China’s Gome Gains More Net Profit, Cancels Real Estate Subsidiary Plans
Chinese electronics and home appliances retailer Gome has published its unaudited performance results for first three quarters of 2011, stating that from January to September 2011, its total revenue increased by 18.01% year-over-year to CNY43.983 billion, while its net profit increased by 24.38% year-over-year to CNY1.791 billion.
During the reporting period, Gome’s adjustment to store strategy brought certain achievements and its gross margin increased by 1.26% year-over-year to 18.85%. However, its marketing and management expense largely increased by 30.9% and 20.8%, respectively.
According to the report published by Gome, the company will terminate its plans to establish a real estate subsidiary, which caused major stock price volatility. Gome stated due to the recent uncertainty of macro economy, Gome Beijing and its two partners had concurred to terminate their agreement on setting up a real estate joint venture on November 29, 2011.
Public files showed that on September 27, 2011, Gome announced plans to invest CNY90 million to set up a real estate joint venture, which will be responsible for creating more store resources and building storage and logistics bases in the second- and third-tier cities in China, to reduce overall operating costs. The stock price of Gome saw consecutive dives following the announcement.
source : www.chinatechnews.com
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Submited at Thursday, December 1st, 2011 at 3:00 pm on Technologies by jessica
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