Braised food giant Juewei Food Co.,Ltd. (603517) is becoming increasingly less profitable.
The company recently disclosed its interim report, showing revenue of 2.82 billion yuan for the period, down 15.57% year-on-year; net profit attributable to shareholders was 175 million yuan, declining 40.71% year-on-year.
This performance is not a short-term fluctuation. Looking back at 2024, Juewei Food Co.,Ltd.'s full-year revenue was 6.257 billion yuan, down 13.84% year-on-year; net profit attributable to shareholders was 227 million yuan, down 34.04% year-on-year, hitting the lowest profit level since listing.
Now with first-half revenue and net profit declines expanding further, it indicates the company faces even more challenging circumstances.
**Fresh Product Sales Drop by 500 Million Yuan**
From an external environment perspective, the consumer market was under pressure in the first half of 2025. According to National Bureau of Statistics data, catering revenue growth within total retail sales of consumer goods slowed to 4.3% year-on-year in the first half of 2025. Consumer price sensitivity increased significantly, with reduced unplanned purchasing behavior, creating some impact on the braised food industry that relies on impulse consumption.
Within the braised food sector, three other listed companies - Huang Shanghuang, Zhou Hei Ya, and Ziyan Foods - also experienced varying degrees of revenue decline in the first half, but Juewei Food Co.,Ltd. led the decline with a 15.57% drop. This suggests that beyond external environmental factors, the company's own operational strategy issues may be more prominent.
The weakness of core business is a key factor dragging down performance.
In the first half, Juewei Food Co.,Ltd.'s fresh product category contributed 2.112 billion yuan in revenue, directly down 500 million yuan from 2.612 billion yuan in the same period last year, declining over 19%; its proportion of main business revenue also fell from 79.88% to 76.59%, dragging down overall revenue performance.
Breaking down fresh product subcategories, poultry products (mainly duck and chicken products) generated revenue of 1.591 billion yuan, down 20.8% year-on-year; vegetable products and other products generated revenue of 277 million yuan and 226 million yuan respectively, with declines of 11.6% and 14.3% year-on-year; livestock product revenue was less than 20 million yuan, also showing a declining trend.
Packaged products, also belonging to braised foods, performed well in the first half with revenue growing 16.3% year-on-year to 228 million yuan. However, due to their low revenue proportion, they could only partially offset the declining impact of fresh products and were unable to drive overall performance recovery.
To boost sales growth, Juewei Food Co.,Ltd. invested heavily in marketing in the first half.
During the period, the company spent 92.31 million yuan on advertising and promotion, an increase of over 14.2 million yuan year-on-year. However, judging from results, this investment failed to reverse the sales downturn. In the first half, total sales expenses were 283 million yuan, down 5.2% year-on-year, but affected by significant revenue contraction, the sales expense ratio climbed from 8.9% in the previous period to 10%.
Additionally, Juewei Food Co.,Ltd.'s administrative expenses increased 10% year-on-year in the first half due to increased employee compensation; R&D expenses also grew 9.44% year-on-year due to increased digitalization investment. Multi-dimensional cost pressures combined caused the company's net profit decline to far exceed revenue decline, with profitability continuing to weaken.
**Brokers Downgrade Expectations**
Poor product sales are largely related to channel contraction.
Braised food sales are highly dependent on offline stores, and Juewei Food Co.,Ltd. previously expanded rapidly through a franchise model, breaking through 10,000 stores in 2019, reaching a total of 15,950 stores in mainland China by the end of 2023. At that time, company revenue also grew from 5.172 billion yuan in 2019 to 7.261 billion yuan in 2023, forming positive synergy between store expansion and performance growth.
However, this trend reversed in 2024, when the company did not disclose store numbers and growth in its annual report, with the market widely predicting scale contraction.
In the 2025 interim report, Juewei Food Co.,Ltd. still did not publicly disclose store data, but research reports point out that Juewei's performance adjustment mainly stems from excessive store closures, with individual store operations still facing pressure. Referring to third-party data, as of September 3, Juewei had only 10,838 operating stores, down over 5,000 from the official figure of 15,950 stores at the end of 2023.
Behind store contraction is weakening franchisee confidence.
Reflected in financial data, as of June 2025, Juewei Food Co.,Ltd.'s contract liabilities were 143 million yuan, down 9.4% year-on-year. As an indicator of "received payments for goods not yet delivered," contract liabilities directly reflect franchisee procurement enthusiasm. Their decline means downstream channels are becoming more cautious about future sales expectations for company products, further affecting performance realization pace.
A more direct signal comes from franchise management income: in the first half, the company's revenue from this business was 27.12 million yuan, significantly down from 34.02 million yuan in the same period last year. This fee is charged by the enterprise for granting franchise licenses to franchisees and providing management services during the contract validity period. The revenue reduction indirectly confirms that the number of franchisees is shrinking.
Recently, securities firms have also downgraded the company's 2025-2027 profit forecasts due to pressure on Juewei's store operations, expecting net profits attributable to shareholders of 390 million yuan, 500 million yuan, and 530 million yuan respectively, compared to earlier predictions at the beginning of this year of 630 million yuan, 680 million yuan, and 720 million yuan.
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