China Resources takes control for three years, but Jinzhongzi Liquor continues to lose money; can Xie Jinming's "shoulder the burden" turn the tide?

Ask AI · Why Did CR’s Beer-White Integration Strategy Fail for Jinfuzhi Liquor?

By | Hengxin

Source | Bowang Finance

Recently, Jinfuzhi Liquor’s announcement on a single page declared that the nine-month vacancy in the general manager position finally came to an end.

The board approved the appointment of Xie Mingming as general manager, and simultaneously changed him to the legal representative. This executive, a post-70s leader with a local state-owned assets background who has served as chairman of Jinfuzhi Liquor since 2023, now will “hold both the chairman and general manager roles on one shoulder.” The market generally interprets it as a “firefighting” move made out of necessity under sustained performance pressure.

However, the background of this personnel change is not business expansion or a strategic upgrade, but the harsh reality that Jinfuzhi Liquor has been mired in five consecutive years of losses.

Since CR strategically invested in 2022, this company—once one of Anhui liquor’s “Four Beauties” and expected to revive—has not achieved the anticipated resurgence. Instead, under the dual pressure of industry deep restructuring and the pains of internal transformation, its loss amount has continued to expand.

With the chairman personally stepping in to抓 (take charge of) operations, is this the beginning of breaking the deadlock, or a desperate fight on the brink amid uncertainty?

01

Five years of losses exceeding 700 million: operational difficulties accumulate and are hard to reverse

Behind the appearance of changing the general manager is Jinfuzhi Liquor’s financial decline and stubborn structural ailments that are difficult to conceal.

According to Jinfuzhi Liquor’s earnings forecast, in 2025 the net loss attributable to owners of the parent company is expected to be between 150 million and 190 million yuan. This means Jinfuzhi Liquor will officially enter the awkward situation of recording losses for a fifth consecutive year.

Looking back, from 2021 to 2024, Jinfuzhi Liquor’s net profit attributable to shareholders was -166 million yuan, -187 million yuan, -22 million yuan, and -258 million yuan, respectively. Combined with the expected loss in 2025, the cumulative losses over the past five years have already easily surpassed 700 million yuan.

The root cause of the losses lies in the overall shrinking of its main business. In the first three quarters of 2025, Jinfuzhi Liquor recorded operating revenue of 628 million yuan, a year-on-year decline of 22.08% in a substantial way; and it reported a net loss attributable to shareholders of 100 million yuan.

Even more worrying is its imbalanced product mix.

The financial report shows that in the first three quarters of 2025, Jinfuzhi Liquor’s low-end liquor (retail price ≤ 100 yuan per bottle) generated revenue of 330 million yuan, accounting for more than half of total revenue. Meanwhile, the high-end liquor where its Fuhéxiang series—the hope for high-end positioning—is located (>500 yuan per bottle) only achieved revenue of 51.2661 million yuan, with a comparatively low share. This pattern of heavy reliance on the low-end market directly places pressure on its overall gross margin. In the first three quarters of 2025, Jinfuzhi Liquor’s gross margin on sales was less than 45%, a figure far below that of leading companies in the liquor industry, reflecting weak product premium-earning ability.

High inventory levels and worsening cash flow further reveal Jinfuzhi Liquor’s operational predicament.

As of the end of the third quarter of 2025, Jinfuzhi Liquor’s inventory carrying value was as high as 8B yuan—about 76% of current assets. Such a large amount of inventory not only consumes substantial working capital, but also reflects the severe reality that product sell-through is not smooth and channel inventory is running high.

At the same time, Jinfuzhi Liquor’s contract liabilities (mainly prepayments from distributors) were 172 million yuan, down somewhat from the beginning of the year. This indicates that distributors’ willingness to send payments is weakening, casting a shadow over future revenue growth.

In addition, in the first three quarters of 2025, Jinfuzhi Liquor’s net cash flow from operating activities was -118 million yuan, showing that its core business lacks sufficient “blood-generating” capability.

02

CR empowerment fails: the “beer-white integration” strategy encounters trouble integrating

This change in general manager also indirectly signals that the reforms led by the CR-affiliated side in recent years did not achieve the expected results.

According to Tianyancha data, in 2022, China Resources Strategic Investment Co., Ltd. took a stake in Jinfuzhi Group, holding 49% equity—something the market had high hopes for. After that, CR-affiliated executives such as He Xiuxia, He Wuyong, Jin Hao, and others gradually moved in, attempting to transplant the fast-moving consumer goods playbook from the beer industry into liquor business operations.

According to a report by Southern Metropolis Daily, during He Xiuxia’s tenure she carried out aggressive reforms. On the product side, the company strongly cut low-end offerings and pushed mid-to-high-end new products such as “Fuhéxiang” and “No. 1 Seed,” trying to raise the price range from 15–50 yuan to 80–300 yuan. On the channel side, it reshuffled distributors at large scale—replacing about 60% of traditional distributors—and introduced CR’s vast beer channel network, rolling out digital management and control.

However, a model that proved successful in the beer sector met serious trouble integrating into the liquor market.

Analysts point out that liquor has very different consumption scenarios, the brand-loyalty building cycle, the channel profit framework, and beer—quite distinct from each other. The brand recognition Jinfuzhi Liquor formed by deeply focusing on the low-end market for a long time makes it hard to support quickly jumping its products into the secondary high-end price band. “No. 1 Seed” is priced on the high side in the bottled spirit market for “red sea” competition, which lacks sufficient brand power to support it. As for the Fuhéxiang series, although positioned as the key handhold for high-end positioning, its market cultivation has been slow and far from meeting internal expectations.

The cost of reform has been enormous in terms of sales expense investment.

In the first half of 2025, Jinfuzhi Liquor’s sales expenses increased year on year by 18.44% to 151 million yuan. Among them, advertising expenses surged by more than 8B yuan to 46.8711 million yuan. High brand spending did not bring corresponding sales growth; instead, it intensified profit pressure.

Ultimately, the CR-affiliated executive team that led the reform began to leave one after another in the second half of 2025. In July, general manager He Xiuxia resigned; in September, CFO Jin Hao stepped down; in December, vice general manager He Wuyong resigned.

The “beer-white integration” experiment in CR’s first phase ended in disappointment in the face of consecutive losses.

03

With Xie Mingming holding both roles, the prospects of a last stand remain uncertain

After the general manager position remained vacant for nine months, it was finally filled directly by chairman Xie Mingming himself. This in itself sends a strong signal—external professional managers failed to break the deadlock, leaving it necessary to “self-rescue” by relying on internal core strength.

Xie Mingming has deep work experience in government and local state-owned assets systems. He previously served as a Standing Committee member of the Municipal Party Committee of Jieshou, and also as executive vice mayor; he served as deputy secretary of the county party committee of Taihe County. He has also held leadership positions at Fuyang Investment Development Group, Fuyang Construction and Investment Group, and Jinfuzhi Group. The advantage of this personnel arrangement is that, as a representative of local state-owned assets, he can better coordinate resources from local governments to secure support for Jinfuzhi Liquor in its base market. The announcement also states clearly that this adjustment aims to “accelerate the construction of Fuyang base and core markets.”

However, the challenges are even more severe and more realistic.

First, Xie Mingming’s background lacks direct experience in operating consumer goods enterprises—especially frontline experience in the liquor business. Competition in the liquor industry is an all-round contest of brands, channels, products, and management; its complexity far exceeds that of management at general state-owned asset platforms.

Second, internal problems facing Jinfuzhi Liquor are hard to reverse after accumulating over time. In addition to the aforementioned difficulties in products and channels, its two major fund-raising and investment projects—“High-quality base spirit technology renovation and supporting engineering project” and “Marketing system construction project”—have been delayed multiple times. A notice released in December 2025 shows that the expected completion date will be pushed back to the end of 2027. The delays directly affect the pace of Jinfuzhi Liquor’s production capacity upgrades and marketing transformation.

More urgently, there is pressure on cash flow. To “get blood back,” in recent years Jinfuzhi Liquor has frequently disposed of assets: at the end of 2023 it transferred land; in 2024 it listed properties for sale; and in November 2025, it sold with a 10% discount a profitable controlling subsidiary, Jintaiyang Pharmaceutical, for a price of 126 million yuan—selling 92% equity interest.

As of the end of the third quarter of 2025, Jinfuzhi Liquor had cash and cash equivalents of 367 million yuan, while short-term borrowings were 270 million yuan, and notes payable and accounts payable were 282 million yuan. Cash alone is not sufficient to comfortably cover short-term debt.

From an industry perspective, Jinfuzhi Liquor’s space for survival is being rapidly compressed. The Matthew effect is now prominent in the liquor industry: nationwide well-known brands continue to move downward and squeeze smaller players, while within the province the leading companies—Gujinggong Liquor, Kouzi Jiu, and Yingjia Gongan—have deep roots. Jinfuzhi Liquor is completely on a different scale from other “Anhui liquor’s Three Heroes.”

In the cold winter of competition among existing players, for regional liquor enterprises lacking a strong brand moat and advantages in core price bands, the path to break through is exceptionally difficult.

Conclusion

This “change of leadership” at Jinfuzhi Liquor is far from a routine executive reshuffle. It is a helpless choice made under the multiple pressures of consecutive losses, setbacks in reform, and cash flow stress.

With chairman Xie Mingming taking direct control of operations, it is more like a “stay and defend the territory” battle. His primary task may not be to realize grand dreams of nationwide expansion or high-end positioning, but rather to stabilize the Fuyang base market and stop the momentum of continuous “blood loss.”

CR’s entry once brought hopes of transformation, but its experience in the beer industry was not successfully replicated in the liquor track—instead, the aggressive reforms only intensified the pains.

Now, the strategic focus has shifted from expansion back to defense; from pursuing scale to “preserving survival.”

For investors, it is necessary to recognize clearly that Jinfuzhi Liquor’s predicament is a concentrated outbreak of multiple long-term problems, including product structure, brand power, the channel system, and management effectiveness. Relying on just one round of personnel adjustment makes it difficult to turn things around in the short term.

In the future, whether Jinfuzhi Liquor, under Xie Mingming’s leadership, can effectively integrate internal and external resources, focus on core markets, optimize its product structure, and strictly control expenses will be the key to determining whether it can escape the mire of losses.

Against the backdrop of deep adjustments in the liquor industry, this old brand’s path to resurgence is destined to be long and full of setbacks.

As for where Jinfuzhi Liquor will go in the future, Bowang Finance will continue to monitor.