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on the evening of september 23, miniso and yonghui superstores issued separate announcements, stating that miniso plans to spend rmb 6.27 billion to acquire 29.4% of yonghui superstores' shares, becoming yonghui superstores' largest shareholder. in a conference call that evening, miniso founder and ceo ye guofu said, "yonghui's current price is the lowest, and many people don't understand it. if everyone could understand it, i would definitely have no chance." however, judging from the market reaction, investors do not seem to buy into his optimism.

the capital market responded with mixed feelings

on the evening of september 23, yonghui supermarket issued an announcement stating that the company's shareholders dairy farm, jd world trade and suqian hanbang intend to transfer their 1.913 billion shares, 367 million shares and 387 million shares of the company to guangdong juncai international trading co., ltd. (hereinafter referred to as "juncai international") through an agreement transfer, accounting for 21.08%, 4.05% and 4.27% of the company's total share capital respectively. after the completion of this transaction, the company's largest shareholder will be changed to juncai international, which will hold a total of 29.40% of the company's shares. the announcement also shows that the source of funds for this equity change is the self-owned and self-raised funds of juncai international and juncai international's shareholders.

in addition, miniso also issued an announcement on the hong kong stock exchange, announcing its acquisition of 29.4% of yonghui supermarket's equity for rmb 6.27 billion. after the completion of the transaction, miniso is expected to become yonghui supermarket's largest shareholder, further expanding its offline retail footprint.

screenshot of yonghui supermarket’s announcement.

screenshot of miniso’s announcement.

regarding this news, dute news reporters noticed that the capital market gave completely different feedback to the two companies. on september 23, miniso's us stocks closed down 16.65% at $13.720 per share. on september 24, miniso's hong kong stocks also suffered a heavy drop, with a drop of nearly 40% at one point, until the closing drop narrowed to 23.86%, at hk$25.05 per share. in sharp contrast, a-share yonghui supermarket's stock price rose to the daily limit after opening on the 24th, closing at 2.48 yuan per share.

"market sentiments vary widely, and this phenomenon reflects the different assessments of market participants on the potential impact of mergers and acquisitions." zhi peiyuan, a corporate mentor for master's students at the school of management of china university of mining and technology (beijing) and president of zhongqinnong co., ltd., told dute news that, on the one hand, the sharp decline in miniso's share price shows that some investors are concerned about the short-term financial pressure that mergers and acquisitions may bring and the impact on the company's original business model; on the other hand, the strong rise in yonghui superstores' share price reflects the market's high expectations that this cooperation will inject new vitality into yonghui and usher in a new stage of business transformation and upgrading.

it is worth noting that yonghui superstores pointed out in the announcement that this equity change does not constitute a related transaction and does not involve a tender offer. there is still uncertainty as to whether the above matters can be finally implemented and when they will be completed. this transaction will not affect the company's normal production and operation. the company will fulfill its information disclosure obligations in a timely manner based on subsequent progress. investors are advised to invest rationally and pay attention to investment risks.

cross-border cooperation, transformation to quality retail model

in addition to the dramatic fluctuations in the capital market, people inside and outside the industry also expressed that they "don't understand, but are greatly shocked" by the cross-border cooperation between the two companies.

according to data, miniso is a retailer of trendy lifestyle home products featuring ip design. according to its first half of 2024 performance report, miniso's revenue increased by 25% year-on-year to 7.76 billion yuan; adjusted net profit was 1.24 billion yuan, a year-on-year increase of 17.8%. as of the first half of 2024, the number of miniso group stores worldwide has exceeded 7,000.

yonghui superstores was founded in 2001 and listed on the a-share market in 2010. it is one of the first distribution companies in mainland china to introduce fresh agricultural products into modern supermarkets. according to official website data, yonghui superstores has developed more than 800 chain supermarkets across the country, with business covering 29 provinces. it was once the leader in fresh supermarket chains, with profits approaching 1.8 billion yuan in 2020 and revenue exceeding 93 billion yuan that year. however, in the past three years, yonghui superstores' performance has faced challenges, with revenue declining year by year. as of the end of last year, it had not yet turned losses into profits, but losses were decreasing year by year.

dute news reporters observed that since 2024, yonghui superstores has continued to accelerate its transformation. since june this year, yonghui superstores has adopted the "pang donglai model" to adjust some of its stores, which has attracted widespread attention. as for the cross-border cooperation with miniso, yonghui superstores stated in the announcement that "juncai international and its actual controlling party miniso will work with yonghui superstores to transform to a quality retail model."

miniso pointed out in its announcement that "the store adjustment and reform being carried out by the target group is a revolutionary attempt to return to the essence of retail business." combined with reports from multiple media, ye guofu also explained the transaction at a telephone communication meeting on the night of the announcement. the success of the pang donglai model has set off a major change in china's supermarket industry. after the pang donglai adjustment, yonghui has achieved breakthroughs in sales, customer flow and other dimensions. after seeing the two pang donglai-adjusted yonghui stores, it decided to "sell" yonghui. ye guofu also said that pang donglai has helped yonghui supermarket adjust five stores, and in the future yonghui supermarket will speed up its own adjustment and quickly reverse the business situation.

in addition, miniso disclosed in the announcement that "the group has unique capabilities and experience in developing its own brands, designs and ip products. after the acquisition, the group can provide support to the target group through business cooperation to develop higher-quality own-brand products at a lower cost, which is expected to enhance the target group's differentiated competitive capabilities. the target group has established a large store network and supply chain in china. the group and the target group can share resources through business cooperation to further enhance economies of scale and optimize the cost structure." the announcement also mentioned that "the acquisition will expand the group's investment and operating channels in the daily necessities retail business, thereby enabling the group to diversify cyclical business risks."

regarding the integration of the two companies, zhi peiyuan analyzed that miniso is known for its ip design-driven lifestyle retail, while yonghui supermarket is deeply involved in the supermarket business of fresh food and agricultural products. although the two companies appear to have very different styles on the surface, a closer look reveals that both companies can complement each other's resources in terms of brand marketing and consumer groups, and jointly build an integrated online and offline retail ecosystem to create a borderless and convenient shopping experience for customers and cater to the immediate consumption needs of modern consumers.

however, the "pang donglai model" emphasizes extreme customer service, carefully selected products, and the agility and reliability of the supply chain. for yonghui supermarket, chain enterprises need to cleverly integrate local cultural elements while maintaining brand consistency, meet regional consumer preferences, and achieve a delicate balance between scale and personalization. in addition, high-quality services and selected products are often accompanied by higher operating costs, such as employee training investment and in-store facility upgrades. how to effectively control expenses and achieve sustainable profitability without weakening service levels is a severe test of management's cost control skills.

zhi peiyuan believes that the strategic cooperation between miniso and yonghui superstores is an unprecedented market opportunity, but also comes with a series of challenges to be solved. both parties must give full play to their respective comparative advantages, actively explore innovative paths under the new retail format, and prudently respond to market changes and many internal management challenges, so as to create a new world in the fiercely competitive retail industry.

editor kong pancheng reviewed the case zhang lei second reviewed it guan yue third reviewed it zheng weiheng