Core Viewpoint - The focus should shift towards the future of Wahaha amidst the ongoing family disputes and trust issues surrounding its inheritance and management [4][6]. Group 1: Legal Developments - On August 1, the Hong Kong High Court ruled that Jian Hao Ventures Limited's assets in HSBC are trust properties for the three plaintiffs, prohibiting the defendant from withdrawing or transferring funds until a final ruling is made in mainland courts [5]. - The court's decision indicates that the trust established by the late founder, Zong Qinghou, involves $2.1 billion, which is a small fraction of Wahaha's overall business value [6][10]. - The court documents reveal that Zong Qinghou left handwritten documents to establish a trust for his three children, acknowledging that Zong Fuli has inheritance rights to Wahaha [8][9]. Group 2: Company Performance and Structure - Wahaha's revenue reached 50 billion yuan in 2023, down from a peak of 78.3 billion yuan in 2013, indicating a shrinking market share [6]. - The current ownership structure shows that the state-owned Hangzhou Shangcheng District holds 46% of Wahaha, while Zong Qinghou and Zong Fuli control 29.4% [13][15]. - As of the end of 2022, Wahaha Group's total assets were 37.047 billion yuan, with a revenue of 51.202 billion yuan and a net profit of 4.767 billion yuan [16]. Group 3: Internal Changes and Challenges - Zong Fuli has initiated significant management changes and factory closures, which have led to labor disputes and employee dissatisfaction [20][22]. - The restructuring efforts include a shift in supply chain management and a focus on budget control, which have caused friction within the company [21][24]. - Despite the controversies, Wahaha's market share in packaged water increased from approximately 9.42% in Q1 2024 to 17.07% in Q1 2025, indicating some recovery in sales performance [24].

Core Points - The recent court ruling in Hong Kong confirmed that Jian Hao Ventures Limited's assets in HSBC Hong Kong are trust properties benefiting three plaintiffs, prohibiting the defendant, Zong Fuli, from withdrawing or transferring funds until a final ruling is made in mainland courts [2][4] - The trust dispute involves a total of $2.1 billion (approximately 150.94 billion RMB), which is a small fraction of Wahaha's overall business, which had a peak revenue of 78.3 billion RMB in 2013 and 50 billion RMB in 2023 [2][4] - The court ruling indicates that Zong Qinghou left behind handwritten documents establishing a trust for his three children, acknowledging Zong Fuli's inheritance rights [4][5] Trust Dispute - The Hong Kong court's ruling highlights that Zong Qinghou had indeed left a trust of $2.1 billion for his three children [4] - The plaintiffs acknowledged Zong Fuli's inheritance rights, and Zong Fuli committed to establishing three trusts totaling $2.1 billion for her siblings [5] - The court noted that Zong Qinghou had two wills, one concerning overseas assets and another for domestic assets, neither of which named the plaintiffs as beneficiaries [5][6] Company Structure and Financials - The current ownership structure of Wahaha shows that the state-owned enterprise holds 46% of the shares, while Zong Qinghou and Zong Fuli hold 29.4% [9][11] - As of the end of 2022, Wahaha Group's total assets were 37.047 billion RMB, with a revenue of 51.202 billion RMB and a net profit of 4.767 billion RMB [12][13] - The state-owned shares represent only about 15% of the total assets of the Wahaha business empire, with net profits accounting for just 0.39% [13] Management Changes and Reforms - Zong Fuli has initiated significant management changes within Wahaha, including a complete overhaul of the core management team and the transfer of employee contracts to her new company, Hongsheng Group [15][16] - The company has been closing factories, including those where her siblings serve as directors, while the production capacity is being replaced by Hongsheng Group [16][17] - Recent changes have led to labor disputes and dissatisfaction among long-term employees, contrasting with Zong Qinghou's previous management style that emphasized employee loyalty and stability [18][19] Market Performance - Wahaha's market share in packaged water increased from approximately 9.42% in Q1 2024 to 17.07% in Q1 2025, despite ongoing internal disputes and management changes [21] - The company has not successfully launched new blockbuster products since its Nutritional Fast Line, with competitors like Nongfu Spring dominating the market [21]