When a single store opening adds $35 million to your market cap, you know investors are desperate for good news. That's exactly what happened to Zhou Hei Ya, the Chinese braised duck neck snack chain that just opened its first location outside China in Port Klang, Malaysia.

The company's stock jumped 7.7% over the next three trading days after announcing the Dec. 5 opening. Not bad for one store. But the enthusiasm makes sense when you consider what Zhou Hei Ya International Holdings Co. Ltd. (1458.HK) has been through lately.

This is a brand that was once a top player in China's snack food scene but has spent the past several years getting absolutely hammered by younger competitors. The Malaysia store represents more than just geographic expansion. It's a signal that maybe, just maybe, founder Zhou Fuyu can pull off a turnaround after coming out of semi-retirement to rescue his struggling creation.

From Wet Market Stall to Hong Kong IPO

Zhou Hei Ya's story started in 1994 when Zhou Fuyu set up a humble stall in a wet market in Wuhan, Central China. He experimented with braised duck sauce before officially founding the chain with his wife Tang Jianfang in 2002. The specialty? Braised duck necks, a traditional dish that somehow became wildly popular among Chinese millennials a decade ago.

By the time Zhou Hei Ya went public in Hong Kong in 2016, the company was in its prime. It operated 715 stores across 38 cities, generating annual revenue of 2.4 billion yuan ($339 million) in a braised foods niche worth 52.1 billion yuan. The company's success wasn't just about taste. It was about experience and clever marketing.

"The success is not all about taste," then-CEO Hao Lixiao said in 2017. "What we're selling is a distinguished experience." Zhou Hei Ya stores featured virtual reality games and packaging designed to appeal to the coveted 18-35 age demographic. Social media marketing helped turn duck necks into a trendy snack for young urbanites.

The Competition Moves In

But success attracts imitators. Rival braised food chains with names like Juewei and Huangshanghuang quickly flooded the market, and Zhou Hei Ya couldn't keep up. Revenue fell 0.8% in 2019 as profit plunged 29.7%. Founder Zhou had stepped back from management shortly after the IPO, leaving operations to professional managers.

First came Hao Lixiao, then Zhang Yuchen, a consumer goods veteran who had worked at Procter & Gamble, L'Oréal, Mattel and Hasbro. Zhang pursued an aggressive franchising strategy to build scale, but the competition was too fierce. By 2024, it was clear the strategy wasn't working. Zhang resigned in June, and founder Zhou stepped back in as both chairman and CEO.

His first move? A brutal round of store closures. Zhou shut down nearly 1,000 underperforming locations, shrinking the network from 3,816 stores at the end of 2023 to just 2,864 by mid-2025. The 2024 results were grim: revenue down 10.7% to 2.45 billion yuan, profit down 15% to 98.2 million yuan.

Signs of Life

But here's where things get interesting. The company's first-half 2025 report showed something different. Revenue dipped slightly to 1.22 billion yuan for the six-month period, but profit more than tripled to 107.9 million yuan. Zhou's slash-and-burn approach was starting to work.

The numbers tell the story. Total sales volume for the half was 14,383 tons, barely down from 14,618 tons a year earlier, despite having far fewer stores. That means the remaining locations were performing better. Even more telling, average spending per order dropped from 55.57 yuan to 53.56 yuan, part of a deliberate strategy to shed Zhou Hei Ya's high-end image as Chinese consumers tightened their wallets in a sluggish economy.

According to Everbright Securities, Zhou Hei Ya spent the second half of this year refining store operations, refreshing its brand image and reconnecting with millennials. The company also expanded into membership stores like Costco and Walmart's Sam's Club, plus mass-market channels including snack chains Busy Ming and Wancheng Group.

Looking Beyond China

Still, there's only so much juice you can squeeze from store closures and new distribution channels in a stagnant domestic market. That's where international expansion comes in. According to Chinese media, Zhou Hei Ya established its overseas strategy in early 2025, starting with vacuum-packed products sold through Malaysia's MiX convenience store chain before opening the Port Klang location.

Port Klang, Malaysia's largest port, sits about 42 kilometers from Kuala Lumpur. It's a strategic choice for a first overseas location, providing access to both the Malaysian market and the broader Southeast Asian region.

"The opening of this store marks a substantial step forward in the group's overseas expansion strategy and is an important move toward exploring new markets and achieving long-term sustainable growth," Zhou Hei Ya said in its announcement. "The company believes that this successful launch will not only enhance the brand's influence in the international market, but also lay a replicable operational foundation for the group's steady expansion in Southeast Asia and other overseas markets."

The company plans to make overseas business a "crucial engine of growth," starting with Southeast Asia and gradually expanding to Europe, the Americas and beyond. It's a well-worn path. Southeast Asia has become the default first stop for Chinese consumer brands looking to escape brutal domestic competition. At least 60 Chinese brands had opened 6,100 outlets in the region by the end of last year, drawn by aligned culinary tastes and large ethnic Chinese populations.

A Second Chance at Expansion

The overseas push isn't entirely new territory for Zhou Hei Ya. Back in November 2020, the company raised HK$1.55 billion through a corporate bond issue, partly to fund international expansion. The goal then was to reach 10,000 overseas points of sale within three years.

That plan, championed by former CEO Zhang, never materialized. Now founder Zhou is trying to make up for lost time, and he's throwing himself into the effort with characteristic intensity. He's been livestreaming for years to promote products, building a direct connection with consumers.

Last December, Zhou was camping when a stove near him exploded, leaving him burned and bandaged. The next day, he went live on Douyin, the Chinese version of TikTok, to continue promoting Zhou Hei Ya products. That kind of relentless dedication might be exactly what the company needs as it fights to reclaim prominence in China's crowded snack market while building a meaningful international presence.

The Malaysia store opening may seem like a small step, but investors clearly see it as something more. Whether Zhou Hei Ya can turn one store into a sustainable overseas business while fixing its domestic operations remains to be seen. But at least for now, the market is willing to bet that the founder who built the brand once can do it again.