"Six Walnuts" crosses into AI, stock price triples in one year

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Author: Think AI, Aaron

"Use your brain often, drink more Six Walnuts," this is a well-known advertising slogan.

As a popular beverage of Yangyuan Beverage Company, Six Walnuts once became a nationwide hit. No one would have thought that this beverage company would get involved with AI chips.

In fact, the parent company of Six Walnuts has truly gone all-in on AI, investing nearly all of its net profit for three consecutive years into AI-related industries.

Although they haven't yet made real money from the AI industry, the stock price has surged from around 17.7 yuan at the beginning of last year to a high of 52 yuan in May, a 293% increase, nearly tripling.

The market has already regarded Yangyuan Beverage as an AI concept stock.

Meanwhile, similar consumer stocks this year have basically collapsed; 1,653 stocks in the A-share market hit nearly a one-year low, with the consumer sector making up a large proportion. "Six Walnuts" has become a bright spot on the market.

Why has the parent company of Six Walnuts continued to increase its investments in AI and other hard technologies since 2021? If these investments fail, what will be the future?

Core business shrinking, the founding team needs imagination

Once upon a time, Yangyuan Beverage was a dominant force. In 2015, revenue hit 9.1 billion yuan, setting a record high, and that year founder Yao Kuizhang became Hebei's richest person.

From 2015 to 2018, Yangyuan continued rapid growth, with net profit reaching 2.8 billion yuan in 2018, a record high.

At that time, Yangyuan held 90% of the walnut milk market share, almost monopolizing the entire industry.

Annual net profits of over 2 billion yuan also made the company a cash cow.

But now, by 2025, Yangyuan's revenue is close to 5.3 billion yuan, a 41% decline over 10 years, with profits only around 1.2 billion yuan, halving from the peak.

More troubling is that the decline is not localized. Yangyuan faces pressure across major sales regions such as East China, Central China, and North China, with declines in Northeast and Northwest regions exceeding 30%. The traditional peak seasons have also failed to reverse the downward trend.

Yangyuan heavily relies on core products like Six Walnuts, with walnut milk accounting for over 80% of all product sales.

New products have been lukewarm, and walnut milk itself is being diverted by markets for nut milks, oat milk, etc. The gift attribute of Six Walnuts has gradually weakened, and the core business is entering a long-term shrinking track.

Faced with weak product performance, the company did not choose to increase R&D or innovate new products to compete in the market.

Instead, it chose a more imaginative route—investing in AI. Yangyuan's overall investment philosophy is relatively simple: invest in what is hot.

We won't discuss right or wrong here. First, let's look at which sectors Yangyuan has aggressively invested in, what results have been achieved, and then we will predict Yangyuan's possible ultimate outcome.

Cross-industry gamble

Since 2021, Yangyuan Beverage has focused on the upstream and downstream of AI hardware, launching a 3 billion yuan fund, which was expanded by 1 billion yuan in October last year, continuously increasing investments in AI, semiconductors, and new energy.

Currently, 2.95 billion yuan has been spent, with 1.05 billion yuan still idle, awaiting new projects.

Within its 4 billion yuan fund, one major investment drew attention: in April last year, Yangyuan invested 1.6 billion yuan in Yangtze Memory, acquiring a 0.99% stake.

This 1.6 billion yuan is equivalent to Yangyuan's entire annual profit, and investing it into long-cycle industries like storage demonstrates the company's boldness.

Yangtze Memory has become prominent this year, with rumors of an IPO in China, valued between 500 billion and 1 trillion yuan. Compared to last year's valuation, it has tripled.

If Yangtze Memory successfully goes public, this investment will determine Yangyuan's success in industrial investment.

Most of the other investments are still in floating loss, but Yangyuan has not exited and continues to hold long-term.

One such investment is Ruipu LanJun, an 800 million yuan investment in new energy power batteries, which was fully exited after its 2023 Hong Kong IPO, realizing a book gain of about 241 million HKD.

Focus Media's acquisition of Netease was valued at only 8.3 billion yuan, far below the 16.1 billion yuan valuation at the time of investment. It has not yet exited, and the fund still holds equity, currently at a floating loss.

Other AI-related companies are concentrated in AI vision, edge AI chips, large model training GPUs, etc., forming a relatively complete AI industry chain.

What is Yangyuan's future direction?

In the next few years, Yangyuan Beverage is unlikely to completely turn into a VC firm but will maintain a dual model of "core consumer business foundation and equity investments for flexibility."

Six Walnuts will still be the company's mainstay, but the walnut milk category has passed its rapid growth phase and is unlikely to return to the peak of over 10k yuan.

The 4 billion yuan Quanhong Fund will continue to be a noteworthy industrial fund.

Yangyuan's subsequent funds are likely to continue flowing into upstream AI computing power, including storage, edge AI chips, industrial vision, and other hard tech sectors. Non-core sectors like new energy and media will gradually become marginal.

If Yangtze Memory's IPO proceeds smoothly, the investment returns could dramatically improve the profit statement and transform the company from a traditional beverage stock into a "consumer + hard tech shadow stock" with dual valuation.

Conversely, if the IPO is delayed or the semiconductor cycle cools, the stock price could sharply retreat due to unmet tech expectations.