On September 24th, ST Juewei Food Co.,Ltd. (603517.SH) opened with a limit down, trading at 13.77 yuan per share. ST stocks are subject to a 5% daily trading limit system. This followed another limit down on September 23rd, the first day of trading resumption.
On September 23rd, Juewei Food Co.,Ltd., one of the "three giants" in the braised food sector, had its stock subject to risk warning measures, with its A-share designation changed to "ST Juewei."
The stock designation change relates to an Administrative Penalty Advance Notice received by the company on September 19th.
According to ST Juewei's announcement, the Hunan Securities Regulatory Bureau of the China Securities Regulatory Commission issued the Advance Notice stating: "The investigation into Juewei Food Co.,Ltd.'s suspected information disclosure violations has been completed. The investigation found that Juewei Food engaged in the following suspected violations: From 2017 to 2021, Juewei Food failed to recognize revenue from franchise store decoration business, resulting in underreported operating revenue in annual reports. The underreported amounts represented 5.48%, 3.79%, 2.20%, 2.39%, and 1.64% of the publicly disclosed operating revenue for the respective years. The company's annual reports from 2017 to 2021 failed to truthfully disclose operating revenue."
The Hunan Securities Regulatory Bureau ordered Juewei Food Co.,Ltd. to make corrections, issued a warning, and imposed a fine of 4 million yuan. Additionally, several executives involved were fined a total of 4.5 million yuan.
Furthermore, based on the circumstances identified in the Administrative Penalty Advance Notice, the company triggered the "other risk warning" conditions specified in Article 9.8.1 of the Shanghai Stock Exchange Listing Rules (April 2025 revision). Therefore, the company's stock was suspended for one day on September 22nd, and from September 23rd, it has been subject to "other risk warning" measures, with its designation changed to "ST Juewei."
It is understood that a major revenue source for many franchise-based chain enterprises is selling raw materials to franchisees and collecting management fees. The decoration business revenue that Juewei Food was found to have failed to disclose is also one of the revenue sources for such companies.
Juewei Food's performance has been lackluster. In the first half of this year, Juewei Food achieved operating revenue of 2.82 billion yuan, a year-on-year decrease of 15.57%, and realized net profit attributable to shareholders of 175 million yuan, a year-on-year decrease of 40.71%. In its interim report, Juewei Food stated that the change in operating revenue was mainly due to declining domestic sales volume.
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