ZHOU HEI YA (01458) has released its 2025 annual results, reporting revenue of RMB 2.526 billion, a year-on-year increase of 3.5%, and a net profit of RMB 157 million, which surged by nearly 60%. This performance marks a simultaneous growth in both revenue and net profit.
Following the earnings release, several financial institutions, including CLSA, Citi, CICC, China Merchants Securities, and Xiangcai Securities, issued research reports maintaining positive ratings on the company. CLSA reaffirmed its "High Conviction Outperform" rating and raised the target price from HK$2.1 to HK$2.3. Xiangcai Securities initiated coverage on ZHOU HEI YA with a "Buy" rating. Overall, analysts widely acknowledge the positive signals from the company's improvements in store operations, channel expansion, innovation initiatives, and shareholder returns.
The dual-driver strategy has yielded results, leading to growth in both revenue and net profit for 2025. Despite market restructuring and intensified industry competition, ZHOU HEI YA advanced its quality and efficiency enhancement efforts under the "Store + Channel" dual-driver strategy. On the store front, the company focused on expanding operational scenarios, deepening member engagement, optimizing employee incentives, and adjusting store structures, leading to sustained improvements in overall operational quality. As of December 31, 2025, ZHOU HEI YA operated 3,019 stores, with average monthly sales per store increasing by 13.6% year-on-year. The total number of stores returned to net growth in the second half of the year, highlighting enhanced operational resilience.
Channel expansion has emerged as a significant new growth driver. In 2025, ZHOU HEI YA continued to diversify its channels, including membership stores, hypermarkets, and convenience stores. The company has entered over 80 key channel systems, such as Sam's Club, Pang Dong Lai, and Yonghui Superstores, covering nearly 40,000 retail points. It has also developed a diversified product portfolio tailored to different channels and consumer needs, fostering synergistic growth across all sales avenues. Additionally, the company made progress in overseas markets and its prepared seasoning business, with products now available in mainstream retail channels across 12 countries. Its "Ga Ga Xiang" seasoning line has launched 29 SKUs, further expanding consumption scenarios and brand reach.
The 2025 results not only reflect improved store performance but also demonstrate the role of channel expansion and innovation in supporting medium- to long-term growth.
Leading brokerages have expressed collective optimism, with high dividend payouts and share buybacks underscoring management confidence. CLSA issued a report on March 27, maintaining its "High Conviction Outperform" rating and raising the target price, citing healthy cash flow, growth potential in new retail channels, and room for further margin improvement. Citi, in a March 30 report, noted that while the company is still in a phase of channel adjustment and new business development, it remains positive on ZHOU HEI YA's medium- to long-term recovery prospects, supported by store efficiency gains, franchise expansion, new product launches, and incentive optimization. CICC maintained an "Outperform" rating, highlighting significant store operation improvements in 2025, with the proportion of profitable stores rising from 60% to over 80%, alongside rapid channel business growth. Looking ahead to 2026, CICC expects continued profit and valuation recovery driven by the dual strategies of store quality enhancement and channel expansion.
China Merchants Securities also reiterated a "Strong Recommend" rating, pointing to substantial improvements in store efficiency and the ratio of profitable stores, with revenue turning positive in the second half of the year. The brokerage noted robust growth in offline channel revenue, strong sales of new products in key channels like Sam's Club, and overseas and seasoning businesses becoming new growth drivers.
Xiangcai Securities initiated coverage with a "Buy" rating, stating that the company has established a development path centered on store quality improvement, channel breakthroughs, and innovation for long-term growth. High dividend payouts and share repurchase plans further enhance investment appeal. Other institutions, including Guotai Haitong, Soochow Securities, Everbright Securities, Changjiang Securities, and SDIC International, also issued "Buy" or "Overweight" ratings, expressing confidence in ZHOU HEI YA's operational quality and growth resilience.
Notably, the company's dividend payout ratio reached 107.2% for 2025, and it plans to repurchase up to 10% of its total shares in 2026, demonstrating a strong commitment to shareholder returns and confidence in its future development.
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