Core Insights - JD Retail has established a new Prepared Food Business Unit, elevating its strategic importance within the company and marking a significant shift towards self-branded product development in the prepared food sector [1][3] Group 1: Business Strategy - The new Prepared Food Business Unit will report directly to CEO Xu Ran, indicating a high-level commitment to this sector [1][3] - JD's previous efforts in the prepared food market date back to 2017, with ongoing collaborations with well-known restaurant brands from 2019 to 2023, aiming to create multiple billion-level sales brands within three years [1][3] - The focus will shift from category operations and brand partnerships to the development of proprietary branded products, emphasizing innovation in food technology and alignment with Chinese culinary culture [1][3] Group 2: Market Positioning - The prepared food unit will serve both B2C and B2B markets, providing supply support to offline stores like Qixian Supermarket and Huaguan Discount Supermarket, thus creating a multi-channel synergy [5] - This initiative aligns with the retail logic of "fresh food driving traffic, standard products generating profit," and accurately captures the industry trend of "B-end dominance, C-end acceleration" [5] Group 3: Logistics and Infrastructure - JD's mature cold chain system supports the development of prepared foods, with approximately 60 temperature-controlled cold chain warehouses dedicated to fresh, frozen, and refrigerated foods, covering an operational area of about 400,000 square meters as of June 30, 2025 [5] - The establishment of the Prepared Food Business Unit and the self-operated Qixian Kitchen will enhance the requirements for JD's cold chain systems, technology, and cost control, serving as a catalyst for accelerated upgrades [5]

Summary of Yonghui Supermarket Conference Call Company Overview - **Company**: Yonghui Supermarket - **Date**: October 21, 2025 Key Points and Arguments Industry and Company Strategy - Yonghui Supermarket is undergoing a transformation from traditional inventory management to a brand retail logic, focusing on core user segmentation to enhance store traffic and positioning [2][3] - The company has closed over 300 underperforming stores while increasing its store count to over 200 during September to October 2025, positively impacting financial performance [2][3] Operational Efficiency and Brand Development - The company is adopting a customer-centric approach, optimizing both consumer demographics and employee management [4] - Over 60% of the remodeled stores have achieved profitability levels exceeding the average of the past five years, with customer traffic increasing by over 80% [2][4] - Yonghui is focusing on developing private labels to improve product quality and category optimization, inspired by the operational model of Costco, which increased its private label share from 12% in 1999 to over 30% [2][5] Future Growth Plans - Yonghui plans to complete its store remodeling by June 2026 and is likely to initiate a new round of store growth, targeting the addition of no less than 400 remodeled stores, each expected to generate sales of at least 150 million yuan, with total revenue projected to exceed 60 billion yuan [2][6] Competitive Advantages of Offline Supermarkets - Offline supermarkets have a significantly lower cost ratio compared to online platforms like Alibaba and JD.com, with ROI ratios typically not exceeding 8% [4][7] - This cost advantage allows offline supermarkets to adjust prices more flexibly, enhancing their competitive edge in terms of price-to-quality ratio, which attracts more consumers and boosts sales [4][7] Additional Important Insights - The management is focused on attracting talented individuals and enhancing organizational capabilities to further improve operational efficiency and market competitiveness [2][6]

Financial Performance - Group revenue grew by 8.5% to HK$2.9 billion[24] - Gross profit increased by 9.7% to HK$1.3 billion[24] - Profit attributable to equity holders for FY22 was HK$220.8 million, up 20.1% excluding HK$71 million incomes from Employment Support Scheme in FY21[24] - Proposed final dividend is HK cents 12, with an interim dividend of HK cents 10.5 plus a special HK cents 4.2 already paid[24] - Gross margin was 45.7%[31] - Operating margin (excluding incomes under Employment Support Scheme) was 9.5%[31] - Net margin (excluding incomes under Employment Support Scheme) was 7.5%[31] Business Operations - The company has a physical store retail network of 322 stores in Hong Kong, 47 stores in Singapore, and 9 stores in Macau[27] - Hong Kong accounted for 89.3% of the group's revenue, Singapore 9.1%, and Macau 1.6%[36] Strategies and Outlook - The company aims to transform into a convenience GMS (General Merchandise Store) offering a wide range of price-competitive products[43] - The company plans to expand its store network, with a net increase of 5 stores in Hong Kong, 1 in Macau and 1 in Singapore in FY23[61]

Core Insights - Yonghui Supermarket plans to launch over 60 private label products this year, aiming to enhance its product development capabilities [1] Company Strategy - Yonghui Supermarket's CMO, She Xianping, announced the strategy to replicate the high-quality supply chain of competitor Pang Donglai, focusing on product quality and pricing [1]

Core Viewpoint - The recent "reverse rounding" incident at Yonghui Supermarket in Chongqing has raised concerns about the company's operational management and service standards, leading to an apology and commitment to rectify the issue [1][6][8]. Summary by Relevant Sections Incident Overview - Yonghui Supermarket acknowledged the validity of customer complaints regarding the "reverse rounding" practice at its Chongqing Jin Yuan Times store, which reflects operational shortcomings [1][8]. - The practice involved rounding up prices for items with fractional amounts during cash transactions, which was not clearly communicated to customers [5][6]. Company Response - Following the incident, Yonghui Supermarket announced that as of April 29, 2025, all stores will implement a "round down" policy, ensuring that fractional amounts will not be included in customer payments [6][8]. - The company also initiated a compensation program for customers affected by the rounding discrepancies [8]. Financial Performance - Yonghui Supermarket has faced significant financial challenges, reporting a revenue decline of 14.07% to 67.574 billion yuan in 2024, with a net loss of 1.465 billion yuan [9]. - Cumulatively, the company has incurred losses of 9.5 billion yuan over the past four years [9]. Strategic Initiatives - The company is undergoing a strategic transformation, learning from the "Fat Donglai" model to improve store operations and customer service [11][15]. - As of the end of 2024, Yonghui had completed adjustments in 31 stores, with plans to increase this number significantly in the coming years [13][17]. Partnership with Miniso - Miniso announced plans to acquire a 29.4% stake in Yonghui Supermarket for 6.27 billion yuan, positioning itself as the largest shareholder [15]. - Miniso aims to assist Yonghui in developing private label products and improving operational efficiency, focusing on enhancing gross margins [18]. Future Plans - Yonghui plans to adjust approximately 200 stores by 2025 while closing 250-350 underperforming locations [17]. - The company is committed to enhancing its supply chain and product offerings, with a goal of developing 100 billion-level super products in collaboration with core suppliers over the next three years [18].