20-F: Yunji Inc. Reports Financials Amid Revenue Decline

Yunji Inc. filed its annual report on Form 20-F for the fiscal year ended December 31, 2025, detailing a continued revenue decline and net loss.

Summary

• Yunji Inc. reported total revenues of RMB 317.0 million (US$45.3 million) for the fiscal year ended December 31, 2025, a decrease of 24.1% from RMB 417.7 million in 2024.
• The company experienced a net loss of RMB 133.3 million (US$19.1 million) in 2025, an increase from a net loss of RMB 123.1 million in 2024.
• Revenue from the sale of merchandise, net, decreased by 18.9% to RMB 268.1 million (US$38.3 million), while marketplace revenue saw a significant drop of 41.4% to RMB 46.6 million (US$6.7 million).
• Operating cost and expenses decreased by 16.5% to RMB 468.0 million (US$66.9 million), primarily due to reductions in fulfillment, technology, and content expenses.
• Sales and marketing expenses increased by 5.9% to RMB 102.7 million (US$14.7 million), driven by increased personnel costs and depreciation.
• The company's average spending per buyer decreased from RMB 901 in 2024 to RMB 843 in 2025.
• Yunji Inc. had cash, cash equivalents, and restricted cash totaling RMB 132.4 million (US$18.9 million) as of December 31, 2025.
• The company is continuing construction on a new office building in Hangzhou, with capital expenditures of RMB 68.8 million (US$9.8 million) in 2025.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the significant revenue decline, increased net loss, and rising sales and marketing expenses relative to revenue, indicating ongoing financial challenges.

Positives

• Total operating cost and expenses decreased by 16.5% to RMB 468.0 million (US$66.9 million) in 2025.
• Cost of revenues decreased by 16.6% to RMB 176.2 million (US$25.2 million) in 2025.
• Fulfillment expenses decreased significantly by 55.5% to RMB 33.9 million (US$4.9 million) in 2025.
• Technology and content expenses decreased by 38.0% to RMB 28.3 million (US$4.0 million) in 2025.
• General and administrative expenses decreased by 2.7% to RMB 126.9 million (US$18.1 million) in 2025.
• Financial income, net, increased to RMB 9.4 million (US$1.3 million) in 2025 from RMB 17.3 million in 2024, indicating improved financial management or investment returns.
• The company has a substantial cash balance of RMB 132.4 million (US$18.9 million) as of December 31, 2025, providing liquidity.
• The company is actively investing in its future with ongoing construction of a new office building.

Negatives

• Total revenues decreased by 24.1% to RMB 317.0 million (US$45.3 million) in 2025.
• Net loss increased to RMB 133.3 million (US$19.1 million) in 2025 from RMB 123.1 million in 2024.
• Revenue from sale of merchandise, net, decreased by 18.9% to RMB 268.1 million (US$38.3 million).
• Marketplace revenue decreased by 41.4% to RMB 46.6 million (US$6.7 million).
• Average spending per buyer decreased from RMB 901 in 2024 to RMB 843 in 2025.
• Sales and marketing expenses increased by 5.9% to RMB 102.7 million (US$14.7 million), despite declining revenues.
• General and administrative expenses, as a percentage of total revenues, increased significantly to 40.0% in 2025.
• The company has experienced net losses and negative operating cash flow for multiple consecutive years.

Risks

• The company has experienced declining revenues, negative operating cash flow, and net losses since 2018, and cannot assure that its financial performance will improve in the future.
• Failure to maintain membership loyalty or generate membership growth, or failure to maintain member relationships effectively and retain existing members, could materially and adversely affect the business and operating results.
• The company faces intense competition and may lose market share and users if it fails to compete effectively.
• The company's business operations are primarily conducted in China and are subject to complex and evolving PRC laws and regulations, including potential government actions that could affect its ability to conduct business or maintain its listing status.
• The company's reliance on contractual arrangements with its VIE structure carries significant legal and regulatory risks, including the possibility of PRC government intervention or changes in interpretation of laws.
• The company's ADSs may be prohibited from trading in the United States under the HFCAA if the PCAOB is unable to inspect auditors located in mainland China and Hong Kong.
• Cash transfers from PRC subsidiaries to entities outside mainland China are subject to PRC government controls on currency conversion, which could limit the company's ability to utilize its revenues effectively.
• The company may fail to meet Nasdaq Capital Market continued listing requirements, which could lead to delisting of its ADSs.
• The company is likely to be classified as a passive foreign investment company (PFIC) for U.S. federal income tax purposes, which could result in adverse tax consequences for U.S. Holders.

Future Outlook

The company's outlook appears challenging given the continued revenue decline and net losses. Management's strategy to refine product selection and scale back the marketplace business is impacting current sales, and future performance will depend on improving member engagement, adapting to market changes, and navigating regulatory complexities in China.

Management Comments

• Management attributes the revenue decrease primarily to soft consumer confidence and a strategy to refine product selection and optimize suppliers and merchants.
• The significant decrease in marketplace revenue is attributed to a strategic decision to focus on private label products and deliberately scale back the marketplace business.
• The increase in sales and marketing expenses is primarily due to a shift in resource allocation towards offline and private-domain initiatives and an increase in depreciation and amortization.

Industry Context

StockSavvy.ai notes that the e-commerce sector in China continues to face evolving consumer behaviors and intense competition. Yunji Inc.'s reported revenue decline and net loss reflect these broader industry pressures, particularly the impact of soft consumer sentiment and the company's strategic adjustments.

Comparison to Industry Standards

• Yunji Inc.'s revenue decline of 24.1% in 2025 is a significant negative trend compared to the generally expected growth in the broader Chinese e-commerce market, although specific segment performance varies.
• The company's net loss of RMB 133.3 million in 2025, coupled with negative operating cash flow, indicates a struggle for profitability that is not aligned with industry leaders who are demonstrating sustained growth and profitability.
• The decrease in average spending per buyer to RMB 843 in 2025 suggests a potential challenge in customer value realization or a shift in consumer spending habits, which is a concern when compared to more successful e-commerce platforms that are seeing increased average transaction values.

Legal Proceedings

• The company was involved in a legal proceeding where the plaintiff sought monetary damages. The Guangzhou Intermediate Peoples Court concluded the appeal trial, ruling that the company bore no additional liabilities beyond outstanding accounts, including interests and fees, which have been settled.

Related Party Transactions

• Purchases of merchandise from related parties (Jimi, Bixin, Yunnong, Others) totaled RMB 1.368 million in 2025.
• Marketplace services provided to related parties (Jimi) amounted to RMB 17 thousand in 2025.
• Other goods and services provided to related parties (Jimi, Yin Yu Guo) totaled RMB 52 thousand in 2025.
• Amounts due from related parties (Yin Yu Guo, Jimi) were RMB 225 thousand as of December 31, 2025.
• Amounts due to related parties (Yin Yu Guo, Jibi, Small Ye Group, Jimi, Others) totaled RMB 2.836 million as of December 31, 2025.

Stakeholder Impact

• Shareholders may experience continued dilution if the company needs to raise additional capital.
• Investors may face volatility in ADS prices due to the company's financial performance and potential delisting risks.
• Employees may be affected by ongoing staffing structure refinements and cost optimization measures.
• Suppliers and third-party merchants may be impacted by the company's reduced marketplace business and strategic shifts in product sourcing.

Next Steps

• Continue construction of the new office building in Hangzhou.
• Monitor compliance with Nasdaq Capital Market continued listing requirements.
• Continue to refine product selection and optimize suppliers and merchants.
• Manage cybersecurity risks and protect sensitive information.

Key Dates

Recommendation

The company's financial performance continues to deteriorate with declining revenues and increasing net losses. The strategic shift away from the marketplace business and the increase in sales and marketing expenses relative to revenue suggest a lack of clear path to profitability. Coupled with the ongoing risks associated with its VIE structure, PRC regulations, and potential Nasdaq delisting, the outlook is unfavorable, warranting a sell recommendation.

Keywords

Yunji Inc., Form 20-F, Annual Report, SEC Filing, E-commerce, China, Financial Results, Revenue Decline, Net Loss, VIE Structure, Nasdaq, Shareholder Equity