---
title: "Liziyuan Is Not So \"Sweet\""
description: "Three years after its listing, Liziyuan's performance has stagnated, which may not have been anticipated by its boss, Li Guoping. In its early years, the company rose on the strength of its sweet milk products, but now its addiction to sweetness has become an unshakable habit, making it difficult to find new growth drivers. After 30 years in the food and beverage industry, Li Guoping has tried more than once to seek breakthroughs, launching new products such as fruit and vegetable yogurt, coconut milk, and zero-fat products, which are undeniably youthful and trendy. However, no miracle has occurred."
author: "陈晓京"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2024-05-20"
language: "en"
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---

# Liziyuan Is Not So "Sweet"

> Three years after its listing, Liziyuan's performance has stagnated, which may not have been anticipated by its boss, Li Guoping. In its early years, the company rose on the strength of its sweet milk products, but now its addiction to sweetness has become an unshakable habit, making it difficult to find new growth drivers. After 30 years in the food and beverage industry, Li Guoping has tried more than once to seek breakthroughs, launching new products such as fruit and vegetable yogurt, coconut milk, and zero-fat products, which are undeniably youthful and trendy. However, no miracle has occurred.

****
**Three years after its listing, Liziyuan's performance has stagnated,** which may not have been anticipated by its boss, Li Guoping.
In its early years, the company rose on the strength of its sweet milk products, but now its addiction to sweetness has become an unshakable habit, **making it difficult to find new growth drivers.**
After 30 years in the food and beverage industry, Li Guoping has tried more than once to seek breakthroughs. He has led the company to launch numerous new products, including fruit and vegetable yogurt, coconut milk, and zero-fat products, which are undeniably youthful and trendy.
However, no miracle has occurred.
**Addicted to Sweetness**
A few days ago, during a centralized bidding reduction, the family member of Liziyuan (605337.SH) vice president Fang Jianhua accidentally bought 2,900 shares, constituting a short-swing trade. The company had to issue a clarification announcement on the evening of May 14, and this absurd episode gradually subsided.
This also drew outside attention to this food and beverage company. Liziyuan has long marketed its dairy-containing beverages, which have been the core of its business for nearly 30 years. In 2023, the company's dairy-containing beverage business generated revenue of 1.381 billion yuan, accounting for 98.31% of total revenue.
The revenue from its dairy-containing beverage business mainly comes from sweet milk products, which has long made the company aware of market risks. In last year's annual report, the company stated that **if it relies heavily on these products, it may have a significant impact on performance.**
Now, there are simply too many companies making dairy-containing beverages. Yili, Mengniu, Bright Dairy, and China Want Want are all heavyweight players, while Yangyuan Beverage, Chengde Lulu, and Juneyao Health have also entered this field to cash in.
Under this competitive pressure, Liziyuan is facing an unprecedented severe test in a battlefield it cannot afford to lose.
From 2021 to 2023, the sales volume of the company's dairy-containing beverages was 277,300 tons, 254,900 tons, and 250,700 tons, respectively, with year-on-year growth of 34.49%, -8.06%, and -1.67%; revenue grew by 36.64%, -4.82%, and 1.62%, respectively.
It is worth noting that last year, **the company's inventory of dairy-containing beverages was 9,583.68 tons,** a sharp increase of 43.13% from the previous year, the highest in three years.
**Hard to Find Growth Points**
Liziyuan is not unwilling to change its "sweet" status quo. In recent years, while consolidating its classic "sweet milk" flavor, it has launched many products. Products such as Liziyuan milk coffee, Liziyuan coconut milk, fruit and vegetable yogurt, lactose-free oat milk, and zero-fat lactic acid bacteria drinks have not made a big splash in the market.
As a result, the company's non-dairy-containing beverage business is not very optimistic in terms of revenue scale and profitability. In 2023, revenue from milk-flavored beverages, compound protein beverages, and other products was 8.4919 million yuan, 5.4049 million yuan, and 9.8637 million yuan, respectively, together accounting for about 1.69% of total revenue. The gross margins for these three were 7.44%, -2.55%, and 14.81%, respectively.
In last year's annual report, the company stated that **in 2024 it will launch aseptic canned cup fruit juice beverages, sparkling milk-flavored beverages, and fruit pulp juice beverages.**
To launch new products, the company's R&D expenditure has increased from 14.154 million yuan in 2021 to 19.3367 million yuan in 2023, with the expense ratio rising from 0.96% to 1.37%.
The excessive reliance on a single large product has also made it difficult for the company to break through in the market.
The company's main revenue is concentrated in the East China region. From 2021 to 2023, this region contributed revenue of 782 million yuan, 729 million yuan, and 702 million yuan, respectively, accounting for 53.38%, 52.15%, and 50.02%.
As early as in the prospectus before listing, the company proposed to expand to the national market while maintaining its sales position in East China. Last year, the company's core market in East China was weak, revenue in Central China and Southwest China only grew at single-digit rates, and the Northeast and Northwest markets declined significantly. Although the emerging markets in South China and North China grew rapidly, their combined share was less than 8%.
Last year, revenue from distribution channels was 1.374 billion yuan, a year-on-year increase of only 0.59%. However, the number of distributors decreased by 589 from the previous year to 2,585 at the end of the period.
Like many food and beverage companies, the company has also embraced the internet, but online sales growth is sluggish. Last year, online sales revenue was 40.1638 million yuan, a decrease of 1.38% from the previous year.
**Stubborn Persistence**
Liziyuan listed on the capital market in 2021, almost falling into the curse of peaking at listing.
From 2021 to 2023, the company's operating revenue was 1.47 billion yuan, 1.404 billion yuan, and 1.412 billion yuan, respectively; net profit attributable to the parent company was 263 million yuan, 221 million yuan, and 237 million yuan, respectively, all stagnant and generally declining.
Li Guoping, a native of Jinhua, Zhejiang, founded Liziyuan in 1994. Over 30 years, he has become famous with a single sweet milk product, **but he has been unable to create another blockbuster product.**
Sweet milk products first appeared in the 1980s and 1990s. At that time, due to insufficient domestic milk production, production processes, and logistics constraints, fresh milk was hard to come by, and dairy-containing beverages became a substitute.
In 2005, Wahaha launched Nutrition Express, which exceeded 20 billion yuan in sales by 2013, becoming a blockbuster product under Wahaha. In addition to Wahaha, China Want Want, Yili, Mengniu, and others have successively launched dairy-containing beverages, with some becoming blockbusters with sales exceeding 10 billion yuan.
During the golden period of dairy-containing beverage development, these companies benefited from the dividend of milk + drinks, conquering the market with nutrition, taste, and flavor. However, as room-temperature milk penetrated the national market, health-conscious consumers have long had better choices.
Liziyuan has chosen to persist, with capacity construction and layout locked into the dairy-containing beverage track, seemingly believing that this market still has great potential.
**In terms of product promotion, Liziyuan has no major highlights.** It is not like Weidongli under Juneyao Health, which focuses on gastrointestinal health; nor is it like Yakult, which highlights the selling point of beneficial lactic acid bacteria. It relies solely on the slogan "Fresh and fresh, Liziyuan" to conquer the market, and beyond that, it sells memories and nostalgia.
I wonder what changes the new spokesperson Cheng Yi will bring to Liziyuan?
**Recommended Reading**


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