Zhou Hei Ya Reaffirms Full-Year Revenue Growth Guide Exceeding 20%; Distribution Business Shows Bright Performance

Overview

This report is meeting minutes from Goldman Sachs during the 2026 Asia-Pacific Consumer & Leisure Corporate Day on Zhou Hei Ya (1458.HK) management. The report core conveys the company's performance guidance for 2026 full year and latest operating dynamics across major business segments. Although store business saw slowed offline traffic growth due to high base from last year, the company responded with new product launches and marketing strategies. Meanwhile, distribution business expanded rapidly, becoming a new growth engine. Additionally, raw material costs lower than expected and stable shareholder return policy were highlights of this exchange. Note that Goldman Sachs explicitly marked Zhou Hei Ya as 'Not Covered' in this report, thus no specific rating or target price is included.

Core views

Performance Guidance and Overall Tone: Management reaffirmed 2026 full-year revenue growth exceeding 20% and net margin (NPM) stable YoY guidance. This goal is based on multi-channel coordinated development. Channel Performance Divergence: For store business, starting from second quarter facing higher same-period base pressure, offline customer traffic growth trending flat (muted), but average selling price (ASP) remained stable. To support channel performance, company focused reliance on new product releases and marketing activities. In contrast, distribution business performance strong, proceeding according to company established targets (annual goal RMB 300M to 400M). This growth mainly benefited from rapid expansion of channel outlets (sales points POS increased from 38k last year to 50k this year) and improvement in product strength. Cost and Profit End: Gross margin (GPM) welcomes favorable news, raw material costs more favorable than company early expectations. Specifically, duck byproduct prices maintained at relatively low level, and company successfully locked packaging material procurement prices, helping stabilize cost structure. Emerging Channel Exploration: Delivery channel share reached 20% (2025 data), continuing to bring incremental sales, e.g., night unmanned store operations carried out for delivery channel. Since channel set average selling price higher, its profit margin performance acceptable. For current popular fresh-made snack retail store model, company holds cautious attitude, tending not to open small portion fresh braised food counters in such stores, but will learn from its business model, such as providing more diverse choices, optimizing product layout and customer experience. Shareholder Returns: Company committed to continue share buybacks, and according to dividend policy maintain higher dividend payout ratio (over 60%).

Analysis framework

This report adopts typical 'Meeting Minutes/Expert Interview' analysis framework. Institution through participating listed company held investor communication meetings (Corporate Day), directly obtaining management first-hand information on operational status, future guidance and strategic thinking. Analysis logic along 'Overall Financial Guidance -> Channel Business Breakdown (Store/Distribution/Delivery) -> Cost Side Changes -> Competition and Model Learning -> Capital Allocation' main line unfolded. This method focuses on verifying whether market company fundamentals expectation consistent with management tone, especially focusing on volume-price split, channel structure changes and cost sensitivity etc key driving factors.

Methodology notes

• Industry/Industrial Analysis FrameworkVolume-Price Split

  Decompose revenue growth into two dimensions: volume (traffic/store count) and price (ASP)

  Report when analyzing store business, points out although traffic growth slowed, ASP stable, and through new products and marketing supporting volume, this is typical volume-price analysis logic, helping investors understand revenue growth source and quality.

• Industry/Industrial Analysis FrameworkUpstream/Midstream/Downstream Industry Chain Transmission

  Analyze upstream raw material price fluctuations impact on midstream manufacturing enterprise gross margin

  Report specifically mentions duck byproduct price low level and packaging material price locking benefit on GPM, reflecting upstream cost side changes transmission mechanism to downstream income statement, key for evaluating profitability of cyclical or cost-sensitive consumer enterprises.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Zhou Hei Ya (1458.HK)

  Report directly covered target, though not rated but detailed recorded its operating dynamics

  Strengths

  Distribution business expanding rapidly (POS reached 50k), cost side favorable (duck byproduct prices low), shareholder returns high (dividend payout >60%)

  Weaknesses

  Store business facing high base pressure, offline traffic growth muted

  Risks

  Store traffic recovery worse than expected, raw material price rebound

Key data

• Full-Year Revenue Growth Guidance>20%Management reaffirmed annual goal
• Net Margin (NPM) GuidanceStable YoYDespite cost fluctuations, still pursuing margin stability
• Distribution Business Annual TargetRMB 300M-400MCurrent progress meets company expectations
• Distribution Channel POS Points50,000Significantly increased compared to 38,000 last year
• Delivery Channel Sales Share20%2025 data, continues to bring incremental sales
• Dividend Payout Ratio Policy>60%Company committed high dividend proportion

Impact & implications

For Zhou Hei Ya, distribution business rapid expansion (POS points significantly increased) proves strategy of walking away from traditional store dependence, expanding diversified sales channels effective, this helps offset risk of store traffic growth lackluster. Raw material cost low operation provides company short-term profit buffer space, enabling maintaining stable net margin while investing in marketing and new product promotion. For investors, although lacking sell-side rating support, company clear revenue growth guide and high dividend commitment provides fundamental bottom line and cash flow return safety cushion. At the same time, company cautious attitude towards fresh-made snack store model indicates more inclined to leverage own supply chain and brand advantages, rather than blindly following hot spots.

Risks

• Store business affected by high base, offline traffic growth may continue weak
• If raw material prices rebound from low level, may squeeze gross margin space
• If new products and marketing activities ineffective, may fail to effectively support store performance

What to watch

• Distribution business full-year 300M-400M goal achievement progress
• Second half store business under new products and marketing promotion traffic and ASP changes
• Raw material (duck byproducts and packaging materials) price trend and its actual impact on gross margin