Weilong Co. (603779.SH), long billed in China as a leading listed organic-wine producer, has warned that 2025 will mark a return to the red. The company expects a net loss attributable to shareholders of Rmb40.92–66.11 million and has proposed scrapping 600 mu of vines at its Longhu planting base, keeping 400 mu for tourism use.
The firm said preliminary estimates point to 2025 revenue of Rmb341–391 million, and adjusted operating revenue of Rmb315–360 million after excluding non-core and non-commercial items. Weilong also plans to book about Rmb62.68 million in asset write-offs and impairment charges for the year, of which roughly Rmb11.18 million will be recorded as losses from scrapped vineyard assets.
Management blamed the shortfall on a weak wine market and declining core sales, along with targeted provisions tied to a subsidiary’s pending litigation and impairment charges on bulk wine inventory. The company defended the decision to retire 60% of the 1,000-mu Longhu plot by arguing that existing supplies from its Australia, Gansu and Xinjiang bases are sufficient to meet production needs for the next four to five years, and that scarce cash should not be used to sustain low-return field investment.
Corporate governance strains compound Weilong’s operating problems. The company disclosed that its ultimate controller, Yan Pengfei, was placed under residential surveillance amid allegations of embezzlement, and controlling shareholder Xinghe Xirang—listed as holding 18.84% of Weilong—has seen 86.47% of its stake frozen or flagged, representing 16.29% of Weilong’s total shares. Those restrictions have sharply curtailed the group’s ability to raise fresh capital and have prompted a pragmatic pivot toward leasing retired land to third parties to generate rental income.
The move to downscale vineyard acreage and pivot some land to tourism or rental use is emblematic of pressures across China’s lower-tier wine sector. Domestic consumers have not consistently rewarded organic or premium messaging with higher prices, and small and mid-sized producers face margin squeeze from overcapacity, rising input costs and intense retail competition. Weilong’s stock reflected that malaise, falling about 30% in 2024 and a further 16% in 2025.
For investors and creditors the announcement is a mixed signal: the company is taking a conservative accounting stance and pruning underperforming assets, which should shore up future cash burn, but the combination of persistent operating weakness, legal exposures and a frozen controlling stake increases the risk profile. How Weilong manages the fallout from the controller’s legal troubles, whether it can monetize non-core assets, and whether demand stabilizes for its organic positioning will determine whether this is a corrective reset or a deeper restructuring ahead.