Yonghui Superstores Co.,Ltd. has seen its stock price decline by more than 10% year-to-date, with its market capitalization falling below 40 billion yuan, a significant drop from its peak. The company's recently disclosed performance forecast for 2025 indicates an expected net loss of 2.14 billion yuan for the full year, and a net loss excluding non-recurring gains and losses of 2.94 billion yuan. Yonghui attributed the losses primarily to major operational and strategic adjustments made during the reporting period. This is not the first time the company has reported losses; from 2021 to 2024, Yonghui consistently recorded losses totaling 9.501 billion yuan. Including the projected 2025 loss, cumulative losses over the past five years will reach 11.641 billion yuan.
In response to the substantial losses, the company's management has undertaken a period of reflection. On February 11, CEO Wang Shoucheng issued a New Year's letter to all employees, acknowledging that the company had previously overemphasized scale expansion, deviating from its founding principles and failing to honor the dedication of its employees and the trust of its customers. He offered an apology on behalf of the company. In the letter, Wang also summarized the company's actions in 2025, noting the closure of nearly 400 underperforming stores and the comprehensive renovation of over 300 existing stores, involving a total commercial space exceeding 2 million square meters.
Wang Shoucheng stated that 2026 will mark a year of intensified focus on happiness and quality retail operations for Yonghui. In terms of merchandise, the company will shift from a "procurement" model to a "co-development" approach. For stores, the focus will upgrade from being mere "transaction spaces" to becoming "lifestyle spaces." At the organizational level, the emphasis will transition from "management functions" to "service functions."
Despite the severe financial losses, Yonghui's online business has achieved a breakthrough. In the first half of 2025, online revenue reached 5.49 billion yuan, with losses reduced by 34.75 million yuan year-on-year. Notably, the online store-and-warehouse model has achieved profitability, which is expected to contribute positively to the company's overall turnaround efforts.
Yonghui Superstores, having lost over 10 billion yuan in five years and seen a sharp decline in market value, has performed poorly in recent years. On January 20, the company disclosed its 2025 performance forecast, confirming it remained in a loss-making position. According to the announcement, preliminary calculations indicate an estimated net loss attributable to shareholders of 2.14 billion yuan, and a net loss excluding non-recurring items of 2.94 billion yuan.
Yonghui explained that the significant losses were due to major strategic operational adjustments undertaken in 2025. During the reporting period, the company thoroughly renovated 315 stores and closed 381 stores that did not align with its future strategic positioning. The impact on profits primarily included losses from asset write-offs related to renovations, loss of revenue during store closures for refurbishment, and one-time startup costs. Asset write-offs and one-time investments totaled approximately 910 million yuan, while estimated gross profit loss from store closures for renovation was around 300 million yuan. The closure of the 381 stores also resulted in substantial losses from asset write-offs, employee severance packages, and lease contract termination penalties.
Furthermore, external investments and asset impairment losses exacerbated the overall loss. In 2025, the continued decline in the stock price of Yonghui's overseas equity investment, Advantage Solutions, led to a fair value loss of 236 million yuan. Additionally, the company expects to recognize a long-term asset impairment loss of 162 million yuan.
Notably, Yonghui also faces the challenge of a high debt ratio. Data from Tonghuashun iFinD shows that as of the end of the third quarter of 2025, Yonghui's total assets stood at 31.62 billion yuan, with total liabilities of 28.129 billion yuan, resulting in a debt-to-asset ratio of 88.96%.
Financial data reveals that Yonghui has been loss-making since 2021. From 2021 to 2024, the company reported losses of 3.944 billion yuan, 2.763 billion yuan, 1.329 billion yuan, and 1.465 billion yuan, respectively. If the 2025 forecast remains unchanged, the cumulative loss over the past five years will amount to 11.641 billion yuan.
Following years of consecutive losses, CEO Wang Shoucheng publicly admitted to the strategic error of previously "over-pursuing scale." In his New Year's letter dated February 11, he candidly stated that the company had strayed from its original entrepreneurial spirit in its pursuit of growth, allowing ambition to outpace capability, and letting down both employees and customers. Wang expressed, "We have deeply recognized our problems and sincerely apologize to everyone."
Reflecting on 2025, Wang described it as the inaugural year of Yonghui's three-year reform plan. During the year, the company decisively closed nearly 400 low-quality stores and focused on comprehensively and systematically renovating over 300 existing stores, completing commercial renovations covering more than 2 million square meters. Wang also disclosed that Yonghui distributed nearly 50 million yuan in profit-sharing to employees throughout 2025, demonstrating a commitment to sharing operational outcomes with its partners.
Looking ahead to 2026, Wang expressed determination, stating, "If the direction is right, don't fear the distance. Once started, don't fear slowness. Once believed, don't change." He indicated that Yonghui would transition from comprehensive adjustments to a year focused on deepening happiness and quality retail operations. Specifically, in merchandise, the company will move from "procurement" to "co-development," establishing 200 core production regions and factories and creating 100 best-selling products with billion-yuan level reputations. For stores, the aim is to upgrade from "transaction spaces" to "lifestyle spaces," positioning them as "community kitchens" and "neighborhood living rooms" that offer convenient daily services. Organizationally, Yonghui will shift from "management functions" to "service functions" and actively explore enterprise-level applications of AI technology.
Notably, Wang Shoucheng specifically thanked Pang Donglai for its selfless assistance and emphasized that "corporate health lies in bringing smiles to employees' faces and satisfaction to customers."
Can the online business serve as a lifeline? Amidst the substantial losses incurred during its transformation, Yonghui's online business achieved a phased breakthrough in 2025, potentially becoming a crucial support during its "deepening year." Yonghui's initial exploration into online business began in January 2014 with the trial launch of the "Yonghui Weidian APP" in Fuzhou. In 2015, to promote online-to-offline integration and同步 develop in-store and home-delivery services, Yonghui launched the "Yonghui Life APP" and established Yonghui Cloud Innovation Technology Co., Ltd. (Yonghui Yun Chuang).
In the first half of 2018, Yonghui Yun Chuang, in collaboration with Tencent's Smart Retail team, began testing a front-end warehouse model. In September of the same year, the Yonghui Life·Home satellite warehouse debuted in Fuzhou, marking a period of rapid development for the company's online operations. Starting in 2022, due to changes in the market environment and some stores becoming unsuitable for continued operation because of urban planning or商圈 shifts, Yonghui began fully promoting its "integrated store-and-warehouse" business model and expanding its "home-delivery" services in core cities. The "integrated store-and-warehouse" model designates specific areas within stores for the storage and sorting of online order goods, which, compared to the pure front-end warehouse model, can effectively reduce comprehensive operating costs such as rent and utilities.
After years of effort, the company's online business has shown signs of improvement. Public information indicates that in the first half of 2025, Yonghui's online business revenue reached 5.49 billion yuan, accounting for 18.33% of total operating revenue, with online losses reduced by 34.75 million yuan compared to the same period last year. In terms of specific performance, the coverage rate for the "Yonghui Online Supermarket" self-operated home-delivery service and third-party store partnerships has reached 90%. The self-operated home-delivery business achieved sales of 3.14 billion yuan, with a daily average order volume of 216,000 orders and a monthly customer repeat purchase rate of 56.3% in the following month. Third-party platform home-delivery services generated sales of 2.36 billion yuan, with a daily average of 143,000 orders.
It is worth highlighting that Yonghui explicitly stated in its interim report that its online store-and-warehouse format has achieved overall profitability. According to a report by Business Observer, market sources revealed that in the Chongqing market alone, Yonghui invested over 300 million yuan in its home-delivery business in 2025, launching 41 pure front-end warehouses. As 2026 begins, the home-delivery business will remain a key focus for Yonghui. However, competition in the online sector is intensifying, with Yonghui facing strong rivals such as Meituan's Xiaoxiang Supermarket and PuPu Supermarket. As a national retailer, although Yonghui's home-delivery business has a wide reach, it has not yet achieved a dominant market share in any single city.
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