The story of Songhe Liquor, once hailed as "Henan's Liquor King," has turned a new page with the exit of Henan's former richest man.

Recently, Songhe Liquor held a press conference in Zhengzhou, Henan, announcing the imminent conclusion of its restructuring. As a representative brand of Henan's baijiu industry, Songhe Liquor once achieved peak sales exceeding 2.2 billion yuan. Its parent company, Furen Pharmaceutical, was controlled by Zhu Wenchen, Henan's former richest man. However, plagued by long-standing issues such as fund misappropriation and asset mortgages, Songhe Liquor fell into deep debt and filed for bankruptcy restructuring in late 2022.

In December 2023, GUOQUAN (02517.HK), a hotpot and barbecue ingredient retail chain also originating from Henan, stepped in as a restructuring investor. GUOQUAN Chairman Yang Mingchao stated that the company invested 180 million yuan to secure Songhe Liquor's two-year revival plan.

The restructuring is now nearing completion. On October 28, Songhe Liquor's legal representative changed from Zhu Wenchen to Wang Shuiyun, who also serves as director and general manager. Reports indicate Wang is part of Yang Mingchao's team, signaling a formal transfer of control. While Furen Pharmaceutical still holds 52.39% equity, operational rights have shifted to Yang.

At the relaunch event, Songhe Liquor introduced three core product lines—Celebration Red, Business Green, and Premium Purple—alongside a budget-friendly 9.9 yuan/500ml Daqu product targeting mass consumers. The company also plans to open its first "Songhe Liquor-to-Home" store by year-end, marking a shift from traditional baijiu to broader beverage offerings.

A year ago, Yang Mingchao set a decade-long goal: "100 million Henan residents, 10 billion yuan for Songhe Liquor." With initiatives ranging from affordable liquors to diversified beverages, the battle for Songhe's revival has just begun.

**Cross-Industry Revival: Building a "Drinking GUOQUAN"** Yang Mingchao's ties with Songhe Liquor date back to 2020, when GUOQUAN's supply chain partnered with the brand. Yang aimed to leverage GUOQUAN's retail network to expand Songhe's reach nationwide.

After Furen Pharmaceutical's 2019 financial scandal, Songhe Liquor, burdened by over 10 billion yuan in liabilities, began restructuring in late 2022. GUOQUAN officially joined as an investor in late 2023.

Why venture into liquor? GUOQUAN explained that while it focuses on "eating," Songhe covers "drinking," aligning in consumer channels. Future synergy between baijiu and beverages through "Liquor-to-Home" stores could complement GUOQUAN's existing model.

Post-restructuring, Songhe streamlined its product lineup, cutting 438 outdated SKUs and relaunching premium series like "Purple Eastward" and "Deer County Daqu." It also plans 800 smart liquor warehouses across Henan.

At a 2024 product launch, Yang outlined a three-phase strategy: stabilization (3 years), expansion (3 years), and 10-billion-yuan growth (4 years).

GUOQUAN's 2025 interim report highlighted its push into beverages, introducing NFC juices and tea-infused craft beers. Currently, Deer County Daqu products are available in Henan stores, with combo promotions tested last year.

Targeting younger consumers, Songhe launched a 29-proof Deer County Gold Label and plans a 9.9 yuan pure-grain liquor. GUOQUAN envisions transforming traditional tobacco-alcohol shops into multi-purpose "Liquor-to-Home" hubs, integrating offline and online sales.

Yang's ultimate goal is to evolve Songhe into an open "beverage industry platform," offering convenient home-delivery services.

**Road to Recovery: Long Path Ahead** Founded in 1968 as a state-owned distillery, Songhe Liquor gained fame in 1989 as one of China's top 17 liquors, Henan's only representative in the strong-aroma category.

After peaking in the 1990s with 690 million yuan profits, it declined post-1994. Furen Pharmaceutical's 2002 acquisition spurred growth, pushing sales past 2.2 billion yuan by 2012—Songhe's zenith.

However, Furen's 2019 financial fraud exposed Songhe's asset-backed debts, totaling 11.586 billion yuan by 2023. The restructuring saw GUOQUAN inject 180 million yuan, enabling production resumption and product upgrades. By mid-2024, Songhe's gross margin rose from 41% to 79%, with breakeven costs slashed from 870 million to 320 million yuan annually.

Despite progress, challenges remain. In Henan's 66.8 billion yuan liquor market, Songhe holds just a 2% share among top brands like Moutai (29%) and Wuliangye (20%). Among local players, Songhe trails rivals like Shedian and Huang Gou Imperial Liquor, with sales stagnant at 600 million–1 billion yuan.

Yang Mingchao's billion-yuan ambition still faces a steep climb.