Recently, Zhou Fuyu, founder and chairman of ZHOU HEI YA (01458), was invited to speak at the "Shandong Meat Duck High-Quality Development Conference" hosted by the Shandong Animal Husbandry Association. In his keynote address, he proposed breaking through industry challenges with "heart quality productivity" to reshape industry value. Zhou Fuyu indicated that current issues facing the braised food sector include slowing growth and consumer feedback that "ducks don't taste as good as they used to," with industry problems rooted in excessive cost-cutting at the expense of quality. "Heart quality productivity" represents a return to quality fundamentals and rebuilding consumer trust.
"Heart quality productivity" can withstand the rigorous test of operators' cost-benefit considerations. Under intense industry competition, companies upgrade their new quality productivity through technological means, but profit-driven approaches often lead to deteriorating product quality, with technological innovations disconnected from consumer taste preferences. ZHOU HEI YA's thirty-year practice of "food theory" emphasizes that "people making food must have conscience," with its core being genuine care for consumers, dedication to products, and reverence for the market.
Two Major Initiatives to Build "Heart Quality Productivity"
Based on "heart quality productivity," Zhou Fuyu presented two major industry initiatives.
The first initiative involves shifting competitive mindset from "upstream-downstream internal competition" to "industry chain collaborative competition," joining forces to face external track competition and collectively meeting consumer demands for "healthy and delicious" products. Since 2024, the braised food industry has entered an era of serious internal competition, with intense cost competition among peers and upstream-downstream enterprises collectively losing focus on meeting consumer needs. Industry-wide internal competition has also led to deteriorating competitive environments, with participants facing compressed profits and some experiencing losses.
The second initiative involves shifting from "cost-first" to "quality-first" approach, breaking away from the "pursuit of extreme meat-to-seasoning ratio" and returning to the original intention of "raising good ducks and producing good seasoning." Due to upstream-downstream competitive pressure, price wars inevitably affect costs, leading to corner-cutting and quality compromises that undermine both product safety and quality, significantly impacting customer taste experience and threatening the entire industry's survival.
These two initiatives are highly interconnected. Individual company efforts are limited, requiring collaborative cooperation between upstream supply chain enterprises and downstream brand partners to form a comprehensive quality control system spanning duck breeding, raising, slaughtering, and braising processing. This transforms quality improvements at each stage into overall product competitiveness, jointly establishing industry quality benchmarks. ZHOU HEI YA is willing to take a leadership role, working with visionary partners across the industry chain to jointly improve quality standards in the meat duck and braised food sectors.
Leading by Example in Industry Transformation
How does ZHOU HEI YA implement "industry chain collaborative competition" and "quality-first" principles?
ZHOU HEI YA has established a comprehensive supply chain management system. For upstream raw material suppliers, the company primarily selects industry leaders as suppliers, ensuring stable sourcing and quality of raw and auxiliary materials while supporting supplier development through capability enhancement. In logistics, the company collaborates closely with logistics providers while building its own cold chain system and transportation fleet. Five national production bases serve over 3,000 stores, with 90% of stores receiving deliveries within 24 hours. In retail channels, the company maintains comprehensive online and offline coverage, actively expanding cooperation with supermarkets and other new channel scenarios.
The key to industry chain collaborative competition lies in coordination, enabling mutual development among industry chain participants alongside company growth. The company has made significant industry contributions, participating in drafting standards including "Requirements for Modified Atmosphere Packaging of Cooked Braised Products," "Modified Atmosphere Packaging of Meat and Meat Products," and "Technical Specifications for Modified Atmosphere Packaging of Meat." The "Requirements for Cooked Braised Products Modified Atmosphere Packaging" was implemented in Hubei Province in 2015, providing strong support for the braised food industry's standardization process.
Additionally, ZHOU HEI YA consistently maintains "quality first" as its business philosophy, strictly controlling quality throughout the entire chain from raw material selection to production, using better ingredients to create more delicious braised foods. In raw and auxiliary material procurement, for example, old hemp ducks are raised for approximately 400 days, resulting in tender and flavorful meat. For auxiliary materials, chilies are selected from premium production areas and undergo over 20 hours of low-temperature drying and multiple screening processes, while Sichuan peppers are packaged in aluminum foil for freshness preservation within 60 days from harvest to storage.
These stringent raw material requirements ensure product quality and taste, maintaining ZHOU HEI YA's unique and consistent flavor profile.
The company operates pharmaceutical-grade 100,000-level clean production facilities with automated microwave thawing and blanching lines, automated sorting screens, and multiple automated production lines. These clean, hygienic facilities and intelligent production lines create industry barriers for food safety production while significantly improving production efficiency in response to new quality productivity requirements. With strict quality control throughout the entire production chain, the company remains an industry benchmark in quality production.
ZHOU HEI YA has consistently led industry development by deeply engaging with production areas, from upstream targeted breeding of raw materials to relentless pursuit of processing excellence, advancing from primitive processing methods to professional processing workshops and equipment investment. The company has comprehensively upgraded pepper quality, foreign object handling, and packaging formats, guiding the entire industry toward professional processing development while consistently dedicating itself to product excellence.
This commitment has enabled the company to stand out in the industry and maintain its leading position. According to the company's profit alert, net profit attributable to shareholders is expected to increase 55.5%-94.8% in the first half of 2025, with performance over the past two and a half years consistently outperforming peers.
Since Zhou Fuyu's return last June, he has continuously implemented multidimensional reforms at ZHOU HEI YA, including ongoing "store quality reform," product innovation, comprehensive cost reduction and efficiency improvement initiatives, and braised food overseas expansion. Addressing current issues of intense internal competition and sluggish growth in the braised food industry, Zhou Fuyu has "personally engaged," pursuing a differentiated development path and creating a successful transformation template for peers through transparent business operations.
In summary, as an industry leader, ZHOU HEI YA has consistently upheld quality-first business principles, establishing comprehensive systems across supply chain management and food production. Zhou Fuyu's two initiatives demonstrate the company's willingness to share successful experiences and collaborate deeply with upstream and downstream industry chain enterprises to improve meat duck and braised food product quality from the source, ensuring consumer satisfaction, safety, and recognition while jointly promoting Chinese braised food culture to the world.
ZHOU HEI YA's recent stock performance has been strong, particularly with sustained gains on reduced volume following the profit alert announcement, suggesting potential entry of long-term investment funds. The company's "heart quality productivity" concept provides a clear upgrade path for the industry, guiding the transition from scale growth to quality growth. As industry growth recovers, the company will be a primary beneficiary, with long-term investment value continuing to be realized.