Regarding Mengniu's takeover of Shengmu, I disagree with the notion of 'rescue' or 'salvation.' The capital market is always about interests, not chivalry. Have you read too much Jin Yong? However, Shengmu's sell-off and Mengniu's takeover do confirm an unwritten rule: the old Mengniu people who followed Niu Gensheng often return to Mengniu's embrace after their second ventures. The Mengniu faction is naturally strong and unites under one banner. This emerging trend gives hope to Mengniu-affiliated companies like Saikexing, Zhongding, and Tianmu. However, according to Shiwu Jun's research, to attract Mengniu and sell at a good price, these affiliates need to make some strategic adjustments. What Mengniu Still Needs to 'Supplement' According to Shiwu Jun, some people plan to be acquired by Mengniu from the start of their second ventures. They grow their businesses according to Mengniu's needs and style, then negotiate and close deals when the time is right. Others may not initially plan to return to Mengniu, having bigger ambitions, but as they progress, they change their minds, thinking 'being acquired by Mengniu isn't bad.' Or they may have no better option and have to turn to Mengniu. But this is not one-sided; it's a mutual benefit. After all, Mengniu is no longer a private enterprise but a joint-stock central enterprise led by COFCO. Any acquisition must be approved by the board and shareholders. Currently, few companies can enter Mengniu's vision and complement Lu Minfang's and Mengniu's goals. In the past, the milk powder business was a weakness, so under Sun Yiping's tenure and COFCO's leadership, Mengniu acquired Yashili at a high price. After years of drag, Yashili is now on track and rebounding. Low-temperature dairy is Mengniu's strength, and it has chosen self-reliance rather than following New Hope Dairy's route. In recent years, it has focused on fresh milk, with products like Shiri Xianyu and Fresh Factory impressing consumers and attracting attention across channels. In ambient dairy, while overall performance is slightly inferior, Mengniu still leads in high-end white milk. Telunsu series has exceeded 15 billion yuan, but Lu Minfang once told media at a meeting: Mengniu needs to create more star products. It is for this reason that Mengniu took over Shengmu's product line. Through repackaging, brand upgrading, channel expansion, and advertising, Lu Minfang likely has high expectations for Shengmu's future growth. Additionally, Mengniu needs to 'supplement' its ice cream business. But it won't acquire just any company; it needs distinctive, high-end products. For instance, Ma Jianping, Vice President of COFCO and Chairman of Mengniu, recently visited Tianmu Group. Tianmu Group is a full-industry-chain enterprise producing cold fresh beef, pasteurized fresh milk, and fresh milk ice cream. From pasture planting to ecological breeding, to processing and cold-chain logistics, its industrial and product structures are unique and distinctive. Notably, Tianmu's founder Liu Rui is a former Mengniu person, and 80% of Tianmu's team comes from old Mengniu. Proactively Adapt to Mengniu's Needs If Mengniu can accept Shengmu, which had 'strayed' (planned to transfer 37% equity to Yili), why not accept other close affiliates like Saikexing, Zhongding, and Tianmu? Logically yes, but Mengniu is no longer what it used to be. Its current and future strategic direction depends entirely on COFCO, shareholders, and the board. COFCO wants political achievements, shareholders want performance, and all need 'results.' Especially for a professional manager, Lu Minfang's evaluation is based solely on performance: revenue and profit, both are indispensable. Despite the huge demand for high-quality raw milk after increasing its stake in Modern Dairy, the dairy farming market conditions in recent years and the Huishan lesson mean COFCO and Lu Minfang dare not touch upstream milk sources in the short term. This is the reality, and no one can change it. The only thing Mengniu affiliates can do is change themselves and proactively contribute to Mengniu's goals. In short: whatever Mengniu lacks, you should plan to provide. Shengmu's organic full-industry chain is a deck of cards; Mengniu drew the downstream product card. This means other affiliates waiting for acquisition should not limit themselves to dairy cattle breeding and farming. They should consider making moves in downstream products. If they have experience and expertise, they can leverage their strengths, build their own full-industry chains, and lay a good foundation for the future. Even if Mengniu doesn't acquire them, other dairy companies will take notice. As long as they are distinctive and high-quality, if Mengniu doesn't love them, Yili will; if Yili doesn't, Bright Dairy will; if Bright doesn't, New Hope will. Source: Shiwu Media, a leading new media in the global nutrition and health food industry. Click here to register in one click.