On the evening of September 23rd, Miniso announced that it plans to acquire 29.4% of Yonghui Supermarket's shares for 6.3 billion yuan, including 21.1% held by Milk Company and 8.3% held by JD.com. After the transaction is completed, Miniso is expected to become the largest shareholder of Yonghui Supermarket.
As of noon on September 24th, the stock price of Miniso in Hong Kong fell 26.14% to HKD 24.30 per share. Yonghui Supermarket's A-shares hit the daily limit up, with the stock price reporting 2.48 yuan per share. On the afternoon of the same day, Yonghui Supermarket's stock price continued to rise by the limit up, while the decline of Miniso Hong Kong stock slightly narrowed.
Regarding the reason for investing in Yonghui Supermarket, Ye Guofu, founder of Miniso, said during a conference call on the evening of the 23rd, "I hope everyone can be patient. I hope everyone believes in my vision. I am someone who not only looks at the retail industry in China, but also globally. I may make mistakes in other places, but in the retail industry, I will definitely not make mistakes." He also said, "Yonghui's current price is the lowest, and many people cannot understand it. If everyone can understand, there will definitely be no chance for me
Industry insiders believe that the investment of 6 billion yuan by Mingchuang Youhao to invest in Yonghui is mainly due to the effect of Yonghui's transformation to the east. And it was pointed out that this was a "big gamble" by Ye Guofu, betting that Yonghui could be successfully adjusted. If successful, this transaction will become a good story. However, some industry insiders have pointed out that the investment plan has only just been announced. As for whether Miniso and Yonghui Supermarket can improve their business and capital markets in the future, it depends on how both parties collaborate and integrate, and the effectiveness of the cooperation remains to be seen.
Miniso will not be the controlling shareholder or actual controller of Yonghui Supermarket
It is reported that the executives of Miniso stated during the evening's conference call that Miniso is not expected to control a majority of the board of directors. Therefore, Miniso will not act as the controlling shareholder or actual controller of Yonghui Supermarket, nor will it consolidate its financial statements. The investment income or loss that should be recognized will be calculated based on the shareholding ratio. The above transaction is expected to be completed in the first half of 2025.
Meanwhile, executives from Miniso stated that from a retail perspective, Miniso is optimistic about the prospects of Yonghui Supermarket's restructuring and believes that this business has a promising future; In addition, Yonghui Supermarket's current valuation is attractive, with a low premium on investment costs and a high safety margin. The executive mentioned that this investment will increase Miniso's use of liabilities in its capital structure and optimize Miniso's capital structure. If Yonghui Supermarket starts to make profits after the adjustment in the future, this investment will greatly optimize the return on investment of Miniso.
It is worth noting that Miniso has also targeted the supply chain of Yonghui Supermarket. Announcement reveals that Miniso has unique capabilities and experience in developing its own brand, design, and IP products. After the acquisition, Miniso can provide support to the target group through business cooperation. Yonghui Supermarket can leverage Miniso's advantages to develop higher quality domestic brand products at lower costs, which is expected to enhance Yonghui Supermarket's differentiated competitiveness. Yonghui Supermarket operates a total of approximately 850 stores, spread across more than 25 provinces and municipalities in China, and has established a huge store network and supply chain in China. Miniso and Yonghui Supermarket can share resources through business cooperation to further enhance economies of scale.
It is understood that in addition to resources such as supply chain and self owned brands, Miniso has invested in Yonghui Supermarket and hopes to achieve coordinated development, even creating a "Chinese version of Sam's Club".