Core Viewpoint - Yonghui Supermarket has launched a new store in Weinan, marking the 100th store to adopt the "Fat Donglai model," emphasizing quality retail and providing a fresh shopping experience during the "Double Eleven" shopping festival [1][16]. Group 1: Store Launch and Model Adoption - The new Yonghui store in Weinan is designed to offer a different shopping experience compared to online platforms, focusing on immediate satisfaction and quality lifestyle [1][3]. - The store's opening signifies the nationwide expansion of the "Fat Donglai model," which aims to enhance the quality of retail across 100 cities in China [1][4]. Group 2: Product and Service Innovations - The store has optimized its product structure by removing 4,744 items and adding 5,425 high-quality products, achieving a 47% increase in new offerings [4]. - Yonghui has committed to strict quality standards, including the "468 principle," which ensures that unsold fresh products are removed within eight hours, enhancing consumer trust in product freshness [3][13]. Group 3: Supply Chain and Pricing Strategy - Yonghui's supply chain capabilities allow for high-quality, affordable custom products, such as fresh milk priced at 7.9 yuan for 950ml, which meets stringent quality standards [8]. - The store emphasizes "quality and affordability," providing a shopping experience that is immediate and tangible, contrasting with the complexities of online shopping [8][13]. Group 4: Fresh Food and Culinary Offerings - The fresh food section has been highlighted as a key upgrade, featuring organic vegetables and a variety of ready-to-eat products, ensuring freshness for family meals [8][10]. - The prepared food area has been revamped to include diverse offerings, catering to various meal occasions and preferences, enhancing the overall dining experience [10][11]. Group 5: Customer Experience and Store Layout - The store layout has been redesigned for a more comfortable shopping experience, with wider aisles and lower shelving to improve visibility and accessibility [13]. - Over 40 customer service enhancements have been implemented, including rest areas and personalized services at meat and seafood counters, to create a welcoming environment [13][14]. Group 6: Employee Welfare and Service Quality - The store has increased its workforce from 99 to 145 employees, improving overall service quality through enhanced employee benefits and training [14]. - Employee welfare initiatives, such as paid leave and improved working conditions, contribute to a more professional and sincere customer service experience [14].

Core Insights - Yonghui Supermarket is undergoing a transformation by adopting the "Fat Donglai" retail model, focusing on enhancing service and experience across its seven stores in Zhengzhou [2][6] - The company aims to optimize its supply chain and develop a proprietary brand system to improve profitability and customer engagement [6][9] Store Transformation - Yonghui has completed adjustments in seven stores in Zhengzhou, aligning product structure, space layout, service capabilities, and employee benefits with the "Fat Donglai" model [2][6] - The stores have seen an average customer traffic increase of 80%, with over 60% of the adjusted stores achieving profitability levels surpassing the highest in the past five years [6][9] Product and Service Enhancements - The product range in stores has been optimized, with a 26.8% increase in new products, achieving 80% alignment with the "Fat Donglai" standards, and a rise in imported products to 15% [2][6] - The introduction of a "Fresh Kitchen" in the Yuhua Plaza store allows customers to have seafood and meat cooked on-site, catering to busy professionals [5] Employee Welfare - Average employee salaries have been raised to 5,000 yuan, reflecting the company's commitment to improving staff welfare [4] Proprietary Brand Development - Yonghui plans to focus on developing its proprietary brand system, with a goal of launching 500 proprietary products over the next five years [9][10] - The company aims to collaborate with suppliers to create 100 billion-level products within three years, enhancing its product ecosystem [8][9] Market Trends - The retail industry is witnessing a shift towards proprietary brands as companies seek to bypass traditional distribution channels and reduce costs [10][12] - The average number of proprietary products developed by retailers is increasing, indicating a growing trend in the market [11][12]

Core Insights - Yonghui Supermarket has initiated a transformation process inspired by the "Fat Donglai model," which began over 500 days ago, following a visit by its former management team to the chairman of Fat Donglai [1] - The company announced that Guangdong Jun Cai International Trade Co., a wholly-owned subsidiary of Miniso, will acquire shares held by several stakeholders, marking a significant step in its transformation [1] - New CEO Wang Shoucheng reported an average customer traffic increase of 80% in transformed stores, with over 60% of stabilized stores achieving their highest profitability in five years [1][5] Transformation Phases - The transformation has progressed from "Fat Donglai assistance" to "regional autonomous transformation," establishing Yonghui's own methodology for store improvement [2] - A systematic evaluation metric has been developed, focusing on technical standards, customer service, product quality, and food safety, with stores scoring above 80 considered high-performing [2] - The second phase of transformation will emphasize refining product offerings to meet consumer needs, breaking down existing barriers [2] Product Strategy - Yonghui aims to shift focus from traditional retail practices to a product-centric approach, dedicating full attention to market analysis and product development [3] - The company plans to launch its own brand products, adhering to the quality standards set by Fat Donglai, with 12 new products introduced, including juice and laundry detergent [3] - The introduction of products similar to popular items from Fat Donglai indicates a strategic alignment with successful market trends [3] Financial Performance - Despite ongoing transformation efforts, Yonghui reported a revenue decline of 14.07% in 2024, with a net loss of 1.465 billion yuan, marking the fourth consecutive year of losses [5] - The revenue drop is attributed to intense competition in the retail sector and significant store optimization and strategic shifts [5] - Positive indicators from transformed stores include a net promoter score (NPS) exceeding 40 and sales growth of over 100% during peak holiday periods, suggesting improving customer engagement [5]

Core Insights - Yonghui Supermarket has initiated a transformation process inspired by the "Fat Donglai model," which began over 500 days ago, following a visit by its former management team to the founder of Fat Donglai [1] - The company announced that Guangdong Jun Cai International Trade Co., a subsidiary of Miniso, will acquire shares from several stakeholders, marking a significant step in its transformation [1] - New CEO Wang Shoucheng reported an average customer traffic increase of 80% in transformed stores, with over 60% of stabilized stores achieving their highest profitability in five years [1][8] Transformation Phases - The transformation has progressed from "Fat Donglai-assisted reform" to "regional autonomous reform," establishing Yonghui's own methodology for store improvement [4] - A systematic evaluation framework has been developed, focusing on metrics such as technician qualification rates and customer service standards, with stores scoring above 80 considered high-performing [4] - The second phase of transformation will emphasize refining product offerings to meet consumer needs, breaking down existing barriers [4] Product Strategy - Yonghui aims to shift focus from traditional retail practices to a product-centric approach, dedicating 100% of its efforts to market analysis and product development [5] - The company plans to launch a range of private label products, adhering to the quality standards set by the Fat Donglai brand, with 12 new products already introduced [5] - The introduction of new products, such as "YH Da Fu Cake," mirrors successful items from Fat Donglai, indicating a strategic alignment with popular market trends [5] Financial Performance - Despite the ongoing transformation, Yonghui reported a revenue decline of 14.07% year-on-year, with a net loss of 1.465 billion yuan, marking the fourth consecutive year of losses [7] - The revenue drop is attributed to intense competition in the retail sector and significant store optimization efforts [7] - Recent data indicates that transformed stores are beginning to attract more customers, with metrics such as a net promoter score exceeding 40% in 102 transformed stores [8] Future Outlook - The company anticipates a timeline of 2-3 years to stabilize operations, 3-5 years to regain customer trust, and 5-10 years to establish itself as a beloved national supermarket [8]

Core Insights - Yonghui Supermarket has initiated a transformation process inspired by the "Fat Donglai model," which began over 500 days ago, following a visit to Fat Donglai's chairman [1] - The company announced a significant acquisition involving its shares by Jun Cai International Trading Co., a subsidiary of Miniso, marking a pivotal moment in its restructuring efforts [1] - The newly appointed CEO, Wang Shoucheng, reported an average customer traffic increase of 80% in reformed stores and over 60% of stabilized stores achieving their highest profitability in five years [1][9] Phase of Transformation - Yonghui has transitioned from "Fat Donglai-assisted reform" to "regional autonomous reform," establishing its own systematic evaluation metrics for reformed stores [4] - The focus of the second phase of transformation is to refine the product offerings based on consumer needs, aiming for a complete product-centric transformation over the next three years [5] Product Strategy - Yonghui plans to collaborate with 200 core strategic partners and 100 billion-level products, eliminating channel fees and ensuring timely payments to partners [5] - The company aims to develop its own brand products, launching 12 new items that adhere to the quality standards set by Fat Donglai's private label [5][6] Financial Performance - Despite the ongoing transformation, Yonghui reported a revenue decline of 14.07% year-on-year, with a net loss of 1.465 billion yuan, marking the fourth consecutive year of losses [8] - The company closed 227 underperforming stores while opening 93 reformed ones, indicating a significant operational shift [8] Customer Engagement - As of October 2025, reformed stores achieved a net promoter score (NPS) exceeding 40%, with some benchmark stores surpassing 50% [9] - During the recent holiday season, reformed stores saw sales increase by over 100%, with customer traffic rising by over 80% [9]

Core Viewpoint - Yonghui Supermarket has initiated a transformation process inspired by the "Fat Donglai model," which has led to significant changes in its operations and management structure, aiming to improve customer experience and profitability [2][6]. Group 1: Transformation Progress - Yonghui Supermarket's transformation began over 500 days ago, with a visit to Fat Donglai's chairman, which marked the start of the "Fat Reform" [2]. - The company announced that Guangdong Jun Cai International Trade Co., a subsidiary of Miniso, will acquire shares from several stakeholders, including JD.com, indicating a strategic shift in ownership and management [2]. - The newly appointed CEO, Wang Shoucheng, reported an average customer traffic increase of 80% in transformed stores, with over 60% of stabilized stores achieving their highest profitability in five years [2][7]. Group 2: New Strategies and Methodologies - Yonghui has developed its own "transformation methodology," moving from external assistance to a self-directed approach in store modifications [3]. - The company has implemented a systematic evaluation framework for transformed stores, focusing on various performance metrics, including customer service and product quality [3]. - The three-year goal includes a comprehensive product-centered transformation involving 200 strategic partners and 100 major products, emphasizing a commitment to no channel fees and timely payments [3][4]. Group 3: Product Development and Market Focus - Yonghui aims to shift its focus from traditional retail practices to a more product-centric approach, dedicating resources to market analysis and product development [4]. - The company has launched a series of private label products, adhering to high standards of quality and pricing, similar to successful items from Fat Donglai [5]. - Recent data shows that transformed stores have significantly improved customer engagement, with a net promoter score (NPS) exceeding 40% in 102 stores and sales during peak seasons increasing by over 100% [7]. Group 4: Financial Performance and Future Outlook - Despite ongoing transformation efforts, Yonghui reported a revenue decline of 14.07% year-on-year, with a net loss of 1.465 billion yuan, marking the fourth consecutive year of losses [6]. - The company anticipates a gradual recovery, aiming to regain customer trust over the next 3-5 years and establish itself as a respected supermarket brand in the long term [7].

Core Insights - YH Supermarket's scale has returned to 2016 levels after a year of restructuring, with a significant increase in customer traffic and profitability in remodeled stores [1] - The company reported over 100% year-on-year sales growth during the recent Mid-Autumn and National Day holidays, with a notable increase in customer footfall and sales of key products [2] Group 1: Store Performance and Customer Engagement - YH Supermarket has 102 remodeled stores with an average Net Promoter Score (NPS) exceeding 40, and 19 stores surpassing 50 [1] - Average customer traffic in remodeled stores has increased by 80%, with over 60% of these stores achieving profitability levels higher than the past five years [1] Group 2: Sales Growth and Product Performance - During the recent holiday period, overall sales in remodeled stores grew by over 100% year-on-year, with customer transactions increasing by over 80% [2] - Sales of 16 key products increased by over 10 times, with the "Ice Fresh Norwegian Salmon" alone selling over 1 million units in a single day [2] Group 3: Employee Incentives and Development - From January to August, YH Supermarket distributed over 31 million yuan in employee bonuses, benefiting 32,094 employees, with the highest monthly bonus exceeding 300,000 yuan [4] - As of August 31, 4,665 employees participated in technical certification programs, emphasizing the company's focus on human resources as a core value [4] Group 4: Product Strategy and Brand Development - YH Supermarket is advancing its "Quality YH" brand, aiming to enhance its proprietary product offerings, with plans to launch approximately 60 new products this year and expand to 500 by 2029 [9] - The company emphasizes quality over low cost, focusing on operational efficiency and supply chain optimization to provide consumers with value [9] Group 5: Regional Adaptation and Market Strategy - The newly opened YH store in Guangzhou integrates local culinary preferences, featuring regional specialties to cater to local tastes [9] - The company plans to challenge the "tree-ripened" model by leveraging local tropical fruit resources to enhance product quality [9] Group 6: Strategic Partnerships and Product Centralization - YH Supermarket is undergoing a transformation towards product centralization, with plans to establish 200 core strategic partnerships and develop 100 billion-yuan level products within three years [10]

Core Viewpoint - Yonghui Supermarket is accelerating its "downward strategy" to enhance quality service and innovate the "Fat Donglai model" in county markets, marking a significant step in its layout in the Suzhong county market with the opening of its first "Fat Donglai model" store in Hai'an [4]. Group 1: Store Transformation - The newly renovated Yonghui Supermarket in Hai'an has a retail area of over 2,600 square meters and aims to meet local consumer demands for improved fresh produce quality, shopping environment, and service experience [4]. - The store has undergone a significant product overhaul, removing 7,636 out of 13,030 original items and adding 3,751 new products, resulting in a new product ratio exceeding 41% [5]. - The product structure now closely aligns with the Fat Donglai standard, with imported goods accounting for 13% and fresh food categories increasing from 5% to 20% [5]. Group 2: Product Innovation - The fresh produce section has been upgraded to include high-altitude vegetables, organic products, and specialty fruits, enhancing quality and source control [5]. - The store features a dedicated area for Fat Donglai products and Yonghui's selected items, including ten core products that meet daily family needs with high quality-to-price ratios [7]. - The bakery section has introduced over 90 new products, balancing health and creativity, and offering popular items like durian mille-feuille and matcha red bean soufflé [7]. Group 3: Service and Experience Enhancement - The store layout has been optimized to create a more open shopping atmosphere, with wider aisles and lower shelf heights [8]. - Customer service has been enhanced with various amenities, including a rest area with health measurement tools and free charging stations, reflecting a deep understanding of customer needs [8]. - Food safety measures are strictly implemented, with a "468 principle" for cut fruit products to ensure freshness [10]. Group 4: Employee Development - The employee count has increased from 86 to over 130, creating numerous local job opportunities, with an increase in average salaries [11]. - Yonghui has launched a "Craftsman Plan" to provide systematic training and certification for frontline employees, enhancing their professional skills and service quality [11]. - The store aims to integrate the "people-oriented" philosophy of the Fat Donglai model with local consumer habits and culture, creating a unique shopping experience for the Hai'an community [11].

Core Viewpoint - Yonghui Supermarket has launched its first "Fat Donglai model" store in Hai'an, marking a significant step in its market expansion in the Suzhong county area, responding to local consumer demand for upgraded shopping experiences and service quality [1][3]. Group 1: Store Features and Offerings - The new store covers over 2,600 square meters and aims to enhance the shopping environment and service experience for local consumers [3]. - The product structure has been significantly adjusted, with over 41% of new products and an overall alignment with the Fat Donglai standard of 80% [5]. - The proportion of imported goods has increased to 13%, while the share of fresh food categories like baked goods and cooked food has risen from 5% to 20% [5]. Group 2: Product and Service Innovations - The fresh produce section has been upgraded to include high-altitude vegetables, organic products, and specialty fruits, enhancing quality and sourcing [5][6]. - The store features a dedicated area for Fat Donglai products, allowing customers to conveniently purchase high-quality items without traveling to Henan [6]. - Service upgrades include various customer-friendly amenities such as blood pressure monitors, drinking water, and free charging stations, creating a comfortable resting space [6]. Group 3: Commitment to Local Culture and Quality - The store integrates the "people-oriented" philosophy of Fat Donglai with local consumer habits and culture, aiming to create a unique shopping experience for Hai'an residents [8]. - The seafood section promises to sell only seafood without added water, offering free cleaning and oxygenation services [6]. - Strict food safety measures are implemented, including the "468 principle" for cut fruit, ensuring quality and freshness [6].

Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Views - In the first half of 2025, the company achieved revenue of 29.95 billion yuan, a year-on-year decline of 21%, with a net loss attributable to the parent company of 800 million yuan [2][4]. - In the second quarter alone, revenue was 12.47 billion yuan, down 23% year-on-year, with a net loss of 940 million yuan; however, after considering asset disposal gains from store closures, the net loss was reduced to 390 million yuan, a year-on-year improvement of 70 million yuan [2][4]. - The retail segment's gross margin showed improvement, with a gross margin of 19.8% in the second quarter, remaining stable year-on-year, driven by a shift towards self-operated sales in the bakery segment and a reduction in high-margin service business revenue [9]. Summary by Sections Financial Performance - The company reported a total revenue of 29.95 billion yuan in the first half of 2025, a decrease of 21% year-on-year, and a net loss of 800 million yuan [2][4]. - The second quarter revenue was 12.47 billion yuan, down 23% year-on-year, with a net loss of 940 million yuan; however, the loss was reduced to 390 million yuan after accounting for asset disposal gains [2][4]. Supply Chain and Margin Improvement - The company closed 223 stores in the first half of 2025, resulting in a total of 552 stores, which contributed to the revenue decline [9]. - The gross margin for the retail segment improved by 0.6 percentage points year-on-year, attributed to a higher proportion of self-operated sales in the bakery segment and a focus on quality retail and supply chain reform [9]. Strategic Initiatives - The company launched high-quality private label products, including fresh milk at a competitive price, which achieved sales of over 1 million yuan within four days of launch [9]. - The company is actively restructuring its brand marketing system to enhance consumer reach and product differentiation [9]. Future Outlook - The company plans to raise up to 4 billion yuan through a private placement to support store renovations, logistics upgrades, and working capital [9]. - Earnings per share (EPS) are projected to be -0.08 yuan, 0.05 yuan, and 0.12 yuan for 2025, 2026, and 2027, respectively, indicating a potential turnaround [9].