Youyou Foods Co Ltd

Youyou Foods has disclosed its latest employee stock ownership plan, and the performance assessment targets fall short of the company's actual growth rate last year. According to the draft, the plan covers no more than 175 participants, with total funds raised not exceeding 48 million yuan, of which the incentive fund contributed by the company is capped at 24 million yuan. Shares will be purchased through competitive trading on the secondary market. The performance assessment uses 2025 results as the baseline, requiring revenue growth of at least 25 percent in 2026 and at least 50 percent in 2027, implying a compound annual growth rate of about 22.5 percent. By comparison, the company's revenue growth rates for 2024, 2025, and the first quarter of 2026 were 22.37 percent, 34.39 percent, and 39.62 percent respectively. Song Xiangqing, vice president of the China Society of Business Economics, pointed out that the assessment relies solely on revenue, without incorporating net profit or gross margin, and the two-year cycle provides insufficient medium- to long-term discipline, making it easy to interpret as a phased incentive windfall for core employees. The company's recent explosive growth has been driven mainly by entry into emerging channels such as Sam's Club, but gross margins remain under sustained pressure. In 2025, gross margin fell by 3.2 percentage points year-on-year, and in the first quarter of this year it dropped another 2.82 percentage points, primarily due to the rising revenue share of low-margin channels. Industry insiders believe the company needs to offset downward pressure on gross margins through measures such as tiered channel pricing and differentiated new product price increases.