Yonghui Superstores Co.,Ltd. (601933) is accelerating store renovations while closing underperforming locations in a bid to survive, yet its net loss expanded by 70% last year. On April 20, the company held a performance briefing for the full year 2025 and the first quarter of 2026. While the so-called "Pang Donglai-style reforms" are being implemented at a faster pace, the company's financial performance has come under significant pressure.
In 2025, Yonghui Superstores reported total operating revenue of 53.508 billion yuan, down 20.82% year-on-year. Its net loss reached 2.552 billion yuan, a 74.17% increase compared to the previous year's loss of 1.465 billion yuan. The continuous deterioration in profitability has even affected its major shareholder. In September 2024, Miniso invested 6.3 billion yuan to become Yonghui's largest shareholder. According to Miniso's 2025 financial report, this investment resulted in a profit loss of over 800 million yuan.
Accelerated adoption of Pang Donglai's operational model and intensive store modifications are primary reasons for Yonghui's declining revenue and widening losses. After setting a "quality retail" strategy at the beginning of 2025, Yonghui sped up store renovations, completing upgrades at 315 locations by year-end while proactively closing 381 inefficient stores. By the end of the first quarter of 2026, the total number of Yonghui stores nationwide had shrunk to 392, nearly halving from 775 at the beginning of last year. This contraction in scale directly contributed to the drop in revenue.
Additionally, during the store renovation process, the company restructured its supply chain and product mix, phasing out old items and introducing new ones while simultaneously implementing a transparent pricing strategy. These changes caused the gross profit margin to fall to 19.83%, further squeezing profit margins.
The latest financial report reflects the growing pains of Yonghui’s transformation. Market attention is now focused on the actual performance of the renovated stores and when an improvement in earnings might materialize. "Large-scale store closures have basically concluded, and renovated stores have already begun to show revenue growth," said Zhang Xuansong, Chairman of Yonghui Superstores, offering some positive signals during the earnings call.
According to the report, the company’s first-quarter revenue stood at 13.367 billion yuan, down 23.53% year-on-year. However, net profit attributable to shareholders rose 94.4% to 287 million yuan, indicating some signs of recovery in profitability. Still, investors remain cautious about whether this growth is sustainable and if short-term improvements can alleviate the funding challenges resulting from years of losses.
Over a longer horizon, Yonghui has been in the red for five consecutive years, with cumulative losses from 2021 to 2025 totaling 14.2 billion yuan. By the end of last year, the company’s debt ratio had climbed to 94.61%, far above the normal level for retail enterprises. Net cash flow from operating activities was 646 million yuan, down 70.54% year-on-year, reflecting a sharp contraction in cash reserves.
Yonghui hopes to ease its financial strain through fundraising, but its private placement plan has yet to make substantial progress. Management stated that the refinancing project is still under review. Zhang Xuansong noted that Yonghui has entered the second phase of its "Pang Donglai-style reforms," shifting from rapid store overhauls to refined management. The goal is to offer customers high-quality products at reasonable prices—"satisfying customers and making employees happy."
However, several challenges have emerged during the transformation. Many consumers have complained about rising prices, while employees report increased overtime, more performance metrics, and stagnant wages. The success of the "Pang Donglai model" lies in its people-centered value cycle: higher job satisfaction drives better service, while product quality and transparent pricing build consumer trust, together fueling business growth. As a large publicly listed company, Yonghui faces the core challenge of balancing profitability with service quality, and addressing the needs of both consumers and employees in the next stage of its restructuring.
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