Dai Wenjun's duck neck foundation peaked, his net worth shrank by 9 billion, the stock price of Juewei Food fell by 80%, and there were more than 1,000 complaints from black cats

Yangtze River Business Daily News ● Yangtze River Business Daily reporter Pan Ruidong

"Duck King" Delicious Food (603517. SH) is again mired in food safety issues.

On 10 May, the Centre for Food Safety (FEHD) of the Food and Environmental Hygiene Department of Hong Kong issued an announcement stating that a batch of prepackaged frozen rattan pepper-flavoured duck wings sold by Juewei Food (Hong Kong) Limited may have been contaminated with the pathogen Listeria monocytogenes, and members of the public are advised not to consume them.

On 11 May, Juewei Food responded that the FEHD had detected suspected Listeria monocytogenes in its duck wings, but it was not certain that it contained Listeria monocytogenes. On the same day, Juewei Food recalled the product and handed it over to a third-party testing agency for testing, and the current test results all showed that it did not contain listeria.

The Yangtze River Business Daily inquired about the black cat complaint platform, and as of now, there have been as many as 1,016 complaints involving the words "exquisite duck neck", involving food spoilage, eating foreign objects, and selling expired food.

Juewei Food, which has been mired in food safety controversy, is also facing dual pressure on its performance and stock price. In 2023, the net profit attributable to the parent company of Juewei Food will be 344 million yuan, although it will increase year-on-year, but the amount will be less than half of that in 2021. As of the close of trading on May 10, 2024, the share price of Juewei Food was 20.61 yuan per share, a cumulative decrease of more than 80% from the high point in February 2021.

As the founder of Juewei Food, Dai Wenjun, through dislocation competition and franchise model, has made Juewei duck neck open all over the country, and his net worth has been as high as 17 billion yuan. But now, with the sharp drop in the stock price of Juewei Food, Dai Wenjun's net worth has shrunk to 8 billion yuan, a decrease of 9 billion yuan in three years.

How to regain the glory of Juewei food and how to solve food safety problems are all issues that Dai Wenjun urgently needs to consider.

Halfway to the entrepreneurial wealth, it was as high as 17 billion

Unlike other catering tycoons from the grassroots, Dai Wenjun was already well versed in marketing and marketing when he entered the catering industry.

Dai Wenjun was born in 1968 and started a "small business" when he was a student, and experienced the mystery of the market. The year 2000 was the first turning point in Dai Wenjun's career. This year, he joined Hunan Zhuzhou Qianjin Pharmaceutical as a marketing manager. In Qianjin Pharmaceutical, he worked for 5 years, during which he gained not only capital accumulation, but also company management experience and market resources.

In 2005, Dai Wenjun retired bravely and left Qianjin Pharmaceutical. After resigning, Dai Wenjun's first thought was to start a pharmaceutical business. In that era of "sales is king", the marketing planning experience he accumulated from pharmaceutical companies was enough to help him complete the early market development. But the duck neck that he inadvertently gave to his friends contributed to the turning point of his career.

From pharmaceutical cross-border catering, Dai Wenjun knows nothing except marketing. It is understood that in order to obtain the true scripture of "duck neck", Dai Wenjun asked his brother to learn the art, and after "pushing the cup and changing the lamp" many times, Dai Wenjun successfully got the duck neck formula. He brought in a few friends, pieced together less than one million yuan, and opened the first "Juewei Duck Neck" store in a small attic of only a few dozen square meters at the south gate of Changsha.

The competition in the small duck neck market is also extremely fierce, when Dai Wenjun opened the first duck neck store, Huang Shanghuang was already a leading enterprise, and Zhou Heiya was already well-known in Wuhan business district. In order to quickly expand the market, Dai Wenjun's marketing experience accumulated over the years in Qianjin Pharmaceutical came in handy.

Advertising, leaflets, promotions...... Dai Wenjun, who originally planned to open a chain pharmacy, used this set of marketing methods on the neck. Different from Zhou Heiya's direct sales model, Dai Wenjun adopted a chain franchise model, and by the end of 2005, the number of Juewei Food stores had risen rapidly to 61.

This model has made Juewei Food come from behind and become the "king of duck necks". By the end of 2023, the total number of stores in Chinese mainland is 15,950, while the number of stores of Zhou Heiya is only 3,816 in the same period.

During this period, Juewei Food was listed in 2017, and with the expansion of the number of stores and revenue scale, the company's stock price continued to rise, reaching as high as 106.63 yuan per share on February 18, 2021.

According to the data of the Hurun Report, in 2020, Dai Wenjun's wealth was as high as 17 billion yuan.

There are more than 1,000 complaints about black cats caught in quality disputes

But soon, Dai Wenjun's fortune shrank with the decline in the performance of Juewei Food.

In 2021, Dai Wenjun's net worth shrank to 12 billion yuan. According to the data of the Hurun Report, in 2023, Dai Wenjun's net worth will continue to shrink to 8 billion yuan, and it will shrink by 9 billion yuan in three years.

As of May 10, 2024, Juewei Food's share price is 20.61 yuan per share, which has dropped 80.67% from the high point in February 2021.

The stock price of Juewei Food fell, Dai Wenjun's wealth shrank, behind which the ceiling of the industry peaked, and the "Big Three" of lo-mei could not be sold.

According to the data, in 2019, Juewei Food achieved a net profit of 801 million yuan attributable to the parent company, and in 2020 and 2021, this indicator was 701 million yuan and 981 million yuan respectively, a year-on-year change of -12.46% and 39.86%.

Judging from the data, Juewei Food's profitability will reach its peak in 2021, but there is the help of industrial investment behind it, and in 2021, due to the listing of Qianwei Central Kitchen, Juewei Food adjusted the accounting method of its shares, forming a net investment income of 152 million yuan.

From the perspective of main business, the net profit deducted by Juewei Food in 2021 will be 719 million yuan, a slight increase from 2020, but not as high as the level in 2019.

At the end of April this year, Juewei Food released its 2023 annual report and 2024 first quarter report. On the basis of the low base in 2022, the net profit attributable to the parent company of Juewei Food in 2023 will increase significantly, but the amount will be 344 million yuan, less than half of that in 2021, and the company's operating income in the current period will be 7.261 billion yuan, with a year-on-year growth rate of 9.64%.

In the first quarter of this year, the company's operating income declined to 1.695 billion yuan, a year-on-year decrease of 7.04%; The net profit attributable to the parent company was 165 million yuan, a year-on-year increase of 20.02%.

How to break through the ceiling of the industry and return to growth is a problem that Dai Wenjun needs to think about seriously.

In addition, Dai Wenjun may also need to deal with loopholes in franchisee management. On May 10, the FEHD issued an announcement stating that a batch of prepackaged frozen rattan pepper-flavoured duck wings sold by Juewei Food (Hong Kong) Co., Ltd. may be contaminated with the pathogen Listeria monocytogenes, and the public is requested not to eat them.

On 11 May, Juewei Food responded that the FEHD had detected suspected Listeria monocytogenes in its duck wings, but it was not certain that it contained Listeria monocytogenes. On the same day, Juewei Food recalled the product and handed it over to a third-party testing agency for testing, and the current test results all showed that it did not contain listeria.

However, FEHD indicated that it had informed the vendor concerned and requested that the affected batch of the product be stopped for sale and removed from shelves, and the retailer concerned had recalled the affected batch of the product as required.

A reporter from the Yangtze River Business Daily checked the black cat complaint platform and found that there were as many as 1,016 complaints involving the words "exquisite duck neck", including complaints about food spoilage, eating foreign objects, and selling expired food.

How to expand stores and boost performance while ensuring food safety is a problem that Dai Wenjun and Juewei Food have to face.