Handover of a billion-dollar empire: Tingyi must not only preserve its legacy but also 'entrust' its future

Investor Network Gravitation | Han Yijia

In the final quarter of 2025, Tingyi Holdings announced that professional manager Chen Yingrang is retiring, and Wei Hongcheng, son of founder Wei Yinzhou, will assume the role of Chief Executive Officer on January 1, 2026. This signifies that after 11 years under professional management, Tingyi will return to direct oversight by the Wei family.

This transfer of 'power' also implies an assumption of pressure for the 'second generation': stagnant growth in core business operations, weakening distribution networks, and constantly changing consumer trends... Under the leadership of this new generation of the family, can Tingyi revitalize itself and break through these challenges?

Second-Generation Succession: Family Governance and Corporate Challenges

Since the founder Wei Yingzhou initiated the intergenerational succession plan in 2013, Tingyi (Master Kong) has undergone a prolonged transition period.

In 2007, the third son Wei Hongcheng joined Tingyi and gradually became involved in business management. Since 2015, Wei Hongcheng has been deeply involved in beverage operations management, and since 2019 he has served as Chairman of Tingyi Beverage Holdings. Under his leadership, the beverage division achieved several consecutive years of revenue growth—a key 'accomplishment' viewed by the market as important to his appointment as Group CEO. Now, Wei Hongcheng has officially taken over as CEO, while his elder brother Wei Hongming assumed the role of Chairman of the Board in 2018. From this point on, Tingyi enters a new phase led jointly by the Wei brothers under a 'Chairman + CEO' structure.

Over the past decade, Tingyi experienced a phase led by professional managers. In 2015, Wei Yingzhou handed over the CEO position to professional manager Bruce Wei Junxian with the aim of driving corporate 'de-familialization' and standardized management. Wei Yingzhou gradually stepped back from the frontlines, while the family retained control over major decisions via the board of directors. Professional managers took charge of daily operations and built a modernized management system. This phase left a significant 'legacy' in areas such as ESG framework development, digitalization, and compliance processes.

Market analysts suggest that amidst current challenges of pressured revenues and channel transformations, family governance offers greater stability for dealer networks and enables long-term strategic investments—also being one of the 'reasons' behind Tingyi’s strategy shift.

However, this 'second-generation' successor faces a series of developmental challenges upon assuming office.

According to the latest financial report, Tingyi's net profit for the first half of 2025 was RMB 2.271 billion, a year-on-year increase of 20.5%. However, this growth masks a comprehensive contraction in core businesses: instant noodle sales reached RMB 13.465 billion, down 2.5% year-on-year, and beverage sales amounted to RMB 26.359 billion, down 2.6% year-on-year.

Moreover, part of the profit improvement stemmed from reduced raw material costs, margin improvements due to price hikes, and gains from the sale of subsidiaries. This growth model, reliant on 'cost-cutting' measures and one-time gains, raises market concerns about the sustainability of such growth.

Even more concerning is the loosening of the distribution network that this FMCG giant relies on. In the first half of 2025, Tingyi saw a net reduction of 3,409 distributors compared to the end of 2024, along with a decrease of 1,499 direct retailers. Since the end of 2021, its total number of distributors has decreased by approximately 17,000.

Tingyi’s 'price hike controversy' last year impacted profit margins for channels, prompting some distributors to exit, which in turn caused changes in the distributor system, directly affecting Tingyi's market coverage capabilities.

Compared with its main competitors, Master Kong's growth momentum is clearly insufficient. Uni-President Enterprises achieved an 8.8% year-on-year increase in instant noodle business revenue and a 9.1% rise in tea beverage revenue during the same period, maintaining an overall growth trend. This also poses significant challenges for Master Kong.

Beyond sales channels, the biggest test for Master Kong is the change in consumer demand. With the growing popularity of healthy eating concepts, the convenience advantage of traditional instant noodles has been diluted by various alternatives such as food delivery and pre-made meals. The premium series introduced by Master Kong in recent years has received lukewarm market feedback, with some products even being criticized as 'packaging gimmicks' due to lack of innovation, directly damaging brand credibility.

In terms of beverage operations, although Master Kong entered the sugar-free tea market relatively early, it still lags behind brands like Nongfu Spring’s “Oriental Leaves” in terms of buzz and market share with its products such as 'Pure Brew Zero Sugar' and 'Tea Heritage.' Wei Hongchen successfully drove the beverage business towards full-category transformation and capitalized on the sugar-free tea trend, but these categories have now reached their growth peak. In the first half of 2025, all major categories under Master Kong—including tea, water, and juice—declined, with only the carbonated drinks segment showing growth.

Amid fierce competition in this red ocean market, this veteran fast-moving consumer goods giant still needs more innovation and transformation.

Path to Breakthrough: Preservation and Innovation

Facing market challenges, Master Kong needs profound transformations in product innovation and channel reform.

The overall scale of China’s convenient food market is still expanding, with analysts from the China Industrial Research Institute predicting that the market size will reach 914.1 billion yuan in 2025 and further grow to 960.3 billion yuan in 2026. Among the broader category of ready-to-eat foods, instant noodles account for approximately 45.38% of market share, firmly holding the top position. However, beneath the vast scale lies a dichotomy for this traditional food category—it supports a large portion of the ready-to-eat product landscape while facing dual pressures of growth stagnation and structural adjustments.

Data from the World Instant Noodles Association shows that between 2020 and 2023, China’s instant noodle consumption dropped by 4 billion packs, from 47.8 billion to 43.8 billion packs. In Q2 of 2025, total industry sales fell 8.9% year-on-year, with the decline accelerating.

From a channel perspective, in the first half of 2025, offline retail channel instant noodle sales declined 6.22% year-on-year, whereas online sales through mainstream e-commerce platforms reached 9.234 billion yuan, growing 10.8% year-on-year, showing both volume and price increases. The decline in offline sales contrasts sharply with the growth in online channels, while the sharp drop in consumption and steady price increases point to one conclusion—the market is shifting from 'volume-driven' to 'price-driven.'

The industry structure is undergoing deep adjustments, with premiumization and health-focused offerings becoming the main growth drivers. The previous simple strategy of 'ingredient upgrades + price hikes' can no longer meet growth demands; future innovation will be more technology-driven. For instance, Master Kong’s 'FreshQ Noodles' series, which uses aerospace FD freeze-drying technology, focuses on being 0% fried and offering a 'freshly cooked feel,' addressing consumers’ core demands for health and taste. Its newly launched 'He Mian' series attempts to penetrate meal replacement scenarios with 'restaurant-grade' quality (such as large chunks of real meat). These innovations have supported its instant noodle business, allowing gross margin to increase by 0.7 percentage points despite slight revenue declines.

Channel development is another key focus for Master Kong. As one of the earliest brands to systematically engage in instant retail, Master Kong has translated this into a significant first-mover advantage. From January to August 2025, its instant noodle sales ranked first on platforms like Meituan Flash Purchase. This is not just a supplement to sales channels but also a deep integration into specific consumption scenarios.

The company launched its new product 'He Mian' through the instant retail 'Lightning Warehouse,' precisely targeting lunch and dinner occasions. At the same time, by creating marketing IPs such as 'Midnight Noodle Shop,' the product was seamlessly embedded into late-night snacks and overtime work scenarios, transitioning from 'shelf-waiting' to 'scenario-triggered' demand.

In terms of beverage operations, Master Kong needs to consolidate and expand its competitiveness in the sugar-free tea market while exploring new potential categories. Currently, trends such as Chinese health drinks, electrolyte water, and fermented beverages are emerging as new market directions. The scale and channel advantages that Master Kong possesses enable rapid market testing and product promotion; the key lies in how to convert these strengths into tangible market share.

It can be foreseen that 2026 will be a critical year for Wei Hongchen to lead Master Kong's breakthrough. He must inject more new growth momentum into the company to navigate the dual challenges of maintaining legacy business while driving innovation, leading Master Kong toward comprehensive upgrading. Amidst the ever-changing consumer market, the transformation journey of this FMCG giant has only just begun. (Produced by Siwei Finance) ■

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