About Sun Art Retail Group Limited
Sun Art is a leading retailer with hypermarket and omni-channel e-commerce businesses in China. Sun Art operates its business with hypermarkets and superstores under “RT-Mart” and “RT-Super”. As of 31 March 2026, Sun Art had a total of 462 hypermarkets, 34 superstores and six membership stores in China with a total gross floor area (“GFA”) of approximately 13.39 million square meters, covering 207 cities across 29 provinces, autonomous regions and municipalities. The Group has long been committed to value-for-money offerings and takes health and happiness as its core customer value. It provides a one-stop shopping experience featuring diverse, safe, affordable, fresh, tasty and trendy goods. The Group strives to become life service centers, a trusted community neighbor and a trustworthy shopping partner of customers.
As of 31 March 2026, DCP Capital Partners II, L.P. indirectly controls 79.15% of the issued share capital of Sun Art Retail Group Limited (the “Group”) and therefore has become the ultimate controlling shareholder of the Group.
Sun Art Retail Group will leverage its integrated online and offline expertise to explore growth opportunities in China’s retail sector, positioning itself as an innovation driver as well as industry leader and benchmark for retail excellence.
Strategic Advancement & Business Performance
Strategic Advancement
The Group has optimized and upgraded the structure of core business segments. The new framework is designed to build an agile and collaborative organization that stays closely aligned with market dynamics and supports the smooth implementation of the Group’s strategy.
The Group has systematically revamped core merchandise capabilities, and realigned existing procurement functions into two major nationwide divisions for general merchandise and fresh food, steering merchandise management toward nationwide integration and a flattened organizational structure. Brand public relations and marketing teams were consolidated and upgraded into the Commercial Operations Department, connecting online and offline omni-channel businesses through annual strategic guidelines and monthly promotional calendars & themed campaigns.
Business Progress & Key Highlights
Fresh Food Business Delivers Solid Performance, with Upgraded Supply Chain Strengthening Core Competitiveness
Fresh food business maintained resilient performance throughout the fiscal year, achieving year-on-year growth in both sales and profit. Overall sales volume rose by nearly 3%, units per transaction increased by 1.2%, and gross margin improved by 0.8 percentage points. Meanwhile, fresh food business penetration exceeded 40%, up 1.0 percentage point year-on-year. Vegetables and meat were standout categories, greatly enhancing customer loyalty. Operations are driven by clear category positioning: vegetables serve as traffic drivers, fruits lift ticket size, seafood creates differentiated advantages, and meat solidifies customer retention.
The Group rolled out the national joint procurement program for self-operated pork category in September 2025. From January to March 2026, like for like (LFL) sales volume of self-operated pork across the country increased by more than 20% year-on-year. East China and North China withstood CPI volatility and delivered positive LFL revenue growth. The Group’s national joint procurement model has created a true win-win-win. Suppliers focus on core businesses through in-depth strategic partnerships to drive sustained market share growth. The Group secures premium supply chain resources, improved product quality, faster delivery to the market, and stronger promotional support, driving steady growth in both sales and profits. Consumers can purchase premium, high value-for-money products and gain early access to new product launches.
In the new fiscal year, fresh food division will focus on high-efficiency traffic acquisition as its core strategy. It will build a business model characterized by popularity, seasonality and local features, explore consumer needs in depth, continue to lift repeat purchase rate and consolidate long-term competitiveness. The Group will further expand category coverage of national joint procurement. The sales contribution of joint procurement will rise to nearly 30% in fresh food and 60% in FMCG respectively, to further optimize procurement costs and elevate overall product quality.
Deepening Brand Cooperation, Complemented by Private Brand Advancement, to Forge Differentiated Merchandise Edges
The Group has deepened strategic partnerships with leading brands to enrich merchandise portfolio via customized product development and new product premier launches. Simultaneously, the Group has also steadily advanced private brand development to boost differentiated merchandise advantages via dual strategies.
During the reporting period, the Group’s private brand business achieved rapid expansion, with sales surging over 60% year-on-year. In March 2026, private brand sales penetration reached 3.2%, successfully meeting the annual target. The penetration target will be lifted to 5% in the new fiscal year. The Group currently features two core private brand tiers: RT-Mart Select and Super Saver. RT-Mart Select focuses on differentiation and quality-to-value, serving as the core gross profit contributor. Super Saver concentrates on extreme value and price competitiveness to drive order and sales growth. Going forward, the overall gross margin of private brands will post steady improvement through continuous sales mix optimization across both brand tiers.
Private brands feature a high-quality customer portfolio and outstanding customer stickiness. Family shoppers aged 30 to 49 contribute more than 60% of total sales. The repeat purchase rate leads all age groups and registers steady growth, validating the precision of our product development strategy. Customer purchase activity has increased significantly, with the overall repeat purchase rate up 4.5 percentage points year-on-year. Drawing on in-depth consumer insights and targeted product positioning, private brands prioritize health, safety and premium sourcing for fresh offerings, launching high-quality and functional product lines. In FMCG, the Group is closely tracking evolving consumer trends, building competitive moats through clean-label formulations, regional authenticity, organic wellness attributes, and craftsmanship innovation, driving repeat purchases and enhance brand value.
The Group's core strategy focuses on brand revitalization, category restructuring, science-backed pricing, differentiated product development, and scenario-based merchandising. With multidimensional cooperation with premium brands, it leverages brand resources to enrich product offerings and strengthen quality assurance. At the same time, the Group is elevating its private label strategy from price-based competition to quality-based competition, continuously optimizing the gross profit structure and creating a hit product matrix.
Supermarket Format Delivers Proven Model, Driving Both Quality and Efficiency Gains
During the reporting period, the supermarket expanded steadily, with 34 stores in operation including 3 new openings during the year. Stores average approximately 2,800 square meters, feature around 8,000 curated SKUs, and boast a streamlined, efficient layout that is closely aligned with customer demand. The category strategy reinforces the Group's strengths in fresh food, with fresh produce accounting for 35% of sales, notably higher than in hypermarkets. Supported by an optimized product mix and enhanced by high-margin categories such as private brands and bakery, the supermarket format delivers a stronger gross margin performance than the hypermarket format.
Supermarket online sales penetration reached 31%, with same-store sales growth of approximately 15% and same-store order growth of around 25% for the reporting period. Online average ticket size remains notably higher than offline, and continued online expansion is steadily driving improved profitability.
Meanwhile, the Group has optimized its workforce structure, with flexible staffing accounting for nearly 40% Note1. This has efficiently managed personnel costs and tightly controlled operating expenses while maintaining service quality. In fiscal year ended 31 March 2026, the supermarket format successfully turned cash flow positive, further strengthening its operational quality, earnings resilience, and long-term foundation.
Accelerated Deployment of Front Warehouses to Build a New Growth Engine for Online Business
During the reporting period, the Group accelerated the deployment of front warehouses. By the end of the reporting period, 9 front warehouses were in operation, with 7 new openings added during the fiscal year. Each front warehouse covers approximately 500 square meters, with a capital expenditure of around RMB400,000, and offers approximately 6,000 SKUs, with an assortment depth comparable to that of the supermarket format.
As an effective extension of the hypermarket format, front warehouses serve trade areas within a 3–5 km radius and beyond surrounding hypermarkets, fulfilling orders across all online channels. Compared with the high fulfillment costs of long-distance delivery from hypermarkets, the front warehouse model effectively dilutes overall online operating expenses, significantly improves delivery efficiency, and optimizes the cost structure.
In terms of product mix, fresh food, dairy and chilled & frozen categories generate approximately 50% of sales. This strongly builds consumer perception of high-frequency, daily essentials, one-stop meal shopping, and freshness and reliability. This continuously lifts customer stickiness and repurchase frequency, and will serve as a key growth pillar of the Group’s online business.
Note 1: Based on the report dated March 31, 2026.
