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wrote a column · Mar 5 14:52

Poor profit performance in the second half dragged down the stock price, with Zhou Hei Ya (01458.HK) plunging over 7%!

After market close on March 4th, $ZHOU HEI YA (01458.HK)$ submitted a 2025 earnings forecast showing 'profit growth without revenue growth.' Total revenue for the full year of 2025 is expected to be between RMB 2.52 billion and RMB 2.55 billion, representing a year-over-year increase of only 2.8% to 4.0%; however, net profit reached RMB 150 million to RMB 165 million, surging 52.7% to 68.0% year-over-year. Following the announcement, Zhou Hei Ya's share price fell instead of rising, with a drop of 7.64% as of press time, hitting a new low since mid-January 2025. This decline is closely related to the fiercely competitive market environment and poor performance in the second half. Great divergence in the marinated flavor industry: three giants experience contrasting fortunes The divergence within the marinated flavor industry intensified further in 2025. Among the leading companies, Huang Shang Huang (002695.SZ) benefited from lower raw material costs and better expense control, expecting net profit to grow by 73.57% to 123.16% year-over-year; Jue Wei Food (603517.SH) suffered a major setback, reporting its first annual loss since going public, with an estimated net loss of RMB 160 million to RMB 220 million and revenue declining by 12.09% to 15.29% year-over-year; Zhou Hei Ya sits between these two, achieving profit recovery but still facing issues of unstable performance. Compared to doubling profits in the first half, Zhou Hei Ya's profits turned around in the second half. In the first half of 2025, Zhou Hei Ya’s revenue was RMB 1.223 billion, ...
After the market close on March 4th, $ZHOU HEI YA (01458.HK)$ a profit alert for 2025 was filed, showing 'increased profits but not revenue'.
Total revenue for the full year of 2025 is expected to be between RMB 2.52 billion and RMB 2.55 billion, representing a year-over-year growth of only 2.8% to 4.0%. However, net profit is projected to reach RMB 150 million to RMB 165 million, surging by 52.7% to 68.0% year-over-year.
Following the announcement, the share price fell instead of rising, with a drop of 7.64% as of the time of writing, hitting a new low since mid-January 2025. This decline is closely related to an intensely competitive market environment and poor performance in the second half of the year.
The marinated food industry sees major divergence: the three giants experience contrasting fortunes
The divergence within the marinated food sector intensified further in 2025. Among the leading companies, Huangshanghuang (002695.SH) benefited from lower raw material costs and strict cost control, expecting net profit growth of 73.57% to 123.16%. Juewei Food (603517.SH), however, suffered a setback, reporting its first annual loss since going public, with an estimated net loss of RMB 160 million to RMB 220 million and revenue declining by 12.09% to 15.29% year-over-year. Zhouheiya falls in between, achieving profit recovery but still facing persistent instability in performance.
Compared to the profit doubling in the first half, Zhouheiya's profit declined significantly in the second half.
In the first half of 2025, Zhouheiya reported revenue of RMB 1.223 billion, down 2.93% year-over-year, while net profit reached RMB 108 million, up 228% year-over-year. Based on forecasted data, second-half revenue is projected at RMB 1.297 billion to RMB 1.327 billion, growing by 8.9% to 11.4% year-over-year; second-half net profit is estimated at RMB 42 million to RMB 57 million, decreasing by 35.7% to 12.7% year-over-year. Clearly,while second-half revenue showed steady growth, profit dropped sharply, indicating significant pressure on Zhouheiya’s profitability in the second half of the year.
Based on Changjiang Securities’ previous RMB 200 million profit forecast for Zhouheiya in 2025,The financial report data released this time is significantly lower than the institution's expectations.In the institution’s mid-2025 earnings report research commentary, it is projected that the company’s net profit attributable to shareholders will reach 2 billion yuan, 2.3 billion yuan, and 2.66 billion yuan for the years 2025, 2026, and 2027, respectively.
The divergence may reflect changes in the industry’s growth logic and that its own transformation remains in a painful adjustment period.
Around 2018, the domestic flavored snack industry transitioned from a phase of rapid expansion to one of market saturation and competition. Consumer choices became more rational, emerging channels caused significant diversion, and product homogenization issues became prominent, rendering the previous growth model reliant on store expansion increasingly ineffective.
During those years when the industry underwent significant change, Zhoa Heiya faced growth challenges with fluctuating revenue and profits. During this period, the company continued to expand, with the number of stores peaking at over 3,800. However, scale growth did not bring corresponding profit increases, leading to a situation of 'diseconomies of scale.'
After market close on March 4th, $ZHOU HEI YA (01458.HK)$ submitted a 2025 earnings forecast showing 'profit growth without revenue growth.' Total revenue for the full year of 2025 is expected to be between RMB 2.52 billion and RMB 2.55 billion, representing a year-over-year increase of only 2.8% to 4.0%; however, net profit reached RMB 150 million to RMB 165 million, surging 52.7% to 68.0% year-over-year. Following the announcement, Zhou Hei Ya's share price fell instead of rising, with a drop of 7.64% as of press time, hitting a new low since mid-January 2025. This decline is closely related to the fiercely competitive market environment and poor performance in the second half. Great divergence in the marinated flavor industry: three giants experience contrasting fortunes The divergence within the marinated flavor industry intensified further in 2025. Among the leading companies, Huang Shang Huang (002695.SZ) benefited from lower raw material costs and better expense control, expecting net profit to grow by 73.57% to 123.16% year-over-year; Jue Wei Food (603517.SH) suffered a major setback, reporting its first annual loss since going public, with an estimated net loss of RMB 160 million to RMB 220 million and revenue declining by 12.09% to 15.29% year-over-year; Zhou Hei Ya sits between these two, achieving profit recovery but still facing issues of unstable performance. Compared to doubling profits in the first half, Zhou Hei Ya's profits turned around in the second half. In the first half of 2025, Zhou Hei Ya’s revenue was RMB 1.223 billion, ...
After founder Zhou Fuyu returned in 2024, Zhoa Heiya made an abrupt strategic shift from 'scale expansion' to 'quality and efficiency prioritized,' reflecting the profound transformation of the flavored snack industry from a phase of aggressive growth into one of存量竞争 (market share contention). This also indicates that the company has entered a painful transition period.
Strategic Shift towards 'Quality over Quantity'
After founder Zhou Fuyu returned, he implemented a series of adjustments to the company’s strategy, primarily focusing on three areas.
First, there was an adjustment in store strategy. The company reviewed existing stores and eliminated inefficient ones: a net reduction of 785 stores in 2024, followed by another net reduction of 167 stores in the first half of 2025, bringing the total number of stores down to 2,864 by the end of June 2025 from its peak.
At the same time, the company concentrated resources on transportation hubs such as airports and high-speed rail stations, taking multiple measures to enhance store operational quality. According to promotional materials, in the first half of 2025, the proportion of profitable stores increased, and average output per store grew by 15.5% year-on-year. Additionally, Zhoa Heiya ventured overseas, opening its first Southeast Asia outlets in Singapore and Malaysia, targeting Chinese communities and tourist hotspots in pursuit of a second growth curve.
After market close on March 4th, $ZHOU HEI YA (01458.HK)$ submitted a 2025 earnings forecast showing 'profit growth without revenue growth.' Total revenue for the full year of 2025 is expected to be between RMB 2.52 billion and RMB 2.55 billion, representing a year-over-year increase of only 2.8% to 4.0%; however, net profit reached RMB 150 million to RMB 165 million, surging 52.7% to 68.0% year-over-year. Following the announcement, Zhou Hei Ya's share price fell instead of rising, with a drop of 7.64% as of press time, hitting a new low since mid-January 2025. This decline is closely related to the fiercely competitive market environment and poor performance in the second half. Great divergence in the marinated flavor industry: three giants experience contrasting fortunes The divergence within the marinated flavor industry intensified further in 2025. Among the leading companies, Huang Shang Huang (002695.SZ) benefited from lower raw material costs and better expense control, expecting net profit to grow by 73.57% to 123.16% year-over-year; Jue Wei Food (603517.SH) suffered a major setback, reporting its first annual loss since going public, with an estimated net loss of RMB 160 million to RMB 220 million and revenue declining by 12.09% to 15.29% year-over-year; Zhou Hei Ya sits between these two, achieving profit recovery but still facing issues of unstable performance. Compared to doubling profits in the first half, Zhou Hei Ya's profits turned around in the second half. In the first half of 2025, Zhou Hei Ya’s revenue was RMB 1.223 billion, ...
Secondly, there is an adjustment in the channel structure. The company established a channel division, intensifying the selection of franchisees beyond the direct operation model, and expanded distribution channels such as supermarkets and membership stores. Currently, it has reached cooperation with Sam's Club, Yonghui (601933.SH), and Pangdonglai to launch customized seasoning packets and flavored duck meat sauce products.
In terms of online and offline integration, by leveraging blockbuster strategies and platform resources, the company's food delivery terminal sales reached approximately 380 million yuan in the first half of 2025; public domain store visits (Douyin + Meituan) terminal sales exceeded 80 million yuan; by the end of June 2025, the company added 2.45 million registered members, with member sales accounting for over 60%. Additionally, Zhou Youyi personally joined the live-streaming e-commerce track, continuously driving traffic to offline stores.
Thirdly, there is an extension of product and business lines. While maintaining its core flavors of sweet, spicy, and numbing, Zhou Heiya has tried launching new categories like marinated duck and braised squid, developed region-limited Sichuan-style spicy duck neck, and incubated the beverage brand 'Yaya Coconut' to expand consumption scenarios combining 'braised flavor + drinks.' Moreover, the company entered the compound seasoning market, forming a joint venture with Sichuan Shentang to launch the 'Gaga Fragrant' series of seasoning packets, extending its business scope from braised goods retail to seasoning supply.
Initial results of the reform are evident, but the pain of transformation remains unresolved.
Zhou Heiya’s bold reforms have gradually shown results. In the first half of 2025, the gross margin increased from 55.4% in the same period last year to 58.6%, while the net profit margin soared from 2.6% to 8.8%. Profit attributable to owners of the parent company grew by 228% year-on-year. Sales and distribution expenses decreased by 6.6% year-on-year, administrative expenses dropped by 3.3%, and cost pressures narrowed somewhat.
After market close on March 4th, $ZHOU HEI YA (01458.HK)$ submitted a 2025 earnings forecast showing 'profit growth without revenue growth.' Total revenue for the full year of 2025 is expected to be between RMB 2.52 billion and RMB 2.55 billion, representing a year-over-year increase of only 2.8% to 4.0%; however, net profit reached RMB 150 million to RMB 165 million, surging 52.7% to 68.0% year-over-year. Following the announcement, Zhou Hei Ya's share price fell instead of rising, with a drop of 7.64% as of press time, hitting a new low since mid-January 2025. This decline is closely related to the fiercely competitive market environment and poor performance in the second half. Great divergence in the marinated flavor industry: three giants experience contrasting fortunes The divergence within the marinated flavor industry intensified further in 2025. Among the leading companies, Huang Shang Huang (002695.SZ) benefited from lower raw material costs and better expense control, expecting net profit to grow by 73.57% to 123.16% year-over-year; Jue Wei Food (603517.SH) suffered a major setback, reporting its first annual loss since going public, with an estimated net loss of RMB 160 million to RMB 220 million and revenue declining by 12.09% to 15.29% year-over-year; Zhou Hei Ya sits between these two, achieving profit recovery but still facing issues of unstable performance. Compared to doubling profits in the first half, Zhou Hei Ya's profits turned around in the second half. In the first half of 2025, Zhou Hei Ya’s revenue was RMB 1.223 billion, ...
The above data indicate that the 'quality and efficiency first' strategy has shown benefits on the profit side. However, the profit reversal in the second half may reflect that the painful transition period is not yet over.Whether the lack of profit growth despite revenue increase in the second half is related to store expansion and adjustments in sales strategy still requires waiting for the disclosure of Zhou Heiya's full annual report or further clarification from the company's management.
However, it can be foreseen that the current braised goods industry is in a stage of stock competition. Zhou Heiya will continue to face multiple uncertainties: the pace of recovery in consumer markets, competitive pressure from peers, and the balance between franchise expansion and direct operation control. Adjustments made since 2024 have improved the company’s profit performance and per-store efficiency in the short term. But whether circulation channels and new seasoning businesses can become new growth points still needs time to verify. Zhou Heiya’s transformation path provides an observable case study for the industry.
In the future, whether Zhou Heiya can convert short-term profit improvements into sustainable revenue growth, and whether circulation channels and seasoning businesses can contribute stable increments, remain to be seen.
Author: Yuan
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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