On January 20, Yonghui Superstores (SH601933) issued a performance forecast indicating an expected net loss for 2025.
The announcement reveals that Yonghui Superstores anticipates an attributable net loss of -2.14 billion yuan for 2025, with a non-GAAP net loss of -2.94 billion yuan.
Throughout 2025, Yonghui Superstores persistently studied the operational model of Pang Donglai, culminating in the closure of 381 stores deemed misaligned with the company's future strategic positioning.
Concurrently, to support this comprehensive reform initiative, Yonghui Superstores is planning a private placement of up to 3.114 billion yuan, with approximately 2.4 billion yuan earmarked directly for store upgrades and renovations.
The "reform bill" exceeded 1.2 billion yuan. While the 2025 loss figure was within market expectations, its magnitude remains staggering.
According to the performance forecast, Yonghui Superstores expects a net loss of 2.14 billion yuan for 2025, widening from the net loss of 1.47 billion yuan in the same period last year; the non-GAAP net loss, which better reflects core operational performance, is forecast at 2.94 billion yuan, an increase of over 500 million yuan from the 2.41 billion yuan loss a year earlier.
This substantial loss represents the "reform bill" paid by Yonghui Superstores for its future transformation.
Yonghui Superstores stated that in 2025, the company undertook a significant operational strategy adjustment, shifting from "scale expansion" to "quality growth," and redefining its strategic direction as "New Yonghui, New Quality."
Throughout 2025, Yonghui Superstores deeply renovated 315 stores and closed 381 stores that did not align with the company's future strategic positioning.
The large-scale store closures triggered a series of "one-time" substantial expenses. Primarily, there were asset disposal losses; Yonghui Superstores indicated that the impact of store renovations on profits mainly includes asset scrapping losses related to the modifications, loss of operating revenue during closure for refurbishment, and one-time startup costs, with the combined total for asset scrapping and one-time investments amounting to approximately 910 million yuan.
Secondly, there was a loss in gross profit margin due to closures for renovation, which Yonghui Superstores estimates resulted in a loss of about 300 million yuan for the full year 2025.
In other words, the losses incurred by Yonghui Superstores in 2025 due to the "Pang (Donglai)-style reforms" exceeded 1.2 billion yuan.
"Simultaneously, closing 381 stores also resulted in significant losses, primarily including asset disposal losses, employee optimization severance compensation, and lease-related breach of contract penalties," Yonghui Superstores stated.
Furthermore, regarding external investments and asset impairments, the stock price of Advantage Solutions, an overseas equity investment held by Yonghui Superstores, continued to decline, leading to a recognized fair value change loss of -236 million yuan in 2025.
Additionally, Yonghui Superstores conducted impairment tests on its long-term assets (primarily assets of persistently loss-making stores) and made corresponding provisions. Based on preliminary calculations, Yonghui Superstores expects to record a long-term asset impairment provision of 162 million yuan for 2025.
Plans to raise 2.4 billion yuan to bolster the store upgrade and renovation project. While bearing substantial losses, Yonghui Superstores has not halted its reform efforts but is instead choosing to double down. Recently, Yonghui Superstores is planning a 3.114 billion yuan private placement.
According to the plan, the raised funds will be primarily used for three main areas: the Store Upgrade and Renovation Project (planned investment of 2.405 billion yuan), the Logistics and Warehousing Upgrade Project (planned investment of 309 million yuan), and supplementing working capital (planned investment of 400 million yuan).
Clearly, the "Store Upgrade and Renovation Project," which is slated to utilize nearly 80% of the raised funds, is the core of this fundraising effort.
According to the plan, Yonghui Superstores will use these funds to renovate and upgrade 216 stores nationwide, implementing reforms across various aspects including product structure, shopping experience, organizational structure, and compensation.
Yonghui Superstores stated that the specific content of the store upgrades includes: increasing the proportion of fresh and 3R (Ready-to-Cook, Ready-to-Heat, Ready-to-Eat) products, expanding areas with vibrant offerings like bakeries, prepared foods, and steamed buns; adding new equipment and facilities such as daily refrigerated distribution, fresh produce sections, bulk grains, and endcap displays in the sales area; and increasing supporting facilities.
Yonghui Superstores expresses strong confidence in this transformation.
According to Yonghui Superstores' estimates, the Store Upgrade and Renovation Project has an internal rate of return (after-tax) of 21.57%, with an investment payback period of approximately 4.84 years.
Yonghui Superstores' confidence stems from the success of preliminary pilot projects; according to data provided by the company, for stores that had completed renovations for at least six months from January to September 2025, the average monthly sales per square meter reached 3,295 yuan/square meter, significantly higher than the benchmark of 2,800 yuan/square meter, and the gross profit margin also steadily increased to 22.1%.
"In the future, the company will further enhance gross profit margins by transitioning fresh produce from bulk to packaged sales, increasing the proportion of high-margin 3R foods, re-evaluating supplier structures, and promoting direct sourcing from origins at net prices to eliminate intermediaries. Therefore, the gross margin used in the benefit calculation for this fundraising project is conservative," Yonghui Superstores stated.
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