Zhou Hei Ya’s duck, is it tasteless? The stock price just hit a record high on June 8, and major shareholders announced a reduction in their holdings 10 days later.
On June 22, the latest data from the Hong Kong Stock Exchange showed that on June 18, Zhou Hei Ya was reduced by the controlling shareholder Zhou Fuyu and his wife to cash out about 561 million Hong Kong dollars (equivalent to about 467 million yuan).
After the reduction, Zhou Fuyu and his wife’s share of Zhou Hei Ya’s shares decreased from 62.05% to 59.72%.
Source: Futu Niuniu
As of midday on June 22, Zhou Hei Ya fell 1.75% to 10.10 Hong Kong dollars per share, with a total market value of 24.07 billion Hong Kong dollars.
What’s the signal for major shareholders to reduce their holdings?
The reduction of holdings, especially the reduction of holdings by major shareholders, is often regarded by the market as a negative factor. Zhou Hei Ya, which has been listed for 5 years since 2016, was suddenly reduced by the controlling shareholder Zhou Fuyu and his wife on June 18. On June 8, Zhou Hei Ya also set a record high.
According to data from the Hong Kong Stock Exchange, on June 18, Zhou Hei Ya was reduced by his controlling shareholder Zhou Fuyu and his wife by about 55.659,700 shares, with an average price of 10.08 Hong Kong dollars per share. A total of about 561 million Hong Kong dollars were reduced. The shareholding ratio was reduced from 62.05% to 59.72%.
Zhou Heiya’s shareholders’ shareholding changes
Source: Hong Kong Stock Exchange data
In fact, in the past few years, Zhou Fuyu and his wife have increased their holdings several times. In September last year, their shareholding ratio reached 62.05%.
According to media reports, Zhou Heiya responded to the reduction in holdings and stated that the transaction had no effect on the actual control status of Zhou Fuyu and his wife. The company’s operations are all normal, and the management is confident in business development and achieving this year’s goals.
Regarding this reduction, a stockholder said on the forum: “Actually, I thought that Zhou always would reduce its holdings at some point, but this reduction came earlier than I thought.”
“Luwei Jianghu” pattern undecided
At present, China’s “luwei Jianghu” mainly consists of three giants: Juewei Food, Huangshanghuang, and Zhou Hei Ya. In the 2020 annual report, the three giants have their own “goods and worries”.
Juewei Foods, in 2020, the company achieved operating income of 5.276 billion yuan, a year-on-year increase of 2.01%, and net profit attributable to the parent was 701 million yuan, a year-on-year decrease of 12.5%. This is the first time that Juewei’s net profit has declined since its listing.
Huangshanghuang has an operating income of approximately 2.436 billion yuan in 2020, an increase of 15.09% year-on-year; the net profit attributable to shareholders of listed companies is approximately 282 million yuan, an increase of 28.04% year-on-year. Huang Shanghuang surpassed Zhou Hei Ya in net profit.
Zhou Hei Ya, the company realized revenue of approximately RMB 2.182 billion in 2020, a year-on-year decrease of 31.53%, and annual profit attributable to shareholders was RMB 151 million, a year-on-year decrease of 62.89%. Zhou Hei Ya is facing three consecutive years of performance decline. In 2017, its net profit was as high as 762 million yuan.
Industrial Securities believes that although the lo-mei market pattern has changed, due to the large scale of the lo-mei market in China, the low market concentration, and the differences in the commercial layout of the three leading braised products companies, the pattern of the lo-mei products in China has not yet been determined. According to data from Zhiyan Consulting, the scale of China’s leisure halogen products industry in 2019 is about 106.5 billion yuan, a year-on-year increase of 16.9%. The CAGR (compound annual growth rate) of China’s leisure halogen products from 2014 to 2019 is about 19.51%. The industry scale is large. The growth rate is fast. The bittern products industry is dominated by husband-and-wife neighborhood stores, and the leading companies must taste food. The market share of Zhou Hei Ya and Huang Shanghuang was only 9.0%, 5.0% and 3.0% in 2019. The space for competition is still huge, so the company’s business model adjustment and expansion capabilities can bring about effective performance restoration and market share.