When facing thousands of listed company announcements every day, which ones should you read? What are the key points to take away from the dozens or hundreds of pages of material announcements? Are the many professional terms in the announcements bullish or bearish? Check out Caixin's "Quick Read Announcement" column, where our reporters across the country will provide you with accurate, fast and professional interpretations on the night of the announcement.

According to Caixin, the overall pressure on the seasoning industry due to declining consumer demand has led to a decrease in revenue in the first half of this year for companies such as Juewei Food (603517.SH) and Jiangxi Huangshanghuang Group Food (002695.SZ).

Tonight, Juewei Food released its financial report for the first half of the year, achieving a revenue of 3.34 billion yuan, a decrease of 9.73% YoY; net profit attributable to the parent company's shareholders was 0.296 billion yuan, an increase of 22.20% YoY.

The financial report shows that the decrease in Juewei Food's revenue in the first half of the year is mainly due to a decrease in product sales. Sales expenses increased by 13.6% YoY, mainly due to increased advertising expenses, but the increase in expenses was still unable to offset the decline in revenue.

According to past financial reports, the company's revenue in the first half of 2022 and 2023 increased by 6.11% and 10.91% YoY, respectively. The revenue growth was mainly due to the company's accelerated layout and expansion of stores.

According to data from Frost & Sullivan and the Red Meal Industry Research Institute, the growth rate of the seasoning industry has slowed down significantly. In the first half of 2024, although the raw material prices have decreased YoY, the industry as a whole is facing severe operational pressures, and leading enterprises are also facing survival tests.

Juewei Food's store count has also been impacted by the overall pressure on the industry's consumption. As of the end of June 2024, Juewei Food had a total of 14,969 stores in mainland China (excluding Hong Kong, Macau, Taiwan, and overseas markets). Compared to the end of 2023, the number of stores has decreased by nearly 1,000.

In addition to Juewei Food Co., Ltd., another listed company in the same braised food track is facing the same difficulties. Huangshanghuang recently disclosed its interim report, which showed that the company achieved revenue of 1.06 billion yuan in the first half of the year, a year-on-year decrease of 7.5%, and achieved net income attributable to shareholders of 0.061 billion yuan, a year-on-year decrease of 26.6%. As of the end of June 2024, the company had a total of 4,052 stores, a net decrease of 445 stores compared to the end of 2023.

In the interim report, Juewei Food Co., Ltd. stated that in the first half of this year, the company adhered to the strategic operation of "deep cultivation of the duck neck main business," and focused on adjusting the structure of its stores and franchisees. It will prioritize increasing store revenue and ensuring the survival of franchisees, and overcome difficulties together with them.

Although the growth rate of main operating income is under pressure, the decrease in costs has given Juewei Food Co., Ltd. some relief, as the company's product gross margin has improved. The financial report shows that the cost of goods sold decreased by 17.95% year-on-year, mainly due to a decrease in raw material prices.

According to company insiders interviewed by Caixin, the main factor affecting the company's product gross margin is the price of raw materials. The price of duck by-products has fallen from a peak of 28 yuan/kg to about 10 yuan/kg, which is now lower than the historical average. With the increase in duck stocking volume this year, it is expected that the price of duck by-products will remain stable for a long time.

It is worth mentioning that in mid-August, Juewei Food Co., Ltd. announced that it had received a "Notice of Filing" from the China Securities Regulatory Commission (CSRC) regarding suspected violations of information disclosure laws and regulations. The CSRC decided to file a case against the company. The announcement did not disclose the specific violations of information disclosure by the company. However, more than one person close to the company told Caixin reporters that the CSRC's investigation and filing against the company may be related to previous regulatory measures taken against the company.

According to previous announcements made by the company, it has engaged in undisclosed joint investments with related parties, failed to disclose related parties and related transactions as required, and had irregularities in the management of store sales revenue, franchise fees, and management fees, among other violations. These violations involving Juewei Food Co., Ltd. have been subject to regulatory measures or warning letters issued by the Hunan Securities Regulatory Bureau and the Shanghai Stock Exchange.