疫情恢复&竞争业态补贴退坡，超市行业迎来转机：近年来我国超市行业规模增速长期跑输电商，也跑输社零总额。2019-2023 年，根据国家统计局，我国超市/电商/社零总额的复合增速为3.6%/ 12.1%/ 4.4%。跑输的原因主要是行业受到电商的侵蚀和各类新业态的挤压。但此前对超市行业影响最大的疫情（已结束）、电商（逐渐趋于成熟）、社区团购（扩张放缓&补贴收窄）均好转，以超市为代表的线下零售迎来整体性转机。Key investment points
Yonghui Supermarket is currently one of the largest supermarket chains in China, and operations have been under pressure in recent years.
According to CCFA (China Chain Management Association) statistics, in 2023, Yonghui Supermarket's operating scale (estimated by the Association, including tax) was 85.55 billion yuan, second only to Walmart Group's 120.2 billion yuan. In the past few years, due to industry-level and competitive reasons, Yonghui Supermarket's business situation has clearly been under pressure. Judging from the flat rate that best reflects the company's operating conditions, the company's operating efficiency in 2023 was 0.0099 million yuan, a cumulative decrease of 21% compared to 2019. In 2023, the company's revenue was 78.6 billion yuan, -13% year on year; the company's net loss to mother was 1.33 billion yuan, and the loss margin narrowed by 52% year on year.
The epidemic has recovered and competitive subsidies have declined, and the supermarket industry has ushered in a turning point: in recent years, the scale growth rate of China's supermarket industry has long outpaced e-commerce, and has also outperformed the social sector's total value of zero. In 2019-2023, according to the National Bureau of Statistics, the compound growth rate of total supermarket, e-commerce, and social zero in China was 3.6%/12.1%/4.4%. The main reason for the failure was that the industry was being eroded by e-commerce and squeezed by various new business formats. However, the previous epidemic (which has had the greatest impact on the supermarket industry), e-commerce (gradually maturing), and community group buying (slowing expansion & narrowing of subsidies) have all improved, and offline retail represented by supermarkets has ushered in an overall turning point.
Yonghui Supermarket imitates excellent peer reform stores such as Fat Donglai, and has achieved good results. I am optimistic about replicating the modified store: Yonghui Supermarket is learning from excellent peers such as Fat Donglai. As of November 8, Yonghui Supermarket has opened 13 stores (including Fat Donglai's help & independent regulation).
The company expects the number of modified stores to reach 40 to 50 before the Spring Festival in 2025. The effects of the restructuring of the stores that have already opened are outstanding. After the reopening of the revised stores, customer traffic and average daily sales both increased several times compared to before the restructuring, and the trial operation sales of most stores were 5 times or more than before the restructuring. Of course, there must be a new store effect in this, and the performance and model of the revised store after stabilizing is a more important operating indicator.
By reducing loss-making stores & improving operating efficiency & accounting standards, the company's profit margin is expected to be repaired in the future:
① Closing loss-making stores. The number of company stores dropped from 1,000 in early 2024 to 804 in 2024 M10. It may involve store expenses in the short term, but it will improve long-term profits. ② Optimized back-office expenses. The company's management/R&D expenses decreased from 21.55/ 0.428 billion yuan in 2021 to 18.87/ 0.318 billion yuan in 2023. ③ The characteristics of the new leasing standards are high and low. The new leasing standards in 2021 caused the company to increase leasing-related expenses by 1.44 billion yuan in that year. In the future, amortization of right-to-use assets and interest on lease liabilities will be reduced year by year, reducing lease-related expenses.
Profit forecast and investment rating: As a leading supermarket in China, Yonghui Supermarket has recently shown some results from studying Fat Donglai's reforms. It is an enterprise with high operating flexibility in the future. We expect net profit to be -5.2/2.7/0.56 billion yuan from 2024 to 2026, or +61%/+152%/+109% YoY. The corresponding 2025/26 P/E is 146/70 times. Considering future changes in stores, there is more room for profit improvement & replication. Coverage for the first time was given a “gain” rating.
Risk warning: Fluctuations in consumer demand, uncertainty about the effects of adjustment and replication, intensification of industry competition, uncertainty about matters related to Mingchuang's shareholding, etc.
