Core Insights - The 30th anniversary celebration of Zhou Hei Ya showcased its journey from a small shop to a national brand, launching a global brand renewal strategy aimed at a century-long vision for the braised food industry [1][11] - Zhou Hei Ya has evolved from a local delicacy to a national leisure food benchmark, with significant milestones including its listing on the Hong Kong Stock Exchange in 2016 as the first brand in the braised food industry [5][6] Company Development - Zhou Hei Ya was founded in 1995 by Zhou Fuyou, who introduced a unique sweet and spicy flavor, gradually gaining recognition in Wuhan [3] - In 2004, the brand began its formal branding process by opening its first commercial store in Wuhan International Plaza, leading to a decade of innovations in packaging and production [5] - By the end of 2024, Zhou Hei Ya plans to have over 3,000 stores across more than 300 cities in China [6] Brand Strategy - The brand renewal includes a new visual identity with three core colors and a youthful IP character "Xiao Zhou Zhou," reflecting a commitment to modernization and consumer engagement [8][10] - Zhou Hei Ya aims to become a "creator of global flavors," focusing on building a strategic ecosystem with international partners and promoting "Chinese flavors" worldwide [10][11]

Summary of Key Points Core Viewpoint - The company, Zhou Hei Ya, has been actively repurchasing its shares, indicating a strategy to support its stock price amid recent declines [2][3]. Share Buyback Details - On May 22, Zhou Hei Ya repurchased 1.2605 million shares at a price range of HKD 2.580 to HKD 2.630, totaling HKD 3.2727 million [2]. - The stock closed at HKD 2.580 on the same day, reflecting a decline of 4.09%, with a total trading volume of HKD 20.286 million [2]. - Since May 21, the company has conducted buybacks for two consecutive days, accumulating a total of 2.3705 million shares and a total expenditure of HKD 6.2519 million, during which the stock price fell by 5.84% [2]. Year-to-Date Buyback Activity - Year-to-date, Zhou Hei Ya has executed 53 buyback transactions, acquiring a total of 65.4565 million shares for a cumulative amount of HKD 12.5 million [3]. - The detailed buyback transactions include various dates, share quantities, and price ranges, showcasing a consistent effort to stabilize the stock price [3][4].

Core Insights - The core message of the news is the celebration of the 30th anniversary of Zhou Hei Ya, highlighting its brand renewal strategy and commitment to quality as it aims to expand globally [1][8]. Group 1: Brand Development and Quality Control - Zhou Hei Ya has evolved from a street vendor to a national brand, emphasizing a vision of becoming "the creator of deliciousness for the world" while maintaining a quality-first approach [1]. - The company has implemented rigorous quality control measures, including advanced equipment to ensure a 99.9% impurity removal rate in its pepper sourcing, reflecting its commitment to high standards [2][3]. - Zhou Hei Ya's products have received multiple industry awards, including the iSEE Delicious Award, reinforcing its reputation for quality [4]. Group 2: Market Adaptation and Product Innovation - The company has adapted its store formats and product offerings to meet changing consumer preferences, including the introduction of new product lines such as spicy chicken and collaborations with other brands [5][6]. - Zhou Hei Ya has expanded its store count to over 3,000 across more than 300 cities in China, utilizing a dual model of direct sales and franchising to enhance market presence [5]. Group 3: Strategic Expansion and Globalization - Zhou Hei Ya is actively pursuing global market opportunities, starting with Southeast Asia, and aims to promote Chinese marinated food culture internationally [8]. - The company has diversified its distribution channels, including partnerships with major retailers and e-commerce platforms, resulting in a 75% increase in customer transactions [7]. - The introduction of new beverage products and collaborations in the seasoning sector indicates a strategic move towards creating new consumption scenarios [7].

Core Insights - The article highlights the competitive landscape of the Chinese snack food industry, particularly the unique position and evolution of Zhou Hei Ya over the past 30 years, emphasizing its innovative strategies and brand development [1] Brand and Product Revitalization - Zhou Hei Ya celebrated its 30th anniversary with a brand revitalization event, receiving the "Chinese Consumer Quality Trusted Snack Brand" certification, indicating high industry recognition in quality, brand, and service [3] - The brand's revitalization includes a comprehensive upgrade of its visual identity, store design, product packaging, and IP image, aimed at attracting Gen Z consumers [3] Product Quality and Innovation - Zhou Hei Ya focuses on using over 20 natural plant spices and employs 38 meticulous processes to create its signature sweet and spicy flavor profile, which has garnered widespread consumer acclaim [5] Key Business Decisions - Significant business decisions have shaped Zhou Hei Ya's trajectory, including the introduction of e-commerce in 2010, which expanded its consumer reach [7] - The launch of modified atmosphere packaging in 2012 addressed preservation challenges, broadening consumption scenarios [7] - The initiation of a franchising model in 2019 marked a shift from direct sales to an open franchise system, accelerating brand expansion [7] Future Plans - The chairman of Zhou Hei Ya, Zhou Fuyu, outlined two main focuses for the future: building a team that continuously challenges the impossible and pursuing the vision of becoming a "global creator of deliciousness" [8] - Zhou Fuyu draws inspiration from the Wright brothers' story, emphasizing a mindset of innovation and adaptability in facing global market challenges [8] Overall Development - Zhou Hei Ya's 30-year journey is portrayed as a case study in the rise of Chinese consumer brands, characterized by precise market positioning, ongoing product innovation, flexible business models, and a commitment to quality [10] - The brand aims to leverage its revitalization as a catalyst for accelerating its focus on youth-oriented and international markets, injecting new vitality into the future of the Chinese snack food industry [11]

Core Insights - The article highlights the 30th anniversary of Zhou Hei Ya, showcasing its journey from a small shop to a national brand and the launch of its global brand renewal strategy [2][3][4] Company Development - Zhou Hei Ya was founded in 1995 by Zhou Fuyou in Wuhan, starting with a small shop and introducing a unique "sweet and spicy" flavor that disrupted traditional practices [2] - The brand transitioned to a more formalized business model in 2004 by opening its first commercial store, marking the beginning of its branding process [2] - By 2024, Zhou Hei Ya plans to have over 3,000 stores across more than 300 cities in China [2] Quality Control and Supply Chain - The company adheres to GMP standards to ensure product quality and has significantly upgraded its supply chain, leading to the development of industry benchmarks among its partners [3] - Zhou Hei Ya's innovative processing techniques, such as a highly automated processing line, achieve a 99.9% impurity removal rate [3] Brand Strategy and Innovation - The brand is implementing a dual strategy of "classic + innovation," maintaining its signature flavors while introducing new product lines and visual branding elements [3] - Zhou Hei Ya's new branding includes a recognizable IP character "Xiao Zhou Zhou" and modern packaging designs that enhance consumer engagement [3] Future Vision - The company aims to build a "steel team" focused on quality improvement and to deepen the cultural interpretation of "Chinese Zhou Hei Ya" while expanding into global markets [4] - Zhou Hei Ya plans to create a strategic ecosystem with international partners, emphasizing continuous improvement and market penetration beyond snacks into dining experiences [4]

Core Insights - The article highlights the 30-year journey of Zhou Hei Ya, emphasizing its transformation from a workshop-style operation to a standardized brand-driven model in the marinated food industry [1][4] - Zhou Hei Ya's founder, Zhou Fuyou, is credited with leading the company through economic fluctuations and consumer preference changes, driving innovation and adapting business models to meet market demands [1][5] Company Achievements - Zhou Hei Ya has established itself as a national culinary symbol, with its brand becoming widely recognized and respected in the industry [1][5] - The company has implemented a standardized model across various dimensions, including procurement, production, logistics, and consumer engagement, which has significantly contributed to the industry's upgrade [6][12] Industry Leadership - Zhou Hei Ya has been awarded the title of "China's Consumer Quality Trusted Marinated Food Leader" by a third-party authority, reflecting its excellence in product quality and brand building [7] - The company has pioneered several industry standards, including the introduction of modified atmosphere packaging in 2012, which has transformed the market from bulk and vacuum packaging to a more standardized approach [6][12] Product Innovation - Zhou Hei Ya focuses on catering to younger consumers by launching diverse products and refreshing its brand image, ensuring it remains relevant in a competitive market [8][10] - The company has developed a dual-driven product strategy of "classic + innovation," enhancing its product matrix with unique flavors and offerings that resonate with consumer preferences [10][12] Channel Expansion - Zhou Hei Ya has strategically expanded its offline and online channels, establishing over 3,000 stores and leveraging e-commerce platforms like Douyin to enhance brand recognition and market penetration [11][13] - The company is set to embark on an international expansion journey, starting with Southeast Asia in 2024, aiming to become a global leader in the marinated food sector [11][14] Future Vision - Zhou Hei Ya aims to become a global representative of Chinese marinated food, with a focus on continuous innovation in product development and supply chain management [14] - The company is committed to building a strong team and establishing a strategic ecosystem with international partners, positioning itself as a pioneer in global marinated food culture [14]

Core Viewpoint - CICC maintains profit expectations for Zhou Hei Ya (01458) for 2025 and 2026, raising the target price by 20% to HKD 3.0, indicating a potential upside of approximately 13.2% from the current price [1] Group 1: Store Quality and Structure - In 2025, the company will focus on enhancing store quality and optimizing store structure, emphasizing "people, goods, and environment" [2] - The company will enhance membership operations and attract traffic through online channels and in-store competitions among staff [2] - There are no specific targets for the number of stores in 2025, with a focus on improving store quality instead [2] - The store structure adjustment is expected to be completed by 2024, with a net reduction of 504 and 252 stores in commercial and community areas, respectively, while increasing transportation hub stores by 36 [2] - Same-store operations showed a year-on-year increase in Q1 2025 and April-May, indicating steady improvement in overall store performance [2] Group 2: Emerging Channels - The company is making steady progress in emerging channels, with products entering Sam's Club, Pang Donglai, and Yonghui stores [3] - In March 2024, the company's marinated products entered the Sam's Club channel, ranking in the Top 6 of the seasoning and sauce category by sales data [3] - The company has also entered Pang Donglai and some Yonghui stores, accelerating expansion into leading regional supermarkets [3] - Zhou Hei Ya has recently entered the MIX supermarket in Malaysia, laying a solid foundation for future expansion into Southeast Asia and other markets [3]

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]