The data released by Yonghui Supermarket recently shows that the company’s net profit in 2023 was -13.29 billion yuan (RMB). This marks the third consecutive year of losses for the company, accompanied by a change in the company’s digital executives.
Yonghui Supermarket’s annual report for 2023, released on April 27, revealed that the company achieved operating income of 78.642 billion yuan in 2023, a 12.71% decrease compared to the previous year. The net profit was -13.29 billion yuan, a reduction in losses compared to 2022.
In 2022, Yonghui Supermarket reported a loss of 27.63 billion yuan, followed by a loss of 39.44 billion yuan in 2021, resulting in three consecutive years of losses totaling 80.36 billion yuan.
Yonghui Supermarket explained the decline in operating income in 2023 by citing ongoing adjustments to its store portfolio, including the proactive closure of underperforming stores. Additionally, the overall physical retail industry faced unprecedented challenges in 2023 due to decreasing consumer willingness and purchasing power, leading to a decline in store revenue.
Furthermore, there have been recent changes in the company’s senior management. On April 25, the board of directors convened and approved the dismissal of senior executives. Vice Presidents Wu Guangwang and Lin Jianhua were relieved of their positions.
On February 20, Yonghui Supermarket announced that Vice President Peng Huasheng had submitted a written resignation, stepping down from any position within the public company.
Since the beginning of this year, three Vice Presidents have left Yonghui Supermarket, in addition to changes in the positions of the company’s secretary and CFO.
Facing declining performance and losses, Yonghui Supermarket has been actively selling assets to increase its cash flow.
On April 27, Yonghui Supermarket announced the sale of 65% equity interest in Yonghui Cloud Gold Technology Co., Ltd. to Shanghai Paihui Technology Co., Ltd. for an estimated 3.36 billion yuan. The proceeds from the transaction will be used for the daily operations of Yonghui Supermarket.
In December 2023, Yonghui Supermarket planned to sell 389 million shares of Wanda Commercial Management Co., Ltd., corresponding to a transfer price of 4.53 billion yuan.
Also in December 2023, Yonghui Supermarket decided to transfer 136 million shares of Red Flag Chain to Sichuan Business Investment Co., Ltd. for a total price of 800 million yuan.
Netizen “Nisa555” expressed confusion over Yonghui Supermarket’s losses, questioning how the business could still be in deficit, possibly indicating serious issues.
Netizen “贪睡豬舊書畫影音老物店” noted the challenging times faced by large supermarkets today, citing high rent costs and declining foot traffic affecting the operational efficiency of spacious stores.
Yonghui Supermarket emerged as a privately-owned large-scale corporate group during the transition from traditional to modern distribution methods. Established in 2001, the company is headquartered in Fuzhou, Fujian Province, and stands as one of the first in China to introduce fresh produce into modern supermarkets.
As of 10:00 AM on April 29, Yonghui Supermarket’s stock was priced at 2.41 yuan per share, with a total market capitalization of 21.78 billion yuan.