Shanxi Fenjiu Excluded from Core Index! Heavy Fines for Four Hundred Distributors, Successor Yuan Qingmao Faces Challenges in Continuing Performance Legend

How Yuan Qingmao’s Financial Background Influences Fenjiu’s Transformation Strategy

On October 8, 2024, in Taiyuan, Shanxi, Yuan Qingmao delivered a speech at the new season launch of Shanxi Fenjiu Men’s Basketball and Shanxi Zhuyeqing Women’s Basketball. Image source: Visual China

Text | Wen Shijun

Editor | Sun Chunfang

Produced by | Prism · Tencent Xiaoman Studio

For Yuan Qingmao, who has been leading Fenjiu for the fourth year, March 23, 2026, is not considered an auspicious day.

On that day, Shanxi Fenjiu (600809.SH), along with Everbright Bank and China CRRC, will be removed from the FT China A50 Index. Replacing them are China State Shipbuilding Corporation, Tanfeng Communication, and Wanhua Chemical.

The FT China A50 Index was launched in 1999, comprising the 50 most liquid and largest-cap stocks listed on the Shanghai and Shenzhen markets. It is rebalanced quarterly and serves as a key benchmark for global funds, especially passive investments like ETFs, allocating Chinese stocks.

Once a darling of institutional investors and a star among growth stocks in the liquor sector, Fenjiu’s departure from the index marks a significant shift. Once a legendary capital story soaring relentlessly, what happened to Shanxi Fenjiu?

The High-Position Entrants

Fenjiu’s connection to the FT China A50 Index began in December 2020 — when it was first included as a candidate stock. At that time, the backdrop was a booming A-share liquor sector. Shanxi Fenjiu’s stock price had risen from a bottom of less than 20 yuan per share and a market cap of 27.3 billion yuan in October 2018, to around 170 yuan.

Subsequently, Shanxi Fenjiu’s stock price surged further, reaching a record high of 352.43 yuan in July 2021, with a market cap of 438.8 billion yuan, ranking 23rd among A-shares.

Shortly after reaching this peak, at the end of 2021 and early 2022, the company’s former top executive, Li Qiuxi, retired. Known as a “pioneer,” Li Qiuxi joined Fenjiu in 2005 and served twice as chairman of the listed company Shanxi Fenjiu. He was instrumental in building the “Chinese Liquor Spirit” brand narrative and pushing high-end and nationwide strategies.

His successor, Yuan Qingmao, born in 1969, took over in September 2022. Just a few months after Yuan’s full assumption of leadership, Shanxi Fenjiu was officially included in the FT China A50 Index. As the first white liquor company listed on the Shanghai Stock Exchange in 1994, Shanxi Fenjiu finally joined the core blue-chip ranks after 28 years of IPO.

However, reaching a peak often means a subsequent descent. Li Qiuxi chose to retire at the top, and the new chairman, Yuan Qingmao, might feel the weight of high expectations.

Bid Farewell to the Two-Digit Era

Today, Shanxi Fenjiu’s former glory days are gradually fading. Its removal from the FT China A50 Index on March 23, 2026, directly reflects its declining market value.

After the recent adjustment cycle in the liquor sector, Shanxi Fenjiu’s stock price fell to around 155 yuan, with market cap less than half of its peak, briefly dropping just above 190 billion yuan. In comparison, even ignoring the long-standing “national liquor” rivalry, Guizhou Moutai’s current market cap of about 1.75 trillion yuan still surpasses that of Bank of China.

Among all A-share listed companies, Fenjiu’s market cap once fell to around 80th place. Meanwhile, the newly included China State Shipbuilding Corporation, Tanfeng Communication, and Wanhua Chemical all rank within the top 50 in market cap, each exceeding 250 billion yuan. After all, the FT China A50 Index targets the top 50 by size and liquidity.

Corresponding to the stock price decline is a slowdown in revenue growth. Currently, the liquor industry is experiencing a cyclical slowdown, but for Shanxi Fenjiu, the deceleration of financial metrics is particularly stark: since 2017, it had maintained double-digit revenue growth, but in the third quarter of 2025, it posted its most modest results in recent years.

In the first three quarters of 2025, Shanxi Fenjiu achieved revenue of 32.924 billion yuan, with a growth rate of less than 5%. Compared to the end of Li Qiuxi’s era, when revenue growth in 2021 reached 42.75%, far exceeding Guizhou Moutai’s 11.88% in the same period.

Such results are not easy during industry adjustments. Notably, among 20 listed liquor companies in A-shares, only Guizhou Moutai and Shanxi Fenjiu maintained positive revenue growth in the third quarter of 2025.

Alongside revenue slowdown, profits are also retreating: in Q3 2025, Shanxi Fenjiu’s net profit attributable to parent was 2.899 billion yuan, down 1.38% year-over-year, marking rare consecutive quarterly profit declines. For the first three quarters of 2025, net profit was 11.405 billion yuan, a slight increase of 55 million yuan from the same period last year, barely maintaining a decent financial report — profits are still positive.

But pressure is evident. Especially for core products like Qinghua 30, tasked with high-end positioning and high gross margins, which are now competing directly with the eighth-generation Puwu (Wuliangye) priced around 800 yuan in high-value markets — a tough battle.

On the surface, everything seems fine. While many liquor companies talk about industry pains in their financial reports and announcements, Shanxi Fenjiu’s disclosures are relatively understated, merely mentioning “adapting to a complex and changing environment” as the most severe phrase — a typical bureaucratic expression, avoiding specifics.

The Pain of Changing Gears

However, valuation logic in the capital markets follows a different, more ruthless principle.

During Li Qiuxi’s era and its subsequent inertia-driven growth, Fenjiu relied on the “Qinghua Fen” to target high-end markets and “Glass Fen” to stabilize affordable staple products. Its nationwide expansion strategy and aggressive channel incentives created performance growth surpassing industry averages.

This built a “growth stock” expectation among investors: high valuation depended on high growth — but looking back, this has become Yuan Qingmao’s biggest dilemma now.

Five months after taking over Fenjiu, Yuan Qingmao launched his core strategy — the “Revitalization Blueprint.” At that time, Fenjiu was still in a high-growth inertia phase, and this blueprint was initially more of a strategic debut by the new leadership.

By the end of 2024, at the global distributor conference, the market’s tone had shifted. Yuan, now firmly in the chairman role, sensed the industry changes early and proposed a “Nationwide 2.0” strategy, essentially attempting to alter Fenjiu’s traditional growth model.

Unlike Li Qiuxi’s nationwide expansion, Nationwide 2.0 aims to end the previous broad expansion: focusing on high-value regions like Yangtze River Delta and Pearl River Delta, trying to conquer Fenjiu’s traditional weak spots south of the Yangtze; and “going to the mountains and countryside,” aiming to penetrate county and township markets.

In other words, this is a necessary choice when traditional growth hits a ceiling.

Yuan Qingmao tries to shift Fenjiu from a purely “channel-driven” approach to a model emphasizing volume stability, price control, brand leadership, and consumer engagement — no longer relying solely on high rebates to push inventory, but instead enhancing brand image and product tiers to earn genuine consumer loyalty.

But breaking through entrenched利益堡垒 is no easy task. This transformation strategy inevitably clashes with Fenjiu’s long-standing operational inertia. Moreover, this business school-style approach is less quick and direct than previous brute-force methods.

Especially as the industry enters a stock-accumulation cycle, no matter how refined the strategy, the once-rapid growth of over 10% is bound to slow to below 5%.

In a capital market that loves doubling or tripling, Yuan Qingmao is an unpopular operator — Shanxi Fenjiu’s valuation logic has changed, turning from “growth stock” to “value stock,” and the premium on its stock price has diminished accordingly.

From 2017 to the third quarter of 2025, Shanxi Fenjiu (600809.SH) total revenue growth rate (%). Data source: company announcements, Wind

The Most “Tough” Leader

In the liquor industry, successors of star entrepreneurs often face two fates: either they follow the previous path of high-speed growth and enjoy the residual benefits; or at industry turning points, they are forced to become the cutters wielding the scalpel.

Now it seems Yuan Qingmao must embody both roles. He enjoyed the tailwind of Li Qiuxi’s growth myth but also has to break the old logic supporting that myth to “cope with a complex and changing environment.”

This makes him the most “tough” leader in the liquor industry.

This complex situation became especially heavy in December 2023. The sudden death of the retired former leader Li Qiuxi at age 63 cast a shadow of tragic inevitability over Fenjiu’s future. The departure of the high-growth narrative figure increased the burden on Yuan Qingmao’s revitalization blueprint.

A closer look at Yuan Qingmao’s background reveals he differs markedly from many industry leaders in the liquor sector, with hardly any traces of traditional liquor marketing experience.

This manager, who grew up within Shanxi’s state-owned enterprise system, has a strong financial background. He was once the director of Shanxi Province Supply and Marketing Cooperative’s finance department and served as the chief accountant of Shanxi Transportation Department. Before joining Fenjiu in December 2021, he was chairman of Shanxi Transportation Holding Group, overseeing the province’s highway infrastructure.

His career has been almost entirely focused on “assets and liabilities.” Especially in transportation infrastructure, large investments and long cycles mean risk aversion and seeking safety through financial maneuvering. This outsider’s perspective, with a focus on financials, differs fundamentally from the traditional liquor industry’s reliance on emotion, relationships, and inventory pushing for scale.

This explains Fenjiu’s recent financial reports, which show meticulous operations aimed at maintaining stable revenue and profit figures — at least for now, allowing slight growth.

It also explains why under his leadership, Fenjiu has been particularly resolute and even somewhat aggressive in controlling inventory and cracking down on channel misconduct. After all, short-term volume boosts in finance are a future cash flow risk — a strategy that could be masked during high-growth periods by high returns but becomes problematic during industry cycles.

The Successor’s Curse

To implement policies, Fenjiu has built upon the “five-in-one” system of stacking, boxing, sealing, bottling, and capping initiated during Li Qiuxi’s era, and launched the “Fenxiang Privilege” model. The term “privilege” conceals the aggressive intent — linking rebates to actual sales data to curb past gray profits from dealer inventory pressure.

If these data are genuine and traceable, industry issues like cross-region arbitrage, price chaos, and inventory mismanagement could be effectively curbed.

This tough approach inevitably leads to channel cleanup. The system aims to track every bottle, with penalties for dealers caught engaging in misconduct like cross-region sales or price manipulation.

At the 2025 Fenjiu dealer conference, official data showed: in 2025, over 6,000 online and 24,000 offline evidence collections, canceling 33 dealer contracts and penalizing over 400 dealers for violations.

How many dealers does Fenjiu have? According to the company’s third-quarter 2025 operational data, as of September 2025, the total number of dealers (Fenjiu + other brands) was 4,359. Nearly one in ten dealers faced penalties, indicating a significant channel cleanup effort.

Because systems require human enforcement, especially when redistributing利益 — a curse many successors must bear.

(This article is based on publicly available financial data and does not constitute investment advice.)