Sour Fish "Live Fish Freshly Killed" is JIUMAOJIU's redemption or trap?

Once the king of sauerkraut fish, it is now betting on "live fish freshly killed" for a rebirth. JIUMAOJIU's third-quarter data shows that the situation is improving.

Key Points:

• Third-quarter data shows that Tai Er Sauerkraut Fish's same-store average daily sales decline has narrowed to 9.3% year-on-year, marking three consecutive quarters of improvement.
• As of the end of September, 106 Tai Er stores have completed upgrades, and the company plans to exceed 200 stores by the end of the year.

Li Shida

Looking back to the day in 2020 when it rang the bell on the Hong Kong Stock Exchange, JIUMAOJIU International Holdings Limited (9922.HK) saw its stock price surge, closing up nearly 56% on the first day. At that time, many believed that this restaurant company, which popularized sauerkraut fish cuisine nationwide, would become a new giant.

However, five years later, the situation is quite different. JIUMAOJIU's latest market value is only about HKD 2.9 billion, having evaporated more than 90% from its peak of nearly HKD 55 billion; its stock price has plummeted from a high of HKD 38.4 to around HKD 2, a decline of up to 95%, leading investors to jokingly say it is "really only worth JIUMAOJIU."

The turning point appeared in 2024, where revenue grew by 1.47% to RMB 6.074 billion, but net profit plummeted by 87% to RMB 55.8 million, with operating profit at the store level dropping over 30% to RMB 748 million.

The highs and lows of JIUMAOJIU actually stem from the same logic. In 2015, the company shifted its resources from Northwest cuisine to Tai Er Sauerkraut Fish, advancing with a strategy of "extreme single product + standardized replication," relying on efficiency and table turnover rates to capture the national market.

This approach was indeed effective during the market boom, with small store formats, low labor, and high turnover making Tai Er synonymous with youth socializing. However, as the sauerkraut fish sector expanded comprehensively, with consumption stratification and category diversion occurring simultaneously, a single explosive product became a risk.

High-priced Pre-made Dishes

Especially in recent years, the controversy over pre-made dishes has plunged Tai Er into a trust crisis. Videos on social media showing "seven-minute serving" once went viral, and the company's launch of pre-made sauerkraut fish packages further amplified the image contrast of "industrialization." Particularly, sauerkraut fish is a major category of pre-made dishes, with Hema Workshop selling 430g for RMB 11.8 and Sam's Club selling 1.5kg for RMB 59.8, while Tai Er, which serves in seven minutes, has the cheapest portion costing around RMB 70, placing it in the unfavorable position of "high-priced pre-made dishes" in consumers' eyes.

In response, JIUMAOJIU has chosen to adopt a "fresh" strategy. Starting in March this year, the company launched the "Tai Er 5.0 Fresh Model," emphasizing a supply chain of "live fish, fresh chicken, and fresh beef," with fresh killing and frying, and opened the kitchen to allow customers to visualize the entire process. The restaurant design has been completely revamped, with the menu adding stir-fried dishes and new items to cater to group dining scenarios; the brand tone has also shifted from "rule culture" to "sincere service," hoping to rebuild trust through experience.

However, performance is difficult to rebound immediately. According to data, in the first half of 2025, JIUMAOJIU recorded revenue of RMB 2.753 billion, a year-on-year decline of 10.1%; net profit was RMB 60.691 million, a year-on-year decrease of 16%. The total number of stores decreased from 771 to 729, and by the end of the third quarter, it further shrank to 686 Tai Er remains the main source of income, contributing 1.95 billion yuan in the first half of the year, a year-on-year decrease of 13.3%, with the table turnover rate dropping from 3.8 times to 3.1 times. Per capita consumption increased from 71 yuan to 73 yuan. Same-store sales fell 19% year-on-year to 1.54 billion yuan.

By the third quarter, the adjustment trend began to show. As of the end of September, Tai Er's same-store daily sales decline narrowed to 9.3% year-on-year, marking three consecutive quarters of narrowing; the table turnover rate rebounded to 3.3 times; per capita consumption of 74 yuan also increased from 73 yuan in the first half of the year.

The "Fresh and Active" Approach

Management pointed out that stores in first-tier cities such as Beijing and Shanghai achieved positive year-on-year growth, indicating that the "Tai Er 5.0 Fresh and Active Model" is gradually proving effective. As of the end of September, 106 stores had completed upgrades, with a year-end target of over 200 stores, aiming to cover all restaurants within two years.

Emphasizing "fresh and active" means increasing costs. The company previously revealed that losses from live fish, cold chain distribution, and additional personnel have caused a decline in single-store gross profit margin of about 1 to 2 percentage points. However, with centralized procurement and economies of scale beginning to show, management expects mid-term gross profit margins to rebound.

The restaurant market is changing rapidly, but many restaurant brands still achieved counter-cyclical growth in the first half of the year. For example, Xiao Cai Yuan (0999.HK) and Green Tea Group (6831.HK) both achieved growth in revenue and profit.

It is worth mentioning that Green Tea operates with a central kitchen model and was reported last year for using pre-prepared dishes in its "Buddha Jumps Over the Wall," leading to the removal of its sign stating "No pre-prepared dishes, made to order." However, its offerings integrate various cuisines and frequently innovate, coupled with a small store model that deeply penetrates the sinking market, resulting in a year-on-year revenue growth of 23.1% in the first half of this year, with adjusted net profit reaching 251 million yuan, an increase of 40.4%. This shows that the same set of standards cannot be applied to all cases.

Currently, JIUMAOJIU has a price-to-earnings ratio of about 69 times, far higher than Xiao Cai Yuan's 17.9 times and Green Tea's 11.9 times. This gap mainly reflects that JIUMAOJIU's profit base is too low, and while its stock price has significantly declined, profits are also rapidly shrinking, making investment attractiveness still limited