“Epoch Times, September 24, 2025” – Known for its famous “Duck Neck” products, the company “Juewei Foods” once had a market value exceeding 60 billion yuan. However, it is now facing challenges due to financial irregularities and has been fined 4 million yuan by the Hunan Regulatory Bureau of the China Securities Regulatory Commission. The stock was halted for a day on September 22 and was renamed “ST Juewei” as of September 23. Amidst a tough period for the luwei (braised food) industry overall, the company is confronting the triple challenges of declining performance, significant closure of stores, and regulatory penalties.
According to the “Administrative Penalty Advance Notice” issued by the Hunan Regulatory Bureau of the China Securities Regulatory Commission on September 19, “Juewei Foods” failed to truthfully disclose the income from franchise store renovations from 2017 to 2021, leading to an underestimation of annual revenue data by 5.48%, 3.79%, 2.20%, 2.39%, and 1.64% respectively.
This violation resulted in a 4 million yuan fine imposed on the company, totaling 8.5 million yuan, which includes fines of 2 million yuan for the then-chairman, 1.5 million yuan for the CFO, and 1 million yuan for the board secretary.
As a result, Juewei Foods’ stock was suspended for a day on September 22 and resumed trading on the Shanghai Stock Exchange’s risk alert board as “ST Juewei” from September 23 onwards, with a daily fluctuation limit of 5%. As of the closing on September 19, the stock price was 15.25 yuan per share, with a total market value of 9.242 billion yuan.
Juewei Foods stated that they would retrospectively adjust financial statements and improve internal controls, planning to apply for the removal of the ST warning 12 months after the official release of the CSRC penalty decision.
The CSRC initiated an investigation in June 2024, which lasted 16 months, revealing that “Juewei Foods” deliberately excluded franchise store renovation costs from financial statements, creating an opaque “profit cake.”
Jing Yan, a senior partner at “Retail Circle,” analyzed to Phoenix Finance that Juewei creating a regulatory blind spot by designating renovation suppliers and controlling pricing. For example, in 2017, with a revenue of 3.85 billion yuan, unaccounted renovation income was as high as 211 million yuan, accounting for 5.48%.
Phoenix Finance reached out to Juewei’s official customer service, revealing that apart from franchise fees of 20,000 to 30,000 yuan, renovation fees and deposit standards are undisclosed, requiring completion of data review, scrutiny, and interview through the official mini-program to obtain, providing room for off-balance sheet financing.
Huang Lichong, CEO of Huisheng International Capital, stated that the administrative penalty and ST mark reflect “credit and compliance discipline,” not just accounting errors but also “severe governance and internal control failures” that may involve benefit distribution. Specific details are awaited in the final “Penalty Decision.”
Founded by Dai Wenjun in 2005, Juewei Foods rose to prominence with marketing strategies like endorsing Fan Chengcheng and collaborating with the movie “Ne Zha 2.” By 2023, they owned nearly 16,000 stores, with revenue growing from 3.85 billion yuan in 2017 to 7.261 billion yuan in 2023, with a compounded annual growth rate of 11.15%. The income concealment occurred during this high-speed expansion period.
The financial report for the first half of 2025 of Juewei Foods shows revenue of 2.82 billion yuan, a year-on-year decrease of 15.57%, and a net profit of 175 million yuan, plunging 40.71%. Their core product, duck necks, consumed 10,000 tons of raw materials annually, with retail sales exceeding 6 billion yuan. However, due to declining sales, it has lost its status as a “cash cow.”
To cope with market pressure, Juewei significantly reduced the scale of its stores. According to Narrow Gate’s statistics, as of September 8, 2025, the number of stores decreased from nearly 16,000 at the end of 2023 to 10,838, with over 5,000 closures within 18 months, reducing by 32.3%.
The luwei industry is facing a bottleneck in growth. In the first half of 2025, the four major players (Juewei Foods, Ziyanshi Foods, Zhouheiduck, Huangshanghuang) had a combined revenue of about 6.5 billion yuan, a decrease of over 10% year-on-year, with a total net profit of 465 million yuan, dropping by over 20%.
Huangshanghuang reduced its store count to 2,898, a year-on-year reduction of 1,154 or about 30%; Zhouheiduck decreased to 2,864 stores, closing nearly 600, a decrease of 17%; Ziyanshi Chicken reduced around 800 stores to 5,407.
Phoenix Finance believes that market saturation, soaring costs, and shifting consumer preferences towards healthier diets mark an end to the luwei industry’s era of rapid expansion. Companies now need to shift towards more refined operations.
For Juewei Foods founder Dai Wenjun, who boasted of reaching a billion in revenue within three years in 2005 and then went public in 2017, the ST mark and the wave of store closures present the company’s biggest crisis since its inception. While the company pledges to operate normally and actively reform, rebuilding market trust and profitability will be long-term challenges.