Once ranked among the top three wine producers in China alongside industry giants Changyu and Great Wall, Weilong Wines (603779.SH) is now grappling with a precarious future. On May 5, the company announced that its controlling shareholder, Galaxy Xirang (Zhejiang), is planning a share transfer that could once again lead to a change in control. Trading was suspended shortly after, signaling yet another chapter of instability for the firm that pioneered organic wine in the Chinese market.
This potential exit by the current leadership comes at a time of significant legal and financial duress. The company’s actual controller, Yan Pengfei, was detained by police in late 2024, and his entire 18.84% stake in the firm remains frozen by judicial order. This legal impasse presents a formidable obstacle for any prospective buyer, as the unfreezing of these shares is a prerequisite for any successful transfer of ownership.
The current crisis is not an isolated event but the culmination of years of governance instability. The company's downward spiral began in 2020 following a scandal involving illegal guarantees by former chairman Wang Zhenhai. Since then, Weilong has cycled through various financial investors who lacked the long-term industrial commitment necessary to revitalize the brand. This revolving door of shareholders has consistently disrupted the continuity of the company’s corporate strategy.
Financial performance reflects this internal chaos. Weilong recently reported a shift from profit back to loss, with a net loss of 63 million yuan for 2025 and a continued decline in revenue during the first quarter of 2026. The domestic wine market in China is currently enduring a structural low, as consumer preference shifts toward Baijiu, beer, and pre-mixed cocktails, leaving traditional wine producers with shrinking margins and bloated inventories.
High-end products, while showing marginal growth, remain a negligible portion of Weilong's total revenue. The company is currently burdened with 525 million yuan in inventory, representing nearly 40% of its total assets. Without a strategic partner capable of injecting significant capital and industrial resources, the 'organic' prestige that Weilong once held risk becoming a historical footnote in an increasingly competitive beverage landscape.