A disastrous fund investment: How did it make Miaoke Landuo bid farewell to the "Chai Xiu era"?

``` The era of Milkground’s founder has come to an end. Recently, Milkground’s board of directors decided to remove founder Chai Xiu from her positions as vice chairman, general manager, and legal representative. This founder, who once led the company to pioneer the “children’s cheese stick” blue ocean market, exited the core management team early through a “dismissal.” At the same time Chai Xiu stepped down, Mengniu’s professional manager Kuai Yulong was comprehensively promoted, taking over as general manager and concurrently serving as chief financial officer. The immediate trigger for Chai Xiu’s removal was an overdue guarantee debt involving an off-balance-sheet M&A fund. The creditor of this debt is none other than Milkground’s largest shareholder, Mengniu. The chain of events traces back several years. In June 2018, Milkground invested 100 million yuan to purchase a stake in “Shanghai Xiangmin Equity Investment Fund Partnership (Limited Partnership).” Two years later, original actual controller Chai Xiu acquired the primary partner of this M&A fund, making the other limited partner “Jilin Yaohe Economic and Trade Co., Ltd.” (controlled by Chai Xiu’s related parties) an affiliate of Milkground. In December 2020, shortly after Mengniu became Milkground’s controlling shareholder through a targeted placement of about 3 billion yuan, it provided a 700 million yuan loan to “Jilin Yaohe” via a trust plan. Providing a guarantee for this massive loan was none other than the “Shanghai Xiangmin” M&A fund and its subordinate entities. Thus, the listed company began to bear indirect risk for affiliated party’s debt. In response, Chai Xiu issued a personal commitment to the listed company, promising to fully compensate the company if it suffered losses due to the guarantee. However, this promise did not prevent real risks. In September 2024, Mengniu informed Milkground that borrower Jilin Yaohe had overdue unpaid trust loan principal and interest, and the debt officially defaulted. By early 2025, as the M&A fund reached the end of its term, Milkground was unable to recover its 100 million yuan investment due to the underlying assets being pledged and frozen, exposing the risk completely. Meanwhile, Chai Xiu’s compensation commitment remained unfulfilled, prompting Milkground’s board to ultimately decide to pursue arbitration. This “bad debt” has brought a direct financial impact. Accounting for income tax effects, the change in its fair value is expected to reduce Milkground’s 2025 net profit attributable to shareholders by 119 million to 127 million yuan. Regardless of the outcome of the arbitration, this incident objectively further strengthens Mengniu’s control over Milkground. In 2024, Mengniu already injected its cheese business into Milkground, making it the group’s sole cheese operation platform. In December 2025, Mengniu increased its stake in the company again and made it clear it plans to continue increasing its stake over the next three months. In contrast to the management turmoil, Milkground’s core business is showing signs of recovery. In the first three quarters of 2025, the company achieved revenue of 3.957 billion yuan, up 10.09% year-on-year; net profit reached 176 million yuan, a significant increase of 106.88% year-on-year. Huaxi Securities analyst Kou Xing pointed out that, supported by raw milk prices and the ongoing cost reduction and efficiency improvements in the industry, the B-end domestic cheese industry trend is beginning. In the long term, domestic cheese is expected to occupy half of the domestic market, with Milkground likely to take half of the domestic cheese’s market share, corresponding to an incremental revenue scale in the tens of billions. Risk Warning and Disclaimer The market has risks, and investment must be cautious. This article does not constitute personal investment advice and does not take into account any individual user’s specific investment goals, financial situation or needs. Users should consider whether any opinions, viewpoints or conclusions contained herein are suitable for their particular situation. Investing accordingly is at your own risk. ```