(Yicai) Jan. 15 -- Shares of Yonghui Superstores dropped after the Chinese supermarket giant said its net loss likely widened 12 percent last year because of poor management and ongoing operational changes.

Yonghui [SHA: 601933] closed 4.4 percent down at CNY5.68 (77 US cents) in Shanghai today.

Net loss after deducting non-recurring gains and losses is expected to have exceeded CNY2.2 billion (USD301.4 million) in the 12 months ended Dec. 31, compared with CNY2 billion a year earlier, the Fuzhou-based company said in its annual earnings forecast yesterday.

Yonghui’s operating performance last year did not improve much from the year before, and its strategic and operational model transformations in the second half impacted profitability, the firm added.

As of Dec. 31, Yonghui had completed the adjustment and renovation of 31 supermarkets. Even though the outlets have seen a rapid increase in traffic, the new operational model requires a large investment in terms of personnel and resources at the initial stage.

Yonghui set a target to adjust and renovate between 40 to 50 supermarkets by Chinese New Year late this month.

Yonghui has recently taken proactive measures to learn from Chinese supermarket brand Pangdonglai, which became popular for its care for employees and thoughtful customer service.

On Jan. 10, Yonghui opened its first Pangdonglai-inspired superstore in Shanghai. However, the company’s 700 supermarkets across 40 Chinese cities still have much to learn from Pangdonglai, Vice President Wang Shoucheng said.

Editor: Futura Costaglione