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People's Daily Online>>China Business

Gome posts 13% climb in Q3 net profit

By Lu Nengneng  (Shanghai Daily)

13:34, November 30, 2011

Hong Kong-listed Gome Electrical Appliances, China's second largest home appliance retailer, said yesterday its profit surged 13 percent to 538.8 million yuan (US$84 million) in the third quarter from a year earlier.

The company's quarterly revenue gained 14 percent to 14.2 billion yuan compared with the same quarter of last year.

Over the past three quarters Gome earned 1.79 billion yuan while its arch-rival, Suning Appliance, posted net income of 3.4 billion yuan between January and September.

Chairman and non-executive director Zhang Dazhong said he is happy about Gome's performance in the first three quarters of the year, especially its wider presence in the country's second-tier cities. The Beijing-based retailer, once the biggest in the country, has been fighting to reclaim lost ground since Zhang stepped in to end a two-year internal battle for control in March.

Gome has opened 241 new stores by the end of September, bringing its total store number to 1,657, including 616 stores that are branded as Dazhong Electronics and owned by its jailed founder Huang Guangyu.

To add more self-owned properties in a bid to slash its operating costs in the long run, Gome announced it would form a real estate venture with its controlling shareholder on September 27. But it decided to hold back the plan after investors expressed worries Gome may deviate from its core business. The news of the plan also sent its shares tumbling over 30 percent in 3 days.

Gome formally aborted the plan yesterday, citing "the recent volatility and uncertainty in the macroeconomic environment" in a statement filed with the Hong Kong stock exchange.


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