Consumer China

Yonghui – fresh food and direct-sourcing drive rapid expansion

  • Published 20 Oct 2011

Supplying fresh food bought directly from the producer has proven a winning combination for Yonghui.

Yonghui Superstores (601933:SHA) is around a quarter of the size of competitors such as RT-Mart (6808:HKG) and Carrefour (CA:PAR) by revenues. However, its positioning as a fresh-food specialist increasingly targeting inland regions has enabled it to expand rapidly beyond its Fujian borders. Further, thanks to the Rmb 2.64bn ($414m, £263m, €302m) raised during its A-share listing in December last year, it has reduced bank lending, helping to boost net margins. We expect revenues at the company to exceed 40% YoY in 2011, aided by rapid expansion as well as strong same-store sales.

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