FAST NEWS: Zhou Hei Ya profit soars on sales rebound

The latest: Food processor and retailer Zhou Hei Ya International Holdings Co. Ltd. (1458.HK) announced Wednesday its revenue rose 19.8% to 1.41 billion yuan ($195 million) in the first half of this year, as net profit rose 454% to 102 million yuan.

Looking up: The company’s retail sales are gradually recovering, with first-half revenue jumping 29.3% to 751 million yuan, offsetting a 5% drop in revenue from online channels.

Take Note: Its gross margin in the first half of the year fell by 4.4 percentage points year-on-year to 52.5%, due to raw materials shortage and surging demand, which led to a significant increase in prices.

Digging Deeper: Established in 2006, Zhou Hei Ya is a food-processing company that produces and sells cooked and marinated products and was listed in Hong Kong in November 2016. The company has expanded rapidly since its IPO, with 3,706 stores at the end of June this year, covering 339 cities throughout China. However, since the outbreak of Covid epidemic in 2020, its business has been seriously disrupted, especially after the implementation of stringent closure and control measures in several cities in China last year, its full-year profit plunged by 92.6% to 25.28 million yuan. Until the first half of this year, the situation improved significantly.

Market Reaction: Zhou Hei Ya shares jumped on Thursday, closing up 7.6% to HK$3.1 at the midday break. The stock now trades at the lower end of its 52-week range.

Translation by A. Au

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