Is JD and Yonghui rumored to have big news? Both parties urgently respond to store | company | both parties

After becoming the second largest shareholder of Yonghui Supermarket through investment, JD.com has recently been rumored to plan to acquire Yonghui Supermarket.

Recently, self media reported that JD.com is currently in talks with Yonghui regarding the acquisition matter, and the two sides have had at least one round of preliminary communication, but have not yet reached an agreement. The key difference between the two sides lies in the acquisition method - JD.com tends to favor a wholly-owned acquisition and has a strong attitude, with the aim of obtaining actual control of Yonghui. Zhang Xuansong, the founder and chairman of Yonghui, is more inclined to accept pure financial investment from JD.com to maintain the company's autonomy in independent operation.

On August 2nd, the stock price of Yonghui Supermarket rose to the limit, with the latest market value of 36.2 billion yuan.

Regarding this rumor, Yonghui Supermarket issued a clarification notice on the evening of the same day, stating that as of the disclosure date, the company did not have the above-mentioned matters, nor did it have any other undisclosed matters that should have been disclosed. JD.com also responded to media reports that it currently has no intention of doing so.

JD has become the second largest shareholder of Yonghui Supermarket

In October 2022, a notice disclosed by Yonghui Supermarket showed that Jiangsu Jingdong Bangneng Investment Management Co., Ltd. had transferred approximately 736 million shares of unrestricted tradable shares, accounting for 8.11% of the company's total share capital, to Beijing Jingdong Century Trading Co., Ltd. The transfer registration procedures have been completed.

On the same day, Jiangsu Yuanzhou E-commerce Co., Ltd. transferred its approximately 479 million shares of unrestricted tradable shares, accounting for 5.27% of the company's total share capital, to Suqian Hanbang Investment Management Co., Ltd. The transfer registration procedures have been completed.

As a result, JD.com and Suqian Hanbang jointly hold approximately 1.215 billion shares of Yonghui Supermarket, accounting for 13.38% of the total share capital, becoming the second largest shareholder of Yonghui Supermarket.

Yonghui Supermarket was established in 2001 and listed on the A-share market in 2010. It is one of the first circulation enterprises in China to introduce fresh agricultural products into modern supermarkets. According to the company, Yonghui Supermarket has developed over a thousand chain supermarkets nationwide, covering 29 provinces and nearly 600 cities, with a business area of over 8 million square meters. Ranked second on the 2022 Top 100 Chinese Supermarkets and fourth on the 2022 Top 100 Chinese Chain Stores.

In 2015, JD.com proposed its O2O strategy and developed its O2O business into an independent subsidiary, alongside six major sectors including JD.com, JD.com Finance, Paipai.com, Overseas Business Unit, and JD.com Intelligence, becoming one of the six core businesses of JD.com Group.

Subsequently, JD.com announced a strategic investment of 9 yuan per share and a total value of 4.31 billion yuan in Yonghui Supermarket. After strategic investment, JD.com will hold a 10% stake in Yonghui Supermarket and appoint two independent directors to strengthen its O2O business.

According to the 2022 annual report of Yonghui Supermarket, Li Songfeng served as a director and CEO of Yonghui Supermarket Co., Ltd. Previously, he was a senior director of JD Group. Xu Lei, who was then the CEO of JD Group, was also a member of the board of directors of Yonghui Supermarket.

In May of this year, as Xu Lei withdrew from the frontline management position on JD.com, he also resigned from his position as a director of Yonghui Supermarket. Instead, the newly appointed CEO of JD.com, Xu Ran, became a non independent director of the fifth board of directors of Yonghui Supermarket.

Yonghui Supermarket turned losses into profits in the first half of the year

Due to changes in the domestic and foreign socio-economic environment, the retail competition environment is still relatively severe, and the impact of changes in consumer habits and limited consumption ability of residents, Yonghui Supermarket achieved a revenue of RMB 90.091 billion in 2022, and a net profit loss attributable to the parent company of RMB 2.763 billion.

On the evening of July 14th, Yonghui Supermarket released its performance forecast for the first half of 2023, which is expected to turn losses into profits. According to the announcement, based on preliminary calculations, the company expects to achieve a net profit attributable to shareholders of 390 million yuan in the first half of the year, an increase of 500 million yuan year-on-year.

Yonghui stated that the performance forecast for the first half of this year is mainly based on the company's active promotion of store optimization, closure of some long-term loss making stores, vigorous promotion of digitalization, and a series of measures such as cost reduction and efficiency increase achieved through internal assessment and promotion. In terms of non recurring gains and losses, they are mainly affected by factors such as government subsidies, income from asset disposal, and changes in fair value.

It is worth mentioning that according to the first quarter report of Yonghui Supermarket, the company achieved a revenue of 23.802 billion yuan and a net profit attributable to the parent company of 704 million yuan in the first quarter. This means that the company was actually in a loss making state in the second quarter, with a specific loss of approximately 314 million yuan.

Yonghui Supermarket stated that in recent years, facing a challenging external environment, the company has focused on its main business and focused on improving quality and efficiency. On the one hand, while adhering to the principle of opening new stores with high quality, Yonghui actively enters the era of store iteration by selecting and selecting high-quality store properties, eliminating some tail stores. The proactive optimization and upgrading of stores have provided assistance for Yonghui's high-quality development.

The first quarter report shows that the online business revenue in the first quarter of 2023 was 4.02 billion yuan, accounting for 16.90% of the total, with a daily average of 469000 orders and a 6% increase in average customer value.

Regarding the 2023 plan, Zhang Xuansong, Chairman of Yonghui Supermarket, stated that firstly, we will continue to promote the construction of a stable, flexible, and transparent sunshine supply chain; Secondly, promote store optimization; The third is to strengthen the capacity building of grassroots employees; Fourthly, focus on the development of all channels, both online and offline; The fifth is the cultivation of young cadres at the grassroots level.

Frequent consumption promotion policies

The recent sustained strong performance of the retail sector may be related to the frequent emergence of consumer promotion policies.

On July 31st, the General Office of the State Council forwarded the Measures on Restoring and Expanding Consumption issued by the National Development and Reform Commission. In order to deeply implement the strategy of expanding domestic demand, fully leverage the fundamental role of consumption in economic development, and continuously enhance the sustainable driving force of high-quality development, a series of important measures have been proposed to restore and expand consumption in accordance with the decisions and deployments of the Party Central Committee and the State Council.

The Twenty Measures emphasize "stabilizing bulk consumption" and "expanding service consumption". The long chain of bulk consumption industry is of great significance for boosting the overall economy; The high proportion of labor costs in service consumption has a significant effect on improving people's income levels. Promoting bulk consumption and service consumption is a powerful lever to promote income and achieve a virtuous cycle of consumption growth.

Dongwu Securities believes that the core of the "Twenty Measures" is to promote a long-term endogenous and healthy virtuous cycle of consumption. For promoting consumption, a more practical and practical path is to find the direction of state-owned enterprise reform. Some large state-owned enterprises with strong business foundations and leading resource endowments have room for improvement and tapping into actual consumption, and companies with multiple business formats such as department stores, supermarkets, home appliances, auto trading, and consumer finance have benefited more significantly.