Chinese leisure marinated product company Zhouheiya International Holdings Co., Ltd. (Zhouheiya) has seen its stock price drop by 85% over the past four years, evaporating a market value of 20 billion yuan.
Zhouheiya is a company specialized in the production, marketing, and retail of leisure marinated products, focusing on marinated duck, duck by-products, marinated red meat, marinated vegetables, marinated poultry, and aquatic products. For a long time, Zhouheiya has been perceived as a luxury brand by consumers. Its product, duck neck, is even jokingly referred to as the “Hermes of snacks” or the “snack assassin.”
According to research data from China International Capital Corporation Limited, the price of Zhouheiya’s duck neck was 45 yuan per jin in 2012 and increased to 60 yuan per jin by 2020. Currently, based on Zhouheiya’s official mini-program, the price of 200g of duck neck is 26.9 yuan, equivalent to 67.25 yuan per jin. On delivery platforms or in certain areas, prices may exceed 70 yuan, even reaching close to 75 yuan per jin.
At its peak, Zhouheiya’s market value reached 26 billion Hong Kong dollars, but its stock price has been declining for four consecutive years. As of December 13, Zhouheiya’s stock price was 1.74 Hong Kong dollars per share, representing an 85% decline from its peak, resulting in a market value loss of 22 billion Hong Kong dollars (approximately 200 billion yuan).
Additionally, the company’s revenue and net profit have been decreasing annually. In 2019, Zhouheiya’s operating income was 3.186 billion yuan; by 2023, it had dropped to 2.744 billion yuan; and in the first half of 2024, the operating income was 1.26 billion yuan, a year-on-year decrease of 10.97%.
In 2019, Zhouheiya’s net profit was 407 million yuan; by 2023, it had declined to 116 million yuan; and in the first half of 2024, the net profit was 32.91 million yuan, a year-on-year decrease of 67.65%. Moreover, in the first half of 2024, Zhouheiya also experienced a large-scale closure of stores. As of the end of June this year, the total number of Zhouheiya stores decreased by 360 compared to the previous year, with 3,456 stores remaining. The Chinese financial media “Kan Cai Jing” said on December 12 that Zhouheiya’s business performance has collapsed!
“Kan Cai Jing” pointed out that despite the decline in operating income and a significant drop in net profit, Zhouheiya’s gross profit margin continues to rise. In the first half of 2024, Zhouheiya’s gross profit margin was 55.39%, an increase of three percentage points from the previous year, making it the highest among the three marinated product companies in China (Weilong, Huang Shang Huang, Zhouheiya). “Kan Cai Jing” questioned: Although Zhouheiya’s gross profit margin is the highest, its net profit margin is the lowest. The frequent price increases of Zhouheiya’s duck neck products are not due to strong demand but rather a supply shortage. This is an issue that Zhouheiya needs to ponder on.
“Kan Cai Jing” believes that the marinated product market in China has become saturated, leading to increasingly fierce competition. For Zhouheiya, declining performance, market value collapse, intensifying market competition, and the increasing variety of leisure products available to consumers leave the company with limited time.
Many netizens express that Zhouheiya’s products are perceived as expensive.
Netizen “Shantai Liangshan” said: “Too expensive, not affordable for ordinary people like us. When you want to eat, even spending forty to fifty yuan won’t satisfy your cravings. To enjoy it, you need to spend over a hundred yuan. Over a decade ago, I could afford it once a month, but now it’s more like once every few years.”
A Tencent netizen also commented: “The main issue is the high prices. In the past, ten yuan could buy a drink, but now it’s only enough to get a taste. The marinated dishes at local shops are more affordable, and the flavor of Zhouheiya is not an exclusive secret; even marinated dish shops can replicate it.”
“Lan Xiannu” echoed the sentiment, saying: “Indeed, it’s expensive, getting increasingly pricier. It used to be affordable, but now it’s out of reach.”