YONGHUI SUPERSTORES(SH:601933) Xin Lang Cai Jing·2025-09-08 00:29Core Viewpoint - The company reported a significant decline in revenue and net profit for the first half of 2025, primarily due to store closures and ongoing adjustments in its business model [1][2][3]. Financial Performance - For 25H1, the company generated revenue of 29.95 billion yuan, a year-on-year decrease of 20.7%, with a net profit attributable to shareholders of -240 million yuan and a non-recurring net profit of -800 million yuan, slightly better than previous forecasts [1][2]. - In 25Q2, revenue was 12.47 billion yuan, down 22.6% year-on-year, with a net profit of -390 million yuan and a non-recurring net profit of -940 million yuan [1]. - The company's gross margin for 25H1 was 20.8%, a decrease of 0.8 percentage points year-on-year, while the gross margin for fresh and processed goods improved to 14.5%, up 2.1 percentage points [2]. Operational Adjustments - The company has accelerated its store adjustment pace, with 124 stores modified in 25H1 and a target of over 208 modified stores by the end of Q3 [3]. - The company aims to complete adjustments for all existing stores by early 2026, with a focus on reducing the number of suppliers by 50% and increasing direct sourcing of fresh products to over 60% [3]. - The company has also launched new private label products, with a long-term goal of achieving a 40% share of private label products by 2029 [3]. Investment Outlook - The company is positioned as one of the two most promising national supermarket chains in China, alongside Hema, with a differentiated competitive strategy compared to existing players like Sam's Club and Costco [4]. - The estimated bottom market value is projected at 54 billion yuan based on a profit of 2.7 billion yuan and a 20x price-to-earnings ratio, with expectations for improved profitability as store adjustments progress [4]. - The company anticipates achieving operational breakeven by Q4, excluding the impacts of store closures and impairments [4].