UNTIL recently, China’s budget retail billionaire Ye Guofu had been on a roll, building his fortune as his stores proved a hit in the nation’s slowing economy.
Then his Miniso Group Holding announced a surprise bid to acquire a majority stake in struggling mega-supermarket Yonghui Superstores for 6.3 billion yuan (S$1.2 billion).
Miniso said in a filing to the Hong Kong Stock Exchange that it was acquiring nearly 2.7 billion shares amounting to a 29.4 per cent stake in Yonghui for a total consideration of 6.3 billion yuan. Ye’s fortune tumbled US$593 million, according to the Bloomberg Billionaires Index, after the move spooked investors and sent its New York-listed stock down a record 17 per cent on Monday (Sep 23) and a further 2.3 per cent on Tuesday. That came even as markets on the mainland and in Hong Kong soared on massive stimulus announced by Chinese officials.
“The Chinese economy and the Chinese consumer is not exactly on the front foot,” said Neil Saunders, an analyst at GlobalData. “So I think there’s just a lot of doubts swirling about exactly how they are gonna generate a return over this.”
That left Ye with a net worth of US$2.9 billion, a roughly US$4 billion drop from his peak in February 2021. Back then, owners of budget stores in Asia such as Ye amassed billions of US dollars in wealth as customers looking for bargains flocked to their stores.
The majority of his fortune comes from his stake in Miniso, a retail chain that sells low-cost household goods and electronic gadgets. The Guangzhou-based company is listed in New York and had revenue of 11.5 billion yuan in the year to June 2023.
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