Chinese retailer Miniso (9896) plunged 23.9 percent in Hong Kong yesterday after it unveiled plans to buy a stake in embattled Yonghui Superstores.
Miniso's stock closed at HK$25.05, its lowest since January 2023 after the company revealed it would take a 29.4 percent stake in Yonghui for 6.3 billion yuan (HK$6.97 billion).
Miniso founder and chief executive Ye Guofu said China's offline supermarkets are facing a "once-in-20-years structural opportunity" and Pangdonglai's style of doing business remains "the only way out for them."
Pangdonglai, a small Chinese retailer headquartered in Henan, announced in the first half that it will help Yonghui by adjusting business models in its superstores.Miniso's chief financial officer Zhang Jingjing said that from a retail perspective, Miniso is bullish on the prospects of Yonghui Superstores under the Pangdonglai model.
Compared with Sam's and Costco, the similarity of the Pangdonglai model is its high emphasis on product quality. The difference is that there is a greater emphasis on customer experience, respect for employees and no membership, he said.Miniso's US-listed shares saw their price slump by as much as 19.9 percent on Monday before closing at US$13.72 apiece, a decrease of 16.6 percent.
Financial services company Jefferies downgraded the stock rating for Miniso from buy to hold. The firm also slashed Miniso's target price to HK$29.1 from its previous HK$61.9.Tmall will offer 30 billion yuan worth of shopping coupons during the Double 11 festival and help attract traffic for merchants and decrease logistic costs for sellers by 20 percent.
In other news, Alibaba-controlled hypermarket operator Sun Art Retail (6808) climbed 17 percent in the stock market yesterday.
