Sichuan Swellfun Co.,Ltd., which recruited a general manager with an annual salary approaching ten million yuan, has once again seen its top executive depart. On May 6, Sichuan Swellfun announced that Hu Tingzhou has resigned from his positions as a company director, general manager, member of the strategy committee, and member of the nomination committee for personal reasons, effective immediately. He also resigned as the company's legal representative, with Zhou Zhiming taking over.
Hu Tingzhou's departure was sudden; as recently as April 30, he participated in an online communication meeting in his managerial capacity. Reportedly, Hu Tingzhou began serving as General Manager of Sichuan Swellfun in July 2024, with his term originally set to end in June 2027. His departure, coming over a year early, means he served for less than two years. Just one week prior to Hu's resignation, Sichuan Swellfun disclosed its 2025 annual report and 2026 first-quarter report. The performance was dismal: in 2025, Sichuan Swellfun's revenue was 3.038 billion yuan, a year-on-year decline of 41.77%, effectively returning to 2020 levels; net profit attributable to shareholders was 401 million yuan, plummeting 69.73% year-on-year, reverting to 2018 levels.
In the first quarter of 2026, performance showed no significant improvement, with revenue of 815.8 million yuan, down 14.92% year-on-year, and net profit attributable to shareholders of 171 million yuan, a decrease of 10.12% year-on-year. With performance collapsing and the multi-million-yuan-salaried general manager departing, what exactly went wrong with Sichuan Swellfun's "high-salary leadership change"?
The British Major Shareholder Took a Year to Find This General Manager He Departed After Less Than Two Years, Taking Over 16 Million in Compensation "The company remains, but the general managers flow like water." This external description of the frequent changes in Sichuan Swellfun's senior management in recent years is quite apt. Public information shows that in December 2006, Diageo acquired a 43% stake in Quanxing Group for 570 million yuan, thereby indirectly holding a 16.87% stake in Sichuan Swellfun. Subsequently, Diageo continuously increased its holdings in Sichuan Swellfun and formally gained control in 2013. As of now, Diageo holds 63.27% of Sichuan Swellfun's shares. However, since the foreign shareholder Diageo took actual control, Sichuan Swellfun has been caught in a "curse of frequent leadership changes," having replaced eight general managers over 16 years, with an average tenure of less than two years and the longest being three years, which is extremely rare in China's baijiu industry. In recent years, executive changes have become even more frequent, with three changes in three years—March 2024, July 2024, and May 2026. Such high-frequency turnover is unmatched within the entire baijiu industry. Viewed this way, Hu Tingzhou's early departure could also be said to be expected. The role of General Manager at Sichuan Swellfun is not an easy one. After the previous general manager, Mark Anthony Edwards, left in 2023, the position remained vacant for over a year before the major shareholder found Hu Tingzhou as the successor. According to previous public statements by Sichuan Swellfun Chairman Fan Xiangfu, working at Sichuan Swellfun also requires strong communication skills with the major shareholder Diageo, making it even more challenging. Hu Tingzhou's resume is quite impressive. Prior to joining Sichuan Swellfun, he held sales management positions at Procter & Gamble, Kodak, and PepsiCo, and served as General Manager of Hershey China, Chief Product Officer of Ping An Group's Life Insurance division, and President of Yuyuan Tourist Mart. His extensive experience working in foreign companies恰好 aligned with the need for communication with the foreign major shareholder, becoming his core advantage. Naturally, Sichuan Swellfun was not stingy in offering him generous compensation. The 2025 financial report shows Hu Tingzhou's annual salary was as high as 9.9644 million yuan, approaching the ten-million-yuan level. His pre-tax compensation for 2024 was 6.2339 million yuan, meaning he took over 16 million yuan in less than two years. It is important to note that Hu Tingzhou's actual service period in 2024 was only 4.5 months. Calculated proportionally, Hu Tingzhou's 2025 salary was indeed reduced. Sichuan Swellfun also stated that Hu Tingzhou's performance pay coefficient was adjusted downward from 1.57 in the F24 fiscal year to 0.83, a reduction of 0.74 coefficient points. Had it not been adjusted, Hu Tingzhou's annual salary could have reached 16 million yuan.
Performance Plummets, Net Profit Falls Nearly 70% Unfortunately, the multi-million-yuan high salary offered by Sichuan Swellfun did not yield corresponding performance returns. The stark contrast between Hu Tingzhou's high compensation and the company's dismal performance is glaring. Hu Tingzhou's departure is widely believed by outsiders to be due to the company's declining performance. Hu Tingzhou took office just as the baijiu consumption market was cooling. However, he made high-profile moves. In his second year, he launched a dual-brand strategy of "Sichuan Swellfun" + "First Workshop": the main "Sichuan Swellfun" brand focused on the sub-high-end segment of 300-800 yuan, while the "First Workshop" brand pushed into the high-end segment above 800 yuan. Corresponding products were launched, with Sichuan Swellfun successively introducing two core new products: "First Workshop·Crystal Lion" and "Sichuan Swellfun·Jing 18." In December 2025, Sichuan Swellfun also signed Tony Leung Chiu-wai as a brand ambassador, aiming to further elevate the brand's image and support the implementation of its premiumization strategy.
Additionally, Hu Tingzhou promoted a strong performance culture. During the mid-2025 shareholders' meeting, the company's management revealed that internally, they closely tracked data on sales, inventory, shipments, collections, and banquets, down to daily report tracking and weekly internal rankings. However, the baijiu market continued to adjust, with the high-end segment being the most noticeably cooled price point. This directly poured cold water on Hu Tingzhou's strategy. In 2025, Sichuan Swellfun's revenue was 3.038 billion yuan, down 41.77% year-on-year; net profit attributable to shareholders was 401 million yuan, plummeting 69.73% year-on-year. Even though the entire baijiu market generally experienced performance declines, Sichuan Swellfun's decline was among the most severe. More critically, Sichuan Swellfun's net cash flow from operating activities also saw a significant decline, dropping directly from 744 million yuan in 2024 to -624 million yuan, a year-on-year decrease of 183.96%.
The outflow of cash from operating activities far exceeded the inflow, meaning that last year, despite generating 3 billion yuan in revenue and 400 million yuan in net profit, the company was essentially operating by "burning cash," with extremely low "quality" of profit. Fortunately, in the first quarter of 2026, operating cash flow turned positive again, achieving a net inflow of 70.21 million yuan. Although not high, it at least freed the company from the predicament of "cash-burning" operations, showing faint signs of recovery. However, Sichuan Swellfun's operational pressure has not fundamentally eased, and inventory continues to climb. The annual report shows that Sichuan Swellfun's finished goods inventory reached 210 million yuan in 2025, an increase of 39% compared to the mid-2025 report and 42.8% higher than at the end of 2024. The inventory volume of finished baijiu and semi-finished baijiu (including base liquor) also increased from 71,808 kiloliters in 2024 to 82,425 kiloliters, a growth of 14.77%. Furthermore, contract liabilities, which represent a reservoir for future revenue in the baijiu industry, are also declining. By the end of 2025, Sichuan Swellfun's contract liabilities continued to fall to 806 million yuan, and by the first quarter of 2026, they had dropped to 689 million yuan. This indicates weak confidence and a continued reluctance among distributors to make advance payments. Shrinking revenue and continuously rising inventory have further eroded Sichuan Swellfun's cash flow, leading to tightening liquidity. As of the end of 2025, cash and cash equivalents plummeted 68.37% year-on-year to 672 million yuan, insufficient to cover the company's short-term borrowings of 1.032 billion yuan, highlighting liquidity pressure.
New Leader Takes Over, But Company's Actual Control May Change Now, with Hu Tingzhou having left the stage and Zhou Zhiming taking over as General Manager, the frequent changes in senior management continue to raise investor concerns regarding strategic wavering, execution gaps, and impacts on team stability. What makes the market even more uneasy are the "ambiguous" signals released by the major shareholder Diageo, casting uncertainty over the future control of Sichuan Swellfun. Late last year, Diageo announced an "Acceleration Plan," clearly stating its intention to dispose of some non-core assets within the next few years to streamline its global business portfolio and reduce leverage. Following this news, market rumors repeatedly surfaced about Sichuan Swellfun potentially being sold, sparking widespread discussion. In response, Diageo explicitly stated during its February 2026 fiscal year interim results conference call that Sichuan Swellfun was not among the assets mentioned for disposal. However, it also noted that if an institution presented an offer that could not be refused for an asset not core to its strategy, the company would obviously listen and engage in communication. This "ambiguous" stance, which neither completely ruled out the possibility of a sale nor released a clear signal of continued holding, has made Sichuan Swellfun's control situation uncertain. For Sichuan Swellfun, mired in performance woes and frequent executive changes, whether the new leader can break the curse of leadership turnover and reverse the performance decline, and whether the major shareholder will maintain its stake, remains full of variables.
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