Gaofei Ruthlessly Dumps 2.4 Billion Burden to Give Mengniu a "Light and Agile" Spring

(Author | Zhou Qi Editor | Zhang Guangkai)

Revenue declines, profits soar.

On March 6, 2026, Mengniu Dairy released its 2025 annual performance forecast.

The announcement shows that total revenue for 2025 is expected to decrease by 7%–8% year-on-year, with an operating profit margin of approximately 7.9%–8.1%, slightly below 2024’s 8.2%, but still higher than previous years.

Performance Forecast

This is the second annual report since Gao Fei took the helm at Mengniu.

He plans to recognize impairment provisions of about 2.2–2.4 billion RMB for some idle production facilities and uncertain receivables from financial and contractual assets, paving the way for a leaner 2026.

Under the combined influence of these factors, Mengniu expects net profit attributable to shareholders of the company to be approximately 1.4–1.6 billion RMB in 2025.

Six months ago, in the depths of the Ulan Buh Desert, Mengniu held a strategic consensus meeting titled “Evolve Stronger, Win the Battlefield.”

“Evolution is not a choice but a necessity for survival,” Gao Fei motivated the 275 management and key employees present, “Being strong is not just a slogan; it’s an evolution.”

Gao Fei is reshaping Mengniu’s future with decisive actions.

Entrusted in Crisis, From the “Double Trillion” Dream to Leadership Change

Rewind two years.

On the night of March 26, 2024, Mengniu issued two announcements. One was the performance forecast already disclosed, and the other was a personnel change: Lu Minfang, who had led Mengniu for nearly eight years, stepped down.

The CEO position was taken over by Gao Fei, former Senior Vice President and head of the Ambient Temperature Business Unit.

“Believe it or not, everyone saw the announcement yesterday, maybe a bit of a surprise, but this was an important decision by the Mengniu Board based on medium- and long-term strategic considerations,” Lu Minfang said at the earnings meeting the next day.

(Mengniu: Left Gao Fei, Right Lu Minfang)

The sudden personnel change perhaps caught Lu Minfang off guard. He had been practicing French for a long time, aiming to leverage “Olympic marketing” at the Paris Olympics in July.

“Regarding the company’s future development, Lu did not provide clear directions or measures,” said industry expert Song Liang to Observer.

This day marked exactly four years since Mengniu set the “Double Trillion” goal—to achieve revenue and market value exceeding 100 billion yuan by 2020.

Lu Minfang was Mengniu’s fourth CEO. When he took office in 2016, he proposed “releasing Mengniu’s wolfish culture,” targeting the “Double Trillion” goal, and began Mengniu’s expansion era.

Over eight years, Mengniu’s scale nearly doubled from 53.779 billion RMB to 98.624 billion RMB. He led a series of capital operations, such as acquiring Australian milk powder brand Bellamy’s, merging with cheese leader MiaoKeLando, and forming joint ventures with Modern Dairy.

However, the costs of expansion exploded in 2024.

Mengniu’s 2024 annual report showed revenue of 88.675 billion RMB, down 10.1% year-on-year; net profit attributable to shareholders was only 105 million RMB, a plunge of 97.8%.

The sharp decline in net profit was mainly due to impairment of acquisitions: Bellamy’s goodwill and intangible assets impairments totaled 3.981 billion RMB, and Modern Dairy’s goodwill impairment was 827 million RMB.

The “Double Trillion” target has been missed for four consecutive years. Coupled with the dramatic performance decline, leadership change became inevitable.

This marked the return of veteran Mengniu personnel after 12 years and two leadership changes. Unlike the external professional manager Lu Minfang or CCF’s Sun Yiping, Gao Fei is a “homegrown” Mengniu veteran.

In 1999, when Mengniu was founded by Guo Ningsheng, Gao Fei was the 77th employee.

He started as a regional sales and marketing manager, then served as a center manager, sales general manager, and marketing general manager, participating in Mengniu’s entire growth process.

Within Mengniu, the Ambient Temperature Business Unit is considered the “cornerstone,” contributing over half of the revenue. In 2013, he led the sales of TeLunSu to surpass 30 billion RMB, accounting for over 30% of Mengniu’s revenue; in 2016, he became Vice President of Mengniu Group and head of the Ambient Temperature Business Unit.

Internal evaluations of Gao Fei describe him as “pragmatic.” This pragmatism stems from 26 years of frontline market experience. From regional manager to CEO, Gao Fei has held nearly all positions in the sales system, with deep understanding of channels, terminals, and consumers.

“Two leaders have different styles. Lu Minfang has an international background and is eager to share; Gao Fei, with a business background, is more reserved,” an insider told Observer.

Three Key Strategies After Ascending to Power

Gao Fei’s series of reforms were carried out amid an extremely challenging industry cycle.

2024–2025 marks a critical period for China’s dairy industry.

Euromonitor data shows that in 2024, China’s liquid milk market size was 344.2 billion RMB, with a CAGR of -4.2% from 2022 to 2024. NielsenIQ data indicates that in September 2025, total dairy sales across channels declined by 16.8% year-on-year.

The industry’s difficulties can be summarized as threefold pressures:

Supply-demand imbalance, with persistent low raw milk prices and weak consumer demand; insufficient product innovation, with liquid milk growth plateauing and emerging categories not yet scaled; fragile supply chains, with distributor funding strains and urgent channel reforms.

Since Gao Fei’s appointment, he has spent considerable time visiting markets.

He faces a mess of internal and external problems.

Externally, supply-demand imbalance and weak demand; internally, acquisitions like Bellamy’s dragging down performance, with a business structure overly reliant on liquid milk, which accounts for over 80% of revenue.

The gap in the milk powder segment is even more pronounced. Milk powder is a high-margin segment and a core business for dairy giants.

“If you don’t do well in infant formula, you won’t become a leading enterprise,” Lu Minfang has repeatedly emphasized.

In the first half of 2025, Mengniu’s milk powder revenue was only 1.68 billion RMB, less than one-tenth of Yili’s 16.578 billion RMB in milk powder and dairy products.

From Downsizing to Moving Forward

With a leaner structure, Mengniu showed signs of “offensive” at the start of 2026.

First, a surge in sports marketing.

2026 is a sports year, with the Milan Winter Olympics and the North America-Mexico-Canada World Cup seamlessly connected.

According to MiaoZhen Marketing Academy data, Mengniu topped the 2026 Milan Winter Olympics brand digital asset rankings, leading in social media volume and engagement.

Goldman Sachs predicts that benefiting from “Winter Olympics marketing + Lunar New Year,” Mengniu’s ambient temperature milk sales in January achieved high single-digit to double-digit growth.

Second, breaking into new categories.

For example, Mengniu launched a “milk calcium electrolyte drink,” entering the electrolyte water market. This product targets active consumers’ hydration and calcium needs, trying to carve out a niche amid fierce competition from brands like Yuanqi Forest’s “Alien” and Dongpeng’s “Hydrate.”

“Within a month of launch, online sales exceeded 100,000 bottles,” Mengniu stated.

Observer noted that on Mengniu’s Tmall flagship store, the “Mengniu Milk Calcium White Peach Electrolyte Drink PET bottle 500ml x 15 bottles x 20 boxes” was priced at 2,132 RMB before coupons, with a post-discount price of 1,470 RMB, about 4.9 RMB per bottle.

(Mengniu Tmall Store)

Finally, deep ecosystem integration.

Earlier, Gao Fei, during a visit to MiaoKeLando, emphasized “long-term ecosystem development, fully connecting the cheese industry chain.”

This means MiaoKeLando is no longer just a subsidiary but a core piece in Mengniu’s “One Body, Two Wings” strategy, focusing on B2B markets and reshaping cheese consumption.

Looking back at Mengniu’s history, in 1999, Guo Ningsheng founded Mengniu with 1 million RMB, gradually building its reputation through marketing.

In 2003, after the “Shenzhou V” spaceflight, Mengniu branded itself as “astronaut’s milk”; in 2005, it sponsored “Super Girl,” boosting yogurt sales from 800 million to 3 billion RMB; in 2004, it listed on the Hong Kong Stock Exchange. By 2007, Mengniu’s annual sales exceeded 20 billion RMB, surpassing Yili for the first time, and in 2009, COFCO became its largest shareholder.

Since then, Mengniu has had four CEOs: Yang Wenzhun, Sun Yiping, Lu Minfang, and Gao Fei.

Today, Mengniu’s core segments include liquid milk, ice cream, milk powder, and cheese.

Its brands include TeLunSu, ChuanZhen, ZhenGuoLi, GuanYiRu, MeiRiXianYu, DiLanShengXue, RuiBuEn, Bellamy’s, MiaoKeLando, among others. TeLunSu is its flagship product, and MiaoKeLando leads the cheese industry.

For Gao Fei, the 2025 financial report may just be the beginning.

In his 2026 New Year’s message, he wrote, “The Milan Winter Olympics and North America-Mexico-Canada World Cup are about to begin, and we will once again step onto the world stage. We must seize the momentum and do ‘difficult but right’ things.”

“Difficult but right” may refer to the pain of proactively clearing assets, the hardships of diversification, or redefining the importance of “being strong” in a saturated market.

As the burden of 6.5 billion is lifted and the sports year’s momentum arrives, Gao Fei and Mengniu are awaiting a spring suited for “lightweight players.”