Accelerated slimming under huge losses, Yonghui Asset shrinks by nearly 30%

Questioning AI · What Strategic Considerations Are Behind Yonghui’s Accelerated Restructuring?

2025 is a year of deep adjustment for Yonghui Supermarket, and also a year of heavy costs.

The company achieved total operating revenue of approximately 53.51B yuan for the year, a year-on-year decrease of 20.8%; net profit attributable to shareholders of the listed company was a loss of 2.55 billion yuan, expanding by about 74% year-on-year, and exceeding the upper limit of the forecast guidance by 400 million yuan.

Behind these figures is the tangible cost paid by this retail giant to focus on clearing out inefficient assets left over from historical expansion.

By the end of 2025, Yonghui’s total assets had fallen to 30.48B yuan, a decrease of 28.7% from the beginning of the year.

The asset shrinkage is mainly due to three reasons: First, store renovations and closures led to asset write-offs and one-time investments totaling about 880 million yuan, including lease breach compensation and personnel optimization payouts.

Second, during the reporting period, a total impairment of long-term assets of 308 million yuan was recognized.

Third, the company’s overseas equity investment in Advantage Solutions saw its stock price continuously decline, resulting in a fair value change loss of 448 million yuan.

These three non-operating losses totaling over 1.6 billion yuan constitute the main part of Yonghui’s book losses in 2025.

A greater challenge comes from cash flow.

Yonghui Supermarket CEO Wang Shoucheng once stated that the investment in renovating a single store ranges from 5 million to 8 million yuan.

During renovations, stores are usually closed for 30 to 40 days, which not only results in no income but also requires ongoing rent and labor costs. Meanwhile, the decline in operating revenue directly reduces operational cash inflows.

Additionally, Yonghui is following the “naked price direct procurement” model pioneered by Pang Donglai.

This model theoretically helps to reduce procurement costs over the long term, but in the early stages of reform, it demands extremely high organizational capabilities and supply chain control, which in the short term further compresses Yonghui’s already thin profit margins.

However, the renovation progress has exceeded expectations. According to a plan disclosed a year ago, Yonghui aimed to renovate about 200 stores and close 250 to 350 stores in 2025. In reality, 315 stores were deeply renovated, and 381 stores that were inconsistent with future strategies were closed.

By the end of 2025, the total number of Yonghui stores had decreased to 403, with only about 80 stores remaining unrenovated.

This means that if progress continues smoothly, all store renovations could be completed by 2026.

Once the store renovations are fully completed, whether Yonghui can truly emerge from the trough depends on two variables:

First, whether the renovated stores can achieve sustainable same-store growth; second, whether the supply chain reform can control costs while maintaining product quality. The market is waiting for answers to these two questions.