Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company reported a revenue of 2.451 billion yuan in 2024, a year-on-year decrease of 10.7%, and a net profit attributable to shareholders of 98.2 million yuan, down 15.0% year-on-year [1][2] - The company is actively optimizing its store structure, closing underperforming stores, resulting in a total of 3,031 stores by the end of 2024, with a net closure of 785 stores [2] - The average single-store revenue for self-operated and franchised stores in 2024 was 840,000 yuan and 346,000 yuan respectively, indicating a significant decline due to weak consumer spending and intensified competition [2] - The gross profit margin improved by 4.4 percentage points to 56.8% in 2024, driven by cost reductions and lean management [2] - The company is focusing on enhancing single-store efficiency and optimizing product structure to improve competitiveness and brand strength [3] Financial Summary - In 2024, the company achieved total revenue of 2,451 million yuan, with a year-on-year growth rate of -10.88% [4] - The net profit attributable to shareholders for 2024 was 98.2 million yuan, with a year-on-year growth rate of -15.03% [4] - The projected earnings per share (EPS) for 2025, 2026, and 2027 are 0.07 yuan, 0.08 yuan, and 0.10 yuan respectively [3][4] - The company’s net profit margin for 2024 was 4.01%, slightly down from the previous year [2][6] - The operating cash flow for 2024 was 420 million yuan, reflecting a year-on-year increase of 15.3% [2] Industry Insights - The prepared food industry is facing challenges such as intensified competition from other snack categories and a shift in consumer spending patterns [2] - The recovery of single-store performance is seen as a key signal for a new round of development in the industry [2] - The company is leveraging its unique flavor appeal to enhance its product offerings in new distribution channels, including partnerships with major retailers like Costco [3]

Investment Rating - The report maintains an "Outperform" rating for the company, indicating a relative strength compared to market performance [2][6][16]. Core Views - The company is expected to stabilize its main business in 2025 after a period of store closures and efficiency improvements, with a focus on new products and channels [6][7]. - The company reported a revenue of 2.451 billion RMB for 2024, a decrease of 10.7% year-on-year, and a net profit of 98 million RMB, down 15% year-on-year, aligning with market expectations [6][7]. - The company plans to optimize its store count, with a reduction of 20.6% in the number of stores by the end of 2024, which is expected to enhance operational efficiency [6][7]. Financial Data and Profit Forecast - Revenue projections for the company are as follows: - 2023: 2,744 million RMB - 2024: 2,451 million RMB - 2025E: 2,396 million RMB - 2026E: 2,523 million RMB - 2027E: 2,767 million RMB - The expected growth rates for revenue are -11% in 2024, -2% in 2025, 5% in 2026, and 10% in 2027 [5][6]. - Net profit forecasts are: - 2023: 116 million RMB - 2024: 98 million RMB - 2025E: 137 million RMB - 2026E: 163 million RMB - 2027E: 191 million RMB - The projected net profit growth rates are 357% in 2023, -15% in 2024, 40% in 2025, 19% in 2026, and 17% in 2027 [5][6][7]. Market Data - As of April 22, 2025, the closing price of the company's stock is 2.53 HKD, with a market capitalization of 54.64 billion HKD [2][6]. - The stock has experienced a price change of -16% over the past year compared to the HSCEI index, which has increased by 34% [3][6].

Summary of Zhou Hei Ya Conference Call Company Overview - **Company**: Zhou Hei Ya - **Industry**: Food and Beverage, specifically focused on snack foods and ready-to-eat products Key Points and Arguments Sales Performance - In Q1 2025, same-store sales showed a slight increase, with an average transaction value of approximately 54 yuan, driven primarily by volume growth. The goal is to achieve high single-digit growth in same-store sales and double-digit growth in average store performance [1][2][8] Strategic Initiatives - Zhou Hei Ya plans to enhance store management and service quality to achieve its sales targets. This includes launching new products and strengthening operational management [1][2] - The company is actively expanding its distribution channels, having entered Sam's Club and established a special business unit to elevate distribution to a strategic level [1][2] - A three-phase strategy for overseas expansion is in place, starting with light-asset trade in Southeast Asia and Hong Kong, followed by entry into Western markets with customized products, and ultimately localizing the supply chain [1][3] Shareholder Returns - Zhou Hei Ya has repurchased 3.9 billion HKD worth of shares and plans to continue this practice. The dividend payout ratio for 2024 is set to increase to 60%, with a commitment to full-year profit distribution [1][4] Store Management - In 2024, over 700 underperforming stores were closed, with a reduction in closures expected in 2025 while also opening new stores. The focus is on improving the quality of operations and increasing the proportion of profitable stores, which currently exceeds 80% [1][7] Market Adaptation - The company has conducted internal reviews to adapt to changing consumer preferences and increased competition. Key strategies include improving store performance, launching new product categories, and enhancing service quality [5][6] Future Outlook - The company anticipates a return to positive store growth starting in 2026, with a focus on optimizing store models to ensure profitability [9] - The goal for 2025 is to double the cold chain logistics business to reach 200 million yuan, with a long-term target of 1 billion yuan by 2027 [16] Brand Strategy - Zhou Hei Ya plans a brand upgrade in 2025, including updates to store design and brand image, while reinforcing internal quality standards [14][15] Financial Metrics - The company aims to maintain a gross margin of around 55% at the store level and over 50% overall, with expectations for net profit margins to return to double digits in the long term [21][22] Marketing and Channel Management - Marketing expenses are expected to remain at 1-2% of total revenue, with a focus on efficiency in spending [25] - The CEO has returned to oversee daily management and strategic execution, enhancing the company's operational capabilities [26][27] New Leadership - New leadership in channel management brings extensive experience from leading consumer brands, which is expected to enhance the company's market strategies [28] Additional Important Information - The company has successfully launched a new product line in Sam's Club, exceeding initial sales expectations [18] - Online channels have shown higher customer repurchase rates, aided by a membership program that has improved customer retention [12][13]

Core Viewpoint - Zhou Hei Ya, a leading brand in the marinated food sector, is diversifying into the compound seasoning market amid declining sales in its core products, raising questions about the viability of this strategic shift [1][4]. Financial Performance - Zhou Hei Ya's total revenue for 2024 decreased to 2.451 billion RMB from 2.744 billion RMB in 2023, representing a year-on-year decline of 10.7% [2]. - The net profit for 2024 fell to 98.204 million RMB from 115.576 million RMB in 2023, a decrease of 15% [2]. - The average transaction value dropped from 56.9 RMB in 2023 to 54.39 RMB in 2024, a reduction of approximately 4.4% [2]. Market Strategy and Adjustments - Zhou Hei Ya is closing underperforming stores, reducing its total number of offline stores from 3,816 at the end of 2023 to 3,031 by the end of 2024, marking a net decrease of 785 stores [4]. - The company is focusing on retaining stores in high-tier cities and key commercial areas while closing 129 self-operated and 656 franchised stores [4]. New Ventures - Zhou Hei Ya has entered a strategic partnership with Sichuan Shentang Industrial Group to establish a joint venture, "Sichuan Zhou Hei Ya Food Technology Co., Ltd.," aimed at developing the "Gaga Flavor" series of compound seasonings and convenient ready-to-eat products [5][7]. - The joint venture will leverage Zhou Hei Ya's expertise in marinated products and Shentang's experience in compound seasonings to create a dual-engine model that integrates ready-to-eat and cooking scenarios [7]. Industry Context - The compound seasoning market in China has shown double-digit growth over the past five years and is expected to maintain a 13.5% annual growth rate in the next five years, with a market size projected to reach 687.1 billion RMB in 2024 [8][16]. - The marinated food market has seen slower growth, with a compound annual growth rate of approximately 6.42% from 2018 to 2023, indicating a need for Zhou Hei Ya to explore new growth avenues [8][16]. Competitive Landscape - The compound seasoning market is characterized by a fragmented competitive landscape, with leading players like Tianwei Foods and Yihai International dominating the market [16]. - Zhou Hei Ya's entry into this market will require differentiation through product innovation and competitive pricing to establish a foothold [20].

Summary of Conference Call Company Overview - The conference call involved a discussion about the company, focusing on its financial performance, strategic initiatives, and market outlook. Key Points Financial Performance and Growth Strategy - The company aims to return to a growth trajectory, with a focus on long-term strategic planning for 2025. The goal is to achieve double-digit growth in revenue and maintain a store count around 3,000 by 2024 [2][36]. - The company plans to enhance operational efficiency and product offerings, particularly in the beverage and overseas markets, with a target to break into the U.S. market by 2025 [2][36]. Store Performance and Expansion - The company has implemented a dual-store model, combining retail and wholesale, which has shown positive results. However, there is a need to reassess the long-term viability of this model [6][8]. - The company has halted blind expansion and is focusing on optimizing existing stores, with a goal to reduce the proportion of loss-making stores significantly [14][15]. Channel Development - The company is actively developing its distribution channels, including partnerships with major retailers like Sam's Club and Yonghui, and is exploring opportunities in convenience stores and local distributors [4][5][16]. - The focus is on enhancing the product range, particularly in vacuum-sealed products, with a sales target to increase their market share from 11% to over 15% [26]. E-commerce and Membership Strategy - The company has seen significant growth in its membership program, with sales through its app reaching 150 million, a 217% increase year-over-year. Membership sales now account for 30-40% of total sales [22][23]. - The company is leveraging online platforms like Douyin for customer engagement and sales, with a strong focus on maintaining profitability in online channels [13][24]. Operational Efficiency and Employee Engagement - The company emphasizes the importance of employee performance and engagement, with plans to enhance training and incentive programs for staff, which are seen as critical to improving store performance [31][32]. - The management is committed to maintaining a high dividend payout ratio, aiming for at least 60% in the coming years, reflecting strong cash flow and financial health [37]. Future Outlook - The company is optimistic about its growth prospects, particularly in international markets, with plans to expand into Southeast Asia and beyond, aiming for a revenue target exceeding 10 billion in three years [17][29]. - The management is focused on maintaining a strategic approach to pricing and competition, avoiding price wars while enhancing product quality and brand value [29][36]. Additional Insights - The company is actively analyzing customer traffic and sales trends, with a focus on improving customer experience both in-store and online [11][12]. - There is a strong emphasis on sustainability and quality control in product development, particularly in the context of expanding the vacuum-sealed product line [18][20]. This summary encapsulates the key discussions and strategic directions outlined during the conference call, providing a comprehensive overview of the company's current status and future plans.

Core Viewpoint - The company maintains its profit forecast for 2025 and introduces a net profit estimate of approximately 204 million yuan for 2026, raising the target price by 47.1% to 2.5 HKD, corresponding to P/E ratios of about 27.3 and 24.5 for 2025 and 2026 respectively, while maintaining an outperform rating in the industry [1] Group 1: Financial Projections - The company is expected to generate revenue of 2.45 billion yuan and a net profit of 98.2 million yuan in 2024, aligning with market expectations [2] - The revenue structure for 2024 is projected to be approximately 1.39 billion yuan from self-operated stores, 612 million yuan from franchised stores, 334 million yuan from online sales, and 114 million yuan from other sources [3] - The gross profit margin for 2024 is anticipated to be 56.8%, an increase of 4.4 percentage points year-on-year, with a second-half gross margin expected to rise to 58.3% [3] Group 2: Store and Channel Strategy - In 2025, the company will focus on optimizing store structure and enhancing store quality, with initiatives to boost single-store revenue through store renovations and product upgrades [4] - The company has laid the groundwork for new channel development in 2024, with expectations to gradually expand in supermarkets, convenience stores, new retail, and specialty snack channels in 2025 [4] - The company plans to explore overseas markets, starting with Southeast Asia, leveraging distributor channels to sell long-shelf-life products abroad [4]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected investment return exceeding the market benchmark by more than 15% over the next 6-12 months [4][6]. Core Insights - The company reported a total revenue of 2.451 billion yuan for 2024, a decline of 10.66% year-on-year, with a net profit attributable to shareholders of 98 million yuan, down 15.03% year-on-year. In the second half of 2024, revenue was 1.192 billion yuan, a decrease of 10.34%, but net profit increased significantly by 371.96% to 65 million yuan [1]. - The company is focusing on optimizing store efficiency by closing underperforming locations and enhancing the quality of its stores. The total number of stores at the end of 2024 was 3,031, with a net closure of 785 stores. The average revenue per store increased by 6.7% for self-operated stores and 13.7% for franchised stores [2]. - The gross profit margin improved to 56.79%, an increase of 4.37 percentage points year-on-year, primarily due to reduced raw material costs and a higher proportion of self-operated stores, which have a better gross margin [3]. - The company plans to expand into new channels, including supermarkets, membership stores, and convenience stores, with a focus on differentiated product offerings. The introduction of a proprietary beverage brand and new product lines aims to enhance consumer experience and sales [3]. Summary by Sections Financial Performance - For 2024, the company achieved a revenue of 2.451 billion yuan, with a year-on-year decline of 10.66%. The net profit attributable to shareholders was 98 million yuan, down 15.03% [1]. - The revenue breakdown shows that duck and duck-related products generated 1.956 billion yuan, down 7.79%, while other products and franchise fees saw declines of 21.34% and 5.93%, respectively [2]. Store Operations - The company closed 785 stores in 2024, focusing on improving store quality rather than quantity. The total number of self-operated and franchised stores was 1,591 and 1,440, respectively [2]. - The average revenue per self-operated store increased by 6.7%, while franchised stores saw a 13.7% increase [2]. Profitability and Cost Management - The gross profit margin for 2024 was 56.79%, an increase of 4.37 percentage points year-on-year, attributed to lower raw material costs and a higher proportion of self-operated stores [3]. - The sales expense ratio increased to 40.34%, up 4.52 percentage points, due to increased investment in high-potential self-operated stores [3]. Future Outlook - The company has adjusted its profit forecasts for 2025 and 2026, projecting net profits of 130 million yuan and 158 million yuan, respectively, reflecting a significant downward revision of 53.57% and 50.25% from previous estimates [4]. - The company aims to enhance its store performance and expand into new channels, which is expected to provide additional revenue streams [3].

Core Insights - Zhou Hei Ya, a leading brand in the duck neck market, has announced its entry into the seasoning industry through a strategic partnership with Sichuan Shentang Industrial Group to develop the "Gaga Flavor" series of compound seasonings and convenient fast food products [1][2][3] Company Developments - Zhou Hei Ya has established Sichuan Zhou Hei Ya Food Technology Co., Ltd. with a registered capital of 5 million yuan, where Zhou Hei Ya holds 44% and Shentang holds 36% [2] - The partnership aims to leverage Zhou Hei Ya's strong brand recognition and extensive distribution network of over 3,000 stores to create a new product line [3][4] Market Context - Zhou Hei Ya's revenue for 2024 is reported at 2.451 billion yuan, a decline of 10.7% year-on-year, with net profit dropping to 98 million yuan, down 15% [6] - The company has been closing underperforming stores, reducing its total from 3,816 to 3,031, which has impacted short-term sales [6][7] Industry Trends - The compound seasoning market in China is projected to reach a scale of 687.1 billion yuan in 2024, growing at 16% year-on-year, with expectations of continued double-digit growth in the coming years [8] - The competitive landscape for the duck neck market is becoming increasingly challenging, with consumers showing a preference for diverse food options and price sensitivity affecting sales [7][8]

Core Insights - The core viewpoint of the articles is that Zhou Hei Ya is entering the compound seasoning market through a strategic partnership with Sichuan Shentang Industrial Group, aiming to create new growth engines amid a slowdown in the mature stage of the marinated food industry [1][2]. Company Developments - Zhou Hei Ya has signed a strategic cooperation agreement with Sichuan Shentang Industrial Group to establish a joint venture named Sichuan Zhou Hei Ya Food Technology Co., Ltd. This venture will focus on developing the "Gaga Xiang" series of compound seasonings and convenient fast food products [1]. - The company plans to launch at least 10 new products in the "Gaga Xiang" series this year, targeting not only its existing 3,000+ stores but also supermarkets, e-commerce platforms, and international markets [1][2]. Market Context - The small lobster industry has spurred the development of related products, including seasoning and feed processing, with the annual output value of lobster cooking seasonings in Hubei exceeding 1.8 billion yuan [3]. - The small lobster seasoning market is characterized by significant seasonal fluctuations, with rapid growth expected from April to July due to the lobster harvest [3]. Competitive Landscape - Zhou Hei Ya's entry into the compound seasoning market faces challenges from established competitors, as many brands are already capitalizing on the small lobster seasoning trend [3]. - Other companies in the industry, such as Ziyan Food and Juewei Food, are also exploring beverage collaborations that complement marinated food products, indicating a broader trend of diversification within the sector [4].

Core Viewpoint - The company has successfully transitioned from a focus on scale expansion to quality improvement, achieving total revenue of RMB 2.451 billion and a net profit of RMB 98.204 million in 2024, driven by optimized store strategies, innovative products, and enhanced brand marketing [1][4]. Group 1: Financial Performance - In 2024, the company reported total revenue of RMB 2.451 billion and a net profit of RMB 98.204 million, marking a significant achievement in its financial performance [1]. - The gross profit margin improved to 56.8% in 2024, up from 52.4% in 2023, indicating effective cost management and operational efficiency [4][5]. Group 2: Market Strategy - The company is focusing on enhancing the profitability of existing stores and optimizing its store structure by reallocating resources to core markets while reducing presence in low-potential markets [1][4]. - The company aims to build a comprehensive taste ecosystem, with duck and duck by-products accounting for 79.8% of total revenue, and has successfully increased active membership to over 5.5 million through digital operations [1][3]. Group 3: Product Innovation - The company is actively expanding its product offerings to meet diverse consumer demands, with the "Zhou Hei Ya Classic Flavor" series accounting for 70.3% of terminal sales, and new products like spicy chicken and dry-fried spicy chicken achieving monthly sales of over 180,000 boxes [1][2]. - The company is also venturing into the compound seasoning and convenience food sectors, launching products like seasoning packs for various ingredients in collaboration with Sam's Club [2][3]. Group 4: Brand Collaboration and Expansion - The company has engaged in brand collaborations, such as with Yanjin Puzhi and Mars, to enhance flavor IP and penetrate new market scenarios [2]. - The company is set to expand its international presence, starting with Southeast Asia, and plans to develop localized products for markets in Europe, America, Japan, and South Korea [5][6]. Group 5: Future Outlook - The company is expected to continue its growth trajectory with a focus on innovation, channel expansion, and international market entry, aiming for a revenue growth of 6.2% by 2026 and a 17% increase in net profit [6]. - Analysts have upgraded the company's rating to "highly confident outperform" with a target price increase, reflecting positive market sentiment and growth potential [6].