Jingwu Financial News | Since MINISO (09896) announced its stake acquisition on September 23, Yonghui Superstores (601933) has seen its stock price rise by 203%. This is mainly due to investor optimism regarding the sales growth and profit turnaround following its collaboration with Pandonglai and MINISO. Currently, Yonghui Superstores' expected enterprise value/EBITDA for 2025 is 19 times, with a PE of 78 times, higher than the average of 17 times and 41 times over the past 12 months since 2013, and significantly above the expected median EV/EBITDA of 7 times for domestic/global food retailers in 2025. However, UBS Group expects the year-on-year growth rate of Yonghui Superstores' EBITDA to slow to 3%-4% starting in 2027.
In the Retail Trade Industry, the current competitive landscape is quite fierce. With the development of e-commerce and other New Retail formats, traditional supermarkets face significant challenges. Consumer shopping habits are gradually shifting online, while demands for shopping experiences and product quality are also increasing. Although Yonghui Superstores is undergoing transformation, it still faces many uncertainties. Factors such as the effects of store renovations and closures, as well as execution risks in supply chain management, may impact its competitiveness and performance in the market.
Based on its analysis of Yonghui Superstores, UBS Group expects the EPS for 2025/2026 to be revised upward by 16% (0.09 yuan) / 79% (0.19 yuan), primarily due to the sales boost from the renovation of approximately 100 stores each year, the closure of unprofitable stores, improved operating profit margins of renovated stores, and potential profit recovery from online businesses and older stores. However, UBS Group maintains a Sell rating for Yonghui Superstores, with the Target Price adjusted from 2.00 yuan to 5.10 yuan. This is mainly due to the possibility of a higher than expected number of store closures, lower than expected economic benefits from renovated stores, and execution risks in supply chain management, all of which could lead to the company's future performance falling short of expectations and pose downward risks to the stock price.
