A performance forecast revealing losses exceeding 2 billion yuan has thrust Yonghui Superstores, a retail behemoth currently grappling with the pains of transformation, back into the spotlight.
According to the announcement, Yonghui Superstores expects to report a net loss attributable to shareholders of 2.14 billion yuan for the full year, a significant 45.58% widening from the loss of 1.47 billion yuan recorded in the previous year.
The pressure on Yonghui's performance stems from the company's ongoing and "drastic" store adjustments. In 2025, the company completed deep renovations of 315 stores and shuttered 381 outlets that were deemed misaligned with its future strategic positioning.
Compounded by short-term pressures including product shortages and declining gross margins, alongside factors related to external investments and asset impairments, these elements collectively contributed to Yonghui Superstores' current loss situation.
Notably, as Yonghui Superstores navigates this transformative phase, Vice President Luo Wenxia and persons acting in concert with Chairman Zhang Xuan Song successively executed share reduction plans during the fourth quarter of last year.
Furthermore, Yonghui Superstores faces challenges including a high asset-liability ratio, a sharp decline in operating cash flow, and newly added litigation and arbitration cases. Amidst this complex web of challenges, the path forward for Yonghui's transformation is fraught with unknowns and uncertainty.
As of the market close on January 22nd, Yonghui Superstores' share price stood at 4.67 yuan per share, giving the company a latest market capitalization of 42.38 billion yuan.
The company anticipates a pre-tax loss of 2.14 billion yuan for last year, with the cost of store renovations and adjustments "burning through" over 1.2 billion yuan.
On January 20th, Yonghui Superstores released its annual performance pre-loss announcement for 2025. Based on preliminary calculations by the company's finance department, it expects to report a net loss attributable to shareholders of -2.14 billion yuan, and a net loss after deducting non-recurring items of -2.94 billion yuan.
Looking back at the previous year, Yonghui's performance was already concerning, with net profit attributable to shareholders and net profit after deducting non-recurring items at -1.47 billion yuan and -2.41 billion yuan respectively. This indicates that the company remained mired in losses in 2025, continuing the difficult situation from 2024.
Yonghui Superstores stated that in 2025, it undertook a significant operational strategy shift, moving from "scale expansion" to "quality growth," and redefining its strategic development around "New Yonghui, New Quality."
Detailing the specific reasons for last year's anticipated loss, Yonghui's announcement listed several key factors.
Regarding store adjustments, the company was highly active during the reporting period. On one hand, it completed deep renovations of 315 stores; on the other, it closed 381 stores that did not fit its strategic positioning. These two initiatives led to the accumulation of multiple losses.
It is understood that the impact of Yonghui's store renovations on profits primarily includes losses from asset scrapping related to the renovations, loss of operating revenue during closure for refurbishment, and one-time start-up costs.
Among these, the combined cost of asset scrapping and one-time investments amounted to approximately 910 million yuan. Additionally, the estimated loss in gross profit due to store closures for renovation is around 300 million yuan. The sum of these two figures alone accounts for over half of the company's estimated net loss attributable to shareholders for last year.
The losses resulting from the closure of 381 stores are also significant and cannot be overlooked. Although the announcement did not disclose a specific amount, it mentioned they mainly encompass asset scrapping losses, employee optimization and severance compensation, and lease-related违约赔偿.
Yonghui Superstores also pointed out that regarding product strategy, it first reformed its supply chain, adhering to the principles of "transparency, quality-driven, and efficiency enhancement," focusing on five directions: "Sunshine Supply Chain, Direct Sourcing at Naked Prices, Core Focus, Cold Chain Upgrade, and Store Synergy." It implemented systematic measures to address pain points in the traditional supply chain.
Consequently, the company faced short-term pressures including out-of-stock situations and a decline in gross profit margin, which adversely affected its revenue. However, Yonghui emphasized that as the supply chain reforms deepen, these impacts have gradually been eliminated.
In terms of external investments and asset impairment, the value of Yonghui's overseas equity investment in Advantage Solutions shares continued to decline, resulting in a recognized fair value change loss of -236 million yuan in 2025.
Additionally, Yonghui conducted impairment tests on its long-term assets (primarily assets of persistently loss-making stores) and made provisions for impairment. Based on preliminary calculations, it expects to recognize a long-term asset impairment provision of 162 million yuan.
It is noteworthy that this expanded loss does not necessarily indicate a sudden deterioration in Yonghui Superstores' fundamental operations, but rather represents a necessary transitional cost the company must bear during its transformation period.
According to a report, senior retail expert Zhang Weirong stated that the substantial loss incurred by Yonghui Superstores in 2025 is essentially the inevitable pain of a "shock therapy" approach adopted to respond to industry changes and seek long-term survival.
Zhang Weirong pointed out that the core reasons lie in the aggressive store closures undertaken at the cost of short-term revenue scale, and the high-cost store renovations and supply chain reforms aimed at重塑 competitiveness. These factors collectively led to revenue bleeding, surging expenses, and substantial one-time losses.
The connection between Yonghui Superstores and Pang Donglai can be traced back to May 2024. At that time, Yonghui dispatched executives to Xuchang to learn from the wildly popular supermarket chain, Pang Donglai.
In June of the same year, following close preparation and collaboration between the two parties, the first Yonghui store renovated with assistance from Pang Donglai grandly opened.
Subsequently, under the careful guidance of Pang Donglai's professional team, an increasing number of Yonghui Superstores outlets completed their transformations.
Concurrently, Yonghui also pursued its own independent store modifications, comprehensively overhauling aspects such as product mix, quality, pricing, store layout and flow, environment, service, and employee treatment.
According to data disclosed by Yonghui Superstores, as of the end of September 2025, a total of 222 renovated stores were in operation. Currently, the total number of Pang Donglai-style renovated stores nationwide has even surpassed 300.
However, just as the "Pang-style" renovations were持续推进如火如荼, with Yonghui investing huge sums in store transformation while its performance remained under significant pressure, share reduction actions by the company's executives and core shareholders相继上演.
In October of last year, Yonghui Superstores disclosed a share reduction plan by Vice President Luo Wenxia. By November 7th, Luo Wenxia had reduced her holdings by 108,700 shares via centralized bidding, representing 0.0012% of the company's total share capital, and the reduction plan was completed.
Subsequently, on the evening of November 11th of the same year, Yonghui Superstores announced that Chairman Zhang Xuan Song and persons acting in concert with him intended to reduce their combined holdings by up to 90.75 million shares through centralized bidding, not exceeding 1% of the company's total share capital.
Corporate records and company announcements show that Zhang Xuan Song currently holds the position of Chairman at Yonghui Superstores.
As of the date of the aforementioned announcement, Zhang Xuan Song directly held 791 million shares of the company, representing an 8.72% stake. Zhang Xuan Song and his persons acting in concert collectively held approximately 1.275 billion shares of Yonghui Superstores, accounting for 14.05% of the total share capital.
These persons acting in concert include six private securities investment funds, including Shanghai Xishirun Investment Management Co., Ltd. - Xishirun Herun No. 6 Private Securities Investment Fund.
Among them, the entity executing this reduction plan – Shanghai Xishirun Investment Management Co., Ltd. - Xishirun Herun No. 6 Private Securities Investment Fund – held approximately 170 million company shares, representing 1.87% of the total share capital.
On December 8, 2025, Yonghui Superstores received a notice from Zhang Xuan Song and his persons acting in concert informing that the share reduction plan had been completed.
Between December 4 and December 8, 2025, Shanghai Xishirun Investment Management Co., Ltd. - Xishirun Herun No. 6 Private Securities Investment Fund sold a total of 90.75 million shares through centralized bidding, with total proceeds from the reduction amounting to 377 million yuan.
Beneath the surface of the anticipated losses during Yonghui Superstores' transformation period, the pressures from debt, cash flow, and operational risks it faces are equally noteworthy.
Data shows that Yonghui Superstores' asset-liability ratio has remained at a high level for many consecutive years, exceeding 87% at the end of 2022, 2023, and 2024.
As of the end of the third quarter of 2025, Yonghui Superstores' asset-liability ratio remained alarmingly high at 88.96%, showing no significant signs of improvement.
Simultaneously, the company's short-term solvency continued to be under pressure. By the end of Q3 2025, its current ratio was 0.63 and its quick ratio was 0.32, both down compared to the same period last year.
Regarding cash flow, in the first three quarters of last year, the net cash flow from operating activities generated by Yonghui Superstores was 1.14 billion yuan, a sharp decline of nearly 70% compared to 3.776 billion yuan in the same period of the previous year.
Furthermore, Yonghui Superstores faces litigation and arbitration risks. According to a December disclosure regarding cumulative litigation and arbitration, from the previous disclosure date to the announcement date, the company and its subsidiaries accumulated new litigation and arbitration cases involving approximately 495 million yuan, representing 11.14% of the absolute value of the company's audited net assets from 2024.
In these newly added cases, Yonghui Superstores and its subsidiaries were the defendant/respondent in cases involving 457 million yuan, accounting for over 92% of the total.
It was noted that although Yonghui did not disclose specific details of these cases, those involving single amounts exceeding 10 million yuan were mostly related to lease contract disputes, and also included some supplier-retailer disputes and property rights protection disputes.
Additionally, although the number of renovated Yonghui stores continues to increase, its "Pang-style" transformation path still faces multiple challenges, and its effectiveness requires further validation.
According to a November 2024 report, some internet users posted criticisms of individual renovated Yonghui stores: staff completely ignoring customers, cooked food prepared and then left coolly on the counter; the "Pang Donglai content" of the products was not high; store layout and flow were unclear, leading to customer congestion; and products were still perceived as expensive.
Other media reports indicated that while "improved experience and more meticulous service" were consensus points among many consumers visiting the renovated stores, several employees posted complaints on social platforms. They reported that after the renovations, their workload increased significantly, with constant training, inspections, and overtime, but their take-home pay remained largely unchanged, and holidays were reduced, suggesting the company "wants to learn from Pang Donglai, but is reluctant to treat employees well."
As of the time of writing, searching for the keyword "Yonghui" on a consumer complaint platform yields over ten thousand results, including numerous complaints related to food safety and service experience.
Amidst its firm commitment to the "Pang-style" transformation and quality retail strategy, the question remains: when will Yonghui Superstores be able to return to profitability and regain the favor of both the capital markets and consumers? This will be subject to ongoing scrutiny.
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