First loss in nearly 34 years since listing: How can "Old Eight-Stock" Yu Garden Corporation break free from the performance "quagmire"?

Ask AI · Is Yu Yuan Corporation’s loss related to the deep adjustment of the real estate industry?

Reporters Fang Chao and Shi Qingjing from China Economic Journal, Shanghai

Revenue decline, profit pressure, one of the “Old Eight Stocks” Yu Yuan Corporation (600655.SH) has delivered its first loss since going public nearly 34 years ago.

Yu Yuan Corporation recently released its 2025 annual report, which shows that during the reporting period, Yu Yuan achieved operating revenue of 36.37B yuan, a year-on-year decrease of 22.49%; net profit attributable to the parent was a loss of 4.9B yuan, a significant decline of 4009.26% year-on-year.

Regarding the reasons for the huge loss in 2025, Yu Yuan Corporation explained that it was mainly due to a decrease in investment income from disposal of non-core assets during the reporting period and an increase in asset impairment provisions for some real estate projects, resulting from comprehensive factors.

In the future, how will Yu Yuan reverse the decline in revenue in sectors such as industrial operations and commercial integrated operations? How to break out of the quagmire of large net profit losses? In response, a relevant staff member from Yu Yuan’s securities department told the China Business Journal on April 1: “First, we need to ‘shed burdens,’ then accelerate inventory clearance and capital recovery, and then consider ‘what to do next’.”

Nearly 4.9 Billion Yuan Loss in 2025

Yu Yuan Corporation, known as the “Number One Chinese Commercial Stock,” was formerly Yu Yuan Mall, one of the “Old Eight Stocks.” It was approved in 1987 as the first joint-stock enterprise in Shanghai’s commercial system. On September 2, 1992, it merged with 14 units and was listed on A-shares. In 2002, Fosun Group acquired a 20% stake in Yu Yuan, becoming the largest shareholder. In 2018, after completing major asset restructuring, Yu Yuan became the flagship platform of Fosun’s “Happy Industry.”

“After completing the mixed-ownership reform, Yu Yuan gained new development momentum: firstly, the mechanism became more flexible; after Fosun became the largest shareholder, it introduced flexible mechanisms and advanced concepts from the private economy, quickly helping Yu Yuan improve its modern corporate governance system and effectively activate operational management,” a Yu Yuan official previously stated.

However, in the past year of 2025, Yu Yuan experienced its first loss in nearly 34 years of listing.

Financial data shows that in 2025, Yu Yuan achieved operating revenue of 36.37B yuan, down 22.49% year-on-year; net profit attributable to the parent was -4.9B yuan, a sharp decline of 4009.26%; net profit after deducting non-recurring gains and losses was -4.1B yuan, down 94.38% year-on-year.

Regarding the nearly 4.9 billion yuan loss, a Yu Yuan official recently stated that the company conducted year-end impairment tests on relevant assets according to accounting standards, and after evaluation and analysis, provisions for asset impairment were made for some real estate projects and goodwill.

“Due to the ongoing deep adjustment and downward trend in the real estate industry, the company has dynamically optimized sales strategies, accelerated inventory clearance and capital recovery, which has led to a decline in the profitability of its complex functional real estate business,” the official further explained. “Under the influence of macroeconomic pressure, industry policy adjustments, and sharp fluctuations in gold prices, structural changes in the consumer sector have caused short-term pressure on related industrial sectors.”

In fact, as early as 2023, Yu Yuan’s net profit attributable to the parent had already entered a downward trend.

Wind data shows that in 2023, Yu Yuan achieved revenue of 58.15B yuan, an increase of 15.83% year-on-year; but net profit attributable to the parent was 2.02B yuan, down 45%; net profit after deducting non-recurring gains and losses was -451 million yuan, a large decrease of 378.96%. In 2024, Yu Yuan’s net profit after deducting non-recurring gains and losses was -2.11B yuan, again a significant decline of 367.43%.

“During the reporting period (2024), affected by macroeconomic factors and structural adjustments in the consumer industry, domestic consumption growth was weak, compounded by increased volatility in international gold prices, impacting related consumer enterprises,” a Yu Yuan official previously told reporters.

It is noteworthy that, facing the decline in performance in 2024, Yu Yuan set a performance target for 2025 in its 2024 annual report: “Based on preliminary estimates, the company plans to achieve operating revenue of 50.5 billion yuan in 2025.”

However, based on the final performance, Yu Yuan did not meet this target and instead fell into a quagmire of losses.

What About the Outlook for Expanding Overseas?

Data from the 2025 annual report shows that most of Yu Yuan’s jewelry, fashion, catering, cosmetics, watch, and real estate businesses are in decline.

Industry-wise, Yu Yuan’s main businesses include industrial operations, commercial integrated operations, property management services, and property development and sales. In 2025, revenue from all three major sectors declined, with decreases of 23.41%, 20.79%, and 19.82%, respectively.

Among these, the industrial operations sector, including jewelry fashion and catering management and services, is Yu Yuan’s core segment. However, among the eight sub-businesses listed in the 2025 annual report, only “Pharmaceutical and Healthcare and Other Businesses” saw a year-on-year revenue increase of 7.53%, while all others declined. Jewelry fashion alone generated about 22.73 billion yuan in revenue in 2025, down 24.2% year-on-year.

“In 2025, gold prices fluctuated sharply, which had a significant impact on our brands, including Lao Miao Gold. Consumer willingness to buy was not as strong,” a Yu Yuan securities official told reporters.

As the core business, the jewelry fashion segment owns two chain brands, “Lao Miao Gold” and “Ya Yi Gold Store,” but the number of closed stores increased significantly. The 2025 annual report shows that by the end of 2025, the chain outlets for “Lao Miao Gold” and “Ya Yi Gold Store” totaled 3,952, a reduction of 663 stores from 2024.

Similarly, Yu Yuan’s property development and sales business is also under pressure. Data shows that in 2025, revenue from property development and sales was 8.05 billion yuan, down 19.8% year-on-year.

In response, Yu Yuan explained that due to overall market transaction volume shrinking, prices continuing to fall, and increased pressure to clear inventories, the company made asset impairment provisions for some real estate projects showing signs of impairment, further intensifying the performance pressure in this sector, which became one of the main areas contributing to the company’s losses during the reporting period.

Despite the revenue decline, Yu Yuan is still exploring new opportunities in real estate. A relevant official recently stated that the real estate business will leverage the “Feilun Model” of Fudi to stimulate urban renewal markets, using sector structure optimization to hedge against industry cycle fluctuations.

Additionally, Yu Yuan is further increasing its efforts to go overseas. A company official said at the earnings presentation that in 2025, the company achieved a significant breakthrough in globalization—overseas revenue reached 940 million yuan, a substantial increase, making overseas business an important future growth engine.

However, Wind data shows that in 2025, Yu Yuan’s overseas revenue decreased by 25.89% year-on-year across regions. In 2024, overseas revenue was 1.27B yuan, down 17.36% year-on-year.

“In the context of complex geopolitical situations and increasing global trade uncertainties, the company has adopted a series of strategies to balance risk prevention and brand internationalization,” a Yu Yuan official said. “We are leveraging cultural ecosystems like the Lantern Festival to enhance brand influence and improve overseas profitability.”

(Edited by Zhang Jiazhen, reviewed by Tong Haihua, proofread by Liu Jun)