Author | Zheng Qiao. After a series of unsuccessful attempts, Ke Holdings finally succeeded in acquiring land in the land auction market. On July 30th, Xi'an Jiajia Zhihe Real Estate Co., Ltd. won two plots of land in the core sector of the second ring road in Xi'an, with a total transaction price of 0.134 billion yuan. The plot numbers are WY10-9-177-1 and WY10-9-177-2. The controlling shareholder of the company is Beihaojia (Xi'an) Real Estate Development Co., Ltd., a residential development service platform established by Ke Holdings in July 2023.

In today's weather is good. Today's weather is good.

A retailer selling household sundries set its eyes on traditional chain supermarkets, and miniso began to venture into cross-border activities.

On the evening of September 23rd, miniso announced on the Hong Kong Stock Exchange that it plans to acquire 29.4% of yonghui superstores' equity for 6.27 billion yuan, including 21.1% held by yonghui superstores' original shareholder Milk Company and 8.3% held by jd.com.

If the transaction is successfully completed, miniso will become the largest shareholder of yonghui superstores. The management of miniso also hopes to use this opportunity to create a "Chinese version of Sam's Club".

The capital markets' response to this acquisition has shown a polarized state. On one hand, yonghui superstores' stock price quickly hit the limit up after the opening, while on the other hand, miniso plummeted by 19.5% when the US stock market opened, with a total market value evaporating approximately $0.85 billion (around 6 billion yuan), leaving investors perplexed.

"It's good if everyone doesn't understand, if everyone understood, then I wouldn't have a chance." Miniso's founder, Ye Guofu, expressed on his social media.

Ye Guofu has already shown interest in Yonghui Superstores.

He has visited Yonghui stores transformed by Pandawel multiple times. At the end of July 24, Ye Guofu went to Zhengzhou, Henan, to visit the first Yonghui store assisted by Pandawel for adjustments. Even in this usually less crowded time on Thursday afternoon, the store was still crowded, which made Ye Guofu very excited. In August, he visited Henan again for inspection.

Earlier, Yonghui Superstores introduced Pandawel in a high-profile manner for store adjustments and transformations. On August 31, the first Yonghui Superstore in the country to mimic the 'Pandawel store' for self-adjustment - located in Yonghui Supermarket in Zhongmao Plaza, Xi'an, Shaanxi, officially reopened after closing for adjustments. Data shows that the store had a daily sales volume of approximately 0.2 million yuan before the adjustment, with a daily customer flow of about 3,000 people; after the adjustment, the store's customer flow surged to over 0.014 million people, and the first day's sales reached 1.5143 million yuan.

In Ye Guofu's view, Chinese offline supermarkets are facing a once-in-twenty-years structural opportunity, and he believes, 'The Pandawel model is the only way out for Chinese supermarkets.'

Miniso mentioned that the Pandawel model has sparked a major transformation in the Chinese commercial retail industry, and Yonghui Superstores, after adjustments by Pandawel, have achieved breakthroughs in sales, customer flow, and other dimensions. As a rapidly globalizing Chinese retail brand, the collaboration between Miniso and Yonghui Supermarkets is expected to create the 'Chinese version of Sam's Club.'

Yonghui was once hailed as the 'King of Chinese Supermarkets,' with a peak of 1440 stores. However, the current operational situation of Yonghui is not optimistic. According to Yonghui Supermarket's semi-annual report disclosed on August 23, the company achieved revenue of 37.779 billion yuan in the first half of 2024, a year-on-year decrease of 10.11%; the net income was 0.275 billion yuan, a year-on-year decrease of 26.34%.

In the first eight months of 2024, Yonghui closed 136 stores, including 63 closures in the first half of the year, meaning that Yonghui closed 73 stores in just July and August.

In contrast, the performance of Miniso in 2024 is particularly noteworthy. In March, products jointly developed by Miniso and Chiikawa were launched in the domestic market, quickly causing a sensation on social networks. Young people lined up overnight with small stools to buy products, and the three-day appointment quota was sold out in just 2 minutes.

According to the financial report, Miniso's revenue in the first half of 2024 was 7.759 billion yuan (1.068 billion US dollars), an increase of 25% compared to the same period last year; operating profit in the first half was 1.495 billion yuan (about 0.206 billion US dollars), a year-on-year increase of 18.1%.

Adequate cash flow has given Miniso confidence. Zhang Jingjing emphasized that the 6.27 billion yuan required by the exchange is well supported by Miniso's resources for payment.

Ye Guofu also showed great confidence in the future of the retail industry in China. He pointed out at the investor conference on September 23 that Yonghui is an underestimated investment in the market and is expected to drive Miniso's profit growth. He also emphasized that the acquisition will not change Miniso's strategic direction in the next five years. The company will continue to focus on product innovation, IP strategy, cost performance, and globalization, aiming to achieve a revenue growth of over 20% per year, with EPS growth exceeding revenue growth.

"In the top 1000 shopping malls nationwide, our effective coverage rate is still not high enough. Yonghui Supermarkets have occupied many excellent positions nationwide. With the successful adjustment and transformation of Yonghui, it will become the main brand attracting customer traffic in commercial real estate. Miniso can leverage Yonghui's advantage to upgrade our channels, open stores together with Yonghui, obtain the best positions in similar formats in more commercial properties, and help MINISO's brand for continued success."

Miniso also stated that after entering Yonghui, it can help optimize Yonghui Supermarkets' current governance structure, leverage the integrated advantages of both parties in channels and supply chains, and create greater value for consumers.

Some industry insiders believe that Yonghui Supermarkets has been planning to sell equity for some time. The previous cooperation and adjustment of store layout with JD.com is partly to improve the operational efficiency of stores and likely to enhance its own commercial value. This will be beneficial for Yonghui Supermarkets' capital operation.

Although the market is cautious about this acquisition, Ye Guofu is full of confidence in the future of the retail industry in China and seems to have planned well for Miniso's expansion. Whether they can truly achieve the goal of the 'Chinese version of Sam's Club' remains to be tested by the market and time.