Juewei Food (SH:603517) Xin Lang Cai Jing·2025-09-28 23:45Core Viewpoint - The company, known as the "Duck Neck King," has faced significant financial and operational challenges, leading to a decline in its stock price and market value due to financial misconduct and poor performance in the competitive market [3][5][10]. Financial Misconduct - The company was penalized by the China Securities Regulatory Commission (CSRC) for underreporting revenue by approximately 724 million yuan from 2017 to 2021, resulting in a fine of 4 million yuan [3][5]. - The investigation revealed that the company failed to recognize income from franchise store renovations, leading to a systematic underreporting of revenue across multiple years [5][7]. Performance Decline - In the first half of 2025, the company reported a revenue decline of 15.57% year-on-year, with net profit dropping by 40.71% [4][10]. - The total number of stores decreased from 14,969 at the end of 2023 to 10,725 by September 2024, indicating an average closure of about 10 stores per day over the past year [4][10][14]. Market Position and Strategy - The company has shifted its focus from aggressive expansion to optimizing store performance and franchise management in response to market saturation [14][15]. - Despite previous growth, the company has faced increased competition and declining profitability, prompting a reevaluation of its business model and marketing strategies [10][15][17]. Investment and Brand Strategy - The company has invested over 5 billion yuan in various brands since 2017, but these investments have resulted in significant losses, totaling over 370 million yuan from 2022 to 2024 [15][17]. - In an effort to rejuvenate its brand, the company appointed a new global ambassador and introduced new store formats, although the effectiveness of these strategies remains uncertain [17][18].