Revenue declines and profit pressures: How can the "old tricks" of Yuyuan Group break free from the performance "quagmire"?

@中经记者@ 方超 石英婧 上海报道

Revenue declined and profit faced pressure. Yuyuan Co., Ltd. (600655.SH)—one of the “Old Eight Shares”—has delivered its first loss-making financial report in nearly 34 years since listing.

Yuyuan Co., Ltd.’s 2025 annual report released earlier shows that, for the reporting period, the company achieved operating revenue of RMB 36.37B, down 22.49% year over year; net profit attributable to shareholders was a loss of RMB 4.9B, down sharply by 4,009.26% year over year.

Regarding the reasons for the large loss in 2025, Yuyuan Co., Ltd. explained that it was mainly due to a year-over-year decrease in investment gains arising from the disposal of non-core asset projects during the reporting period, as well as a year-over-year increase in asset impairment provisions made by the company for some real estate projects.

In the future, how will Yuyuan Co., Ltd. reverse the revenue decline across segments such as industrial operations and commercial integrated operations? How will it pull itself out of the “quagmire” of a massive decline in net profit? In response, on April 1, relevant staff from Yuyuan Co., Ltd.’s securities department told reporters from the China Business News: “First, it’s necessary to ‘take off the burden,’ then accelerate inventory sell-through and ensure cash is coming back, and only then consider the question of ‘what to do next.’”

A near-RMB 4.9 billion loss in 2025

Yuyuan Co., Ltd. is known as the “No. 1 Chinese commercial listed company.” Its predecessor was Yuyuan Shopping Mall. It was one of the “Old Eight Shares.” Approved in 1987 to become the first shareholding-system enterprise in Shanghai’s commercial system, it absorbed and merged 14 units on September 2, 1992, and achieved A-share listing. In 2002, Fosun Group obtained a 20% stake in Yuyuan Co., Ltd., becoming the largest shareholder. In 2018, after completing a major asset restructuring, Yuyuan Co., Ltd. became the flagship platform of Fosun Group’s “Joyful Industries” within the group.

“After completing the mixed-ownership reform, Yuyuan Co., Ltd. once again gained new momentum for development. First, the mechanisms became more flexible. After Fosun Group became the largest shareholder of Yuyuan Co., Ltd., it introduced flexible mechanisms and advanced concepts from the private economy, which quickly helped Yuyuan Co., Ltd. improve its modern corporate governance system and effectively activated the driving force behind business management.” A relevant executive of Yuyuan Co., Ltd. said previously.

However, during the past year of 2025, Yuyuan Co., Ltd. experienced its first loss since nearly 34 years of being listed.

Financial data shows that in 2025, Yuyuan Co., Ltd. achieved operating revenue of RMB 36.37B, down 22.49% year over year; net profit attributable to shareholders was -RMB 4.9B, down sharply by 4,009.26%; and net profit after excluding non-recurring items was -RMB 4.1B, down 94.38% year over year.

Regarding the reason for the near-RMB 4.9 billion loss, a relevant executive of Yuyuan Co., Ltd. said earlier that, in accordance with accounting standards, the company performed year-end impairment tests on the relevant assets. After assessment and analysis, it made asset impairment provisions for some real estate projects, goodwill, and so on.

“The company dynamically optimized its sales strategy, accelerated inventory sell-through and cash repatriation, which has led to a decline in the profitability of the company’s composite-function real estate business.” The executive further stated, “Affected by macroeconomic pressure, industry policy adjustments, and sharp fluctuations in gold prices, among other factors, structural changes in the consumer sector have put short-term pressure on the company’s related industrial segments.”

In fact, as early as 2023, Yuyuan Co., Ltd.’s net profit attributable to shareholders had already entered a downward channel.

Wind data shows that in 2023, Yuyuan Co., Ltd. recorded revenue of RMB 58.15B, up 15.83% year over year; but net profit attributable to shareholders was RMB 2.02B, down 45% year over year. Net profit after excluding non-recurring items was -RMB 451M, down sharply by 378.96% year over year. In 2024, Yuyuan Co., Ltd.’s net profit after excluding non-recurring items was -RMB 2.11B, again declining sharply by 367.43% year over year.

“During the reporting period (2024), due to the impact of the macroeconomic environment and structural adjustments in the consumer industry, domestic consumer growth was weak, and in addition, turbulence in international gold prices intensified, affecting relevant consumer companies as well.” A relevant executive of Yuyuan Co., Ltd. told reporters earlier.

It is worth noting that, in the face of the 2024 performance downturn, Yuyuan Co., Ltd. set performance targets for 2025 in its 2024 annual report: “Based on an initial budget, the company plans to achieve operating revenue of RMB 50.5 billion in 2025.”

Judging by the final performance, Yuyuan Co., Ltd. did not achieve the above target and instead fell into the “quagmire” of performance losses.

What does the overseas expansion outlook look like?

Yuyuan Co., Ltd.’s 2025 annual report shows that most businesses such as jewelry and fashion, catering, cosmetics, watches and real estate are in a downward channel.

By industry, Yuyuan Co., Ltd.’s main businesses include industrial operations, commercial integrated operations and property integrated services, and property development and sales. In 2025, revenue across all three business segments of Yuyuan Co., Ltd. fell across the board, with declines of 23.41%, 20.79%, and 19.82%, respectively.

Among them, the industrial operations segment—including businesses such as jewelry and fashion, catering management and services—is Yuyuan Co., Ltd.’s core segment. However, among the eight subdivided business categories listed in Yuyuan Co., Ltd.’s 2025 annual report, only “medical and health and other businesses” saw revenue increase by 7.53% year over year; the revenue of the other businesses all showed a downward trend. Specifically, the jewelry and fashion business achieved operating revenue of about RMB 22.73 billion in 2025, down 24.2% year over year.

“In 2025, gold prices fluctuated dramatically, which had a major impact on our brands, including Laomiao Gold. Consumers’ willingness to purchase is not that strong.” A relevant executive from Yuyuan Co., Ltd.’s securities department told reporters.

As a core business, Yuyuan Co., Ltd.’s jewelry and fashion segment has two chain brand names: “Laomiao Gold” and “Yayi Gold Stores.” But the number of stores closing increased significantly. Yuyuan Co., Ltd.’s 2025 annual report shows that, as of the end of 2025, the number of chain outlets for the “Laomiao Gold” and “Yayi Gold Stores” brands was 3,952, down 663 from 2024.

Similarly, Yuyuan Co., Ltd.’s property development and sales business is also under pressure. Relevant data shows that in 2025, revenue from Yuyuan Co., Ltd.’s property development and sales business was RMB 8.05 billion, down 19.8% year over year.

In this regard, Yuyuan Co., Ltd. explained that, affected by an overall contraction in market transaction volume, continuous price declines, and increased inventory sell-through pressure, the company made asset impairment provisions for some real estate projects that showed impairment indicators, further intensifying performance pressure on the segment. This segment became one of the main areas driving the company’s performance loss during the reporting period.

It is understood that although Yuyuan Co., Ltd. faces pressure from declining revenue, the company is still exploring new opportunities in the real estate segment. A relevant executive of Yuyuan Co., Ltd. said earlier that the real estate business will use Vanke? “Flying Wheel Mode” to leverage the city renewal market, and hedge against single-industry cycle fluctuations through track structure optimization.

In addition, Yuyuan Co., Ltd. is further increasing its efforts in overseas expansion. A relevant executive of Yuyuan Co., Ltd. said at an earnings briefing meeting earlier that in 2025, the company achieved an important “0-to-1 breakthrough” in global development. “Overseas revenue reached RMB 940 million, achieving a substantial increase, and overseas business has become an important engine for future growth.”

However, Wind data shows that in 2025, by region, Yuyuan Co., Ltd.’s overseas revenue decreased by 25.89% year over year. In 2024, overseas revenue was RMB 1.27B, down 17.36% year over year.

“Against the backdrop of complicated geopolitical conditions and increased uncertainty in global trade, the company adopted a series of strategies to balance risk prevention and brand overseas expansion.” A relevant executive of Yuyuan Co., Ltd. said that the company drives brand enhancement through a cultural ecosystem led by Yuyuan Lantern Festival, while also expanding the profitability space of overseas business.

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