been called the A-share "face-changing king" due to multiple performance corrections. A search on the Shenzhen Stock Exchange reveals 37 correction-related announcements since 2011. On April 29, Beingmate issued multiple performance correction announcements covering 2022 and 2023 annual reports, as well as Q1, interim, and Q3 2024 reports.
Released alongside the performance correction reports was Beingmate's 2024 annual report. The annual report shows that despite performance recovery, major shareholders continued reducing holdings, with 4 of the top 10 shareholders reducing stakes. The largest reductions came from the largest shareholder Beingmate Group Co., Ltd. and fifth-largest shareholder Ningbo Xinda Huajian Investment Co., Ltd., reducing 58.789 million and 42.348 million shares respectively.
In summary, the series of reforms and diversified layouts implemented since Xie Hong's return have not succeeded in leading Beingmate out of difficulties. As of August 21, 2025, Beingmate's market value is less than 8 billion yuan, less than one-tenth of the target; 2024 total revenue was only 2.773 billion yuan, also less than one-tenth of the target.
However, the implementation of policies such as childcare subsidies has injected vitality into the maternal and infant industry and will boost consumption of maternal and infant products including infant formula, thereby improving maternal and infant companies' performance. According to reports, based on approximately 9 million annual newborns nationwide and monthly subsidies of 500-800 yuan, the policy will release approximately 54-86 billion yuan in childcare funding annually, with a considerable proportion flowing into infant formula consumption.
Whether Beingmate can seize this policy-driven opportunity remains to be observed.
Comments