---
title: "Weiwei's Substance and Image"
description: "After a long detour, Weiwei shares found that soy milk is its ultimate destination. In the 1990s, Weiwei Soy Milk emerged in the wild consumer market, with the slogan 'Weiwei Soy Milk, Happy and Joyful' deeply rooted in people's hearts. However, after listing as the 'first soy milk stock', the company focused on diversification, trying dairy, coal, liquor, real estate, and pharmaceuticals, only to end up empty-handed after more than a decade in the liquor industry. In recent years, the prodigal son has finally returned, divesting loss-making assets..."
author: "陈晓京"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-09-02"
language: "en"
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---

# Weiwei's Substance and Image

> After a long detour, Weiwei shares found that soy milk is its ultimate destination. In the 1990s, Weiwei Soy Milk emerged in the wild consumer market, with the slogan 'Weiwei Soy Milk, Happy and Joyful' deeply rooted in people's hearts. However, after listing as the 'first soy milk stock', the company focused on diversification, trying dairy, coal, liquor, real estate, and pharmaceuticals, only to end up empty-handed after more than a decade in the liquor industry. In recent years, the prodigal son has finally returned, divesting loss-making assets...

After a long detour, Weiwei shares found that only soy milk is its ultimate destination. In the 1990s, Weiwei Soy Milk emerged in the wild consumer market, with the slogan 'Weiwei Soy Milk, Happy and Joyful' deeply rooted in people's hearts. However, after listing as the 'first soy milk stock', the company focused on diversification, trying dairy, coal, liquor, real estate, and pharmaceuticals, ultimately spending over a decade in the liquor industry, only to find it was a futile endeavor. In recent years, the prodigal son has finally returned: Weiwei divested loss-making assets, returned to its core soy milk business, and on the basis of traditional soy milk powder, laid out ready-to-drink soy milk products representing future trends. The company's control changed hands, becoming a state-owned listed company, with new shareholders injecting grain business. Relying on the 'stability' of the grain business as an anchor, Weiwei regards the soy milk business as 'advancement'. This complementary relationship has already been reflected in the company's performance in the first half of this year. The combination of substance and image is the revival strategy of this national consumer brand.

**First Soy Milk Stock**
For many born in the 1980s, Weiwei Soy Milk, along with Southern Black Sesame Paste, Subor console, Walkman, and cassettes, are childhood memories. In an era when room-temperature milk was not yet widespread, brewed Weiwei Soy Milk was the most common nutritional supplement. Moreover, loyal fans of Weiwei Soy Milk discovered the hidden use of eating it dry, which left the post-2000s generation, accustomed to bottled drinks, astonished. In the early 1990s, Cui Guiliang, former director of Xuzhou Tongshan Rice Mill, established Xuzhou Soy Milk Powder Factory, launched the Weiwei brand, and single-handedly created the soy milk powder category. To gain fame, Cui used the company's entire savings of 100,000 yuan to sponsor the broadcast of the hit TV drama 'Aspirations' on Xuzhou TV, making Weiwei Soy Milk famous. Tasting success, Weiwei Soy Milk continued to advertise during prime time on CCTV and various satellite channels, with the slogan 'Weiwei Soy Milk, Happy and Joyful' resounding across the country, making this small-packaged, milk-powder-like instant soy milk powder popular in the market. Weiwei Soy Milk expanded from Xuzhou to nationwide, with its market share peaking at 70%. Within a few years, Weiwei (600300.SH) became the leader in the segment and listed on the Shanghai Stock Exchange main board in 2000 as the 'first soy milk stock'. That year, the company's revenue was 928 million yuan, and net profit attributable to shareholders was 104 million yuan, a solid consumer leader and white horse in food. That year, Yili (600887.SH), which had just started national expansion, had revenue of 1.505 billion yuan and net profit of 98.477 million yuan; Mengniu Dairy (02319.HK) was only established the previous year; and Vitasoy (00345.HK), now the 'soy milk king', had just gained a foothold in the mainland market. The gears of fate had already begun to turn.

**Aggressive Diversification**
At that time, China's consumer market was not yet developed, and Weiwei faced growth bottlenecks and the threat of substitutes like room-temperature milk. Facing internal and external threats, Weiwei chose diversification, involving dairy, coal, liquor, real estate, and pharmaceuticals. Many traditional consumer brands followed this path, and a few did establish a second curve. However, Weiwei lacked some luck. It encountered melamine in dairy, coal price crashes in coal, and the 'Eight Regulations' in liquor investment. Among these, the company's liquor business started high and ended low, experiencing a turbulent decade. In 2006, Weiwei acquired 38% of Jiangsu Shuanggou Liquor, increasing to 40.6% two years later. Shuanggou not only contributed significant investment income annually but also, after being acquired by Yanghe in 2009, allowed the listed company to earn over 200 million yuan at once. After tasting success in liquor investment, Weiwei moved quickly: in 2009, it spent 348 million yuan to take control of Hubei Zhijiang Liquor, and in 2013, it invested another 240 million yuan to acquire 20% of its shares. In 2012, the company spent 357 million yuan to acquire Guizhouchun Distillery. In an era when liquor capital operations were not so frequent, Weiwei became one of the earliest 'liquor shadow stocks', joining the A-share liquor sector.

However, circumstances were stronger than people. In 2012, restrictions on three public consumption and the plasticizer incident caused turmoil in the liquor industry; in 2013, Zhijiang Liquor was exposed for using edible alcohol to blend and pass off as pure grain brewing, coupled with management changes, leading to deteriorating performance. At its peak in 2012, Zhijiang Liquor's revenue was 1.559 billion yuan and net profit attributable to shareholders was 178 million yuan, but then it declined year after year, falling into losses from 2017, with net losses approaching 90 million yuan by 2019. Even after the liquor industry entered a recovery period from 2016, Weiwei's liquor business failed to catch the tailwind. Zhijiang Liquor at least had its glory days, but Guizhouchun suffered losses for many years, dragging down Weiwei's performance. Over more than a decade, Weiwei's liquor business scale fell from nearly 2 billion yuan to less than 500 million yuan, with gross margins hovering around 40%, instantly becoming the 'most miserable liquor stock' at the time.

**Comprehensive Adjustment**
During the years when Weiwei Soy Milk was stagnant, Yili and Mengniu had grown into world-class dairy companies. Although the company's soy milk powder business was relatively stable in scale and profitability, the losses from liquor kept Weiwei in a performance quagmire. From 2017 to 2019, the company suffered losses in non-GAAP net profit for three consecutive years. To maintain performance and eliminate potential liquidity risks, the company sold assets for several consecutive years, including Hubei Bank shares held by Zhijiang Liquor and land of Guizhouchun Distillery, to fill the gaps. At that time, Weiwei not only suffered from decision-making errors affecting development, but the controlling shareholder Weiwei Group also long-term illegally occupied billions of yuan of listed company funds, suspected of violating information disclosure laws, leading to a delisting risk warning and the stock abbreviation changed to 'ST Weiwei'. In 2015, Weiwei proposed a strategy to focus on its core business, repeatedly reiterating the policy of 'big agriculture, big grain, and big food'. Subsequently, the company, after painful reflection, began comprehensive adjustments. On one hand, it divested liquor assets: transferring Guizhouchun in 2018 and selling Zhijiang Liquor shares in 2020, basically bidding farewell to the liquor business. The final buyers, Zan Shengda of Variety Group, together with former Yanghe executive Zhu Wei, gathered a large number of liquor brands, trying to replicate Yanghe's success path, which is another story. On the other hand, the controlling shareholder Weiwei Group transferred control of the listed company to Xinsheng Group under Xuzhou state-owned assets, making Weiwei a state-owned enterprise. The state-owned assets injected the grain business into Weiwei, forming a dual-main business structure and painting a grand blueprint: striving to achieve over 10 billion yuan in both grain and food and beverage industries within about 5 years, and creating a 100-billion-yuan grain, oil, and food industry cluster in Xuzhou.

**Weiwei's Revival**
Many have noticed that Weiwei Soy Milk, silent for years, has become active again recently. On supermarket shelves, in addition to the old Weiwei Soy Milk, reduced-sugar soy milk powder, high-protein pure soy milk powder, oatmeal, lotus root starch, and other instant products are gradually regaining ground, while ready-to-drink products like nut soy milk, red date soy milk, oat milk, and low-sugar soy milk are beginning to emerge. On short video platforms, Weiwei Soy Milk produces short videos and live-streams sales, leveraging the revival of domestic brands and nostalgic consumption, gaining attention and allowing the post-90s and post-00s generations to reacquaint themselves with this national brand. After all, amid the plant protein market boom, the golden signboard of Weiwei Soy Milk still holds value. Weiwei discovered the market opportunity for ready-to-drink soy milk relatively early, launching bottled soy milk products in 2015. However, at that time, Weiwei was busy solving its own problems, with limited market investment, allowing brands like Doudou, Zhixuan, and Chengshidou to seize market dominance. In recent years, as Weiwei gradually emerged from difficulties, it has shown determination to grow its soy milk business. In terms of products, it has launched new instant and ready-to-drink products based on market trends, and to solve the old pain point of clumping in instant drinks, it introduced a stirring cup included with the soy milk powder. In terms of branding, it increased investment, with sales expenses up 16.40% in the first half of this year. In terms of channels, it focused on e-commerce. Even so, because the traditional business lagged far behind, short-term efforts still couldn't keep up. In the first half, revenue from solid beverage products only grew 6.80%, while protein beverage revenue fell 12.64%. This is where the grain business injected by the major shareholder comes in. Although the primary grain processing business seems lacking in imagination, with gross margin below 3% last year, it has stable revenue and profits due to cooperation with major customers like Yihai Kerry and COFCO. Thanks to this, in the first half of this year, despite the soy milk business not performing well, the company still achieved overall performance growth, with net profit attributable to shareholders up 23.78% to 62 million yuan, and non-GAAP net profit of 58 million yuan, up nearly 60% year-on-year. The C-end business related to Weiwei Soy Milk is the 'face' of Weiwei; the grain business under the company is the 'substance'. The substance is the anchor during the company's transition, while the face is the focus of future growth and profitability. This is Weiwei's revival strategy: to repair the road in the open and secretly cross the Chencang. This national brand is determined to reclaim the lost 20 years.


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