For years, Juewei Food was the undisputed king of China’s 'braised snack' industry, its ubiquitous red-and-yellow storefronts a staple of subway exits and high streets across the country. That empire is now crumbling. Recently released financial reports for 2025 reveal the company’s first annual loss since its IPO, a staggering 191 million RMB deficit that marks a 184% plunge in profitability. Beyond the red ink, the company has been slapped with 'ST' (Special Treatment) status by regulators, a move that signals serious risk of delisting following a multi-year financial fraud scandal.
The decline is not merely a bookkeeping error but a systemic collapse of its franchise-heavy business model. In just two years, Juewei has seen nearly 6,000 stores vanish from its network. At its peak in late 2023, the brand boasted nearly 16,000 locations; by April 2026, that number has shriveled to just over 10,000. Franchisees, once the engine of the company's growth, are fleeing as demand for premium-priced duck necks cools and inventory sits rotting in warehouses. In early 2026, the company’s operating cash flow turned negative for the first time, signaling a dangerous depletion of its liquidity.
At the heart of the crisis is a governance scandal that has shaken investor confidence. Regulators found that between 2017 and 2021, Juewei systematically hid over 724 million RMB in revenue by funneling franchise fees through personal bank accounts and unofficial committees. This shadow accounting allowed executives to maintain a veneer of hyper-growth while evading taxes. The subsequent discovery led to a massive 300 million RMB penalty for back taxes and interest, effectively wiping out the company's operating gains and forcing a sudden turnover in the finance department.
Market dynamics have also turned against the 'duck neck' industry. As Chinese consumers become more price-sensitive, they are migrating toward discount snack variety stores and community group-buying platforms that offer better value. Juewei’s 'price for volume' strategy—slashing prices to maintain foot traffic—has failed, resulting in lower margins without a meaningful recovery in sales. Competitors like Zhou Hei Ya have fared slightly better by focusing on direct-sale models, leaving Juewei’s fragmented franchise network vulnerable and overextended.
In a desperate bid for survival, Juewei is pivoting from retail brand to industrial supplier. The company is increasingly acting as an OEM (Original Equipment Manufacturer) for discount chains and supermarkets like Walmart. While this logistics and supply chain business is the only segment showing growth, it comes at a steep price. These B2B channels command significantly lower margins than retail sales, threatening to turn the former premium brand into a low-margin commodity processor. For an entity once valued for its brand equity, this transition looks less like a pivot and more like a retreat.