---
title: "Huangshi Group, Trapped in Water Buffalo Milk"
description: "Despite holding exclusive water buffalo milk resources, Huangshi Group's poor performance raises questions about its leadership. In 2024, the company is expected to report a net loss of over 600 million yuan, continuing a trend of losses. After years of diversification into film, internet, and photovoltaic sectors, the company is now refocusing on its dairy business, even opening milk tea shops, but faces intense competition."
author: "陈晓京"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2025-02-18"
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# Huangshi Group, Trapped in Water Buffalo Milk

> Despite holding exclusive water buffalo milk resources, Huangshi Group's poor performance raises questions about its leadership. In 2024, the company is expected to report a net loss of over 600 million yuan, continuing a trend of losses. After years of diversification into film, internet, and photovoltaic sectors, the company is now refocusing on its dairy business, even opening milk tea shops, but faces intense competition.

Chen Xiaojing clearly holds exclusive water buffalo milk resources, but why has Huangshi Group played its cards so poorly? This can only be asked of the company's leader, Huang Jiadi.
In 2024, the company once again fell into a quagmire of huge losses, with an expected annual loss of over 600 million yuan. Many years ago, Huangshi Group was the king in the domestic water buffalo milk sector, using this niche product to become a regional power, laying a foundation for the company to expand beyond Southwest China. However, during the golden period of dairy industry development, the company became addicted to cross-industry ventures, dabbling in popular fields such as film and television, internet, information services, and photovoltaics, making it an outlier in the dairy industry. At the beginning of last year, the company decided to leverage its dairy supply chain advantages and directly enter the milk tea business. After opening a store at Wuxu Airport, it recently opened a second store in downtown Nanning. Now, the milk tea market is already a red ocean. How much chance does Huangshi Group have?

**Expected Loss Exceeds 600 Million**
This warm winter is exceptionally cold for Huangshi Group (002329.SZ). On the evening of January 21, the company disclosed its 2024 performance forecast, expecting a net loss attributable to shareholders of 620 million to 680 million yuan, compared to a profit of 67.3452 million yuan in the same period last year. Two main factors led to the dismal performance: first, litigation triggered provisions for estimated liabilities, credit impairment losses, and impairment provisions for long-term equity investments; second, in 2023, there were non-recurring gains of 210 million yuan from asset transfers, but no such items in 2024. According to preliminary calculations, the non-recurring gains and losses for the reporting period are expected to be -126 million yuan, mainly due to provisions for estimated liabilities caused by litigation. The litigation involves an investment by subsidiary Huangshi Shuzhi. In November 2019, Huangshi Shuzhi, together with Tai'an Dongyue Wealth Equity Fund, established Tai'an Dongyue Shuzhi Equity Partnership. Later, Huangshi Shuzhi triggered obligations such as difference compensation, leading to disputes and court proceedings. According to a company announcement on November 22, 2024, the Tai'an Intermediate Court in Shandong ruled that Huangshi Shuzhi must pay 310 million yuan in investment transfer payments to Tai'an Dongyue Wealth Equity Fund, with Huangshi Group bearing joint and several liability. Huangshi Group has appealed the ruling.
Losses in main business are common for Huangshi Group. From 2020 to 2023, its non-GAAP net profits were approximately -192 million yuan, -520 million yuan, -106 million yuan, and -152 million yuan, respectively.

**Cross-Industry Mania**
Huangshi Group's current predicament is not unrelated to strategic mistakes. In 2010, the company became the fourth listed dairy company in China, differentiating with water buffalo milk, and was once viewed favorably by the outside world. However, after listing, the company's performance did not improve significantly. Leader Huang Jiadi led the company to seek breakthroughs in sideline businesses. Huang originally had a professional background in architecture, rising from project manager to head of development and operations departments. A chance opportunity changed his life trajectory. Due to a friend's backlog of milk powder, he started a milk powder agency business. In 2001, he invested in a dairy production line in Guangxi, founded Huangshi Dairy, and officially entered a new track. As a cross-industry entrant, when the company encountered bottlenecks, Huang Jiadi chose to continue diversifying. In 2014, during the wave of mergers and acquisitions in the domestic film and television industry, Huangshi Group acquired Yujia Film and Television and Shengshi Jiaoyang, and the company was renamed from Huangshi Dairy to Huangshi Group. In 2015, the company continued its acquisition spree, spending money to acquire all shares of Wanmei Online, and later invested in cross-border e-commerce for maternal and infant products, Zhenpin Yuedong, and Yilian Video. At this point, Huangshi Group was still not satisfied. In 2017, to develop information business, it acquired mobile information service provider Zhejiang Zhuwang Technology. In 2020, it cooperated with Shanghai SenseTime Intelligent on artificial intelligence business. The following year, it began to layout photovoltaic business. However, these cross-industry ventures not only failed to promote successful transformation but also triggered a series of problems. Due to investment in Yujia Film and Television, goodwill impairment of 554 million yuan was recognized in 2018, resulting in huge losses that year. The litigation triggered by Shengshi Jiaoyang's performance commitment lasted as long as four years. After suffering several major losses, the company finally chose to stop, gradually shedding "burdens" and refocusing on the dairy main business.

**Entering the Milk Tea Market**
At the beginning of 2024, Huangshi Group opened its first milk tea store at Nanning Wuxu Airport, and on January 10 this year, it opened a second flagship store in downtown Nanning. Why jump into the milk tea red ocean now? Huangshi Group stated externally that products based on water buffalo milk help avoid price wars initiated by peers and facilitate interaction and communication with consumers, stimulating the potential of water buffalo milk products. Before opening its own stores, Huangshi Group had already supplied water buffalo milk products to several freshly made tea brands as a supplier. Bawang Chaji, Lele Tea, Liu Nainai, Heytea, etc., are all its customers. Although the company had already entered the new tea beverage track indirectly, it did not significantly drive performance growth.

**From 2021 to 2023, the company's dairy and food business revenue was 2.07 billion yuan, 2.345 billion yuan, and 2.03 billion yuan, accounting for 80.57%, 81.14%, and 70.17% of the company's revenue, respectively.** In the first half of 2024, affected by the sale of two dairy subsidiaries such as Laishier Dairy, the company's dairy and food business dropped 32.85% to 811 million yuan. Although established for over 20 years, Huangshi Group has never been able to shake off its identity as a regional dairy company, with nearly 80% of its revenue coming from the Southwest region. The golden development period of the dairy industry has passed, and the competitive landscape of "two superpowers and multiple strong players" is almost ironclad. After a decade of delay, the difficulty of refocusing on the main business has increased exponentially.

**【New Order · Symbiosis】**
******The 10th China FMCG Innovation Conference**
**Time: March 17-19, 2025**
**Location: Chengdu, China**


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