On October 26, 2024, the Chinese chain food enterprise, Juewei Food, released a report indicating that the continuous reduction in the number of its stores has had a sustained impact on the company’s revenue. In the first half of this year, Juewei Food reduced a net of 981 stores, with the majority of its income in the braised food industry coming from offline stores. Additionally, the company’s external investments in several projects have also incurred substantial losses.
According to reports from Interface News and Red Star News, on the evening of October 24, Juewei Food released its third quarter report for 2024. In the third quarter of this year, the company’s quarterly main revenue was 1.675 billion yuan, a 13.29% decrease compared to the same period last year. The net profit attributable to shareholders in the quarter was 143 million yuan, a 3.33% decline year-on-year.
The shrinking number of Juewei Food’s stores continues to have a sustained impact on the company’s revenue. The majority of the braised food industry’s income comes from offline stores, but in the first half of this year, Juewei Food’s revenue was 3.34 billion yuan, a 9.73% decrease year-on-year, with a net reduction of 981 stores.
Data from Frost & Sullivan and the Red Meal Industry Research Institute shows that the growth rate of the braised product industry has significantly slowed down. Despite a slight decrease in raw material prices year-on-year in the first half of 2024, the industry as a whole is facing severe operational pressures, with leading companies also undergoing survival tests.
On the evening of October 21, Juewei Food issued a “Response Announcement on the Letter from the Shanghai Stock Exchange on Information Disclosure Supervision”, as a result of long-term investment losses, Juewei Food was once again required by the Shanghai Stock Exchange to disclose investment-related data.
Since 2017, Juewei Food, through its wholly-owned subsidiary Shenzhen Wangju, has collaborated with Tomato Capital, New Hope, and others in joint investments focusing on braised food, seasonings, supply chain, and related industries. However, most of the company’s external investments have become a burden.
From 2022 to the first half of 2024, the company’s cash investments amounted to 880 million yuan, 2.422 billion yuan, and 1.063 billion yuan, with investment returns totaling -94.2185 million yuan, -116 million yuan, and -3.252 million yuan, resulting in a total loss of 213 million yuan.
In its external investments, Juewei Food mainly targeted braised food, light catering, seasonings, and the upstream and downstream sectors of the industry chain. However, the company’s expectations for investments in the braised food sector have not been met.
In 2023, Juewei Food’s equity investments in five targets resulted in a total loss of 105 million yuan. In the first half of 2024, Juewei invested in Jiangsu Manguan and Changsha Nayun, both enterprises associated with brands that also incurred substantial losses.