Executive Summary: Critical Takeaways from the Huiyuan Crisis – Huiyuan Group’s public declaration to regain control of Beijing Huiyuan signals a severe breakdown in the restructuring partnership with Wensheng Asset, threatening the stability of the iconic juice brand. – Founder Zhu Xinli (朱新礼) may re-enter the fray to reclaim authority, highlighting unresolved governance issues and investor dissatisfaction three years after the company’s delisting from the Hong Kong Stock Exchange. – Wensheng Asset’s 16 billion yuan investment has been marred by allegations of contract breaches, underfunding, and operational mismanagement, with Beijing Huiyuan’s revenues declining amid intense market competition. – The control rights battle underscores broader challenges in China’s corporate restructuring landscape, particularly for distressed assets handled by private asset management companies (AMCs). – Investors and analysts should monitor legal proceedings and strategic shifts closely, as the outcome could influence brand valuation, sector consolidation, and regulatory approaches to equity market revitalization. The Sudden Escalation: Huiyuan Group’s Declaration of War In a stunning move that has sent shockwaves through China’s beverage industry, Huiyuan Group issued a严正声明 (Yan Zheng Sheng Ming – Solemn Statement) on the evening of December 19, 2025, asserting its intention to legally恢复管理权与控制权 (recover management and control rights) over Beijing Huiyuan Food and Beverage Co., Ltd. This dramatic statement, posted on the official “Huiyuan” WeChat account, immediately sparked speculation about a potential comeback for the company’s founder, Zhu Xinli (朱新礼), who has remained largely out of the public eye since Huiyuan Juice’s delisting. The control rights battle has now erupted into full view, exposing deep-seated conflicts that threaten the very survival of a once-dominant brand. Decoding the Legal and Contractual Battle The statement accuses Wensheng Asset and its designated entity, Zhuji Wensheng Hui, of践踏契约 (trampling on contracts) by failing to fulfill obligations under the《重整投资协议》及《增资协议》(Restructuring Investment Agreement and Capital Increase Agreement). According to Huiyuan Group, this breach has forced Beijing Huiyuan to operate under high负荷 (load) using pre-restructuring funds, jeopardizing its financial health. The group claims that, under the《民法典》(Civil Code), it holds优先履行抗辩权 (priority performance defense rights) as a compliant party and has already filed a lawsuit with the Beijing Third Intermediate People’s Court, seeking财产保全 (property preservation) and demanding that Zhuji Wensheng Hui fulfill its contractual duties and assume liability for违约 (default). This legal offensive aims to调整或归于消灭 (adjust or eliminate) the rights acquired by Wensheng Asset through the agreements, effectively nullifying any decisions made by Beijing Huiyuan’s current management without Huiyuan Group’s approval. If successful, this move would recentralize authority around Zhu Xinli and his associates, marking a pivotal turn in the control rights battle. The immediate implications include potential disruptions to supply chains, customer relationships, and ongoing restructuring efforts, as the company grapples with dual governance structures. Immediate Market Reactions and Brand Impact The public airing of grievances has already triggered operational chaos, reminiscent of earlier incidents in 2025. In August, Beijing Huiyuan reported that an “不明第三方” (unidentified third party) attempted to fraudulently reissue company seals and business licenses, while in September, it accused Wensheng Asset and Zhuji Wensheng Hui of私刻公章 (privately carving company seals) to manipulate legal proceedings. These episodes led to电商平台大面积断货 (widespread stockouts on e-commerce platforms), eroding consumer trust and sales. For a brand that once commanded over 50% of China’s concentrated juice market, such instability is particularly damaging as competitors like农夫山泉 (Nongfu Spring) and可口可乐 (Coca-Cola) capitalize on the turmoil. Market analysts note that the control rights battle could further delay Beijing Huiyuan’s recovery, especially as it seeks to navigate shifting consumer preferences toward healthier, NFC (Non-Concentrated Reconstituted) and HPP (High-Pressure Processing) juice products. The brand’s legacy, built on Zhu Xinli’s vision since its 1992 founding, now hangs in the balance, with the outcome likely to influence perception among institutional investors and retail consumers alike. A Troubled Restructuring: Wensheng Asset’s Investment Gone Sour When Beijing Huiyuan was裁定重整 (adjudicated for restructuring) in 2022, Wensheng Asset’s participation was hailed as a potential lifeline for the beleaguered juice giant. As a prominent民营AMC机构 (private AMC institution), Wensheng Asset pledged 16 billion yuan to重塑汇源果汁品牌 (reshape the Huiyuan Juice brand) and propel it back to industry leadership. However, the partnership has unraveled spectacularly, revealing fundamental flaws in execution and alignment. The control rights battle is, in many ways, a symptom of this deeper dysfunction, raising questions about the efficacy of distressed asset interventions in China’s equity markets. The 16 Billion Yuan Bet and Unfulfilled Promises According to public disclosures, Zhuji Wensheng Hui has only实缴到位 (actually contributed) 7.5 billion yuan of its committed investment, with 6.47 billion yuan (including interest and performance bonds) remaining in Beijing Huiyuan’s accounts under its direct control, rather than being deployed for operational needs. A staggering 8.5 billion yuan is still未实缴到位 (not contributed), meaning Wensheng Asset has effectively gained majority board and supervisory committee提名权 (nomination rights) with minimal capital outlay. This imbalance has sparked outrage among其他股东及债转股受益人 (other shareholders and debt-to-equity beneficiaries), who have fully paid their认缴出资 (subscribed capital) and collectively hold 47.76% of the实收资本 (paid-in capital). In a公开求助信 (open letter for help) issued in August 2025, Beijing Huiyuan accused Zhuji Wensheng Hui of侵害股东及债权人利益 (infringing on shareholder and creditor interests) by proposing to use capital reserves to cover losses, which could force被动确认债转股 (passive confirmation of debt-to-equity conversions) and dilute权益 (rights and interests). The letter highlighted that if Zhuji Wensheng Hui主导进行公司分红或整体转让股权 (leads company dividends or overall equity transfers), it could secure 60% of proceeds without fulfilling its出资义务 (funding obligations), directly harming other stakeholders. This scenario underscores the high stakes in the control rights battle, where financial engineering appears to have overshadowed operational revitalization. Operational Challenges and Financial Strains Beijing Huiyuan’s financial performance has deteriorated amid the infighting. Public data shows营业收入 (operating revenue) falling from 27.45 billion yuan in 2023 to 24.75 billion yuan in 2024, while扣非净利润 (non-net profit after deducting non-recurring gains/losses) dropped from 3.93 billion yuan to 3.30 billion yuan over the same period. These figures lag behind the业绩承诺 (performance commitment) set during restructuring, which required cumulative non-net profits of至少11.25亿元 (at least 11.25 billion yuan) from 2023 to 2025, or an annual average of 3.75 billion yuan. The shortfall reflects not only internal governance issues but also external pressures, as the juice market undergoes结构性变革 (structural changes) with rising demand for premium, health-focused products. The company’s reliance on重整投资前的自有资金 (pre-restructuring自有资金) has strained its ability to invest in innovation and marketing, allowing rivals to gain ground. For instance, brands like味全 (Weiquan) and零度果坊 (Lingdu Guofang) have captured market share with advanced HPP offerings, while Beijing Huiyuan’s production assets, including its顺义工厂 (Shunyi factory) and 15条自有生产线 (15 proprietary production lines), risk becoming underutilized. This operational疲软 (weakness) compounds the legal complexities, making the control rights battle a critical determinant of whether the company can achieve its stated goal of becoming a轻资产、低负债、高盈利、高现金流的一流公司 (light-asset, low-liability, high-profit, high-cash-flow first-tier company). The Founder’s Shadow: Zhu Xinli’s Potential Comeback Zhu Xinli (朱新礼), the charismatic founder who built Huiyuan into a household name, has watched from the sidelines as his creation teetered on the brink. His possible return to the forefront is now a central theme in the control rights battle, driven by both personal legacy concerns and strategic necessity. Industry observers suggest that Zhu Xinli’s re-engagement could galvanize loyalists and stabilize the brand, but it also raises questions about governance continuity and past management decisions that led to the company’s initial downfall. Zhu Xinli’s Legacy and Strategic Intentions Zhu Xinli’s journey with Huiyuan began in 1992 when he transformed a near-bankrupt fruit cannery in Shandong into China’s leading juice producer. His hands-on approach and emphasis on quality helped the company secure a landmark investment from可口可乐 (Coca-Cola) in 2008, though that deal was后来 blocked by regulators on antitrust grounds. After Huiyuan Juice’s delisting in 2021, following years of financial struggles and debt defaults, Zhu Xinli retreated, allowing Wensheng Asset to take the helm. However, the recent turmoil appears to have spurred him back into action, likely motivated by不甘心 (unwillingness) to see the brand沉沦 (sink) and frustration with the重整过程中出现诸多怪事 (many strange occurrences during restructuring). If Huiyuan Group succeeds in reclaiming control, Zhu Xinli would regain authority over the核心资产 (core assets), including the “汇源”品牌及商标所有权 (Huiyuan brand and trademark ownership),全部销售渠道 (all sales channels), and production facilities. This could enable a back-to-basics strategy focused on brand rejuvenation and operational efficiency, leveraging his deep industry connections and consumer trust. However, it also risks reintroducing the centralized decision-making that contributed to earlier woes, highlighting the delicate balance required in this control rights battle. Investor Sentiment and Historical Context Market sentiment toward Zhu Xinli’s potential return is mixed. On one hand, his track record as a visionary entrepreneur inspires confidence among long-term investors who recall Huiyuan’s peak years. On the other, his previous leadership saw the company accumulate unsustainable debt and fail to adapt to market trends, leading to its delisting. The control rights battle thus represents a referendum on his legacy versus the promises of external restructuring experts. Institutional investors, such as those involved in国中水务 (Guozhong Water Affairs) indirect stake in Beijing Huiyuan, are closely monitoring developments, as any shift could impact their回报率 (return on investment). Historically, founder comebacks in China’s equity markets have yielded varied results. For example, in the tech sector, figures like联想 (Lenovo) founder Liu Chuanzhi have successfully stabilized companies, while others have struggled with outdated strategies. For Huiyuan, the key will be whether Zhu Xinli can collaborate with existing stakeholders and implement modern governance practices, rather than reverting to past models. The ongoing legal proceedings will likely shape this dynamic, as courts weigh the merits of Huiyuan Group’s claims against Wensheng Asset’s counterarguments. Broader Implications for China’s Corporate Restructurings The Huiyuan control rights battle transcends a single company, offering critical lessons for China’s broader corporate restructuring ecosystem, especially as regulators emphasize市场秩序 (market order) and投资者保护 (investor protection). The case highlights the pitfalls when distressed asset investments prioritize financial engineering over sustainable operational turnarounds, a common issue in transactions involving民营AMC (private AMCs) like Wensheng Asset. For international investors eyeing Chinese equities, this saga underscores the importance of due diligence on governance structures and partner alignment in post-restructuring entities. Regulatory Scrutiny and AMC Practices Chinese authorities, including the中国证监会 (China Securities Regulatory Commission) and最高人民法院 (Supreme People’s Court), have been tightening rules on破产重整 (bankruptcy restructuring) to prevent abuses. The Huiyuan case may prompt further scrutiny of AMC practices, particularly regarding实缴出资 (actual capital contributions) and股东权益平衡 (shareholder equity balance). Recent guidelines, such as those outlined in the《企业破产法》修订草案 (Enterprise Bankruptcy Law revision draft), emphasize transparency and creditor rights, which could influence the outcome of this control rights battle. If courts rule in favor of Huiyuan Group, it could set a precedent for enforcing stricter compliance on investment agreements, potentially deterring speculative plays in distressed assets. Moreover, the involvement of entities like广东民营投资股份有限公司 (Guangdong Private Investment Co., Ltd., aka粤民投 – Yuemin Tou), which冻结股权 (froze equity) in a related transaction, illustrates the complex web of interests in Chinese restructurings. This interconnectedness can lead to prolonged disputes, as seen when国中水务 terminated its acquisition of Zhuji Wensheng Hui stakes due to unresolved legal issues. For market participants, these dynamics underscore the need for robust legal frameworks and clear exit strategies in restructuring investments. Lessons for Equity Market Participants The Huiyuan control rights battle offers several key takeaways for fund managers, corporate executives, and policymakers. First, it reveals the risks of over-reliance on financial investors without aligned operational expertise; Wensheng Asset’s background in asset trading may have ill-prepared it for the hands-on demands of running a consumer brand. Second, it highlights the importance of清晰的业绩承诺机制 (clear performance commitment mechanisms) with enforceable penalties, as vague targets can lead to disputes and underperformance. Third, the case demonstrates how internal governance conflicts can exacerbate external market challenges, such as shifting consumer preferences and competitive pressures. Investors should also note the role of公开信 (public letters) and社交媒体 (social media) in escalating corporate disputes, a trend increasingly common in China’s digital economy. The rapid dissemination of information via platforms like WeChat can amplify market volatility and force quicker resolutions, but it can also muddy legal proceedings. As such, stakeholders must factor in communication strategies when engaging in restructuring scenarios, ensuring that public narratives align with legal and financial realities. Pathways to Resolution: Scenarios for Beijing Huiyuan’s Future As the control rights battle unfolds, several potential outcomes could shape Beijing Huiyuan’s trajectory, each with distinct implications for the brand, investors, and the beverage sector. The most likely scenarios range from a negotiated settlement to protracted litigation, with Zhu Xinli’s involvement serving as a wild card. Regardless of the path, the company’s ability to涅槃重生 (rise from the ashes) will depend on resolving governance fractures and refocusing on core competencies. Legal Proceedings and Ownership Adjustments The immediate future hinges on the北京三中院 (Beijing Third Intermediate People’s Court) rulings on Huiyuan Group’s lawsuits. If the court upholds the claims of contract breach and orders Zhuji Wensheng Hui to fulfill its出资义务 (funding obligations) or adjust equity rights, control could revert to Zhu Xinli and his allies. This might involve重新增资 (recapitalization) or股权转让 (equity transfers) to rebalance ownership, potentially attracting new investors like战略合作伙伴 (strategic partners) from the beverage industry. Conversely, if Wensheng Asset successfully defends its position, it could retain control but face intensified pressure to inject capital and improve operations, possibly through partnerships or asset sales. Another possibility is a调解 (mediation) brokered by regulators or industry associations, aiming to avoid a drawn-out legal battle that could further damage the brand. Such a settlement might involve shared control or phased transitions, similar to past restructurings in sectors like房地产 (real estate) and制造业 (manufacturing). Key to any resolution will be addressing the concerns of债转股股东 (debt-to-equity shareholders), who have borne the brunt of the instability and seek clearer权益保障 (rights protection). Strategic Revival in a Competitive Beverage Landscape Beyond ownership, Beijing Huiyuan must tackle operational headwinds to regain market relevance. This could involve聚焦100%果汁 (focusing on 100% juice) as a premium niche, leveraging its brand heritage while innovating with HPP and NFC technologies to meet health-conscious demand. Strategic initiatives might include partnerships with新零售 (new retail) platforms, expansion into lower-tier cities, or diversification into adjacent categories like plant-based beverages. Learning from competitors, such as伊利 (Yili) and康师傅 (Master Kong), which have successfully navigated market shifts, could provide a blueprint for turnaround. Financial restructuring will also be crucial; the company may need to探索证券化 (explore securitization) or attract equity from长期投资者 (long-term investors) to reduce reliance on volatile funding. The previously hinted goal of市值超500亿 (market capitalization exceeding 50 billion yuan) seems distant amidst current turmoil, but with stabilized governance, it could become a rallying point. Ultimately, the control rights battle must give way to a cohesive strategy that aligns ownership, management, and market ambitions, allowing Beijing Huiyuan to reclaim its status as a果汁一哥 (juice leader). Synthesizing the Stakes: What Lies Ahead for Huiyuan and the Market The Huiyuan control rights battle encapsulates the complexities of revitalizing distressed icons in China’s rapidly evolving equity markets. At its core, this is a story of conflicting visions: one rooted in founder-led revival, and another in financial investor-led restructuring. The outcome will not only determine the fate of a beloved brand but also signal broader trends in corporate governance, regulatory enforcement, and investor confidence. For Zhu Xinli, the journey represents a chance at redemption; for Wensheng Asset, a test of its restructuring model; and for the market, a case study in balancing legacy with innovation. Key takeaways include the critical role of transparent contracts and aligned incentives in restructuring deals, the enduring influence of founders in Chinese business culture, and the market’s low tolerance for prolonged internal conflicts. As legal proceedings advance, stakeholders should prioritize scenarios that stabilize operations and restore brand trust, perhaps through hybrid governance models that incorporate both historical insights and fresh perspectives.
Huiyuan Juice’s Control Rights Battle Intensifies: Is Founder Zhu Xinli Poised for a Dramatic Return?
