(Yicai) Dec. 24 -- Juewei Food has withdrawn its plans for a secondary share offering in Hong Kong due to a slowdown in the marinated foods sector that has led to a big drop in revenue at the Chinese retailer of braised duck snacks, which has seen 80 percent of its market capitalization wiped off the Shanghai stock exchange in just under three years.

Juewei has decided to terminate its application to list on the Hong Kong stock exchange due to adjustments in the company’s development strategy and operating conditions, the Changsha-based firm said yesterday. The decision was made based on a thorough examination of the firm’s capital needs and development direction and will not have a significant impact on the company's operations, it added.

Juewei’s share price [SHA:603517] closed up 2.1 percent at CNY19.16 (USD2.63) today, after slumping 6.2 percent yesterday. The firm’s market valuation has plunged 80 percent since it reached a peak in February 2021 to CNY11.8 billion (USD1.6 billion).

Last March, Juewei, which was founded in 2008 and went public on the Shanghai bourse in December 2017, said it was planning a secondary listing in Hong Kong, to accelerate the company's internationalization strategy and enhance its ability to raise finance offshore.

But the sales growth of marinated meat snacks has slowed down this year due to weak demand. The segment’s growth is expected to shrink to 5 percent in 2024, whilst it clocked an average annual growth rate of 6.4 percent between 2018 and 2023, according to Juewei’s semi-annual report.

As a result of the weak sales, Juewei’s revenue contracted in the first three quarters for the first time in recent years, tumbling 11 percent from the same period a year ago to CNY5 billion (USD685 million), according to its latest financial report. However, thanks to a drop in the price of raw materials, net profit still soared 13 percent to CNY438 million (USD60 million).

In order to avoid overcapacity, earlier this month Juewei pushed back the opening dates of two factories under construction by two years. One plant with an annual output of 25,000 tons of braised snacks was supposed to start operations this month, but will now open in December 2026. And the start date for another factory with an annual output of 65,700 tons has been postponed to October 2027 from October 2025.

Editor: Kim Taylor