Sanyuan Corporation spends hundreds of millions to acquire a 42% stake in "Bingboke".

The dairy industry’s B-side business welcomes a landmark transaction.

On March 30, Sanyuan Shares announced that it plans to invest about 104 million yuan, together with its related party Gongqingcheng Ruxing Investment Partnership, to jointly acquire part of the equity in Shanghai Bilu Foods Co., Ltd. and inject additional capital in cash.

After the transaction is completed, Sanyuan Shares will hold 42% of Bilu Foods, making the latter an associated subsidiary that is not consolidated in its financial statements. Since Shanghai Fosun Group controls a portion of Sanyuan Shares' shareholders as well as Gongqingcheng Ruxing, this transaction constitutes a related-party transaction.

Established in 2015, Bilu Foods is a “little giant” in the domestic dairy product segmentation. Its core products include “Ice Bock” refined milk, super milk, and butter milk, and it has already established partnerships with many mainstream tea beverage and boutique coffee chain brands.

Among them, “Ice Bock” uses frozen purification technology to achieve higher milk fat content and a unique salty-sweet flavor, forming strong brand barriers and customer stickiness in the B-side market.

Sanyuan Shares’ decision to make this move comes at a key juncture when the fundamentals of its main business are undergoing positive changes.

According to performance forecasts, the company’s expected operating income for the whole year of 2025 is about 6.35 billion yuan, with a net loss attributable to shareholders ranging from 178 million to 356 million yuan.

Although this marks the first annual loss in nearly ten years, the main reason is due to a large goodwill impairment of its associated company France HCo, with an impact amounting to about 496 million to 616 million yuan. Excluding this factor, the company's main business remains steadily profitable.

From an industry perspective, this transaction also reflects the macro trend of accelerated expansion in the B-side dairy track. In recent years, as the C-side liquid milk market has entered homogeneous competition, major dairy companies like Mengniu and Yili have turned their attention to the B-side.

It is estimated that in 2024, the size of China’s B-side dairy product industry has exceeded 40 billion yuan, and is expected to reach 70.3 billion yuan by 2028, with a compound annual growth rate of over 14%.

Previously, this market was dominated by international brands such as Fonterra and Anchor, with a domestic substitution rate of less than 30%, leaving huge room for replacement.

In tea beverages, coffee, and other segmented fields, application scenarios for dairy products continue to expand—just in freshly made milk coffee alone, sales in 2025 are expected to reach 5 billion cups, bringing about 26.5 billion yuan of expansion space for dairy products.

By investing in Bilu Foods, Sanyuan Shares not only gains a direct entry into a determined track, but also accumulates customized development and channel service experience for chain restaurant customers.

Bilu Foods’ research and development capabilities in products like “Ice Bock” are expected to help Sanyuan Shares build a differentiated B-side product system, gradually breaking away from a single low-margin raw milk supply model.

For Sanyuan Shares, whether this transaction can truly create synergy between milk sources, R&D, and channels will to a certain extent determine how far it can go in the trillion-yuan B-side dairy market.

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