bonbombluxpotsmegaways| A former supermarket giant, warning of delisting risks! Last year, the loss was nearly 500 million yuan and 22 stores were closed

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This Friday (April 19th), everyone is happy (002336Bonbombluxpotsmegaways.SZ) Trading is suspended for one day, and starting from next Monday, the company's shares will be subject to "delisting risk warning" and "other risk warnings", and the short name of the stock will be changed from "Renle" to "* ST".

According to the 2023 annual report, Renle achieved operating income of 2.853 billion yuan during the reporting period, down 28.15 percent from the same period last year, and the net profit and loss belonging to the shareholders of the parent company reached 498 million yuan. The company has lost money for three years in a row.

As a former supermarket giant, how did Renle get to this situation?

Risk warning of delisting will be implemented

On April 19, Renle disclosed its 2023 annual report. In 2023, the company achieved operating income of 2.853 billion yuan, down 28.15% from the same period last year; net profit loss of 498 million yuan, compared with 507 million yuan in the same period last year; deducting non-net profit loss of 579 million yuan, loss of 540 million yuan in the same period last year; net cash flow from operating activities was 209 million yuan, an increase of 35.83% over the same period last year; during the reporting period, Renle's basic earnings per share was-1.13 yuan.

According to the 2023 annual report, Renle du's audited net asset is about-387 million yuan. According to the listing rules of Shenzhen Stock Exchange, the company's shares will be delisted risk warning.

At the same time, according to the annual report for the past three years (2021-2023), Renle's audited net profit before and after deducting non-recurring profits and losses was about-795 million yuan,-540 million yuan and-579 million yuan, respectively. China Asia Pacific Accounting firm (Special General Partnership) issued financial report for 2023.BonbombluxpotsmegawaysThere is an unqualified opinion audit report with significant uncertainties related to continuing operations. According to the situation that "the net profit before and after deducting non-recurring profit and loss in the last three fiscal years is negative, and the audit report of the most recent year shows that there is uncertainty about the company's sustainable operating ability", the company's stock will be warned of other risks by the Shenzhen Stock Exchange.

As it touches on the implementation of delisting risk warning and other risk warnings for stocks at the same time, according to the relevant regulations, the Shenzhen Stock Exchange will implement a delisting risk warning for Renle shares, and the short name of the stock will be changed from "Renle" to "* ST".

Renle also suggested that if net assets cannot be positive by the end of 2024, the company's shares will be forced to be delisted.

Renle's main business is a commodity retail chain, which mainly includes Le supermarket, Le super, Le life, department stores and other physical formats as well as "Renxing Home" Mini Program and APP.

As of December 31, 2023, the company has opened 91 physical stores in Guangdong, Hunan, Xi'an, Guangxi, Fujian, Chengdu, Chongqing, Tianjin and other provinces, municipalities and autonomous regions. During the reporting period, the company closed 22 stores and did not open any new stores.

Of the 22 stores closed, 4 were not renewed because their contracts expired, 5 were transferred to other merchants, and the remaining 13 were closed due to long-term operating losses or failing to meet the needs of transformation.

The annual report also shows that eight of the top 10 stores by revenue are from Shaanxi Province, most of them are old stores that have been open for more than 10 years.

Renle has stood on the brink of delisting many times.

Renle, founded in 1996, has been known as the "three giants of Guangdong supermarkets" with China Resources Wanjia and Xinyijia supermarkets, and is a leader in China's retail industry. Renle was listed on the Shenzhen Stock Exchange in 2010, when its revenue exceeded 10 billion yuan and there were more than 100 stores nationwide. As a result, founder he Jinming briefly became the richest man in Jiangxi. But the good times didn't last long, with Renle losing money for the first time in 2012.

Photo source: screenshot of Renle's official website

Renle lost 461 million yuan in 2014 and 475 million yuan in 2015, and was warned of the risk of delisting in 2016. There were two consecutive years of net profit losses in 2017 and 2018, and Renle wore a hat for the second time (refers to the risk of stocks being warned of delisting). Since then, although through the sale of assets and other means to temporarily get rid of the delisting crisis, but Renle's business situation has not been fundamentally improved.

He Jinming, who retired in 2015, announced his return to the mountain and said that "everyone is happy now and will not be sold in the future." But in 2019, he Jinming transferred the company's controlling stake to Xi'an Qujiang Cultural Industry Investment (Group) Co., Ltd., and the actual controller was changed to Xi'an Qujiang New area Management Committee.

Renle is not the only one facing the problem of poor management.

On January 30, 2024, the leading retail enterprise in Hunan issued an announcement that the net profit loss attributed to the shareholders of the listed company in 2023 is expected to be 1.32 billion yuan to 1.96 billion yuan. At the same time, the company still has the risk of being declared bankrupt by the court because of restructuring failure. At the end of January this year, Yonghui supermarket issued a performance pre-loss announcement. Yonghui supermarket expects to return to its mother in 2023 with a net profit of-1.34 billion yuan, a year-on-year loss of 1.42 billion yuan. Yonghui supermarket lost 3.944 billion yuan in 2021 and 2.763 billion yuan in 2022.

Over the past year, there have been significant signs of recovery in the consumer market, but competition in the retail industry has also intensified, with a large number of supermarket chains closing stores to stop losses and shrinking to regional markets, even listed companies. At the beginning of 2024, the China chain Management Association conducted a survey on the operation of 43 sample enterprises of regional chain supermarkets in 2023. According to the statistical results, regional chain supermarkets are still facing greater development pressure in 2023. The key indicators (except the number of customers from stores) to achieve year-on-year growth of less than 50%. The development strategy of more than half of the enterprises has changed from the consolidation of the existing market in 2023 to the deep ploughing regional market in 2024.

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