Core Viewpoint - The acquisition of Yonghui Supermarket by Miniso has led to significant changes in the company's operational model, focusing on the "Fat Donglai" approach to enhance customer experience and operational efficiency [4][5][6]. Group 1: Acquisition and Leadership Changes - Miniso announced the acquisition of Yonghui Supermarket for approximately 6.2 billion yuan, which raised questions about the strategic direction of the company [5]. - Yonghui Supermarket appointed Wang Shoucheng as the new CEO, marking a shift towards a more stable leadership structure after a six-month vacancy [6][9]. Group 2: Operational Improvements - Under Wang Shoucheng's leadership, Yonghui has seen a significant increase in customer traffic, with an average growth of 80% in remodeled stores, and over 60% of these stores achieving profitability levels surpassing the highest in the past five years [6][12]. - The company has implemented a three-year reform plan, currently in its initial stage, to adopt the "Fat Donglai" model, aiming to create a unique operational path [7][11]. Group 3: Cultural and Structural Changes - Yonghui has undergone extensive organizational restructuring, including the establishment of 26 regional divisions to enhance operational efficiency and learning [14][15]. - The company has shifted its focus from profit margins to customer satisfaction and product sales rates as key performance indicators for its procurement and product teams [21][22]. Group 4: Anti-Corruption Measures - Yonghui has taken a firm stance against corruption, implementing various mechanisms to guide employees towards ethical practices and away from self-serving behaviors [19][20]. - The company has redefined its procurement strategy, eliminating unreasonable backend revenue practices to reduce corruption risks [21][22]. Group 5: Private Label Strategy - Yonghui aims to develop its private label products by ensuring quality and supply stability, while also allowing partners to earn reasonable profits [28][31]. - The company has learned from past mistakes in private label development, now focusing on quality standards and effective management processes [31][32]. Group 6: Future Outlook - Yonghui has reportedly passed its most challenging phase, with plans to refine its operations further and achieve a stable state within three to five years [39][50].

Core Viewpoint - The acquisition of Yonghui Supermarket by Miniso has led to significant changes in the company's operational model, focusing on the "Fat Donglai" approach to enhance customer experience and operational efficiency [2][4]. Group 1: Acquisition and Leadership Changes - Miniso announced the acquisition of Yonghui Supermarket for nearly 6.2 billion yuan on September 24 last year, which raised questions about the strategic implications of this move [2]. - Yonghui Supermarket appointed Wang Shoucheng as the new CEO, marking a shift towards a more stable phase in the company's transformation efforts [4][5]. Group 2: Transformation and Operational Improvements - The transformation plan includes a three-year strategy, with current efforts being in the initial stages of adopting the "Fat Donglai" model [5]. - Yonghui has seen an average customer net promoter score (NPS) exceeding 40% across 102 transformed stores, with an average customer traffic increase of 80% [4]. - Over 60% of the transformed stores have achieved profitability levels surpassing their highest values in the past five years [4]. Group 3: Cultural and Structural Changes - The company has undergone extensive restructuring in its organizational framework, supply chain, and cultural development, aiming to align more closely with the "Fat Donglai" ethos [4][10]. - Yonghui has established 26 major districts to enhance operational efficiency, allowing for synchronized learning and implementation of transformation strategies [11][12]. Group 4: Addressing Corruption and Ethical Practices - Yonghui has taken a firm stance against corruption, implementing various mechanisms to guide employees towards ethical practices and enhance personal value without resorting to unethical means [14][15]. - The focus has shifted from profit maximization to customer satisfaction and product sales rates, aiming to foster a more transparent and cooperative relationship with suppliers [16]. Group 5: Self-Branding and Market Positioning - Yonghui is developing its private label products by leveraging its scale advantages and ensuring stable quality and supply through strong partnerships with suppliers [23][26]. - The company aims to achieve profitability not through high margins but by increasing sales volume and optimizing cost structures [27]. Group 6: Future Outlook and Independence - Yonghui is committed to establishing its unique path while learning from the "Fat Donglai" model, with aspirations to create a distinctive business model that reflects its values [30][31]. - The company has successfully navigated through a critical phase of transformation, with plans to refine its operations further over the next three to five years [43].

Investment Rating - The report maintains a "Positive" investment rating for the supermarket and department store industry [4]. Core Insights - The overall retail sector is showing signs of stabilization and recovery, with essential and national subsidized categories performing well. In the first seven months of 2025, the retail sales growth rate was 4.8%, with July's growth at 3.7% [14]. - Supermarkets are undergoing store closures and adjustments, leading to an optimization of profit margins. In the first half of 2025, major supermarket chains closed a total of 223 stores, with ongoing adjustments expected to enhance profitability [15][19]. - The department store sector is experiencing a short-term decline in performance, with a focus on maintaining operational stability and gradually improving brand matrices [35]. Summary by Sections Overall Retail Sector - Retail sales growth is stabilizing, with essential goods showing strong growth. For instance, the retail sales growth for essential food categories was 12.2% in Q2 2025 [14]. - The performance of optional categories is recovering, with notable growth in national subsidized products like home appliances and furniture, which saw growth rates of 40.4% and 27.2% respectively in Q2 2025 [14]. Supermarkets - Supermarkets are optimizing their store networks, with significant closures and adjustments. For example, Yonghui Supermarket closed 223 stores, reducing its total to 552 [15]. - The average revenue for representative supermarket enterprises in Q2 2025 was 3.8 billion yuan, a decrease of 15% year-on-year, primarily due to the closure of underperforming stores [19]. - The average gross margin for supermarkets improved by 0.84 percentage points to 22.82% in Q2 2025, despite a net loss of 160 million yuan [19][25]. Department Stores - The average revenue for representative department store enterprises in Q2 2025 was 1.28 billion yuan, down 11% year-on-year, attributed to weak consumer demand [35]. - The average gross margin for department stores increased by 1.83 percentage points to 36.25% in Q2 2025, while average sales and management expenses decreased by 3% and 2% respectively [35]. Investment Recommendations - The report suggests continuous monitoring of supermarket adjustments and improvements in operational efficiency. Key companies to watch include Yonghui Supermarket, Jiajiayue, Wushang Group, Chongqing Department Store, and Tianhong [42][43].