By Zhiliao

Source: GPLP Rhino Finance (ID: GPLPCN)

On the evening of February 11, Zhou Heiya (01458.HK) announced that some stores in different regions had suspended business, with about 1,000 stores across the country temporarily closed. The resumption of business hours will be arranged by the government.

In terms of production and operation, Zhou Heiya has processed the capacity deployment in North and South Production Center of China, the overall production capacity is adequate, production activities are still running good.

In the first half of 2019, Zhou Heiya realized revenue of 1.626 billion yuan, up 1.8% year by year, and realized net profit of 224 million yuan, down 32.4% year by year, according to the mid-term report of 2019 released by Zhou Heiya In a previous profit warning, Zhou Heiya announced that, the decline in net profit is mainly due to the decline in operating profit margin, raw material costs lead to a decline in gross margin, new production projects and store rental growth and other reasons.

In the first half of 2019, Zhou Heiya opened 84 new stores and closed 117 stores, bringing the total to 1,255 by the end of June 2019. Geographically, central China remains the main regional market for Zhou Heiya. As of the end of June 2019,560 stores had been opened in central China, accounting for 44.7% of the total, with central China for 60% of the total revenue.

In the first half of 2019, due to market demand and new capacity in store layout, Zhou Heiya started production of the Dongguan, Guangdong, and is preparing to build two new factories in Jiangsu and Sichuan.

In its 2019 interim report, Zhou Heiya also said that in the next stage, Zhou Heiya will open up franchise model, explore diversified channel strategies, and strengthen product innovation to further enhance its core competitiveness.

By the end of February 13, the stock had risen 6.42 % by 4.31 HKD