Wednesday, 2023 November 29

CHINA BRIEF | Supermarket chain backed by Tencent and reports nearly 40% increase in Q1 net profits

Supermarket chain operator Yonghui Superstores Co (SHA: 601933) announced Wednesday that it has booked RMB 29.3 billion (USD 4.1 billion) in revenue in the first quarter of this year, up 31.6% year-on-year.

Yonghui, which counts Tencent and among its shareholders, collected RMB 1.6 billion in net profits, up 39.5% year-on-year. The company attributes its revenue to an increase in sales coming from its newly-opened stores and online channels.

In the first quarter, the company said it has opened 16 supermarkets, each of which occupies an area between 8,577 square meters to 1,200 square meters, and 7 mini-stores, facilities of about 500 square meters on average. However, the firm has also closed 74 mini-stores in the first quarter, for a total of 118 of such stores closed between January 2019 and March of this year, according to another filing of the company.

Yonghui operated 900 supermarkets in 529 cities of 24 provinces in China last year, according to its 2019 corporate social responsibility report.

The firm said it delivered goods worth RMB 2.1 billion in online orders via its app or other third-party apps, up 2.3 times compared with the first quarter in 2019. Despite the huge increase, online sales only accounted for 7.3% of all sales in the first quarter.

Following the announcement, the company’s stock dived 6.1% to RMB 10.52 per share on Wednesday. 

This article is part of KrASIA’s “China Brief” section, where KrASIA’s reporters will provide quick daily updates about the tech ecosystem in China.

Jingli Song
Jingli Song
I believe Chinese innovation at various level needs to be known by the world.

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