China's network finance and economics on September 2 (reporter Guo Shuai) a few days ago, Yonghui Supermarket (SH: 601933) disclosed the 11th interim report since the listing, ten years after listing, the company's first performance in the first half of the year showed a loss, the amount of loss reached 1.083 billion yuan. At the same time, the company's stock price is still "falling and falling", which is close to the beginning of listing.
Stock price trend since listing Source: Snowball
In fact, the performance of Yonghui Supermarket in the secondary market has indeed had "glorious years": from the company's listing in 2010 to 2018, the overall stock price has shown an upward trend, reaching 11.83 yuan / share at the highest time, and the market value has also risen all the way, once becoming one of the hundred billion white horses of A shares. However, since the second quarter of 2020, the company's stock price has entered a continuous decline channel, and the market value has shrunk all the way to less than 40 billion.
Huge loss of performance
According to the interim report, the company's net loss in the first half of the year reached 1.083 billion yuan, compared with a profit of 1.854 billion yuan in the same period last year, a year-on-year decrease of 15.841 billion yuan, which was the first time that the performance of Yonghui Supermarket in the first half of the year showed negative growth since its listing in 2010. At the same time, the company's revenue in the first half of the year was 46.827 billion yuan, down 7.30% year-on-year, and the first decline since its listing.
Regarding the reasons for the decline in revenue, Yonghui Supermarket said that it was mainly affected by the comprehensive impact of internal and external factors, of which the external was affected by the expansion of low prices of community group buying and the normalization of epidemic prevention and control, and the internal was affected by the company's initiative to adjust the structure and reduce inventory.
Due to the decline in gross margin, the decline in the fair price of financial assets and the impact of the new leasing standard, the company's net profit decreased by 158% year-on-year to a loss of 1.083 billion yuan.
According to the report, the company's comprehensive gross profit margin in the first half of the year was 18.82%, down 3.55% year-on-year. According to the data of Tonghuashun, the gross profit margin of Yonghui Supermarket in the first half of the year is far lower than the gross profit margin of nearly 30% of Hualian Zongchao, BBK and Hongqi Chain, and has fallen to the end of the 11 A-share listed companies.
In this regard, Hualian Supermarket said that taking the initiative to reduce inventory and adjust the structure is the main reason, and the competition of community group buying and the recurrence of the epidemic are external factors.
According to the company's financial data, since its listing in 2010, the inventory level of Yonghui Supermarket has shown a steady upward trend, and by 2019, the inventory amount has soared from 1.351 billion yuan in 2010 to 12.333 billion yuan, an increase of nearly 10 times in ten years. At the same time, the number of inventory turnover days has also risen, with the lowest time approaching 40 days, and the 2020 annual report has reached 57 days.
The new format is unfavorable
The financial reporter of China Net noted that the "low-price expansion of community group buying" was frequently mentioned in the regular report of Yonghui Supermarket in the past two years. In fact, as a new thing, community group buying has a really obvious impact on the traditional supermarket format of Yonghui Supermarket.
Yonghui Supermarket reported that the company opened 28 new supermarket stores in the first half of 2021, with a total of 1026 stores (including 20 converted warehousing stores) and 202 reserve stores. It covers 29 provinces and municipalities across the country. The average area of the store is 7876.35 square meters.
Although the number of supermarket stores is still increasing, new business stores have ushered in a wave of store closures. According to the announcement of the resolution of the board meeting disclosed by the company on August 27, 68 stores are planned to be closed in the second quarter, including 13 Bravo stores, 9 mini stores, 10 super species stores and 36 Yonghui life stores.
Yonghui Supermarket said that 13 Bravo stores were closed due to poor sales performance, expiration of store lease contracts and property defaults, and 9 mini stores, 10 super species stores and 36 Yonghui life stores were closed due to losses and company operating adjustments, and the loss of this closure is expected to be 80.4819 million yuan.
Previously, in April, the company's board of directors unanimously passed the proposal to "close 9 Bravo stores, 336 mini stores, 15 super species and 18 Yonghui life totaling 378 stores", and the store closure is expected to lose 337 million yuan, and the reason for the closure is the same as disclosed in the interim report: poor performance, expiration of store lease contracts, losses and company operating adjustments.
Unfavorable revenue and continued store closures in new formats also contributed to a surge in expenses during the period. Among them, sales expenses increased by $163 million, of which rent and property management fees decreased from $1,363 million to $394 million, and depreciation and amortization rose from $728 million to $1,804 million.
Galaxy Securities Research Report believes that the epidemic in 2020 has further accelerated the squeeze of various new retail formats such as online and offline community group buying on traditional offline retail formats, which eventually led to a more obvious decline in the company's 2021Q1 revenue scale in the case of a significant decline in customer unit prices and a slight recovery in passenger flow. Although the revenue in the second half of the year may be expected to achieve positive growth, it is expected that the company's revenue scale for the whole year will be difficult to achieve a considerable positive growth compared with the same period last year.
Internal management confusion
Yonghui Supermarket, which was established for 20 years and listed for 10 years, is no longer young, and in the past two years, the company has frequently appeared on the hot search list due to various problems, and with the news of the departure of many executives this year, the former "100 billion white horse" seems to have ushered in a mid-life crisis.
In August this year, the issue of "Yonghui Life Mini Program forcibly charging consumers 1 yuan packaging fee" caused great concern, and the Shanghai Xuhui District Market Supervision and Administration Bureau believed that Yonghui Yunchuang's behavior violated the relevant provisions of the Shanghai Municipal Consumer Rights and Interests Protection Regulations, and fined it 32,000 yuan according to law. Under the supervision of regulators and consumers, Yonghui Supermarket finally issued an apology statement and agreed to refund the overcharged packaging fee.
In September last year, a video of an employee in Yonghui overalls unfreezing raw chicken legs on the ground was exposed and appeared on the hot search. In addition to food quality problems, Yonghui Supermarket was investigated for "price violations" during the epidemic last year, which also attracted widespread attention.
Regarding the repeated food safety problems of Yonghui Supermarket, Zhu Danpeng, an analyst in the Chinese food industry, said in an interview with the financial reporter of China Net that on the one hand, the company lacks the management of standardized operation processes for employees in the case of rapid expansion, on the other hand, it also exposes that there are great loopholes in Yonghui's quality internal control system, and the quality of employees is also a core reason for many enterprises to back the pot.
During the "315" period this year, the Yonghui Life APP "buy Moutai without delivery and no refund" incident once again rushed to the hot search. Cai Xuefei, an analyst in the liquor industry, said in a previous interview with the financial reporter of China Net that there is a huge gap between the actual transaction price of Moutai and the manufacturer's guidance price, there is a risk of interception internally, and the incident also exposes the problem of internal management chaos of the platform.
In April this year, the problem of "15 batches of unqualified food detected in Yonghui Supermarket in Fujian Province" caused great concern. According to the financial reporter of China Net, the Fujian Provincial Market Supervision and Administration Bureau issued a total of 13 food sampling information announcements from January to April, and Yonghui Supermarket was "on the list" many times, and the food was detected as unqualified as many as 15 times.
Zhang Jingyi, the 62-year-old former secretary of the board of directors, said in response to the problem of 15 batches of unqualified, "Yonghui supermarket measures more than 3,000 batches of self-measurements every day, and in a quarterly 90 days, basically nearly 300,000 times of testing, 15 batches of unqualified, you say more? ", once again triggered the public's attention, the topic was also sent to the hot search. After that, the public announcement of the listed company's apology calmed the public anger.
It is worth noting that shortly after the above incident, Zhang Jingyi applied for resignation on the grounds of "reaching the statutory retirement age". So far, since 2020, vice president Yang Li and vice president Li Jing have left Yonghui Supermarket. The latest announcement shows that vice president Jin Bin also resigned as vice president for personal reasons. In addition, the company's former CEO Li Guo was also transferred to the fresh supply chain business in early August.
Externally, it is facing the double blow of community group buying and the epidemic; internally, it is under pressure to continue to close stores and adjust management of new businesses. Under the internal and external troubles, the once hundreds of billions of white horses, whether it is reborn in the fire, or sinking, China Net Finance will remain concerned.
(Editor-in-Charge: Zor)