Yonghui Supermarket is being madly ＂involved＂ by Tik Tok and the US Mission.
In less than four years, from "returning to the market value of 100 billion" to "don’t be ST", investors’ confidence and expectations for Yonghui Supermarket (601933.SH), a former white horse, are constantly lowering.
"A dime for a year", "A hundred-year loom" and "Fujian will lose forever", Yonghui Supermarket investors expressed their helplessness in the stock bar. The company’s current market value is higher than 100 billion in 2020, and it has been halved.
At the same time, there is also performance under pressure. According to the latest performance forecast, in 2021 and 2022, Yonghui Supermarket may have a total loss of about 6.6 billion yuan.
In recent years, Yonghui Supermarket has also taken a number of measures to turn the situation around, including repeated buybacks in the stock market and the introduction of JD.COM veterans in the management. Judging from the effect, the effect of stimulating stock prices and improving performance is not obvious.
How to get to Yonghui Supermarket in the future? Can the company promise to make a profit in 2023? This is a problem that many investors are paying attention to now.
The market value dropped from 100 billion to 30 billion.
Looking back at the market value performance of Yonghui Supermarket in the last four years, it can be described as peaks and valleys.
Judging from the stock price trend, at the beginning of 2020, Yonghui Supermarket’s share price was still around 7 yuan, and it went down all the way after reaching the stage peak of 11.2 yuan in April. As of the close of February 9, 2023, the total market value of the company was only 32.3 billion yuan.
In order to stabilize the stock price and give investors confidence, Yonghui Supermarket started a big repurchase when the market value continued to decline.
In October 2020, Yonghui Supermarket issued a repurchase plan, indicating that it intends to repurchase the company’s shares with its own funds of no more than 2.7 billion yuan. By May 2021, the company had actually repurchased 390 million shares, accounting for 4.13% of the total share capital, and the total amount of funds used was 2.7 billion yuan, which was cancelled in September of the same year.
In August, 2022, Yonghui Supermarket issued a repurchase plan again, and planned to repurchase no more than 150 million shares with its own funds of 400 million to 700 million yuan. As of January 30, 2023, the company has repurchased 95.64 million shares, and the total amount of funds paid is about 298 million yuan.
At the same time, the executives of Yonghui Supermarket are also increasing their shares. From February 2021 to November 2021, Zhang Xuansong, the chairman of the company, and his concerted action, Xishirun Herun Series Fund, increased their holdings by 184 million shares, accounting for 2.03% of the company’s total share capital.
Wu Lefeng, secretary of the board of directors of Yonghui Supermarket, also increased his holding of 68,800 shares in May 2022, accounting for 0.00076% of the total share capital. According to the average price of 4.36 yuan/share, the total amount of funds spent is about 300,000 yuan. According to the 2021 annual report, Wu Lefeng earned an annual salary of 660,000 yuan. According to the current share price, if Wu Lefeng still holds it, the book floating loss will exceed 18%.
However, while Zhang Xuansong and concerted action increased their holdings, their personal shareholding ratio was decreasing. According to the financial report, in the third quarter of 2020 -2022, Zhang Xuansong’s personal shareholding ratio has dropped from 14.79% to 9.72%, with a cumulative reduction of more than 500 million shares. By the third quarter of 2022, 355 million shares of Zhang Xuansong were pledged, accounting for 40% of the shareholding ratio.
Huge performance losses, tight capital chain
The market value of Yonghui Supermarket continues to fall, which is not unrelated to its declining performance.
Yonghui Supermarket was listed at the end of 2010. By 2019, the company’s revenue has increased to 84.9 billion yuan with an annual growth rate of 15%-24%. However, since 2020, the company’s revenue growth rate began to decline. From 2020 to the third quarter of 2022, this indicator dropped from 9.8% to 1.53%, and the positive growth of 1.53% was achieved on the negative growth base in 2021.
The performance of net profit is also not optimistic. According to the performance forecast, Yonghui Supermarket is expected to lose 2.7 billion yuan in 2022, which is smaller than the loss of 3.9 billion yuan in 2021, but the loss is still huge.
Regarding the reasons for the loss, Yonghui Supermarket said in the performance forecast that first, due to the COVID-19 epidemic, more stores were closed; Second, the transaction price of the company’s financial assets in the secondary market dropped significantly in 2022, and the annual loss of fair value change was 640 million yuan; Third, the company invested about 700 million yuan in science and technology throughout the year, and the online business sales lost 440 million yuan.
The financial assets of Yonghui Supermarket are mainly equity investments such as Karman Topco L.P and Arowana.
In the third quarter of 2022, Yonghui Supermarket sold its shares in Arowana, with a loss of 115 million yuan (before tax); So far, the cumulative investment income of Arowana investment target is 173 million yuan (before tax).
As for Karman Topco L.P., according to the 2022 performance forecast, the fair value of Karman Top Co L.P decreased by 524 million yuan compared with the beginning of the year. The company conducts impairment test on some long-term assets and makes provision for impairment. According to preliminary calculation, the company is expected to accrue long-term equity investment and other long-term assets impairment of about 600 million yuan.
On the whole, however, most of the company’s losses in 2022 were caused by the epidemic and poor investment in financial assets. Although the online business suffered losses, it lost 400 million yuan compared with the previous year, and its sales increased by 21% year-on-year. The company’s operating fundamentals are improving. Li Songfeng, CEO of the company who has been in office for less than two years, has also said that he will strive to achieve profitability in 2023.
According to the information, Li Songfeng joined Yonghui Supermarket in 2021 and was hired by the company with a high salary. According to the 2021 annual report, his annual salary was 3.96 million yuan, much higher than other senior managers.
According to the announcement, Li Songfeng was deeply involved in the transformation of JD.COM’s mobile Internet, the construction of China and Taiwan, and the external empowerment of technology. He was selected into the JD.COM JD Pilot Future Leader Program and has 20 years of technical and management experience. After joining the company, Li Songfeng will be responsible for the technology strategy and digital transformation strategy of Yonghui Supermarket.
Li Songfeng’s profound experience in the field of interconnection technology is his confidence in calling for profitability in 2023. But judging from other financial indicators of the company, profit is not only a slogan, but also an imminent pressure.
In the third quarter of 2022, the asset-liability ratio of Yonghui Supermarket reached 84%, and the monetary fund in its account was 8.1 billion yuan, while the short-term loans, accounts payable and non-current liabilities due within one year during the period totaled 18.1 billion yuan, which is far from being covered by the company’s current monetary fund. If it fails to make profits, the company may face greater pressure and risks in the capital chain.
Tik Tok’s US delegations joined the melee strongly.
Yonghui Supermarket suffered losses in 2021, which was related to the large-scale expansion of online supermarkets and community group purchases, including Meituan Youxuan, Dingdong Shopping, Pupu Supermarket, Duoduo Shopping, Orange Heart Youxuan, Tik Tok Mall, etc. The low-price strategy of such retail channels had a great impact on the operation of traditional supermarkets.
According to the research data of soochow securities, the fresh products of community group buying platform are 25%~30% cheaper than supermarkets on average, and the standard daily necessities are about 20% cheaper on average. The common people are very sensitive to the price of daily consumer goods. Such a large price gap reduces the flow of people in supermarkets and puts pressure on retail prices.
In addition to the price advantage, the market share of traditional supermarkets is gradually being eroded.
According to the China Instant Retail Development Report 2022 released by China Chain Store & Franchise Association in November last year, more than 90% of users prefer to spend online to meet their daily needs.
The report also mentioned that people in the industry generally predict that the compound growth rate of the instant retail market will be around 50% in the next few years. It is estimated that by the end of 2026, the relevant market size of the instant retail industry will exceed 1 trillion yuan.
As a traditional retailer, super leader. The current performance of Yonghui Supermarket also reflects the plight of traditional supermarkets. In recent years, news about the closure and declining performance of traditional supermarkets such as Carrefour, Wal-Mart and RT Mart has frequently appeared in the media.
Based on market changes, in order to get rid of this situation, shortly after Li Songfeng took office, Yonghui Supermarket put forward the goal of building an omni-channel digital retail platform based on fresh food and taking customers as the center in 2021, and upgraded its organizational structure to be more flat, flexible and young, which is also its new ten-year strategy for the future.
Judging from the performance of the online channel of the 2022 annual performance forecast, the strategy of "Science and Technology Yonghui" has achieved results, but compared with other platforms, there is still much room for improvement.
For example, in terms of service, in July, 2021, Yonghui Supermarket WeChat applet "YH Yonghui life+"illegally charged 1 yuan packaging fees without the consent of consumers, and its affiliated companies were fined by Shanghai State Administration for Market Regulation for a total of 40,000 yuan, which quickly reached the top of the hot search and triggered discussion.
In August of the same year, Yonghui Supermarket issued an apology statement, saying that it attached great importance to the issue of "1 yuan packaging fee charged by Yonghui Life applet", saying that it had urgently optimized the commodity packaging service and charging rules. After rectification, the online platform of Yonghui Supermarket has been changed to be charged, that is, the order can only be placed successfully after 1 yuan’s fee has been paid. In terms of delivery timeliness, Yonghui Supermarket takes one hour.
Based on these two items, online platforms such as Meituan Shopping, Dingdong Shopping and Pupu do not charge packaging fees. In addition, in terms of delivery timeliness, these platforms take half an hour.
According to iResearch’s Research Report on User Insight of C-End Platform in the Same City, 62.8% of users can accept the delivery time within 30 minutes to 50 minutes, and more than 18% of users hope to receive the goods within 30 minutes of placing an order. It has become an important label on instant retailing.
In this respect, Yonghui Supermarket is still a long way from users’ hopes. In order to win the online battle, Li Songfeng still faces one huge challenge after another. (Jordan) (produced by Thinking Finance)