Jiangsu Vinegar Industry Leader "Heavy Investment" Enters Jin! Shanxi Vinegar Industry Welcomes the "Warring States Era"

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Source: Shanhе Capital Circle

Author: Shanhе Capital Circle

Recently, Héngshùn Chùyè, the only vinegar company listed on the A-share market, (600305.SH) announced that its wholly owned subsidiary, Shanxi Hengshun Old Vinegar Co., Ltd. (hereinafter “Shanxi Hengshun”), has officially put into operation the “Annual 30,000-ton Fermented Vinegar Expansion Project” that it built and implemented. This means that this industry leader, known for Zhenjiang aromatic vinegar, has officially “entered” the heartland of Shanxi’s old vinegar market.

From trial positions to heavy allocation

China’s vinegar industry has distinct regional characteristics, and the long-running “vinegar capitals” rivalry between Qingxu in Shanxi and Zhenjiang in Jiangsu is well known. For a long time, the two factions have each deeply cultivated their home bases, with “no interference with each other’s waters,” and “reverse deployment” has not been common. But Hengshun Vinegar Industry’s move to take a position in Shanxi is, in effect, “planting a stake in the opponent’s backyard,” and its strategic intent is self-evident.

According to public information, Hengshun Vinegar Industry was founded in the Daoguang period of the Qing Dynasty in 1840. It was listed on the Shanghai Stock Exchange in February 2001 and became the first listed company in China’s vinegar industry. However, its ties to Shanxi can be traced back as early as 2002.

In that year, Hengshun Vinegar Industry reached a cooperation intention with Shanxi Sìyǎnjǐng, kicking off its plan to expand northward. In 2003, the predecessor of Shanxi Hengshun—“Shanxi Hengshun Sìyǎnjǐng Old Vinegar Co., Ltd.”—was formally established, becoming the first foothold for Zhenjiang aromatic vinegar in Shanxi.

Over the following nearly 20 years, Shanxi Hengshun functioned more like the parent company’s “contract manufacturer”: Hengshun sourced its old vinegar from Shanxi Hengshun and then sold it under its own brand.

It was not until 2021 that Hengshun Vinegar Industry began reorganization of Shanxi Hengshun. In November of that year, the company released a pre-announcement for a private placement, proposing to raise no more than 2 billion yuan to fund multiple expansion projects, including Shanxi Hengshun’s “Annual 30,000-ton Fermented Vinegar Expansion Project.” In December, it also acquired the remaining 35% equity interest in Shanxi Hengshun for 19.1698 million yuan, making it a wholly owned subsidiary.

Starting in 2022, Hengshun Vinegar Industry launched an expansion plan in Shanxi with a total investment of 153 million yuan: building vinegar fermentation workshops, vinegar sun-drying rooms, intelligent bottling lines, and more. It also increased capital to Shanxi Hengshun to 140 million yuan, and its registered address moved from Yuci District of Jinzhong to Shanxi Comprehensive Reform Demonstration Area.

From 2023 to 2024, Shanxi Hengshun’s revenue was 49.5117 million yuan and 54.5215 million yuan, respectively, while its net profit was -21.106 million yuan and 23.421 million yuan, respectively. Its operating performance improved steadily.

With the expansion project entering production, the total production capacity at the Shanxi base will be raised to 40,000 to 50,000 tons per year, becoming Hengshun’s largest fermentation base in Northern China.

Shanxi vinegar companies “without listings”

As is well known, Shanxi is the largest province in China in vinegar production, producing nearly 10 million tons of vinegar per year, accounting for 20% of the national total. Qingxu County even earned the title of “China Vinegar Capital,” and many well-known vinegar companies cluster there, such as Zilin, Water Tower, Donghu, and Ninghuifu. Regrettably, to date, there is not a single vinegar company listed on the A-share market in Shanxi.

Among them, the closest to going public is Zilin Vinegar Industry. In June 2016, Zilin Vinegar Industry submitted its prospectus for the first time, intending to list on the Shanghai Stock Exchange. At that time, the vinegar company located in Qingxu County, Shanxi, had already become the industry’s volume runner-up in China, ranking second only to Hengshun Vinegar Industry.

In December 2017, Zilin Vinegar Industry updated its prospectus, with an originally scheduled hearing date of April 10, 2018.

However, just on the eve of the hearing, the CSRC issued a supplementary announcement stating that “given that Shanxi Zilin Vinegar Co., Ltd. still has related matters that need further verification,” it decided to cancel the review of its issuance filing documents. Two weeks later, Zilin Vinegar Industry appeared on the CSRC’s list of terminated review enterprises, and its first IPO “attempt to pass” was officially declared a failure.

After that, Zilin Vinegar Industry launched successive drives in June 2020, September 2021, and March 2023, but all ended without results. In June 2023, Zilin Vinegar Industry once again voluntarily withdrew its application documents, and there has been no new listing development since then.

Shanhе Capital Circle notes that while Zilin Vinegar Industry’s listing plan hit a roadblock, another leading vinegar company in Shanxi, Water Tower Vinegar Industry, has met the same fate.

Water Tower Vinegar Industry began preparing for a listing in 2015. Over nine years, it changed advisers three times. During that period, it repeatedly ran into setbacks due to issues such as environmental penalties and insufficient financial compliance, but it never managed to reach fruition.

Why is it so hard for vinegar companies in Shanxi to go public? Besides whether their own business development meets the required standards, the answer may also be hidden in official data.

As the largest vinegar production base in the country, Qingxu County has an annual vinegar output of 8.5 million tons, and the vinegar industry chain realizes an output value of 7 billion yuan. Yet Shanxi vinegar companies’ problem of “many but not strong” is very prominent. Even in just Yuci Huairen Village, there are 114 vinegar brewing enterprises, of which only 5 are above designated size.

The existence of many small workshops makes it difficult to implement industry standards and leads to serious homogeneous competition. Moreover, the level of industry concentration is far lower than that of Zhenjiang aromatic vinegar—where Hengshun Vinegar Industry alone occupies over 90% of the local market share.

To encourage companies to go public, Taiyuan City once introduced a policy: companies listed on the main board, the ChiNext board, or the STAR Market would receive a one-time reward of 5 million yuan, and for companies that invest 70% of the funds raised in Taiyuan City, the bonus would be doubled to 10 million yuan. The policy incentives cannot be said to be weak. However, after years of effort, vinegar companies in Shanxi still come back with “no listings.”

Shanxi vinegar industry enters the “Warring States era”

Just as local vinegar companies struggle to seek a listing, Shanxi vinegar industry is also facing a capital “siege.” Besides Hengshun Vinegar Industry sending its forces north, the grain and oil giant Jīnlongyú also, as early as 2019, carried out a deep layout of the vinegar industry track by gaining 100% control of a Shanxi local vinegar company.

In October 2025, an industrial and commercial change occurred for Shanxi Jīnlongyú Liángfén Vinegar Industry Co., Ltd.: its registered capital increased from about 580 million yuan to about 680 million yuan. This Shanxi local vinegar company, founded in November 2010, is now wholly owned by Jīnlongyú.

It is worth noting that this is not Jīnlongyú’s first capital increase in Liángfén Vinegar Industry. From December 2023 to October 2025—less than two years—the registered capital of Shanxi Jīnlongyú Liángfén Vinegar Industry rose from 283 million yuan to 680 million yuan, an increase of more than 140%. Jīnlongyú’s level of attention to the vinegar industry track is evident.

At the same time, a large number of cross-industry capital players are also deploying in Shanxi’s vinegar industry through strategic cooperation, channel binding, and similar approaches.

In January 2026, Henan Medicine and Food Same Origin Healthy Development Co., Ltd. signed a strategic cooperation agreement with Hongdong Tongzongtang Hu Lu Vinegar Trading Co., Ltd. and Taiyuan Ninghuifu Yiyuan Qingpu Yang Vinegar Industry Co., Ltd. The three parties will jointly develop premium health-preserving vinegars and “medicine and food same origin” vinegar beverages, promoting the vinegar industry to extend into the broader healthy-living sector.

In August 2025, Guangzhou Salt Industry Group—through its subsidiary Guangzhou Salt Co., Ltd.—signed a strategic cooperation agreement with Shanhе Vinegar Industry Co., Ltd., jointly releasing the “Pledge of Love and Promise” eco-intangible cultural heritage co-branded product (Shanxi aged vinegar × Guangdong sea salt), achieving synergy between branding and channels.

In March 2024, the Qianxihe Group signed a strategic cooperation framework agreement with the Yuci District government regarding the Qianxihe (Yuci District) central kitchen agricultural product deep-processing industrial park project. The project plans a total investment of 500 million yuan and explicitly mentions building a landmark food industry chain represented by “Yuci Huairen vinegar.”

And even larger pools of capital are on the way. According to the Fourth Batch of Projects Recommended to Private Capital released by the Shanxi Provincial Development and Reform Commission in December 2025, the “Qingxu County Old Vinegar Characteristic Professional Town Construction Project in Taiyuan City” plans a total investment of 5.5 billion yuan. It is proposed to introduce 3.5 billion yuan of private capital—this is the largest capital-raising scale project among the 75 projects in this batch.

The advancement of this project means more private capital will enter Shanxi’s vinegar industry, accelerating industrial integration and upgrading. In other words, Shanxi’s vinegar industry will completely enter the “Warring States era.”

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